passion to excel - bhilwara energybhilwaraenergy.com/uploads/file/bel_ar_2010-11.pdf · 2016. 9....

Passion to excel Annual Report 2010-11Bhilwara Energy Limited

Pioneering pedigree:

Possesses India’s second-largest spindle capacity

Largest Indian producer and exporter of polyester/viscose

blended yarn

Provides largest range in grey, dyed and mélange yarns

Possesses the world’s largest single-location plant for

graphite electrodes with an installed capacity of 66,000 TPA

Commissioned India’s first hydro-power project co-financed

by the International Finance Corporation, Washington

Emerged as the first merchant power producer in India’s

hydro sector

Awards and recognition:

Winner of the SRTEPC (The Synthetic and Rayon Textiles

Export Promotion Council) award for exports for the

last 17 years – a record in the Indian textiles space

and Rajiv Gandhi National Quality Award (RSWM Ltd.)

The LNJ Bhilwara Group*Established in 1961 *A USD 1 billion conglomerate *Among

leading business groups in India *Diversified interests in

textiles, graphite electrodes, power generation, power

engineering, ITeS and consultancy services *Promoted by

Shri L. N. Jhunjhunwala.

50 Glorious Years

A journey that began in 1961 with a single textile unit in

of Bhilwara, Rajasthan has, over five decades, created one of India’s leading

business conglomerates, firmly etching itself in the global space.

the lesser known town

Group Statistics

Number of Companies

14

March 31, 2011

No. of ManufacturingFacilities

24

March 31, 2011

Human Capital

25,000

March 31, 2011

crore

2010-11

Exports

2,252`

crore

2010-11

900`

EBIDTA

crore

2010-11

238`

Profit After TaxRevenue

crore4,739

2010-11

`

Recipient of the CAPEXIL award for 19 consecutive

years and the prestigious Rajiv Gandhi National Quality

award (HEG Ltd.)

Awarded the Greentech Environment Excellence Award (Malana Power Company Ltd)

1

Bhilwara Energy Ltd. – Powering the Future.

Presence in Renewable Power Generation•

Strong International Partnerships•

Excellent Execution Track Record and Strong Project Pipeline•

Experienced Management Team with Focused Group Strategy•

Passion to excel

2

Annual Report 2010-11

ContentsBEL | Annual Report 2010-11

03 04 12Corporate information

Key data about the corporate

Passion to excel

A snapshot of the Company’s achievements and its vision

Chairman’s statement

An insight into the strategic direction of the Company going forward

14 24 25Directors' Report

A reflection on the Company’s performance in 2010-11

Annexures to the Directors' Report

A reflection on the Company’s superior performance in 2010-11

Standalone Financial Statements

Auditors' Report, Balance Sheet, Schedules, Cash Flow Statements, Balance Sheet Extract, Statement Pursuant to Sec. 212

56 83Consolidated Financial Statements

Auditors' Report, Balance Sheet, Profit and Loss Account, Schedules, Cash Flow Statement

Attachments of Annual Report

Malana Power Company Limited AD Hydro Power Limited Indo Canadian Consultancy Services Ltd. NJC Hydro Power Limited Bhilwara Green Energy Limited Balephi Jalbidhyut Company Ltd., Nepal Green Ventures Private Limited, Nepal

84118152173193208223

3

Corporate InformationBOARD OF DIRECTORS

CHAIRMANMr. Ravi Jhunjhunwala

DIRECTORSMr. Riju Jhunjhunwala Managing Director

Mr. Rishabh Jhunjhunwala Managing Director

Dr. Kamal Gupta

Mr. Sunil Chawla

Mr. Anand Prakash

Mr. Ajay Munot

Mr. Salil Bhandari

Mr. M. K. Doogar

KEY EXECUTIVESMr. O. P. Ajmera President & CEO

Mr. T. Dev Joshi President & CHRO

Mr. Ravi Gupta Company Secretary

STATUTORY AUDITORSM/s. S. S. Kothari Mehta & Co.,

Chartered Accountants

New Delhi

TECHNICAL CONSULTANTSRSW Inc., Canada

Indo Canadian Consultancy Services Limited

BANKERSIDBI Bank Ltd.

Yes Bank Ltd.

HDFC Bank Ltd.

State Bank of India

Axis Bank Ltd.

Kotak Mahindra Bank Ltd.

CORPORATE OFFICEBhilwara Towers

A-12, Sector - 1

Noida - 201 301 (U.P.)

Phone: 0120 - 4390300

Fax: 0120 - 4277841 / 2536268

REGISTERED OFFICEBhilwara Bhawan

40-41, Community Centre

New Friends Colony,

New Delhi - 110 025

Phone: 011 - 26822997

4


Passion to excel

capacityAn installed capacity of 278 MW in Hydro Power in India

Malana HEP: 86 MW• Hydro power plant developed and operated by Malana Power Company Ltd.

• Commissioned in a record period of 30 months in October, 2001

5

2000 MWThe envisioned hydro power generation capacity to be achieved by the year 2017.

Allain Duhangan HEP: 192 MW• Hydro power plant developed and operated by AD Hydro Power Ltd.

• Commissioned in July, 2010

• International Finance Corporation, Washington lead financer to the project and have also taken Equity Stake in the Company.

6


Passion to excel

presenceLeveraging upon its engineering skills and understanding of the power business, BEL is one of the largest private players in India. Its strong presence has ensured its growth through innovative strategy in serving the sector.

Himachal Pradesh: 618 MWMalana – 86MWAD Hydro – 192MWBara Banghal – 200MWChango Yangthang – 140MW

Punjab: 85 MW

UBDC - III - 85 MW

Arunachal Pradesh: 780 MWNyamjang Chhu – 780MW

7

780 MW With 780 MW hydro power project, BEL has entered Arunachal Pradesh which has a potential of 50,064 MW (34 per cent of India's total hydro potential), out of which only 6% has been used till date).

Maharashtra: 49.5 MW

Satara Wind – 49.5 MW

Nepal: 638 MW

Likhu IV – 120MW

Balephi – 50MW

Humla I and Mugu I – 468MW

8


Passion to excel

sustaining lives

CSR Initiatives:We aspire to fulfill our responsibilities as corporate citizen. Our foundation is laid on strong orientation towards ensuring social upliftment and overall development of the areas within & adjoining our project sites.

The Group aspires to fulfill its responsibilities as corporate citizen.

The initiatives include:• Environment• Health• Social welfare• Infrastructure Development• Education • Employment opportunities• Sports, Culture & Religious

Activities

9

EMS-14001Our commitment and dedication to ecological preservation and development

Power Sector CollaborationsThe value of the group is reinforced with its strong International Collaborations:

• Statkraft Norfund Power Invest AS, Norway - JV partner in Malana Power Company Limited.

• RSW Inc. Canada – JV partner in ICCS for Power Consultancy services.

• IFC, Washington – Member of the World Bank Group; Invested over US$5.35bn in 199 companies in India till date.

Awards:As recognition of its efforts for sustainable

development, the Group has won many awards

and recognition including “Greentech Environment

Excellence Award”.

10


Passion to excel

moving ahead...

BEL’s SPV “Bhilwara Green Energy Limited” to develop wind farm of 49.5 MW likely to be commissioned by the end of the FY2011-12.• Dominant force in clean energy segment with a diversified portfolio comprising of

hydro and wind.

• Continue growing the project pipeline by actively considering/ bidding for new projects.

• Follow an aggressive merchant power sale strategy in the near term with focus on meeting peak demand.

Hydro power is a huge untapped energy resource in India with power generation potential worth 1,45,320 MW (as estimated by CEA) coming from large (more than 25 MW) schemes alone, of which around 25.9 per cent has only been transmuted into installed capacity.

11

400 MWThe company is targeting to achieve the total installed capacity of 400 MW of wind energy by 2016.

• Leverage Group’s track record, management talent and sectoral experience to establish leadership position in the hydro power sector.

• Incorporate best practices learnt from Group’s JV with SN Power with respect to operation and performance, technology, management control and safety of hydro power plants.

• Enhance project implementation and execution skills with inputs from ICCS’ experience.

• Hydro energy portfolio in excess of 2,500MW across India and Nepal.

• Strong financial health exhibiting robust growth in top-line and bottom-line.

12


The global economy has been

observing weakening in global

activity, which is becoming more

uneven. The economic recovery of

2010 appears to have come close

to a halt in the major industrialized

economies, with falling household

and business confidence affecting

both world trade and employment,

while the risk of hitting patches of

negative growth going forward has

gone up. Against a backdrop of

unresolved structural fragilities, a

barrage of shocks, which includes the

devastating Japanese earthquake

and tsunami, political unrest in

some oil-producing countries, and

the major financial turbulence in the

euro area, has hit the international

economy.

In such a scenario, the Indian

economy has been performing

well by recording 8.6 percent GDP

growth in the year 2010 to March

2011, but the impact of the trends in

world economy has started affecting

the growth rate. With fewer options

available to boost growth, both

business and consumer confidence

are moving downward. Falling

growth and taxes leaves much

lesser room for expenditure to boost

the economy and spearhead much

needed infrastructure investment.

The Indian power sector is also

observing turbulence. The fossil

fuels (coal and gas) based thermal

power generation, which has been

dominating India’s power generation

capacities with almost 65% share, is

staring at shortages in fuel supplies.

This has resulted in power stations

operating at sub-optimal fuel stocks

and considerably low PLFs and

newly commissioned power stations

finding difficulties for debt servicing.

The rising international prices of

fossil fuels have also impacted

meeting of fuel needs of thermal

power projects through imports.

The distribution utilities are saddled

up with phenomenal losses on

their balance sheets because of

losses during transmission and

distribution; billing inefficiencies,

and revisions in consumer tariffs not

in commensuration with input costs.

The financial institutions are also

showing less inclination to provide

funding. With improved monsoons

and less-than-expected demand,

the distribution utilities have been

resorting to load shedding instead

of procuring substantial power from

short term market.

This peculiar situation has reduced

the attractiveness of the Indian

power sector inspite of vast

opportunities arising because of

overall growth and insufficient plans

on the ground for fulfillment of the

power requirements. But such

situation is likely to remain prevalent

in the short term. Going forward, it

has been forecasted that power

shortage situation will continue and

the energy and peaking shortages

will likely to hover around 10.3%

and 12.9% respectively. In such a

situation, to secure its energy needs,

India will have to revisit its energy

sector strategy with considerable

focus on exploitation of renewable

energy potential of about 150 GW.

During the year under consideration,

Dear Stakeholders,

Chairman, Ravi Jhunjhunwala

India will have to revisit its energy sector strategy with considerable focus on exploitation of renewable energy potential of about 150 GW.

13

your company at consolidated level

achieved a turnover of INR 1881

million as against INR 1651 million

in the previous year.

As reported earlier, the Allain

side of the project was completed

successfully and has started

generating power on 17th July,

2010. The Duhangan Tunnel was

day lighted on 21st December,

2010. The work on the completion

of the Duhangan side of the project

is progressing at a fast pace despite

the challenges being thrown by the

nature. The Duhangan side is likely

to be commissioned by 31st March,

2012.

I am also pleased to inform you

that Techno Economic Clearance

has been given to the company’s

780 MW Nyamjang Chhu Hydro

Electric Project and the company

is expecting Environment & Forest

Clearance of the project very soon.

For 120 MW Likhu HEP in Nepal,

the Company is in the process of

preparing tender documents for this

project and simultaneously working

on financial closure for the Project.

For 200 MW Bara Bhangal HEP in

Himachal Pradesh, the DPR is under

review with CEA.

During the year, the Company has

also diversified into Wind Power

business and is in the process of

setting up 49.5 MW Wind farm in

Maharashtra, which is likely to be

commissioned by the end of this

financial year. The company is

also exploring other opportunities

available in the wind power and

is targeting to achieve the total

installed capacity of 400 MW of wind

power by 2016.

On behalf of the Board of Directors,

I would like to express our sincere

gratitude to the Ministry of Power and

Ministry of Environment and Forests,

Government of India, Central

Electricity Authority, Government

of Himachal Pradesh, Government

of Arunachal Pradesh, Government

of Punjab, Government of Federal

Democratic Republic of Nepal, other

government agencies, PTC India

Limited, lenders, commercial banks,

financial institutions, investors, joint

venture partners 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 JhunjhunwalaChairman

1881 MNINR

The company at consolidated level achieved a turnover of INR 1881 mn as against INR 1651 million in the previous year.

14


The Directors of the company are pleased to present their fifth annual report on the business and operations of the company and audited statement of accounts for the year ended 31st march, 2011 together with the auditors' report.

(` in Million)

Particulars Consolidated Standalone

For the financial year ended For the financial year ended

31st March 2011

31st March 2010

31st March 2011

31st March 2010 *

Total Income 2,193.578 2,128.099 54.81 -

Total Expenditure 2,875.767 947.744 120.34 -

Profit/(Loss) before tax (682.189) 1,180.355 (65.53) -

Taxes 106.32 199.814 - -

Profit/(Loss) after tax before minority interest (788.22) 980.541 (65.53) -

Minority Interest 423.041 480.465 - -

Profit/(Loss) after tax & minority interest (365.180) 500.076 - -

* The Company has prepared its first standalone profit & loss account during the year under review. So, the comparable figures for the financial year ended 31st March 2010 are not available.

The Standalone and Audited Consolidated Balance Sheet for the year 2010-11 is attached to this Annual Report.

FINANCIAL PERFORMANCE

Directors' Report

Dear Members,

15

SUBSIDIARIES, JOINT VENTURES AND SPVs

• Malana Power Company Limited

• AD Hydro Power Limited

• NJC Hydro Power Limited

• Indo Canadian Consultancy

Services Limited

• Bhilwara Green Energy Limited

• Green Ventures Private Limited,

Nepal

• Balephi Jalbidhyut Company

Limited, Nepal

The statement pursuant to the

provisions of Section 212 of the

Companies Act, 1956 relating to the

Subsidiary Companies are attached

to this Annual Report. In terms of the

Circular of the Ministry of Corporate

Affairs dated 8th February 2011,

the Board of Directors has decided

not to annex the annual accounts

of the Subsidiary Companies in the

Annual Report. The annual accounts

of the Subsidiary Companies and

related detailed information shall be

made available to the shareholders

of the company and the subsidiary

companies seeking such information

at any point of time. The annual

accounts of the subsidiary

companies shall also be kept for

inspection by any shareholder at the

registered office of the company and

of the Subsidiary Companies. The

Company shall furnish a hard copy

of details of accounts of Subsidiary

Companies to any shareholder on

demand. Information in aggregate for

each subsidiary in respect of capital,

reserves, total assets, total liabilities,

detail of investment, turnover,

profit before taxation, provision

for taxation, profit after taxation,

proposed dividend is disclosed in

the consolidated balance sheet of

the company.

PROJECT STATUS AND INFORMATION

86 MW Malana HEP in the state of Himachal Pradesh

Malana Power Company Ltd, a

subsidiary of your company, which

is engaged in the generation &

transmission of energy from its 86

MW, Malana Hydro Electric Project

in the state of Himachal Pradesh.

The Malana HEP is operational

plant since 2001. During the period

under review, the turnover of MPCL

is Rs 143.11 crore (Previous year

Rs 161.94 crore) and Profit After tax

is Rs 43.05 crore (Previous year Rs

98.92 crore). The plant availability

of the Malana HEP was 94.03% as

compared to 99.94% (FY2009-10)

on account of planned shut-down

of 20 days taken during February

2011. Without the planned shut-

down, the plant availability for the

period was 99.51 per cent. As per

the available hydrology data, the

generation during the period under

review stood at 333.864 million units

as compared to 305.790 million

units in the previous financial year.

This increased generation was due

16


to better hydrology during Sept.

2010 to Nov, 2010, which is the best

achieved in the history of the plant.

192 MW Allain Duhangan HEP in the State of Himachal Pradesh

AD Hydro Power Ltd, a step down

subsidiary of your company, is

engaged in developing 192 MW,

Allain Duhangan Hydro Electric

Project in the state of Himachal

Pradesh. Despite all unanticipated

odd and adverse conditions

encountered during the project

implementation, ADHPL has been

able to successfully commission the

Project from Allain side with both the

units of 96 mw each totaling 192 MW

& 220 kv double circuit dedicated

Transmission Line of 175 km.

The project has started generating

power on 17th of July, 2010. However,

for want of completion of dedicated

transmission line, the project was

operated at restricted capacity of

50 MW at lower voltage in order to

evacuate the power through partly

completed dedicated transmission

line and State Utility Transmission

System for almost two months. 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. The Board

would like to place on record their

appreciation to ADHPL’s technical

team and consultants for making this

operation a success. Meanwhile, the

work of dedicated transmission line

got completed on 16th September,

2010, thereafter, the operations were

brought back to normal voltage as

well as on its designed capacity and

power evacuation started through

the dedicated transmission line, right

up to CTU at Nalagarh.

The Duhangan Tunnel was day

lighted on 21st of December, 2010.

The work on the completion of the

Duhangan side is progressing at

a fast pace despite the challenges

being thrown by the nature, ADHPL is

poised to commission the Duhangan

side by 31st March, 2012.

780 MW Nyamjang Chhu HEP in the state of Arunachal Pradesh

The Company with the prior

approval of Government of

Arunanchal Pradesh has formed a

100% subsidiary (SPV) in the name

of “NJC Hydro Power Limited” for

the implementation of said project.

Accordingly all the project related

approvals and expenses have been

transferred to the SPV. The DPR for

the Project has been approved by

Central Electricity Authority (CEA).

In addition, project has advanced

further to obtain the Environment and

Forest Clearances after conducting

the successful public hearing on

8th February 2011 for obtaining the

Environment Clearance. Experts’

Appraisal Committee of Ministry

of Environment and Forest has

already considered the project for

the purpose of Final Environment

Clearance. In addition to this, to

speed up the work, the Company

has already awarded the contracts

for commissioning of construction

power project of 7.5 MW to ensure

smooth availability of power before

start of construction on main project

components.

17

120 MW Likhu HEP in Nepal

Green Ventures Private Limited,

Nepal a subsidiary of your company

is developing a 120 MW Likhu Hydro

Electric Project in Nepal. The project

has already received all requisite

clearances applicable in the country

of Nepal and Generation License is

also expected to be received during

the current year. The project has

also received the sanctions from

banks for the entire debt amount

required for the project.

50 MW Balephi HEP in Nepal

Your company is developing a 50

MW Balephi Hydro Electric Project

in the country of Nepal in the name

of Balephi Jal Vidyut Company

Limited having its registered

Office at Kathmandu. The project

has already received all requisite

clearances applicable in the country

of Nepal and Generation License is

also expected to be received during

the current year.

140 MW Chango Yangthan HEP in Kinnaur Distt, Himachal Pradesh.


subsidiary of your company has

also signed the Pre Implementation

Agreement with the Government of

Himachal Pradesh for development

of 140 MW Chango Yangthan

Hydro Electric Project in District

Kinnaur HP, The DPR of the

Project has been accepted by CEA

for detailed analysis. The DPR is

expected to be approved by CEA

during 2011-12. As per the Pre-

Implementation Agreement (PIA)

signed with Government of Himachal

Pradesh, MPCL is expected to sign

Implementation Agreement in the

month of October 2011.

200 MW Bara Bhangal HEP in Kangra/Chamba Distt,, Himachal Pradesh.


subsidiary of your company, has

also signed the Pre Implementation

Agreement with the State

Government of Himachal Pradesh

for development of 200 MW Bara

Bangal Hydro Electric Project in

District Chamba HP. However as

some part of the project area is falling

into Dhauladhar Forest Sanctuary, it

is required to be de-notified by the

Govt of India to take up the project

activities. In this regard the MPCL

has already taken up necessary

steps for de-notification by filing the

requisite application with concerned

Govt. Authorities. MPCL has also

approached to State Government for

a suitable extension of time line to

sign the Implementation Agreement.

85 MW UBDC Stage-III HEP in the State of Punjab

After signing the Implementation

Agreement for capacity of 75

MW, DPR for the Project was

approved by the State Authorities

for 85 MW Project. However due

to considerable delay in according

the approval for compensation for

revised capacity and signing the

revised Implementation Agreement

for 85 MW, there is a significant

increase in the cost of project for

which the company has taken up the

matter with the State Government

and other relevant Authorities for

suitable compensation.

49.5 MW Wind Power Project in Distt. Satara, Maharashtra

During the year, your company has

also taken steps to diversify into

wind power sector by awarding

a EPC contract for development

of wind farm of 49.5 MW in Distt.

Satara, Maharashtra through SPV

“Bhilwara Green Energy Limited”

( BGEL) and the Project is likely to

18


be commissioned by the end of the

FY2011-12. In this project, the BGEL

will enter into PPA with State Govt of

Maharashtra as per the prevailing

policies of the State Govt.

Other Projects

For other projects, the Company

is under various stages of

implementation like signing of MOA,

preparation of DPR and other allied

activities.

New Endeavours

The Company is exploring various

possibilities in Nepal for identification

of new projects and obtaining survey

licenses. The Board is pleased to

inform you that Company has got

survey licenses for 274 MW Humla

Karnali-I HEP and 194 MW Mugu

Karnali-I HEP in Nepal.

FUTURE OUTLOOK

In the year 2010-11, Indian economy

observed the return of high growth

in its GDP. The growth has been

broad based. However, the core

infrastructure sector continues to

remain a constraint for high growth.

The demand for power has been

outstripping supply. The energy

deficit in the country has reached to

a level exceeding 10 per cent, while

the peak deficit has reached 13 per

cent in FY2010-11. India’s current

per capita consumption continues

to be dismally low against the world

average. With ongoing focus of

the Government of India to provide

increased access to power across

the country, both the energy demand

and the peak demand are expected

to grow.

In response to call for huge capacity

additions in energy generation, XIth

5-year Plan (2007-2012) is expected

to see an achievement of around

50,000 MW (from CEA estimates),

against initial plan of 78,577MW. In

addition, inadequate coal availability

and rising prices are threatening to

derail the ambitious capacity addition

programme. Thus the shortages

(base deficit and peak deficits) are

likely to continue for the foreseeable

future.

In such a critical scenario, the hydro

& renewable energy represents the

viable option. Hydropower represents

a vastly untapped energy resource in

India with power generation potential

worth 1,45,320 MW (as estimated by

CEA) coming from large (more than

25 MW) schemes alone, of which

around 25.9 per cent has only been

transmuted into installed capacity.

Half of this potential lies in the North

Eastern region of India. The state of

Arunachal Pradesh has a potential

of 50,064 MW (34 per cent of India's

total hydro potential), out of which

only 6% has been tapped till date.

To tap these vast hydro power

resources, private investments are

being increasingly sought.

The Indian renewable energy

sector also has considerable growth

potential. The ambitious government

of generating 15 per cent of country’s

electricity by 2020 through renewable

sources, as a part of the National

Action Plan on Climate Change

(NAPCC) has expanded the Indian

market dramatically. In the past

five years, the country’s renewable

energy capacity has increased at a

CAGR of 24.18 per cent, faster than

any other fuel source. Estimates

indicate that in order to meet this

target, the country will need to add

over 85,000 MW of capacity based

on renewable sources out of which

45,000 MW is expected to come

from wind power alone.

India has a huge wind potential

19

of 48,561 MW (as estimated by

MNRE), out of which only 14,157

MW has been installed as of 31st

March 2011, which makes it world’s

fifth largest market. In 2010, with

capacity additions of 2139 MW, India

was the third largest wind market

in the world after China and US.

With the rapid development of wind

technology and manufacturing bases

of most of the renowned players in

India, the industry is poised to add

5,000 MW of wind capacity annually

in the coming years.

The merchant tariffs are a function

of supply and demand. With the

shortfall in supply forecast likely to

continue in the foreseeable future

because of capacity additions not

matching with the growth in demand

and shortage in availability of fossil

fuels to thermal power plants, the

power rates are likely to see an

upward pressure. The distribution

utilities are slowly showing renewed

interest in the power trading market.

Your Directors are confident that the

hydro and wind power sectors shall

be playing a significant role in the near

future in contributing to substantial

increase in country’s generating

capacities and in increasing country’s

portfolio of clean energy generation.

The merchant tariffs are also likely to

see buoyancy. Thus the outlook for

the next financial year is likely to be

cautiously optimistic.

PRIVATE EQUITY INVESTMENT OF USD 50 MILLION

Your Directors’ are pleased to

inform you that International Finance

Corporation (IFC), a member of

World Bank Group, and India Clean

Energy III Limited, Mauritius, have

made equity investment of US$50

million in your Company. The funds

raised is being utilised towards

development of power projects of

the Company, its subsidiaries, SPVs

and Joint Ventures.

SHARE CAPITAL

During the period under review, the

Company has issued 1,63,19,992

equity shares of Rs 10/- each at a

premium of Rs 129.30 per share to

International Finance Corporation

(IFC) and India Clean Energy III

Limited (Mauritius).

DIVIDEND

As the construction work is under

progress, without any operation, no

dividend is proposed to be declared

during the year under review.

PUBLIC DEPOSITS

The Company has not accepted any

deposits from the public during the

year under reporting.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

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.

PARTICULARS OF EMPLOYEES:

During the year 2010-11, no employee

20


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.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

INTERNAL CONTROL SYSTEMS

The Company has proper and

adequate systems for internal

controls to ensure protection of

assets, proper financial and operating

functions and compliance with the

policies, procedure, applicable Acts

and Rules. The Company’s Internal

Controls are supplemented by

Internal Audit covering all financial

and operating functions.

INTERNAL AUDIT

Internal Audit at BEL 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. The areas requiring

specialized knowledge are reviewed

in partnership with external experts.

Internal audit plans cover matters

identified in risk management

assessments as well as issues

highlighted by the Board, the Audit

Committee and senior management.

Periodically 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.

DIRECTORS

During the period under review, Mr

Vimal Banka and Mr O P Ajmera

resigned from the Board of Directors

of the Company on 17th August

2010. The Board of Directors

wishes to place on record sincere

thanks & appreciation towards the

contributions made by Mr Vimal

Banka and Mr O P Ajmera during

their tenures as Directors of the

Company.

Mr. Anand Prakash was appointed

as an additional director of the

Company with effect from 21st

December 2010, as per the

Shareholders’ Agreement executed

with M/s. India Clean Energy III

Limited, Mauritius. He will hold office

upto the date of ensuing annual

general meeting. The Company

has received notice u/s 257 of the

Companies Act from shareholder

of the Company proposing the

candidature of Mr Anand Prakash

as Directors of the Company. The

Board recommends the appointment

of Mr. Anand Prakash on the Board

of the Company.

Your Directors has appointed Mr.

Ajay Munot as an additional director

of the Company with effect from 2nd

September 2011. He will hold office

upto the date of ensuing annual

21

general meeting. The Company

has received notice u/s 257 of the

Companies Act from shareholder

of the Company proposing the

candidature of Mr Ajay Munot as

Directors of the Company. The

Board recommends the appointment

of Mr. Ajay Munot on the Board of

the Company.

In accordance with the provisions

of the Companies Act, 1956 and

of the Articles of Association of the

Company, Mr. Ravi Jhunjhunwala,

Dr. Kamal Gupta and Mr. Salil

Bhandari, 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.

AUDIT COMMITTEE

During the year, the Audit Committee

met twice to review Company’s

Financial results, Internal Control

Systems, Risk Management Policies

and Internal Audit Reports.

During the year, the Audit Committee

was reconstituted. As on date, the

Members of the Audit Committee

are: Mr Salil Bhandari, Mr Sunil

Chawla, Mr Anand Prakash and Mr

M K Doogar. The proceedings of the

Committee were in accordance with

the provisions of the Companies Act,

1956.

DIRECTORS’ RESPONSIBILITY

STATEMENT

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 judgments and

estimates have been made 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 2010-2011.

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 a going concern

basis.

AUDITORS

M/s S. S. Kothari Mehta & Co.,

Chartered Accountants, Statutory

Auditors of the Company, will retire

from their office at the ensuing

Annual General Meeting. They are,

however, eligible for re-appointment.

The Company has received consent

letter from M/s S. S. Kothari Mehta &

Co., Chartered Accountants, under

Section 224(1B) of the Companies

Act, 1956, for re-appointment as

Statutory Auditors of the Company

for the financial year ending on

31st March, 2012. The Board

recommends the re-appointment

22


of M/s S. S. Kothari Mehta & Co.,

Chartered Accountants, as Statutory

Auditors of the Company.

AUDITORS’ REMARKS

The Auditors’ Report read alongwith

Notes to the Accounts is self

explanatory and require no further

comments from the Board.

HUMAN RESOURCE DEVELOPMENT

The employees are vital and most

valuable assets. The Company

strives to implement the best HR

practices so as to ensure that talent

retention is ensured at all levels. A

favorable work environment has

been created in the organization

that encourages innovation and

meritocracy. A scalable recruitment

and human resources management

process has been set up, which

enables us to attract and retain

high-caliber employees. The Human

Resources Development activities

focused on multi-skill training,

performance improvement, learning

from each other training module and

basic engineering skills.

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 tranche to be given

to employees at a formulated strike

price as per the detailed ESOP

Scheme. Out of the two million,

1.068 million ESOPs has been

issued to the eligible employees as

per the ESOP Scheme.

The employee relations continued

to be cordial and harmonious at

all levels and in all divisions of the

Company.

ENVIRONMENT, HEALTH AND SAFETY

In the upcoming projects,

Environment Management Plan,

comprising of international best

practices, procedure and norms,

shall be adopted to take care of

environment and social impacts on

the Projects. Further, the 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 the

corporate level.

Environmental Management Plan

involves mitigation, monitoring

and institutional measures to

eliminate, offset or reduce adverse

environmental and social impacts in

or around the project area.

The Company is also committed to

provide a zero injury workplace to its

employees and workers all across

its unit. Security of employees is

one of the prime concerns of the

Management. The employees are

adequately covered under various

insurance policies against risk of

health and life disasters. Consistent

efforts were made by the Company

to improve safety standards in the

Company by taking measures.

The steps being taken up by the

Company’s subsidiaries, SPVs

and joint ventures in the field of

Environment, Health and Safety

have been mentioned in their

respective Annual Reports.

CORPORATE SOCIAL RESPONSIBILITY

We believe that, wherever we

operate, our activities should

generate economic benefits and

opportunities for an enhanced quality

of life for society at large; that our

relationships should be honest and

23

open; and that we should be held

accountable for our actions.

As a constructive partner in the

communities in which it operates,

your Company has been taking

concrete action to carry out its social

responsibility and has been spending

on the infrastructure development.

The steps being taken up by the

Company’s subsidiaries, SPVs and

joint ventures in the field of Corporate

Social Responsibility have been

mentioned in their respective Annual

Reports.

CORPORATE GOVERNANCE

Corporate Governance is a process

that aims to meet shareholders’

aspirations and societal expectations.

It is a commitment that is backed by

the fundamental belief of maximizing

shareholders value, transparency

in functioning values and mutual

trust amongst all the stakeholders,

transparency in functioning, values

and mutual trust amongst all the

stakeholders of the organization. In

our company, corporate governance

philosophy stems from our belief

that it 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 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’s

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.

ACKNOWLEDGEMENTS

Your Directors’ acknowledge the

assistance and continued support

provided by the Ministry of Power

and Ministry of Environment and

Forests (Government of India),

Central Electricity Authority,

Government of Himachal Pradesh,

Government of Arunanchal Pradesh,

Government of Punjab, Government

of Federal Democratic Republic of

Nepal, other government agencies,

lenders, commercial banks, financial

institutions, PTC India Limited

and our valued customers & look

forward to their continued support

and cooperation in the coming years

as well. Your Directors’ also like to

express great appreciation for the

commitment and contribution of its

employees at all levels.

Your Directors also place on record

the appreciation for investors for their

support and confidence reposed by

them in the company.

For and on Behalf of the

Board of Directors

Ravi Jhunjhunwala

Chairman

Place: Noida

Date: 2nd September, 2011

24


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

(` in million)

2010-11 2009-10

I Foreign Exchange Outgo

Import of Components/Spares (CIF value)

Travelling 4.93 NIL

Professional Expenses 8.18 0.125

Consultancy Charges NIL 48.659

Total 13.11 48.784

II Foreign Exchange Earnings NIL NIL

Total NIL NIL

For and on Behalf of the

Board of Directors

Place: Noida Ravi Jhunjhunwala

Date: 2nd September, 2011 Chairman

25

To

The Members of BHILWARA ENERGY LIMITED

We have audited the attached Balance Sheet of 1.Bhilwara Energy Limited (‘the Company’) as at March 31, 2011 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.

We conducted our audit in accordance with 2.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 (Auditor’s Report) 3.Order, 2003 as amended by Companies (Auditors’ Report) (Amendment) Order, 2004 (collectively the Order) issued by the Central Government of India in issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 and on the basis of such checks as we considered appropriate and according to information and explanation 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 4. to above, we report that:

We have obtained all the information and i.explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

In our opinion, proper books of account ii.as required by law have been kept by the Company so far as appears from our examination of those books;

In our opinion, the Balance Sheet, Profit and iii.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;

The Balance Sheet, Profit and Loss account iv.and Cash Flow statement dealt with by this report are in agreement with the books of account;

On the basis of the written representations v.received from the directors, as on March 31, 2011, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

In our opinion and to the best of our vi.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 :

In the case of Balance Sheet, of the state a)of affairs of the Company as at March 31, 2011;

In the case of Profit and Loss account, b) of the loss for the year ended on that date; and

In the case of Cash Flow statement, of c)the cash flows 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 : 2nd September, 2011

AuDITORS' RePORT

26


Annexure referred to in paragraph 3 of our report of even dateRe: Bhilwara Energy Limited (‘the Company’)

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, refer note no 4(b) of Schedule 13 of the financial statements regarding transfer of project to the subsidiary company.

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. The company has not granted/taken any loans, secured or unsecured, to / from 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.

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) 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 value of Rupees five lakhs in respect of each party have been entered into during the financial year at prices

which are reasonable having regard to the prevailing market prices at the relevant time.

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. The company has accumulated losses as at the end of the financial year which are less than fifty percent of the net worth. The company has incurred cash losses in the current financial year; since the company has started its operation during the year no profit and loss account was prepared in the previous year due to which there were no cash losses in the immediately preceding 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.

27

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 given guarantee for loans taken by one step down subsidiary from International Finance Corporation (IFC), the terms and conditions of which are, prima facie, not prejudicial to the interest of the company.

16. In our opinion, and according to the information and explanations given to us, the term loans raised 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, 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 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


28


` in ‘000’

Schedules As at 31.03.2011

As at 31.03.2010

SOURCES OF FUNDSShareholders' FundsShare capital 1 1,919,144 1,755,944 Reserves and surplus 2 2,561,955 499,479 Loans 3 – 1,100,000 TOTAL 4,481,099 3,355,423 APPLICATION OF FUNDSFixed AssetsGross block 4 10,699 13,269 Less : Depreciation (4,152) (4,166)Net block 6,547 9,103 Capital work-in-progress (including capital advances) 2,750 63,781 Project and pre-operative expenses (pending allocation)

5 282,667 917,983

291,964 990,867 Investments 6 2,805,805 1,886,047 Current Assets, Loans and AdvancesProject Inventories (explosive stock ) – 83 Cash and bank balances 7 400,770 28,490 Other current assets 8 10,943 3,176 Loans and advances 9 1,002,507 480,501

1,414,220 512,250 Less: Current Liabilities and ProvisionsLiabilities 10 15,641 8,964 Provisions 11 80,778 39,400

96,419 48,364 Net Current Assets 1,317,801 463,886 Profit and Loss Account 65,529 Miscellaneous Expenditure 12 – 14,623 (to the extent not written off or Adjusted)TOTAL 4,481,099 3,355,423 Notes to Accounts 18The Schedules referred to above and Notes to Accounts 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


For and on behalf of the Board of Directors

Riju Jhunjhunwala Managing Director (DIN - 00061060)Rishabh Jhunjhunwala Managing Director (DIN - 03104458)Ravi Gupta Company Secretary

BALANCe SHeeT AS AT 31st MARCH, 2011

29

` in ‘000’

Schedules For the year ended 31.03.2011

INCOMETurnoverTurnover ( net ) –Other income 13 54,816 TOTAL 54,816 ExpenditurePersonnel expenses 14 13,902 Operating and other expenses 15 30,453 Depreciation 4 576 Financial expenses 16 60,791 Preliminary expenses written off 12 14,623 TOTAL 120,345 Profit/(Loss) before tax and prior period items (65,529)Prior Period Income – Profit/(Loss) before tax (65,529)Current Tax – Deferred tax charge/ ( credit ) – Total tax expense – Net Profit (+)/ Loss (-) (65,529)Balance brought forward from pervious yearProfit /(Loss) available for appropriiation (65,529)Profit/(Loss) carried to balance sheet (65,529)earning per share ( figures are not annualised) ( in Rs.) 17– Basic ( Nominal value Rs. 10 per share ) (0.455)– Diluted ( Nominal value Rs. 10 per share) (0.455)Notes to Accounts 18The Schedules referred to above and the Notes to Accounts form an integral part of the Profit and Loss Account.






PROFIT AND LOSS ACCOuNT FOR THe YeAR eNDeD 31ST MARCH 2011

30


SCHEDULE 1: SHARE CAPITAL` in ‘000

As at 31.03.2011

As at 31.03.2010

Authorised200,000,000 (Previous year 200,000,000) equity shares of ` 10 each 2,000,000 2,000,000

4,000,000 (Previous year 4,000,000) Cumulative Redeemable Preference Shares of ` 100/– each

400,000 4,000,000

2,400,000 2,400,000 Issued, Subscribed and Paid up 1,51,914,420 (Previous year 135,594,428) equity shares of ` 10 each

fully paid up 1,519,144 1,355,944

4,000,000 (Previous year 4,000,000) 0.01% Cumulative Redeemable Preference share of ` 100/– each fully paid up

400,000 400,000

1,919,144 1,755,944

SCHEDULE 2: RESERVES AND SURPLUS

Capital Reserve Account Opening Balance 1,012 – Add : Warrant money forfeited during the year – 1,012 Closing Balance 1,012 1,012 Securities Premium Account Opening Balance 498,467 987,818 Add- Addition during the year 2,110,175 – Less : utilised for issue of Bonus Shares during the year – 451,981 Less : Premium on redemption of preference shares. 47,699 37,370 Closing Balance 2,560,943 498,467

2,561,955 499,479

SCHEDULE 3: LOANS

Secured loansTerm Loan From Banks (Note 1) – 1,100,000 From others – –

– 1,100,000

Note 1: Term loan is secured by way of pledge of Nil (Previous year 3,38,98,607) 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 Nil in thousand (Previous year Rs 11,00,000 in thousand).

SCHeDuLeS TO ACCOuNTS

31

SCHEDULE 4: FIXED ASSETS ` in ‘000’

GROSS BLOCK DEPRECIATION NET BLOCKParticulars As at

01.04.2010Additions Sale/

AdjustmentTran-

ferred to Subsidiary Company

As at31.03.2011

Upto

01.04.2010

For the Year *

Sales/Transfer

Tran-ferred To

Subsidiary Company

Upto31.03.2011

As At31.03.2011

As At31.03.2010

TANGIBLE ASSETSBuilding (Explosive Magazine Stores)

359 – – 359 – 25 16 – 41 – – 334

Furniture & Fixtures 805 44 – 183 666 229 127 – 56 300 366 576 Computers 989 446 – 153 1,282 597 234 – 120 711 571 392 Other office equipments 891 7 – 281 617 202 96 – 75 223 394 689 Vehicles 3,268 3,421 1,296 1,166 4,227 1,449 788 594 234 1,409 2,818 1,819 Electrical Equipments & Fittings

935 61 – 348 648 175 128 – 62 241 407 760

Project Equipment 5,682 12 66 2,710 2,919 1,307 608 14 878 1,023 1,896 4,375 TOTAL TANGIBLE ASSETS 12,929 3,991 1,362 5,200 10,359 3,984 1,997 608 1,466 3,907 6,452 8,945 INTANGIBLE ASSETSSoftware (Bought out) 340 – – 340 182 63 – 245 95 158 TOTAL INTANGIBLE ASSETS 340 – – 340 182 63 – 245 95 158 Total (A) 13,269 3,991 1,362 5,200 10,699 4,166 2,060 608 1,466 4,152 6,547 9,103 Capital Work In Progress – – – – – – – – 2,750 63,781 Total (B) – – – – – – – – 2,750 63,781 Total (A+ B) 13,269 3,991 1,362 5,199 10,699 4,166 2,060 608 4,152 9,297 72,884 Previous year 12,089 1,180 – 13,269 2,169 1,997 – 4,166 72,884 Note1: Capital work in progress includes capital advances of ` NIL/- in thousand (Previous Year ` 19,095/- in thousand)* Amount transferred during the year to project and pre-operative expenses ` 1485 in thousand (Previous year ` 1997 in thousand)

SCHEDULE 5: PROJECT AND PRE-OPERATIVE EXPENSES (PENDING ALLOCATION)

As at 31.03.2011

As at 31.03.2010

Personnel ExpensesSalaries, wages and bonus 21,080 34,152 Contribution to provident and other funds 1,176 1,517 Workmen and staff welfare expenses 1,018 1,579

23,274 37,248 Administrative and other expensesRent 2,908 5,770 Rates & taxes 23 52 Insurance 175 304 Repairs and maintenance 294 85,734 Travelling expense 5,066 10,328 Conveyance 1,870 2,180 Vehicle running & hiring expenses 2,793 4,290 Communication expenses 495 790 Director remuneration 876 2,154 Audit Fees 139 341 Advertisement 267 622 Legal & professional charges 45,223 75,208 Fee & subscription 460 945 Stores consumption – 1,283 Power and fuel 398 476 Testing & Surveys – 3,600 Consultancy Charges 64,038 142,582 Project processing fee 2,868 11,600 upfront Premium- NJC – 243,080 Miscellaneous expenses 25,755 37,372 Financial / bank charges (Net of Interest earned of Rs. 21,488/- in thousand) (Previous year Rs. 26,365/- in thousand) (Tax deducted at source Rs. Nil/- thousand, (Previous year Rs.806/- thousand) (net of provision for income tax Rs. 9,642 thousand. upto ( Previous year Rs. 11,830 thousand).

102,551 247,756

Depreciation 3,213 4,259 259,412 880,754

Less -: Profit on Sale of Fixed Assets (19) (19) 282,667 917,983

Net of expenses transferred to subsidiary Company NJC Hydro Power Limited (refer note no. 4b of Schedule 13)

32


SCHEDULE 6: INVESTMENTS TRADE (LONG TERM AT COST)` in ‘000’

As at 31.03.2011

As at 31.03.2010

Unquoted – Fully Paid 75,238,123 (Previous Year75,238,123 ) equity Shares of Rs.10/- each

of Malana Power Company Limited [includes 50 equity shares (Previous Year 50) held jointly with nominees of the company]

1,810,338 1,810,338

1,80,200 (Previous Year 1,80,200) equity Shares of Rs.10/- of Indo Canadian Consultancy Services Limited [includes 50 equity shares (Previous Year 50) held jointly with nominees of the company}

42,449 42,449

50,070 (Previous year Nil -) equity share of 10/- each fully paid up of Bhilwara Green energy Ltd.

245 –

8,00,50,000 (Previous year 50,000) equity Shares of 10/- each fully paid up of NJC Hydro Power Ltd (Includes 6 equity shares (Previous year 6 equity shares) held jointly with nominees of the company

800,500 500

19,20,000 (Previous year 10,333) equity Shares of NR.100/- each fully paid up of Balephi Jalvidyut Co. Ltd. Nepal (Overseas Subsidiary Company)

120,000 646

1,90,000 (Previous year 190,000) equity Shares of NR 100/-each fully paid up of Green Venture Pvt. Ltd. Nepal (Overseas Subsidiary Company)

22,114 22,114

Other companies Unquoted

40,000 (Previous Year 40,000)equity Shares of Rs.100/-each of Green Venture Renewable India Pvt. Limited

10,000 10,000

10,000 (Previous year Nil -) equity share of 10/- each fully paid up of Odetta Realty Pvt. Ltd.

