CHALLENGES INSPIRE NEW OPPORTUNITIES. - …bhilwaraenergy.com/Uploads/File/bel_ar2008_09.pdf · · 2016-09-03CHALLENGES INSPIRE NEW OPPORTUNITIES. Annual Report 2008-2009 ... Cotton

CHALLENGES INSPIRE NEW OPPORTUNITIES.

Annual Report 2008-2009

Bhilwara Energy LimitedBhilwara Energy LimitedBhilwara Towers, A-12, Sector I, Noida - 201301 (NCR - Delhi), India

www.bhilwaraenergy.com/www.lnjbhilwara.com

LNJ Bhilwara Group Companies

Group Brands

Group Salient Features

• AD Hydro Power Ltd. 192 MW Hydro Power Project at Manali (H.P.) scheduled to be commissioned by the March, 2010.

• The Group is committed to achieve over 3,000 MW of Power Generation by the year 2017.

• Bhilwara Energy Ltd. collaborated with Mannvit Engineering, Iceland for developing Geothermal Power Projects in India and Nepal.

• The Power Generation up from 90 crore units to 113 crore units during the year because of RSWM TPP and Maral TPP being fully operational.

• RSWM's 46 MW and Maral's 10 MW capacity Thermal Power plants running successfully.

• HEG's additional 33 MW Captive Thermal Power Plant running successfully.

• HEG Ltd. has undertaken a capacity expansion to raise its Graphite Electrodes production to 66,000 TPA.

• The exports constitute 46% of the total turnover.

• The Group's Textile Business has 4.83 lacs spindleage.

• The Group employing over 25,000 people and poised to establish its presence in a leadership position in its businesses.

• HEG has won Dun & Bradstreet Corporate Award, 2008 for the best category in Graphite Electrodes.

• RSWM was felicitated with the 14th Rajiv Gandhi National Quality Award and “Niryat Shree” and SRTEPC Awards during the year.

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LNJ Bhilwara Group

TEXTILES

GRAPHITE

POWER

INFORMATION TECHNOLOGY

OFFICES

RSWM Limited

1. Kharigram Fibre Dyeing, Spinning Dyed & Grey Yarn

2. Mayur Nagar, Banswara Spinning PV Blended, Cotton & Open End Grey Yarn

3. Mandpam Melange, Cotton Dyed Yarn & Yarn Dyeing

4. Rishabhdev Spinning PV Blended Grey Yarn

5. Ringas Fibre Dyeing & Spinning Dyed Yarn

6. LNJ Nagar, Mordi Weaving & PV Fabric Processing & Finishing

7. LNJ Nagar, Mordi Cotton Ring & Open End Spinning, Denim Fabric Weaving & Rope Dyeing, Processing & Finishing

8. LNJ Nagar, Mordi Thermal Power

Cheslind Textiles Ltd.

9. Bagalur Spinning Cotton, Compact, Gassed & Mercerized Yarn & Knitting

10. Pondicherry Spinning Cotton, Compact, Gassed & Mercerized Yarn & Knitting

Maral Overseas Ltd.

11. Maral Sarovar Cotton Spinning, Knitting, Dyeing & Finishing, Knitted Garments

12. Maral Sarovar Captive Thermal Power

13. Noida Knitted Garments


BSL Ltd.

15. Bhilwara PV & Worsted Spinning, PV & Worsted Weaving & Silk Fabric

16. Jaisalmer Wind Power Generation

Bhilwara Spinners Ltd.

17. Bhilwara Spinning PV Blended Grey Yarn

BMD Pvt. Ltd.

18. LNJ Nagar, Mordi Automotive Furnishing Fabric, Flame Retardant Fabric, Furnishing Fabric

Bhilwara Processors Ltd.

19. Bhilwara Dyeing, Processing & Finishing of Fabric

Bhilwara Technical Textiles Ltd.

20. LNJ Nagar, Mordi Technical Textiles

HEG Ltd.

21. Mandideep Graphite Electrodes

22. Mandideep Captive Thermal Power

23. Tawa Captive Hydro Electric Power

Bhilwara Energy Ltd.

24. Pathankot UBDC Stage III Hydro Electric Power Generation

25. Tawang Nyam Jang Chhu Hydro Electric Power Generation

Malana Power Company Ltd.

26. Malana (Kullu) Hydro Electric Power Generation

AD Hydro Power Ltd.

27. Allain-Duhangan Hydro Electric Power Generation(Manali)

Indo Canadian Consultancy Services Ltd.

28. Noida Power Engineering Services

Bhilwara Scribe Pvt. Ltd.

29. Bhopal Medical Transcription Services

30. Bengaluru Medical Transcription Services

Bhilwara Infotech Ltd.

31. Bengaluru IT Services

Corporate Office

32. Noida (NCR-Delhi)

Regional / Marketing

33. Mumbai 37. Ludhiana

34. Kolkata 38. Amritsar

35. Bengaluru 39. Bhilwara

36. New Delhi

01

Corporate Information 02

Directors’ Report 03

Annexures to the Directors’ Report 08

Standalone Financial Statements

Auditors’ Report 09

Balance Sheet 12

Schedules 13

Cash Flow Statement 21

Balance Sheet Abstract 22

Statement Pursuant to Sec. 212 23

Consolidated Financial Statements

Auditors’ Report 27

Balance Sheet 28

Profit and Loss Account 29

Schedules 30

Cash Flow Statement 45

Balance Sheet Abstract 46

Attachments of Annual Report

a. Malana Power Company Limited 49

b. AD Hydro Power Limited 85

c. Indo Canadian Consultancy Services Limited 113

d. Green Ventures Private Limited, Nepal 131

CONTENTS

02

BOARD OF DIRECTORS

KEY EXECUTIVES

STATUTORY AUDITORS

TECHNICAL CONSULTANTS

Vimal BankaB. P. SinghSalil BhandariM. K. DoogarO. P. Ajmera Director - FinanceSunil Chawla

Ravi Gupta Company Secretary

S. S. Kothari Mehta & Co.,Chartered AccountantsNew Delhi

RSW International Inc., CanadaIndo Canadian Consultancy Services Limited

BANKERS

CORPORATE OFFICE

REGISTERED OFFICE

Axis Bank LimitedState Bank of IndiaHDFC Bank LimitedYes Bank Limited

Bhilwara TowersA-12, Sector - 1Noida - 201 301 (U.P.)Phone : 0120 - 2541810, 4390300Fax : 0120 - 2531648, 2531745

Bhilwara Bhawan40-41, Community CentreNew Friends Colony,New Delhi - 110 025Phone : 011 - 26822997

CORPORATE INFORMATION


of Section 212 of the Companies Act, 1956 is attached to this report.

During the year 2008-09, Malana Power Company Limited, a subsidiary of your Company has signed the Pre-Implementation Agreement (PIA) for Bara Bhangal HEP (200 MW) and Chango Yangthang HEP (140 MW) in the state of Himachal Pradesh. After signing of their PIA’s, the detailed site survey & investigation were started and preparation of Detailed Project Report are underway for these projects.

Based on Optimization Report submitted by RSW, Canada

and ICCS, the Company had approached to the Government of Arunachal Pradesh for enhancement of capacity of Nyamjang Chhu Project to 900 MW by combining the three stages into one stage. The Govt. of A.P has accepted your Company’s proposal by giving it in Principle consent followed by signing of MoA. Your Company had also submitted the DPR of Nyamjang Chhu of 900 MW capacity to the Govt. of A. P., which was subsequently approved by the Govt. of A. P. on 26th June, 2009. Subsequently, the DPR of the project has also been submitted to CEA for its approval. This would be one of the largest Hydro Electric Projects in the private sector in the country.

In Nepal, the Company has started construction of Balephi 50 MW & Likhu –IV 120 MW HEP‘s under its Joint Venture companies with Triveni Group of Nepal:-

YEAR OF FIRM STRIDE

03

DIRECTORS’ REPORT

To the Members

M/s Bhilwara Energy Limited

Dear Member,

On behalf of the Board of Directors, we have pleasure in presenting the Third Annual Report of the Board and audited statement of accounts for the year ended 31st March, 2009 together with the Auditors’ Report.

The Company has not yet started its commercial activities and therefore no Profit and Loss Account has been prepared and the expenditure incurred has been shown under Schedule - 5 under the head “Project & Pre-operative Expenses (Pending Allocation)” to the Balance Sheet.

As of 31st March, 2009, the Company’s expenditure on various accounts is detailed below:

(Rs. in Million)

Fixed Assets (Gross) 117.29Pre-operative Expenses 276.64Investments 1884.90Net Current Assets 600.20Miscellaneous Expenditure 6.61TOTAL 2885.64

The financial statements of Subsidiaries of your Company, Malana Power Company Ltd., AD Hydro Power Ltd., Indo Canadian Consultancy Services Ltd., & Green Venturs Pvt. Ltd., Nepal alongwith statement pursuant to the provisions

FINANCIAL HIGHLIGHTS

PARTICULARS AMOUNT

04

(1) Green Ventures Pvt. Ltd. (for Likhu – IV 120 MW) and

(2) Balephi Jalvidhyut Co. Ltd. (for Balephi – 50 MW)

UBDC Stage – III

The capacity of the project has been enhanced to 85 MW as against the allotted capacity of 75 MW. This has also resulted into enhancement in payable deemed generation from 468 MUs to 510 MUs aggregating an annual realization of Rs.125 Crore approximately. The Company has also started the process of land acquisition. The total land required for the project development is approximately 839 acres including Government as well as Private land. Out of this, the Govt. of Punjab has already approved the

acquisition of private land totaling 691 acres for which Notification u/s 4 of the Land Acquisition Act is likely to be issued by August, 2009. The irrigation department of the Govt. of Punjab has already obtained in principle forest clearance for approximately 104 acres of forest land required to be used by the Company for realignment and remodeling of main UBDC line.

The Company envisages developing this project under Clean Development Mechanism (CDM) norms. The expected commissioning of this project is December, 2012.

The Company had entered into Memorandum of Understanding with Glitnir Bank inf, Iceland for study, survey, investigations and development of Geo-thermal Projects for generation of electricity in India and Nepal.

NEW ENDEAVORS

Subsequently, as per the communication available, Glitnir Bank inf, Iceland due to financial crisis has been taken over by the Government of Iceland and has opted out of the joint Venture. Thereafter, Company entered into Joint Venture with M/s. Mannvit, Iceland for study and development of geothermal projects in India and Nepal.