100 –

Non TradeCurrent at CostQuoted

489 (Previous year NIL) equity Shares of Rs. 10/- each fully paid up of Punjab & Sind Bank Market Value of the investment Rs. 63 in thousand (Previous year NIL)

59 –

2,805,805 1,886,047 Aggregate Book value of Investments : Unquoted 2,805,746 1,886,047 Quoted 59 –

2,805,805 1,886,047

SCHEDULE 7: CASH AND BANK BALANCES

Cash in hand 419 312 Balances with scheduled banks: In current accounts 30,351 8,178 Term Deposits with Bank 370,000 20,000

400,770 28,490

SCHEDULE 8: OTHER CURRENT ASSETS

Interest accrued on term deposits with banks and others 10,943 3,176 10,943 3,176

33

SCHEDULE 9: LOANS AND ADVANCES ` in ‘000’

As at 31.03.2011

As at 31.03.2010

(Unsecured, considered good) Advances recoverable in cash or in kind or for value to be received** 448,172 6,652 [includes advance to capital suppliers Rs.3,13,480 in thousand (Previous year Nil in thousand)] Loan to Subsidiary Companies (Interest free)* 252,630 252,630 Loan to Body Corporates 23,630 22,176 Security deposit with Govt. departments & others 5,629 5,239 Share application money (Pending for allotment) 272,447 193,804 *Loan given to Malana Power Company Limited maximum balance outstanding Rs 2,52,630 in thousand (Previous Year Rs.2,52,630 in thousand )

1,002,508 480,501

` in ‘000’

**S. No.

Particulars Year end balance Maximum balance outstanding during the year

2010-11 2009-10 2010-11 2009-101. Malana Power Co. Limited 99,836 Nil 1,98,650 1,98,0882. Balephi Jalvidyut Co. Ltd. Nepal 5,752 Nil 5,752 Nil3. Green Venture Pvt. Ltd. Nepal 21,306 Nil 21,306 Nil

SCHEDULE 10: LIABILITIES

Sundry creditors *a) Outstanding dues of Micro & Small enterprises b) Outstanding dues of Creditors other than Micro & Small enterprises – – Payable to others 12,903 7,786

Deposits from employees and others 714 95 Other liabilities 2,024 1,082

15,641 8,964 * Includes amount payable to companies under the same management maximum balance outstanding & year end balance Rs.5,554 & Rs.942 in thousand respectively. (Previous year Rs.6604 & Rs.2314 in thousand respectively)

SCHEDULE 11: PROVISIONS

Provision for Tax (Net of Advance tax/tax deducted at source Rs. 16,366 in thousand, (Previous year Rs.10891 in thousand))

(6,465) 778

Provision for Fringe Benefit Tax (net of advance fringe benefit tax Rs. 1,138 in thousand, (Previous year Rs.1138 in thousand))

88 88

Provision for Wealth Tax – 8 Provision for Premium on redemption of preference shares 85,068 37,370 Provision for Gratuity 286 291 Provision for Long term compensated absences 1,801 865

80,778 39,400

SCHEDULE 12: MISCELLANEOUS EXPENDITURE (to the extent not written off or adjusted)

Share issue expensesBalance as per last account 14,623 14,623 Less: written off during the year (14,623) –

– 14,623

34


SCHEDULE 13: OTHER INCOME` in ‘000’

For the year ended 31.03.2011

Interest received on Fixed deposit (Gross, Tax deducted at source Rs. 4,868 in thousand) 48,688 Interest received from Subsidiary company (Gross, Tax deducted at source Rs.429 in thousand)

4,294

Other Interest (Gross, Tax deducted at source Rs. 177 in thousand) 1,774 Profit on sale of Fixed Assets (Net of Loss of Rs. NIL) 60

54,816

SCHEDULE 14: PERSONNEL EXPENSES

Salaries, wages and other related costs 13,234 Contribution to provident and other funds 525 Workmen and staff welfare expenses 143

13,902

SCHEDULE 15: OPERATING AND OTHER EXPENSES

Rent 3,758 Insurance 254 Travelling & conveyance expenses 5,012 Telephone 359 Business Promotion 1,685 Conveyance expenses 512 Car Running & Maint. exp- 312 Gift & Presentation 303 Audit fees 195 Repair & Maintenance 424 Book & Periodical 146 electricity expenses 562 Internet Charges 530 Legal & Professional 11,438 Miscellaneous expenses 2,451 Postage & Telegram 61 Printing & Stationery 434 Fees and subscription 2,017

30,453

SCHEDULE 16: FINANCIAL EXPENSES

Interest

– On term loans and debentures 60,591 – To banks for working capital – – To others – Bank charges 200

60,791

SCHEDULE 17: EARNING PER SHARE

Loss as per profit and loss account ( Rs in '000 ) (65,529)equity shares at the beginning of the year ( No's ) 135,594,428 equity shares at the end of the year ( No's) 151,914,420 Dilutive potential equity shares at the end of the year ( No's ) 965,592 Weighted average number of equity shares in calculating basic ( No's ) 144,045,054 Weighted average number of equity shares in calculating diluted No's ) 144,312,245 Basic earning Per Share ( in Rupees ) (0.455)Diluted earning Per Share ( in Rupees ) (0.455)Note : As the dilutive potential equity shares are anti-dilutive in nature as they reduce loss per equity share, they have not been considered for calculating diluted earning per share.

35

SCHEDULE – 18: SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS

A. SIGNIFICANT ACCOUNTING POLICIES

(1) BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The financial statements have been prepared to comply in all material respects with the Accounting Standards notified by Companies (Accounting Standards) Rules, 2006, (as amended) 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.

(2) USE OF ESTIMATES

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. 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.

(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 the principles given under AS-26- Intangible Assets. These are grouped and separately shown under the schedule of Fixed Assets.

(5) DEPRECIATION/AMORTISATION

Depreciation is provided on fixed assets over the useful lives of the assets estimated by the management, which are equivalent to the rates prescribed in Schedule XIV to the Companies Act, 1956. The following methods of depreciation are used by the Company for fixed assets:

Software Written down value method at the rate of 40% per annum based on its estimated useful life

Remaining Fixed Assets Written Down Value Method at the rates prescribed in Schedule XIV to the Companies Act, 1956

Intangible assets are amortized over their expected useful life, not exceeding ten years.

(6) 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 are reversed where the recoverable amount increases because of favorable 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.

(7) 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.

(8) LEASES

Where the company is lessee

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased

36


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.

Where the company is Lessor

Assets subject to operating leases are included in fixed assets. Lease income is recognized in the Profit and Loss Account on a straight-line basis over the lease term. Costs including depreciation are recognized as an expense in the Profit and Loss Account. Initial direct costs such as legal costs, brokerage costs, etc. are recognised immediately in the Profit and Loss Account.

(9) GOVERNMENT GRANTS AND SUBSIDIES

Grants and subsidies from the government are recognised when there is reasonable assurance that the grant/subsidy will be received and all attaching conditions will be complied with.

When the grant or subsidy relates to an expenses item, it is recognized as income over the periods necessary to match them on a systematic basis to the cost, which is intended to compensate.

Where the grant or subsidy relates to an asset , its value is deducted from the gross value of the asset concerned in arriving at the carrying amount of the related asset.

(10) BORROWING COSTS

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

(11) SEGMENT REPORTING

Identification of segments

The Company’s operating businesses are organized and managed separately according to the nature of activities and services provided, with each segment representing a strategic business unit distinct from other business units. The analysis of geographical segments is based on the areas in which major operating divisions of the Company operate.

Inter segment Transfers

The Company generally accounts for intersegment sales and transfers as if the sales or transfers were to third parties at current market prices.

Allocation of common costs

Common allocable costs are allocated to each segment on reasonable basis.

Unallocated items

It Include general corporate income and expense items which are not allocated to any business segment.

Segment Policies

The company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the company as a whole.

(12) EMPLOYEE BENEFITS

expenses and liabilities in respect of employee benefits are recorded in accordance with Accounting Standard 15 – “employee Benefits”.

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.

Gratuity(b)

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.

37

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.

Leave Encashment(c)

Long term compensated absences are provided for based on actuarial valuation at the year end. The actuarial valuation is done as per projected unit credit method.

Other Short Term Benefits(d)

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) VALUATION OF INVENTORIES

Inventories comprising of explosive stock are valued at lower of cost and net realizable value. Cost is determined on weighted average basis.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

(14) INVESTMENTS

Investments that are readily realizable 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 for each category separately. Long-term investments are carried at cost on individual investment basis. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments in case of long term investments.

(15) REVENUE RECOGNITION

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the amount can be reliably measured.

Interest

Interest is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

Dividend

Dividend on investment with mutual funds and others is recognized on declaration basis.When the right to receive payment is established.

(16) 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; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

(iii) Exchange Differences

exchange differences arising on a monetary item that, in substance, form part of the company’s net investment in a non-integral foreign operation is accumulated in a foreign currency translation reserve in the financial statements until the disposal of the net investment, at which time they are recognized as income or as expenses.

exchange differences arising on the settlement of monetary items not covered above, or on reporting such monetary items of company at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise.

38


(17) TAXES ON INCOME

Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred tax reflects 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 and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the taxes on income levied by same governing taxation laws. Deferred tax assets are recognized 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 realized. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.

At each balance sheet date the Company re-assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realized.

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 realized. 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 recognized 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 Company will pay normal Income Tax during the specified period.

(18) EARNING PER SHARE

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. 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 period. The weighted average number of equity shares outstanding during the period is adjusted for events of bonus issue, bonus element in a rights issue to existing shareholders, share split and reverse share split (consolidation of shares).

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.

(19) PROVISIONS & CONTINGENT LIABILITIES

Provisions are made when the present obligation as a result of a past event gives rise to a probable outflow, (a)embodying economic benefits on settlement, and the amount of obligation can be reliably estimated.

Contingent Liability is disclosed after careful evaluation of facts, uncertainties and possibility of (b) reimbursement, unless the possibility of an outflow of resources embodying economic benefits is remote.

Provisions and Contingent Liabilities / Assets are reviewed at each Balance Sheet date and adjusted to (c)reflect the current best estimates. However contingent assets are neither accounted for nor disclosed in Accounts.

(20) 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.

39

NOTES TO ACCOUNTSB.

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 Rs. 106,500/- in thousand. (Previous Year Rs.106,500/- in thousand).

Liability on Account of Investments committed in Green Ventures Pvt. Ltd. Nepal, and remaining unpaid (b) is Nepali Rs.1667/- in thousand (equivalent to INR 1042/- approx in thousand).(Previous year Nepali Rs. 1667/- in thousand ( equivalent to INR 10,42/- approx. in thousand).

The Company has provided Guarantee in favour of International Finance Corporation ( IFC ) with HeG (c)Ltd. and RSWM Ltd. on joint and several basis on behalf of AD Hydro Power Ltd. for Rs 60,000 in thousand (Previous Year Rs 60,000 in thousand).

2. Capital contracts remaining to be executed on capital account and not provided for as on the date of Balance Sheet (net of advances) are Rs.28,21,320 in thousand (Previous Year Rs.11,35,032/- in thousand)

3. On May 26, 2009 Company had issued 40,00,000, 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 there after and in such event redemption premium to be paid as per terms of issue.

In the absence of distributable profits, the coupon liability of 0.01% amounting to Rs. 74 in thousand (Previous year Rs 39/- in thousand) has not been provided in the books being in the nature of dividend. However, redemption premium has been provided for on proportionate basis.

4. (a) The company was incorporated with the object of commissioning and operating various power projects whether by itself or through Special Purpose Vehicles (SPV’s). upto the year ended March 31, 2010, the company had incurred direct and indirect project expenditure on some major hydroelectric projects including uBDC, Nyamjang Chhu and Chango Yangthang. During this period, all activities were related to projects and, therefore, all the indirect expenditure was classified and carried forward under pre-operative expenditure.

However, certain indirect expenditure not strictly related to project was also carried forward as mentioned in the preceding paragraph to be charged off to profit & loss account when the same is prepared. During the year, the company has inducted managerial personnel on the Board as well as strengthened its administrative setup to look at other opportunities in the power sector by way of diversification/expansion and other strategic avenues. However, techno-economic viability of these initiatives will take time to get established. In view of this, indirect expenditure including administrative expenses not strictly related to projects and incomes arising on surplus funds have been accounted for in profit & loss account. Accordingly, interest upto the period ended March 31, 2010 of Rs.45,601/- in thousand (on loans taken during this period) net of interest income of Rs.7,065/- in thousand and net of income tax Rs.2,188/- in thousand, to the extent it was not directly utilized for projects, has been charged off to profit & loss account under interest expense.

(b) The company’s management takes decision from time to time as regards the projects to be commissioned by the company and/or by the SPV’s. The projects are transferred to the SPV’s when relevant State Government and other approvals are received and the SPV is formed for the purpose. Accordingly, on receipt of approval from the Govt. of Arunachal Pradesh, the company’s Board has resolved to transfer the Nyamjang Chu HeP to the SPV namely NJC Hydro Power Ltd. and the direct and indirect expenditure incurred on the project upto March 31, 2011 has been transferred accordingly.

The relevant details are as under:-

(` in ‘000)Amount

Net Fixed Assets (Refer schedule no. 2) 3734 CWIP (including capital advances) 143448Project and Pre-Operative expenses*(pending allocation)

715850

Loans & Advances 2676Total Assets 865707Less: Current Liabilities 22777Net Assets 842931

40


*Detail of projects and pre operative expenses (pending allocation)

(` in 000’s)Salaries ,wages and bonus 27490Contribution to provident and other funds 1295Workmen and staff welfare expenses 1029Rent 4376Rates & taxes 29Insurance 161Repairs and maintenance 88042Travelling expenses 9396Conveyance 1453Vehicle running & hire charges 3871Communication expenses 540Audit Fees 223Advertisement 669Legal & professional charges 43071Fees & subscription 1015Stores consumption 1424Power and fuel 149Testing & Survey 667Consultancy charges 98099Project processing fee 11600Upfront premium 243080Miscellaneous expenses 23784Financial/bank charges 151869Depreciation 2518Total 715850

5. The Government of India promulgated an act namely the Micro, Small and Medium enterprises (Development) Act, 2006 which came into force with effect from October 2006.As per the Act, the Company is required to identify the Micro, Small and Medium enterprises 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 falls under the definition of ‘supplier’ as per the section 2(n) of the Act to the extent of information available with the company. In view of the above, the prescribed disclosures under Section 22 of the Act are not required to be made.

6. The Company has given undertaking to Yes Bank limited for term loan facilities of Rs.260,00,00 in thousand (Previous year Rs.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.

7. GRATUITY – DEFINED BENEFIT PLAN (AS-15-REVISED) (UNFUNDED)

The company has a defined gratuity plan. Gratuity is computed as 15 days salary, for every completed year of services or part thereof in excess of 6 months and is payable on retirement/termination/resignation. The benefits vest on the employee completing 5 year of services. The company makes the 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 summaries the components of net benefit expenses recognized in the ‘Project and preoperative expenses’ (pending allocation)’/’Personnel expenses’ and amount recognized in the balance sheet:

41

Net employee benefits expenses (recognized in employee cost) (` in ‘000’)

Particulars For the year endedMarch 31, 2011

For the year endedMarch 31, 2010

Current Service Cost 137 173Interest Cost On Benefit obligation 24 10expected return on plan assets – –Net Actuarial (Gain)/ Loss recognized in the period (165) (42)Past Service cost – –expenses recognized in the statement of profit & loss account/project and preoperative expenses (pending allocation)

(5) 142

Changes in the present value of the defined benefit obligation are as follows:(` in ‘000’)

Particulars As AtMarch 31, 2011

As AtMarch 31, 2010

Opening defined benefit obligation 291 149Interest cost on benefit obligation 24 10Current service cost 137 173Benefits paid – –Actuarial (gains)/ losses on obligation (165) (42)Closing defined benefit obligation 286 291

Changes in the fair value of plan assets are as follows:(` in ‘000’)

Particulars As AtMarch 31,2011

As AtMarch 31,2010

Opening fair value of plan assets – –expected return – –Contribution by employer – –Benefits paid – –Actuarial gains/ (losses) on obligation – –Closing fair value of plan assets – –

The principal assumptions used in determining gratuity for the Company’s plans are shown below:

Particulars As AtMarch 31,2011

As AtMarch 31,2010

Discount Rate 8.20% 8.10%expected rate of return on assets – –Future salary increase 5.00% 5.00%Withdrawal rate – –

The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market

Amounts for the current year and previous two years in respect of gratuity are as follows: (` in ‘000’)

Particulars For the year endedMarch 31,2011

For the year endedMarch 31,2010


Defined benefit obligation 286 291 149Plan assets – – –Surplus/ (deficit) (286) (291) (149)experience adjustment on plan liabilities 122 27 –experience adjustment on plan assets – – –

As the company has adopted AS 15 in the year 2008-09, the above disclosure as required under para 120 (n) have been made prospectively from the date the company has first adopted the standard.

42


Leave encashment liability (unfunded)

Profit & Loss Account

Net employee benefits expenses (recognized in employee cost) (` in ‘000’)

Particulars For the period yearMarch 31,2011


Current Service Cost 771 669Interest Cost On Benefit obligation 70 27expected return on plan assets – –Net Actuarial (Gain)/ Loss recognized in the period 367 (222)expenses recognized in profit & loss account/project and preoperative expenses (pending allocation)

1,208 474

Balance Sheet (` in ‘000’)

Particulars As At 31.03.2011

As At 31.3.2010

Fair value of plan assets at the end of the period – –Present value of obligation 1801 865Funded status – –excess of actual over estimated – –Net asset/(liability) recognized in the balance sheet (1801) (865)

Changes in the present value of the defined benefit obligation are as follows: (` in ‘000’)


As At 31.3.2010

Present value of obligation at the beginning of the period 865 391Interest cost 70 27Current service cost 771 669Benefits paid (273) –Actuarial (gains)/ losses on obligation 367 (222)Closing defined benefit obligation 1801 865

Changes in the fair value of the plan assets are as follows: (` in ‘000’)


As At 31.3.2010

Present value of plan assets at the beginning of the period – –expected return on the plan assets – –Contributions – –Benefits paid – –Actuarial (gains)/ losses on plan assets – –fair value of the plan assets as at the end of the period – –

The principal assumptions used in determining Leave encashment for the Company’s plans are shown below:

(` in ‘000’)


As At 31.3.2010

Discount Rate 8.20% 8.10%expected rate of return on assets - -Future salary increase 5.00% 5.00%

The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. The above information is certified by the actuary.

43

Amounts for the current year and previous two years in respect of Leave encashment are as follows:

(` in ‘000’)

Particulars For the year endedMarch 31, 2011



Defined benefit obligation 1.801 865 391Plan assets – – –Surplus/ (deficit) (1,801) (865) (391)experience adjustment on plan liabilities (382) 180 –experience adjustment on plan assets – – –

As the company has adopted AS 15 in the year 2008-09, the above disclosure as required under para 120 (n) have been made prospectively from the date the company has first adopted the standard

Defined Contribution Plan (` in ‘000’)

Contribution to Defined Plan, recognized as expenses for the year are as under



employer’s Contribution to Provident fund 1,390 830

8. MANAGERIAL REMUNERATION

Details of remuneration & perquisites of managerial personnel: (` in ‘000’)

Particulars For the year endedMarch 31,2011


Salary 4877 394Other perquisites 1,196 565

As the future liability on account of gratuity and earned leaves is provided on actuarial basis for the company a)as a whole, the amount pertaining to the directors is not ascertainable and hence, not included.

Perquisites have been considered as per taxable value as per Income Tax Act 1961.b)

In the absence of the profit, remuneration to the directors is paid within the limits prescribed in Schedule c)XIII to the Companies Act, 1956. Computation of profits under section 349 is, therefore, not applicable.

9. SEGMENTAL REPORTING

The company has only one segment of power generation identified in accordance with guiding principles enunciated in Accounting Standard AS-17 “Segment Reporting” notified pursuant to the Companies (Accounting Standard) Rules, 2006 and hence the segment information is not applicable.

10. Derivative instruments and foreign currency exposures.

(a) There is no foreign currency exposure outstanding as at the Balance Sheet date.

(b) Particulars of un-hedged foreign currency exposures as at the Balance Sheet date are NIL.

11. Movement of deferred tax items in accordance with Accounting Standard AS-22 ‘Accounting for Taxes on Income’ is as under:

(` in ‘000’)

Items of deferred tax Balances ason 1-4-2010

Charge/(credit)during the year

Balances ason 31-03-2011

Deferred Tax Assets – – 249

Net Deferred tax assets have not been accounted for in the absences of virtual certainty of realizing such assets against future taxable income.

12. On 21st December, 2010, the company has granted 10,68,820 stock options as per Bhilwara energy eSOP 2010 to its employees including those of subsidiary companies.

44


Bhilwara Energy Employee Stock Option Plan 2010

Salient features of the plan

Parameters/Terms of Grant explanationTotal number of options granted A total of 1,068,820 options are being awarded in the current

grant amounting to 0.70% of the total paid up capital as on the grant date.

Total number of options accepted 965,592Total number of options lapsed 103,228Categorization of employees All eligible employees as defined in the plan document.Fair Share Price Rs 82exercise price per option Rs 82Grant Date 21st December, 2010Vesting Period The options would vest in the grantee over a period of three

years from the date of grant.Vesting Schedule The options would vest as per the following schedule:

-20% of the options would vest at the end of 12 months from the date of grant.-30% of the options would vest at the end of 24 months from the date of grant.-50% of the options would vest at the end of 36 months from the date of grant.

Closing Date The closing date of the plan is two months from the date of grant. That is all award recipients need to accept the offer before this date.

exercise Period The exercise period for the options granted is effectively eight years from the date of grant. That is, all vested options should be exercised within this period.

exercise Conditions As per Bhilwara energy eSOP 2010 plan.

No accounting treatment has been made for eSOP in current accounting period as there is no difference in the fair price of the share and exercise price per option.

13. 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) AD Hydro Power Limited –Subsidiary of a Subsidiary.iii) Indo Canadian Consultancy Services Limited. –Subsidiary.iv) NJC Hydro Power Limited – Subsidiary.v) Bhilwara Green energy Limited – Subsidiary.vi) Green Ventures Private Limited, Nepal – Subsidiary.vii) Balephi Jalvidhyut Company Limited, Nepal – Subsidiary.

Associates and joint ventures of the reporting enterprise and the investing party or venturer in (b)respect of which the reporting enterprise is an associate or a joint venture;

HeG 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.

Mr. Ravi Jhunjhunwala Mr. Riju Jhunjhunwala Mr. Rishabh Jhunjhunwala

45

(d) Key Management Personnel and their relatives

Mr. Ravi Jhunjhunwala Mr. Riju Jhunjhunwala Mr. Rishabh Jhunjhunwala Mr. O.P.Ajmera (upto17/08/2010)

(e) Enterprises over which any person described in (c) or (d) is able to exercise significant influence.

(i) RSWM Limited (ii) Bhilwara Scribe Pvt. Ltd.(iii) Deepak Knits & Texturise Pvt. Ltd(iv) Maral Overseas Ltd.(v) Bhilwara Technical Textiles Ltd.(vi) BMD Pvt. Ltd.(vii) Bhilwara Infoway Pvt. Ltd.(viii) Bhilwara Services Pvt. Ltd.(ix) LNJ Bhilwara Textile Anusandhan Vikas Kendra(x) HeG Graphite and Service Ltd.(xi) Odetta Realty Pvt. Ltd.(xii) BSL Ltd.

The following transactions were carried out with the related parties in the ordinary course of business:

(` in ‘000’)31.03.2011 31.03.2010

i) Parties referred to in item (a) aboveequity Shares allotted during the year by:-(a) NJC Hydro Power Ltd.(b) Balephi Jalbidhyut Co. Ltd. Nepal

8,00,0001,19,354

500–

Services received 24,528 20,191Interest received 4,295 3,040Guarantee given (refer note no.1(c) above)OthersOutstanding payable 942 2,032Loans & Adv. - Amount receivable 3,52,464 252,630Reimbursement of expenses 7,404 –Investment as at year end.equity Shares in Malana Power Company Ltd. 18,10,338 18,10,338equity Shares in Indo Canadian Consultancy Services Ltd. 42,449 42,449equity Share in NJC Hydro Power Ltd. 8,00,500 500equity Share in Bhilwara Green energy Ltd. 245 –equity Shares in Green Venture Pvt. Ltd., Nepal 22,114 22,114equity Shares in Balephi Jalbidhyut Co. Ltd., Nepal 1,20,000 646Share Application Money (Pending Allotment)Green Ventures (P) Ltd. Nepal 229,281 149,231Balephi Jalbidhyut Co. Ltd. Nepal 235 44,565NJC Hydro Power Ltd. 42,931Undertaking (refer note no.6 above)

ii) Parties referred to in item (b) aboveGuarantee given (refer note no.1(c) above)Reimbursement of expenses to HeG Ltd – –Premium on Redemption of Preference Shares payable 85,068 37,370Dividend on Preference Shares payable 74 39expenses for the year on Redemption of preference share 47,698 37,370Reimbursement of expenses to HeG Ltd 57

46


(` in ‘000’)31.03.2011 31.03.2010

iii) Persons referred to in (c) & (d) aboveSalaries and perquisite paid/payable during the year to Mr. Riju Jhunjhunwala. 2,503 –

Salaries and Perquisite paid/payable during the year to Mr. Rishab Jhunjhunwala. 2,503 –

iv) Persons referred to in (d) aboveSalaries and Perquisite paid during the year to Mr. O.P Ajmera (upto 17/08/2010) 1,067 959

v) Persons referred to in (e) aboveOutstanding payable – 282Rent Paid to RSWM Ltd. 3,758 –Loans & Adv.-Amount receivable 373 –Reimbursement of expenses 3,107 –equity shares in Odetta Realty Private Ltd 100 –

14. Transactions in Foreign Exchange (` in ‘000’)

Sl.No.

Nature of Transaction For the year endedMarch 31,2011


1 Income Nil Nil2 expenditure (Foreign Travelling) 4,931 Nil3 Legal & Professional expenses reimbursement (Foreign) 8,180 1254 Consultancy Charges NIL 48,659

15. The company is paying rentals for office premises taken on rent which are not in the nature of lease agreements. Therefore, disclosure requirements of Accounting Standards AS-19 are not applicable.

16. Auditors’ Remuneration paid/payable during the year (` in ‘000’)

31.03.11 31.03.10Statutory Auditors Fee 165 165Other Services 375 371Reimbursement of expenses 15 24Total 555 521

Disclosure of other items as required by Part–II of Schedule–VI to the Companies Act, 1956 is not applicable.17.

Previous year figures have been regrouped and rearranged where necessary and confirm to this year 18. classification. With references to point no. 4 above, this is the first year when the company has prepared profit & loss account. Therefore, previous year figures are not applicable for profit & loss account.






47

CASH FLOW STATeMeNT AS AT MARCH 31, 2011

` in '000' PARTICULARS For the

year ended 31.03.2011

For t he year ended31.03.2010

CASH FLOW FROM OPERATING ACTIVITIESProfit/(Loss) Before Tax (65,529) – Adjustments for :Depreciation 576 – Interest Paid 60,591 – Interest received 46,990 – (Profit) / Loss on Sale of Fixed Assets (60)Preliminary exps Written off 14,623 Cash Generated from Operations (36,788) – Direct Taxes Paid (5,475) – Operating Profit before working capital changes (42,263) – Adjustments for Changes in Working Capital:Sundry Debtors – – Inventories 83 – Loans & advances /Other current assets (537,024) – Liabilities and provisions 13,082 – Net cash from operating activities (566,122)CASH FLOW FROM INVESTING ACTIVITIES Acquisition of Fixed Assets 693,839 (473,236)Sale of Fixed Assets 4,548 – Investments (919,758) (1,146)Interest Received 46,990 7,889 Net cash from investing activities (174,381) (466,493)CASH FROM FINANCING ACTIVITIES Proceeds from Issuance of equity Shares 2,273,375 – Proceeds from Issuance of Preference Shares – 400,000 Proceeds from Conversion of Warrants – 165,321 Share Issue expenses – (8,015)Long Term Borrowings (1,100,000) (1,090,000)Short Term Borrowings – 1,034,000 Interest Paid (60,591) – Proceeds from issue of capital in subsidiary to Minority – – Repayment of Share Application Money in subsidiary to Minority – – Addition in Security Premium – – Increase in Miscellaneous expenditure – Provision for Redemption of Preference Shares – (37,370)Net cash from financing activities 1,112,783 463,936 Net increase / (decrease) in cash and cash equivalents 372,280 (2,557)Cash and cash equivalents at the beginning of the year 28,490 31,047 Cash and cash equivalents at the end of the year 400,770 28,490 Components of cash and cash equivalents Cash on hand 419 312 With scheduled banks :In Current Accounts 30351 8,178 In Deposit Accounts 370,000 20,000 In Margin Money Account – –

400,770 28,490 As per our report of even date

For S. S. Kothari Mehta & CoChartered AccountantsFirm Registration No. : 000756N

Arun K. TulsianPartner

Membership No. 089907




48


I. REGISTRATION DETAILS

Registration No. u31101DL2006PLC148862 State Code 5 5

Balance Sheet Date 3 1 0 3 2 0 1 1

Date Month Year

II. CAPITAL RAISED DURING THE YEAR (Amount in ` Thousands)

Public Issue – Rights Issue –

Bonus Issue – Private Placement –

III. POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (Amount in ` Thousands)

Total Liabilities 4 5 7 7 5 1 8 Total Assets 4 5 7 7 5 1 8

SOURCES OF FUNDS

Paid-up Capital 1 9 1 9 1 4 4 Reserves and Surplus 2 5 6 1 9 5 5

Share Application Money – Deferred Tax Liability –

Warrants – Secured Loans –

unsecured Loans –

APPLICATION OF FUNDS

Net Fixed Assets 2 9 1 9 6 4 Investments 2 8 0 5 8 0 5(Incl. P.O.P. exps)

Net Current Assets 1 3 1 7 8 0 1 Misc. expenditure –

Profit & Loss debit balance 6 5 5 2 9

IV. PERFORMANCE OF COMPANY (Amount in ` Thousands)

Turnover / Other Income 5 4 8 1 6 Total expenditure 1 2 0 3 4 5

Profit/Loss before Tax ( 6 5 5 2 9 ) Profit/Loss after tax ( 6 5 5 2 9 )

earning Per Share in ` ( 0 . 4 5 5 ) Dividend Rate % N I L

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






49

NAME OF THE SUBSIDIARY MALANA POWER COMPANY LTD.

1. Financial Period ended March 31, 2011

2. extent of the interest of holding company 51% in equity share in the Subsidiary company

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 Nilthe accounts of the holding company.

b) Not dealt with or provided for in the Rs 22,09,39,140accounts 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


b) Not dealt with or provided for in the Rs 142,52,93,391accounts of the holding company.

STATeMeNT PuRSuANT TO SeCTION 212 OF THe COMPANIeS ACT, 1956, ReLATING TO SuBSIDIARY COMPANIeS




50


NAME OF THE SUBSIDIARY AD HYDRO POWER LIMITED (Subsidiary of M/s Malana Power Company Ltd.)


2. extent of the interest of holding 44.88% in equity shares company in the Subsidiary company

3. Shares held by the holding company 25,14,07,376 equity shares of Rs 10- each in the subsidiary through its subsidiary fully paid up (Indirectly through its M/s Malana Power Company Limited Subsidiary-M/s Malana Power Company Limited)


a) Dealt with or provided for in Rs (50,55,88,459)the accounts of the holding company.

b) Not dealt with or provided for in the NILaccounts of the holding company.



b) Not dealt with or provided for in the Nilaccounts of the holding company.





51

NAME OF THE SUBSIDIARY INDO CANADIAN CONSULTANCY SERVICES LTD.

1 Financial Period ended March 31, 2011

2 extent of the interest of the holding company in 51% in equity shares the Subsidiary Company

3 Shares held by the holding company in subsidiary 1,80,200 equity shares of Rs.10/- each fully paid up.



b) Not dealt with or provided for in the Rs (1,49,79,585)accounts of the holding company.



b) Not dealt with or provided for in the Rs (32,17,785)accounts of the holding company.





52



NAME OF THE SUBSIDIARY NJC HYDRO POWER LIMITED


2. Holding Company’s interest 100% in equity shares

3 Shares held by the holding company in subsidiary 8,00,50,000 equity shares of Rs.10/- each fully paid up.



b) Not dealt with or provided for in the N.A.accounts of the holding company.







53

NAME OF THE SUBSIDIARY BHILWARA GREEN ENERGY LTD.


2. extent of the interest of holding company 100% in equity share in the Subsidiary company

3. Shares held by the holding company in subsidiary 500,700 equity Shares of Rs.10/- each fully paid.



b) Not dealt with or provided for in the Rs (29) accounts of the holding company.



b) Not dealt with or provided for in the Nilaccounts of the holding company.





54



NAME OF THE SUBSIDIARY GREEN VENTURE PVT LTD., NEPAL


2. extent of the interest of holding company in 63.33% in equity shares the subsidiary company

3. Shares held by the holding company in subsidiary 1,90,000 equity shares of Nepali Rs.100/- each fully paid up.










55

NAME OF THE SUBSIDIARY BALEPHI JALBIDHYUT COMPANY LTD., NEPAL


2. extent of the interest of holding company 94.55% in equity shares in the subsidiary company

3. Shares held by the holding company in subsidiary 19,20,000 equity shares of Nepali Rs.100/- each fully paid up.











56


AUDITORS’ REPORT

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 (‘the Company’) and its subsidiaries (Collectively referred to as “the Group”) as at 31ST March, 2011, the Consolidated Profit and Loss account and the Consolidated Cash Flow Statement (the Consolidated Financial Statements) for the year ended on that date, annexed thereto. These consolidated financial statements are the responsibility of the company’s management and have been prepared by the management on the basis of separate financial statements and other financial information regarding subsidiaries. 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. 27,764,416 in thousands (Previous Year Rs. 27,198,610 in thousands) as at 31st March, 2011, total revenues of Rs. 2,138,762 in thousands (Previous Year Rs. 2,098,568 in thousands) and total cash flows of Rs. (6562.40) in thousands (Previous Year Rs. 472,914 in 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 the 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 auditor of one of the subsidiaries AD Hydro Power Limited have mentioned in their audit report without qualifying the report that, attention is invited to Note 17 of Schedule 21 of the financial statements, regarding management’s assessment of carrying amount of the fixed assets of the Company. Based on financial projections (including the power tariff) arrived at after considering past experience of running similar power projects and renewable source of fuel, the company believes the profits are expected to accrue once the entire project commences full commercial operation in the next year and hence, no adjustments are required to be carrying amount of fixed assets on account of impairment. In the absence of external evidence of such future projections (including those related to assumptions of projected tariff), they have relied upon management’s assessment.

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:

In the case of Consolidated Balance Sheet, of the a)consolidated state of affairs of “the Group” as at 31st, March 2011;

In the case of Consolidated Profit & Loss account, b)of the consolidated results of operations of “the Group” for the year ended on that date; and

In the case of Consolidated Cash Flow Statement, c)of the consolidated cash flows of “the Group” for the year ended on that date.

For S.S. KOTHARI MEHTA & CO.Chartered AccountantsFirm Reg. No. 000756N

(Arun K. Tulsian)PartnerMembership No. 089907Place: New DelhiDated: 2nd September, 2011

57

` in ‘000’


As at 31.03.2010

SOURCES OF FUNDSShare Capital 1 1,919,144 1,755,944 Reserves and Surplus 2 4,784,608 3,090,042 Minority Interest 4,636,350 5,036,299 Loans 3 12,830,441 12,759,315 Deferred Tax Liability (net) 4 210,288 216,837 Total 24,380,831 22,858,437 APPLICATION OF FUNDSGross Block 5 19,961,097 4,308,734 Less: Depreciation 2,039,783 1,598,005 Net Block 17,921,314 2,710,729 Capital Work In Progress (Including Capital Advances) 2,262,188 12,770,296 Project & Pre-operative Expenses (Pending Allocation) 6 2,398,047 7,116,379

22,581,549 22,597,404 Investments 7 10,169 10,646 Current Assets, Loans & AdvancesSundry Debtors 8 113,747 97,108 Inventories 9 176,571 197,140 Cash and Bank Balances 10 990,752 610,176 Other Current Assets 11 294,255 23,798 Loans and Advances 12 1,024,956 435,619

2,600,281 1,363,841 Less: Current Liabilities and ProvisionsLiabilities 13 653,566 1,053,855 Provisions 14 164,210 94,259

817,776 1,148,114 Net Current Assets 1,782,505 215,727 Miscellaneous Expenditure 15 6,608 34,660 (to the extent not written off or adjusted) Total 24,380,831 22,858,437 Notes to Accounts 21The Schedules referred to above form an integral part of the Balance Sheet.

CONSOLIDATED BALANCE SHEET AS AT 31st MARCH, 2011





Riju Jhunjhunwala Managing DirectorRishabh Jhunjhunwala Managing DirectorRavi Gupta Company Secretary

58


CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31st MARCH, 2011

` in ‘000’Schedules For the

Year Ended 31.03.2011

For the Year Ended 31.03.2010

INCOMETurnover 1,910,276 1,704,334 Add : Unscheduled Interchange Charges (net) 18,433 (13,391)Less : Discount on Prompt Payments (36,091) (31,997)Less : Handling Charges (11,625) (7,326)Turnover (net) 1,880,993 1,651,620 Other Income 16 312,585 446,948 TOTAL 2,193,578 2,098,568 EXPENDITUREWheeling Cost 135,347 15,434 Personnel Expenses 17 233,635 105,021 Operating and Other Expenses 18 464,726 194,582 Provision against Upfront Premium / Other Expenditure for Bara Banghal (refer note 26 of Schedule 21B)

359,771 –

Depreciation 5 757,526 205,603 Financial Expenses 19 923,041 427,104 TOTAL 2,874,046 947,744 Profit Before Tax and Prior Period Items (680,468) 1,150,824 Prior Period Expense (Travelling Expense) 1,722 Prior Period Income (Represents Surrender Value of Keyman Insurance Policy)

– 29,531

Profit Before Tax (682,190) 1,180,355 Current Tax (Including Rs. 1,198 Thousand Pertaining to Earlier Years)

112,581 204,146

Deferred Tax Charge / (Credit) (6,550) (4,332)Total Tax Expense 106,031 199,814 Net Profit (788,221) 980,541 Less: Minority Interest (423,041) 480,465 Profit for the Year (365,180) 500,076 Balance Brought Forward from Previous Year 1,177,162 674,252 Profit Available for Appropriation 811,982 1,174,328 APPROPRIATION:Transfer to/(from) Debenture Redemption Reserve (5,556) (5,556)Transfer to/(from) Minority Interest for Share of above 2,722 2,722 Total (2,834) (2,834)Balance Carried Forward 814,816 1,177,162 Earnings Per Share (in Rs.) 20– Basic (2.54) 3.97 – Diluted (2.54) 3.97 Notes to Accounts 21The Schedules referred to above form an integral part of the Profit & Loss Account.






59

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET

SCHEDULE 1: SHARE CAPITAL ` in ‘000

As at 31.03.2011

As at 31.03.2010

Authorised200,000,000 (Previous year 200,000,000) Equity shares of ` 10 each 2,000,000 2,000,000

4,000,000 (Previous year 4,000,000) Cumulative Redeemable Preference Shares of ` 100/– each

400,000 400,000

Issued, Subscribed and Paid up 1,51,914,420 (Previous year 1,35,594,428) Equity shares of ` 10 each

fully paid up 1,519,914 1,355,944

4,000,000 (Previous year 4,000,000) 0.01% Cumulative Redeemable Preference share of ` 100/– each fully paid up

400,000 400,000

1,919,144 1,755,944Of the above :a) Nil (Previous Year 45,198,143) equity shares have been issued as fully paid bonus shares by capitalisation of

securities premium account.

SCHEDULE 2: RESERVES AND SURPLUS

Capital Reserve on Consolidation (net) - Opening 1,399,512 1,399,512 Capital Reserve on acquisition of M/s Bhilwara Green Energy Limited (formerly known as M/s Bhilwara Mannvit Green Energy Limited)

8 –

Capital Reserve on Consolidation (net) - Closing 1,399,504 1,399,512 Capital Reserve:Opening Balance 1,012 – Add: Warrant money forfeited during the year – 1,012 Closing Balance 1,012 1,012 Securities Premium Account:Opening Balance 498,467 987,818 Add: During the year 2,110,175 – Less: Utilised for issue of bonus shares during the year – 451,981 Less: Provision for premium on redemption of preference shares 47,699 37,370 Closing Balance 2,560,943 498,467 Debenture Redemption Reserve Account:Opening Balance 13,889 19,445 Transferred (to)/from Profit and Loss Account (5,556) (5,556)Closing Balance 8,333 13,889 Consolidated Profit & Loss Account 814,816 1,177,162

4,784,608 3,090,042

SCHEDULE 3: LOANS

Secured LoansRedeemable Non-Convertible Debentures of Rs.1,000 thousand each 33,333 55,555 Term Loans From Banks 9,933,553 10,553,760 From Others 2,863,555 2,150,000

12,830,441 12,759,315 12,830,441 12,759,315

60


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 installments 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 833 thousand (previous year Rs 722 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 Bhilwara Energy Limited, term loan is secured by way of pledge of Nil shares (Previous year 33,898,607 Equity Shares) held by Promoter Group in the company and first charge by way of hypothecation on the movable assets of the company.

3. Debentures and loans and advances from banks aggregating to Rs. 1,518,712 thousand (Previous year Rs. 2,187,467 thousand) are repayable within one year.

SCHEDULE 4: DEFERRED TAX LIABILITY (Net) ` in ‘000

As at 31.03.2011

As at 31.03.2010

Difference in depreciation and other differences in Block of Fixed Assets as Per tax books and financial books

225,194 226,327

Income Taxable on Receipt 342 258 Gross Deferred Tax Liabilities 225,536 226,585 Gross Deferred Tax Assets 15,248 9,748 Deferred Tax Liability (Net) 210,288 216,837 Note: In case of holding company, net deferred tax asset have not been recognized in the absence of virtual certainty of realising such assets against the future taxable income.

SCHEDULE 5: FIXED ASSETS ` in ‘000’

GROSS BLOCK DEPRECIATION NET BLOCKAs at

31.03.2010Additions New

SubsidiarySale /

AdjustmentAs at

31.03.2011Upto

31.03.2010For The

YearNew

SubsidiarySale /

TransferUpto

31.03.2011As at

31.03.2011As at

31.03.2010Land - Freehold 51,664 313,051 3,172 – 367,887 – – – – – 367,887 51,664 Civil Works 1,847,265 5,989,395 – – 7,836,660 625,253 333,476 – – 958,729 6,877,931 1,222,012 Roads & Building 481,649 1,158,748 – – 1,640,397 77,537 66,480 – 42 143,975 1,496,422 404,112 Plant & Machinery 958,084 4,859,747 – – 5,817,831 384,354 229,754 – – 614,108 5,203,723 573,730 Transmission Lines 199,670 3,899,242 – – 4,098,912 91,142 120,403 – – 211,545 3,887,367 108,528 Electrical Equipment 32,527 2,022 – – 34,549 6,347 1,681 – 62 7,966 26,583 26,180 Vehicles 45,528 7,877 5,301 3,973 54,733 23,756 7,274 717 3,157 28,590 26,143 21,772 Furniture & Fixtures 29,366 1,901 931 – 32,198 15,975 3,435 168 56 19,522 12,676 13,391 Other Equipments 21,684 1,952 162 26 23,772 11,340 1,662 52 81 12,973 10,799 10,344 Computers 21,668 741 261 67 22,603 17,657 1,886 97 165 19,475 3,128 4,011 Project Equipment 598,422 26,462 – 615,311 9,573 325,131 70,554 – 392,831 2,854 6,719 273,291 Software 21,207 775 – – 21,982 19,513 533 – – 20,046 1,936 1,694 Total 4,308,734 16,261,913 9,827 619,377 19,961,097 1,598,005 837,138 1,034 396,394 2,039,783 17,921,314 2,710,729 Capital Work In Progress

2,262,188 12,770,296

Total 4,308,734 16,261,913 9,827 619,377 19,961,097 1,598,005 837,138 1,034 396,394 2,039,783 20,183,502 15,481,025 Previous Year 4,138,181 179,931 9,378 4,308,734 1,199,856 401,197 3,048 1,598,005 15,461,929 13,716,552 Depreciation Transferred to Pre-Operative Expenditure Account

79,612

Previous Year 195,5941) Road & Building includes cost of road Rs. 122,838 thousand (Previous year 122,838) 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 constructon of Trasmission towers under irrevocable right to use.3) Gross Block of Transmission LIne includes payment for "Right to Use" amounting to Rs. 525,398 thousand. 'Right to use' is a irrevocable

perpetual right of use of land, but the ownership of land does not vest with the Company.