During the year, your Company has also been prequalified to submit the request for proposal for Hydro Electric Project, Ratle 690 MW by Govt. of Jammu and Kashmir. The Company has also signed MOU with State Government of M.P. for setting up 1500 MW Thermal Power Plant at District Anuppur/Shahdol, M.P. on 29th July, 2008. The Company has already short listed 4 sites for the same. The Company has also submitted application to Ministry of

Coal, Government of India, for dedicated long term coal linkage supply to the proposed plant on 11th July, 2008.

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05

70 MW Lignite based Thermal Power Station linked to Gurha (West) mines.

Gurha Thermal Power Company Limited (A wholly owned subsidiary of Rajasthan Rajya Vidyut Prasaran Nigam Limited) invited bids to submit Request for Qualification (RFQ) for 70 MW Lignite based Thermal Power Station linked to Gurha (West) Mines. The Company intends to submit RFQ shortly.

The Company and its associates has participated in bidding projects for over 1700 MW in Hydro as well in thermal projects located all over the country and Nepal.

About 700 MW of power projects in hydro as well in thermal are under consideration for bidding.

The Company has now challenging projects in pipeline for development and execution in coming years. The Company plans to achieve total generating capacity over 3000 MW in hydro power by 2016-17. The Company envisages developing all hydro power projects under Clean Development Mechanism (CDM) norms.

During the period under review, the Company raised its authorized share capital from Rs. 1000 Million to Rs. 1400 Million. The Company also issued and allotted 40,00,000 (Forty Lacs) 0.01% Cumulative Redeemable Preference Shares of Rs. 100/- each aggregating to Rs. 40,00,00,000 (Forty Crores) to M/s. HEG Limited on preferential basis. The funds raised through issue of Cumulative Redeemable

FUTURE OUTLOOK

SHARE CAPITAL

Preference Shares will be utilized for meeting the immediate fund requirement of power projects of BEL/SPV’s promoted by BEL.

In the upcoming projects, Environment Management Plan comprising international practices, procedure and norms shall be adopted to take care of environment and social impacts on the Projects.

Environmental Management Plan involves mitigation, monitoring and institutional measures to eliminate, offset or reduce adverse environmental and social impacts in or around Project area.

The Company recognizes serious dearth of trained expert personnel in growing power sector not only in power generation, distribution but also in trading and values human resources very vital to the augmentation of the organization.

ENVIRONMENT, HEALTH AND SAFETY

HUMAN RESOURCE DEVELOPMENT

DIVIDEND & OTHER APPROPRIATION

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

PARTICULARS OF EMPLOYEES

DIRECTORS’ RESPONSIBILITY STATEMENT

As the construction work is under progress, without any operation, no dividend is proposed to be declared during the year under review.

The system of internal control has been designed and implemented to meet the particular requirements of the Company and the risks to which it is exposed. The objectives are to identify the level of risk appropriate to the company, taking into account the need to increase shareholder value through an entrepreneurial culture and ensuring that the Company achieves its objectives.

During the year 2008-09, no employee of the Company was covered as per the provision of Section 217(2A) of the Companies Act, 1956 (the Act), read with the Companies (Particulars of Employees) Rules, 1975, as amended, regarding employees.

As required under Section 217 (2AA) of the Companies (Amendment) Act, 2000, the Directors’ of your Company states hereunder:-

i) That in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii) That the accounting policies have been selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for the financial year 2008-09;

iii) That the proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and

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

Mr. M. K. Doogar and Mr. Salil Bhandari, Directors retire by rotation and being eligible, offers themselves for re-appointment.

During the year, the committee met to review Company’s financial results, internal control system, risk management policies and internal audit reports. The audit committee of the Company comprises of three Directors viz Mr. O. P. Ajmera, Mr. Vimal Banka & Mr. B. P. Singh. All the members were present during the meeting of the audit committee and the proceedings of the committee were in accordance with the provisions of the Companies Act, 1956.

M/s. S. S. Kothari Mehta & Co., Chartered Accountants has conveyed their willingness for re-appointment as statutory auditors of the Company for the financial year ending on 31st March, 2010. The Company has also received consent letter from M/s. S. S. Kothari Mehta & Co., Chartered Accountants under section 224(1B) of the Companies Act, 1956, being eligible, showing willingness for their appointment as statutory auditors of the Company for the financial year ending on 31st March, 2010. The Board recommends for the appointment of M/s. S. S. Kothari Mehta & Co., Chartered Accountants as Statutory Auditors of the Company.

DIRECTORS

AUDIT COMMITTEE

AUDITORS

06


AUDITORS’ REMARKS

PUBLIC DEPOSITS

E N E R G Y C O N S E R V A T I O N , T E C H N O L O G Y ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

CORPORATE GOVERNANCE

The Auditors' Report read alongwith notes to the Accounts is self explanatory and require no further comments from the board.

The Company has not accepted any deposits from the Public during the year under report. Therefore, provisions of Section 58A are not applicable.

The information with regard to Conservation of Energy,

Technology Absorption, Foreign Exchange Earnings and out go in accordance with the provisions of Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosures of particulars in the Report of Board of Directors) Rules, 1988, is given as an annexure forming part of this Report.

Your Company has adopted the doctrine of Corporate Governance to ensure greater transparency, accountability and integrity in the affairs of the Company.

Majority of the Board comprises of Non-Executive Directors who play a critical role in imparting balance to the Board processes by bringing an independent judgment to bear on issues of strategy, performance, resources, standards of Company conduct etc. The Corporate governance ideology followed by the Company represents the value framework, the ethical framework and the moral framework under which business decisions are taken.

INDUSTRIAL RELATIONS

ACKNOWLEDGEMENTS

During the year, your Company maintained harmonious and cordial relation. No man-days were lost due to strike, lockout etc.

Your Directors record their grateful appreciation of the encouragement, assistance and co-operation received from shareholders, Ministry of Power- Govt. of India, Government of Himachal Pradesh, Himachal Pradesh State Electricity Board, Govt. of Arunachal Pradesh, Govt. of Punjab, Govt. of Nepal, Nepal Electricity Authority, Commercial Banks, IL&FS Financial Services Ltd. and other Government Departments. The Board look forward to

their continued support and co-operation in the coming years as well.

Your Directors also place on record the appreciation for investors M/s. New York Life Investment Management India Fund (FVCI) II LLC, Jacob Ballas Capital India Pvt. Ltd. and WIH Holdings for their support and confidence reposed by them in the Company.

Your Directors are pleased to place on record the appreciation for the highly motivated employees of the Company for their commitment and the achievement and look forward to their continued support and co-operation in the years to come.

For and on behalf of the Board of Directors

Vimal Banka O. P. AjmeraDirector Director - Finance

Place : NoidaDate : 13th August, 2009

07

08


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

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

A. CONSERVATION OF ENERGY – NIL

B. TECHNOLOGY ABSORPTION – NIL

C. FOREIGN EXCHANGE EARNING AND OUTGO - The details of Foreign Exchange Earnings and Outgo during the year 2008-09 are mentioned in Notes to Accounts.

(Rs. in Million)

Investment in Joint Ventures in Nepal 112.50 10.83


Place : Noida Vimal Banka O. P. AjmeraDate : 13th August, 2009 Director Director - Finance

Foreign Exchange Outgo This Year Previous Year

9

AUDITORS' REPORT

To

The members of Bhilwara Energy Limited

We have audited the attached Balance Sheet ofBhilwara Energy Limited as at 31st March, 2009 andCash Flow Statement for the year ended on that dateannexed thereto. No Profit & Loss Account has beenprepared as the company has not commencedcommercial operations; the relevant details have beenfurnished in Schedule-5 'Project and Pre-operativeexpenses (pending allocation).

These financial statements are the responsibility of theCompany's management. Our responsibility is toexpress an opinion on these financial statements basedon our audit.

We have conducted our audit in accordance withauditing standards generally accepted in India. ThoseStandards require that we plan and perform the audit toobtain reasonable assurance about whether the financialstatements are free of material misstatement. An auditincludes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements.An audit also includes assessing the accountingprinciples used and significant estimates made by themanagement, as well as evaluating the overall financialstatement presentation. We believe that our auditprovides a reasonable basis for our opinion.

As required by the Companies (Auditors' Report) Order,2003 as amended by Companies (Auditors' Report)(Amendment) Order, 2004 (Collectively the Order)issued by the Central Government of India in terms ofSection 227 (4A) of the Companies Act, 1956 and onthe basis of such checks as we considered appropriateand according to the information and explanations givento us, we enclose in the Annexure a statement on thematters specified in paragraphs 4 and 5 of the saidOrder.

Further to our comments in the Annexure referred toabove, we report that:

a) We have obtained all the information andexplanations which, to the best of our knowledgeand belief, were necessary for the purposes of ouraudit;

b) In our opinion, proper books of account, as requiredby law, have been kept by the Company so far asappears from our examination of those books;

c) The Balance Sheet and Cash Flow Statement dealtwith by this report are in agreement with the booksof account;

d) In our opinion, the Balance Sheet and Cash FlowStatement, dealt with by this report, comply withthe Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act,1956.

e) On the basis of written representations receivedfrom the directors as on 31st March, 2009 andtaken on record by the Board of Directors, we reportthat none of the directors is disqualified as on 31stMarch, 2009 from being appointed as a director interms of clause (g) of sub section (1) of section274 of the Companies Act, 1956.

f) In our opinion and to the best of our informationand according to the explanations given to us, thesaid accounts, read with the Accounting policiesand Notes thereon, give the information requiredby the Companies Act, 1956 in the manner sorequired and give a true and fair view in conformitywith the accounting principles generally acceptedin India:

i) In the case of Balance Sheet, of the state ofaffairs of the Company as at 31st March, 2009;and

ii) In the case of Cash Flow Statement, of thecash flows for the year ended on that date.

For S. S. KOTHARI MEHTA & Co.Chartered Accountants

Arun K. TulsianPartnerMembership No.: 89907

Place : New DelhiDated : 13th August, 2009

10


ANNEXURE TO AUDITORS' REPORT

(Annexure referred to in our report of even date)

(i) (a) The Company has maintained properrecords showing full particulars includingquantitative details and situation of fixedassets.

(b) The Company has done the physicalverification of its fixed assets which, in ouropinion, is reasonable having regard to thesize of the Company and the nature ofassets. As informed to us, no discrepancieswere noticed on such verification.

(c) No Substantial part of the fixed assets wasdisposed off during the year.

2. According to the information and explanationsgiven to us and the records examined by us, theCompany is not having any inventory, in view ofwhich the related reporting requirement of theOrder is not applicable to the company.

3. (a) The Company has not granted any loan,secured or unsecured, to Companies, firmsand other parties covered in the registermaintained under section 301 of theCompanies Act, 1956.

(b) The company has not taken any loan,secured or unsecured, from Companies,firms and other parties covered in the registermaintained under section 301 of theCompanies Act, 1956.

(c) Since there are no such loans, the commentsregarding terms & conditions, repayment ofthe principal amount & interest thereon andoverdue amount are not required.

4. In our opinion, and according to the informationand explanations given to us during the course ofaudit, there are adequate internal control systemscommensurate with size of the Company and thenature of its business with regard to purchase offixed assets. Further on our examination of thebooks and records of the company, carried out inaccordance with the generally accepted auditingpractices in India, we have neither come acrossnor have we been informed of any instance ofmajor weaknesses in the aforesaid internal controlsystems.

5. (a) Based upon the audit procedures applied byus and according to the information andexplanations given to us, we are of theopinion that there is no transaction which isrequired to be entered into the registermaintained under section 301 of the Act.

(b) In our opinion and according to theinformation and explanations given to us,there are no transactions made in pursuanceof contracts or arrangements required to beentered in the register maintained undersection 301 of the Companies Act, 1956 andaggregating during the year to Rupees fivelacs or more in respect of reach party.

6. The Company has not accepted any deposits frompublic within the meaning of section 58A and 58AAof the Companies Act, 1956 or any other relevantprovisions of the Act including the Companies(Acceptance of Deposit) Rules, 1975.

7 . In our opinion, the Company has an internal auditsystem commensurate with the size & nature ofits business.

8. (a) According to the records of the Company,undisputed statutory dues including Income-Tax, Sales-Tax, Wealth-Tax, Service Tax,Custom Duty, Excise Duty, Cess and othermaterial statutory dues, as applicable, havebeen regularly deposited during the year withthe appropriate authorities. According to theinformation and explanations given to us andas per the books and records examined byus, there are no arrears of such undisputedstatutory dues outstanding as on the date ofbalance sheet for a period exceeding sixmonths from the date they became payable.

(b) According to the records of the Companyexamined by us and the information andexplanations given to us, there are no duesof Custom Duty, Wealth Tax, Service Tax,Sales Tax, Excise duty and Income Tax andCess which have not been deposited onaccount of any dispute.

9. Since the Company is yet to commencecommercial operations, no profit & loss accounthas been prepared in view of which there are noaccumulated losses as at the end of the financialyear.

10. In our opinion and according to the informationgiven to us, the company has not availed any loanor credit from financial Institution or banks.

11. According to the information and explanationsgiven to us, the Company has not granted anyloans and advances on the basis of security byway of pledge of shares, debentures and othersecurities.

12. The Company does not fall within the category ofChit fund / Nidhi / Mutual Benefit fund / Societyand hence the related reporting requirements ofthe Order are not applicable.

11

13. According to the information and explanationsgiven to us and the records examined by us, theCompany is not dealing or trading in shares,securities, debentures and other investments andhence the related reporting requirements of theOrder are not applicable.

14. The Company has not given any guarantee forloans taken by others from financial institutions /banks.

15. In our opinion and according to the informationand explanations given to us, the term loans raisedduring the year by the Company have beenapplied for the purpose for which the said loanswere obtained, where the lenders have stipulatedsuch end use.

16. According to the information and explanationsgiven to us and as per the books and recordsexamined by us, as on the date of balance sheet,no short term fund have been raised by theCompany. Hence the reporting requirement of theOrder is not applicable

17. The Company has not made any preferentialallotment of shares to companies and other partiescovered in the register maintained under section301 of the Companies Act, 1956.

18. The Company has not raised any debenturesduring the year nor has any outstandingdebentures.

19. The Company has not raised any money throughpublic issue during the year.

20. During the course of our examination of the booksand records of the Company carried out inaccordance with the generally accepted auditingpractices in India, we have neither come acrossany instance of fraud on or by the Company,noticed or reported during the year, nor have webeen informed of such case by the management.

21. The other clauses of the Order are not applicableto the company.




12


(Rs. '000)

Schedule As at As at31.03.2009 31.03.2008

SOURCE OF FUNDSShareholders' FundsShare capital 1 729,941 729,941

Reserves and surplus 2 987,818 987,818

Warrants 9,713 9,713

Loans 3 1,156,000 –

TOTAL 2,883,472 1,727,472

APPLICATION OF FUNDSFixed AssetsGross Block 4 12,089 4,055

Less : Depreciation (2,169) (263)

Net Block 9,920 3,792

Capital work–in–progress including capital advances 105,199 –

Project and pre–operative expenses (pending allocation) 5 276,644 82,487

391,763 86,279

Investment 6 1,884,901 1,298,340

Current Assets Loans and AdvancesCash and bank balances 7 31,047 51,935

Other current assets 8 2,828 3,143

Loans and advances 9 643,212 299,044

677,087 354,122

Less: Current Liabilities and ProvisionsLiabilities 10 65,659 14,300

Provisions 11 11,228 3,578

76,887 17,878

Net Current Assets 600,200 336,244

Miscellaneous Expenditure 12 6,608 6,608(to the extent not written off or adjusted)

TOTAL 2,883,472 1,727,472

Notes to Accounts 13

The Schedules referred to above form an integral part of the Balance Sheet.

BALANCE SHEET AS AT 31st MARCH, 2009

As per our report of even date

For S.S. Kothari Mehta & CoChartered Accountants

Arun K. TulsianPartner

Membership No. 89907



O. P. Ajmera Director - Finance

Vimal Banka Director


13

SCHEDULES TO ACCOUNTS

SCHEDULE 1 : SHARE CAPITAL(Rs. '000)

As on As on31.03.2009 31.03.2008

Authorised100,000,000 Equity shares of Rs.10 each 1,000,000 1,000,000

Issued, Subscribed and Paid up72,994,082 (Previous year 72,994,082) 729,941 729,941

Equity shares of Rs.10 each

729,941 729,941

SCHEDULE 2: RESERVES AND SURPLUS

Balance as per last account 987,818 987,818

Add: Received during the year – –

987,818 987,818

SCHEDULE 3: LOANS

Secured loansTerm Loan from IL & FS Financial Services Limited (Note) 1,090,000 –

Inter corporate loans (Unsecured) 66,000 –

1,156,000 –

Note:– Term loan is secured by way of pledge of 2,19,35,900 shares held by Promoters group in the company.Amount due within next one year Rs NIL(Previous year Rs NIL). Inter corporate loan is repayable in fullwithin next one year.

SCHEDULE 4: FIXED ASSETS

Rs. in '000GROSS BLOCK DEPRECIATION NET BLOCK

Particulars Opening Additions / Sale/ As at Opening For the Sales/ Upto As At As At01.04.08 Adjustment Adjustment 31.03.09 01.04.08 year transfer 31.03.09 31.03.09 31.03.08

TANGIBLE ASSETS

Furniture & Fixtures 225 477 – 702 21 102 – 123 579 204

Computer 497 443 – 940 47 303 – 350 590 449

Other office equipments 136 450 – 586 23 67 – 90 496 113

Vehicles 2,138 1,580 450 3,268 131 778 95 814 2,454 2,008

Electrical Equipments & Fittings 349 295 – 644 21 77 – 98 546 328

Project Equipment 710 4,540 – 5,250 21 590 – 611 4,639 690

Building ( Explosive Magazine Storges ) – 359 – 359 – 7 – 7 352 –

TOTAL TANGIBLE ASSETS 4,055 8,144 450 11,749 263 1,924 95 2,093 9,656 3,792

INTANGIBLE ASSETS

Software – 340 – 340 – 76 – 76 264 –

TOTAL INTANGIBLE ASSETS – 340 – 340 – 76 – 76 264 –

Total (A ) 4,055 8,484 450 12,089 263 2,000 95 2,169 9,920 3,792

Previous year 131 3,924 – 4,055 18 244 – 263 3,792 112

Capital Work In Progress – – – 105,199 – – – – 105,199 –

Total (B) – – – 105,199 – – – – 105,199 –

Total (A+B) 4,055 8,484 450 117,289 263 2,000 95 2,169 115,120 3,792

14


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

(Rs. '000)

As on As on31.03.2009 31.03.2008

Personnel Expenses

Salaries, wages and bonus 15,811 2,384

Contribution to provident and other funds 456 40

Workmen and staff welfare expenses 508 127

16,775 2,551

Administrative and other expenses

Rent 1,092 413

Rates & taxes 32 14

Insurance 200 7

Repairs and maintenance 404 48

Travelling expense 7,857 2,616

Conveyance 918 137

Vehicle running & hiring expenses 2,819 886

Communication expenses 411 114

Directors' remuneration 1,195 373

Auditors' Remuneration :

– Audit Fees 166 56

Advertisement 566 460

Legal & professional charges 58,018 23,157

Fee & subscription 307 123

Power and fuel 181 47

Testing & Surveys 3,234 2,934

Consultancy Charges 73,272 34,793

Project processing fee 11,600 11,600

Miscellaneous expenses 30,027 8,011

Financial / bank charges 86,252 854

Depreciation 2,263 263

280,814 86,906

Less : Interest earned (Tax deducted at source Rs.4515 thousand,(Previous year Rs.2142 thousand)(net of provision for income taxRs.6245 thousand. Upto Previous year Rs.3135 thousand). (20,926) (6,969)

Less -: Profit on Sale of Fixed Assets (19) –

276,644 82,487

SCHEDULE 6: INVESTMENTS (LONG TERM - NON TRADE)

Unquoted - Fully Paid

7,52,38,123 (Previous Year 7,09,76,789) Equity Shares of Rs.10/- each ofMalana Power Company Limited(Susidiary company) 1,810,338 1,235,058

40,000 (Previous Year 40,000)Equity Shares of Rs.100/- each ofGreen Venture Renewable India Pvt. Limited 10,000 10,000

1,80,200 (Previous Year 1,80,200)Equity Shares of Rs.10/- ofIndo Canadian Consultancy Services Limited (Susidiary Company) 42,449 42,449