61

SCHEDULE 6: PROJECT & PRE-OPERATIVE EXPENSES* (PENDING ALLOCATION) ` in ‘000

As at 31.03.2011

As at 31.03.2010

Personnel ExpensesSalaries, Wages and Bonus 166,581 541,805 Contribution to Provident, Gratuity and Other Funds 10,987 43,721 Workment and Staff Welfare Expenses 8,870 39,424 Total (A) 186,438 624,950 Administrative & Other ExpensesExpenditure on Forest Land 51,212 269,538 Rent 23,352 64,999 Rates & Taxes 1,337 399 Insurance 24,469 139,050 Repair & Maintenance 96,177 124,770 Stores Consumption 50,266 192,797 Traveling Expenses 32,975 89,590 Conveyance 7,143 24,138 Equipment Hiring Charges 48,350 Vehicle Running & Hiring Expenses 33,756 149,065 Communication Expenses 5,810 22,219 Directors Remuneration 2,541 12,024 Audit Fees 1,899 7,119 Donations and Contributions (other than to Political Parties) 974 3,591 Advertisement 1,034 678 Legal & Professional Charges 117,370 207,895 Fee & Subscription 2,535 6,116 Power & Fuel 11,082 17,696 Testing and Surveys 11,896 39,636 Consultancy Charges 407,313 924,696 Project Processing Fee 269,206 254,683 Miscellaneous Expenses 121,134 766,884 Financial & Bank Charges [refer note no. 7 (a) of Schedule 21B] 287,157 431,839 Fringe Benefit and Wealth Tax 2,512 16,692 Interest 528,473 2,457,308 Depreciation 98,878 384,079 Total (B) 2,238,851 6,607,501 Total (A+B) 2,425,289 7,232,451 Less: Interest Earned (Tax Deducted at Source Rs. 120 thousand, previous year Rs. 1,310 thousand) (net of provision for income tax Rs. 140 thousand, previous year Rs. 10,324 thousand)

11,963 88,359

Less: Profit on Sale of Fixed Assets 1,387 788 Less: Scrap Sale / Misc. Income 13,892 26,925 Total 2,398,047 7,116,379

*Net of expenses transferred to subsidiary company NJC Hydo Power Limited [refer note no 7 (b) of Schedule 21B] and net of expenses capitalized (including interest and financial / bank charges) with relevant fixed assets in ADHPL [refer note no. 11 and 14 of schedule 21B]

4) Addition in case of ADHPL include expenditure during the construction period amount to Rs. 5,652,395 thousands (Previous Year Rs. Nil) capitalised under the following heads:

Amount (Rs. '000)Road & Building 415,598Civil Works 2,355,665Transmission Lines 974,371Plant & Machinery 1,906,761Total 5,652,395

5) Addition in gross block and depreciation under new subsidiary represents assets of the companies existing at the beginning of financial year which became subsidiaries during the year.

62


SCHEDULE 7: INVESTMENTS ` in ‘000

As at 31.03.2011

As at 31.03.2010

Trade - Long Term, at CostUnquoted - Fully Paid40,000 (Previous Year 40,000) Equity Shares of Rs. 100/- each of Green Venture Renewable India Pvt. Ltd.

10,000 10,000

1,920,000 (Previous Year 10,333) Equity Shares of Rs. 100/- each fully paid up of Balephi Jalbidyut Company Ltd. (Incorporated in Nepal) *

– 646

10,000 (Previous Year Nil) Equity Shares of Rs. 10/- each fully paid up of Odetta Realty Private Limited

100 –

Non Trade - CurrentQuoted489 (Previous Year Nil) Equity Shares of Rs. 10/- each of Punjab & Sind Bank

59 –

Investment in Other Listed Shares 10 – 10,169 10,646

Aggregate Book Value of Investments:Unquoted 10,100 10,646 Quoted 69 – Total 10,169 10,646 * During the year, the said company became the subsidiary company so it has been eliminated while doing the consolidation.

SCHEDULE 8: SUNDRY DEBTORS (UNSECURED, CONSIDERED GOOD)Outstanding for a Period Exceeding Six Months Considered good 38,781 34,631 Considered doubtful 1,437 –Less: Provision 1,437 – Net 38,781 34,631 Other Debts 74,966 62,477

113,747 97,108

SCHEDULE 9: INVENTORIESStores and Spares (Including Material Lying With Third Parties Rs. 2,883 Thousand, Previous Year Rs. 67,772 Thousand)

172,079 197,140

Scrap 4,492 – 176,571 197,140

SCHEDULE 10: CASH & BANK BALANCESCash in hand 1,583 3,366 Balances with Scheduled Banks: In Current Accounts 584,851 175,473 In Fixed Deposit Accounts 393,739 425,557 In Margin Money Account 10,579 5,780

990,752 610,176 Note: Fixed Deposit and Margin Money include Rs. 5,768 Thousand (Previous Year Rs. 400 Thousand) Pledged with Government departments and others.

SCHEDULE 11: OTHER CURRENT ASSETSInterest Accrued on Deposits and Others 11,945 3,415 Surrender Value of Keyman Insurance Policy 1,021 767 Fixed Assets (Project Equipment) held for Sale (at Net Book Value or Estimated Net Realisable Value whichever is Lower)

223,307 –

Advance Tax & TDS (Net of Provisions of Rs 625,525 Thousand (Previous Year Rs. 472,822 Thousand))

57,982 19,616

294,255 23,798

63

SCHEDULE 12: LOANS AND ADVANCES ` in ‘000As at

31.03.2011 As at

31.03.2010Unsecured, considered good Loans to Employees 6,303 3,389 Loan to Body Corporates 23,630 22,176 Advances for Projects 294,290 289,136 Security Deposit with Government Department & Others 12,290 11,668 Other Advances Recoverable in Cash or in Kind or For Value To Be Received [(including capital advances to suppliers Rs. 313,480 thousands, (previous year Nil)]

382,443 64,685

Share Application Money (Pending for Allotment) – 44,565 Advance for Bara Banghal Project (including Rs. 53,771 thousand towards Consultancy and Other Expenses on the Project)

665,771 –

Less: Provision against Upfront Premium / Other Expenditure for Bara Banghal (refer note 26 of Schedule 21B)

(359,771) –

1,024,956 435,619

SCHEDULE 13: CURRENT LIABILITIESSundry Creditors(a) Outstanding Dues of Micro & Small Enterprises – – (b) Outstanding Dues of Creditors other than Micro & Small Enterprises 510,538 889,851 Advance from Customers 874 5,327 Deposits from Contractors and Others 49,376 83,291 Interest Accrued But Not Due on Loan from Instituitions 59,745 41,857 Other Liabilities 33,033 33,529

653,566 1,053,855

SCHEDULE 14: PROVISIONSProvision for premium on redemption of preference shares 85,068 37,370 Provision for Gratuity 7,542 1,403 Provision for Long Term Compensated Absences 25,762 14,898 Provision for Continuity Linked Bonus/ Superannuation 45,838 40,588

164,210 94,259

SCHEDULE 15: MISCELLANEOUS EXPENDITURE(to the extent not written off or adjusted)Share Issue ExpensesOpening Balance 34,660 26,626Add: Incurred During the Year 6,589 8,034Less: Expensed Off During the Period 34,641 – Closing Balance 6,608 34,660

64


SCHEDULES FORMING PART OF THE CONSOLIDATED PROFIT & LOSS ACCOUNT

SCHEDULE 16: OTHER INCOME ` in ‘000



Interest from Others (Gross, Tax Deducted at Source Rs. 34,011 Thousand (Previous Year Rs. 49,788 Thousand ) (See note below)

188,796 359,288

Interest on Bank Deposits (Gross, Tax Deducted at Source Rs. 5,980 Thousand, (Previous Year Rs. 203 Thousand))

55,271 1,227

Foreign Exchange Fluctuation (net) 6 8,012 Profit on Sale/Discard of Fixed Assets (net) 88 – Sale of Voluntary Emission Reductions 67,444 75,982 Unspent Liabilities Written Back 561 1,200 Surrender Value of Keyman Insurance Policy 254 767 Miscellaneous Income 165 472

312,585 446,948 Note: Interest Paid by Subsidiary Company Transferred to Pre-Operative Expenses.

SCHEDULE 17: PERSONNEL EXPENSESSalaries , Wages and Other Expenses 201,874 91,514 Contribution to Provident, Gratuity & Other Funds 16,822 4,494 Long Term Compensated Absences 4,195 3,195 Workmen and Staff Welfare Expenses 10,744 5,818

233,635 105,021

SCHEDULE 18: OPERATING AND OTHER EXPENSESPower and Fuel 18,252 5,982 Repairs and Maintenance – Plant and Machinery 106,729 51,920 – Civil Works 18,922 316 – Buildings 2,695 1,504 – Others 5,269 2,302 Rent 29,763 18,811 Rates and Taxes 63 3,344 Insurance 42,823 5,709 Traveling & Conveyance 24,006 9,914 Legal and Professional Expenses 33,728 6,054 Director's Remuneration 13,361 38,547 Commission to Managing Director 9,201 12,457 Auditor's Remuneration : – – – Audit Fee 1,740 908 – Fees for International Reporting 715 – – Fees for Special Audit 828 303 – Fees for Certification 786 276 – Out of Pocket Expenses 180 7 Open Access Charges 9,333 Loss on Fixed Assets Sold /Discarded (net) – 223 Foreign Exchange Fluctuation (net) 123 – Donations and Contributions (other than to Political Parties) 668 763 Expenses on Sale of Voluntary Emission Reductions (Including Commission)

18,412 15,453

Bad Debts (including provision) 6,485 3 Miscellaneous Expenses (includes material written off Rs. 5,830 thousand)

86,003 19,786

Miscellaneous Expenditure Written Off 34,641 464,726 194,582

65

SCHEDULE 19: FINANCIAL EXPENSES ` in ‘000



InterestOn Term Loans and Debentures 819,116 311,832 – To Banks 96,041 12,030 – To Others 3,723 198 Bank Charges Including Guarantee Commission and Processing Fees (Net of Upfront Fees / Commitment Charges Reimbursed by Subsidiary Company Rs Nil, (Previous Year Rs 8,273 thousand))

4,161 103,044

923,041 427,104

SCHEDULE 20: EARNING PER SHARENet Profit as Per Profit and Loss Account (365,180) 500,076 Equity Shares at the Beginning of the Year 135,594,428 72,994,082 Equity Shares at the End of the Year 151,914,420 135,594,428 Weighted Average Number of Equity Shares in Calculating Basic EPS 144,045,054 126,011,297 Potential Dilutive Shares 965,592 – Weighted Average Number of Equity Shares in Calculating Dilutive EPS 144,312,245 126,011,297 Basic Earnings Per Share (in Rupees) (2.54) 3.97Diluted Earnings Per Share (in Rupees) (2.54) 3.97Note: As the dilutive potential equity shares are anti-dilutive in nature as they reduce loss per equity share, they have not been considered for calculating diluted earning per share.

66


SCHEDULE - 21

SIGNIFICANT ACCOUNTING POLICIES & NOTES TO ACCOUNTS


Basis Of Preparation Of Financial Statements1. The financial statements have been prepared to comply in all material respects with the Accounting

Standards notified by Companies (Accounting Standards) Rules, 2006, (as amended) 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 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. 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 take substantial period of time to get ready for their intended use are also included to the extent they relate to the period till such assets are ready to be put to use.

Expenditure directly relating to construction activity is capitalized and apportioned to fixed assets on completion of the project. Indirect expenditure incurred during the construction period which is not related to the construction activity nor is incidental thereto has been charged to the Profit and Loss Account. Income earned during construction period is deducted from the total of the indirect expenditure.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 using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset.

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.Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

Depreciation6.Depreciation is provided on written down value method at the rates and in the manner prescribed in (i)Schedule – XIV to the Companies Act, 1956.Depreciation on software is provided on written down value method at the rate of 40% per annum (ii)based on its estimated useful life.Depreciation on Project equipments (net of their expected realizable value at the completion of the (iii)project) has been provided as per straight line method over the period upto the date of completion of the project.On the assets of generating unit and other Plant & Machinery, depreciation is provided on straight-line (iv)method at the rates based on their estimated useful lives, which corresponds to the rates prescribed in Schedule XIV to the Companies Act, 1956.Depreciation on Buildings is provided on straight-line method at the rates based on their estimated (v)useful lives, which corresponds to the rates prescribed in Schedule XIV of the Companies Act, 1956.

67

Depreciation on Roads constructed on land owned by the Company is provided on straight line (vi)method at the rates based on their estimated useful life of 10 years which is higher than the rates prescribed in Schedule XIV of the Companies Act, 1956, as under:

Rate (SLM) Schedule XIV Rate (SLM)

Roads 10.00% 3.34%

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.Sale of ElectricityRevenue 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 ServicesRevenue 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. Carbon Credit Entitlement

In process of generation of hydro-electric power, the Company also generates carbon emission reduction units which may be negotiated for price in international market under Clean Development Mechanism (CDM) subject to completing certain formalities and obtaining certificate of Carbon Emission Reduction (CER) as per Kyoto Protocol. Revenue from CER is recognised as and when the CER’s are certified and it is probable that the economic benefits will flow to the Company.

10. Borrowing CostBorrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

11. Expenditure Incurred During Construction PeriodPreliminary 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.

12. Miscellaneous Expenditure to the extent not written off or adjustedPreliminary / Share Issue Expenses are 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.

68


13. Employee Benefits Expenses and liabilities in respect of employee benefits are recorded in accordance with Revised

Accounting Standard 15 – Employee Benefits notified by Companies (Accounting Standards) Rules 2006, (as amended) and the relevant provisions of the Companies Act, 1956.

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 EncashmentLiability 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.

14. 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’, Deferred tax (b)Liability/Assets arising from timing differences between book and income tax profits is accounted for at the rate of tax substantively enacted by the balance sheet date 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.

15. Foreign Currency Transactions(i) Initial Recognition


(ii) ConversionForeign 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; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

(iii) Exchange DifferencesExchange differences arising on a monetary item that, in substance, form part of the company’s net investment in a non-integral foreign operation is accumulated in a foreign currency translation reserve in the financial statements until the disposal of the net investment, at which time they are recognized as income or as expenses.Exchange differences arising on the settlement of monetary items not covered above, or on reporting such monetary items of company at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise.

69

16. 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.

17. 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.

18. 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.


19. Cash & Cash Equivalents Cash & Cash Equivalents in the Cash Flow Statement comprises cash at bank and cash/cheque in hand

and term deposits with banks.

NOTES TO ACCOUNTSB.

Basis of Consolidation1. The Consolidated Financial Statements have been prepared by consolidating the financial statements of

the company with those of its subsidiaries as on 31st March 2011, in accordance with Accounting Standard 21 (AS 21) – Consolidated Financial Statements notified by Companies (Accounting Standard) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956.(a) The subsidiary companies considered in the consolidated financial statements are:

Name of Subsidiary Country of Incorporation

Proportion of OwnershipAs on 31st March 2011 (%)

NJC Hydro Power Limited (NJCHPL) India 100.0%Bhilwara Green Energy Limited (BGEL) India 100.0%Malana Power Company Limited (MPCL) India 51.0%Indo Canadian Consultancy Services Limited (ICCSL) India 51.0%AD Hydro Power Limited (ADHPL)(A subsidiary of Malana Power Company Limited)

India 44.9%

Balephi Jalbidhyut Company Limited (BJCL) Nepal 94.6%Green Ventures Private Limited (GVPL) Nepal 63.3%The financial statements of parent Company and its subsidiaries have been consolidated on line by (b)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.

70


In terms of the General Circular 2 of the Ministry of Corporate Affairs, Govt of India dated 8th February (c)2011, the information about the Subsidiaries are as under:-

(` ‘000)

Particulars / Subsidiaries

MPCL ADHPL ICCSL NJCHPL BGEL GVPL* BJCL*

Capital (including share application money)

1,475,257 5,601,528 3,533 843,430 501 342,515 137,979

Reserves 7,620,486 (1,126,534) 23,747 – (263) – –Total Assets 13,201,095 19,506,617 100,702 872,942 253 344,847 138,238Total Liabilities 4,105,352 15,031,623 73,422 29,512 15 2,342 259Investment (except in subsidiary)

– – – – – 10 –

Turnover 1,391,596 401,151 90,589 – – – –Profit before Taxation

5,40,301 (1,126,534) (30,427) – – – –

Provision for Taxation

107,087 – (1,055) – – – –

Profit after Taxation 433,214 (1,126,534) (29,372) – – – –Proposed Dividend – – – – – – –

Exchange Rate 100 INR (Indian Rupees) = 160 NPR (Nepali Rupees)*

Figures pertaining to the subsidiary companies have been reclassified wherever necessary to bring them (d)in line with parent company’s financial statements.Investments other than in subsidiaries have been accounted for in accordance with Accounting Standard (e)13 (AS 13) – Accounting for Investments.

2. CONTINGENT LIABILITIES Contingent liabilities not provided for:

(a) In case of holding company, 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 GVPL. –Nepal, and remaining unpaid is Nepali Rs. 1,667 thousand equivalent to INR approx. 1,042 thousand (Previous year Nepali Rs. 1,667 thousand equivalent to INR approx. 1,042 thousand).

(c) Guarantee given by MPCL for loans availed by ADHPL, subsidiary company, amounting Rs. 800,000 thousand (Previous year Rs. 800,000 thousand). Further holding company has provided guarantee in favour of International Finance Corporation (IFC) with HEG Limited and RSWM Limited on joint and several basis on behalf of ADHPL for Rs. 60,000 thousand (Previous year Rs. 60,000 thousand)

(d) Claims made against the Company not acknowledged as debts amounting to Rs.151,964 thousand (previous year 693,790 thousand)

(e) Bank Guarantees outstanding amounting to Rs. 6,094 thousand (previous year Rs. 6,094 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.

(f) In case of MPCL, in respect of assessment year 2008-09, the Assessing Officer had disallowed certain proportion of the expenses as expenses incurred towards the exempt income under Section 14A and other expenses of the Income Tax Act, 1961 (‘the Act’) amounting to Rs. 16,658 thousand and raised a demand of Rs. 1,584 thousand (Previous year Rs. Nil). The Company has preferred an appeal before Commissioner of Income Tax (Appeals) in respect of the said matter. Assessments for the subsequent years could include demands on the similar items, amounts whereof could not be ascertained. Based on expert analysis, management believes that this demand and any possible demand for other assessment years to be raised by Income Tax Authorities on similar grounds, is unlikely to crystallize and there is a fair chance of decision in its favour.

3. Estimated amount of contracts remaining to be executed on capital account as on the date of Balance Sheet (net of advances) are Rs. 5,543,909 thousand (Previous Year Figure Rs. 3,015,636 thousand).

4. During the year, holding company has given undertaking to Yes Bank limited for term loan facilities of

71

Rs.2,600,000/-in thousands (Previous Year Rs.2,600,000/-in thousands) availed by MPCL 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, holding 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 distributable profits, the coupon liability of 0.01% that amount to Rs. 74 in thousand (Previous year Rs. 39 in thousand) has not been provided in the books being in the nature of dividend. However, redemption premium has been provided for on proportionate basis.

6. There are no unprovided present obligations requiring provision in accordance with the guiding principles as enunciated in AS-29 as it is not probable that an outflow of resources embodying economic benefit will be required.(a) The holding company was incorporated with the object of commissioning and operating various power 7.

projects whether by itself or through Special Purpose Vehicles (SPV’s). Upto the year ended March 31, 2010, the company had incurred direct and indirect project expenditure on some major hydroelectric projects including UBDC, Nyamjang Chhu and Chango Yangthang. During this period, all activities were related to projects and, therefore, all the indirect expenditure was classified and carried forward under pre-operative expenditure. However, certain indirect expenditure not strictly related to project was also carried forward as mentioned in the preceding paragraph to be charged off to profit & loss account when the same is prepared. During the year, the company has inducted managerial personnel on the Board as well as strengthened its administrative setup to look at other opportunities in the power sector by way of diversification/expansion and other strategic avenues. However, techno-economic viability of these initiatives will take time to get established. In view of this, indirect expenditure including administrative expenses not strictly related to projects and incomes arising on surplus funds have been accounted for in profit & loss account. Accordingly, interest upto the period ended March 31, 2010 of Rs.45601/- in thousand (on loans taken during this period) net of interest income of Rs.7065/- in thousand and net of income tax Rs.2188/- in thousand , to the extent it was not directly utilized for projects, has been charged off to profit & loss account under interest expense.

(b) The holding company’s management takes decision from time to time as regards the projects to be commissioned by the company and/or by the SPV’s. The projects are transferred to the SPV’s when relevant State Government and other approvals are received and the SPV is formed for the purpose. Accordingly, on receipt of approval from the Govt. of Arunachal Pradesh, the company’s Board has resolved to transfer the Nyamjang Chu HEP to the SPV namely NJC Hydro Power Ltd. and the direct and indirect expenditure incurred on the project upto March 31, 2011 has been transferred accordingly. The relevant details are as under:-

(` in ‘000)(Amount)

Net Fixed Assets (Refer Schedule 5) 3,734CWIP (including capital advances) 143,448Project and Pre-Operative Expenses*(pending allocation)

715,850

Loans & Advances 2,676Total Assets 865,708Less: Current Liabilities 22,777Net Assets 842,931


Salaries, wages and bonus 27,490Contribution to provident and other funds 1,295Workmen and staff welfare expenses 1,029Rent 4,376Rates & taxes 29Insurance 161Repairs and maintenance 88,042Travelling expenses 9,396Conveyance 1,453

72



Vehicle running & hire charges 3,871Communication expenses 540Audit Fees 223Advertisement 669Legal & professional charges 43,071Fees & subscription 1,015Stores consumption 1,424Power and fuel 149Testing & Survey 667Consulting charges 98,099Project processing fee 11,600Upfront premium 243,080Miscellaneous expenses 23,784Financial/bank charges 151,869Depreciation 2,518Total 715,850

The subsidiary company, MPCL, is eligible for tax holiday under Section 80-IA of the Income Tax Act, 1961. 8.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.In case of ADHPL, Sundry Creditors for supplies and services amounting to Rs. 459,513 thousand, Advances 9.from contractors / suppliers amounting to Rs. 100,772 thousand and Inventories lying with contractors amounting to Rs. 50,067 thousand are subject to confirmation / reconciliation as at the year end or any time during the year. Subsequent to the year end, the management is in the process of seeking confirmation / reconciliation from these contractors / suppliers for the balances outstanding. In the opinion of the management, such advances/ inventory appearing as outstanding at year end are good of recovery, while the amounts payable are due and consequential adjustments required on reconciliation of the balances payable to / receivable from these contractors / suppliers will not be material in relation to the financial statements of the company. ADHPL has not undertaken reconciliation during the year with one of its key contractors / suppliers having 10.payables aggregating to Rs. 18,241 thousand, advances recoverable of Rs. 30,559 thousand and inventory lying with him of Rs. 28,382 thousand as at March 31, 2011. Subsequent to the year end, the management is in the process of seeking confirmation / getting reconciliation done for the balances outstanding. In the opinion of the management, 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.As ADHPL did not commence commercial operations as of March 31, 2010, no Profit and Loss Account was 11.prepared, but in lieu thereof, a statement of ‘Expenditure during construction period (pending capitalization)’ was prepared as per Schedule 6 and expenses incurred upto July 28, 2010 for the Allain side of the project, September 16, 2010 for the Transmission Line and March 31, 2011 for the Duhangan side of the project in relation to the construction of the project, have been included under the said Schedule, allocated / 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 in the financial statements of ADHPL.

12. In case of ADHPL,(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. Land includes Rs. 298,070 thousand paid for 12.51 hectares land, out of which mutation for execution of (b)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. Rs. 778,180 thousand paid to Divisional Forest Officer, Kullu on account of use of forest land measuring (c)264.36 hectares represents amount paid towards loss of environment value, compulsory afforestation, cost of tree felling and Catchment Area Treatment Plan.

ADHPL has signed a Quadripartite Agreement on 5th November, 2005 with Rajasthan Spinning & Weaving 13.Mills Ltd (RSWM) (the holder of Implementation rights /promoter), MPCL 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.

73

ADHPL has the necessary permission from the Government of Himachal Pradesh to own, operate & maintain the project and sell power for a period of forty years from the date of commercial operation i.e. July 29, 2010 with the option to avail a further extension for a maximum period of twenty years after renegotiation of terms and conditions. ADHPL has considered July 29, 2010 as the date of capitalization of Allain side of the project, based on the 14.Synchronization and Commercial Operation certificate issued by the Himachal Pradesh State Electricity Board (‘HPSEB’) for Unit 2 of Allain. The management further believes that such date of capitalization is appropriate, as the concession period of 40 years as per the agreement with State Government of Himachal Pradesh will commence from the said date. Further, the period between July 17, 2010 and July 28, 2010 has been considered as trial run period, which represents the period when the Company was conducting test runs of its project and thus, revenue of Rs. 31,668 thousand for this period has been deducted from ‘Expenditure during Construction period (pending capitalization)’.The date of capitalization of Transmission Line has been considered as September 16, 2010 i.e. the date when the Central Electricity Authority has certified the date of commissioning of Unit 1 of Allain side of the project.In case of ADHPL, the management is in process of carrying out detailed reconciliation of the variations in 15.actual and budgeted quantities of key items (viz. cement, steel, etc.) used in construction of the plant and believes that no material adjustments are likely to be recorded in the financial statements upon completion of such reconciliation exercise.In case of ADHPL, as per the terms of the Implementation Agreement signed with the State Government 16.of Himachal Pradesh on February 2, 2001, the project was scheduled to be completed within 105 months of entering into the said agreement i.e. the scheduled completion date of the project was October 2, 2009. Further, as per the agreement in case of delay in completion of the project, there was a disincentive in terms of additional free power to be given to State Government over the initially agreed 12% as under: “In the event that the commercial operation date of the project is delayed beyond the scheduled commercial operation date, the quantum of free electricity supply shall be as follows - 12% plus 0.2% for each period of 73 days or part thereof falling between the scheduled operation date of the project and the commercial operation date of the project”. The management believes that the delay in completion of project is due to factors outside the control of the Company and there is no additional obligation to supply free power over and above the 12% free power to HPSEB as per the agreement and no adjustments are deemed necessary to financial statements in this regard.In case of ADHPL, on account of various reasons beyond the control of the Company (like significant geological 17.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 Rs. 8,956,000 thousand to Rs. 20,212,820 thousand. Further, the Company has incurred a loss of Rs.1,126,534 thousand for the year ended March 31, 2011.

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 entire project commences full commercial operation in the next year (i.e. by March 31, 2012) and hence, no adjustments are required to the carrying amount of fixed assets on account of impairment. Further, management is of the view that despite such increase in estimated project cost and loss in the current year, the going concern assumption of the Company has not been vitiated.

18. 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 MPCL from its subsidiary ADHPL which has been added to Project and Preoperative Expenses in ADHPL. Similarly Interest received by holding company from its subsidiary MPCL has been reduced from Project and Preoperative Expenses in holding company. Consultancy charges received by ICCSL from holding company, ADHPL and MPCL have been added to Project and Preoperative Expenses in respective Companies.

19. Derivative instruments and un-hedged foreign currency exposures. Particulars of un-hedged foreign currency exposures as at Balance Sheet date are as follows:

Particulars 2010-11 2009-10Foreign Currency Loan Rs. 28,710,400 (USD 640,000 @

closing rate of 1USD=Rs. 44.86)Rs. 43,516,800 (USD 960,000 @ closing rate of 1USD=Rs. 45.33)

Advance for equipment Nil Rs. 2,846,356 (CHF 66,816 @ closing rate of 1CHF=Rs. 42.60

Creditor for Engineering Fees

Rs. 18,552,000 (CAD 400,000 @ closing rate of 1 CAD = Rs. 46.38)

Rs. 15,641,500 (CAD 350,000 @ closing rate of 1 CAD = Rs. 44.69)

Creditor for Supervisory Manpower Support

Rs. 14,194,696 (USD 316,422 @ closing rate of 1 USD = Rs. 44.86)

Rs. 19,571,401 (USD 431,754 @ closing rate of 1 USD = Rs. 45.33)

74


20. On 21st December, 2010, the company has granted 10,68,820 stock options as per Bhilwara Energy ESOP 2010 to its employees including those of subsidiary companies.

Bhilwara Energy Employee Stock Option Plan 2010Salient features of the plan

Parameters/Terms of Grant ExplanationTotal number of options granted A total of 1,068,820 options are being awarded in the current grant

amounting to 0.70% of the total paid up capital as on the grant date.Total number of options accepted 965,592Total number of options lapsed 103,228Categorization of employees All eligible employees as defined in the plan document.Fair Share Price Rs 82Exercise price per option Rs 82Grant Date 21st December, 2010Vesting Period The options would vest in the grantee over a period of three years from

the date of grant.Vesting Schedule The options would vest as per the following schedule:

-20% of the options would vest at the end of 12 months from the date of grant.-30% of the options would vest at the end of 24 months from the date of grant.-50% of the options would vest at the end of 36 months from the date of grant.

Closing Date The closing date of the plan is two months from the date of grant. That is all award recipients need to accept the offer before this date.

Exercise Period The exercise period for the options granted is effectively eight years from the date of grant. That is, all vested options should be exercised within this period.

Exercise Conditions As per Bhilwara Energy ESOP 2010 plan.No accounting treatment has been made for ESOP in current accounting period as there is no difference in the fair price of the share and exercise price per option.

21. In case of ICCSL,(a) Retention and earnest money deposit amounting to Rs. 715 thousands is outstanding for recovery from

various parties since long. However, the management is hopeful to recover this amount and no provision has been considered at present.

(b) Security deposit amounting to Rs. 312 thousands was given to a party is outstanding for recovery / adjustment since 2007. However, the management is hopeful to recover this amount and no provision has been considered at present.

22. 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(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. HEG 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.Mr. Ravi Jhunjhunwala

Mr. Riju Jhunjhunwala Mr. Rishabh Jhunjhunwala(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 (Upto 17TH August’ 2010)

75

(e) Enterprises over which any person described in (c) or (d) is able to exercise significant influence. SN Power Global Services Pte. Ltd. RSWM Limited Bhilwara Scribe Pvt. Ltd. Deepak Knits & Texturise Pvt. Ltd Maral Overseas Ltd. Bhilwara Technical Textiles Ltd. BMD Pvt. Ltd. Bhilwara Infoway Pvt. Ltd. Bhilwara Services Pvt. Ltd. LNJ Bhilwara Textile Anusandhan Vikas Kendra HEG Graphite and Service Ltd. Odetta Realty Pvt. Ltd. BSL Ltd. The following transactions were carried out with the related parties in the ordinary course of business:

Particulars 2010–11(Rs’000)

2009–10(Rs.’000)

With parties referred to in item (a) above Nil NilWith parties referred to in item (b) above

Security Premium on allotment of Shares- – –Consultancy Charges Paid- – 85,540Consultancy Services Rendered- 61 500Reim of Expenses Paid- 353 8,865Balance Receivable- 1,437 2,595Premium on Redemption of Preference Shares Payable - 85,068 37,370Dividend on Preference Shares Payable- 74 39Provision for the year for Redemption of preference - Shares

47,698 37,370

With parties referred to in item (c) aboveRemuneration Paid- 25,105 51,004Rent Paid- 2,830 3,418Balance Payable- 9,201 12,457

With parties referred to in item (d) aboveRent Paid- 4,288 3,775Remuneration Paid- 29,819 55,188Balance Payable- 9,201 12,457

With parties referred to in item (e) aboveRent Paid- 22,495 3,878Consultancy Services Rendered- 1,149 778Consultancy Services Received- 52,217 116,004Reimbursement of Expenses paid- 18,277 2,763Equity Shares in Odetta Realty Private Ltd.- 100 –Amount Receivable- 373 –Amount Payable- 31,113 49,034

23. AS-15 ‘EMPLOYEE BENEFITS’ Defined Contribution Plan Contribution to Defined Plan, being in the nature of short term benefit, recognized as expense for the year are

as under:

Particulars For the year ended on

March 31, 2011

For the year ended on

March 31, 2010 (Rs.’000) (Rs.’000)

Employer’s contribution to Provident Fund 11,739 10,813Employer’s contribution to Superannuation Fund 2,370 2,849

76


Gratuity: 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):


March 31, 2011


March 31, 2010 (Rs.’000) (Rs.’000)

Current Service Cost 3,151 2,473Interest cost on benefit obligation 1,093 965Expected return on plan assets (1,047) (861)Net actuarial (gain)/ loss recognised in the period 4,771 (1,616)Net benefit expense 7,968 961Actual return on plan assets 15 102

Balance Sheet Changes in the present value of the defined benefit obligation are as follows:

Particulars As at 31-Mar-11 (Rs.’000)

As at 31-Mar-10 (Rs.’000)

Opening defined benefit obligation 13,621 13,092Interest cost 1,093 965Current service cost 3,151 2,473Benefits paid (2,080) (2,364)Actuarial (gains)/ losses on obligation 4,704 (543)Closing defined benefit obligation 20,489 13,623

Changes in the fair value of plan assets are as follows:

Particulars As at31-Mar-11(Rs.’000)

As at31-Mar-10(Rs.’000)

Opening fair value of plan assets 12,935 10,775Expected return 1,047 861Contributions by employer 1,112 2,592Benefits paid (2,080) (2,365)Actuarial gains / (losses) (68) 1,072Closing fair value of plan assets 12,946 12,935

The Defined benefit obligation amounting to Rs. 20,489 thousand is funded by assets amounting to Rs. 12,946 thousand and the Company expects to contribute Rs. 7,543 thousand during the year 2011-12. Details of Provision for Gratuity in respect of current year and previous two years are as follows:

Particulars As at 31-Mar-11 (Rs.’000)

As at 31-Mar-10 (Rs.’000)

As at 31-Mar-09 (Rs.’000)

Defined benefit obligation 20,489 5,981 13,091

Fair value of plan assets 12,947 4,578 10,773

Plan asset / (liability) (7,542) (1,403) (2,020)

77


Principal Actuarial Assumptions


March 31, 2011(Rs.’000)


March 31, 2010(Rs.’000)


March 31, 2009(Rs.’000)

% % %Discount Rate 8.1 7.8 7.0Expected rate of return on assets 6.0 6.0 6.0Future Salary Increase 6.9 5.0 4.8Withdrawal rate 1 to 3 1 to 3 1 to 3

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.

Leave Encashment Liability Profit & Loss Net employee benefits expense (recognised in Employee Cost):

Particulars Earned Leave 31.03.11(Rs.’000)

Earned Leave 31.03.10(Rs.’000)


Current service cost 5,025 3,896 3,231Interest cost on benefit obligation 1,093 698 511Expected return on plan assets – – –Net actuarial loss (gain) recognized in the year

8,169 2,257 (993)

Net Expense recognized in the Profit & Loss A/c

14,287 6,851 2,749

Balance Sheet Changes in the present value of the defined benefit obligation are as follows:



Present value of obligations at the beginning of the period 13,602 9,549Interest cost 1,093 698Current service cost 5,025 3,896Benefits paid (2,129) (2,799)Actuarial (gain) / Loss on obligation 8,169 2,257Present value of obligations at the end of the period 25,760 13,601

Changes in the fair value of the plan assets are as follows:



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 – –

78


Details of Provision for Leave Encashment in respect of current year and previous two years are as follows:

PARTICULARS Earned Leave 31.03.11(Rs.’000)



Fair value of plan assets at the end of the period

– – –

Present value of obligations as at the end of the period

25,760 13,601 9,549

Funded Status – – –Excess of actual over estimated – – –Net Assets/ ( Liability) recognized in the balance sheet

(25,760) (13,601) (9,549)


Principal actuarial assumptions

PARTICULARS Rate (%)31.03.11 Rate (%)31.03.10 Rate (%)31.03.09a) Discount rate 8.1 7.8 7.0b) Future salary increase – – –c) Expected Rate of return on plan Assets 6.9 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.

24. Managerial Remuneration Details of remuneration and perquisites of managerial personnel:

Particulars For the year ended 31st March 2011

For the year ended 31st March 2010

Salaries 14,110 8,161Commission 9,201 12,457Rent paid 3,675 3,495Contribution to PF 735 699Other Perquisites (previous year includes assignment of keyman insurance policy)

2,098 30,376

Total 29,819 55,188 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 Director is not ascertainable and therefore, not included.

b) Perquisites have been considered as per taxable value as per Income Tax Act, 196125. Auditor Remuneration

Particulars 2010-11 2009-10Audit Fees 1,863 2,649Other Services 2,925 1,343Out of Pocket Expenses 339 170

26. In an earlier year, MPCL 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. 53,771 thousand in relation to this project. 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.As per the Himachal Pradesh State Hydro Policy, 2006, “The Developer will be permitted to withdraw from the Project after the conveyance of non – feasibility of the Project, if the Government is satisfied that the Developer has sufficient ground to establish that the Project is not techno – economically viable, without any liability on the Government of Himachal Pradesh for the expenditure incurred by the Developer. The security deposited at the time of signing of MOU shall be refunded without interest. 50% of the upfront premium shall also be refunded without interest”.

79

Pending the decision on application by the Supreme Court of India for grant of clearance of the project and in view of uncertainties related to such approvals and significant delays in respect of the project as stated above and in accordance with the terms of the Hydro Policy of the State, the Board of Directors have considered it prudent to make provision against 50% of the upfront premium of Rs. 306,000 thousand and entire expenses incurred of Rs. 53,771 thousand till date (i.e. total amount of Rs. 359,771 thousand) incurred till March 31, 2011 in respect of this project.

The Company has been advised by a tax expert that such provision is allowable for computation of book profits under Section 115JB of the Income Tax Act, 1961. The provision for income tax has been made on the aforesaid basis in the books of account.

27. Leases In case of assets taken on Operating Lease:

Particulars For the year ended March 31, 2011

For the year ended March 31, 2010

Lease payments for the year 41,137 41,137 The company is paying rentals for office premises taken on rent which are not in the nature of lease

agreements. Therefore, disclosure requirements of Accounting Standards AS-19 are not applicable 28. Segment Reporting as required by Accounting Standard (AS–17)

(Rs. In ‘000)Particulars 2010-11 2009-101 Segment Revenue

a) Power 1,792,747 1,566,725

b) Consultancy 90,589 84,895

Sub Total 1,883,336 1,651,620Less : Inter-segment Revenue 2,343 –Net Segment Revenue 1,880,993 1,651,620

2 Segment Results (Profit(+) / Loss(-) before Tax and interest from each segment)Profit before Taxa) Power (651,762) 1,194,484b) Consultancy (30,428) (14,129)

(682,190) 1,180,355Provision for Taxation– Current Tax & FBT 112,581 204,146– Deferred Tax (6,550) (4,332)Profit after tax (788,221) 980,541

3 Other Information I Segment Assets

a) Power 25,113,152 23,891,294b) Consultancy 100,702 122,590

Total Assets 25,213,854 24,013,884 II Segment Liabilities

a) Power 13,800,330 14,074,954b) Consultancy 73,422 65,939

Total Liabilities 13,873,752 14,140,893 III Capital Expenditure

(Including Capital work in Progress)a) Power 1,032,864 4,931,105b) Consultancy 2,606 1,805

Total 1,035,470 4,932,910 IV Depreciation

a) Power 755,464 199,646b) Consultancy 2,061 5,957

Total 757,525 205,603

80


(Rs. In ‘000)Particulars 2010-11 2009-10 V Non Cash expenditure other than depreciation

a) Power – – b) Consultancy – –

Total – – 29. As mentioned in note 14 above, ADHPL has commenced commercial operation during the current year and

commissioned its transmission line with effect from September 16.2010. Due to substantial costs overruns witnessed, resulting in huge reported losses as at March 31, 2011, the company has requested its holding company to waive off the interest from September 17, 10 to March 31, 2011 and henceforth not to charge any interest till the time the company’s operations become profitable. The Board of Directors of holding company, vide their meeting dated March 29, 2011, have approved such request and, thus agreed to waive off interest of Rs 247,901 thousand for the period from September 17, 2010 to March 31,2011 (which was charged at rate of interest of 11% p.a. as agreed with the holding company earlier).Thus, interest charged by the holding company has been capitalized till July 28, 2010 for Allain portion and till September 16, 2010 for transmission line & Duhangan portion, while the same has not been accounted from September 17, 2010 to March 31, 2011.

30. Previous year figures have been regrouped and rearranged wherever considered necessary to conform to this year classification.



Place : NoidaDated : 2nd September, 2011



81

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2011

` in ‘000’For the

Year Ended31.03.2011

For the Year Ended31.03.2010

CASH FLOW FROM OPERATING ACTIVITIESProfit Before Tax (682,190) 1,180,355Adjustments for:Depreciation 757,526 205,603Interest Paid 918,880 324,060Interest Received (244,067) (360,515)Provision against upfront Premium/other expenditure for Bara Banghal Project 359,771 – (Profit) / Loss on Sale of Fixed Assets (88) 223Miscellaneous Expenditure 34,641 0Cash Generated from Operations 1,144,473 1,349,726Direct Taxes Paid 137,268 229,409Operating Profit Before Working Capital Changes 1,007,205 1,120,317Adjustments for Changes in Working Capital:Sundry Debtors (16,639) (27,014)Inventories 20,569 316Loans & Advances and Other Current Assets (1,219,568) (60,322)Liabilities and Provisions (290,919) (376,129)Net Cash from Operating Activities (499,353) 657,168CASH FLOW FROM INVESTING ACTIVITIESAcquisition of Fixed Assets (964,655) (4,201,756)Sale / Transfer of Fixed Assets 223,070 6,109Investments 477.13 (646)Interest Received 244,067.35 360,515Net Cash from Investing Activities (497,041) (3,835,778)CASH FLOW FROM FINANCING ACTIVITIESProceeds from Issuance of Equity Shares 2,273,375 – Proceeds from Issuance of Preference Shares – 400,000 Proceeds from Conversion of Warrants – 165,321 Share Issue Expenses (6,589) (8,034)Long Term Borrowings 71,126 4,329,580Short Term Borrowings – (1,349,333)Interest Paid (918,880) (324,060)Proceeds from issue of capital in subsidiary to Minority 2,625 435,966Repayment of Share Application Money in subsidiary to Minority (44,688) – Net Cash from Financing Activities 1,376,969 3,649,440INCREASE IN CASH OR CASH EQUIVALENTS 380,576 470,830Cash and Cash Equivalents at the Beginning of the Year 610,176 139,346Cash and Cash Equivalents at the Closing of the Year 990,752 610,176Components of Cash and Cash EquivalentCash in hand 1,583 3,366Balances with Scheduled Banks: In Current Accounts 584,851 175,473 In Deposit Accounts 393,739 425,557 In Margin Money Account 10,579 5,780Total 990,752 610,176



Place : NoidaDated : 2nd September, 2011



ATTACHMENT

OF

ANNUAL REPORTS

liSt of AttAchmentS

financial Statement of Subsidiaries for the year ended 31st march, 2011

1. malana Power company Limited 84

2. AD hydro Power Limited 119

3. Indo canadian consultancy Services Limited 152

4. nJc hydro Power Limited 173

5. Bhilwara Green energy Limited 193

6. Balephi Jalbidhyut company Limited, nepal 208

7. Green Ventures Private Limited, nepal 223

FINANCIAL RESULTSOF

MALANA POWER COMPANY LIMITED

85

BOARD OF DIRECTORS

CHAIRMAN & MANAGING DIRECTORMr. Ravi Jhunjhunwala

DIRECTORSMr. L. N. JhunjhunwalaMr. Knut ReedDr. Kamal GuptaMr. R. P. GoelMr. Bidyut Shome

KEY EXECUTIVESMr. O. P. Ajmera, President & Chief Executive OfficerMr. J. K. Beri, Associate Vice President (O&M)

COMPANY SECRETARYMr. Bharat Singh

STATUTORY AUDITORSM/s. S. R. Batliboi & Co., Gurgaon

INTERNAL AUDITORSM/s. Ashim & Associates, New Delhi

TECHNICAL CONSULTANTSM/s. RSW Inc., CanadaM/s. Indo Canadian Consultancy Services Ltd., Noida

CORPORATE INFORMATION

BANKERS / FINANCIAL INSTITUTIONSPunjab & Sind BankIDBI Bank LimitedING Vysya Bank Limited State Bank of TravancoreYes Bank Limited Axis Bank LimitedICICI Bank Ltd.State Bank of IndiaPunjab National Bank

CORPORATE OFFICEBhilwara TowersA-12, Sector - 1Noida - 201 301 (NCR-Delhi)Phone : 0120 - 4390000 (EPABX)Fax : 0120 - 4277841Website : www.malanamodelhep.com

REGISTERED OFFICE & WORKSVillage Chowki, P.O. JariDistt. Kullu (H.P.)Phone : 01902-276074 - 78Fax : 01902 - 276078E-mail - [email protected]

LIAISON OFFICEBhilwara Bhawan40-41, Community CentreNew Friends ColonyNew Delhi - 110 025Phone : 011-26822997

86


CHAIRMAN’S SPEECH

Dear Stakeholder,

The global economy has been observing weakening in global activity, which is becoming more uneven. The economic recovery of 2010 appears to have come close to a halt in the major industrialized economies, with falling household and business confidence affecting both world trade and employment, while the risk of hitting patches of negative growth going forward has gone up. Against a backdrop of unresolved structural fragilities, a barrage of shocks, which includes the devastating Japanese earthquake and tsunami, political unrest in some oil-producing countries, and the major financial turbulence in the euro area, has hit the international economy.

In such a scenario, the Indian economy has been performing well by recording 8.6 percent GDP growth in the year 2010 to March 2011, but the impact of the trends in world economy has started affecting the growth rate. With fewer options available to boost growth, both business and consumer confidence are moving downward. Falling growth and taxes leaves much lesser room for expenditure to boost the economy and spearhead much needed infrastructure investment.