1,90,000 Equity Shares of NR.100/- each fully paid up(Previous year 1,90,000 shares with NR 5 paid up) ofGreen Venture Pvt. Ltd. Nepal (Subsidiary Overseas Company) 22,114 10,833

1,884,901 1,298,340

15

SCHEDULE 7: CASH AND BANK BALANCES(Rs. '000)

As on As on31.03.2009 31.03.2008

Cash in hand 220 212Balances with scheduled banks:

In current accounts 30,827 51,723In Fixed deposit – –

31,047 51,935

SCHEDULE 8: OTHER CURRENT ASSETS

Interest accrued on deposits and others 2,828 3,1432,828 3,143

SCHEDULE 9: LOANS AND ADVANCES(Unsecured, considered good)

Advances recoverable in cash or in kind or for value to be received* 227,077 4,276Loan to Subsidiary Companies (Interest free)** 252,630 252,630Loan to Body Corporates 20,955 19,000Security deposit with govt. departments & others 20,029 19,804Advance income tax / tax deducted at source 8,802 3,334Share application money (Pending for allotment ) 113,719 –* Advance given to MPCL maximium balance outstanding

& year end balance Rs.5,01,861/-& Rs.1,25,715/- respectively.(Previous year Nil & Nil respectively)

** Loan given to Malana Power Company Limited maximum balanceoutstanding Rs.2,52,630/- (Previous Year Rs.2,52,630/-)

643,212 299,044

SCHEDULE 10: LIABILITIES

Sundry creditors 19,687 11,996

Deposits from contractors and others 70 50

Other liabilities 45,902 2,254

* Maximium Credit balance of MPCL outstanding & year end balanceRs.Nil & Rs Nil respectively. (Previous year 119/- & 119/- respectively)

65,659 14,300

SCHEDULE 11: PROVISIONS

Taxation including Fringe benefit tax 10,688 3,553

Gratuity 149 –

Leave encashment 391 25

11,228 3,578

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

Share issue expensesBalance as per last account 6,608 6,608

6,608 6,608

16


SCHEDULE - 13: NOTES TO ACCOUNTS

A. SIGNIFICANT ACCOUNTING POLICIES

(1) GENERAL

Financial statements are prepared on historical cost convention and on the accounting principles ofgoing concern in accordance with Generally Accepted Accounting Principles ("GAAP), comprising ofthe mandatory Accounting Standards, Guidance Notes and other pronouncements issued by the Instituteof Chartered Accountants of India and the provisions of the Companies Act, 1956. The accounts areprepared on accrual basis. The accounting policies applied by the Company are consistent with thoseused in the previous year.

(2) USE OF ESTIMATES

The preparation of financial statements requires estimates and assumptions that affect the reportedamounts of income and expenses for the period, the reported amounts of assets and liabilities anddisclosures relating to contingent liabilities as on the date of financial statements. Difference betweenthe 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. Costcomprises the purchase price and any attributable cost of bringing the asset to its working condition forits intended use. Borrowing costs relating to acquisition of fixed assets, which take substantial periodof time to get ready for its intended use, are also included to the extent they relate to the period till suchassets are ready to be put to use.

The carrying amounts of assets are reviewed at each balance sheet date to ascertain if there is anyindication of impairment based on internal/external factors. An impairment loss is recognized whereverthe carrying amount of an asset exceeds its recoverable amount. The recoverable amount is thegreater of the assets net selling price and value in use. In assessing value in use, the estimated futurecash flows are discounted to their present value at the weighted average cost of capital.

(4) INTANGIBLE ASSTES

Capital Expenditure on purchase and development of identifiable non-monetary assets without physicalsubstance is recognized as Intangible Assets in accordance with principles given under AS-26- IntangibleAssets. These are grouped and separately shown under the schedule of Fixed Assets. These areamortized over their expected useful life.

(5) VALUATION OF INVENTORIES

Inventories comprising of components, stores and spares are valued at lower of cost and net realizablevalue. Cost is determined on weighted average basis.

(6) INVESTMENTS

Current Investments are stated at lower of cost and fair value. Long term Investments are stated atcost and provision for diminution in their value, other than temporary, is made in the accounts.

(7) REVENUE RECOGNITION

Revenue is recognised to the extent it is probable that the economic benefits will flow to the companyand the revenue can be reliably measured.

(8) DEPRECIATION

(i) Depreciation is provided on written down value method at the rates and in the manner prescribedin Schedule - XIV to the Companies Act, 1956.

(ii) Depreciation on software is provided on written down value method at the rate of 40% per annumbased on its estimated useful life.

(9) EXPENDITURE INCURRED DURING CONSTRUCTION PERIOD

Preliminary project expenditure, capital expenditure, indirect expenditure incidental and related toconstruction/ implementation, interest on term loans/ debentures to finance fixed assets and expenditureon start-up/ commissioning of assets forming part of a composite project are capitalized upto the dateof commissioning of the project as the cost of respective assets. Income earned during constructionperiod is deducted from the total of the indirect expenditure.

17

(10) Miscellaneous Expenditure to the extent not written off or adjusted

Preliminary Expenses will be amortized / adjusted starting from the year in which the Companycommences its commercial operations.

(11) TAXES ON INCOME

Provision for current tax is made in accordance with the provisions of the Income Tax Act, 1961.

(12) RETIREMENT BENEFITS

Expenses and liabilities in respect of employee benefits are recorded in accordance with RevisedAccounting Standard 15 - Employee Benefits (Revised 2005) issued by the ICAI.

(a) Provident Fund

The Company makes contribution to statutory provident fund in accordance with EmployeesProvident Fund and Miscellaneous Provisions Act, 1952 which is a defined contribution plan andcontribution paid or payable is recognized as an expense in the period in which services arerendered by the employee.

(b) Gratuity

Gratuity is a post employment benefit and is in the nature of a defined benefit plan. The liabilityrecognized in the balance sheet in respect of the gratuity is the present value of the definedbenefit/obligation at the balance sheet date less the fair value of plan assets, together withadjustment 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 theprojected unit credit method.

Actuarial gains and losses arising from past experience and changes in actuarial assumptionsare charged or credited to the Profit & loss account in the year to which such gains or lossesrelate.

(c) Leave Encashment

Liability in respect of leave encashment becoming due or expected after the balance date isestimated on the basis of an actuarial valuation performed by an independent Actuary using theprojected unit credit method.

(d) Superannuation Benefit

The Company makes contribution to superannuation fund which is the post employment benefitin the nature of a defined contribution plan & contribution paid or payable is recognized as anexpense in the period in which services are rendered by the employee.

(e) Other Short Term Benefits

Expenses in respect of other short term benefits is recognized on the basis of the amount paid orpayable for the period during which services are rendered by the employee.

(13) PROVISIONS & CONTINGENT LIABILITIES

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

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

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

(14) FOREIGN EXCHANGE

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currencythe exchange rate between the reporting currency and the foreign currency at the date of transactions.Any difference on subsequent realization is credited to revenue account.

18


B. NOTES TO ACCOUNTS

1. CONTINGENT LIABILITIES

(a) Contingent Liability on account of Projects awarded to the company and acceptance given againstthe same for which upfront premium is payable post acceptance and before signing of bindingMemorandum of Allotment for two projects with the State of Arunachal Pradesh is Rs. 10.65crores.(Previous Year Rs.10.65 crores)

(b) Liability on Account of Investments committed in Green Ventures Pvt. Ltd. -Nepal, and remainingunpaid is Nepali Rs. 16,66,667/- (equivalent to INR 10,41,667/- aprox.).(Previous yearRs.10,41,720/-)

2. Capital contracts remaining to be executed on capital account as on the date of Balance Sheet (net ofadvances) are Rs. 251.19 lacs (Previous Year Figure Rs.82.33 Lacs).

3. The company had issued and allotted 1, 94, 25,715 warrants of Rs. 10/- each in the previous financialyear convertible into one equity share of face value i.e. Rs. 10 per share, at par in the event of theapproved capacity of Company's projects in Arunachal Pradesh exceeding 290 MW to be determinedby the Detailed Project Report (DPR) and approval thereof by the Government of Arunachal Pradesh.The number of warrants to be converted into Equity shares increases in a graded manner dependingupon the project capacity going beyond 290 MW.

The Company has received 5% of the total value of the warrants and the balance 95% shall be receivedon conversion of the warrants into equity shares.

4. As the Company has not commenced commercial operations as on March 31, 2009, no Profit and LossAccount has been prepared, a Statement of Project and Pre-operative expenses (pending allocation)has been prepared as per Schedule 5 and expenses incurred during the year ended March 31, 2009 inrelation to the construction of the project, have been included under the said Schedule, to be allocatedappropriately to the relevant fixed assets at the time of commencement of commercial operations.

5. On the basis of the information so far made available to the company by its creditors regarding registrationunder the provisions of Micro, Small and Medium Enterprises Development Act, 2006 ("Act") there areno such parties as defined under the Act and, therefore, disclosures regarding delay in payment ofoutstanding amounts and interest payable thereon are not furnished

6. AS-15 'EMPLOYEE BENEFITS '

The company has adopted Revised Accounting Standard- 15 'Employee Benefit' issued by the Instituteof Chartered Accountants of India during the year.

Defined Contribution Plan

Contribution to Defined Plan, being in the nature of short term benefit, recognized as expense for theyear are as under:

(Rs. In lac)

Employer's contribution to Provident Fund 3.64

Employer's contribution to Superannuation Fund 2.30

Defined Benefit Plan

The employees gratuity fund is a defined benefit plan, the present value of obligation is determinedbased on actuarial valuation using the projected Unit Credit Method, which recognizes each period ofservice as giving rise to additional unit of employee benefit entitlement and measures each unit separatelyto build up the final obligation. The obligation for leave encashment is recognized in the same manneras gratuity. Both are in the nature of long term benefits.

Reconciliation of amount recognized in Balance Sheet

Gratuity LeaveEncashment

Fair value of plan assets as at 31st March, 2009 – –

Present value of obligation as at 31st March, 2009 1,49,133 3,91,231

Net assets/(liability) recognized in the Balance Sheet (1,49,133) (3,91,231)

19

Principle Actuarial Assumptions

Gratuity LeaveEncashment

Mortality Table (LIC) 1994-96 duly 1994-96 dulyModified modified

Discount rate as at 31st March, 2009 7.00 7.00

Future Salary Increase 4.50 4.50

Expected rate of return on plan assets 0.00 0.00

Retirement Age 60 years 60 years

Withdrawal Rates Age WithdrawalRates

Up to 30 years 3.00

Up to 44 years 2.00

Above 44 years 1.00

The estimates of rate of escalation in salary considered in actuarial valuation, takes into accountinflation, seniority, promotion and other relevant factors including supply and demand in the employmentmarket. The above information is certified by the actuary, this being the first year of implementation,previous year figure have not been given, and the entire amount of liability has been considered asexpense for the year.