The Indian power sector is also observing turbulence. The fossil fuels (coal and gas) based thermal power generation, which has been dominating India’s power generation capacities with almost 65% share, is staring at shortages in fuel supplies. This has resulted in power stations operating at sub-optimal fuel stocks and considerably low PLFs and newly commissioned power stations finding difficulties for debt servicing. The rising international prices of fossil fuels have also impacted meeting of fuel needs of thermal power projects through imports.

The distribution utilities are saddled up with phenomenal losses on their balance sheets because of losses during transmission and distribution; billing inefficiencies, and revisions in consumer tariffs not in commensuration with input costs. The financial institutions are also showing less inclination to provide funding. With improved monsoons and less-than-expected demand, the distribution utilities have been resorting to load shedding instead of procuring substantial power from short term market.

This peculiar situation has reduced the attractiveness of the Indian power sector inspite of vast opportunities arising because of overall growth and insufficient plans on the ground for fulfillment of the power requirements. But such situation is likely to remain prevalent in the short term. Going forward, it

87

has been forecasted that power shortage situation will continue and the energy and peaking shortages will likely to hover around 10.3% and 12.9% respectively. In such a situation, to secure its energy needs, India will have to revisit its energy sector strategy with considerable focus on exploitation of renewable energy potential of about 150 GW.

During the year under consideration, your company has achieved a turnover of INR 1431 million as against INR 1651 million in the previous year. The Profit After Tax is Rs.433.214 Millions.

As reported earlier, the Allain side of the project was completed successfully and had started generating power on 17th July, 2010. The Duhangan Tunnel was day lighted on 21st of December, 2010. The work on the completion of the Duhangan side of the project is progressing at a fast pace despite the challenges being thrown by the nature. The Duhangan side is likely to be commissioned by 31st March, 2012.

I am also pleased to inform you that for 200 MW Bara Bhangal HEP in Himachal Pradesh, the DPR is under review with CEA.

On behalf of the Board of Directors, I would like to express our sincere gratitude to the Ministry of Power and Ministry of Environment and Forests, Government of India, Central Electricity Authority, Government of Himachal Pradesh, other government agencies, PTC India Limited, lenders, commercial banks, financial institutions, investors, joint venture partners 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


88


DIRECTORS' REPORT

TO THE MEMBERSMALANA POWER COMPANY LIMITEDThe 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, 2011 together with the Auditors' Report.1. FINANCIAL PERFORMANCE (Rs. in million)

Particulars For the Year ended 31.03.2011

For the Year ended 31.03.2010

TOTAL TURNOVER 1,431.151 1,619.439Less : Discount on prompt payments / Unscheduled interchange charges

39.555 52.714

Net Sales 1,391.596 1,566.725Other Income 257.305 446.551Total Income 1,648.901 2,013.275PROFIT BEFORE INTEREST, DEPRECIATION AND TAX

1,039.053 1,792.473

Interest 298.372 426.871PROFIT BEFORE DEPRECIATION AND TAX

740.681 1,365.602

Depreciation 198.658 199.646Profit Before Tax and Prior Period items

542.023 1,165.956

Prior Period Expenses (Travelling Expenses)

1.722

Prior Period Income (Surrender Value of Keyman Insurance Policy)

28.528

PROFIT BEFORE TAX 540.301 1194.484Provision for Tax- Current Tax 107.682 204.140- Deferred Tax (Charge/Credit)

(.595) 1.133

NET PROFIT AFTER DEPRECIATION AND TAX (PADIT)

433.214 989.211

Balance brought forward from previous year

3,918.817 2,924.050

AMOUNT AVAILABLE FOR APPROPRIATION

4,352.031 3,913.261

APPROPRIATIONTransfer from debenture redemption reserves

5.556 5.556

Total 5.556 5.556Surplus carried to Balance Sheet

4,357.587 3,918.817

Basic and diluted Earning Per Share (EPS), (In Rs.)

2.94 6.71

Your Company’s turnover for this financial year stood at Rs.1,431.151 million. The Profit after Tax is Rs. 433.214 million and cash profit from business is Rs. 631.872 million. The Company has delivered 7,52,469 units of VER’s during the year, which has earned Rs. 67.444 million.2. OPERATIONAL PERFORMANCEDuring the period under review, the plant availability was 94.03 per cent as compared to 99.94 per cent during the FY2009-10. The plant availability was lower as a planned shut-down for 20 days was taken during February 2011 for the replacement of penstock protection valve and associated systems. Without the planned shutdown, the plant availability for the period was 99.51 per cent. As per the available hydrology data, the generation during the period stood at 333.864 million units as compared to 305.790 million units in the previous financial year. This increased generation was due to better hydrology during Sept. 2010 to Nov, 2010, which is the best achieved in the history of the plant. The operation data for the year is as given below:

(in million units)S.No

Particulars 2009-10 2010-11

1. Total Generation 305.790 333.8642. Less: Auxiliary

Transmission Loss 3.167 5.451

3. Less: Royalty/Wheeling to Govt. HPSEB

55.682 60.633

4. Less: Impact of UnscheduledInterchange Energy

2.765 6.308

5. Total Units sold 244.176 261.4723. SUBSIDIARY COMPANYThe AD Hydro Power Ltd, a subsidiary of your company, engaged in development and operation of 192 MW hydro electric project in the state of Himachal Pradesh. TheAllain side of the project was completed successfully and has started generating power on 17th July, 2010. TheDuhangan Tunnel was day light on 21st of December, 2010. The work on completion of the Duhangan side of the project is progressing at a fast pace despite the challenges being posed by the nature. The Duhangan side is likely to commissioned by 31st March, 2012.The Annual Report for the financial year 2010- 11 and Accounts for the year ended on 31st March, 2011 as required under Section 212 of the Companies Act, 1956 of the said subsidiary company, is attached. 4. THE FUTURE OUTLOOKIn the year under consideration, there was a revival of good monsoon after two successive years of deficient/scanty rain fall, which resulted in increased availability of

89

water for power generation. This, coupled with addition of hydropower generation of 690MW during the FY ,resulted in the energy generation for the FY2010-11 for the country from the hydropower sector increasing by more than 7% to 114,295.66 million units from 106,655.87 million units in the previous year. But at the same time, the good monsoons also resulted in lower demand for power. In addition to the improved monsoons, there was less-than-expected demand from distribution utilities. Inspite of the energy shortages, the distribution utilities had less interest in short term procurement of power and had resorted to load shedding on account of an estimated accumulated losses of around Rs.70,000 crores till date. (Source: CEA) The unit rates of energy sales fell drastically from April of FY 2010 onwards on the power exchanges as well as among the traders, to reach trough levels in the month of November/December 2010. Subsequently the rates have started picking up, though they are still far from the peaks seen in the last few years.Inspite of the downward pressure on the rates, the volumes in the power trading market have continued to witness strong growth trends. The trading volumes have increased by 27 per cent over the previous year with the traded power accounting for an average 5 per cent of the total power generation. The growth in volumes has been driven by the increased participation of open access industrial power consumers at the exchanges. The bilateral trading has shown negligible growth in FY2010-11 as compared to previous year. Notably, volumes of unscheduled interchange (UI) have dropped indicating this becoming a less preferred avenue for short-term transactions.For merchant power plants, the tariffs typically are a function set by supply and demand in the market. With the shortfall in supply forecast likely to continue in the foreseeable future because of capacity additions not matching with the growth in demand; shortage in availability of fossil fuels to existing and upcoming thermal power plants, the tariffs are likely to see an upward trend. The distribution utilities are slowly showing renewed interest in the power trading market backed by support from the governments. All the aforesaid factors show that the hydro power sector is likely to see an upward momentum in the foreseeable future and tariffs are likely to remain buoyant at sufficiently high levels. Thus the outlook for the next financial year is likely to be cautiously optimistic.5. DIVIDENDKeeping in view the financial commitment of the Company, your Directors’ do not propose any dividend for the financial year under review.6. REDEMPTION OF DEBENTURESDuring the financial year 2010-2011, debentures amounting to Rs.22.2 million have been redeemed.7. PUBLIC DEPOSITSThe Company has not accepted any deposits from the public during the year under reporting.

8. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

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.9. PARTICULARS OF EMPLOYEES: 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. 10. INTERNAL CONTROL SYSTEMS AND THEIR

ADEQUACY10.1 INTERNAL CONTROL SYSTEMSThe Company has systems in place for internal controls to ensure protection of assets, proper financial and operating functions and compliance with the policies, procedure, applicable Acts and Rules. The Company’s Internal Controls are supplemented by Internal Audit covering all financial and operating functions. 10.2 INTERNAL AUDITInternal 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. The areas requiring specialized knowledge are reviewed in partnership with external experts. Internal audit plans cover matters identified in risk management assessments as well as issues highlighted by the Board, the Audit Committee and senior management. Periodically 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. 11. DIRECTORS'Mr. Knut Reed was appointed as an additional director of the Company with effect from 24th November, 2010 until the conclusion of the next annual general meeting. The Board recommends the appointment of Mr. Knut Reed on the Board of the Company. In accordance with the provisions of the Companies Act, 1956 and of the Articles of Association of the Company, Mr. R. P. Goel and Dr. Kamal Gupta, 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.

90


During the year, Mr. Oistein Andresen and Ms. Rohini Roshanara Sood resigned from the Board of Directors of the Company. The Board of Directors wishes to place on record their heartfelt appreciation towards the contribution made by Mr. Oistein Andresen and Ms. Rohini Roshanara Sood during their tenure as Directors of the Company.12. AUDIT COMMITTEEDuring the year, the Audit Committee met three times to review Company’s Financial results, Internal ControlSystems, Risk Management Policies and Internal Audit Reports.During the year, the Audit Committee was reconstituted. As on date, the Members of the Audit Committee are: Mr. Ravi Jhunjhunwala, Dr. Kamal Gupta and Mr. Knut Reed. The proceedings of the Committee were in accordance with the provisions of the Companies Act, 1956.13. DIRECTORS’ RESPONSIBILITY STATEMENTAs 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 judgments and estimates have been made 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 2010-2011.

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 Companyand for preventing and detecting fraud and other irregularities; and

iv) That the annual accounts have been prepared on a going concern basis.

14. AUDITORSM/s S.R. Batliboi & Co., Chartered Accountants, Statutory Auditors of the Company, will retire from their office at the ensuing Annual General Meeting. They are, however, eligible for re-appointment. The Company has received consent letter from S.R. Batliboi & Co., Chartered Accountants, under section 224(1B) of the CompaniesAct, 1956, for re-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. AUDITORS’ REMARKSThe Auditors’ Report read alongwith Notes to the Accounts is self-explanatory and require no further comments from the Board.15. HUMAN RESOURCE DEVELOPMENT The employees are vital and most valuable assets. A favorable work environment exists in the organization that encourages innovation and meritocracy. A scalable

recruitment and human resources management process has been set up, which enables us to attract and retain high-caliber employees. The functioning and activities were further aligned to Company’s business objectives. The ongoing thrust on rationalization of manpower with focus on proper utilization continues. The Human Resources Development activities focused on multi-skill training, performance improvement, learning from each other training module and basic engineering skills. Providing opportunity for open interaction, communication and feedback have been highlights of Human Resources Development at the plant. The Company provided training on Job-Tech Version 6 for Computer Maintenance Management System (CMMS) to its key O&M Staff. A series of Art of Living classes were conducted at Company’s premises for improving the quality of life of the employees. The Company continues to empower its employees to achieve business successes. 16. ENVIRONMENT, HEALTH & SAFETY The Company had planted 85,000 fast growing trees and 900 fruit trees around the Project Area. It is also planning to sow 20,000 saplings of Deodar trees in next two years. The Company has also planted local shrub for rehabilitation of dumping site. The Company also distributed plant saplings to local villagers for plantation. The Company celebrated 22nd April as World Earth Day by having plantation in local areas. The disposal of hazardous waste has been done as per approved standard/Norms of Pollution Control Board. The Company has provided assistance in preparation and fixation of environmental awareness boards from Nehru Kund to Rohtang Pass on request from Pollution Control Board-Badah, Kullu.The Company maintains a medical dispensary at Jari with a 24 hour ambulance. The employees are adequately covered under various insurance policies against risk of health and life disasters as per the statutes of the factory’s act. Annual health check-ups are carried out for all employees at the dispensary.The Company is also committed to provide a zero injury workplace to its employees and workers all across its unit. Security of employees is one of the prime concerns of the Management. Consistent efforts were made by the Company to improve safety standards in the Company by taking measures like intensive safety drives in work area and conducting safety audit, workshop & first aid training, etc. The safety audits were conducted in hazardous departments in plant. In addition, specific workshops on safety were organized. 17. CORPORATE SOCIAL RESPONSIBILITYWe believe that, wherever we operate, our activities should generate economic benefits and opportunities for an enhanced quality of life for all our stakeholders and the society at large.As a constructive partner in the communities in which it operates, your Company has been taking concrete action to realize its social responsibility and accordingly has been spending on the infrastructure development including construction, widening and strengthening of roads; construction of bridges; construction and

91

maintenance of Village Bhojanalya and local school. Your Company also contributes to women empowerment, community development and healthcare. Various events like : Republic Day, Independence Day, New Year, Vishwakarma Jayanti, Saraswati Puja, Ganesh Chaturthi, Dussehra, Diwali, Janmashtami, Christmas, Annual Day, Lohari, etc. are celebrated in the campus.Your Company has taken initiatives like : participating in Pulse Polio Programme organized by Rashtriya Gramin Swasthya Mission, etc. To make our efforts sustainable, the Company has been providing teachers to the local Govt. school, contributing for organization of local fair/ festival like: Kashadha and Jari Mela, Kullu Dussehra Festival, Shauani Mela, Chowki Mehinna Mela; providing appliances to handicapped persons for their day-to-day needs; conducting blood donation camps and Pulse Polio Program and; providing cable facilities for residents of Chowki Village. 18. CORPORATE GOVERNANCECorporate Governance is a process that aims to meet shareholders’ aspirations, values and societal expectations. It is a commitment that is backed by the fundamental belief of maximizing shareholders value, transparency in functioning values and mutual trust amongst all the stakeholders, of the organization. In our company, corporate governance philosophy stems from our belief that it is a key element in improving efficiency and growth as well as enhancing investor confidence.

The majority of the Board comprises of Non-ExecutiveDirectors’ who play a critical role in imparting balance to the Board processes, by bringing an independent judgment to decide on issues of strategy, performance, resources, standards of Company’s conduct, etc. TheAudit 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, ethical and moral framework under which business decisions are taken.19. ACKNOWLEDGEMENT Your Directors’ acknowledge the assistance and continued support provided by the Ministry of Power, Government of Himachal Pradesh, other government agencies, lenders, commercial banks, financial institutions, PTC India Limited and our valued customers & look forward to their continued support and cooperation in the coming years as well. Your Directors’ also like to express great appreciation for the commitment and contribution of its employees at all levels. Last but not the least, the Company thanks its shareholders for their unstinted support.


Ravi JhunjhunwalaChairman and Managing Director

Place: Noida Date: 7th June, 2011

92


ANNEXURE I TO THE DIRECTORS REPORTSTATEMENT OF PARTICULARS PURSUANT TO THE COMPANIES

(DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 19881. CONSERVATION OF ENERGY - • A water pipeline has been laid along the road to carry the water leaking through Adit #2, up to Water Treatment

plant. This water after the treatment is used as drinking water in the Malana colony, resulting in saving of electricity consumption to the tune of Rs.1.06 Lac per annum.

• An additional load of 100KW i.e. from 200kW to 300kW for Doonkhra Colony was sanctioned from HPSEB. This arrangement has resulted in a net saving of to the tune of Rs.3.11 Lacs p.a. on account of running of D.G sets.

2. TECHNOLOGY ABSORPTION - The Company implemented job-tech version 6 for Computer Maintenance Management System (CMMS) at

Malana with the support of SNP team.3. FOREIGN EXCHANGE EARNINGS AND OUTGO

(in ` million)

2010-11 2009-10I Foreign Exchange Outgo

Repair and Maintenance - 16.281Traveling & Conveyance 1.883 2.066Legal and Professional Expenses 2.569 1.570Fees and Subscription 2.766 0.153

Others - 0.001Total 7.218 20.071

II Foreign Exchange EarningsOthers (Sale of Voluntary Emission Rights) 67.444 75.982Total 67.444 75.982

ANNEXURE II TO THE DIRECTORS REPORTInformation 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 2011 are given hereunder:I. Persons employed for the full yearName Designation Remuneration

(Rs. in Millions)Qualification Experi-

enceAge Date of

Commencementof Employment

Mr. Ravi Jhunjhunwala Chairman & MD 20.099 B.Com (Hons) MBA. 30 56 1.11.2001Mr. M.M. Madan CEO 6.719 B Tech. Civil, MBA 32 57 11.9.2008

93

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, 2011 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’smanagement. 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 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 Companyso 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 such directors, as on March 31, 2011, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the CompaniesAct, 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, 2011;

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 AgrawalPartnerMembership No.: 82028

Place: GurgaonDate: June 7, 2011

94


Annexure referred to in paragraph 3 of our report of even date

Re: 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 disposal of a substantial part 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) 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 ` 5,364,212 thousand and the year- end balance of loan granted to such company was ` 4,370,198 thousand (excluding interest accrued on the loan amounting to ` 746,113 thousand).

(b) The company covered in the register maintained under Section 301 of the Companies Act, 1956 has requested the Company to waive off the interest from September 17, 2010 to March 31, 2011 and henceforth not to charge the interest till the time said company’s operations become profitable, which has been approved by the Board of Directors of the Company vide their meeting dated March 29, 2011. Read with above, 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 is 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 only once all obligations to outside lenders have been paid and discharged in full. 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 company 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 had 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 ` 198,839 thousand and the year-end balance of loan taken from such company was ` 100,000 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 is not prima facie prejudicial to the interest of the Company.

(g) The loan taken and interest thereon is re-payable on demand. As informed to us, the lender has 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) As per the information and explanations given to us, certain fixed assets and inventories purchased are of specialized nature for which comparable prices are not available. Read with above, in our opinion, 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, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the Company in respect of these areas. 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 respect of transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees five lakhs entered into during the financial year, because of the unique and specialized nature of the items involved and absence of any comparable prices, we are unable to comment whether the transactions were made at 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

95

maintenance of cost records under section 209(1)(d) of the Companies Act, 1956, related to the generation of electricity from hydro-electric power and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

(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 and other material statutory dues 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 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 and protection fund, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable. The provisions relating to employees’ state insurance are not applicable to the Company.

(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows:

Name of theStatue

Nature ofDues

Amount(Rs.‘000)

Period to which the amountrelates

Forumwheredispute is pending

IncomeTax Act, 1961

Disallowanceof expenses under Section 14A

1,584 Assessment Year 2008-09

Commis-sioner of Income Tax (Appeals)

(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 before 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 banks and 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, though surplus funds which were not required for immediate utilization have been kept in current account with bank. The amount of surplus funds kept in current account at the end of year was ` 38,000 thousand which has, subsequent to the close of the year, been applied for the purpose for which the loan was 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 year.

For S.R. BATLIBOI & CO.Firm registration number: 301003E Chartered Accountants



96


BALANCE SHEET AS AT 31st MARCH, 2011

` '000Schedules As at

March 31, 2011As at

March 31, 2010SOURCES OF FUNDSShareholders' FundsShare capital 1 1,475,257 1,475,257 Reserves and surplus 2 7,620,487 7,187,273

9,095,744 8,662,530 Loan Funds Secured loans 3 3,471,886 3,279,315 Unsecured loans 4 100,000 -

3,571,886 3,279,315 Deferred Tax Liability (net) 5 225,536 226,130 TOTAL 12,893,166 12,167,975APPLICATION OF FUNDSFixed Assets 6Gross block 3,384,278 3,288,874Less : Accumulated depreciation/amortisation 1,390,846 1,194,523Net block 1,993,432 2,094,351 Capital work in progress (including capital advances) - 735,871

1,993,432 2,830,222Investments 7 4,929,556 4,929,556Current Assets, Loans and AdvancesInventories 8 56,679 19,736 Sundry debtors 9 33,191 41,220 Cash and bank balances 10 480,154 59,123 Other current assets 11 747,246 560,029 Loans and advances 12 4,960,838 4,035,630

6,278,108 4,715,738Less: Current Liabilities and ProvisionsCurrent Liabilities 13 296,174 293,935 Provisions 14 11,756 13,605

307,930 307,540Net Current Assets 5,970,178 4,408,198TOTAL 12,893,166 12,167,976Notes to Accounts 20The Schedules referred to above and notes to accounts form an integral part of the Balance Sheet.


RAVI JHUNJHUNWALAChairman & Managing Director

KNUT REED Director

O.P AJMERA CEO & CFO

BHARAT SINGH Company Secretary

Place : NoidaDate : June 7, 2011

For S. R. Batliboi & Co.Firm Registration No. : 301003E Chartered Accountants

per Raj AgrawalPartnerMembership No. 82028

Place : Gurgaon Dated : June 7, 2011

97



KNUT REED Director


BHARAT SINGH Company Secretary


PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31st MARCH, 2011

` '000Schedules For year ended

March 31, 2011For year ended March 31, 2010

INCOMETurnover 1,431,151 1,619,439Less : Discount on prompt payments 28,784 31,997Less : Handling charges 7,866 7,325Less : Unscheduled interchange charges 2,905 13,392Turnover (net) 1,391,596 1,566,725Other income 15 257,305 446,551 TOTAL 1,648,901 2,013,276 EXPENDITUREWheeling Cost 16,806 15,434Personnel expenses 16 48,077 38,480 Operating and other Expenses 17 185,194 166,889 Provision against upfront premium/other expenditure for Bara Banghal (refer note no.13 of schedule 20)

359,771 -

Depreciation 6 198,658 199,646Financial expenses 18 298,372 426,871TOTAL 1,106,878 847,320 Profit before tax and prior period items 542,023 1,165,956Prior Period expense (Travelling expense) 1,722 - Prior Period Income (Surrender value of keyman insurance policy)

- 28,528

Profit before tax 540,301 1,194,484Current Tax (including Nil, Pervious year Rs. 1,198 thousand pertaining to earlier years)

107,682 204,140

Deferred tax charge / (credit) (595) 1,133 Total tax expense 107,087 205,273Net Profit 433,214 989,211 Balance brought forward from previous year 3,918,817 2,924,050 Profit available for appropriation 4,352,031 3,913,261APPROPRIATION:Transfer from debenture redemption reserve 5,556 5,556 TOTAL 5,556 5,556 Surplus carried to balance sheet 4,357,587 3,918,817Earnings per share (In Rupees) (Nominal value Rs. 10 per share)- Basic and Diluted 19 2.94 6.71 Notes to Accounts 20The Schedules referred to above and the notes to accounts form an integral part of the Profit and Loss Account.




98


SCHEDULES TO THE ACCOUNTS

SCHEDULE 1: SHARE CAPITAL(` ’000)

As at March 31, 2011


Authorised160,000,000 (Previous year 160,000,000) equity shares of ` 10 each

1,600,000 1,600,000

Issued and Subscribed147,525,731 (Previous year 147,525,731) equity shares of ` 10 each

1,475,257 1,475,257

Paid-up147,525,731 (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)



Securities premium account 3,254,567 3,254,567 Debenture redemption reserveBalance as per last account 13,889 19,445Transferred to profit and loss account (5,556) 8,333 (5,556)Profit and loss account 4,357,587 3,918,817

7,620,487 7,187,273

SCHEDULE 3: SECURED LOANS(` ’000)



DebenturesRedeemable Non-Convertible Debentures of ` 1,000 thousand each (Refer Note 1 below)

33,333 55,555

Loans and banks (refer note 2 below)Term loans– Rupee loans 3,409,843 3,180,243 – Foreign currency loans 28,710 43,517

3,438,553 3,223,760 3,471,886 3,279,315

99

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 & FinancialServices 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 ` 833 thousand (previous year ` 722 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. Debentures and loans from banks aggregating to ` 925,139 thousand (Previous year ` 757,982 thousand) are repayable within one year.

SCHEDULE 4 : UNSECURED LOANS :(` ’000)



Short-term loans & advances– From holding Company 100,000 –

100,000 –

SCHEDULE 5 : DEFERRED TAX LIABILITY (NET) : (` ’000)



Deferred Tax LiabilitiesDifferences in depreciation and other differences in block of fixed assets as per tax books and financial books

225,194 225,872

Income taxable on receipt 342 258 Gross Deferred Tax Liabilities 225,536 226,130Deferred Tax Assets – – Gross Deferred Tax Assets – –Deferred Tax Liability (Net) 225,536 226,130

100


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, 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

Additions – 92,905 201 – 9 540 1,738 2,714 98,107 – – 98,107 679

Deductions/ Adjustments – – – – – – 26 2,677 2,703 – – 2,703 2,543

As at March 31, 2011 21,517 317,863 1,847,466 199,670 958,093 6,294 10,423 11,254 3,372,580 11,698 11,698 3,384,278 3,288,874

Depreciation

At April 1, 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

For the year – 8,269 120,357 10,549 57,177 328 673 1,002 198,355 303 303 198,658 199,646

Deletions / Adjustments – – – – – – 6 2,329 2,335 – – 2,335 1,932

As at March 31, 2011 – 72,486 745,610 101,691 441,531 4,439 7,121 7,008 1,379,884 10,960 10,960 1,390,846 1,194,523

Net Block March 31, 2011 21,517 245,377 1,101,856 97,979 516,562 1,855 3,302 4,246 1,992,696 738 738 1,993,432 2,094,351

Net Block March 31, 2010 21,517 160,741 1,222,012 108,528 573,730 1,643 2,257 2,882 2,093,312 1,041 1,041 2,094,351

Capital Work in Progress

Building under erection – 71,705

Capital Advances – 1,093

Advance for project allotted (refer note 3 below)

– 663,073

Sub Total – 735,871

Total Fixed Assets as at March 31, 2011

21,517 245,377 1,101,856 97,979 516,562 1,855 3,302 4,246 1,992,694 738 738 1,993,432

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

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.

SCHEDULE 7 : INVESTMENTS :

(` ’000)



Long Term Investments (At Cost)

In Subsidiary Company Unquoted

492,955,640 (Previous year 492,955,640) Equity Shares of `10each fully paid of AD Hydro Power Limited (pledged with security trustee on behalf of lenders of AD Hydro Power Limited)

4,929,556 4,929,556

4,929,556 4,929,556

SCHEDULE 8: INVENTORIES

(` ’000)



Stores and spares (including material lying with third parties` 1,441 thousand, previous year ` 2,043 thousand)

56,679 19,736

56,679 19,736

SCHEDULE 9: SUNDRY DEBTORS

(` ’000)



(Unsecured, Considered good)

Outstanding for a period exceeding six months - -

Other debts 33,191 41,220

33,191 41,220

101

SCHEDULE 10: CASH AND BANK BALANCES

(` ’000)



Cash on hand 314 597

Cheques on hand – –

Balances with scheduled banks:

On current accounts 477,957 25,526

On deposit accounts 200 30,200

On margin money account 1,683 2,800

480,154 59,123

Included in deposit accounts are :

– Fixed deposit of ` 200 thousand (previous year ` 200 thousand) pledged with the H.P. Government Sales TaxDepartment and ` 854 thousand (previous year ` Nil) pledged with Himachal Pradesh State Electricity Board.

SCHEDULE 11: OTHER CURRENT ASSETS

(` ’000)



Interest accrued on deposits and others 112 51

Interest accrued on loan given to subsidiary company 746,113 559,211

Surrender Value of Keyman Insurance Policy 1,021 767

747,246 560,029

SCHEDULE 12: LOANS AND ADVANCES(` ’000)



Unsecured, considered good Loans to employees 1,459 1,944

Loan to subsidiary Company (long term) 4,370,198 3,750,520

Advances for projects 252,630 252,630

Other advances recoverable in cash or in kind or for value to be received 9,075 27,459

Payment of Income Tax/Tax deducted at source 18,397Deposits - others 3,079 3,076

Unsecured, considered doubtfulAdvance for Bara Banghal project (including ` 53,771 thousand towards consultancy and other expenses on the project)

665,771 –

5,320,609 4,035,629

Less : Provision against upfront premium/other expenditure for Bara Banghal (refer note no. 13 of schedule 20)

(359,771) –

4,960,838 4,035,629

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 ` 5,364,212 thousand (Previous year ` 4,262,368 thousand)

4,370,198 3,750,520

ii. Dues from Holding Company

Bhilwara Energy Limited (Maximum amount outstanding during the year ` 466 thousand (Previous year ` Nil)

195 –

102


SCHEDULE 13: CURRENT LIABILITIES(` ’000)



Sundry creditors (refer note 11 of schedule 20)(a) Outstanding dues of Micro & Small Enterprises - - (b) Outstanding dues of creditors other than Micro & Small

Enterprises33,711 32,530

Deposits from holding company (refer note 10 of schedule 20) 252,630 252,630Deposits from contractors and others 6,329 4,475Interest accrued on loan from holding Company 271Other liabilities 3,233 4,300

296,174 293,935Creditors includesManaging Director's commission payable 9,201 12,457

Schedule 14: Provisions(` ’000)



Provision for Income Tax (net of advance tax ̀ Nil thousand (previous year ` 465,487 thousand))

- 5,595

Provision for Gratuity (refer note 15 of schedule 20) 887 - Provision for Long Term Compensated Absences 4,873 3,105Provision for Continuity Linked Bonus 5,996 4,905

11,756 13,605

SCHEDULE 15: OTHER INCOME(` ’000)



Interest from subsidiary company (Gross, tax deducted at source ` 43,480 thousand, previous year ` 49,788 thousand)

434,803 359,288

Less : Interest from Subsidiary Company waived (refer note 14 of schedule 20)

(247,901) -

Interest on bank deposits (Gross, Tax deducted at source ` 194thousand, previous year ` 169 thousand)

2,097 886

Foreign exchange fluctuation (net) 6 8,012 Profit on sale/discard on fixed assets (net) 24 - Sale of voluntary emission reductions 67,444 75,982 Unspent liabilities written back 413 1,200 Surrender Value of keyman insurance policy 254 767 Miscellaneous income 165 416

257,305 446,551

SCHEDULE 16: PERSONNEL EXPENSES (` ’000)



Salaries, wages and other expenses 38,667 31,214Contribution to provident fund 2,314 2,034Contribution to superannuation fund 487 400Gratuity expenses (refer note 15 of schedule 20) 934 - Long Term Compensated Absences 1,768 943Workmen and staff welfare expenses 3,907 3,889

48,077 38,480

103

SCHEDULE 17: OPERATING AND OTHER EXPENSES(` ’000)



Power and fuel 3,877 3,626Repairs and maintenance – Plant and machinery 94,467 51,920– Civil works 610 316– Buildings 903 706– Others 1,166 1,081Rent 3,882 3,882Rates and taxes 44 3,335Insurance 10,553 5,267Traveling & Conveyance 7,287 8,008Legal and professional expenses 4,261 6,054Director's remuneration 10,898 38,547Commission to managing director 9,201 12,457 Auditor's remuneration :– Audit fee 660 908– Fees for international reporting 330 –– Fees for special audit 303 303 – Fees for certification 456 276– Out of pocket expenses 58 7Loss on fixed assets sold /discarded (net) – 223 Donations and contributions (other than to political parties) 668 763 Expenses on sale of Voluntary emission reductions (including commission)

18,412 15,453

Open access charges 3,975 –Miscellaneous expenses 13,183 13,757

185,194 166,889

SCHEDULE 18: FINANCIAL EXPENSES(` ’000)



Interest– On term loans and debentures 290,257 320,822 – To others 4,174 3,040 Bank charges including guarantee commission and processing fees (net of upfront fees / commitment charges reimbursed by subsidiary company ` Nil, previous year ` 8,273 thousand)

3,941 103,009

298,372 426,871

SCHEDULE 19 : EARNINGS PER SHARE (EPS) (` ’000)



Net profit as per profit and loss account 433,214 989,211 Equity shares at the beginning of the period 147,525,731 147,525,731 Equity shares at the end of the period 147,525,731 147,525,731 Weighted average number of equity shares in calculating basic/diluted EPS

147,525,731 147,525,731

Basic & Diluted Earnings Per Share (in Rupees) 2.94 6.71

104


SCHEDULE – 20: NOTES TO ACCOUNTS

1. Nature of Operations

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.

2. Statement of Significant Accounting Policies

(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 CompaniesAct, 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 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.

(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 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 using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset.

(d) Depreciation

(i) 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 of the Companies Act, 1956.

(ii) On fixed assets other than those covered under (i) 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.

(e) Intangible Asset

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.

(f) Borrowing costs


(g) 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.

(h) Investments

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

105

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.

(i) Inventories

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.


(j) 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.

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.

(k) Foreign currency translation

Foreign currency transactions



(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.


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.

(l) Retirement and other employee benefits

(i) Retirement benefits in the form of Provident Fund and Superannuation Schemes are defined 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.

(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.

(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 are immediately taken to profit and loss account and are not deferred.

106


(m) Income taxes

Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected 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 and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the taxes on income levied by same governing taxation laws. 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.

(n) 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 period.


(o) 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.

(p) Cash and Cash equivalents

Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

3. The Company’s activities during the year involved generation of the Hydro power (Refer Note 1). Consideringthe 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.

4. The Company 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 period under the provisions of Section 115JB of the Income-Tax Act, 1961.

5. The Company has the necessary permission from the Government of Himachal Pradesh to own, operate & 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.

107

6. Contingent Liabilities not provided for

(a) Guarantee given for loans availed by AD Hydro Power Limited, subsidiary company, amounting ` 800,000 thousand (Previous year ` 800,000 thousand).

(b) Claims made against the Company not acknowledged as debts –

(i) Demand from Divisional Forest Officer in respect of damages to forest trees ̀ 3,421 thousand (Previous year - ` 3,421 thousand).

(ii) Demand of Stamp Duty and registration fees ` Nil (Previous year ` 40,990 thousand).

The Company has been advised that these cases are not probable to be decided against the Companyand therefore no provision for the above is required.

(c) In respect of assessment year 2008-09, the Assessing Officer had disallowed certain proportion of the expenses as expenses incurred towards the exempt income under Section 14A and other expenses of the Income Tax Act, 1961 (‘the Act’) amounting to ` 16,658 thousand and raised a demand of ` 1,584 thousand (Previous year ̀ Nil). The Company has preferred an appeal before Commissioner of Income Tax(Appeals) in respect of the said matter.

Assessments for the subsequent years could include demands on the similar items, amounts whereof could not be ascertained. Based on expert analysis, management believes that this demand and any possible demand for other assessment years to be raised by Income Tax Authorities on similar grounds, is unlikely to crystallize and there is a fair chance of decision in its favour.

7. Capital Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of advances) ` 612,000 thousand (Previous Year ` 656,016 thousand)

8. Related Party Disclosures

(a) Names of related parties

Holding Company Bhilwara Energy Limited

Subsidiary Company AD Hydro Power Limited

Enterprises having significant influence over the Company

SN Power Holding Singapore Pte Ltd.

Fellow Subsidiary Companies Indo Canadian Consultancy Services Limited,Green Ventures Pvt. Limited

Key Management Personnel Mr. Ravi Jhunjhunwala, Chairman & ManagingDirector

Relatives of key management personnel Mrs. Rita Jhunjhunwala(Wife of the Chairman & Managing Director)Mr. Riju Jhunjhunwala (son of the Chairman & Managing Director)Mr. Rishab Jhunjhunwala (son of the Chairman & Managing Director)

Enterprises owned or significantly influenced by key management personnel or their relatives

HEG Limited, Rajasthan Spinning and Weaving Mills Limited.

108


(b) Transaction with related parties (Rupees ‘000)

Nature of Transaction HoldingCompany/

Enterpriseshaving

significant influence over the Company

Subsidiary/Fellow subsidiary

Company

KeyManagement

Personnel

Relative of Key Management

Personnel

Enterpriseover which key managementpersonnel /

relative having significant influence

March2011

March2010

March2011

March2010

March2011

March2010

March2011

March2010

March2011

March2010

Transactions during the year

Rent

a) Mrs. Rita Jhunjhunwala 1,458 357

b) Mr. Rishab Jhunjhunwala 1,415 1,709

c) Mr. Riju Jhunjhunwala 1,415 1,709

d) RSWM Limited 3,878 3,878

Consultancy service charges paid to Indo Canadian Consultancy Services Limited

2,343 14,895

Remuneration paid to Mr. Ravi Jhunjhunwala

10,898 10,019

Commission paid to Mr. Ravi Jhunjhunwala

9,201 12,446

Value of other perquisite (assignment of Keyman insurance policy in favour of Mr. Ravi Jhunjhunwala)

– 28,528

Reimbursement of expenses paid to HEG Limited

275 2,382

Reimbursement of expenses paid to Rajasthan Spinning and Weaving Mills Limited

1,566 381

Reimbursement of expenses paid to Indo Canadian Consultancy Services Limited

– 232

Reimbursement of expenses paid to AD Hydro Power Limited

995 1,712

Reimbursement of expenses paid to Statkraft Norfund Power Invest AS

1,963 –

Reimbursement of expenses recovered from AD Hydro Power Limited

6,739 15,264

Reimbursement of expenses recovered from Indo Canadian Consultancy Services Limited

– 16,685

Shares acquired in AD Hydro Power Limited

– 628,000

Unsecured Loan repaid to Bhilwara Energy Limited (including interest)

242,194 202,237

Unsecured Loan taken from Bhilwara Energy Limited

342,194 76,521

Unsecured Loan repaid by AD Hydro Power Limited

232,000 5,189,100

Unsecured Loan given to AD Hydro Power Limited

851,678 7,615,100

Interest Income on Unsecured loan given to AD Hydro Power Limited (net of interest waived off of ` 247,901 thousand, refer note no. 14 below)

186,902 359,288

109

Nature of Transaction HoldingCompany/

Enterpriseshaving


Subsidiary/Fellow subsidiary

Company

KeyManagement

Personnel

Relative of Key Management

Personnel

Enterpriseover which key managementpersonnel /

relative having significant influence

Balances outstanding as at the year end

March2011

March2010

March2011

March2010

March2011

March2010

March2011

March2010

March2011

March2010

Balances Receivable:

Investment in AD Hydro Power Limited 4,929,556 4,929,556

Unsecured Loan given to AD Hydro Power Limited

4,370,198 3,750,520

Interest amount recoverable on Unsecured Loan

746,113 559,211

Receivable from Bhilwara Energy Limited

195 –

Balances Payable:

Deposit taken from Bhilwara Energy Limited

252,630 252,630

Loan taken from Bhilwara Energy Limited

100,000 –

Mr. Ravi Jhunjhunwala (commission) 9,201 12,457

Guarantees given by the Company on behalf of AD Hydro Power Limited

800,000 800,000

9. Supplementary Statutory Information (` ’000)

March 2011 March 2010(a) Managing Director Remuneration

Salaries 6,125 5,825Commission 9,201 12,457Rent paid 3,675 3,495Contribution to Provident Fund 735 699Other perquisites (previous year includes assignment of Keyman insurance policy)

363 28,528

20,099 51,004

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 therefore, not included. b) Perquisites have been considered as per taxable value as per Income Tax Act, 1961

March 2011 March 2010(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 540,301 1,194,484Add: Depreciation as per Profit & Loss Account 198,658 199,646

Directors’ remuneration 20,099 51,004Loss on Sale of Fixed Asset – 223Provision against up front premium/other expenditure * 359,771 –

1,118,829 1,445,357Less: Depreciation under section 350 of the Companies Act, 1956 198,658 199,646

Profit on sale of Fixed Assets 24 –Net Profit as per Section 349 of the Companies Act, 1956 920,147 1,245,711

Add: Directors’ remuneration 20,099 51,004Profit as per Section 198 of the Companies Act, 1956 940,246 1,296,715

110


Commission to Managing Director

March 2011 March 2010

Maximum commission under section 309 of Companies Act, 1956 at 10% of net profits (after reducing remuneration of Rs. 10,898 thousand (previous year Rs 38,547 thousand), excluding commission)

92,935 125,817

Commission actually approved for payment (@ 1% of profits

under Section 349 of the Companies Act, 1956) 9,201 12,457

* Based on expert legal opinion, the Company has been advised that such provision against upfront premium/other expenditure for Bara Banghal is to be added back for computation of net profits under section 349 of the Companies Act, 1956.

10. During the financial year 2007-08, the Company had paid 50% upfront premium of Rs. 252,630 thousand to the Government of Himachal Pradesh as first installment for the 140 MW Chango Yangthang HEP project which was awarded to the Company. This amount was 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 Rs. 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 BELhas 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.

11. 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.

12. Leases 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)



Lease payments for the year 3,882 3,882

13. In an earlier year, the Company had given an upfront premium of ̀ 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 ` 53,771 thousand in relation to this project.

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.

As per the Himachal Pradesh State Hydro Policy, 2006, “The Developer will be permitted to withdraw from the Project after the conveyance of non – feasibility of the Project, if the Government is satisfied that the Developer has sufficient ground to establish that the Project is not techno – economically viable, without any liability on the Government of Himachal Pradesh for the expenditure incurred by the Developer. The security deposited at the time of signing of MOU shall be refunded without interest. 50% of the upfront premium shall also be refunded without interest”.

Pending the decision on application by the Supreme Court of India for grant of clearance of the project and in view of uncertainties related to such approvals and significant delays in respect of the project as stated above and in accordance with the terms of the Hydro Policy of the State, the Board of Directors have considered it prudent to make provision against 50% of the upfront premium of ` 306,000 thousand and entire expenses incurred of ` 53,771 thousand till date (i.e. total amount of ` 359,771 thousand) incurred till March 31, 2011 in respect of this project.

111

The Company has been advised by a tax expert that such provision is allowable for computation of book profits under Section 115JB of the Income Tax Act, 1961. The provision for income tax has been made on the aforesaid basis in the books of account.

14. The Company has given loan to its subsidiary, AD Hydro Power Limited of which ̀ 4,370,198 thousand (principal amount) is outstanding at year end.

The subsidiary company has commenced commercial operations during the current year and commissioned its transmission line with effect from September 16, 2010. Due to substantial cost overruns witnessed at the subsidiary, resulting in huge reported losses as at March 31, 2011, the subsidiary company has requested the Company to waive off the interest from September 17, 2010 to March 31, 2011 and henceforth not to charge any interest till the time the subsidiary company’s operations become profitable. The Board of Directors, vide their meeting dated March 29, 2011, have approved such request of the subsidiary and, thus agreed to waive off interest of ` 247,901 thousand for the period from September 17, 2010 to March 31, 2011 (which was charged at rate of interest of 11 % per annum, as agreed with the subsidiary company earlier).

Based on expert legal opinion, the management believes that there is no income tax or corporate laws implications which arise out of the said waiver and thus, accounting for such waiver of interest has been made in the financial statements.

15. Gratuity (AS 15- 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 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):


(` ’000)


(` ’000)

Current Service Cost 587 490

Interest cost on benefit obligation 349 385

Expected return on plan assets (353) (330)

Net actuarial (gain)/ loss recognised in the year 351 (592)

Past service cost - -

Net benefit expense 934 (47)

Actual return on plan assets 333 877

Balance Sheet

Details of Provision for Gratuity:

Particulars As at March 31, 2011

(` ’000)


(` ’000)

Defined benefit obligation 5,400 4,363

Fair value of plan assets 4,513 4,410

(887) 47

Less: Unrecognised past service cost - -

Plan asset / (liability) (887) 47

112


Changes in the present value of the defined benefit obligation are as follows:


(` ’000)


(` ’000)

Opening defined benefit obligation 4,363 5,133

Interest cost 349 385

Current service cost 587 490

Benefits paid (230) (1,600)

Actuarial (gains)/ losses on obligation 331 (45)

Closing defined benefit obligation 5,400 4,363



(` ’000)


(` ’000)

Opening fair value of plan assets 4,410 4,130

Expected return 353 330

Contributions by employer - 1,002

Benefits paid (230) (1,600)

Actuarial gains / (losses) (20) 547

Closing fair value of plan assets 4,513 4,410

The defined benefit obligation amounting to ̀ 5,400 thousand is funded by assets amounting to ̀ 4,513 thousand and the Company expects to contribute ` 887 thousand during the year 2011-12.

The major categories of plan assets as a percentage of the fair value of total plan assets are as follows:


%


%

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:



% %

Discount Rate 8.00 7.50

Expected rate of return on assets 8.00 8.00

Future Salary Increase 5.50 5.00

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.

113

Amounts for the current and previous three years are as follows*: (in ‘000s)

For the year ended

March 31, 2011

For the year ended

March 31, 2010

For the year ended

March 31, 2009

For the year ended

March 31, 2008

Defined benefit obligation 5,400 4,363 5,133 4,000

Plan assets 4,513 4,410 4,130 1,198

Surplus / (deficit) (887) 47 (1,002) (2,002)

Experience adjustments on plan liabilities

(347) 24 (260) -

Experience adjustments on plan assets

(20) 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 (` in thousands)



Contribution to Provident Fund 2,314 2,034

Contribution to Superannuation Fund 487 400

2,801 2,434

16. Particulars of Unhedged Foreign Currency Exposure as at the Balance Sheet date


Foreign Currency Loan ` 28,710,400 (USD 640,000 @ closing

rate of 1USD=` 44.86)

` 43,516,800 (USD 960,000 @ closing

rate of 1USD=` 45.33)

Provision against equipment supplied Nil ` 2,846,356 (CHF 66,816 @ closing rate of 1CHF=` 42.60)

17. Additional information pursuant to the provisions of paragraphs 3, 4C and 4D of Part II of Schedule VIto the Companies Act, 1956

a) Information in respect of Generation and Turnover:

2010-11 2009-10

(i) Installed capacity (technically estimated) 86 MW 86 MW

(ii) Generation M.U. 333.864 305.790

(iii) Less:- Auxiliary Consumption and Associated Transmission Loss

M.U. 5.451 3.167

Free Energy to Govt. of H.P. M.U. 49.429 45.393

Free Energy to HPSEB for wheeling of power M.U. 11.204 10.289

(iv) Turnover (including impact of UI Charges – (6.308) M.U., (Previous period (2.765) MU))

M.U. 261.472 244.176

Rs’000 1,431,151 1,619,439

114


b) Imported and indigenous stores and spare parts consumed (included under respective heads of profit & loss account) :

Percentage of total consumption Value (Rs.’000)

Stores & Spares 2010-11 2009-10 2010-11 2009-10

Imported 70.47 70.72 54,650 28,902

Indigenously obtained 29.53 29.28 22,904 11,967

100.00 100.00 77,554 40,869

c) Expenditure in foreign currency, net of TDS (accrual basis)

2010-11 (` in ‘000)

2009-10 (` in ‘000)

Travelling & Conveyance 1,883 2,066

Legal and professional expenses 2,569 1,570

Repair & Maintenance - 16,281

Fee & Subscription 2,766 153

Others - 1

d) Earnings in foreign currency (accrual basis)

2010-11 (` in ‘000)

2009-10 (` in ‘000)

Others (Sale of Voluntary Emission Rights) 67,444 75,982

18. Previous year’s figures have been regrouped where necessary to conform to this year’s classification.



KNUT REED Director


BHARAT SINGHCompany Secretary


As per our report of even date




115

CASH FLOW STATEMENT AS AT MARCH 31, 2011

Particulars March 2011` ’000

March 2010` ’000

A. Cash flow from operating activities

Net profit before taxation 540,301 1,194,484

Adjustments for:

Depreciation 198,658 199,646

Interest expenses 294,430 323,862

(Profit) / Loss on fixed assets sold / discarded (net) (24) 223

Provision against upfront premium/other expenditure for Barabangal

359,771 –

Unrealised foreign exchange loss/(gain) (6) (8,011)

Interest income (188,998) (360,174)

Operating profit before working capital changes 1,204,132 1,350,030

Movements in working capital:

Decrease / (Increase) in sundry debtors 8,029 (19,612)

(Increase) in other current assets (254) (767)

Decrease / (Increase) in loan and advances 18,866 11,559

Decrease / (Increase) in inventories (36,943) 316

(Decrease) / increase in current liabilities and provisions 5,714 (1,350)

Cash generated from operations 1,199,544 1,340,176

Direct taxes paid (Net of refund) 131,674 226,851

Net cash from operating activities 1,067,870 1,113,325

B. Cash flows from / (used in) investing activities

Purchase of fixed assets (including capital work in progress)

(28,007) (46,533)

Loans and advances to subsidiary company (619,678) (2,389,764)

Proceeds from sale of fixed assets 392 388

Interest received (including received from subsidiary) 2,036 873

Net cash from/ (used in) investing activities 645,257 (2,435,036)

116


Particulars March 2011` ’000

March 2010` ’000

C. Cash flows from / (used in) financing activities

Fixed deposits redeemed – 1,683

Fixed deposits placed (1,683) –

Proceeds from / (Repayments of) Short term borrowings 100,000 (698,261)

(Repayment of) long – term borrowings (757,423) (622,408)

Proceeds from long – term borrowings 950,000 3,010,000

Interest paid (294,159) (334,649)

Net cash from / (used in) financing activities (3,265) 1,356,365

Net increase / (decrease) in cash and cash equivalents (A+B+C)

419,348 34,654

Cash and cash equivalents at the beginning of the year

59,123 24,469

Cash and cash equivalents at the end of the year 478,471 59,123

Components of cash and cash equivalents

Cash on hand 314 597

With banks – on current accounts 477,957 25,526

– on deposit accounts 200 30,200

– on margin money account – 2,800

478,471 59,123

Notes:

1. Difference in the figure of cash and bank balance as per schedule 10 and as shown above of ` 1,683 thousand (Previous Year Rs. Nil) represents long term investment in fixed deposit with an original maturity of more than three months.



KNUT REED Director








117



KNUT REED Director




1. REGISTRATION DETAILS

Registration No. 1 9 9 5 9 State Code 0 6


Date Month Year

2. CAPITAL RAISED DURING THE YEAR (Amount in ` Thousands)



3. POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (Amount in ` Thousands)

Total Liabilities 1 3 2 0 1 0 9 6 Total Assets 1 3 2 0 1 0 9 6

SOURCES OF FUNDS

Paid-up Capital 1 4 7 5 2 5 7 Reserves and Surplus 7 6 2 0 4 8 7

Share Application Money – Deferred Tax Liability 2 2 5 5 3 6

Secured Loans 3 4 7 1 8 8 6 Unsecured Loans 1 0 0 0 0 0


Net Fixed Assets 1 9 9 3 4 3 2 Investments 4 9 2 9 5 5 6 (Incl. P.O.P. exps)

Net Current Assets 5 9 7 0 1 7 8 Misc. Expenditure –

Accumulated Losses –

4. PERFORMANCE OF COMPANY (Amount in ` Thousands)

Turnover 1 6 4 8 9 0 1 Total Expenditure 1 1 0 8 6 0 0

Profit/Loss before Tax 5 4 0 3 0 1 Profit/Loss after tax 4 3 3 2 1 4

Earning Per Share (in `) 2 . 9 4 Dividend Per Share (in `) –

5. GENERIC NAMES OF PRINCIPAL PRODUCTS/SERVICES OF COMPANY (as per monetary terms)


Product Description H y d r o E l e c t r i c E n e r g y


118


Name of the subsidiary AD Hydro Power Limied

Financial period ended March 31, 20111.

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 losses4.For the current period of the subsidiary concerns the members of the holding company

dealt with or provided for in the accounts Nila.of the holding company

not dealt with or provided for in the NAb.accounts of the holding company

The net aggregate of profits or losses5.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



KNUT REED Director




FINANCIAL RESULTSOF

AD HYDRO POWER LIMITED

120


BOARD OF DIRECTORS

CHAIRMANMr. Ravi Jhunjhunwala

DIRECTORSMr. L. N. JhunjhunwalaMr. Knut ReedDr. Kamal GuptaMr. Bidyut Shome

WHOLE TIME DIRECTORMr. R. P. Goel

KEY EXECUTIVESMr. O.P.Ajmera, CEO & PresidentMr. S. K. Khare, In-charge-Operations (Allain)Mr. Vipin Arora, In-charge-Operations (Duhangan)

COMPANY SECRETARYMr. Sandeep Chandna

STATUTORY AUDITORSM/s. S. R. Batliboi & Company, Gurgaon

INTERNAL AUDITORSM/s. Ashim & Associates, New Delhi

TECHNICAL CONSULTANTSM/s. RSW International Inc., CanadaM/s. Indo-Canadian Consultancy Services Ltd., Noida

CORPORATE INFORMATION

BANKERS / FINANCIAL INSTITUTIONSInternational Finance Corporation - WashingtonIDBI Bank LimitedPunjab & Sind BankOriental Bank of CommerceUnited Bank of India Punjab National BankAxis Bank LimitedThe Jammu & Kashmir Bank LimitedICICI Bank Ltd.HDFC Bank LimitedState Bank of IndiaYes Bank Limited

CORPORATE OFFICEBhilwara TowersA-12, Sector - 1Noida - 201 301 (NCR-Delhi)Phone : 0120 - 4390000 (EPABX) Fax : 0120 - 4277841Website : www.adhydropower.com

REGISTERED OFFICE & WORKS Village Prini, P.O. Tehsil - ManaliDistt. Kullu (H.P.)Phone : 01902- 250183 / 184Fax : 01902 - 251798Email - [email protected]

LIAISON OFFICEBhilwara Bhawan40-41, Community CentreNew Friends ColonyNew Delhi - 110 025Phone : 011-26822997

121

Dear Stakeholder,

The global economy has been observing weakening in global activity, which is becoming more uneven. The economic recovery of 2010 appears to have come close to a halt in the major industrialized economies, with falling household and business confidence affecting both world trade and employment, while the risk of hitting patches of negative growth going forward has gone up. Against a backdrop of unresolved structural fragilities, a barrage of shocks, which includes the devastating Japanese earthquake and tsunami, political unrest in some oil-producing countries, and the major financial turbulence in the euro area, has hit the international economy.

In such a scenario, the Indian economy has been performing well by recording 8.6 percent GDP growth in the year 2010 to March 2011, but the impact of the trends in world economy has started affecting the growth rate. With fewer options available to boost growth, both business and consumer confidence are moving downward. Falling growth and taxes leaves much lesser room for expenditure to boost the economy and spearhead much needed infrastructure investment.

The Indian power sector is also observing turbulence. The fossil fuels (coal and gas) based thermal power generation, which has been dominating India’s power generation capacities with almost 65% share, is staring at shortages in fuel supplies. This has resulted in power stations operating at sub-optimal fuel stocks and considerably low PLFs and newly commissioned power stations finding difficulties for debt servicing. The rising international prices of fossil fuels have also impacted meeting of fuel needs of thermal power projects through imports.

The distribution utilities are saddled up with phenomenal losses on their balance sheets because of losses during transmission and distribution; billing inefficiencies, and revisions in consumer tariffs not in commensuration with input costs. The financial institutions are also showing less inclination to provide funding. With improved monsoons and less-than-expected demand, the distribution utilities have been resorting to load shedding instead of procuring substantial power from short term market.

This peculiar situation has reduced the attractiveness of the Indian power sector inspite of vast opportunities arising because of overall growth and insufficient plans on the ground for fulfillment of the power requirements. But such situation is likely to remain prevalent in the short term. Going forward, it

CHAIRMAN’S SPEECH

has been forecasted that power shortage situation will continue and the energy and peaking shortages will likely to hover around 10.3% and 12.9% respectively. in such a situation, to secure its energy needs, india will have to revisit its energy sector strategy with considerable focus on exploitation of renewable energy potential of about 150 GW.

During the year under consideration, your company has achieved a turnover of inR 390.879 million.

as reported earlier, the allain side of the project was completed successfully and had started generating power on 17th July, 2010. the Duhangan tunnel was day lighted on 21st of December, 2010. the work on the completion of the Duhangan side of the project is progressing at a fast pace despite the challenges being thrown by the nature. the Duhangan side is likely to be commissioned by 31st March, 2012.

on behalf of the Board of Directors, i would like to express our sincere gratitude to the Ministry of Power and Ministry of environment and Forests, Government of india, central electricity authority, Government of Himachal Pradesh, other government agencies, PTC India Limited, lenders, commercial banks, financial institutions, investors, joint venture partners 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 Jhunjhunwalachairman

123

DIRECTORS' REPORT

TO THE MEMBERS

AD HYDRO POWER LIMITED

The Directors of the Company are pleased to present their Eighth Annual Report on the business and operations of the Company and Audited Statement of accounts for the year ended 31st March, 2011 together with the Auditors’ Report.

FINANCIAL PERFORMANCE 1.0

(Rs. in million)

Particulars For the Year ended 31.03.2011

TOTAL TURNOVER 390.879Less : Discount on prompt payments 7.307

Less : Handling charges 3.759Add: Unscheduled interchange charges 21.338

Net Sales 401.151Other Income 2.960Total Income 404.111PROFIT/(LOSS) BEFORE INTEREST, DEPRECIATION ANDTAX

(2.272)

Interest 568.032PROFIT/(LOSS) BEFORE DEPRECIATION AND TAX (570.304)

Depreciation 556.230Profit / (Loss) Before Tax (1,126.534)Provision for Tax –– Current Tax – MAT credit reverse – Tax for earlier years

–––

– Deferred Tax –– FBT/WT Tax –NET PROFIT/(NET LOSS) AFTER DEPRECIATION AND TAX (PBDIT)

(1,126.534)

Balance brought forward from previous year –

NET PROFIT/(NET LOSS) CARRIED TO BALANCE SHEET (1,126.534)

OPERATIONAL PERFORMANCE2.0

During the period under review, the total generation stood at 144.722 million units. The operation data for the year is as given below:

(in million units)

S.No

Particulars 2010-11

1. Total Generation 144.7222. Less: Auxiliary Transmission

Loss3.988

3. Less: Royalty/Wheeling to Govt. HPSEB 16.723

4. Total Units sold 108.672

PROJECT STATUS AND CONSTRUCTION 3.0ACTIVITIES

Your Directors are pleased to inform the members that despite all unanticipated odd and adverse conditions encountered during the project implementation, during the year, your company has been able to successfully commission the Project from Allain side along with both the units of 96 mw each totaling 192 MW & 220 kv double circuit dedicated Transmission Line of 178 km.

The project had started generating power on 17th of July, 2010. However, for want of completion of dedicated transmission line, the project was operated at restricted capacity of 50 mw at lower voltage in order to evacuate the power through partly completed dedicated transmission line and State Utility Transmission System for almost two months. 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. The Board would like to place on record their appreciation to our technical team and consultants for making this operation a success. Meanwhile, the work of dedicated transmission line was completed on 16th

September, 2010. Thereafter, the operations were brought back to normal voltage as well as on its designed capacity and power evacuation started through the dedicated transmission line, right up to CTU at Nalagarh.

The Duhangan Tunnel was day lit on 21st of December, 2010. The work on the completion of the Duhangan side is progressing at a fast pace despite the challenges being posed by the nature. The Company has taken reasonable measures like posting road guards, regular patrolling, etc to ensure that safety of people and assets are not compromised. The Company expects to commission the Duhangan side by 31st March, 2011.

124


OUTLOOK4.0

In the year under consideration, there was a revival of good monsoon after two successive years of deficient/scanty rain fall, which resulted in increased availability of water for power generation. This, coupled with additions of hydropower generation of 690MW during the FY resulted in the energy generation for the FY2010-11 for the country from the hydropower sector increasing by more than 7% to 114,295.66 million units from 106,655.87 million units in the previous year.

But at the same time, the good monsoons also resulted in lower demand for power. In addition to the improved monsoons, there was less-than-expected demand from distribution utilities. Inspite of the energy shortages, the distribution utilities had less interest in short term procurement of power and had resorted to load shedding on account of an estimated accumulated losses of around Rs.70,000 crores till date. (Source C.E.A.)

The unit rates of energy sales fell drastically from April of FY 2010 onwards on the power exchanges as well as among the traders, to reach trough levels in the month of November/December 2010. Subsequentlythe rates have started picking up, though they are still far from the peaks seen in the last few years.

Inspite of the downward pressure on the rates, the volumes in the power trading market have continued to witness strong growth trends. The trading volumes have increased by 27 per cent over the previous year with the traded power accounting for an average 5 per cent of the total power generation. The growth in volumes has been driven by the increased participation of open access industrial power consumers at the exchanges. The bilateral trading has shown negligible growth in FY2010-11 as compared to previous year. Notably, volumes of unscheduled interchange (UI) have dropped indicating this becoming a less preferred avenue for short-term transactions.

For merchant power plants, the tariffs typically are a function set by supply and demand in the market. With the shortfall in supply forecast likely to continue in the foreseeable future because of capacity additions not matching with the growth in demand; shortage in availability of fossil fuels to existing and upcoming thermal power plants, the tariffs are likely to see an upward trend. The distribution utilities are slowly showing renewed interest in the power trading market backed by support from the governments. All the aforesaid factors show that the hydro power sector is likely to see an upward momentum in the foreseeable future and tariffs are likely to remain buoyant at sufficiently high levels.

Thus the outlook for the next financial year is likely to be cautiously optimistic.

DIVIDEND5.0

As the construction work is still under progress and

with partial operations, no dividends are proposed to be declared during the year under operation.

PUBLIC DEPOSITS6.0

The Company has not accepted any deposits from the public during the year under reporting.

ENERGY CONSERVATION, TECHNOLOGY 7.0ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

Information required to be disclosed under Section217 (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.

PARTICULARS OF EMPLOYEES:8.0

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.

INTERNAL CONTROL SYSTEMS AND THEIR 9.0ADEQUACY

9.1 INTERNAL CONTROL SYSTEMS

The Company has systems in place for internal controls to ensure protection of assets, proper financial and operating functions and compliance with the policies, procedures, applicable Actsand Rules. The Company’s Internal Controls are supplemented by Internal Audit covering all financial and operating functions.

9.2 INTERNAL AUDIT

Internal Audit at ADHPL 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. The areas requiring specialized knowledge are reviewed in partnership with external experts.

Internal audit plans cover matters identified in risk management assessments as well as issues highlighted by the Board, the Audit Committee and senior management. Periodically 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.

DIRECTORS10.0

In accordance with the provisions of the CompaniesAct, 1956 and the Articles of Association of the Company, Dr. Kamal Gupta and Mr. Bidyut Shome,

125

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.

During the year, Mr. Oistein Andresen and Ms. Rohini Roshanara Sood resigned from the directorship of the Company. The Board of Directors wishes to place on record its sincere appreciation towards the contribution made by them during their tenure as Directors of the Company.

Mr. Knut Reed was appointed as Additional Director in place of Mr. Oistein Andresen, upto the next Annual General Meeting. The Board recommends the appointment of Mr. Knut Reed on the Board of the Company. 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.

AUDIT COMMITTEE11.0

During the year, the Audit Committee met three times to review Company’s Financial results, Internal Control Systems, Risk Management Policies and Internal Audit Reports.

During the year, the Audit Committee was reconstituted. As on date, the Members of the AuditCommittee are: Mr. Ravi Jhunjhunwala, Dr. Kamal Gupta and Mr. Knut Reed. The proceedings of the Committee were in accordance with the provisions of the Companies Act, 1956.

DIRECTORS’ RESPONSIBILITY STATEMENT12.0

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 have been followed along with proper explanation relating to material departures;


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


AUDITORS13.0

M/s. S.R. Batliboi & Co., Chartered Accountants, Statutory Auditors of the Company, will retire from their office at the ensuing Annual General Meeting. They are, however, eligible for re-appointment. The Company has received consent letter from S.R. Batliboi & Co., Chartered Accountants, under section 224(1B) of the Companies Act, 1956, for re-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.

AUDITORS’ REMARKS14.0

The Auditors’ Report read alongwith Notes to the Accounts is self-explanatory and require no further comments from the Board.

HUMAN RESOURCE DEVELOPMENT 15.0

The employees are vital and most valuable assets. A favorable work environment has been created in the organization that encourages innovation and meritocracy. A scalable recruitment and human resources management process has been set up, which enables us to attract and retain high-caliber employees. The functioning and activities were further aligned to Company’s business objectives. The thrust on rationalization of manpower with focus on proper utilization continues. The Human Resources Development activities focused on multi-skill training, performance improvement, learning from each other training module and basic engineering skills. Providing opportunity for open interaction communication and feedback have been highlights of Human Resources Development intervention at the plant.

ENVIRONMENT, HEALTH & SAFETY 16.0

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. For controlling air pollution, some of the steps that are taken are: regular water sprinkling on the roads for dust suppression; plantation on both sides of the road; and ensuring PUC Certification of the vehicles entering the project area. For controlling water pollution, regular action steps include: maintenance of septic tanks and soak pits for wastewater treatment at Labour camps; maintenance of Sewage Treatment Plant installed for Colony and office block and checking of filters for Storm water. For solid waste management, regular steps include : collection and disposal of total waste from project area in double chambered Electrical Incinerator; disposal in designated areas; protection of muck disposal areas with RCC toe walls and; closure of muck disposal areas for restored & usage for various

126


other purposes after stabilization. The Company celebrates Annual Environment Day on 5th June every year by extensive plantation, campaigns and awareness workshops.

The Company is also committed to providing hygienic living and working environment to its employees through numerous steps:

Construction of about 50 Community Toilets at •different labor camp locations and work sites.

Arrangement of safe drinking water from •natural sources to all workers in the project at labor camps and work sites.

Distribution of chlorine tablets during summer •season in all the labor camps.

Installation of water treatment plant with UV•treatment for the ADHPL colony and offices.

Initiation of bacteriological test facility as per •direction of HPSPCB.

Monitoring of drinking water for potability.•

Supply of LPG/Kerosene/Fuel wood to •employees for usage as fuel.

The Company is committed to ensure that all its activities in construction and operation are implemented in safe manner, so as to comply with legal as well as IFC’s requirements, accordingly EHS Plan for the project has been formulated which includes, SOPs for all aspects of the project.

Your Directors have pleasure in informing the members that the positive efforts of ADHPLtowards compliance of environmental requirement have also been recognized by high powered steering committee constituted by Hon’ble High Court of Himachal Pradesh in its inspection report on “ Status of Environment Compliance by ongoing Hydro projects in Himachal Pradesh. Thecommittee also noted that road constructed by the company upto Allain barrage was completely stabilized with lush green vegetative growth on both sides and recommended that this road as a model for other projects.

Security of employees is one of the prime concerns of the Management. The employees are adequately covered under various insurance policies against risk of health and life disasters. The Company operates and maintains one primary health centre at Prini, which has well experienced medical officer and other paramedical staff. The Company also maintains two First Aid centers at Hamta Potato farm and Duhangan weir site with trained Paramedics. Annual health check-ups for all employees are carried out at the health centre. Consistent efforts were made by the Companyto improve safety standards in the Company by taking measures like intensive safety drives in work area and conducting safety audit, workshop & first aid training, training related to Road safety,

defensive driving training, Fire Fighting training, emergency response training, etc. The Company also organizes Health awareness campaigns and AIDS awareness campaign for the benefits of its staff and workers.

CORPORATE SOCIAL RESPONSIBILITY17.0

We believe that, wherever we operate, our activities should generate economic benefits and opportunities for an enhanced quality of life for those whom our business impacts; that our conduct should be a positive influence; that our relationships should be honest and open; and that we should be held accountable for our actions.

As a constructive partner in the communities in which it operates, your Company has been taking concrete action to realize its social responsibility and has spent on the infrastructure development including: contribution to Local Community fairs of Prini, Jagatsukh, Aleo and adjacent villages; organization of health awareness campaigns and environment awareness camp; organization of local sporting events; contribution to local schools, etc.

Various events like : Republic Day, IndependenceDay, New Year, Vishwakarma Jayanti, SaraswatiPuja, Ganesh Chaturthi, Dussehra, Diwali, Janmashtami, Christmas, Annual Day, Lohari, etc. are celebrated in the campus.

The Company actively participates in CSRactivities like: child education, healthcare, women empowerment, etc. At the Company’s primary health centre at Prini, total of 11,320 patients have been treated during the financial year under consideration. A Pulse polio immunization programme was conducted at the health centre at Prini, where 232 children were vaccinated.

The rescue efforts towards 2500 stranded tourists (which included several children and senior citizens) at Rohtang Pass conducted on 22nd October 2010 by the site team was appreciated by one and all.

CORPORATE GOVERNANCE18.0

Corporate Governance is a process that aims to meet shareholders’ aspirations, values and societal expectations. It is a commitment that is backed by the fundamental belief of maximizing shareholders value, transparency in functioning values and mutual trust amongst all the stakeholders, of the organization. In our company, corporate governance philosophy stems from our belief that it 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 play a critical role in imparting balance to the Board processes, by bringing an independent judgment to decide on issues of strategy, performance, resources, standards of Company’s conduct, etc. The Audit

127

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.

ACKNOWLEDGEMENT 19.0

Your Directors acknowledge the assistance and continued support provided by the Ministry of Power, Government of Himachal Pradesh, other government agencies, lenders, commercial banks, financial institutions, PTC India Limited and our

valued customers & look forward to their continued support and cooperation in the coming years as well. Your Directors also like to express great appreciation for the commitment and contribution of its employees at all levels. Last but not the least, the Company thanks its shareholders for their unstinted support.

For and on behalf of the board of directors


Place: NoidaDate: 07th June, 2011

ANNEXURE I TO THE DIRECTORS REPORT

STATEMENT OF PARTICULARS PURSUANT TO THE COMPANIES

(DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988


2. TECHNOLOGY ABSORPTION -

Power was generated and evacuated, at lower voltage, i.e. 6.6/132 kVA. This type of operation was tried •successfully for the first time anywhere in the world.

As a result, the Company was able to generate and transmit power till the time the dedicated Transmission •Line was fully operationalized.

3. FOREIGN EXCHANGE EARNINGS AND OUTGO

(in Rs. million)

2010-11 2009-10I Foreign Exchange Outgo

Engineering Fees and Consultancy charges 33.870 64.609Legal and Professional charges 59.459 117.565Traveling 1.738 0.254Financial charges 0.454 0.969Capital and Project Equipments 0.431 101.743Total 95.955 285.140

II Foreign Exchange EarningsOthers (Sale of Voluntary Emission Rights)Total NIL

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 2011 are given hereunder:

Persons employed for the full yearI.

Name Designation Remuneration (Rs. in Millions )

Qualification Experience Age Date of Commencement of

EmploymentNIL

128


AUDITORS' REPORT

To

The Members of AD Hydro Power Limited

We have audited the attached Balance Sheet of AD1.Hydro Power Limited (‘the Company’) as at March 31, 2011 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’smanagement. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with 2.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 (Auditor’s Report) 3.Order, 2003 (as amended) issued by the CentralGovernment 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.

Without qualifying our opinion, attention is invited to 4.Note 7 of Schedule 20 of the financial statements, regarding management’s assessment of carrying amount of fixed assets of the Company. Based on financial projections (including the projected tariff) arrived at after considering past experience of running similar power projects and renewable sources of fuel, the Company believes that profits are expected to accrue once the entire project commences full commercial operation in the next year and hence, no adjustments are required to the carrying amount of fixed assets on account of impairment. In the absence of external evidence of such future projections (including those related to assumption of projected tariff), we have relied upon management’s assessment in this regard.

Further to our comments in the Annexure referred 5.to above, we report that:

We have obtained all the information and i.explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

In our opinion, proper books of account ii.as required by law have been kept by the Company so far as appears from our examination of those books;

The balance sheet and cash flow statement iii.dealt with by this report are in agreement with the books of account;

In our opinion, the balance sheet and cash flow iv.statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the CompaniesAct, 1956;

On the basis of the written representations v.received from such directors, as on March 31, 2011, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

In our opinion and to the best of our information vi.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;

in the case of the balance sheet, of the a)state of affairs of the Company as at March 31, 2011;

in the case of the profit and loss account, b)of the loss for the year ended on that date; and

in the case of cash flow statement, of c)the cash flows for the year ended on that date.

For S.R. BATLIBOI & CO. Firm registration number: 301003EChartered Accountants



129

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 disposal of a substantial part 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, out of which, confirmations / reconciliations have not been received from third parties for an amount of Rs 21,685 thousand at the end of the year (excluding an amount of Rs. 28,382 thousand lying with a contractor, which is under reconciliation as stated in Note No. 22 of Schedule 20 of the financial statements).

(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.

(b) The Company has taken loan from onecompany covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 5,364,212 thousand and the year-end balance of loan taken from such company was Rs. 4,370,198 thousand (excluding interest accrued on loan amounting to Rs. 746,113 thousand).

(c) 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 is not prima facie prejudicial to the interest of the Company.

(d) 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. Further, 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 only once all obligations to outside lenders have been paid and discharged in full.

(iv) As per the information and explanations given to us, certain fixed assets and inventories purchased are of specialized nature for which comparable prices are not available. Read with above, in our opinion, 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 and scrap. During the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the Company in respect of these areas. 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 respect of transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees five lakhs entered into during the financial year, because of the unique and specialized nature of the items involved and absence of any comparable prices, we are unable to comment whether the transactions were made at 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, related to the generation of electricity from hydro-electric power and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

(ix) (a) Undisputed statutory dues including provident fund, investor education and

130


protection fund, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues have generally been regularly deposited with the appropriate authorities though there has been a slight delay in a few cases 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 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. The provisions relating to employees’ state insurance are not applicable to the Company.

(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) The Company’s accumulated losses at the end of the financial year are less than fifty per cent of its net worth. The Company has incurred cash losses during the current year. As the Company was yet to commence commercial operations as on March 31, 2010, the Profit & Loss Account was not prepared. Hence, in respect of the previous year, we are not required to comment on whether the Company incurred cash losses in the 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 before 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 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) The Company did not have any outstanding debentures during the year.

During the year under review, the Company has (xx)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) We have been informed that theft of materials amounting to Rs. 245 thousand has been reported during the year at the plant location. We are also informed that the Company has recovered an amount of Rs. 221 thousand from the security agency at the plant, while the balance amount has been written off. Other than the foregoing, 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 year.

For S. R. BATLIBOI & CO.Firm registration number: 301003EChartered Accountants



131

BALANCE SHEET AS AT MARCH 31, 2011


For S. R. Batliboi & Co.Chartered AccountantsFirm Registration No. : 301003E




RAVI JHUNJHUNWALA KNUT REED Director Director

O.P. AJMERA SANDEEP CHANDNA CEO & CFO Company Secretary


(` ’000)Schedules As at

March 31, 2011As at

March 31, 2010SOURCES OF FUNDSShareholders' fundsShare capital 1 5,601,528 5,601,528

5,601,528 5,601,528 Loan fundsSecured loans 2 9,358,555 8,380,000 Unsecured loans 3 4,370,198 3,750,520

13,728,753 12,130,520 TOTAL 19,330,281 17,732,048 APPLICATION OF FUNDSFixed assets Gross block 4 16,462,403 934,624 Less : Accumulated depreciation 613,345 376,400 Net block 15,849,058 558,224 Capital work-in-progress including capital advances

5 1,910,966 11,970,645

Expenditure during construction period (pending capitalisation)

6 1,277,756 6,025,024

19,037,780 18,553,893 Current assets, loans and advancesInventories 7 119,801 177,321 Sundry debtors 8 54,274 – Cash and bank balances 9 46,913 499,766 Other current assets 10 223,608 188 Loans and advances 11 24,585 23,329

469,181 700,604 Less: Current liabilities and provisionsCurrent liabilities 12 1,283,641 1,523,854 Provisions 13 19,573 18,613

1,303,214 1,542,467 Net Current assets / (liabilities) (834,033) (841,863)Profit & loss account 1,126,534 – Miscellaneous expenditure(to the extent not written off or adjusted)

14 – 20,018

TOTAL 19,330,281 17,732,048 Notes to accounts 20The Schedules referred to above and the notes to accounts form an integral part of the Balance Sheet.

132


PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2011









(` ’000)Schedules For the Year ended

March 31, 2011INCOMETurnover 390,879 Add : Unscheduled interchange charges 21,338 Less : Discount on prompt payments (7,307)Less : Handling charges (NRLDC charges) (3,759)Turnover (net) 401,151 Other income 15 2,960 TOTAL 404,111 EXPENDITUREBulk power transmission charges 118,541 Personnel expenses 16 85,760Operating and other Expenses 17 202,082 Depreciation 4 556,230 Financial expenses 18 568,032 TOTAL 1,530,645 Loss before tax (1,126,534)Current Tax – Deferred tax charge / (credit) – Total Tax expense – Net loss carried to balance sheet (1,126,534)Earnings / (Loss) per share (In Rupees) (Nominal value Rs. 10 per share) 19 – Basic and diluted (2.01)Notes to Accounts 20The Schedules referred to above and the notes to accounts form an integral part of the Profit and Loss Account.

133

SCHEDULES

SCHEDULE 1: SHARE CAPITAL

(` ’000)



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 560,152,841) equity shares of ` 10 each

5,601,528 5,601,528

492,955,640 (Previous year 492,955,640) equity shares are held by Malana Power Company Limited, the Holding Companyalong with its nominees.

5,601,528 5,601,528

SCHEDULE 2: SECURED LOANS

(` ’000)



Rupee term loans

– From banks 6,495,000 6,230,000

– From an institution 2,863,555 2,150,000

9,358,555 8,380,000

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 Rs 593,573 thousand (previous year Rs 329,485 thousand)

SCHEDULE 3: UNSECURED LOANS

(` ’000)



Long Term loan

– From Holding Company 4,370,198 3,750,520

4,370,198 3,750,520

Unsecured loans include amounts payable within one year Rs. Nil (previous year Rs. Nil)

134


SCHEDULE - 4 : FIXED ASSETS(` ’000)

GROSS BLOCK DEPRECIATION NET BLOCK

Land-Freehold

Road & Building

CivilWorks

Trans-mission

Lines

Plant & Machin-

ery

Projectequip-

ment

Electricalinstalla-

tion

Furniture& Fit-tings

Comput-ers

Office & Other Equip-ments

Vehicles Total Tangible

Assets

Soft-ware

TotalIntan-gible

Assets

Total Previ-ous

Year

Gross Block

At April 1, 2010 – 255,488 – – – 592,687 30,804 19,766 10,994 7,919 16,966 934,624 – – 934,624 776,500

Additions 299,339 1,065,843 5,989,194 3,899,242 4,859,466 26,382 1,946 1,173 277 163 – 16,143,025 – – 16,143,025 158,127

Deductions/Adjustments

– – – – – 615,246 – – – – 615,246 – – 615,246 3


299,339 1,321,331 5,989,194 3,899,242 4,859,466 3,823 32,750 20,939 11,271 8,082 16,966 16,462,403 – – 16,462,403 934,624

Depreciation

At April 1, 2010 – 13,253 – – – 323,784 5,713 10,629 9,020 3,456 10,545 376,400 – – 376,400 185,722

For the year – 58,113 213,119 109,854 172,506 69,044 1,444 1,665 836 640 1,663 628,884 – – 628,884 190,681

Deletions / Adjustments

– – – – – 391,939 – – – – 391,939 – – 391,939 3


– 71,366 213,119 109,854 172,506 889 7,157 12,294 9,856 4,096 12,208 613,345 – – 613,345 376,400

Net Block March 31, 2011

299,339 1,249,965 5,776,075 3,789,388 4,686,960 2,934 25,593 8,645 1,415 3,986 4,758 15,849,058

– – 15,849,058 558,224

Net Block March 31, 2010

– 242,235 – – – 268,903 25,091 9,137 1,974 4,463 6,421 558,225 – – 558,224

Notes :1. Addition include expenditure during the construction period amounting to Rs.5,652,395 thousand (previous year Rs.Nil) capitalised under following heads:

Amount (Rs. '000)

Road & Building 415,598

Civil Works 2,355,665

Transmission Lines 974,371

Plant & Machinery 1,906,761

Total 5,652,395

2. Depreciation amounting to Rs. 72,654 thousand (previous year Rs. 190,681 thousand) has been transferred to expenditure during construction period (pending allocation) 3. Gross block of transmission line includes payment for 'Right to use' amounting to Rs.525,398 thousand. Right to use' is a irrevocable perpetual right of use of land, but the ownership

of land does not vest with the Company.

SCHEDULE – 5 : CAPITAL WORK IN PROGRESS (Including Capital advances)(` ’000)

Particulars As at March 31, 2011

As atMarch 31, 2010

Land – freehold (Refer note no. 11 (a) & (b) of schedule 20) – 306,791 Road & BuildingRoads 778,325 1,377,614 Buildings – 20,299 CivilUpstream/ barrage – 1,246,992 Head race tunnel 947,793 2,244,743 Pressure shaft/ penstock – 669,346 Gates 4,990 98,505 Switch Yard Civil – 94,879 Transmission line– Right to use – 381,513 – Expenditure on forest land (Refer Note no 11 (c) of Schedule 20) – 504,650 – Others – 1,642,518 Plant & MachineryPower house – 987,018 Switch Yard– Mechanical – 195,090 Construction power – 43,609 Turbine & Generators – 1,224,028 Valves – 28,860 Power Cables – 104,928

135

Power Transformer – 214,339 Electro & mechanical auxiliary services – 74,654 EOT Crane – 22,570 Equipments Under Installation – 5,416 Capital stocks 79,085 230,955 – includes stocks lying with third parties Rs 48,625 thousand (Previous year Rs. 204,345 thousand)Capital advances 100,773 251,328 Total 1,910,966 11,970,645

SCHEDULE 6: EXPENDITURE DURING CONSTRUCTION PERIOD (PENDING CAPITALISATION)

(` ’000)Particulars As at

April 1, 2010Addition /

Adjustmentsduring the year

Capitalised during the year


Personnel ExpensesSalaries, wages and bonus 499,549 63,640 463,105 100,084Contribution to provident and other funds

32,837 3,274 29,375 6,736

Gratuity expenses 5,236 – 4,241 995 Long term compensated absences

4,131 – 3,346 785

Workmen and staff welfare expenses

37,845 2,407 33,468 6,784

579,598 69,321 533,535 115,384 Operating and other expensesRent 57,271 12,818 57,640 12,449 Rates & taxes 346 64 332 78 Insurance 138,380 18,372 133,207 23,545 Repairs and maintenance – Plant and machinery 30,885 575 25,481 5,979 – Civil works 1,812 – 1,468 344 – Buildings 3,279 190 2,810 659 – Others 2,899 295 2,587 607 Travelling expense (Additions include Rs 1,583 thousand pertaining to prior years)

77,229 4,264 66,300 15,193

Conveyance 21,958 1,104 19,274 3,788 Vehicle running & hiring expenses

144,075 11,421 130,841 24,655

Communication expenses 20,854 1,066 18,137 3,783 Auditor's Remuneration :– Audit fee 2,806 – 2,383 423 – Fees for international reporting 1,657 221 1,595 283 – Fees for special audit 524 – 445 79 – Fees for certification 1,254 – 1,065 189 – Out of pocket expenses 377 144 443 78 Charity and donations (other than to political parties)

3,591 – 2,909 682

Director's remuneration 9,870 1,183 9,388 1,665 Tender expenses 14,005 360 11,784 2,581 Legal & professional charges (Additions include Rs 15,598 thousand pertaining to prior year)

132,674 20,261 123,882 29,053

136


(` ’000)Particulars As at

April 1, 2010Addition /

Adjustmentsduring the year

Capitalised during the year


Engineering fees 601,678 100,039 550,047 151,670 Consultancy charges 180,436 9,714 155,741 34,409 Test & Survey Expenditure 32,692 – 26,481 6,211 Expenditure on forest land (Refer note no 11 (c) of Schedule 20)

269,538 – 218,326 51,212

Environment health and safety 18,110 – 14,669 3,441 Fee & subscription 5,171 335 4,460 1,046 Stores, spares & other consumables

191,514 20,128 162,959 48,683

Hiring of equipment 254,337 138 206,125 48,350 Power and fuel (net of recoveries of Rs 1,364 thousand)

17,220 37,867 44,703 10,384

Installation charges 3,612 – 2,926 686 Security arrangement expense 66,543 7,942 60,952 13,533 Social welfare expenses 140,995 (14,279) 103,154 23,562 Miscellaneous expenses (net of recoveries Rs. 991 thousand)

77,036 4,415 66,943 14,508

2,524,628 238,637 2,229,457 533,808 Financial expensesInterest on Term Loan 1,890,949 408,979 1,882,613 417,315 Interest to Holding Company 561,334 151,452 602,385 110,401 Interest on Others 5,025 – 4,268 757 Financial / bank charges (includes commitment charges / upfront fee reimbursed to holding company Rs 2,922 thousand)

157,718 1,863 129,301 30,280

2,615,026 562,294 2,618,567 558,753 Depreciation 376,890 72,654 364,404 85,140 Fringe benefit tax 16,667 – 14,155 2,512

5,533,211 873,585 5,226,583 1,180,213Less : Interest earned (Tax deducted at source Rs. 120 thousand, Previous year Rs. 504 thousand) (net of provision for income tax Rs. 140 thousand (Previous year Rs. 1,629 thousand))

(60,899) (1,057) (53,548) (8,408)

Less : Scrap sale (26,886) (5,054) (22,507) (9,433)Less : Revenue during trial run period (refer note 5 of schedule 20)

– (31,668) (31,668) –

6,025,024 905,127 5,652,395 1,277,756

SCHEDULE 7: INVENTORIES(` ’000)



Stores and spares (including stocks lying with third parties Rs 1,442 thousand (previous year Rs 65,729 thousand)

115,309 177,321

Scrap 4,492 – 119,801 177,321

137

SCHEDULE 8: SUNDRY DEBTORS(` ’000)



(Unsecured, considered good)Outstanding for a period exceeding six months 31,668 –Other debts 22,606 –

54,274 –

SCHEDULE 9: CASH AND BANK BALANCES(` ’000)



Cash on hand 446 2,227 Balances with scheduled banks: On current accounts 38,796 124,360 On deposit accounts 200 370,200 On margin money accounts 7,471 2,979

46,913 499,766 Included in deposit accounts is :Fixed deposit of Rs 200 thousand (previous year Rs 200 thousand) pledged with the H.P. Government Sales Tax Department

SCHEDULE 10: OTHER CURRENT ASSETS(` ’000)



Interest accrued on deposits 301 188 Fixed assets (Project equipments) held for sale (at net book value or estimated net realisable value, whichever is lower)

223,307 –

223,608 188

SCHEDULE 11: LOANS AND ADVANCES (Unsecured, considered good)

(` ’000) As at

March 31, 2011 As at

March 31, 2010Loans to employees 4,844 1,445 Advances recoverable in cash or in kind or for value to be received

16,159 18,531

Security deposit 3,582 3,353 24,585 23,329

Included in Loans and Advances are :i. Dues from a Company under the same managementBhilwara Energy Limited(Maximum amount outstanding during the year Rs. 950 thousand (Previous year Rs. nil thousand)

523 –

138


SCHEDULE 12: CURRENT LIABILITIES(` ’000)



Sundry creditors (refer note 10 of schedule 20)(a) Outstanding dues of Micro & Small Enterprises – –"(b) Outstanding dues of creditors other than Micro & Small Enterprises"

417,180 822,165

Deposits from contractors and others 42,333 83,196 Interest accrued but not due on loan from an institution 59,745 41,857 Interest accrued but not due on loan from holding company 746,113 559,211 Other liabilities 18,270 17,425

1,283,641 1,523,854

SCHEDULE 13: PROVISIONS(` ’000)



Provision for Tax (Net of advance tax / tax deducted at source Rs 20,411 thousand, (Previous year Rs 19,861 thousand))

344 866

Provision for Gratuity (refer Note 18 of schedule 20) 2,041 1,112 Provision for Long term compensated absences 7,392 5,108 Provision for Continuity Linked Bonus 9,796 11,527

19,573 18,613

SCHEDULE 14: MISCELLANEOUS EXPENDITURE(to the extent not written off or adjusted)

(` ’000) As at

March 31, 2011 As at

March 31, 2010Share issue expenses Balance as per last account 20,018 20,018 Less : Expensed off during the year (20,018) –

– 20,018

SCHEDULE 15: OTHER INCOME(` ’000)



Interest on bank deposits (Gross, Tax deducted at source Rs. 775 thousand)

2,960 –

2,960 –

SCHEDULE 16: PERSONNEL EXPENSES(` ’000)



Salaries , wages and bonus 73,024 –Contribution to provident fund and other funds 2,400 –Gratuity expenses (refer Note 19 of schedule 20) 2,041 –Long term compensated absences 2,284 –Workmen and staff welfare expenses 6,011 –

85,760 –

139

SCHEDULE 17: OPERATING AND OTHER EXPENSES(` ’000)



Stores, spares & other consumables (including material written off Rs. 5,830 thousand)

10,669 –

Power and fuel 11,482 –Repairs and maintenance –– Plant and machinery 12,262 –– Civil works 18,312 –– Buildings 690 –– Others 2,756 –Rent 7,114 –Rates and taxes 17 –Insurance 31,553 –Travelling expense 7,184 –Conveyance 1,792 –Legal and professional expenses 14,087 –Consultancy charges 4,050 –Director's remuneration 2,463 –Auditor's remuneration :– Audit fee 660 –– Fees for international reporting 385 –– Fees for special audit 525 –– Fees for certification 330 –– Out of pocket expenses 122 –Open access charges 5,358 –Miscellaneous expenditure (share issue expenses) written off 20,018 –Security arrangement expense 14,481 –Social welfare expenses 3,773 –Vehicle running & hiring expenses 13,945 –Miscellaneous expenses 18,054 –

202,082

SCHEDULE 18: INTEREST(` ’000)



Interest- On term loan 528,859 –- To holding company 35,450 –- Others 3,723 –

568,032 –

SCHEDULE 19: EARNINGS / (LOSS) PER SHARE (EPS)(` ’000)



Net profit / (loss) as per profit and loss account (Rs in '000) (1,126,534)Number of equity shares of Rs.10 each at the beginning of the year

560,152,841 –

Total number of equity shares of Rs.10 each at the end of the year

560,152,841 –

Weighted average number of equity shares of Rs.10 each at the end of the year for calculation of basic and diluted EPS

560,152,841 –

Basic and Diluted Earnings / (Loss) Per Share (in Rupees) (2.01) –

140


SCHEDULE – 20: NOTES TO ACCOUNTS

Nature of Operations1.