Disclosure in respect of previous three annual period as required by Revised Accounting Standard- 15"Employee Benefits" is not presented as the management considers it impracticable in the absence ofrequisite information.

7. MANAGERIAL REMUNERATION

Details of remuneration & perquisites of managerial personnel:

Salary Rs. 3.33 Lacs

Other perquisites Rs. 4.89 Lacs

Since no Profit & Loss Account has been prepared & no commission is payable to managerial personnel,computation of Profit under sec 349 of the Companies Act, 1956 is not applicable.

8. SEGMENTAL REPORTING

As the company's business comprises of Power generation, there are no other business segments.Therefore the disclosure requirements of Accounting Standard AS-17 are not applicable.

9. Derivative instruments and un-hedged foreign currency exposures.

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

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

10. There are no items of timing differences. Therefore calculation of deferred tax as required by AccountingStandard AS-22 is not applicable for this year.

11. RELATED PARTY DISCLOSURES

(a) Enterprises that directly or indirectly through one or more intermediaries, control or are controlledby or are under common control with the reporting enterprise (this includes holding companies,subsidiaries and fellow subsidiaries).

i) Malana Power Company Limited -Subsidiary

ii) Green Ventures Private Limited -Subsidiary

iii) AD Hydro Power Limited -Subsidiary of a Subsidiary

iv) Indo Canadian Consultancy Services Limited -Subsidiary

(b) Associates and Joint Venture Companies

– Balephi Jalvidhyut Company Limited

(c) Individuals owning directly or indirectly, an interest in the voting power of the reporting enterprisethat gives them control or significant influence over the enterprise, and relatives of any suchindividual.

NONE

20


(d) Key Management Personnel and their relatives

Mr. O. P. Ajmera

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

NONE

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

(Rs. in'000)

This Year Previous Year

i) Parties referred to in item (a) above

Equity Shares allotted during the year – 3,13,789

Services received 34,444 24,390

Other's – 2,572

Outstanding payable 6,653 11,337

Loans & Adv.-Amount receivable 378,345 252,630

Investment as at year end

Equity Shares in Malana Power Company Ltd. 18,10,338 1,235,058

Equity Shares in Green Venture Pvt. Ltd. - Nepal 22,114 10,833

Equity Shares in Indo Canadian Consultancy 42,449 42,449Services Ltd.

Share Application Money (Pending Allotment)

– Equity Share in Green Venture (P) Ltd. - Nepal 93,718 –

ii) Parties referred to in item (b) above

Share Application Money (Pending Allotment) For 20,000 –equity Shares in Balephi Jalvidyut Company Ltd. (Nepal)

iii) Persons referred to in (c) above NIL NIL

iv) Persons referred to in (d) above NIL NIL

Managerial Remuneration 822 373

v) Persons referred to in (e) above NIL NIL

12. Transactions in Foreign ExchangeAmount (Rs.)

Sl.No. Nature of Transaction This Year Previous year

1 Income Nil Nil

2 Expenditure (Foreign Travelling) 6,35,764 Nil

3 Other Receipts Nil 26,20,250Legal & Professional expenses reimbursement

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 yearclassification.










21

(Rs. '000)

As at As at31.03.2009 31.03.2008

A. Movements in working capital

Increase in Loan and Advances – –Increase in Inventories – –Increase in Current Liabilities 1,156,000 –Cash generated from operations 1,156,000 –Direct taxes paid (Net of Refund)Net cash from (used in) operating activities 1,156,000 –

B. Cash flows from investing activitiesAcquisition of fixed assets (6,128) (3,679)Project Expenses pending capitalisation (299,356) (52,493)Pre–operating Expense pending allocationProceeds from sale of fixed assets – –Investments (586,561) (1,298,340)Fixed deposit accounts – –Interest received –Net cash used in investing activities (892,045) (1,354,512)

C. Cash flows from financing activitiesProceeds from issuance of share capital – 1,050,000Proceeds from issuance of Warrants – –Share Application money pending allotment – (4,410)Repayment of share application money – –Loans & Advances (343,852) (68,723)Sundry Creditors for Capital Expenditure 59009 15791Proceeds from long term borrowings – –Repayment of long –term borrowings – –Interest paid – –Net cash from financing activities (284,843) 992,658Net increase / (decrease) in cash and cash equivalents (A+B+C) (20,888) (361,854)Cash and cash equivalents at the beginning of the year 51,935 413,789Cash and cash equivalents at the end of the year 31,047 51,935

Components of cash and cash equivalentsCash on hand 220 212With scheduled banks – on current accounts 30,827 51,723

31,047 51,935

CASH FLOW STATEMENT AS AT MARCH 31, 2009










22


I. REGISTRATION DETAILS

Registration No. U31101DL2006PLC148862 State Code 5 5

Balance Sheet Date 3 1 0 3 2 0 0 9

Date Month Year

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

Public Issue – Rights Issue –

Bonus Issue – Private Placement –

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

Total Liabilities 2 9 6 0 3 5 9 Total Assets 2 9 6 0 3 5 9

SOURCES OF FUNDS

Paid-up Capital 7 2 9 9 4 1 Reserves and Surplus 9 8 7 8 1 8

Share Application Money – Deferred Tax Liability –

Warrants 9 7 1 3 Secured Loans 1 0 9 0 0 0 0

Unsecured Loans 6 6 0 0 0

APPLICATION OF FUNDS

Net Fixed Assets 3 9 1 7 6 3 Investments 1 8 8 4 9 0 1(Incl. P.O.P. exps)

Net Current Assets 6 0 0 2 0 0 Misc. Expenditure 6 6 0 8

IV. PERFORMANCE OF COMPANY (Amount in Rs. Thousands)

Turnover – Total Expenditure –

Profit/Loss before Tax – Profit/Loss after tax –

Earning Per Share in Rs. – Dividend Rate % –

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

Item Code No. (ITC Code) 9 8 0 1 0 0

Product Description Hydro Electric Energy

BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE










23

NAME OF THE SUBSIDIARY MALANA POWER COMPANY LTD.

1. Financial Period ended March 31, 2009

2. Holding Companies interest 51% in Equity share

3. Shares held by the holding company in subsidiary 75,238,123 Equity Shares of Rs.10/- each fully paid.

4. The net aggregate of profits or Losses for thecurrent year of the subsidiary concerns themembers of the holding Company

a) Dealt with or provided for in the accounts Nilof the holding company.

b) Not dealt with or provided for in the Rs.65,01,31,680.00accounts of the holding company.

5. The net aggregate of profits or Lossesfor the previous years of the subsidiary sinceit became the company's subsidiary concernsthe members of the holding Company

a) Dealt with or provided for in the accounts Nilof the holding company.


STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956,RELATING TO SUBSIDIARY COMPANIES





Place : Noida (UP)Dated : 13th August, 2009

24


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


2. Holding Company's interest 47.69% in equity shares

3. Shares held by the holding company 20,51,41,655 equity shares ofin the subsidiary through its subsidiary Rs 10- each fully paid upM/s Malana Power Company Limited (Indirectly through its

Subsidiary-M/s Malana Power Company Limited)

4. The net aggregate of profits or Losses forthe current year of the subsidiary concernsthe 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 N.A.accounts of the holding company.

5. The net aggregate of profits or Losses forthe previous years of the subsidiary since itbecame the company's subsidiary concernsthe members of the holding Company









25

NAME OF THE SUBSIDIARY INDO CANADIAN CONSULTANCY SERVICES LTD.


2. Holding Company's interest 51% in equity shares

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

4. The net aggregate of profits or Lossesfor the current year of the subsidiaryconcerns the members of the holding Company


b) Not dealt with or provided for in the Rs.11,71,952.00accounts of the holding company.

5. The net aggregate of profits or Lossesfor the previous years of the subsidiary sinceit became the company's subsidiary concernsthe members of the holding Company









26


NAME OF THE SUBSIDIARY GREEN VENTURES PVT. LTD., NEPAL


2. Holding Company's interest 63.33% in equity shares

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

4. The net aggregate of profits or Lossesfor the current year of the subsidiaryconcerns the members of the holding Company



5. The net aggregate of profits or Lossesfor the previous years of the subsidiary sinceit became the company's subsidiary concerns

the members of the holding Company









27

AUDITORS' REPORT

The Board of Directors,

BHILWARA ENERGY LIMITED

We have audited the attached consolidated balancesheet of BHILWARA ENERGY LIMITED, its subsidiariesas at 31st March, 2009, the consolidated Profit and LossAccount and the consolidated cash flow statement forthe year then ended. These consolidated financialstatements are the responsibility of the company'smanagement. Our responsibility is to express an opinionon these financial statements based on our audit.

We conducted our audit in accordance with generallyaccepted auditing standards in India. These Standardsrequire that we plan and perform the audit to obtainreasonable assurance about whether the financialstatements are prepared, in all material respects, inaccordance with identified financial reporting frameworkand are free of material misstatements. An audit includesexamining, on a test basis, evidence supporting theamounts and disclosures in the financial statements.An audit also includes assessing the accountingprinciples used and significant estimates made bymanagement, as well as evaluating the overall financialstatement presentation. We believe that our auditprovides a reasonable basis for our opinion.

We did not audit the financial statements of subsidiaries,whose adjusted financial statements reflect total assetsof Rs. 2,50,388.53 lacs and total liabilities of Rs.1,19,303.22 lacs as at 31st March, 2009 and totalrevenues of Rs. 20,615.26 lacs and total expenses ofRs. 7,844.60 lacs for the year then ended. Thesefinancial statements have been audited by other auditorswhose reports have been furnished to us, and ouropinion, in so far as it relates to the amounts includedin respect of the subsidiaries, is based solely on thereport of the other auditors. Investment in AssociateCompany has been reported in accordance withAccounting Standard AS-23, 'Accounting for Investmentin Associate in Consolidated Financial Statement.'