AD Hydro Power Limited (hereinafter referred to as ‘the Company’) is engaged in the generation of hydro electric power. Upto the end of previous year, the Company was is in the process of setting up a 192 MW hydro electric power generation project, out of which, part of the project (Allain side) has started commercial production in the current year. The Company is still in the process of construction of balance portion of the project on Duhangan side.

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 CompaniesAct, 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 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.

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.

Expenditure directly relating to construction activity is capitalized and apportioned to fixed assets on completion of the project. Indirect expenditure incurred during the construction period which is not related to the construction activity nor is incidental thereto has been charged to the Profit and Loss Account. Income earned during construction period is deducted from the total of the indirect expenditure.

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 using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset.

Depreciation(d)

i Depreciation on Buildings 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 date of completion of the project.

iii. Depreciation on the assets of generating unit and other Plant & Machinery, 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

iv. Depreciation on Roads constructed on land owned by the Company is provided on straight line method at the rates based on their estimated useful life of 10 years which is higher than the rates prescribed in Schedule XIV of the Companies Act, 1956, as under:

Rate (SLM) Schedule XIV Rate (SLM)Roads 10.00% 3.34%

iv. Depreciation on fixed assets other than those covered under (i) to (iv) above 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.

141

Borrowing costs(e)


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 on a straight-line basis over the lease term.

Inventories (g)

Inventories comprising of stores and spares are valued at lower of cost and net realizable value. Cost is determined on a weighted average basis. Scrap is valued at net realizable value.


Revenue recognition(h)


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.

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.

Carbon Credit Entitlement

In process of generation of hydro-electric power, the Company also generates carbon emission reduction units which may be negotiated for price in international market under Clean Development Mechanism (CDM) subject to completing certain formalities and obtaining certificate of Carbon Emission Reduction (CER) as per Kyoto Protocol. Revenue from CER is recognised as and when the CER’s are certified and it is probable that the economic benefits will flow to the Company.

Foreign currency translation(i)

Foreign currency transactions



(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.


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 period, or reported in previous financial statements, are recognised as income or as expenses in the year in which they arise.

142


Retirement and other employee benefits(j)

Retirement benefits in the form of Provident Fund and Superannuation Schemes are defined (i)contribution schemes and the contributions are charged to the ‘Personnel Expenses’ in the period 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 period.

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 period.

Actuarial gains/losses are immediately taken to profit and loss account and are not deferred.(v)

Earnings Per Share(k)

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.


Provisions(l)

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.

Income Taxes(m)

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 till the period plant is under construction / charged to the profit and loss account post completion of construction. 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 and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the taxes on income levied by same governing taxation laws. 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.

Cash and Cash equivalents(n)

Cash and cash equivalents for the purposes of cash flow statement 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). Considering3.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 has signed a Quadripartite Agreement on 54. th November, 2005 with Rajasthan Spinning &

143

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.

The Company has the necessary permission from the Government of Himachal Pradesh to own, operate & maintain the project and sell power for a period of forty years from the date of commercial operation i.e. July 29, 2010 with the option to avail a further extension for a maximum period of twenty years after renegotiation of terms and conditions.

The Company has considered July 29, 2010 as the date of capitalization of Allain side of the project, based on the 5.Synchronization and Commercial Operation certificate issued by the Himachal Pradesh State Electricity Board (‘HPSEB’) for Unit 2 of Allain. The management further believes that such date of capitalization is appropriate, as the concession period of 40 years as per the agreement with State Government of Himachal Pradesh will commence from the said date.

Further, the period between July 17, 2010 and July 28, 2010 has been considered as trial run period, which represents the period when the Company was conducting test runs of its project and thus, revenue of Rs. 31,668 thousand for this period has been deducted from ‘Expenditure during Construction period (pending capitalization)’.

The date of capitalization of Transmission Line has been considered as September 16, 2010 i.e. the date when the Central Electricity Authority has certified the date of commissioning of Unit 1 of Allain side of the project.

As per the terms of the Implementation Agreement signed with the State Government of Himachal Pradesh 6.on February 2, 2001, the project was scheduled to be completed within 105 months of entering into the said agreement i.e. the scheduled completion date of the project was October 2, 2009. Further, as per the agreement in case of delay in completion of the project, there was a disincentive in terms of additional free power to be given to State Government over the initially agreed 12% as under:

“In the event that the commercial operation date of the project is delayed beyond the scheduled commercial operation date, the quantum of free electricity supply shall be as follows - 12% plus 0.2% for each period of 73 days or part thereof falling between the scheduled operation date of the project and the commercial operation date of the project”.

The management believes that the delay in completion of project is due to factors outside the control of the Company and there is no additional obligation to supply free power over and above the 12% free power to HPSEB as per the agreement and no adjustments are deemed necessary to financial statements in this regard.

On account of various reasons beyond the control of the Company (like significant geological problems 7.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 Rs. 8,956,000 thousand to Rs. 20,212,820 thousand. Further, the Company has incurred a loss of Rs.1,126,534 thousand for the year ended March 31, 2011.

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 entire project commences full commercial operation in the next year (i.e. by March 31, 2012) and hence, no adjustments are required to the carrying amount of fixed assets on account of impairment. Further, management is of the view that despite such increase in estimated project cost and loss in the current year, the going concern assumption of the Company has not been vitiated.

The Company is eligible for tax holiday under Section 80-IA of the Income Tax Act, 1961. In view of business 8.loss and unabsorbed depreciation in the current year, the Company has not availed the tax holiday period.

In accordance with Accounting Standard 22 ‘Accounting for Taxes on Income’, issued by the Companies9.(Accounting Standard) Rules, 2006, 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.

Sundry Creditors for supplies and services and deposits from contractors and others amounting to Rs. 459,513 10.thousand, Advances from contractors / suppliers amounting to Rs. 100,772 thousand and Inventories lying with contractors amounting to Rs. 50,067 thousand are subject to confirmation / reconciliation as at the year end or any time during the year. Subsequent to the year end, the management is in the process of seeking confirmation / reconciliation from these contractors / suppliers for the balances outstanding. In the opinion of the management, such advances / inventory appearing as outstanding at year end are good of recovery, while the amounts payable are due and consequential adjustments required on reconciliation of the balances payable to/ receivable from these contractors / suppliers will not be material in relation to the financial statements of the Company.

144


(a)11. 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.

Land includes Rs. 298,070 thousand paid for 12.53 hectares land, out of which mutation for execution of (b)9.73 hectares in favour of Company has been completed. Apart from notified land, 2.80 hectares land has been acquired directly from the villagers and the mutation is in progress.

(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.

Related Party Disclosures12.

Names of related parties(a)

Ultimate Holding Company Bhilwara Energy LimitedEnterprises having significant influence over the Company

SN Power Global Services Pte. Ltd.SN Power Holding Singapore Pte. Ltd.Statkraft Norfund Power Invest Norway

Holding Company Malana Power Company LimitedKey Management Personnel Mr. R. P. Goel, Whole Time Director.Fellow Subsidiary Indo Canadian Consultancy Services Limited, Green

Ventures Pvt Limited

(b) Transactions with related parties

(` ’000)Nature of Transaction Ultimate

HoldingCompany

Holding Company/ Enterprises having


Key Management Personnel

FellowSubsidiary

March2011

March2010

March2011

March2010

March2011

March2010

March2011

March2010

Transactions during the yearRemuneration paid to Mr. RP Goel

3,647 3,225

Consultancy charges to Indo Canadian Consultancy Services Limited

13,764 22,628

Consultancy charges to SN Power Holding Singapore Pte. Ltd.

– 36,817

Consultancy charges to SN Power Global Services Pte. Ltd.

52,217 116,004

Reimbursement of expenses incurred by Malana Power Company Limited on behalf of the Company

6,739 15,264

Reimbursement of expenses incurred on behalf of Malana Power Company Limited

995 1,712

Reimbursement of expenses incurred by Indo Canadian Consultancy Services Limited on behalf of the Company

6,232 7,260

Reimbursement of expenses incurred on behalf of Indo Canadian Consultancy Services Limited

26 30

Reimbursement of expenses incurred by Statkraft Norfund Power Invest Norway on behalf of the Company

20,162 –

145

(` ’000)Nature of Transaction Ultimate

HoldingCompany

Holding Company/ Enterprises having


Key Management Personnel

FellowSubsidiary

March2011

March2010

March2011

March2010

March2011

March2010

March2011

March2010

Shares Capital allotted to Malana Power Company Limited

– 628,000

Reimbursement of expenses incurred by Bhilwara Energy Limited on behalf of the Company

1,614 1,450

Reimbursement of expenses incurred on behalf of Bhilwara Energy Limited

151 1,055

Unsecured Loan taken from Malana Power Company Limited

851,678 7,615,100

Unsecured Loan repaid to Malana Power Company Limited

232,000 5,189,100

Interest Expense on Unsecured loan taken from Malana Power Company Limited

186,902 359,288

Balances outstanding as at the year endInvestments:Investment by Malana Power Company Limited

4,929,556 4,929,556

Balances Receivable:Bhilwara Energy Limited 523 –Balances Payable:SN Power Global Services Pte. Ltd.

14,195 20,149

Unsecured Loan taken from Malana Power Company Limited

4,370,198 3,750,520

Interest accrued on Unsecured Loan from Malana Power Company Limited

746,113 559,211

Guarantees given by the Malana Power Company Limited on behalf of the Company

800,000 800,000

Contingent Liabilities (Not provided for) 13.

(` '000)

Particulars 2010-11 2009-10Bank guarantee outstanding 2,500 2,500Claims by contractors / suppliers against the Company not acknowledged as debts*

116,875 649,249

Claim from customer not acknowledged as debts (for loss of revenue on sale of electricity to HPSEB)

31,668 –

* The Company believes that these claims are not probable to be decided against the Company and therefore, no provision for the above is required.

Capital Commitments14.

Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of advances) Rs. 1,054,848 thousand (Previous Year Rs. 1,224,588 thousand)

146


Unhedged foreign currency exposure at the balance sheet date15.


Creditor for engineering fees Rs. 18,552,000 (CAD 400,000 @ closing rate of 1CAD=Rs. 46.38)

Rs. 15,641,500 (CAD 350,000 @ closing rate of 1CAD=Rs. 44.69)

Creditor for Supervisory Manpower Support

Rs. 14,194,696 (USD 316,422 @ closing rate of USD =Rs. 44.86)

Rs. 19,571,401 (USD 431,754 @ closing rate of USD =Rs. 45.33)

Statutory Supplementary Information (16. ` ’000)

March 2011 March 2010(a) Directors Remuneration

Salaries, wages and bonus 3,108 1,942Allowances 539 1,283

3,647 3,225

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 Director is not ascertainable and therefore, not included.b) Perquisites have been considered as per taxable value as per Income Tax Act, 1961

Additional information pursuant to the provisions of paragraphs 3, 4C and 4D of Part II of Schedule VI to the 17.Companies Act, 1956

a) Information in respect of Generation and Turnover:

March 2011 March 2010(i) Installed capacity (technically estimated) 192 MW 192 MW(ii) Generation M.U. 144.722 –(iii) Less:- Auxiliary Consumption and Associated Transmission

LossM.U. 3.988 –

Free Energy to Govt. of H.P. M.U. 16.723 –(iv) Turnover (including impact of UI Charges – (15.339) M.U.,

(Previous year (Nil) MU))M.U. 108.672 –

Rs’000 422,547 –Less: Turnover for trial run period from July 17, 2010 to July 28, 2010 (Refer Note 5 above)

Rs’000 31,668 –

Rs’000 390,879 –

b) Imported and indigenous stores and spare parts consumed (included under respective heads of ‘Expenditure during construction period (pending capitalization)’ and ‘profit & loss account’) :

Percentage of total consumption

Value (` ’000)

Stores & Spares March 2011 March 2010 March 2011 March 2010Imported 74.56 10.03 24,754 6,476Indigenously obtained 25.44 89.97 8,452 58,089

100.00 100.00 33,206 64,565

*excluding material written off amounting to Rs. 5,830 thousand

c) Expenditure in foreign currency (net of TDS) (accrual basis)

March 2011 March 2010Engineering Fees and Consultancy charge 33,870 64,609Legal and Professional charges 59,459 117,565Travelling 1,738 254Financial charges 454 969

95,521 183,397

147

d) Value of imports calculated on CIF basis (` ’000)

March 2011 March 2010Project Equipments 431 101,743

431 101,743

The Government of India has promulgated an Act namely The Micro, Small and Medium Enterprises Development 18.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.

Gratuity–Defined benefit plan (AS 15- Revised)19.

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 ‘Expenditure during construction period (pending allocation)’ / ‘Personnel Expenses’ 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

March 31, 2011(` ’000)

For the year ended

March 31, 2010(` ’000)

Current Service Cost 1,104 1,154Interest cost on benefit obligation 455 340Expected return on plan assets (366) (271)Net actuarial (gain)/ loss recognised in the period 848 (111)Past service cost – –Net benefit expense 2,041 1,112Actual return on plan assets (318) (775)

Balance Sheet

Details of Provision for Gratuity:

Particulars As atMarch 31, 2011

(` ’000)

As atMarch 31, 2010

(` ’000)Defined benefit obligation 6,390 5,690Fair value of plan assets 4,349 4,578

(2,041) (1,112) Less: Unrecognised past service cost Plan asset / (liability) (2,041) (1,112)



(` ’000)

As atMarch 31, 2010

(` ’000)Opening defined benefit obligation 5,690 4,530Interest cost 455 340Current service cost 1,104 1,154

148



(` ’000)

As atMarch 31, 2010

(` ’000)Benefits paid (1,660) (726)Actuarial (gains)/ losses on obligation 801 393Closing defined benefit obligation 6,390 5,690



(` ’000)

As atMarch 31, 2010

(` ’000)Opening fair value of plan assets 4,578 3,393Expected return 366 271Contributions by employer 1,112 1,138Benefits paid (1,660) (727)Actuarial gains / (losses) 48 503Closing fair value of plan assets 4,349 4,578

The Defined benefit obligation amounting to Rs. 6,389 thousand is funded by assets amounting to Rs. 4,349 thousand and the Company expects to contribute Rs 2,041 thousand during the next year. The major categories of plan assets as a percentage of the fair value of total plan assets are as follows:


As atMarch 31, 2010

% %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:


March 31, 2011


March 31, 2010% %

Discount Rate 8.00 7.50Expected rate of return on assets 8.00 8.00Future Salary Increase 5.00 5.00Withdrawal 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 three years are as follows*:


March 31, 2011


March 31, 2010


March 31, 2009


March 31, 2008Defined benefit obligation 6,390 5,690 4,530 3,298Plan assets 4,349 4,578 3,393 1,298Surplus / (deficit) (2,041) (1,112) (1,138) (2,000)Experience adjustments on plan liabilities

(822) (410) 112 -

Experience adjustments on plan assets

(48) 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.

Defined Contribution Plan (` in thousands)

2010-11 2009-10Contribution to Provident Fund 5,315 5,840Contribution to Superannuation Fund 813 1,059

6,128 6,899

149

As stated in Note 5 above, the Company has commenced commercial operation of Allain side on July 29, 2010 20.and on Transmission line on September 16, 2010. The management is in the process of carrying out detailed reconciliation of the variations in actual and budgeted quantities of key items (viz. cement, steel, etc.) used in construction of the plant and believes that no material adjustments are likely to be recorded in the financial statements upon completion of such reconciliation exercise

Leases21.

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.

(Amount in ` ’000)



Lease payments for the period 37,255 37,255

The Company has not undertaken reconciliation during the year with one of its key contractors / suppliers having 22.payables aggregating to Rs. 18,241 thousand, advances recoverable of Rs. 30,559 thousand and inventory lying with him of Rs. 28,382 thousand as at March 31, 2011. Subsequent to the year end, the management is in the process of seeking confirmation / getting reconciliation done for the balances outstanding. In the opinion of the management, 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.

The Company has taken loan from its holding, Malana Power Company Limited of which Rs. 4,370,198 thousand 23.(principal amount) is outstanding at year end.

As mentioned in Note 1 and Note 5 above, the Company has commenced commercial operations during the current year and commissioned its transmission line with effect from September 16, 2010. Due to substantial cost overruns witnessed, resulting in huge reported losses as at March 31, 2011, the Company has requested its holding company to waive off the interest from September 17, 2010 to March 31, 2011 and henceforth not to charge any interest till the time the Company’s operations become profitable. The Board of Directors of its holding company, vide their meeting dated March 29, 2011, have approved such request and, thus agreed to waive off interest of Rs. 247,901 thousand for the period from September 17, 2010 to March 31, 2011 (which was charged at rate of interest of 11 % per annum, as agreed with the holding company earlier).

Thus, interest charged by the holding company has been capitalized till July 28, 2010 for Allian portion and till September 16, 2010 for transmission line and Duhangan portion, while the same has been not accounted for from September 17, 2010 to March 31, 2011.

Previous year’s figures have been regrouped where necessary to conform to this year’s classification.24.

Note: As the Company did not commence commercial operations as of March 31, 2010, no Profit and Loss Account was prepared, but in lieu thereof, a statement of ‘Expenditure during construction period (pending capitalization)’ was prepared as per Schedule 6 and expenses incurred upto July 28, 2010 for the Allain side of the project, September 16, 2010 for the Transmission Line and March 31, 2011 for the Duhangan side of the project in relation to the construction of the project, have been included under the said Schedule, allocated/ 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.









150



(` ’000)As at

March 31, 2011As at

March 31, 2010A. Cash flow from / (used in) operating activities

Net loss (1,126,534) – Adjustments for:Depreciation 556,230 – Interest expenses 568,032 – Interest income (2,960) – Miscellaneous expenditure (share issue expenses) written off 20,018 – Operating profit before working capital changes 14,786 – Movements in working capital:Decrease / (Increase) in sundry debtors (54,274) – Decrease / (Increase) in loan and advances (371,253) – Decrease / (Increase) in inventories 57,520 – Increase / (Decrease) in current liabilities (446,329) – Cash generated from operations (797,265) – Direct taxes paid (Net of refund) 120 – Net cash from/ (used in) operating activities (797,385) –

B. Cash flows from / (used in) investing activitiesPurchase of fixed assets (including capital work in progress) (707,112) (2,795,607)Fixed deposit redeemed 370,000 2,302 Fixed deposit placed (4,493) (2,979)Interest received 3,904 3,278 Net cash from/ (used in) investing activities (332,701) (2,793,006)

C. Cash flows from financing activitiesProceeds from issuance of share capital – 373,528 (Repayment of) long -term borrowings (336,445) – Proceeds from long -term borrowings 1,934,678 3,629,764 Interest paid (925,491) (780,500)

Net cash from financing activities 672,741 3,222,792 Net increase / (decrease) in cash and cash equivalents( A+B+C) (457,345) 429,786 Cash and cash equivalents at the beginning of the year 496,587 66,801 Cash and cash equivalents at the end of the year / period 39,242 496,587 Components of cash and cash equivalents Cash on hand 446 2,227 With banks – on current accounts 38,796 124,360

– on deposit accounts – 370,000 39,242 496,587

Notes: 1. Difference in the figure of cash and bank balance as per schedule 9 and as per above of Rs 7,671 thousand (Previous period Rs 3,179 thousand) represents long term investment in fixed deposit with an original maturity of more than three months.









151


Registration No. 2 6 1 0 8 State Code 0 6


Date Month Year

2. CAPITAL RAISED DURING THE YEAR (Amount in ` Thousands)



3. POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (Amount in ` Thousands)

Total Liabilities 2 0 6 3 3 4 9 5 Total Assets 2 0 6 3 3 4 9 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 9 3 5 8 5 5 5 Unsecured Loans 4 3 7 0 1 9 8


Net Fixed Assets 1 9 0 7 3 2 3 0 Investments –(Incl. P.O.P. exps)

Net Current Assets (1 0 8 1 9 3 3) Misc. Expenditure –

Accumulated Losses (1 1 2 6 5 3 5)

4. PERFORMANCE OF COMPANY (Amount in ` Thousands)

Turnover 4 0 4 1 1 1 Total Expenditure 1 5 3 0 6 4 7

Profit/Loss before Tax (1 1 2 6 5 3 5) Profit/Loss after tax (1 1 2 6 5 3 5)

Earning Per Share (in `) – Dividend Per Share (in `) –

5. GENERIC NAMES OF PRINCIPAL PRODUCTS/SERVICES OF COMPANY (as per monetary terms)


Product Description H y d r o E l e c t r i c E n e r g y






152


FINANCIAL RESULTSOF

INDO CANADIAN CONSULTANCYSERVICES LTD.

153

DIRECTORS' REPORT

To The MembersThe Directors have pleasure in presenting the 16th Annual Report together with the Audited statements of Accounts for the year ended 31st March 2011.

Financial Performance(Rs. in lacs)

Particulars Current Year Previous Year

Gross Revenue 922.67 852.91

Expenditure 1206.33 944.66

Profit before Depreciation & Tax

(283.66) (91.75)

Depreciation 20.61 59.57

Profit/(Loss) before Tax

(304.27) (151.32)

Prior Period Income - 10.03

Provision for taxation ( for earlier year)

(48.90)

Wealth Tax (0.10) (0.06)

Deferred Tax Assets 59.55 (54.65)

Profit/(Loss) After Tax (293.72) (86.70)

Add/(Less): Profit/(Loss) brought forward from previous year

515.21 601.91

Profit/(Loss) brought forward

221.49 515.21

Dividend

The Directors do not recommend any dividend for the year 2010-11.

Review of Performance

During the financial year, the company designed several projects and provided its technical consultancy services to hydro projects ranging in size from 5MW to about 1000 MW in India, Nepal and Democratic Republic of Congo. 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. (part of AECOM Technologies, USA) 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. The company has been providing consultancy to several clients for hydro projects implementation including services for investigations, due

diligence studies, preparation of prefeasibility reports and detailed project reports, detailed design and drawings, technical specification, construction supervision, system engineering, etc. Till date ICCS has completed detailed design of 15 hydropower projects and 4 thermal power projects with installed capacity of about 470 MW and these projects have been commissioned. DPR and detailed engineering for about 25 projects having installed capacity of 2500 MW are under progress. The Company has bagged several contracts during the year financial year 2010-11 including review of DPR for Dikhu HEP(184 MW) in Nagaland and detailed engineering for Kakobola HEP in Democratic Republic of Congo. 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 completed the work of Techno Economic Approval of DPR for Nyamjang Chhu HEP (780 MW) in Arunachal Pradesh for Bhilwara Energy Limited (BEL). The company has finalized the DPR of Chango Yangthang HEP (140 MW) for BEL and Bara Bangahal HEP (200 MW) for Malana Power Company Ltd. (MPCL)and is in the process of carrying out the work of obtaining Techno Economic Clearance for these projects.

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 100 engineers and technicians. Efforts are being aimed towards imparting technical skills and improve productivity of the Company. The information of employees getting salary in excess of the limit as specified under the provisions of sub section (2A) of Section 217 of the Companies Act, 1956 who were employed throughout or for a part of the financial year under review is given as an annexure – I forming part of the report.

154


Public Deposits

The Company has not accepted any deposits from the Public during the year under report. Therefore, provisions of Section 58A of the Companies Act, 1956 are not applicable.

Directors

Mr. George P. Dick and Mr. L.N. Jhunjhunwala, 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 and Technology Absorption

The information required pursuant to the Companies(Disclosure of particulars in the report of Board of Directors) Rules, 1988 pertaining to Energy conservation and Technology Absorption are not applicable.

Foreign Exchange Earnings and Outgo

During the financial year 2010 -11 the inflow of foreign exchange was Rs 84.034 lacs against services rendered to foreign clients and outflow of foreign exchange was Rs. 1.826 lacs towards travelling.

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.

ON THE BEHALF OF THE BOARD OF DIRECTORS

RISHABH JHUNJHUNWALAChairman

Place: Noida (U.P.)Date: 7th June 2011

Directors’ Responsibility Statement

Your Directors would like to inform members that audited accounts containing the Financial Statements for the year 2010-11 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’sfinancial condition and results of operations. These financial statements are audited by the Statutory Auditors M/s KRA & Associates, 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, 2011 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 the Companies Act, 1956 for safeguarding the assets of the Companyand 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.

155

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, 2011 are given hereunder.

I. Persons employed for the full year

Name Designation Remuneration (Rs in Lacs)

Qualification Experience Age Commencement of Employment

Mr. Rakesh Mahajan Director- Civil 61.55 B.E . (C iv i l )M.Tech (Civil) MBA

31 51 1998

156


AUDITORS' REPORT

AUDITOR'S REPORT TO THE MEMBERS OF INDOCANADIAN CONSULTANCY SERVICES LTD.

We have audited the attached Balance Sheet of INDOCANANDIAN CONSULTANCY SERVICES LTD as at March 31, 2011 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 2011 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 31,2011 and

II. In the case of Profit & Loss Account, of the loss of the Company for the year ended on that date.

For KRA & ASSOCIATES (CHARTERED ACCOUNTANTS)

ROHIT TALWAR (PARTNER) M.NO:054876

Place: New DelhiDate: 7th June 2011

157

ANNEXURE TO THE AUDITOR'S REPORT

ANNEXURE REFERRED TO IN PARAGRAPH 1 OFTHE AUDITOR’S REPORT TO THE MEMBERS OFINDO CANANDIAN CONSULTANCY SERVICES LTD. ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH 2011.

i) The company is in the process of updating its fixed assets register

a) The fixed assets have not been physically verified by the management during the year.

b) 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 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, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchase of inventory fixed assets and with regard to the sale of services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control.

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 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 31.03.2011 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, 2011 which were outstanding for a period of more than six month from the date they became payable.

ix) The Company has no accumulated losses at the end of the financial year but it has incurred cash losses during the year.

x) According to the information and explanations given to us the company has not defaulted in repayment of dues to financial institutions and banks.

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.

158


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 long team 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 & ASSOCIATES (CHARTERED ACCOUNTANTS)

ROHIT TALWAR (PARTNER) M.NO:054876

Place: New DelhiDate: 7th June 2011

159

BALANCE SHEET AS AT 31ST MARCH, 2011

As per our report of even date attached.

For KRA & ASSOCIATESChartered Accountants

Rohit TalwarPartnerMembership No. 054876

Place : New DelhiDATE : 7th June, 2011

For Indo Canadian Consultancy Services Ltd.

Ravi JhunjhunwalaDirector

Rishabh JhunjhunwalaDirector

(Amount in `)

Schedules AS AT 31.03.2011

AS AT 31.03.2010

SOURCES OF FUNDS

Shareholders’ Funds

Share Capital 1 3,533,000 3,533,000

Reserves & Surplus

Profit and Loss Account 2 23,746,754 53,118,490

Total 27,279,754 56,651,490


Fixed Assets

Gross Block 3 28,256,535 25,717,428

Less : Depreciation 21,966,248 19,950,343

Net Block 6,290,287 5,767,085

Deferred Tax Assets 15,248,147 9,293,450

Current Assets, Loans & Advances 4

Sundry Debtors 28,115,638 57,920,426

Cash & Bank Balance 9,551,003 12,734,714

Other Current Assets 588,823 26,809,858

Loans & Advances 40,918,270 10,065,189

79,173,735 107,530,186

Current Liabilities and Provisions

Current Liabilities 5 27,352,050 35,257,619

Provisions 46,080,365 30,681,612

73,432,415 65,939,231

Net Current Assets 5,741,320 41,590,955

Total 27,279,754 56,651,490

Significant Accounting Policies & Notes to Accounts 9

Schedules referred to above and notes to accounts form an integral part of the Balance Sheet.

160


PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH,2011

(Amount in `)

Schedules Current Year 2010-11

Previous Year 2009-10

INCOME

Professional Charges 90,588,666 84,894,895

Other Income 6 1,678,338 396,395

92,267,004 85,291,290

EXPENDITURE

Personnel Expenses 7 85,895,906 66,540,578

Administrative & other expenses 8 33,299,858 27,925,921

Provision for Doubtful Debts 1,437,241 –

120,633,005 94,466,499

(Loss) Before Depreciation (28,366,001) (9,175,209)

Depreciation 2,060,943 5,957,142

(Loss) before Tax and Prior Period Income (30,426,944) (15,132,351)

Prior Period Income – 1,002,991

(Loss) before Tax (30,426,944) (14,129,360)

Provision for Tax

Deferred Tax (Charged)/ Credited 5,954,697 5,465,202

Provision for Taxation ( For earlier years ) (4,889,490) –

Wealth Tax - Current year (10,000)

- Earlier year – (6,105)

(Loss) after Tax (29,371,736) (8,670,263)

Profit Brought Forward 51,520,990 60,191,253

PROFIT/(LOSS) CARRIED FORWARD 22,149,254 51,520,990

E.P.S. (in Rs.) Basic/ Diluted (83.14) (24.54)

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

As per our report of even date attached.


Rohit TalwarPartnerMembership No. 054876

Place : New DelhiDATE : 7th June, 2011




161

SCHEDULES TO ACCOUNTS

SCHEDULE - 1 SHARE CAPITAL (Amount in `)

As at 31.03.2011

As at 31.03.2010

AUTHORISED

10,00,000 Equity Shares of Rs.10/- each 100,00,000 100,00,000

ISSUED, SUBSCRIBED & PAID UP

3,53,300 (Previous year 3,53,300)Equity Shares of Rs.10/- each fully paid-up

3,533,000 3,533,000

3,533,000 3,533,000

*Of the above 1,80,200 Equity Shares are held by Bhilwara Energy Limited the Holding Company

SCHEDULE - 2 RESERVES AND SURPLUS

Securities Premium Account 1,597,500 1,597,500

Profit & Loss Account 22,149,254 51,520,990

23,746,754 53,118,490

SCHEDULE 3 : FIXED ASSETS (Amount in `)GROSS BLOCK DEPRECIATION NETBLOCK

Particulars As At01-04-10

Addi. Dur. The Year

Dedn. Dur. The Year

As At31-03-11

Upto01.04.10

Addi. Dur. The

Period/ Year

Dedn. Dur. The

Period/Year

Upto31.03.11

As At31.03.11

As At31.03.10

TANGIBLE ASSETS

Furniture & Fixtures 723,889 – – 723,889 649,196 16,542 – 665,738 58,151 74,693

Office Equipments 1,509,172 6,990 – 1,516,162 676,107 141,394 – 817,501 698,661 833,065

Computers& Computer Peripherals

9,684,956 117,750 66,760 9,735,946 8,040,307 650,106 45,039 8,645,374 1,090,572 1,644,649

Motor Vehicles 3,789,069 1,741,595 – 5,530,664 1,412,216 1,015,236 – 2,427,452 3,103,212 2,376,853

ElectricalEquipments

788,297 14,755 – 803,052 458,879 47,053 – 505,932 297,120 329,418

Project Equipments 52,503 67,860 – 120,363 39,515 24,049 – 63,564 56,799 12,988

Total Tangible Assets (A)

16,547,885 1,948,950 66,760 18,430,076 11,276,218 1,894,380 45,039 13,125,561 5,304,515 5,271,668

INTANGIBLE ASSETS

Software 9,169,543 656,916 – 9,826,459 8,674,125 166,563 – 8,840,688 985,772 495,418

Total Intangible Assets (B)

9,169,543 656,916 – 9,826,459 8,674,125 166,563 – 8,840,688 985,772 495,418

Total (A + B ) 25,717,428 2,605,866 66,760 28,256,535 19,950,343 2,060,943 45,039 21,966,248 6,290,288 5,767,086

Previous Year 25,494,739 1,805,418 1,582,728 25,717,428 15,105,444 5,957,142 1,112,243 19,950,343 5,767,084 10,389,295

162


SCHEDULE 4: CURRENT ASSETS, LOANS & ADVANCES (Amount in `)

As at 31.03.2011

As at 31.03.2010

(i) Sundry Debtors

Sundry Debtors (Unsecured, considered good by the Management, except disclosed otherwise)

- Outstanding for more than Six Months 8,550,132 34,631,196

Less:- Provision for doubttfull debts 1,437,241 –

7,112,891 34,631,196

- Others 21,002,747 23,289,230

28,115,638 57,920,426

(ii) Cash & Bank Balances

(a) Cash in hand (As certified by the Management) 174,464 170,535

Cheques in Hand – –

(b) Balance with Scheduled Banks:

- In Current Accounts 4,862,344 7,407,104

- In Fixed Deposits (Refer Note 11) 4,514,195 5,157,075

9,551,003 12,734,714

(c) Other Current assets

Interest accrued but not due 588,823 312,631

588,823 312,631

(d) Loan & Advances

Advances recoverable in cash or in kind for value to be received

(Unsecured considered good by Management) 7,856,191 9,752,557

Advances Tax & TDS (net of Provisions) 33,062,079 26,809,858

40,918,270 36,562,415

79,173,735 107,530,186

SCHEDULE 5: CURRENT LIABILITIES & PROVISIONS

Current Liabilities

Sundry Creditors

– Micro small and medium Enterprises – –

– Others 17,235,784 28,969,273

Other Liabilities 9,242,254 5,435,982

Advance from Customers 874,012 852,364

27,352,050 35,257,619

Provisions

– Retirement benefits & Leave Encashment 17,103,511 5,819,833

– Continuity Liability Bonus 27,691,164 24,156,108

Provision for LTA and Medical Benefits 1,285,690 705,671

46,080,365 30,681,612

163

SCHEDULE 6: OTHER INCOME (Amount in `)

As at 31.03.2011

As at 31.03.2010

Interest received on Fixed deposits with bank (CY TDS Nil, PY TDS Rs 33,379/-)

1,526,354 341,043

Excess Provision Written Back 148,169 –

Profit on Sale of Fixed Asstes 3,815 Misc. Income – 55,352

1,678,338 396,395

SCHEDULE 7: PERSONNEL EXPENSES

Salaries, wages and other expenses 76,948,908 62,551,073

Contribution to provident and other funds 8,168,055 2,060,254

Workmen and staff welfare expenses 778,943 1,929,251

85,895,906 66,540,578

SCHEDULE 8: ADMINISTRATIVE & OTHER EXPENSES

Rent 14,929,176 14,929,179

Car running & maintenance 182,474 142,050

Rates & Taxes 2,308 9,359

Insurance 463,295 442,107

Legal and Professional 2,235,328 2,205,052

Traveling expenses 1,677,013 1,906,393

Electricity 2,330,796 2,356,076

Bad Debts Written off 5,048,175 2,856

Repair & Maintenance - Building 1,102,141 798,409

Repair & Maintenance -Others 922,536 718,669

Telephone 559,941 626,694

Establishment Exp. 804,713 713,630

Project Expenses 470,356 513,576

Printing & Stationery 543,243 685,480

Advertisement Exp. 22,956 –

Fee and Subscription 210,767 454,916

Audit Fees 225,000 75,000

Gift & Presentation 287,159 432,978

Interest 386 197,949

Lease Rent 80,000 –

Lease Rent Vehicle 360,000 360,000

Bank Charges 19,604 35,421

Foreign Flutuation Gain/Loss 123,190 –

Miscellaneous expenses 699,301 320,827

Total 33,299,858 27,926,621

164


Schedule 9: A- 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 notified under The Company Accounting Standards Rule’2006 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.

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)

This being a service company, revenue is recognized on billing basis which is billed with achievement of defined milestones.

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

165

realized in future; however, where there is unabsorbed depreciation or carried forward loss under taxation 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 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 period.

For the Purpose of calculating diluted earning per share, the net profit or loss for the period attributable to equity Shareholders is divided by the weighted average number of equity shares outstanding during the period as adjusted for the effects of all dilutive Potential Equity Shares.

166


NOTES TO ACCOUNTS

Contingent Liabilities 1. (` In Lacs)

PARTICULARS Year ended 31.03.2011

Year ended 31.03.2010

(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 Nil 1.30

The following disclosures have been made as required by the Accounting Standard – 15 (Employees 2.Benefit):

Employee Benefits

Defined Contribution Plan (` In Lacs)

Contribution to Defined Plan, recognized as expenses for the year/ period are as under


Year ended 31.03.10

Employer’s Contribution to Provident fund 27.20 21.09

Employer’s Contribution to Superannuation fund 10.70 13.9

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) (Amount in `)

PARTICULARS Gratuity31.03.2011

Gratuity 31.03.10

Current service cost 13,23,163 6,55,493

Interest cost on benefit obligation 2,65,452 2,29,565

Expected return on plan assets 3,28,408 2,60,038

Net actuarial loss (gain) recognized in the year 37,37,090 (8,71,298)

Net Expense recognized in the Profit & Loss A/c 49,97,297 (246,278)

Balance Sheet (Amount in `)


Gratuity 31.03.10

Fair value of plan assets at the end of the period 40,85,208 39,46,568

Present value of obligations as at the end of the period 84,13,120 32,77,183

Funded Status (43,27,912) 6,69,385

Excess of actual over estimated (NIL) 22,097

Net Assets/ ( Liability) recognized in the balance sheet 43,27,912 (669,385)

167

Changes in the present value of the defined benefit obligation are as follows: (Amount in `)


Gratuity 31.03.10

Present value of obligations at the beginning of the period (01/04/2010)

32,77,183 32,79,496

Interest cost 2,65,452 2,29,565


Benefits paid (1,89,768) (38,170)

Actuarial (gain) / Loss on obligation 37,37,090 (8,49,201)

Present value of obligations at the end of the period (31/12/2010) 84,13,120 32,77,183

Changes in the fair value of the plan assets are as follows: (Amount in `)


Gratuity 31.03.10

Fair value of plan assets at the beginning of the period 39,46,568 32,50,478

Expected return on the plan assets 3,28,408 2,60,038

Contributions Nil 4,52,125

Benefits paid (1,89,768) (38,170)

Actuarial gain/(loss) on plan assets NIL 22097

Fair value of plan assets as at the end of the period 40,85,208 39,46,568

Principal actuarial assumptions

a) Economic Assumptions

PARTICULARS Rate (%) 31.03.2011

Rate (%) 31.03.2010

a) Discount rate 8.10 8.10

b) Future salary increase 12.00 5.00

c) Expected Rate of return on plan Assets 8.00 8.00

b) Demographic Assumptions

PARTICULARS 31.03.2011 31.03.2010

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 15.00%31- 44 Years 10.00%Above 44 Years 5.00%

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 (Amount in `)

PARTICULARS Earned Leave 31.03.2011

Earned Leave 31.03.2010


Interest cost on benefit obligation 3,66,471 2,23,440

Expected return on plan assets Nil Nil

Net actuarial loss (gain) recognized in the year 55,62,364 163,225

Net Expense recognized in the Profit & Loss A/c 74,66,036 16,32,194

168


Balance Sheet (Amount in `)

PARTICULARS Earned Leave 31.03.2011


Fair value of plan assets at the end of the period Nil Nil

Present value of obligations as at the end of the period 1,16,96,014 45,24,328

Funded Status (1,16,96,014) (45,24,328)

Excess of actual over estimated Nil Nil

Net Assets/ (Liability) recognized in the balance sheet 1,16,96,014 45,24,328


PARTICULARS Earned Leave31.03.2011


Present value of obligations at the beginning of the period (01/04/2010)

45,24,328 31,92,006

Interest cost 3,66,471 2,23,440


Benefits paid (2,94,350) (2,99,872)

Actuarial (gain) / Loss on obligation 55,62,364 1,63,225

Present value of obligations at the end of the period 1,16,96,014 45,24,328

Changes in the fair value of the plan assets are as follows:

PARTICULARS Earned Leave31.03.2011


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 31.03.2011


a) Discount rate as on 31.03.2009 8.10 8.10

b) Future salary increase 12.00 5.00

c) Expected Rate of return on plan Assets 0.00 0.00

b) Demographic Assumptions

PARTICULARS Year Ended 31.03.2011 Year ended 31.03.2010

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 15.00% 31- 44 Years 10.00% Above 44 Years 5.00%

Ages Withdrawals Rate (%)Upto 30 Years 3.00%31- 44 Years 2.00%Above 44 Years 1.00%

Deferred Tax (AS-22)3)

A. Deferred tax has been accounted for in accordance with the Accounting Standard 22 “Accounting for Taxes on Income “.

169

B. Following are the major components of Deferred Tax Assets/ (Liabilities). (` in Lacs)

Deferred Tax Liabilities As at 31.03.2011 As at 31.3.2010Depreciation – (4.55)Total – (4.55)Deferred Tax Assets 152.48 92.93Depreciation 0.33 –Employee Benefits 147,71 97.48Provision for doubtful debts 4.44 –Total 152.48 97.48Net Deferred Tax Assets 152.48 92.93

C. The company has not recognized deferred tax assets on unabsorbed depreciation and business loss computed as per Income Tax laws.

4) 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. Fellow Subsidiary Co.2. Bhilwara Energy Limited. Holding Company3. Malana Power Company Limited. Fellow Subsidiary Co.4. NJC Hydro Power Limited Fellow Subsidiary Co.5. Green Ventures Pvt. Ltd. Fellow Subsidiary Co.

(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 Inc (Till 25/11/2010 )

RSW International Inc (Since 24/11/2010)


NONE


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.

The following transactions were carried out with the related parties in the ordinary course of business: (Figures in ` Thousands (000))

Sr.N0

Name of Related Party Services Rendered

Reimbursementof expenses

received.

Reimbursementof expenses paid

Rent Paid Amount Receivable

AmountPayable

Period 01-04-10 to 31-03-11

01-04-10 to 31-03-11

01-04-10 to 31-03-11

01-04-10to 31-03-11

01-04-10to 31-03-11

01-04-10to 31-03-11

1 AD Hydro Power Ltd 13,764 - 6,232 - 1,415 -(22,628) (7,290) (60) (-) (-) (-)

2 Bhilwara Energy Ltd 24,528 - 2,672 - 418 -(20,191) (1,397) (531) (-) (2,032) (-)

3 BMD Pvt. Ltd 1,115 - - - - - (-) (40) (-) (-) (-) (-)

4 Malana Power Company Ltd

2,343 - - - - -(1,516) (672) (-) (-) (-) (-)

5 Maral Oversease Ltd - - - - - -(-) (-) (-) (-) (-) (-)

6 RSWM Ltd 34 13,604 - 14,859 - 16,918(278) (11,547) (5,056) (18,565) (-) (14,021)

7 RSW International - - - - 1,437 -(64) (196) (-) (-) (2,595) (-)

8 HEG Ltd 61 21 - - - (500) (17) (5,609) (-) (-) (14,581)

170


5. Earning Per Share (AS-20) (Amount in `)

Basic /Diluted Earning Per Share Year ended 31.03.2011


Profit/Loss after Tax attributable to Equity Shareholders (29,371,736) 8,670,263

Weighted Average Number of Equity Shares 353,300 353,300

Nominal Value of Equity Shares 10 10

Earning Per Share (83.10) (24.54)

6. Transactions in Foreign Exchange (Amount in Rs.)

Nature of Transaction Year ended 31.03.2011


Expenditure (Foreign travelling) 1,82,641 Nil

Income 84,03,356 Nil

7. Auditor Remuneration (Amount in Rs.)

Particulars Year ended 31.03.2011.


Audit Fees 1,75,000 75,000

8. 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.

9. (A) Retention and Earnest money deposit amounting to Rs.7.15 lacs is outstanding for recovery from various parties since long. However, the management is hopeful to recover this amount and no provision has been considered at present.

(B) Security Deposit amounting to Rs.3.12 lacs was given to a party is outstanding for recovery / adjustment since 2007. However, the management is hopeful to recover this amount and no provision has been considered at present.

10. Fixed Deposits

The fixed deposits with the company amounting to Rs. 45, 14,195 are pledged with various authorities \ parties.

11. Balance of Debtors and Creditors and Loans / Advances are subject to confirmation.

12. Previous year figures have been regrouped where necessary. Amount in decimals have been rounded off to the nearest rupee.


Rohit Talwar(Partner)Membership No. 054876

Place : New DelhiDated : 7th June, 2011




171


` in '000'

PARICULARS For the year ended

31st March 2011

For the year ended

31st March 2010CASH FLOW FROM OPERATING ACTIVITIES Profit before tax (30,426,944) (14,129,360)Adjustments for:Depreciation 2,060,943 5,957,142 Interset Paid 386 197,949 Interset received 1,526,354 341,043 Net Profit on fixed assets sold/ dicarded 3,815 55,352 Deferred Tax Assets 10,854,188 5,471,307 Operating Profit before working capital changes (40,749,971) (13,841,971)Working capitalTrade receivable 29,804,788 22,046,455 InvestmentLoans & advances /Other current assets 1,322,651 (4,243,350)Liabilities and provisions 7,493,184 (1,320,338)Net cash from operating activites (2,129,349) 2,640,796 CASH FLOWS FROM INVESTING ACTIVITES Addition in fixed Assets ( Net ) (2,605,866) (1,805,418)Sale of Fixed Assets 25,536 525,837 Interest received 1,526,354 341,043 Others - Net cash from investing activities (1,053,976) (938,538)CASH FROM FINANCING ACTIVITIES Interest paid (386) (197,949)Net cash from financing activities (386) (197,949)Increase in cash and cash equivalents (3,183,711) 1,504,309 Opening cash or cash equivalents 12,734,714 11,230,405 Closing cash or cash equivalents 9,551,003 12,734,714 Components of cash and cash equivalents Cash on hand 174,464 170,535 With scheduled banks - on current accounts 4,862,344 4,429,458 Fixed deposit 4,514,195 8,134,721

9,551,003 12,734,714







172



Registration No. U74899DL1995PLC064168 State Code 5 5


Date Month Year

2. CAPITAL RAISED DURING THE YEAR (Amount in Rs. Thousands)



3. POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (Amount in Rs. Thousands)

Total Liabilities 2 7 2 8 0 Total Assets 2 7 2 8 0

SOURCES OF FUNDS

Paid-up Capital 3 5 3 3 Reserves and Surplus 2 3 7 4 7

Secured Loans – Unsecured Loans –


Net Fixed Assets 6 2 9 0 Investments –

Net Current Assets 5 7 4 1 Misc. Expenditure –

Accumulated Losses – Deferred Tax Assets 1 5 2 4 8

4. PERFORMANCE OF COMPANY (Amount in Rs. Thousands)

Turnover 9 2 2 6 7 Total Expenditure 1 2 2 6 9 4


Earning Per Share in Rs. ( 8 3 . 1 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








173

FINANCIAL RESULTSOF

NJC HYDRO POWER LTD.

174


DIRECTORS' REPORT

TO THE MEMBERS,M/s NJC HYDRO POWER LIMITED Dear Member,The Directors of the Company are pleased to present their Second Annual Report on the business and operations of the Company and Audited Statement of accounts for the year ended 31st March, 2011 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 - 3 under the head “Project & Pre-operative Expenses (Pending Allocation)” to the Balance Sheet.1. FINANCIAL HIGHLIGHTS As of 31st March, 2011, the Company’s expenditure

on various accounts is detailed below: (Rs in Million)

PARTICULARS 31.03.2011Fixed Assets (Gross) including Capital Work-in-Progress

148.49

Preoperative Expenses 716.60Net Current Assets (26.80)Miscellaneous Expenditure 6.608TOTAL 844.89

2. PROJECT STATUS AND INFORMATION780 MW Nyamjang Chhu HEP in the state of Arunachal Pradesh

The Board is pleased to inform you that Central Electricity Authority (CEA) has approved the DPR of the Project. The State Authorities had already approved the DPR for the Project. Your Companyhas been formed as 100% subsidiary (SPV) of the Bhilwara Energy Limited for the implementation of 780 MW Nyamjang Chhu HEP and the Company has received approval from the Government of Arunachal Pradesh to transfer the project from Bhilwara EnergyLtd to your company. Accordingly all the project related expenses have been transferred to your company. In addition, project has advanced further to obtain the Environment and Forest Clearancesafter conducting the successful public hearing on 8th February 2011 for obtaining the Environment Clearance. Experts’ Appraisal Committee of Ministry of Environment and Forest has already considered the project for the purpose of Final Environment Clearance. In addition to this, to speed up the work, the Company has already awarded the contracts for commissioning of construction power project of 7.5 MW to ensure smooth availability of power before start of construction on main project components.

3. SHARE CAPITAL During the period under review, the Company has issued 8,00,00,000 equity shares of Rs 10/- each to its holding company M/s Bhilwara Energy Limited against the project related expenses transferred by M/s Bhilwara Energy Limited.

4. DIVIDEND As the construction work is under progress without

any operation, no dividend is proposed to be declared during the year under review.

5. PUBLIC DEPOSITS The Company has not accepted any deposits from

the public during the year under reporting. 6. ENERGY CONSERVATION, TECHNOLOGY

ABSORPTION AND FOREIGN EXCHANGEEARNINGS & OUTGO

Information required to be disclosed under Section217 (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.

7. PARTICULARS OF EMPLOYEES: During the year 2010-11, 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.

8. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has proper and adequate systems for internal controls to ensure protection of assets, proper financial and operating functions and compliance with the policies, procedure, applicable Acts and Rules.

9. DIRECTORSDuring the period under review, Mr Vimal Banka and Mr Rakesh Mahajan resigned from the Board of Directors of the Company. The Board of Directors wishes to place on record sincere thanks & appreciation towards the contributions made by Mr Vimal Banka and Mr Rakesh Mahajan during their tenures as Directors of the Company.Your Directors are pleased to inform that Company has inducted Mr Ravi Jhunjhunwala, 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, Mr Riju Jhunjhunwala and Mr Rishabh Jhunjhunwala as Directors of the Company. The Board recommends their appointement.

175

In accordance with the provisions of the CompaniesAct, 1956 and of the Articles of Association of the Company, Mr. Om Prakash Ajmera, 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 re-appointment/appointments are subject to the approval of the Members and the necessary resolutions have been incorporated in the notice of the Annual General Meeting.

10. DIRECTORS’ RESPONSIBILITY STATEMENT 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;


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 Companyand for preventing and detecting fraud and other irregularities; and

iv) that the annual accounts have been prepared on a going concern basis.

11. AUDITORSM/s S. S. Kothari Mehta & Co., Chartered Accountants, Statutory Auditors of the Company, will retire from their office at the ensuing Annual General Meeting. They are, however, eligible for re-appointment. 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, 2012. The Company has also received consent letter from M/s S. S. Kothari Mehta & Co., Chartered Accountants, under Section224(1B) of the Companies Act, 1956, confirming their eligibility and showing their willingness for appointment as statutory auditors of the Companyfor the financial year ending on 31st March, 2012. The Board recommends for the appointment of M/s S. S. Kothari Mehta & Co., Chartered Accountants, as Statutory Auditors of the Company.

12. AUDITORS’ REMARKS The Auditors’ Report read alongwith Notes to the

Accounts is self explanatory and require no further comments from the Board.

13. HUMAN RESOURCE DEVELOPMENT The employees are vital and most valuable assets.

The Company strives to implement the best HR practices so as to ensure that talent retention is ensured at all levels. A favorable work environment has been created in the organization that encourages innovation and meritocracy. A scalable recruitment and human resources management process has been set up, which enables us to attract and retain high-caliber employees. The Human Resources Development activities focused on multi-skill training, performance improvement, learning from each other training module and basic engineering skills.

The employee relations continued to be cordial and harmonious at all levels and in all divisions of the Company.

14. ENVIRONMENT, HEALTH AND SAFETY Environment Management Plan, comprising of

international best practices, procedure and norms, shall be adopted to take care of environment and social impacts on the Projects. Further, the Companyis committed to IFC to comply with IFC policy and performance standards on Social & EnvironmentalSustainability for all upcoming projects/acquisitions and also at the corporate level.

Environmental Management Plan involves mitigation, monitoring and institutional measures to eliminate, offset or reduce adverse environmental and social impacts in or around the project area.

The Company is also committed to provide a zero injury workplace to its employees and workers all across its unit. Security of employees is one of the prime concerns of the Management. Consistent efforts were made by the Company to improve safety standards in the Company by taking measures.

15. CORPORATE SOCIAL RESPONSIBILITYWe believe that, wherever we operate, our activities should generate economic benefits and opportunities for an enhanced quality of life for society at large; that our relationships should be honest and open; and that we should be held accountable for our actions.

As a constructive partner in the communities in which it operates, your Company has been taking concrete action to carry out its social responsibility and has been spending on the infrastructure development.

16. CORPORATE GOVERNANCE Corporate Governance is a process that aims to meet

shareholders’ aspirations and societal expectations. It is a commitment that is backed by the fundamental belief of maximizing shareholders value, transparency in functioning values and mutual trust amongst all the stakeholders, transparency in functioning, values and mutual trust amongst all the stakeholders of the organization. In our company, corporate governance philosophy stems from our belief that it 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 play a critical role in imparting balance to the Board processes, by bringing an independent judgment to bear on issues of strategy, performance,

176


resources, standards of Company’s conduct, etc. 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.

17. ACKNOWLEDGEMENTSYour Directors’ acknowledge the assistance and continued support provided by the Ministry of Power and Ministry of Environment and Forests (Government of India), Central Electricity Authority, Government of Arunanchal Pradesh, other government agencies, lenders, commercial banks, financial institutions, PTC India Limited and our valued customers & look forward to their continued support and cooperation in

the coming years as well. Your Directors’ also like to express great appreciation for the commitment and contribution of its employees at all levels. Your Directors also place on record the appreciation for investors for their support and confidence reposed by them in the company.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

DATE: 8th June, 2011 RAVI JHUNJHUNWALAPLACE: NOIDA CHAIRMAN

ANNEXURE I TO THE DIRECTORS’ REPORTSTATEMENT OF PARTICULARS PURSUANT TO THE COMPANIES

(DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 19881. CONSERVATION OF ENERGY - NIL2. TECHNOLOGY ABSORPTION - NIL3. FOREIGN EXCHANGE EARNINGS AND OUTGO

(in Rs. million)

2010-11 2009-10

I. Foreign Exchange Outgo

Import of Components/Spares (CIF value) NIL NIL

Travelling NIL NIL

Professional Expenses NIL NIL

Consultancy Charges NIL NIL

Fees and Subscription NIL NIL

Total NIL NIL

II. Foreign Exchange Earnings NIL NIL

Total NIL NIL

FOR AND ON BEHALF OF THEBOARD OF DIRECTORS

DATE: 8th June, 2011 RAVI JHUNJHUNWALAPLACE: NOIDA CHAIRMAN

177

AUDITORS' REPORT

ToThe Members of NJC HYDRO POWER LIMITED 1. We have audited the attached Balance Sheet of NJC

HYDRO POWER LIMITED (‘the Company’) as at March 31, 2011 and also the Cash Flow Statementfor 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 - 3 ‘Project and Pre-operative 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.

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 by Companies (Auditors’Report) (Amendment) Order, 2004 (collectively the Order) issued by the Central Government of India in issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the CompaniesAct, 1956 and on the basis of such checks as we considered appropriate and according to information and explanation given to us, 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:

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 Companyso 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 CompaniesAct, 1956.

e) On the basis of written representations received from the directors as on 31st March, 2011 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2011 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, 2011; 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.Firm Regn. No. 000756N


Arun K. TulsianPartner

Membership No. 089907Place: New DelhiDated: 8th June, 2011

178


Annexure referred to in paragraph 3 of our report of even dateRe: NJC HYDRO POWER LIMITED (‘the Company’)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. The company has not granted/taken any loans, secured or unsecured, to/ from 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.

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 particulars of contracts or arrangements 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 each party.

6. The Company has not accepted any deposits from the public within the meaning of sections 58A and 58AAor any other relevant provisions of the CompaniesAct, 1956 including the Companies (Acceptance of Deposit) Rules, 1975.

7. The requirements of internal audit are not applicable to the company for the year under report.

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 Customsduty, Sales Tax, Wealth Tax, Income Tax, Service Tax, Excise Duty and Cess which have not been deposited on account of any dispute.

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, or banks 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.

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. There are 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 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.


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.Firm Regn. No. 000756N


Place: New Delhi Arun K. TulsianDated: 8th June, 2011 Partner

Membership No. 089907

179



As at 31.03.2010

SOURCES OF FUNDSShareholders' FundsShare capital 1 800,500 500 Reserves and surplus – Share application money (pending allotment) 42,930 – TOTAL 843,430 500 APPLICATION OF FUNDSFixed Assets 2Gross block 5,200 – Less : Depreciation (1,466) – Net block 3,734 – Capital work-in-progress (including capital advances) 143,290 – Project and pre-operative expenses (pending allocation) 3 716,602 29

863,626 29 Investments – Current Assets, Loans and AdvancesInventories (Explosive stock ) 91 – Cash and bank balances 4 1,943 472 Loans and advances 5 675 –

2,709 472 Less: Current Liabilities and Provisions 6Liabilities 29,512 20 Provisions – –

29,512 20 Net Current Assets (26,803) 452 Miscellaneous Expenditure 7 6,608 19 (to the extent not written off adjusted) 19TOTAL 843,430 500 Notes to Accounts 8The Schedules referred to above and Notes to Accounts form an integral part of the Balance Sheet.

As per our report of even date For and on behalf of the Board of Directors

For S.S. Kothari Mehta & Co.Chartered Accountants Firm Reg. no. 000756N

Arun K. Tulsian Riju Jhunjhunwala Rishabh JhunjhunwalaPartner Director DirectorMembership No. 089907 DIN-00061060 DIN-03104458

Place : New DelhiDate : 8th June 2011

` in ‘000

180



As at 31.03.2011

As at 31.03.2010

Schedule 1: Share Capital

Authorised

10,00,00,000 (Previous year 50,000) Equity shares of Rs.10 each 1,000,000 500

1,000,000 500

Issued, Subscribed and Paid up

8,00,50,000 Equity Shares (Previous year 50,000) of Rs.10/- each fully paid up (entire share capital is held by Bhilwara Energy Ltd. Holding company and its nominees

800,500 500

800,500 500

` in ‘000

Schedule 2: Fixed Assets

` In '000Gross Block Depreciation Net Block

Particulars As At01.04.2010

TransferFrom

HoldingCompany

Sale/Adjust-ment

As At31.03.2011

Upto

01.04.2010

Transfer From

HoldingCompany

Sales/Transfer

Upto31.03.2011

As At31.03.2011

As At31.03.2010

Tangible Assets

Building (Explosive Magazine Stores)

359 – 359 41 41 318 –

Furniture & Fixtures 183 – 183 56 – 56 127 –

Computers 153 – 153 – 120 – 120 33 –

Other Office Equipments 281 – 281 – 75 – 75 206 –

Vehicles 1,166 – 1,166 – 234 – 234 932 –

Electrical Equipments & Fittings

348 – 348 – 62 – 62 286 –

Project Equipment 2,710 – 2,710 – 878 878 1,832 –

Total Tangible Assets – 5,200 – 5,200 1,466 – 1,466 3,734 –

Intangible Assets

Software ( Bought Out ) – – – – – – – – –

Total Intangible Assets – – – – – – – – – –

Total ( A ) – 5,200 – 5,200 – 1,466 – 1,466 3,734

Capital Work In Progress – – – 143,290 – – – – 143,290 –

Total ( B ) – – – 143,290 – – – – 143,290 –

Total (A+ B ) – 5,200 – 148,490 – 1,466 – 1,466 147,024 –

Previous Year – – – – – – – – –

Notes:-1. Capital work in progress includes capital advances of Rs. 50600 in thousand (Previous Year Rs. Nil/- in thousand)2. Transfer from holding company in gross block and depreciation.(refer note no. 6 of Schedule 8 )

181

` In '000

As at 31.03.2011

As at31.03.2010

Schedule3: Project and Pre-operative expenses (pending allocation)

Personnel Expenses

Salaries, wages and bonus 27,490 -

Contribution to provident and other funds 1,295 -

Workmen and staff welfare expenses 1,029 -

29,814 -

Administrative and other expenses

Rent 4,376 -

Rates & taxes 31 1

Insurance 161 -

Repairs and maintenance 88,042 -

Travelling expense 9,397 -

Conveyance 1,453 -

Vehicle running & hiring expenses 3,871 -

Communication expenses 540 -

Audit Fees 243 20

Advertisement 669 -

Legal & professional charges 43,085 4

Fee & subscription 1,015 -

Stores consumption 1,583 -

Power and fuel 149 -

Testing & Surveys 667 -

Consultancy Charges 98,099 -

Project processing fee 11,600 -

Upfront Premium - NJC 243,080 -

Miscellaneous expenses 23,788 4

Financial / bank charges 152,421 -

Depreciation 2,518 -

686,788 29

716,602 29

Note :- Amount at the year end includes Rs. 7,15,850 in thousands transferred from holding company being expenses incurred by it before transfer of project to the company. (refer note no.6 of Schedule 8 )

182


` In '000

As at 31.03.2011

As at31.03.2010

Schedule 4: Cash and Bank Balances

Cash in hand – –

Balances with scheduled banks:

In current accounts 1,943 472

1,943 472

Schedule 5: Loans and Advances

(Unsecured, considered good )

Advances recoverable in cash or in kind or for value to be received 675 –

675 –

Schedule 6: Liabilities

Sundry creditors

a) Outstanding dues of Micro & Small Enterprises

b) Outstanding dues of Creditors other than Micro & Small Enterprises – –

Payable to others 29,456 20

Deposits from employees and others – –

Other liabilities 56 –

29,512 20

Schedule 7: Miscellaneous Expenditure

(to the extent not written off or adjusted)

Preliminary expenses

Balance as per last account 19 19

Addition during the year 6,589 –

6,608 19

183







(3) FIXED ASSETS

Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. Costcomprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.


Capital Expenditure on purchase and development of identifiable non-monetary assets without physical substance is recognized as Intangible Assets in accordance with the principles given under AS-26-Intangible Assets. These are grouped and separately shown under the schedule of Fixed Assets.











184


(8) LEASES


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.


Assets subject to operating leases are included in fixed assets. Lease income is recognized in the Profit and Loss Account on a straight-line basis over the lease term. Costs, including depreciation are recognized as an expense in the Profit and Loss Account. Initial direct costs such as legal costs, brokerage costs, etc. are recognised immediately in the Profit and Loss Account.




Where the grant or subsidy relates to an asset , its value is deducted from the gross value of the asset concerned in arriving at the carrying amount of the related asset.










Unallocated items


Segment Policies


(12) EMPLOYEE BENEFITS

Expenses and liabilities in respect of employee benefits are recorded in accordance with Accounting Standard 15 – “Employee Benefits”.

(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.

185

(b) Gratuity



(c) Leave Encashment

Long term compensated absences are provided for based on actuarial valuation at the year end. Theactuarial valuation is done as per projected unit credit method.

(d) Other Short Term Benefits

Expenses in respect of 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.




(14) INVESTMENTS



Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the amount can be reliably measured.

Interest


Dividend

Dividend on investment with mutual funds and others is recognized on declaration basis .When the right to receive payment is established.




(ii) Conversion



Exchange differences arising on a monetary item that, in substance, form part of the company's net investment in a non-integral foreign operation is accumulated in a foreign currency translation

186


reserve in the financial statements until the disposal of the net investment, at which time they are recognized as income or as expenses.

Exchange differences arising on the settlement of monetary items not covered above, or on reporting such monetary items of company at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise.


Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred tax reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.




MAT credit is recognized 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 Company will pay normal Income Tax during the specified period.





(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.


187



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.

(21) MISCELLANEOUS EXPENDITURE TO THE EXTENT NOT WRITTEN OFF OR ADJUSTED

Preliminary Expenses are amortized / adjusted during the year in which the Company commences its commercial operations.

B. NOTES TO ACCOUNTS

1. CONTINGENT LIABILITIES

As per information available with the management as certified by them, there is no contingent liability as at 31st March, 2011.

2. Capital contracts remaining to be executed on capital account and not provided for as on the date of Balance Sheet (net of advances) are Rs.10,55,741 in thousand (Previous Year NIL).

3. Since, the company has not started commercial operations, no profit & loss account has been prepared. Necessary details of expenditure incurred during the period have been presented under Project and Pre-operative expenses (pending allocation).

4. Since, there are no employees in the company, no provision for employee benefits have been made.

The Payment of Gratuity Act, 1972, The Payment of Bonus Act, 1965, The Employees State Insurance Act, 1948 and Employee Provident Fund & Miscellaneous Provisions Act, 1952 are not applicable during the period ended 31st March, 2011.

5. There are no adjustment on account of Deferred tax liability or Deferred Tax Asset in respect of current period as well as earlier period since there are no timing differences between the book income or taxable income.

6. The company’s holding company Bhilwara Energy Limited was incorporated with the object of commissioning and operating various power project whether by itself or through Special Purpose Vehicles (SPV’S). Accordingly, the company as Special Purpose Vehicle(SPV) was incorporated with the object of commissioning and operating the power project Nyamjang Chu HEP at Arunachal Pradesh originally allotted to the Holding Company. The holding company had incurred certain direct and indirect expenditure relating to the project upto March 31,2010 and during the financial year which got transferred to the company effective March 31,2011 after the necessary approval from State Government of ArunachalPradesh was received before the close of financial year.

The relevant detail of assets and liabilities transferred to the company by the holding company is as under:-

(Rs. in ‘000)

Amount

Net Fixed Assets (Refer schedule no. 2) 3,734

CWIP (including capital advances) 1,43,448

Project and Pre-Operative Expenses* 7,15,850

(Pending allocation)

Loans & Advances 2,676

Total Assets 8,65,707

Less: Current Liabilities 22,777

Net Assets 8,42,931

188


*Detail of project and preoperative expenses (including capital advance) (Rs in 000’s)

Salaries ,wages and bonus 27,490

Contribution to provident and other funds 1,295

Workmen and staff welfare expenses 1,029

Rent 4,376

Rates & taxes 29

Insurance 161

Repairs and maintenance 88,042

Travelling expenses 9,396

Conveyance 1,453

Vehicle running & hire charges 3,871

Communication expenses 540

Audit Fees 223

Advertisement 669

Legal & professional charges 43,071

Fees & subscription 1,015

Stores consumption 1,424

Power and fuel 149

Testing & Survey 667

Consultancy charges 98,099

Project processing fee 11,600

Upfront premium 2,43,080

Miscellaneous expenses 23,784

Financial/bank charges 1,51,869

Depreciation 2,518

Total 7,15,850

7. The Government of India 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 enterprises 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 falls under the definition of ‘supplier’ as per the section 2(n) of the Act to the extent of information available with the company. Inview of the above, the prescribed disclosures under Section 22 of the Act are not required to be made.




(a) There is no foreign currency exposure outstanding as at the Balance Sheet date.

(b) Particulars of un-hedged foreign currency exposures as at the Balance Sheet date are NIL.



i) Bhilwara Energy Limited – Holding Company

ii) Malana Power Company Limited – Fellow Subsidiary

189

iii) AD Hydro Power Limited – Subsidiary of Fellow Subsidiary

iv) Indo Canadian Consultancy Services Limited. – Fellow Subsidiary

v) Bhilwara Green Energy Limited – Fellow Subsidiary

vi) Green Ventures Private Limited, Nepal – Fellow Subsidiary

vii) Balephi Jalvidhyut Company Limited, Nepal – Fellow Subsidiary

(b) Associates and joint ventures of the reporting enterprise and the investing party or venturer in respect of which the reporting enterprise is an associate or a joint venture;

N.A.


Mr. Ravi Jhunjhunwala

Mr. Riju Jhunjhunwala

Mr. Rishabh Jhunjhunwala




Mr. Rishabh Jhunjhunwala

Mr. O.P.Ajmera


(i) HEG Limited

(ii) RSWM Limited

(iii) Bhilwara Scribe Pvt. Ltd.

(iv) Deepak Knits & Texturise Pvt. Ltd

(v) Maral Overseas Ltd.

(vi) Bhilwara Technical Textiles Ltd.

(vii) BMD Pvt. Ltd.

(viii) Bhilwara Infoway Pvt. Ltd.

(ix) Bhilwara Services Pvt. Ltd.

(x) LNJ Bhilwara Textile Anusandhan Vikas Kendra

(xi) HEG Graphite and Service Ltd.

(xii) Odetta Realty Pvt Ltd.

(xiii) BSL Limited.

190



(Rs. in‘000)

31.03.2011 31.03.2010

i) Parties referred to in item (a) above

Equity Shares issued to Bhilwara Energy Ltd. during the Year. 8,00,000 500

Share Application money pending allotment 42,930

Assets & liabilities transferred from Holding Company (Refer Note no.6 of the schedule)

ii) Parties referred to in item (b) above NIL NIL

iii) Persons referred to in (c) above NIL NIL

iv) Persons referred to in (d) above NIL NIL

v) Persons referred to in (e) above NIL NIL


12. Auditors’ Remuneration paid/payable during the year (Rs. in ‘000)

31.03.11 31.03.10

Statutory Auditors Fee 20 20

Reimbursement of Expenses NIL 06

Total 20 26

13. Disclosure of other items as required by Part –II of Schedule –VI to the Companies Act, 1956 is not applicable.

14. Previous year figures have been regrouped and rearranged where necessary and confirm to this year classification.





191

` In '000

PARTICULARS As at 31.03.2011

As at31.03.2010

CASH FLOW FROM OPERATING ACTIVITIESProfit Before Tax – –

Adjustment for: – –

Depreciation

Adjustment for changes in Working Capital:Sundry Debtors –

Inventories (91) –

Loans & Advances and Other Current Assets (675) –

Liabilities and Provisions 29,492 20

Net Cash from Operating Activities 28,726 20CASH FLOW FROM INVESTING ACTIVITIESAcquisition of Fixed Assets (863,596) (29)

Sale/Transfer of Fixed Assets – –

Net Cash from Investing Activities (863,596) (29)

Net Increase/(decrease) in cash and cash equivalentsProceeds from Issuance of Equity Shares 842,930 500

Proceeds from Issuance of Preference Shares

Proceeds from Conversion of Warrants

Share Issue Expenses (6,589) (19)

Net Cash from Financing Activities 836,341 481

Net increase/(decrease) in cash and cash equivalents 1,471 472

Cash and Cash Equivalents at the Beginning of the year 472 –

Cash and Cash Equivalents at the Closing of the year 1,943 472

Components of Cash and Cash Equivalent Cash in hand – –

Balances with Scheduled Banks:

In Current Accounts 1,943 472

In Deposit Accounts – –

In Margin Money Account – –

Total 1,943 472






192



Registration No. U4 0101DL2009PLC196998 State Code 5 5


Date Month Year

2. CAPITAL RAISED DURING THE YEAR (Amount in Rs. Thousands)


Bonus Issue – Private Placement 8 0 0 0 0 0

3. POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (Amount in Rs. Thousands)

Total Liabilities 8 4 3 4 3 0 Total Assets 8 4 3 4 3 0

SOURCES OF FUNDS

Paid-up Capital 8 0 0 5 0 0 Reserves and Surplus –

Share Application Money 4 2 9 3 0



Net Fixed Assets 8 6 3 6 2 6 Investments –

(inc. P.O.P. Exps)

Net Current Assets ( 2 6 8 0 3 ) Misc. Expenditure 6 6 0 8

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)


Product Description H Y D R O E L E C T R I C E N E R G Y


As per our report of even date attached

For S.S. Kothari Mehta & Co.Chartered AccountantsFirm Regn. No. 000756N



FOR NJC HYDRO POWER LIMITED

Riju JhunjhunwalaDirector


193

FINANCIAL RESULTSOF

BHILWARA GREEN ENERGY LIMITED (Formerly Bhilwara Mannvit Green Energy Limited)

194


DIRECTOR’S REPORT

1. TO THE MEMBERSThe Directors of the Company are pleased to present their 16th Annual Report on the business and operations of the Company and Audited Statement of Accounts for the year ended 31st March, 2011 together with the AuditorsReport.During the year, your company has explored the possibilities of entering into wind power project. Your company is in advance stage of developing 51MW wind power project in Distt. Satara, Maharashtra. The Project is likely to be commissioned by the end of the FY2011-12. In this project, the Company will enter into PPA with Govt. of Maharashtra as per the prevailing policies of the State Govt.The MOU between “Bhilwara Mannvit Green Energy Limited” and “Mannvit hf” has been terminated and the name of the Company has since been changed from Bhilwara Mannvit Green Energy Limited to Bhilwara Green Energy Limited.2. DIVIDENDAs the project is under progress, no dividend is proposed to be declared during the year. 3. PUBLIC DEPOSITSThe Company has not accepted any deposit from the Public during the year under reporting. Therefore, provisions of Section 58 A of the Companies Act, 1956 are not applicable.4. ENERGY CONSERVATION, TECHONOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING & OUTGO 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. 5. PARTICULARS OF EMPLOYEESInformation in accordance with the provisions of Section217(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-IIto the Directors' Report. 6. DIRECTORSMr. Ravi Jhunjhunwala, Mr. Riju Jhunjhunwala and Mr. Rishabh Jhunjhunwala have been appointed as additional Directors of the Company with effect from 15th June, 2011 until the conclusion of the next Annual General Meeting. The Board recommends the appointment of Mr. Ravi Jhunjhunwala, Mr. Riju Jhunjhunwala and Mr. Rishabh Jhunjhunwala on the Board of the Company. In accordance with the provisions of the Companies Act, 1956 and of the Articles of Association of the Company.Mr. O. P. Ajmera, Director of the Company, is liable to retire by rotation at the forthcoming Annual General Meeting and being eligible, offer himself for re-appointment. The

Board recommends his re-appointment at the ensuing Annual General Meeting. The aforesaid re-appointment is subject to the approval of the Members and the necessary resolutions have been incorporated in the Notice for the Annual General Meeting. During the year, Mr. Vimal Banka and Mr. B.P. Singh resigned from the Board of Directors of the Company. The Board of Directors wishes to place on record heartfelt appreciation towards the contribution made by Mr. Vimal Banka and Mr. B.P. Singh during their tenure as Directors of the Company.7. DIRECTORS’ RESPONSIBILITY STATEMENTAs 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;


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


8. AUDITORSM/s Singhal Rajeev and Associates, Chartered Accountants, Statutory Auditors of the Company, will retire from office at the ensuing Annual General Meeting. They are, however, eligible for re-appointment. The Company has received consent letter from M/s Singhal Rajeev and Associates,Chartered Accountants, under section 224 (1B) of the Companies Act, 1956, for re-appointment as Statutory Auditors of the Company. The Board recommends the re-appointment of M/s Singhal Rajeev and Associates, Chartered Accountants, as Statutory Auditors of the Company.9. AUDITORS REMARKSThe Auditors Report read alongwith Notes to the Accounts is self- explanatory and requires no further comments from the Board.

For and on behalf of the BoardBhilwara Green Energy Limited

Place: Noida O.P. AjmeraDate: 2nd June 2011 Chairman and Director

195

ANNEXURE I TO THE DIRECTORS REPORT

STATEMENT OF PARTICULARS PURSUANT TO THE COMPANIES(DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988


2. TECHNOLOGY ABSORPTION - NIL

3. FOREIGN EXCHANGE EARNINGS AND OUTGO - NIL

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 2011 are given hereunder:

I. Persons employed for the full year

Name Designation Remuneration (Rs. in Millions)

Qualification Experience Age Date of Commencement of Employment

NIL

196


AUDITORS' REPORT

TO THE MEMBERS OF

BHILWARA GREEN ENERGY LIMITED( Formerly Bhilwara Mannvit Green Energy Limited)

We have audited the attached Balance Sheet of M/s Bhilwara Green Energy Limited as at 31st March, 2011 and the Profit and Loss Account 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.

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) Order2003, issued by the Central Government of India in terms of the section 4A of section 227 of the CompaniesAct, 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 the Profit and Loss Account dealt with by this report are in agreement with the books of account.

iv) In our opinion, the Balance Sheet and Profit and Loss Account 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, and taken on 31st March, 2011 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March 2011 from being appointed as a Director in terms of Clause (g) of Sub-Section (1) of Section274 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.

vii) In the case of Balance Sheet, of the State of affairs of the Company as at 31st March, 2011.

viii) In the case of Profit and Loss account, of the expenses incurred till the date of Balance Sheet.

for Singhal Rajeev & Associates Chartered Accountants

Rajeev AgarwalProprietorMembership No. 084818

Place : New DelhiDate : 2nd June 2011

197

ANNEXURE TO THE AUDITORS’ REPORT

Referred to in Paragraph 3 of our report of even date to the members of Bhilwara Green Energy Limited for the year ended 31st March 2011.

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. According to the information and explanation given to us, the requirements of internal audit do not apply to the Company.

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, 2011. The provisions of EmployeesProvident 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. The accumulated losses of Rs. 2,63,031/- as at the end of financial year are more than 50% of net worth. The Company has incurred Rs. 10,475/- cash loss

during the year and there were cash losses of Rs. 16,320/- in immediately preceding financial year.

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.


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 Singhal Rajeev & AssociatesChartered Accountants

Rajeev AgarwalProprietorMembership No. 084818

Place : New DelhiDate : 2nd June 2011

AUDITORS' REPORT

198


BALANCE SHEET AS AT 31ST MARCH 2011

Amount in `


As at 31.03.2010

SOURCE OF FUNDS

Shareholders' Fund

Share Capital 1 500,700 500,700

500,700 500,700

APPLICATION OF FUND

Current Assets Loans and Advances 2 252,669 260,144

252,669 260,144

Current Liabilites and Provisions 3 15,000 12,000

Net Current Assets 237,669 248,144

Profit and Loss Account 263,031 252,556

500,700 500,700

Significant Accounting Policies and Notes to Accounts 4


For SINGHAL RAJEEV & ASSOCIATES FOR BHILWARA GREEN ENERGY LIMITEDChartered Accountants

RAJEEV AGARWALProprietorMembership No. 084818

O.P. AJMERA DIRECTOR

DIN- 00322834

VIMAL BANKADIRECTOR

DIN- 00322532

Place: New DelhiDated: 2nd June 2011

199

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2011

Amount in `

As at 31.03.2011

As at 31.03.2010

EXPENSES

Auditors Remuneration 3,000 3,000

Fee and Subscription Expenses 1,300 600

Legal and Professional Charges 6,175 6,565

Rate & Taxes - 3,000

Printing & Stationery - 3,155

Net Loss for the year 10,475 16,320

Loss Brought Forward from Previous Year 252,556 236,236

Loss C/d to Balance Sheet (263,031) (252,556)


For SINGHAL RAJEEV & ASSOCIATES FOR BHILWARA GREEN ENERGY LIMITED Chartered Accountants



DIN- 00322834

VIMAL BANKADIRECTOR

DIN- 00322532


200


SCHEDULES TO THE ACCOUNTS

SCHEDULE 1 : SHARE CAPITAL

Amount in `

As on 31st March, 2011


Authorised Capital

100,000 Equity Shares of Rs.10/-each 1,000,000 1,000,000

1,000,000 1,000,000

ISSUED, SUBSCRIBED AND PAID UP CAPITAL

50,070 Equity Shares (Previous Year 50,070) of Rs.10/- each fully paid up (Entire equity shares is held by holding company Bhilwara Energy Ltd (Previous Year NIL)

500,700 500,700

500,700 500,700

SCHEDULE 2: CURRENT ASSETS LOANS AND ADVANCES

Amount in `



Cash in hand 12,534 12,534

In current accounts 240,135 247,610

252,669 260,144

SCHEDULE 3: CURRENT LIABILITIES AND PROVISIONS

Amount in `



Sundry creditors 15,000 12,000

15,000 12,000

201







(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.


Capital Expenditure on purchase and development of identifiable non-monetary assets without physical substance is recognized as Intangible Assets in accordance with the principles given under AS-26- Intangible Assets. These are grouped and separately shown under the schedule of Fixed Assets.











(8) LEASES


Leases where the lesser effectively retains substantially all the risks and benefits of ownership of the leased

202


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.


Assets subject to operating leases are included in fixed assets. Lease income is recognized in the Profit and Loss Account on a straight-line basis over the lease term. Costs, including depreciation are recognized as an expense in the Profit and Loss Account. Initial direct costs such as legal costs, brokerage costs, etc. are recognised immediately in the Profit and Loss Account.




Where the grant or subsidy relates to an asset , its value is deducted from the gross value of the asset concerned in arriving at the carrying amount of the related asset










Unallocated items


Segment Policies


(12) RETIREMENT BENEFITS

Expenses and liabilities in respect of employee benefits are recorded in accordance with Revised Accounting Standard 15 – “Employee Benefits”.

(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


203


(c) Leave Encashment

Long term compensated absences are provided for based on actuarial valuation at the year end. Theactuarial valuation is done as per projected unit credit method.

(d) Other Short Term Benefits

Expenses in respect of 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.




(14) INVESTMENTS




Interest


Dividend

Dividend on investment with mutual funds and others is recognized on declaration basis.




(ii) Conversion



Exchange differences arising on a monetary item that, in substance, form part of the company's net investment in a non-integral foreign operation is accumulated in a foreign currency translation reserve in the financial statements until the disposal of the net investment, at which time they are recognized as income or as expenses.

Exchange differences arising on the settlement of monetary items not covered above, or on reporting such monetary items of company at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise.


Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected

204


to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred tax reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.




MAT credit is recognized 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 Company will pay normal Income Tax during the specified period.





(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.




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.

(21) MISCELLANEOUS EXPENDITURE TO THE EXTENT NOT WRITTEN OFF OR ADJUSTED

Preliminary Expenses are amortized / adjusted starting from the year in which the Company commences its commercial operations.

205

B. NOTES TO ACCOUNTS

1. CONTINGENT LIABILITIES - NIL

2. Since, there are no employees in the company, no provision for retirement benefits have been made.

3. The Payment of Gratuity Act, 1972, The Payment of Bonus Act, 1965, The Employees Insurance State Insurance Act, 1948 and Employee Provident Fund & Miscellaneous Provisions Act, 1952 are not applicable during the period ended 31st March, 2011.

4. There are no adjustment on account of Deferred tax liability or Deferred Tax Asset in respect of current period as well as earlier period since there are no timing differences between the book income or Taxable income.

5. 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 enterprises 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 falls under the definition of ‘supplier’ as per the section 2(n) of the Act to the extent of information available with the company. In view of the above, the prescribed disclosures under Section 22 of the Act are not required to be made.




(a) There is no foreign currency exposure outstanding as at Balance Sheet date.

(b) Particulars of un-hedged foreign currency exposures as at Balance Sheet date are NIL.



i) Bhilwara Energy Limited - Holding Company

ii) Malana Power Company Limited- Fellow Subsidiary.

iii) AD Hydro Power Limited – Fellow Subsidiary

iv) Indo-Canadian Consultancy Services Limited. – Fellow Subsidiary

v) Green Ventures Private Limited, Nepal – Fellow Subsidiary

vi) Balephi Jalvidhyut Company Limited, Nepal – Fellow Subsidiary

(b) Associates and joint ventures of the reporting enterprise and the investing party or venturer in respect of which the reporting enterprise is an associate or a joint venture;

N.A.




Mr. Rishab Jhunjhunwala




Mr. Rishab Jhunjhunwala

Mr. O.P.Ajmera

206



(i) HEG Limited

(ii) RSWM Limited

(iii) Bhilwara Scribe Pvt. Ltd.

(iv) Deepak Knits & Texturise Pvt. Ltd

(v) Maral Overseas Ltd.

(vi) Bhilwara Technical Textiles Ltd.

(vii) BMD Pvt. Ltd.

(viii) Bhilwara Infoway Pvt. Ltd.

(ix) Bhilwara Services Pvt. Ltd.

(x) LNJ Bhilwara Textile Anusandhan Vikas Kendra

(xi) HEG Graphite and Service Ltd.

(xii) Odetta Realty Pvt. Ltd.


(Rs. in‘000)31.03.2011 31.03.2010

i) Parties referred to in item (a) above NIL NILii) Parties referred to in item (b) above NIL NILiii) Persons referred to in (c) above NIL NILiv Persons referred to in (d) above NIL NILv) Persons referred to in (e) above NIL NIL


10. Auditors’ Remuneration paid/payable during the year

31.03.2011 31.03.2010Statutory Auditors Fee 3,000 3,000Other Services NIL NILReimbursement of Expenses NIL NILTotal 3,000 3,000

11. Disclosure of other items as required by Part –II of Schedule –VI to the Companies Act, 1956 is not applicable.

12. Previous year figures have been regrouped and rearranged where necessary and confirm to this year classification.


For SINGHAL RAJEEV & ASSOCIATES For and on behalf of the Board of DirectorChartered Accountants



DIN- 00322834

VIMAL BANKADIRECTOR

DIN- 00322532


207

I. REGISTRATION DETAILS

Registration No. 66321 State Code 5 5


Date Month Year

II. CAPITAL RAISED DURING THE YEAR (AMOUNT IN RS.)



III. POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS

Total Liabilities 5 0 0 7 0 0 Total Assets 5 0 0 7 0 0

SOURCES OF FUNDS

Paid-up Capital 5 0 0 7 0 0 Reserves and Surplus –

Share Application Money –



Net Fixed Assets ( inc.P.O.P Exps) – Investments –

Net Current Assets 2 3 7 6 6 9 Misc. Expenditure –

Accumulated Losses 2 6 3 0 3 1 Deferred Tax Assets –

IV. PERFORMANCE OF COMPANY

Turnover – Total Expenditure 1 0 4 7 5


Earning Per Share in Rs. N A Dividend Rate % –

V. GENERIC NAMES OF THREE PRINCIPAL PRODUCTS/SERVICES OF COMPANY- ELECTRICITY GENERATION

(As per monetary terms)

Item Code No. (ITC Code) N A

Product Description N A

FOR BHILWARA GREEN ENERGY LIMITED



DIN- 00322834

VIMAL BANKADIRECTOR

DIN- 00322532


208


FINANCIAL RESULT'SOF

BALEPHI JALBIDHYUT CO. LTD.(NEPAL)

209

Balephi Jalbidhyut Co. Ltd. (Nepal)

AUDITORS' REPORT

AUDITORS’ REPORT TO THE SHAREHOLDERS’ OF BALEPHI JALBIDYUT CO. LTD., NEPAL

We have audited the accompanying Balance Sheetof Balephi Jalbidyut Co. Ltd. (the “Company”) as of March 31, 2011 and the related statements of CashFlow and Changes in Equity for the period from April 01, 2010 to March 31, 2011.

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 NepalStandards on Auditing or relevant practices. Thosestandards 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 disclosers 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:

We have received prompt replies to our queries 1.and explanations asked for.

The books of accents have been maintained as 2.required by the law.

The Balance Sheet and Cash Flow statements 3.comply with the books of accounts maintained by the Company.

The business of the Company appears to have 4.been conducted satisfactorily in so far as appears from our examination of the books and records of the Company.

In our opinion and to the best of our information 5.and according to the explanations given to us from our examination of the books of accounts 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 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 March 31, 2011 and its Cash Flow and Changes in Equity for the period from April 01, 2010 to March 31, 2011.

CA, Narayan BajajNarayan Bajaj & Associates

Chartered AccountantsDate: April 08, 2011Place: Kathmandu, Nepal

210




CA, Narayan BajajNarayan Bajaj & AssociatesChartered Accountants Director

Place : Kathmandu, NepalDated : 8th April, 2011

(Nepali Rs.)

Particulars Schedules As on 31 March 2011

As on 31 March 2010

SOURCES OF FUND

Shareholders' Fund

Share Capital 1 220,766,694 172,228,422

Reserve & Surplus – –

Total Shareholders' Fund 220,766,694 172,228,422

Mid-term & Long term Loans

– Secured – –

– Unsecured – –

Gross Total 220,766,694 172,228,422

APPLICATION OF FUND

Fixed Assets 2 16,286,942 14,069,319

Work-in-progress – –

Investment in Share – –

Current Assets

Inventory – –

Trade & Other Receivables 3 328,750 47,436

Cash and Bank Balance 4 21,916,923 13,885,306

Prepaid expenses, Advances & Deposits 5 11,641,215 437,534

Total Current Assets 33,886,888 14,370,276

Less :Current Liabilities & Provisions

Trade & Other Payables 6 414,720 5,039,168

Provisions – –

Total Current Liabilities 414,720 5,039,168


Pre-Operating Expenses Pertaining to Capitalization 7 171,007,583 148,827,994

Gross Total 220,766,694 172,228,422

Contingent Liabilities

Notes to Accounts 8

211





STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD FROM 1ST APRIL, 2010 TO 31STMARCH, 2011

(Nepali Rs.)

Particulars Share Capital General Reserve Retained Earnings Total

Opening Balance (April 01, 2010)

Share Capital 12,100,000 – – 12,100,000

Advance Against Share Capital –

BHILWARA ENERGY LTD., India 71,304,322 – – 71,304,322

TRIVENI ENERGY (P) LTD., Nepal 68,000,000 – – 68,000,000

TRIVENI HYDRO (P) LTD., Nepal 20,824,100 – – 20,824,100

During the Period (from April 01, 2010 to March 31, 2011)

Share Capital 190,966,700 – – 190,966,700

Advance Against Share Capital –

BHILWARA ENERGY LTD., India 120,038,272 – – 120,038,272

BHILWARA ENERGY LTD., India (190,966,700) – – (190,966,700)

TRIVENI ENERGY (P) LTD., Nepal (68,000,000) – – (68,000,000)

TRIVENI HYDRO (P) LTD., Nepal (3,500,000) – – (3,500,000)

CLOSING BALANCE (March 31, 2011) 220,766,694 – – 220,766,694

212



SCHEDULE 1: SHARE CAPITAL (Nepali Rs.)