We report that the consolidated financial statementshave been prepared by the Company in accordancewith the requirements of Accounting Standard 21,'Consolidated Financial Statements' and AccountingStandard AS-23, 'Accounting for Investment in Associatein Consolidated Financial Statement' issued by theInstitute of Chartered Accountants of India and on thebasis of the separate audited financial statements ofGroup included in the Consolidated FinancialStatements.

Based on our audit and on consideration of the reportsof other auditors on separate financial statements andon the other financial information of the subsidiaries, inour opinion and to the best of our information andaccording to the explanations given to us, the attachedconsolidated financial statements give a true and fairview in conformity with the accounting principlesgenerally accepted in India:

a) In the case of Consolidated Balance Sheet, of theconsolidated state of affairs of the Group as at 31st,March 2009;

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

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




28


(Rs. '000)

Schedules As at As at31.03.2009 31.03.2008

SOURCE OF FUNDSShareholders' FundsShare capital 1 729,941 729,941Reserves And Surplus 2 3,081,027 2,432,445Warrants 9,713 9,713Minority Interest 4,117,146 2,904,977Loans 3 9,779,068 7,080,588Deferred Tax Liability 221,169 219,485TOTAL 17,938,064 13,377,149

APPLICATION OF FUNDSFixed AssetsGross Block 4 4,138,146 3,693,770Less : Depreciation (1,199,820) (957,980)Net Block 2,938,326 2,735,790Capital work-in-progress (including capital advances) 11,365,740 8,587,708Project and pre-operative expenses (pending allocation) 5 3,748,957 2,242,225

18,053,023 13,565,723Investments 6 10,000 10,000

Current Assets, Loans and AdvancesSundry Debtors 7 70,094 56,737Inventories 8 240,076 154,096Cash And Bank Balances 9 139,346 155,905Other Current Assets 10 3,025 9,281Loans And Advances 11 584,514 370,942

1,037,055 746,961Less: Current Liabilities and ProvisionsLiabilities 12 1,099,143 894,324Provisions 13 89,497 77,837

1,188,640 972,161Net Current Assets (151,585) (225,200)Miscellaneous Expenditure 14 26,626 26,626(to the extent not written off or adjusted)TOTAL 17,938,064 13,377,149Notes to Accounts 19The Schedules referred to above form an integral part of the Balance Sheet.

CONSOLIDATED BALANCE SHEET AS AT 31st MARCH, 2009










29

(Rs. '000)

Schedules for the year for the yearended on ended on

31.03.2009 31.03.2008INCOMETurnover 1,985,373 1,471,902Less : Discount on prompt payments 37,232 26,723Less : Unscheduled interchange charges 20,946 –Less : Inter company revenue 220 1,546Turnover (net) 1,926,975 1,443,633Other income 15 134,331 24,566TOTAL 2,061,306 1,468,199EXPENDITUREWheeling cost 18,148 17,141Personnel expenses 16 112,335 87,958Operating and other expenses 17 171,635 123,309Less: Inter company revenue 220 1,546Depreciation 4 205,647 205,849Financial expenses 18 105,255 123,917TOTAL 612,800 556,628Profit before tax 1,448,506 911,571Current tax 167,649 110,794MAT credit entitlement (availed) / reversed – 25,299Tax for earlier years – 23,373Deferred tax charge / (credit) 1,684 (101,117)Fringe benefit tax 2,106 1,959Wealth tax 1 10Total tax expense 171,440 60,318Adjustment for employee benefits provision (Net of Tax) – 1,562Net Profit for the year 1,277,066 849,691Less: Minority Interest 625,762 416,349Less: Transferred to capital reserve on consolidation – 400,477Proft for the year 651,304 32,865Balance brought forward from previous year 20,115 –Profit available for appropriation 671,419 32,865APPROPRIATION:Transfer (to)/from minority interest 2,722 (12,250)Transfer (to)/from debenture redemption reserve (5,555) 25,000TOTAL (2,833) 12,750Surplus carried to balance sheet 674,252 20,115Basic earning per share (in Rs.) 8.92 0.47Diluted earning per share (in Rs.) 7.05 0.37The schedules referred to above form an integral part of the Profit & Loss Account.

CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31st MARCH, 2009

As per our report of even dateFor S.S. Kothari Mehta & CoChartered Accountants

Arun K. TulsianPartnerMembership No. 89907






30


SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET


As on As on31st March, 31st March,

2009 2008Authorised

100,000,000 Equity shares of Rs.10 each 1,000,000 1,000,000Issued, Subscribed and Paid up

72,994,082 (Previous year 72,994,082) 729,941 729,941Equity shares of Rs.10 each fully paid-up

729,941 729,941

SCHEDULE 2: RESERVES AND SURPLUS(Rs. '000)

31.03.2009 31.03.2008Capital Reserve On Consolidation (Net) 1,399,512 1,399,512Securities Premium AccountBalance as per last account 987,818 987,818Add: Received during the year – 987,818 – 987,818Consolidated Profit & Loss Account 674,252 20,115Debenture Redemption ReserveBalance as per last account 25,000Transferred (to)/from profit and loss account (5,555) 19,445 25,000

3,081,027 2,432,445

SCHEDULE 3: LOANS(Rs. '000)

31.03.2009 31.03.2008Secured loansDebenturesRedeemable Non - Convertible Debentures of Rs.1,000 thousand each(Refer Note 1) 77,778 100,000Term loans (Refer note 2 & 3)– Rupee loans 8,285,167 5,450,000– Foreign currency loans 66,790 1,030,588Short term loans– From Banks (Refer note 5) 500,000 500,000– From others 766,000 –Unsecured LoansShort-term loans & advances– From Banks 83,333 –

9,779,068 7,080,588Notes:

1. Redeemable Non-Convertible Debentures (NCD) are secured by way of first mortgage and charge on landsituated at village Budasan (Gujarat) together with all estate rights etc. present & future of the Company andfurther 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 immovableand 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 Limited and Punjab National Bank equally and 100, 7.865% debentures of Rs.1,000

31

thousand each privately placed with Bank of Baroda were redeemable at par in 36 equal quarterly installmentscommencing from 31st December 2003. However, the above debentures were subject to a call and put optionexercisable by the debenture holders or the Company respectively in November 2007. New India AssuranceLimited (NIA) exercised the call option and 50 debentures of Rs 1000 thousand each held by NIA were redeemedcompletely during the last year. The other debenture holders opted to hold the debentures and repayment isbeing made as per the schedule. Redemption of Rs 611 thousand (previous year Rs 500 thousand) on eachdebenture has been made till date.

2. Term loans from Banks and Institutions are secured by way of a first mortgage/charge on all immovableproperties wherever situated both present and future and hypothecation of all movable assets, rights, etc.present and future of the Company, on pari passu basis. One of the subsidiary company has provided thecorporate guarantee for a loan availed by the step down subsidiary company and has also pledged its shareholding in the company.

3. Rupee term loans includes an amount of Rs.11,50,000 thousands (previous year Rs. 11,50,000 thousands)from IFC, Washington, a minority shareholder.

4. Rupee term loans include an amount of Rs. 1,090,000 thousands (previous year nil) secured by way of pledgeof 2,19,35,900 shares held by Promoters group in the Company.

5. Short term loan is secured by subservient charge on movable fixed assets of the Company.

6. Short term loans include amount payable within one year Rs. 766,000 thousand (previous year Rs. nil).

7. Debentures and Term Loans from banks aggregating to Rs. 832,221 thousand (previous year Rs. 248,700thousand) are repayable within one year.


(Rs. in '000)GROSS BLOCK DEPRECIATION NET BLOCK

Particulars As at Additions / Sale/ As at As at For the Sales/ Upto As at As at01.04.08 Adjustment Adjustment 31.03.09 01.04.08 year transfer 31.03.09 31.03.09 31.03.08

Land– Freehold 21,517 13,708 – 35,225 – – – – 35,225 21,517

Civil Works 1,847,266 – – 1,847,266 384,538 120,357 – 504,895 1,342,371 1,462,728

Building 275,642 203,482 – 479,124 52,228 12,608 – 64,836 414,288 223,414

Plant & Machinery 956,066 1,997 – 958,063 267,846 58,022 – 325,868 632,195 688,220

Transmission Lines ( Refer Note 2) 199,670 – – 199,670 70,044 10,549 – 80,593 119,077 129,626

Electrical Equipment 26,873 411 – 27,284 2,895 1,686 – 4,581 22,703 23,978

Vehicles 33,230 18,854 1,006 51,078 13,058 6,667 271 19,454 31,624 20,172

Furniture 24,542 5,422 210 29,754 9,706 2,923 139 12,490 17,264 14,836

Other Office Equipment 16,829 2,484 96 19,217 7,931 2,091 59 9,963 9,254 8,898

Computers 19,099 2,495 50 21,544 11,250 3,781 45 14,986 6,558 7,849

Project Equipment 254,757 194,079 – 448,836 126,864 20,629 – 147,493 301,343 127,893

TOTAL TANGIBLE ASSETS 3,675,491 442,932 1,362 4,117,061 946,360 239,313 514 1,185,159 2,931,902 2,729,131

INTANGIBLE ASSETS

Software 18,279 2,806 – 21,085 11,620 3,041 – 14,661 6,424 6,659

TOTAL INTANGIBLE ASSETS 18,279 2,806 – 21,085 11,620 3,041 – 14,661 6,424 6,659

Total (A) 3,693,770 445,738 1,362 4,138,146 957,980 242,354 514 1,199,820 2,938,326 2,735,790

Previous year 3,540,482 160,361 7,073 3,693,770 649,914 311,133 3,067 957,980 2,735,790 2,890,568

Capital Work In Progress (Refer Note 3) 11,365,740 8,587,708

Total (B) – – – – – – – – 11,365,740 8,587,708

Total (A+ B) 3,693,770 445,738 1,362 4,138,146 957,980 242,354 514 1,199,820 14,304,066 11,323,498

NOTES:1) Building includes cost of road Rs.122,838 thousand (Previous year 122,838 thousand) constructed on forest land diverted

for the project under irrevocable right to use.2) Transmission Lines includes Rs.4,181 thousand (Previous year Rs. 4,181 thousand) towards cost of land and compensation

paid to Forest Department for construction of Transmission towers under irrevocable right to use.3) Includes Rs. 27,748 thousand (Previous year Rs. 1,782 thousand) towards consultancy expenses on project allotted.4) Depreciation has not been booked in case of addtion of Fixed Assets in Green Ventures (P) Ltd., Nepal.5) Depreciation for the year includes Rs. 36708 thousand (Previous Year Rs.105284 thousand) charged to Project & Pre-

Operative Expenditure (Pending Allocation).