As on 31 March, 2011

As on 31 March, 2010

A. Authorised

Equity Share

5,00,00,000 Shares @ 100 Per Share 1,500,000,000 1,500,000,000

B. Issued

Equity Shares

50,00,000 Shares @ 100 Per Share 1,500,000,000 1,500,000,000

C. Subscribed

Equity Shares

3,00,000 Shares @ 100 Per Share 203,066,700 12,100,000

D. Paid Up

Equity Shares

3,00,000 Shares @ 100 Per Share 203,066,700 12,100,000

Total (A) 203,066,700 12,100,000

Advance Against Share Capital

BHILWARA ENERGY LTD., INDIA 375,894 71,304,322

TRIVENI EBERGY PVT. LTD. [NEPAL] 68,000,000

TRIVENI HYDRO PVT. LTD. [NEPAL] 17,324,100 20,824,100

Total (B) 17,699,994 160,128,422

Total (A+B) 220,766,694 172,228,422

213


SC

HE

DU

LE 2

: FIX

ED

AS

SE

TS

(Nepali

Rs.

)

Cos

t Pri

ce (G

ross

Blo

ck)

Dep

reci

atio

nB

alan

ce (N

et B

lock

)

Par

ticul

ars

Dep

. R

ate

Bal

ance

as

on M

arch

31,

20

10

Add

ition

D

urin

g th

e P

erio

d

Sal

es/A

djus

. D

urin

g th

e pe

riod

Bal

ance

as

on M

arch

31,

20

11

Acc

umul

ated

up

to M

arch

31

, 201

0

For

The

P

erio

d S

ales

/Adj

us.

Dur

ing

the

Per

iod

Acc

umul

ated

up

to M

arch

31

, 201

1

Bal

ance

as

on M

arch

31,

20

11

Bal

ance

as

on M

arch

31,

20

10

Poo

l "A

"

Land

Pur

chas

ed –

5

,074

,880

3

,984

,628

–

9

,059

,508

–

–

–

–

9

,059

,508

5

,074

,880

Tota

l 5

,074

,880

3

,984

,628

–

9

,059

,508

–

–

–

–

9

,059

,508

5

,074

,880

Poo

l "B

"

Com

pute

r25

% 4

18,2

69

28,

815

– 4

47,0

84

155

,372

7

2,92

8 –

2

28,3

00

218

,784

2

62,8

97

Site

Fur

nitu

res

&

Equ

ipm

ents

25%

752

,710

–

–

752

,710

1

98,1

80

138

,633

–

3

36,8

12

415

,898

5

54,5

31

Offi

ce E

quip

men

ts25

% 2

58,4

51

59,

565

–

318

,016

8

3,04

9 5

8,74

2 –

1

41,7

90

176

,225

1

75,4

02

Furn

iture

& F

ixtu

res

25%

737

,276

1

9,59

0 –

7

56,8

66

70,

204

171

,665

–

2

41,8

70

514

,996

6

67,0

72

Tota

l 2

,166

,706

1

07,9

70

–

2,2

74,6

76

506

,805

4

41,9

68

–

948

,773

1

,325

,903

1

,659

,901

Poo

l "C

"

Bik

e B

A 2

9 P

A 3

836

20%

94,

416

– –

9

4,41

6 1

8,88

3 1

5,10

7 –

3

3,99

0 6

0,42

6 7

5,53

3

Mot

or C

ycle

BA

29

PA

380

920

% 1

28,9

00

– –

1

28,9

00

25,

780

20,

624

–

46,

404

82,

496

103

,120

Mot

or C

ycle

BA

29

PA

383

120

% 1

28,9

00

– –

1

28,9

00

25,

780

20,

624

–

46,

404

82,

496

103

,120

Toyo

ta H

ilux

(4X

4)

BA

6 C

HA

761

320

% 2

,656

,742

–

–

2,6

56,7

42

547

,015

4

21,9

45

–

968

,960

1

,687

,782

2

,109

,727

Toyo

ta H

ilux

(4X

4)

BA

6 C

HA

665

220

% 2

,602

,206

–

–

2,6

02,2

06

530

,397

4

14,3

62

–

944

,759

1

,657

,447

2

,071

,808

Toyo

ta H

ilux

(4X

4)

BA

6 C

HA

915

320

% 2

,871

,230

–

–

2,8

71,2

30

–

574

,246

–

5

74,2

46

2,2

96,9

84

2,8

71,2

30

Tota

l 8

,482

,394

–

–

8

,482

,394

1

,147

,855

1

,466

,908

–

2

,614

,763

5

,867

,631

7

,334

,538

Poo

l "D

"

Cur

rent

Mea

sure

men

tM

achi

ne

50%

–

67,

800

–

67,

800

–

33,

900

–

33,

900

33,

900

–

Tota

l –

6

7,80

0 –

6

7,80

0 –

3

3,90

0 –

3

3,90

0 3

3,90

0 –

This

per

iod

end

Bal

ance

: 1

5,72

3,98

0 4

,160

,398

–

2

1,23

4,37

3 1

,654

,660

1

,942

,775

–

3

,597

,436

1

6,28

6,94

2 1

4,06

9,31

9

214


SCHEDULE - 3: TRADE & OTHER RECEIVABLES (Nepali Rs.)

Sl.No.

Particulars As on 31 March 2011

As on 31 March 2010

A. Advance Income Tax 328,750 47,436

B. VAT Receivables – –

Total 328,750 47,436

SCHEDULE - 4: CASH & OTHER BALANCE

A Cash Balance [Petty Cash] 181,112 118,126

B Bank Balances

1 Bank of Asia (Acc. no.06CL005123NPR001) 108,106 111,435

2 Commerz and Trust Bank Ltd. 0010000148 CA 10,007,714 –

3 Nepal Bank 2711 Chautara 153,000 153,000

4 Nepal Bank C/A 0002-0066005 11,750 11,750

5 NIB Acc. No. [Old] 25,000 25,000

6 NIB Acc. No. 01201020013157 [Previous No. 3285700] 636,411 576,886

7 NMB Bank Ltd. - 00400000 293 C 10,030,943 10,175,385

8 NIC Bank Ltd. A/c No. 708,479 –

9 Standard Chartered Bank Nepal Ltd. A/C No. 01-2049589-01 54,408 2,713,725

Total 21,916,923 13,885,306

SCHEDULE - 5: PREPAID EXPENSES, ADVANCES, LOANS AND DEPOSITS

A. Advances to Party Annex A 3,309,462 –

B. Advances to Staff Annex B 366,058 97,379

C. Land Acquasition Advance Annex C 7,192,695 –

D. Letter of Credit Annex D 708,000 305,155

E. Deposits E 65,000 35,000

Total 11,641,215 437,534

SCHEDULE - 6: TRADE & OTHER PAYABLES

1. Other Payables (Annex E) 356,999 5,015,292

2. TDS Payables 57,721 23,876

Total 414,720 5,039,168

215


SCHEDULE-7: PRE -OPERATING EXPENSES PERTAINING TO CAPITALISATION (Nepali Rs.)Sl.No.

Particulars For the year ending on

31 March 2011

For the year ending on

31 March 2010A License & Registration Expenses: 7,146,546 1,206,500 1 License Renew Expenses 500,000 1,206,500 2 License Expenses [WRC] 6,646,546 – B Survey Expenses: 1,255,384 20,881,148

1 Detail Project Report – 20,275,781 2 Survey License Expenses 500,000 – 3 IEE Expenses 260,200 – 4 Consultancy Expenses [Survey] 438,684 – 5 Architectural and Engineering 56,500 – 6 EIA Expenses – 605,367 C PPA Expenses 380,000 – 1 PPA Expenses 380,000 – D Bridge Construction: – – 1 Bridge Civil Works – – E Transmission Line: 526,358 444,000 1 Transmission Work Expenses 526,358 – 2 NEA Processing Expenses – 444,000 F Road Construction: 4,343,563 93,129,564 1 Road Construction Expenses 4,118,563 93,129,564 2 Road Committee Expenses 225,000 – G Land Acquisition: 116,793 – 1 Land Acquisition Expenses 116,793 – 2 Land Compensation Expenses – – H Administrative Expenses: 8,410,946 8,330,034 1 Office expenses (Annex G) 139,993 203,304 2 Consultancy Expenses 110,175 1,130 3 Advertisement Expenses 12,000 50,897 4 Electricity Expenses 3,082 77,398 5 Office Rent 322,037 636,236 6 Miscellaneous Expenses (Annex H) 2,258,407 1,253,529 7 Printing & Stationery 117,316 84,094 8 Telephone & Communication Expenses 181,366 61,197 9 Salary [Office Staffs] 3,111,539 3,344,021 10 Salary [Site Office Staffs] 249,009 169,279 11 Site Office Expenses 82,864 1,085,023 12 Dashain Expenses 375,647 – 13 Office Rent [Site Office] 75,739 24,080 14 Guest House Expenses – 32,753 15 Donation 220,000 20,000 16 Travelling Expenses 61,762 173,098 17 Exchange Rate Loss – 92,460 18 Vehicle Expenses 802,598 430,452 19 Membership Expenses 51,000 10,000 20 Audit Fee 151,200 135,600 21 Depreciation on Fixed Assets 1,942,775 1,497,216 22 Insurance Premium Expenses 44,832 251,620 23 Less: Insurance Cancellation Refund – (70,789)24 Less: Profit on Sale of Fixed Assets – (909,171)25 Less: Interest Income (1,902,396) (323,393)

Total for the Period [April 01, 2010 to March 31, 2011] 22,179,589 123,991,246 Add: Accumulated Expenses up to March 31, 2010 148,827,994 24,836,748 Total Accumulated Expenses up to March 31, 2011 171,007,583 148,827,994

216


SCHEDULE - 8: SIGNIFICANT ACCOUNTING POLICIES & NOTES TO ACCOUNT


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/materilized.

3 Fixed Assets:

Fixed Assets are stated at cost and the cost includes all the expenses incurred up to putting the assets in use.

4 Depreciation:

Depreciation on fixed assets are provided following WDV method. A full year depreciation is charged in the year of purchase/acquisition and no depreciation is charged in the year of sale/disposal.

5 Going Concern:

Financial statement of concern is presented in going concern basis.

6 Figuresinthefiancnialstatementshavebeenexpressedinnearestrupees.

A. Notes to Accounts:

1 Income Statement

Profit & Loss Statement has not been prepared in view of construction period of the company.

2. Regroupingoffigures:

Previous Quarter figures have been regrouped/rearranged wherever necessary and the figures have been restated.

217


ANNEX - A: ADVANCES TO PARTY (Nepali Rs.)

Sl.No.

Party’s Name As on 31 March 2011

As on 31 March 2010

1 Tika Dutta Paudel – –

2 Bajra Guru Construction Co. P. Ltd. 3,309,462 –

Total 3,309,462 –

ANNEX - B: ADVANCES TO STAFF (Nepali Rs.)

Sl.No.

Name of Staff As on 31 March 2011

As on 31 March 2010

AdvanceAgainstOfficeWorks

1. Uttam Thapa – 1,794

2. Amit Panta 10,000 –

3. Anuj Shrestha 6,710 –

4. Bharat Pd. Upadhyay 180 –

5. Divakar Vaidya 26,212 –

6. Jyoti karki 10,000 –

7. Sagun Shrestha 5,000 –

8. Sanat Adhikari 5,000 –

9. Shesh Kumar Dhungana 26,000 –

10. Shyam Lal Shrestha 14,735 –

11. Badri Rijal 86,437 31,885

12. Bishnu Neupane [Advocate] – 32,700

13. Sher Bahadur Rai 11,784 1,000

Advance Against Salary

1. Bishnu Neupane [Advocate] 150,000 15,000

2. Kishor Yadav 2,000 7,000

3. Sher Bahadur Rai 1,000 –

4. Uttam Thapa Magar 11,000 –

5. Santosh Mahato – 8,000

Total 366,058 97,379

218


ANNEX – C: ADVANCE FOR LAND ACQUISITION (Nepali Rs.)

Sl.No.

Name of the Party As on 31 March 2011

As on 31 March 2010

1 Karna Bd. Sarki 173,438 –2 Shanka Bd. Sarki 50,000 –3 Tanka Bd. Sarki 50,000 –4 Dhan Bd. Silwal 525,000 –5 Khadga bd. Silwal 935 970,703 –6 Krishna Bd. Silwal 927 525,000 –7 Sher bd. Khadga 1693 1,121,094 –8 Tej bd. Silwal 928 875,000 –9 Keshari/Shiv/Govind 282 616,699 –

10 Nir bd. Poudel 485 580,000 –11 Chandra/Krishna bd. 284/300 905,761 –12 Ganga maya Bhujel 673 800,000 –

Total 7,192,695 –

ANNEX – D: LETTER OF CREDIT/GUARANTEE (Nepali Rs.)

Sl.No.


As on 31 March 2010

1 GUA PS 08/147 [Bank Guarantee] – 272,255

2 Bank Guarantee CTBNGPB001670003 708,000 –

3 Guarantee 012GACU09-0004 – 32,900

Total 708,000 305,155

ANNEX – E: DEPOSITS (Nepali Rs.)

Sl.No.


As on 31 March 2010

1 Nepal Telecom 15,000 15,000

2 Nepal Electricity Authority (Transmission) 50,000 –

3 Department of Industries [FDI] – 20,000

Total 65,000 35,000

ANNEX – F: OTHER PAYABLES (Nepali Rs.)

Sl.No.


As on 31 March 2010

1 Green Ventures Pvt. Ltd. – 208,377

2 P.L. Sanghai 56,999 56,999

3 Tek bd. Sarki/Shanka bd. Sarki 300,000 –

4 Bajra Guru Constructions Co. Pvt. Ltd. – 3,151,538

5 M.K. Nirman Sewa – 1,203,721

6 Triveni Properties Pvt. Ltd. – 260,857

7 Narayan Bajaj & Associates – 133,800

Total 356,999 5,015,292

219


ANNEX – G: DETAIL OF OFFICE EXPENSES (Nepali Rs.)

Details For the period ending on March

31, 2011

For the period ending on March

31, 2010

Office Cleaning Expenses – 23,650 Tangal House Expenses 108,742 19,992 Cooking Expenses – 65,857 Office Expenses 12,066 77,105 Water Expenses 19,185 13,950 Local Conveyance – 2,750 Total 139,993 203,304

ANNEX – H: DETAIL OF MISCELLANEOUS EXPENSES (Nepali Rs.)

Details For the period ending on March

31, 2011

For the period ending on March

31, 2010 Guest Entertainment 95,141 83,692 Miscellaneous expenses 934,296 458,963 Meeting Expenses 86,809 28,500 Parking Expenses 1,839 2,738 Bank Commission 693,700 145,685 Donation 60,000 299,180 Photo copy 23,138 14,919 Membership Expenses – – Postage & Courier 322 539 Repair & Maintenance 68,166 74,153 Consumable Goods 45,593 – Gifts – 52,468 Fooding Expenses 17,701 42,581 Translation Work Expenses 100,958 – Communication 1,025 100 Vehicle Expenses [Binod] – 2,000 Medical Expenses 3,582 709 Seminar Expenses – 7,500 Cooking, Garden, Guard 12,237 – Employment Fund – 13,167 Topo Graphical Data 1,900 – Generator Expenses 34,611 – TADA [Ganesh] – 2,667 Site Office Rent Expenses – – House Rent [ Karpo Lama] – 3,336 House Rent [Tika Datta Paudel] – 10,002 Extn. Cdoe – 525 CDMA Card Modem – 2,300 Local Conveyance 3,520 6,275 Site Visit Expenses 70,138 – Worship Expenses 1,705 – Books & Periodicals 2,025 1,530 Total 2,258,407 1,253,529

220


DETAILS OF ADVANCE TAX (Nepali Rs.)

Particulars This year Amount

Bank of Asia Ltd. 33,194 NIC Bank Ltd. 143,288 NMB BANK LTD. 143,357 NIB Bank Ltd. 012-01020015066 (4528100) 8,911 Maha Laxmi Finance Ltd. –Total 328,750

DETAILS OF SHARE CAPITAL (Nepali Rs.)

Particulars AmountWater Resurces Consult Pvt. Ltd 12,000 Triveni Hydropower Pvt. Ltd 1,754,700 Bhilwara Energy Ltd 192,000,000 Purushottam Lal Shanghai 25,000 Sushila Devi Sanghai 25,000 Subhash Chandra Sanghai 25,000 Kiran Sanghai 50,000 Birendra Kumar Sanghai 50,000 Manju Devi Sanghai 25,000 Govind Lal Sanghai 50,000 Ram Chadra Sanghai 50,000 Triveni Energy Pvt. Ltd 9,000,000 Total 203,066,700

TDS PAYABLE (Nepali Rs.)Particulars Amount

Employee 51,691 Ajit Jha – Achyuttam Lal Shrestha 571 Anuj Shrestha 75 Amit Panta 319 Badri Rijal 37,084 Bharat Upadhyay 3,000 Bindu Koirala 1,040 Bipin Adhikari – Damber Bd. Sangbo – Hem Bahadur Shrestha – Kanchan Shrestha – Kirhsna Bahadur Shakya 36 Kishore Yadav 107 Lakesh Shrestha – Luk Bahadur Sangbo 36 Narayan Dass Shrestha 46 Padam Subedi 75 Pradeep Mahato – Rajendra Karki – Rajendra Malla 1,500 Rohit Gubajo 36

221


TDS PAYABLE (Nepali Rs.)Particulars Amount

Rupa Thapa – Sagun Shrestha 180 Sanat Adhikari 36 Santosh Mahato – Sarita Adhikari – Shanti Lama – Sher Bahadur Rai 77 Shesh Kumar Dhungana 7,200 Shyam Lal Shrestha 38 Sumit Bhandari 120 Sunil Deoja 14 Sunita Gautam 12 Uttam Thapa magar 89 Wages –

Rent 201 Ganesh Raj Shrestha 89 Kapro Lama 112 Tika Dutt Poudel – Triveni Properties –

Consultant 1,875 Bajra Guru Construction Co. – Gandhi and Associates – M.K. Nirman Sewa – North Star Consultant 1,875 Bishnu Neupane – Geometrix Pvt. Ltd. – Nepal Enviornmental (NESS) –

Others 3,954 Y.K.Singh 3,954 Narayan Bajaj & Associates –

GRAND TOTAL 57,721

222


(Nepali Rs.)S.

No.Particulars As on

31st March, 2011As on

31st March, 2010A. Cash Flow from Operating Activities1. NetProfit/Lossbeforetaxandextraordinaryitems

Add:1. Depreciation 1,942,775 1,497,216 2. Expenses written off – – 3. Interest expense – – 4. Accumulated Pre-Operating Expenses – – 5. Decrease(Increase) in Pre-Operating Expenses Pending for

Capitalisation (22,179,589) (7,827,563)

2. OperatingCashflowbeforeChangeofWorkingCapital1. Decrease(Increase) in Current assets (Other than Cash &

Bank Balance) (11,484,996) 48,051

2. Increase (Decrease) in Current liabilities (4,624,448) (13,036,537)3. Interest paid – – 4. Tax paid/refund – – 5. Cash flow before extraordinary items – – 6. Income/ (Expense) from extraordinary items – – NetCashflowfromOperatingActivities(A) (36,346,257) (19,318,833)

B. CashflowfromInvestingActivities1. Interest /Dividend received – – 2. Sale (Purchase) of Fixed assets or Investment (4,160,398) (28,001)3. Decrease (Increase) in loans, advances and deposits – – 4. Decrease (Increase) in Construction Work In progress – – NetcashflowfromInvestingActivities(B) (4,160,398) (28,001)

C. CashflowfromFinancingActivities1. Issue of shares (except bonus shares) 190,966,700 2. Advance Against Shares 48,538,272 31,500,000 3. Dividends paid – – 4. Conversion of Advance Against Share into Share Capital – – 5. Others – NetcashflowfromFinancingActivities(C) 48,538,272 31,500,000 Net Increase(Decrease) in cash and cash equivalents = (A+B+C)

8,031,617 12,153,166

Cash and cash equivalents at the beginning of the year 13,885,306 1,732,140 Cash and cash equivalents at the end of the year 21,916,923 13,885,306




CASH FLOW STATEMENT AS AT 31ST MARCH, 2011

FINANCIAL RESULTSOF

GREEN VENTURES PVT. LTD.(NEPAL)

224


AUDITORS' REPORT

To

The Shareholders of GREEN VENTURES PVT. LTD.,NEPAL

We have audited the accompanying Balance Sheet of Green Ventures Pvt. Ltd. (the “Company”) as of March 31, 2011 and the related statements of Cash Flow and Changes in Equity for the period from April 01, 2010 to March 31, 2011.

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 on 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 disclosers 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 accents have been maintained as required by the 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 from our examination of the books of accounts 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 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 March 31, 2011 and its Cash Flow and Changes in Equity for the period from April 01, 2010 to March 31, 2011.

CA, Narayan BajajNarayan Bajaj & AssociatesChartered Accountants

Date : April 08, 2011Place : Kathmandu, Nepal

225

Green Ventures Pvt. Ltd. (Nepal)

(Nepali Rs.)


As at 31.03.2010

SOURCE OF FUNDS

Shareholders' Fund

Share Capital 1 548,023,890 415,757,048

Reserve & Surplus 2 – –

Total Shareholders' Fund 548,023,890 415,757,048

Mid-term & Long term Loans

- Secured – –

- Unsecured 3 – –

Gross total 548,023,890 415,757,048

APPLICATION OF FUND

Fixed Assets 4 83,319,296 69,253,913

Work-in-progress 5 – –

Investment in Share 6 16,000 –

Current Assets

Inventory 7 – –

Trade & Other Receivables 8 3,180,226 2,930,374

Cash and Bank Balance 9 57,607,481 15,343,733

Prepaid expences, Advances & Deposits 10 56,736,658 58,867,523

Total Current Assets 117,524,365 77,141,631

Less: Current Liabilities & Provisions

Trade & Other Payables 11 3,747,700 7,985,912

Provisions 12 – –

Total Current Liabilities 3,747,700 7,985,912


Pre-Operating Expenses Pertaining to Capitalisation 13 350,911,930 277,347,416

Gross Total 548,023,890 415,757,048

Contingent Liabilities 14

Notes to Accounts 15



CA, Narayan Bajaj DirectorNarayan Bajaj & AssociatesChartered Accountants


226


STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD FROM 1ST APRIL 2010 TO 31ST MARCH 2011

FOR THE PERIOD FROM APRIL 01, 2010 TO MARCH 31, 2011 (Nepali Rs.)

Particulars Share Capital General Reserve

RetainedEarnings

Total

Opening Balance (1st April, 2010)

Share Capital 30,000,000 30,000,000


BHILWARA ENERGY LTD., INDIA 238,782,048 238,782,048

TRIVENI ENERGY (P) LTD. NEPAL 146,975,000 146,975,000

During the Period (from April 01, 2010 to March 31, 2011)

Share Capital – –



TRIVENI ENERGY (P) LTD. NEPAL 4,200,000 4,200,000

Closing Balance (31 March, 2010) 548,023,890 – – 548,023,890


CA, Narayan Bajaj DirectorNarayan Bajaj & AssociatesChartered Accountants


227



SCHEDULE 1 : SHARE CAPITAL (Nepali Rs.)

S.No.

Particulars As on 31st March, 2011


A. Authorised

Equity Share

5,00,00,000 Shares @ 100 Per Share 5,000,000,000 5,000,000,000

B. Issued

Equity Share

50,00,000 Shares @ 100 Per Share 5,000,000,000 5,000,000,000

C. Subscribed

Equity Share

3,00,000 Shares @ 100 Per Share 30,000,000 30,000,000

D. Paid Up

Equity Share

3,00,000 Shares @ 100 Per Share 30,000,000 30,000,000

Total (A) 30,000,000 30,000,000



TRIVENI ENERGY (P) LTD., NEPAL 151,175,000 146,975,000

Total (B) 518,023,890 385,757,048

Total (A+B) 548,023,890 415,757,048

SCHEDULE 2 : RESERVE & SURPLUS

A. General Reserves – –

B. Retained Earnings – –

Total – –

SCHEDULE 3 : MID - TERM & LONG TERM LOANS

A. Secured Loan – –

1. Long Term Loan – –

2. Debenture – –

B. Unsecured Loan – –

1. Long Term Loan – –

2. Debenture – –

3. Other Unsecured Loan: – –

Total – –

228


SCHEDULE 5: WORK IN PROGRESS (Nepali Rs.)

SNo.



1 Work in Progress: – –

Total – –

SCHEDULE 6: INVESTMENT

SNo.

Particulars

A. Investment on listed companies 16,000 –

B. Investment on non-listed companies – –

Total 16,000 –

SCHEDULE 7: INVENTORIES

SNo.

Particulars

A. Store, Spare Parts, Loose Tools – –

B. Stock – –

Total – –

SCHEDULE 4: FIXED ASSETS (Nepali Rs.)Particulars Dep.

RateCost Price (GROSS BLOCK) DEPRECIATION Balance (NET BLOCK)

Balance as on March 31,

2010

Addition During the

Period

Sales/Adjus. During the

period

BALANCE AS ON MARCh

31, 2011

Ccumulated Upto March 31,

2010

For The Period

Sales/Adjus. During The

Period

ccumulated Upto March 31,

2011


2011


2010

A. LAND

LAND 0% 48,235,614 17,955,031 – 66,190,645 – – – 66,190,645 48,235,614

TOTAL 48,235,614 17,955,031 – 66,190,645 - - - – 66,190,645 48,235,614

B. BUILDING

LeAsehoLD DeveLopmeNts 5% 1,349,995 – – 1,349,995 67,500 64,125 131,625 1,218,370 1,282,495

totAL 1,349,995 – – 1,349,995 67,500 64,125 – 131,625 1,218,370 1,282,495

C. VEhICLES

KIA soReNto BA.6.Ch 6385 20% 3,797,609 – 3,797,609 748,279 609,866 1,358,145 2,439,464 3,049,330

toYotA hILUX (BA.6.Ch 7514) 20% 2,757,463 – 2,757,463 551,493 441,194 992,687 1,764,776 2,205,970

toYotA hILUX (BA.6.Ch 6653) 20% 2,770,810 – 2,770,810 554,162 443,330 997,492 1,773,318 2,216,648

toYotA CoRRoLA CAR (BA.6.Ch 8529) 20% 3,897,917 – 3,897,917 756,983 628,187 1,385,170 2,512,747 3,140,934

toYotA hILUX (BA.6.Ch 9367) 20% 2,976,453 – 2,976,453 561,391 483,012 1,044,403 1,932,050 2,415,062

YAmAhA BIKe BA 29 pA 3824 20% 129,970 – 129,970 25,994 20,795 46,789 83,181 103,976

YAmAhA BIKe BA 29 pA 3836 20% 129,970 – 129,970 25,994 20,795 46,789 83,181 103,976

totAL 16,460,191 – – 16,460,191 3,224,296 2,647,179 – 5,871,475 10,588,717 13,235,896

D. FURNITURE & OFF. EqUIPT.

sIte FURNItURe & oFFICeeqUIpmeNts 25% 2,264,581 – – 2,264,581 524,040 435,135 959,175 1,305,406 1,740,541

OFFICE EqUIPTMENT 25% 1,981,363 210,294 – 2,191,656 359,892 457,941 – 817,833 1,373,823 1,621,471

Furniture and Fixture 25% 3,707,624 – – 3,707,624 569,728 784,474 – 1,354,202 2,353,422 3,137,896

total 7,953,567 210,294 – 8,163,860 1,453,659 1,677,550 – 3,131,209 5,032,651 6,499,908

E. Plant & Machineries

GeNeRAtoR 5 K.vA 15% – 300,015 – 300,015 – 45,002 – 45,002 255,013 –

Current Meter Machine 50% – 67,800 67,800 – 33,900 – 33,900 33,900 –

total – 367,815 – 367,815 – 78,902 – 78,902 288,913 –

This period end Balance: 73,999,368 18,533,139 92,532,507 4,745,455 4,467,756 9,213,211 83,319,296 69,253,913

Note: Depreciation has not been charged on the additions and made during the financial year.

229


SCHEDULE 8: TRADE & OTHER RECEIVABLES (Nepali Rs.)

SNo.



A. Advance Income Tax 473,356 223,505 B. Advance to Director

Nirajala Raut 2,706,869 2,706,869 Total 3,180,226 2,930,374

SCHEDULE 9: CASH & OTHER BALANCE

S.No.

Particulars

A Cash Balance 166,728 95,692 B Bank Balances1 Bank of Asia (Acc. no.06CL005121NPR001) 100,066 94,327 2 Clean Energy Development Bank Ltd. 11,800 - 3 Commerz & Trust Bank 0010000147-CA 12,501,478 - 4 NIC Bank Ltd. C/A No. 004460C 3,783,108 - 5 Mahalaxmi Finance Co. Ltd. Acc. no. 10-00009 105,676 109,895 6 Nepal Bank Ltd. 2-11-65431 20,000 20,000 7 Nepal Bank Ltd. CA 4021 10,000 10,000 8 NIB Bank no. 012-4528100 746,032 471,034 9 NMB Bank Ltd.- 004 00000 283 C 10,036,593 4,560,110

10 RBB 109006583601 Current Account 20,849 84,849 11 RBB 2967 Okhal Dhunga Current Account 5,466 5,466 12 RBB 407 Charikot 10,000 10,000 13 SCB 01-1985426-01 25,000 25,000 14 SCB 02-1985426-01 Short call Deposit 54,686 9,847,360 15 Sanima Bank Ltd. A/c no. 10,000 10,000 16 Clean Energy FD F1083032301 30,000,000 -

Total 57,607,481 15,343,733

SCHEDULE 10: PREPAID EXPENSES, ADVANCES, LOANS & DEPOSITS

S.No.

Particulars

A. Advances to Party Annex A 35,368,530 57,124,680 B. Advances to Staff Annex B 1,712,899 457,374 C. Land Acquisition Advance Annex C 18,083,229 1,285,469 D. Letter of Credit Annex D 1,572,000 –

Total 56,736,658 58,867,523

SCHEDULE 11: TRADE & OTHER PAYABLES

S.No.

Particulars

1. Other Payables (Annex E) 3,473,484 7,764,408 Audit Fee Payables – 144,950

3. TDS Payables 274,216 76,554 Total 3,747,700 7,985,912

SCHEDULE 12: PROVISIONS FOR INCOME TAX

S.No.

Particulars

Total – –

230


SCHEDULE 13: PRE-OPERATING EXPENSES PERTAINING TO CAPITALISATION (Nepali Rs.)

S. No. Particulars For the year ending

31st March, 2011

For the year ending

31st March, 2010

A Licence & Registration Expenses: 2,250,000 1,694,000

Licence Renew Expenses 2,250,000 -

Generation License Application Expenses – 1,000,000

PPA License Expenses – 444,000

License Transmission Line Survey – 250,000

B Survey Expenses: 17,410,226 25,735,437

Detail Project Report 10,591,642 -

Consultancy Fee – 25,492,700

Geo-Technical Investigation 4,843,024 –

IEE Expenses 214,500 –

Survey Expenses 106,260 –

EIA Expenses 1,654,800 242,737

C PPA Expenses 202,464 –

#REF! 202,464 –

D Bridge Construction: 13,588,555 –

Bridge Civil Works 13,588,555 –

E Transmission Line: – 2,425,777

Transmission Line Expenses: – 2,425,777

F Road Construction: 15,615,138 150,635,319

Road Construction Expenses 15,615,138 150,635,319

G Land Acquisition: 4,421,890 427,442

Land Acquisition Expenses 221,890 427,442

Land Compensation Expenses 4,200,000 –

H Administrative Expenses: 20,076,241 9,807,176

1 Office expenses (Annex F) 2,345,172 321,745

2 Dashain Expenses [Staffs] 5,750 –

3 Dashain Expenses [Others] 556,792 200,603

4 Insurance Premium Expenses 58,145 82,461

5 Audit Fee 136,900 146,900

6 Advertising Expenses 60,280 43,976

7 Telephone, Communication & Internet Expenses 326,903 322,486

8 Exchange Loss / [Gain] – 497,093

9 Guest Entertainment Expenses 349,977 308,763

10 Miscellaneous Expenses (Annex G) 1,921,131 1,287,796

11 Office Rent 1,283,845 2,135,567

12 Repair and Maintainance 112,307 137,435

13 Printing Stationary 21,730 89,273

14 Tangal House Expenses 1,036,889 500,702

15 Salary Office Staff 5,310,381 4,694,083

16 Salary Site Staff 376,031 567,152

17 Site Visit Expenses 575,766 1,298,769

231


SCHEDULE - 15: Significant Accounting Policies & Notes To Account


(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/materilized.

(3) Fixed Assets:

Fixed Assets are stated at cost and the cost includes all the expenses incurred up to putting the assets in use.

(4) Depreciation:

Depreciation on fixed assets are provided following WDV method. A full year depreciation is charged in the year of purchase/acquisition and no depreciation is charged in the year of sale/disposal.

(5) Going Concern:

Financial statement of concern is presented in going concern basis.

(6) Figures in the fiancnial statements have been expressed in nearest rupees.

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, 2011

For the year ending

31st March, 2010

18 Project Site Office expenses 856,240 195,061

19 Travelling Expenses 920,465 629,563

20 Vehicle expenses 1,079,815 499,360

22 Depreciation on Fixed Assets 4,467,756 4,664,637

23 Less: Profit on sale of fixed assets – (1,230,373)

24 Less: Insurance Claim Received (29,298) –

25 Less: Miscellaneous Income (3,920) (61,764)

26 Less: Land Acquisition Capitalized – (7,017,980)

27 Less: Interest Income (1,692,817) (506,133)

Total for the Period [April 01, 2010 to March 31, 2011] 73,564,514 190,725,151

Add: Accumulated Expenses up to March 31, 2010 277,347,416 86,622,265

Total Accumulated Expenses up to March 31, 2011 350,911,930 277,347,416

SCHEDULE 14: CONTINGENT LIABILITIES

SNo.



Total – –

(Nepali Rs.)

232


ANNEXURE A : ADVANCE TO THE PARTY (Nepali Rs.)

S. No. Name of the Party As on 31st March, 2011


1 ANK Construction Co. Pvt. Ltd. 6600000 –

2 Balephi JalBidhyut Co. Ltd. – 208,377

3 R.K. Constructions 1742569 –

4 Rasuwa SBA JV PH to Intake 4000000 –

5 Mainawati Steel Industries Pvt. Ltd. 6958474.9 20,366,650

6 Meh Consultants Pvt. Ltd. 475000 475,000

7 ITECO Nepal 60000 12,470,915

8 Rasuwa SBA Joint Ventures 3285998 –

9 Nepal Environment & Scientific Ltd. [NESS] – 780,600

10 Narayan Bajaj & Associates – 10,000

11 ITECO CEMAT ICGS JV 300000 300,000

12 Ramechap Sherpa Construction Pvt. Ltd. 11946488 22,513,138

Total 35,368,530 57,124,680

ANNEXURE B : ADVANCE TO STAFFADVANCE AGAINST OFFICE WORK (Nepali Rs.)

S. No. Name of staff As on 31st March, 2011


Advance for Office Works

1 Badri Rijal 142,278 58,923

2 Bishnu Neupane – –

3 Chandra Bahadur (Sirse House) 88,631 12,715

4 Jai Kumar Singh 27,350 –

5 Jyoti Karki 28,350 14,600

6 Mithila Pandey 110,000 110,000

7 O.P. Soni 16,000 16,000

8 Ajay Singh 16,000 –

9 Anuj Shrestha – –

10 Nirajan Karki – –

11 Kalyan Gawali 10,000 –

12 Man Mohan Madan (BEL-DEL) 16,825 –

13 Padam Subedi 7,035 –

14 Rajendra Acharya (Rasuwa) 1,000,000 –

15 Pashupati Dhungel – –

16 Vipin Arora 20,000 –

Advance against salary

1 Nand Prashad Sharma – –

1 Hit Shankar Ghimire 10,000 –

2 Uma Shankar Kamti 90,000 706

3 Vipin Arora 130,430 244,430

Total 1,712,899 457,374

233


S. No. Name of staff As on 31st March, 2011


1 Khil Nath Timilsina 597,656 250,000

2 Bikram Sunuwar 1,249,999 –

3 Krishna Raj Ghimire – 210,000

4 Shesh Raj Ghimire – 355,469

5 Kirti man Sunuwar 2,405,468 –

6 Pirti Raj Sunuwar 1,021,875 –

7 Rudra Shankar Ghimire 963,000 –

8 Sapna Sunuwar 348,437 –

9 Kamla/Sapna 759,375 –

10 Saroj Sunuwar 1,988,281 –

11 Tej Prashad Ghimire 2,739,843 –

12 Prem Kumari Poudel 5,263,983 –

13 Man Bahadur Shrestha 495,312 –

14 Man Kumari Sunuwar - 220,000

15 Saroj Sunuwar 250,000 250,000

Total 18,083,229 1,285,469

ANNEXURE D : LETTER OF CREDIT/GUARANTEE (Nepali Rs.)



1 Bank Guarantee (CTBNGPB001670004) – –

2 Clean Energy CEDB:PB006/2011 1,572,000 –

Total 1,572,000 –

ANNEXURE E : OTHER PAYABLE (Nepali Rs.)



1 ANK Construction Co. Pvt. Ltd. – 2,300,000

2 P.S. Ramechhap JV 1,473,484 1,473,484

3 Rasuwa SBA Joint Venture – 1,500,000

4 R.K. Constructions – 2,235,902

5 Saroj Sunuwar 1,000,000 –

6 Sidhi Raj Timalsina 1,000,000 –

7 Triveni Properties Pvt. Ltd. – 255,022

Total 3,473,484 7,764,408

ANNEXURE C : ADVANCES FOR LAND ACQUASITION (Nepali Rs.)

234


ANNEXURE F : DETAIL OF OFFICE EXPENSES (Nepali Rs.)



Bank Charges 2,158,290 76,145

Postasge and Courier 13,750 5,913

Electricity expenses 50,471 177,167

Meeting Expenses 105,556 53,630

Local Conveyance 17,105 8,890

Total 2,345,172 321,745

ANNEXURE G : DETAIL OF MISCELLANEOUS EXPENSES (Nepali Rs.)

Details For the Year ending on

31st March, 2011

For the Year ending on

31st March, 2010

Medicine expenses 25,378 33,615

Miscellaneous expenses 895,424 248,405

Fooding expenses 41,164 184,361

Accidental Expenses – 253,405

Electric Lock – 4,375

Nail Cutter – 80

Parking Expenses 2,624 1,710

Office Tea & Snacks 639 –

Photo copy 25,811 17,306

Water Expenses 14,798 14,340

Canteen Expenses – 4,500

Gift Expenses – 81,644

Security Expenses – 36,910

Internet Expenses 44,070 –

Office Inventory (Consumable Goods) 101,188 –

Office Equipments 1,325 –

Puja Expenses 8,955 –

Likhu Site Inventory 1,734 –

Generator Fuel Exp. 304,400 –

Generator Repair Expenses 36,499 –

Topo Sheet Expenses 600 13,490

Labour Expenses 13,435 –

News Paper 1,340 –

Transportation Expenses 2,256 –

Books & Periodicals 4,635 325

Compensation Expenses 1,356 220,000

235


Details For the Year ending on

31st March, 2011

For the Year ending on

31st March, 2010

Employment Fund – 27,680

Advertising Expenses – –

Donation Expenses 393,500 145,650

Total 1,921,131 1,287,796

ANNEXURE E : GREEN VENTURE (P) LTD. (Nepali Rs.)

Details of Advance Tax

S. No. Particulars Amount

1 Bank of Asia Ltd. 13,366

2 NIC Bank Ltd. 202,939

3 NMB BANK LTD. 83,830

4 NIB Bank Ltd. 012-01020015066 (4528100) 17,265

5 Maha Laxmi Finance Ltd. 155,957

Total 473,356

Details of Share Capital

Particulars Amount

Bhilwara Energy 19,000,000

Nirjala Raut 1,500,000

Triveni Energy 9,500,000

Total 30,000,000

(Nepali Rs.)

236



(Nepali Rs.)

As at 31.03.2011 As at 31.03.2010 CASH FLOW FROM OPERATING ACTIVITIESA. 1. Net Profit / Loss before tax and extraordinary items

Add:1. Depreciation 4,467,756 4,664,637 2. Expenses writtten off – –3. Interest expense – –4. Accumulated Pre-Operating Expenses – –5. Decrease(Increase) in Pre-Operating

Expenses Pending for Capitalisation (73,564,514) (190,725,151)

2. Operating Cash flow before Change of Working Capital1. Decrease(Increase) in Current assets (Other than Cash & Bank

Balance) 1,881,014 22,960,582

2. Increase (Decrease) in Current liabilities (4,238,212) 7,753,102 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) (71,453,955) (155,346,830)

B. Cash flow from Investing Activities1. Interest /Dividend received – –2. Sale (Purchase) of Fixed assets or Investment (18,533,139) (20,623,436)3. Sale (Purchase) of Investments (16,000) –4. Decrease (Increase) in loans, advances and deposits – –5. Decrease (Increase) in Construction Work In progress – –Net cash flow from Investing Activities (B) (18,549,139) (20,623,436)

C. Cash flow from Financing Activities1. Issue of shares (except bonus shares) – –2. Advance Against Shares 132,266,842 188,732,0483. Dividends paid – –4. Investment in Shares – –

5. Others – –

Net cash flow from Financing Activities (C) 132,266,842 188,732,048Net Increase(Decrease) in cash and cash equivalents = (A+B+C) 42,263,747 12,761,782 Cash and cash equivalents at the beginning of the year 15,343,733 2,581,951 Cash and cash equivalents at the end of the year 57,607,481 15,343,733


CA, Narayan Bajaj, DirectorNarayan Bajaj & AssociatesChartered Accountants

Date : 8th April, 2011Place : Kathmandu, Nepal

Nationwide Network

TEXTILESRSWM Limited

Cotton Spinning and Gassed Yarn

Cheslind Textiles Ltd.

Cotton Yarn Twisting

9. Bagalur

10. Puducherry

Maral Overseas Ltd.

11. Maral Sarovar12. Maral Sarovar13. Noida

Cotton , Yarn Dyeing, Knitting, Dyeing & FinishingSpinningCaptive Thermal PowerKnitted Garments

BSL Ltd.14. Bhilwara15. Jaisalmer

PV & Worsted Spinning, Weaving & Silk FabricWind Power Generation

BMD Pvt. Ltd.16. LNJ Nagar, Mordi Automotive Furnishing Fabric, Flame Retardant

Fabric, Furnishing Fabric

Bhilwara Technical Textiles Ltd.

17. LNJ Nagar, Mordi Technical Textiles

GRAPHITE

HEG Ltd.18. Mandideep19. Mandideep

20. Tawa

Graphite ElectrodesCaptive Thermal Power

Captive Hydro Electric Power

POWER

Bhilwara Energy Ltd.21. Pathankot UBDC Stage III Hydro Electric Power Generation

Malana Power Company Ltd.22. Malana (Kullu) Hydro Electric Power Generation

Hydro Electric Power Generation

AD Hydro Power Ltd.23. Manali

30. Mumbai31. Kolkata

32. Bengaluru33. New Delhi

34. Ludhiana35. Amritsar

36. Bhilwara

Indo Canadian Consultancy Services Ltd.25. Noida

Power Engineering Services

INFORMATION TECHNOLOGY

Bhilwara Scribe Pvt. Ltd.26. Bhopal

27. Bengaluru

Medical Transcription ServicesMedical Transcription Services

Bhilwara Infotech Ltd.28. Bengaluru

IT Services

OFFICES

Corporate Office29. Noida (NCR-Delhi)

Regional / Marketing :

24. Tawang

Hydro Electric Power GenerationNJC Hydro Power Ltd.

Fibre Dyeing, Spinning Dyed & Grey Yarn

Spinning PV Blended, Cotton & Open End Grey Yarn

Melange Yarn, Fibre Dyed & Yarn Dyed

Spinning PV Blended Grey Yarn

Fibre Dyeing & Spinning Dyed Yarn

Spinning, Weaving, Processing & Finishing

Cotton Ring & Open End Spinning, Weaving & Rope

Dyeing, Processing & Finishing Denim Fabric

Thermal Power Generation

1. Kharigram

2. Mayur Nagar, Banswara

3. Mandpam

4. Rishabhdev

5. Ringas

6. LNJ Nagar, Mordi

7. LNJ Nagar, Mordi

8. LNJ Nagar, Mordi

14

15

16

36

17

1

3

5

2

4

6

78

9

10

11

12

13

1819

20

21

24

2223

25

26

2728

29

30

31

32

33

34

35

Bhilwara Energy Limited

Corporate Office:

Bhilwara Energy LimitedBhilwara Towers, A-12, Sector-I,

Noida - 201301 (NCR - Delhi), India

Website : www.bhilwaraenergy.com / www.lnjbhilwara.com

passion to excel - bhilwara energybhilwaraenergy.com/uploads/file/bel_ar_2010-11.pdf · 2016. 9....

Documents