32


SCHEDULE 5: PROJECT AND PRE-OPERATIVE EXPENSES (pending allocation)

(Rs. '000)

31.03.2009 31.03.2008

Personnel Expenses


Contribution to provident and other funds 22,633 16,448

Contribution to superannuation funds 3,762 2,513

Gratuity expenses 4,124 3,024

Workmen and staff welfare expenses 29,648 21,793

Total (A) 445,242 307,139

Administrative And Other Expenses

Expenditure On Forest Land (Refer Note No.8(c) of Schedule 19B) 271,848 255,726

Rent 280,242 221,552

Rates & Taxes 16,950 11,717

Insurance 96,165 72,143

Repairs And Maintenance 33,155 19,112

Stores Consumption 126,949 83,321

Travelling Expense 77,774 57,909

Conveyance 20,496 16,669

Vehicle Running & Hiring Expenses 114,641 78,211

Communication Expenses 16,802 11,191

Directors Remuneration 7,840 4,340

Audit Fees 4,526 2,798

Advertisement 595 460

Legal & Professional Charges 149,694 85,126

Fee & Subscription 4,876 3,736

Power And Fuel 22,406 20,752

Testing & Surveys 3,234 2,934

Consultancy Charges 73,272 34,793

Project Processing Fee 11,601 11,600

Miscellaneous Expenses 333,899 180,670

Financial / Bank Charges 195,033 72,772

Interest 1,351,309 597,366

Depreciation 188,487 151,779

Total (B) 3,401,794 1,996,677

Total (A+B) 3,847,036 2,303,816

Less : Interest earned (Tax deducted at source Rs.4645 thousand,(Previous year Rs.5408 thousand)(net of provision for income taxRs. 6440 thousand upto Previous year Rs.8268 thousand). (79,296) (61,591)

Less -: Profit on Sale of Fixed Assets (19) –

Less : Scrap Sale (18,764) –

TOTAL 3,748,957 2,242,225

SCHEDULE 6: INVESTMENTS (Long Term - Non Trade)

Unquoted - Fully Paid

40,000 (Previous Year 40,000) Equity Shares of Rs.100/-each ofGreen Venture Renewable India Pvt. Limited 10,000 10,000

10,000 10,000

33

SCHEDULE 7: SUNDRY DEBTORS (Unsecured, considered good)(Rs. '000)

31.03.2009 31.03.2008– Outstanding for more than Six Months 23,274 4,580– Others 46,820 52,157

70,094 56,737

SCHEDULE 8: INVENTORIESStores and spares {including stocks lying with third parties Rs. 116,181thousand (previous year Rs. 55,575 thousand)}" 240,076 154,096

240,076 154,096

SCHEDULE 9: CASH AND BANK BALANCESCash in hand 3,287 3,688Balances with scheduled banks:

In current accounts 128,088 133,960In fixed deposit 4,704 6,228In margin money account 3,267 12,029

139,346 155,905Note: Fixed deposit and margin money account include Rs. 400 thousand (previous year Rs. 400 thousand)pledged with the H.P. Government Sales Tax Department and Rs. 854 thousand (previous year Rs. 854 thousand)pledged with Himachal Pradesh State Electricity Board.

SCHEDULE 10: OTHER CURRENT ASSETS(Rs. '000)

31.03.2009 31.03.2008

Interest accrued on deposits and others 3,025 9,281

3,025 9,281

SCHEDULE 11: LOANS AND ADVANCES (Unsecured, considered good)Loans to employees 5,175 3,247

Advances recoverable in cash or in kind or for value to be received 484,876 308,750

Loan to Body Corporates 20,955 19,000

Security deposit with govt. departments & others 26,192 25,965

Advance income tax / tax deducted at source 27,316 13,980

Share application money (Pending for allotment) 20,000 –

584,514 370,942

SCHEDULE 12: CURRENT LIABILITIESSundry creditors 822,992 644,134Advance from Customers 2,432 2,075Deposits from contractors and others 126,536 184,631Interest accrued but not due on loans 26,643 22,208Other liabilities 120,540 41,276

1,099,143 894,324

SCHEDULE 13: PROVISIONSTaxation Including Fringe Benefit Tax 40,543 37,148Gratuity 2,289 4,002Leave Encashment 10,368 9,427Continuity Liability Bonus 36,297 27,260

89,497 77,837

SCHEDULE 14: MISCELLANEOUS EXPENDITURE(to the extent not written off or adjusted)Share issue expensesBalance as per last account 26,626 22,428Add : Incurred during the year – 4,198

26,626 26,626

34


SCHEDULE 15: OTHER INCOMEInterest from subsidiary company (Gross Tax Deductedat source Rs. 14,647 thousand (previous year Rs. nil)) 64,640 –Interest on bank deposits (Gross Tax deducted at SourceRs. 56 thousand, Previous year Rs. 1,200 thousand) 622 5,475Interest on income tax refund 517 1,133Insurance claim – 6,492Foreign exchange fluctuation (net) – 7,532Profit on sale/discard of fixed assets (net) 270 1,736Sale of voluntary emission reductions 66,528 –Miscellaneous income 1,754 2,198

134,331 24,566SCHEDULE 16: PERSONNEL EXPENSESSalaries, wages and other expenses 99,960 77,771Contribution to provident, gratuity and other funds 7,483 6,609Workmen and staff welfare expenses 4,892 3,578

112,335 87,958SCHEDULE 17: OPERATING AND OTHER EXPENSESPower and Fuel 7,282 7,442Repairs and Maintenance– Plant and Machinery 27,722 18,919– Civil Works 307 604– Buildings 701 232– Others 4,225 4,284Rent 21,176 12,359Rates and Taxes 7,046 2,290Insurance 12,456 15,253Traveling & Conveyance 10,371 13,088Director's Remuneration 9,503 8,987Commission to Managing Director 14,643 8,947Auditors' Remuneration :– Fees for Statutory Audit 635 614– Fees for International Reporting 348 225– Fees for Certification 239 112– Out of Pocket Expenses 4 19Foreign exchange fluctuation (net) 17,043 –Donations and contributions (other than to political parties) 1,217 3,603Commission on sale of Voluntary Emission Rights 9,978 –Bad Debts 1,575 3,897Miscellaneous Expenses 25,164 22,434

171,635 123,309

SCHEDULE 18: FINANCIAL EXPENSESInterest– On term loans and debentures 101,293 119,932– To banks 136,486 6,010– To others 1,000 –Less : Interest recovered from subsidiary company (135,283) (5,163)– Bank charges including guarantee commission

(net of commitment charges reimbursed by subsidiary companyRs. 7,750 thousand (previous year Rs. nil) 1,759 3,138

105,255 123,917

(Rs. '000)For the year For the year

ended on ended on31st March, 31st March,

2009 2008

SCHEDULES FORMING PART OF THE CONSOLIDATED PROFIT & LOSS ACCOUNT

35

SCHEDULE - 19

SIGNIFICANT ACCOUNTING POLICIES & NOTES TO ACCOUNTS


1. Basis of Preparation of Financial Statements

Financial statements are prepared on historical cost convention and on the accounting principles ofgoing concern in accordance with Generally Accepted Accounting Principles ("GAAP), comprising ofthe mandatory Accounting Standards, Guidance Notes and other pronouncements issued by the Instituteof Chartered Accountants of India and the provisions of the Companies Act, 1956. The accounts areprepared on accrual basis. The accounting policies applied by the Company are consistent with thoseused in the previous year.

2. Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principlesrequires managements to make estimates and assumptions that affect the reported amounts of assetsand liabilities and disclosure of contingent liabilities at the date of the financial statements and theresults of operations during the reporting period end. Although these estimates are based uponmanagement's best knowledge of current events and actions, actual results could differ from theseestimates.

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 forits intended use. Borrowing costs relating to acquisition of fixed assets which takes substantial periodof time to get ready for its intended use are also included to the extent they relate to the period till suchassets are ready to be put to use.

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication ofimpairment based on internal/external factors. An impairment loss is recognized wherever the carryingamount of an asset exceeds its recoverable amount. The recoverable amount is the greater of theasset's net selling price and value in use. In assessing value in use, the estimated future cash flowsare discounted to their present value at the weighted average cost of capital.

4. Investments

Current Investments are stated at lower of cost and fair value. Long term Investments are stated atcost and provision for diminution in their value, other than temporary, is made in the accounts.

5. Valuation Of Inventories

Inventories comprising of components and stores and spares are valued at lower of cost and netrealizable value. Cost is determined on weighted average basis.

6. Depreciation

(i) Depreciation is provided on written down value method at the rates and in the manner prescribedin Schedule - XIV to the Companies Act, 1956.

(ii) Depreciation on software is provided on written down value method at the rate of 40% per annumbased on its estimated useful life.

(iii) Depreciation on Project equipments (net of their expected realizable value at the completion ofthe project) has been provided as per straight line method over the period upto the revisedexpected date of completion of the project i.e. March 31, 2010.

(iv) On the assets of generating unit and other Plant & Machinery, depreciation is provided on straight-line method at the rates based on their estimated useful lives, which corresponds to the ratesprescribed in Schedule XIV to the Companies Act, 1956.

7. Intangible Assets

Capital Expenditure on purchase and development of identifiable non-monetary assets without physicalsubstance 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 theleased item, are classified as operating leases.

36


9. Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to theCompany 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 freesupply to HP state Government) scheduled to be transmitted to the customers, which approximatesthe actual electricity transmitted.

Interest

Revenue is recognised on a time proportion basis taking into account, the amount outstanding and therate applicable.

Voluntary Emission Rights (VER)

Revenue is recognised as when the VER's are sold and it is probable that the economic benefits willflow to the Company.

10. EXPENDITURE INCURRED DURING CONSTRUCTION PERIOD

Preliminary project expenditure, capital expenditure, indirect expenditure incidental and related toconstruction/ implementation, interest on term loans/ debentures to finance fixed assets and expenditureon start-up/ commissioning of assets forming part of a composite project are capitalized upto the dateof commissioning of the project as the cost of respective assets. Income earned during constructionperiod is deducted from the total of the indirect expenditure.

11. Miscellaneous Expenditure to the extent not written off or adjusted

Preliminary Expenses will be amortized / adjusted starting from the year in which the Companycommences its commercial operations.

12. Employee Benefits

Expenses and liabilities in respect of employee benefits are recorded in accordance with RevisedAccounting Standard 15 - Employee Benefits (Revised 2005) issued by the ICAI.

(a) Provident Fund

The Company makes contribution to statutory provident fund in accordance with EmployeesProvident Fund and Miscellaneous Provisions Act, 1952 which is a defined contribution plan andcontribution paid or payable is recognized as an expense in the period in which services arerendered by the employee.

(b) Gratuity

Gratuity is a post employment benefit and is in the nature of a defined benefit plan. The liabilityrecognized in the balance sheet in respect of the gratuity is the present value of the definedbenefit/obligation at the balance sheet date less the fair value of plan assets, together withadjustment 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 theprojected unit credit method.

Actuarial gains and losses arising from past experience and changes in actuarial assumptionsare charged or credited to the Profit & loss account in the year to which such gains or lossesrelate.


Liability in respect of leave encashment becoming due or expected after the balance date isestimated on the basis of an actuarial valuation performed by an independent Actuary using theprojected unit credit method.


The Company makes contribution to superannuation fund which is the post employment benefitin the nature of a defined contribution plan & contribution paid or payable is recognized as anexpense in the period in which services are rendered by the employee.

(e) Other Short Term Benefits


37

13. Taxes on Income

(a) Provisions for current taxes are made in accordance with the provisions of applicable tax statutes.

(b) In Accordance with the Accounting standard AS-22 'Accounting for Taxes on Income' issued bythe ICAI, Deferred tax Liability/Assets arising from timing differences between book and incometax profits is accounted for at the current rate of tax to the extent these differences are expectedto crystallize in later years. However, Deferred Tax assets are recognized only if there is areasonable/virtual certainty of realization.

14. Foreign Currency Transactions

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currencythe exchange rate between the reporting currency and the foreign currency at the date of transactions.Any difference on subsequent realization is credited to revenue account.

15. Provisions & Contingent Liabilities

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

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

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

B. Notes To Accounts

1. Basis of Consolidation

The Consolidated Financial Statements have been prepared by consolidating the financial statementsof the company with those of its subsidiaries as on 31st March, 2009, in accordance with AccountingStandard 21 (AS 21) - Consolidated Financial Statements issued by The Institute of CharteredAccountant.

(a) The subsidiary companies considered in the consolidated financial statements are:

Name of Subsidiary Country of Proportion ofIncorporation Ownership as on

31st March, 2009 (%)

Malana Power Company Limited INDIA 51%

Indo Canadian Consultancy Services Limited INDIA 51%

Green Ventures Private Limited NEPAL 63.33%

AD Hydro Power Limited (A subsidiary ofMalana Power Company Limited) INDIA 47.69%

(b) The financial statements of parent Company and its subsidiaries have been consolidated on lineby line basis by adding together book value of like items of assets, liabilities, incomes and expensesafter 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 independentfinancial statements.

(c) Figures pertaining to the subsidiary company have been reclassified wherever necessary tobring them in line with parent company's financial statements.

(d) Investments other than in subsidiaries have been accounted in accordance with AccountingStandard 13 (AS 13) - Accounting for Investments.

2. CONTINGENT LIABILITIES

Contingent liabilities not provided for:

(a) Contingent Liability on account of Projects awarded to the company and acceptance given againstthe same for which upfront premium is payable post acceptance and before signing of bindingMemorandum of Allotment for two projects with the State of Arunachal Pradesh is Rs. 106,500thousands (Previous Year Rs. 106,500 thousands).

38


(b) Liability on Account of Investments committed in Green Ventures Pvt. Ltd. -Nepal, and remainingunpaid is Nepali Rs. 16,66,667/- (equivalent to INR 10,41,667/- aprox.).(Previous yearRs.10,41,720/-)

(c) Guarantee given for loans availed by AD Hydro Power Limited, subsidiary company, amountingRs. 450,000 thousand (Previous year Rs. 450,000 thousand).

(d) Claims made against the Company not acknowledged as debts amounting to Rs.324,764 thousand(previous year NIL)

(e) Bank Guarantees outstanding amounting to Rs. 2,000 thousand (previous year Rs. 2,000thousand)

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

(g) Demand of Stamp Duty and registration fees Rs. 40,990 thousand (Previous year Rs. 40,990thousand)

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

3. Estimated amount of contracts remaining to be executed on capital account as on the date of BalanceSheet (net of advances) are Rs. 1,389,680 thousand (Previous Year Figure Rs.3,309,639 thousand).

4. The Company had issued and allotted 1,94,25,715 warrants of Rs. 10/- each in the previous financialyear convertible into one equity share of face value i.e. Rs. 10 per share, at par in the event of theapproved capacity of Company's projects in Arunachal Pradesh exceeding 290 MW to be determinedby the Detailed Project Report (DPR) and approval thereof by the Government of Arunachal Pradesh.The number of warrants to be converted into Equity shares increases in a graded manner dependingupon the project capacity going beyond 290 MW.

The Company has received 5% of the total value of the warrants and the balance 95% shall be receivedon conversion of the warrants into equity shares.

5. There are no unprovided present obligations requiring provision in accordance with the guiding principlesas annunciated in AS-29 as it is not probable that an outflow of resources embodying economic benefitwill be required.

6. Prior Period Items Includes : Expenses 4,03,749.00

Income (3,400.00)

7. The subsidiary company, Malana Power Company Limited, is eligible for tax holiday under Section 80-IA of the Income Tax Act, 1961. In view of unabsorbed depreciation in the initial years, the Companyhas 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 tillaccounting year 2015-16. The Company is liable to pay Income-Tax for the year under the provisionsof Section 115JB of the Income-Tax Act, 1961.

8. (a) Land includes Rs. 5,677 thousand paid to Deputy Commissioner, Kullu towards transfer ofgovernment's agriculture land measuring 10.76 hectare for which the execution of lease deed ispending.

(b) Land includes Rs. 298,070 thousand paid for 12.38 hectares land, out of which mutation forexecution of 9.75 hectares in favour of Company has been completed. Apart from notified land,2.63 hectares land has been acquired directly from the villagers and the mutation is in progress.

(c) Rs. 542,651 thousand paid to Divisional Forest Officer, Kullu on account of use of forest landmeasuring 111.475 hectares represents amount paid towards loss of environment value,compulsory afforestation, cost of tree felling and Catchment Area Treatment Plan.

9. The subsidiary Company, AD Hydro Power Limited (ADHPL), provides depreciation on the projectequipment as per straight line method over the period upto the expected date of completion of theproject. Since the expected date of completion of project has been extended from March 31, 2009 toMarch 31, 2010, the depreciation of the project equipments is provided over the revised expected dateof completion. Accordingly, the depreciation charge on project equipments in the current year is lowerby Rs 291,385 thousand.

39

10. On account of various reasons beyond the control of the Company (like significant geological problemsexperienced in tunneling work and others), the project in ADHPL has undergone significant cost over-runs and the total estimated cost of the project has gone up from Rs. 8,956,000 thousand toRs. 20,212,820 thousand. In view of the management, such increase in estimated project cost has notaffected the going concern assumption of the Company. Further, based on financial projections, themanagement believes that profits are expected to accrue once the project commences commercialoperation. Accordingly, no adjustment is required to the carrying amount of fixed assets on account ofimpairment.

11. Interest from subsidiary company in Schedule 15 - Other Income and interest received from subsidiarycompany and Bank Charges in Schedule 18 - Financial Expenses represents due to Malana PowerCompany Limited from its subsidiary, AD Hydro Power Limited (ADHPL) which has been added toProject and Preoperative Expenses in ADHPL. Similarly, consultancy charges of Rs. 38,481 thousand(previous year Rs. 22,750 thousand) paid by Bhilwara Energy Ltd. and Rs. 29,023 thousand (previousyear Rs. 52,795 thousand) paid by ADHPL to Indo Canadian Consultancy Services Limited have beendebited to Project and preoperative expenses of respective companies.

12. Derivative instruments and un-hedged foreign currency exposures.

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

(b) Particulars of un-hedged foreign currency exposures as at Balance Sheet date are as follows:

Particulars 2008-09 2007-08

Foreign Currency Loan Rs. 66,790,400 Rs. 63,840,000(USD 1,280,000 (USD 1,920,000

@ closing rate of @ closing rate of1USD=Rs. 52.18) 1USD=Rs. 39.90)

Advance for equipment Rs. 8,495,410 NIL(CHF 187,000

@ closing rate of1CHF=Rs. 45.43

Creditor for Engineering Fees Rs. 16,712,000 NIL(CAD 400,000

@ closing rate of1 CAD = Rs. 41.78)

Rs. 1,240,380 NIL(EURO 18,000

@ closing rate of1 EURO = Rs. 68.91)

13. Deferred Tax

A. Deferred Tax resulting from timing difference between Book Profit and Tax Profit is reversible insubsequent years.

B. Following are the major components of Deferred Tax Assets/ (Liabilities).

(Rs. in ‘000)

As at 31.3.2009 As at 31.3.2008

Deferred Tax Liabilities

Provision for Depreciation (225,970) (225,087)

Deferred Tax Asset

Leave Encashment & CLB disallowed 4801 5,602

Net Deferred Tax Asset 221,169 219,485

14. RELATED PARTY DISCLOSURES

(a) Associates and Joint Venture Companies

– Balephi Jalvidhyut Company Limited

40


(b) Individuals owning directly or indirectly, an interest in the voting power of the reporting enterprisethat gives them control or significant influence over the enterprise, and relatives of any suchindividual.

None

(c) Key Management Personnel and their relatives:

O. P. Ajmera

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

None


(Rs. in ‘000)

2008-09 2007-08

i) Parties referred to in item (a) above

Share Application Money (Pending Allotment)For equity Shares in Balephi Jalvidyut Company Ltd. (Nepal) 20,000 –

ii) Persons referred to in (b) above NIL NIL

iii) Persons referred to in (c) above – –

Managerial Remuneration 822 373

iv) Persons referred to in (d) above NIL NIL

15. AS-15 ‘EMPLOYEE BENEFITS’

Defined Contribution Plan

Contribution to Defined Plan, being in the nature of short term benefit, recognized as expense for theyear are as under:

(Rs. ‘000)

Employer’s contribution to Provident Fund 11,708

Employer’s contribution to Superannuation Fund 2,277


The employees gratuity fund is a defined benefit plan, the present value of obligation is determinedbased on actuarial valuation using the projected Unit Credit Method, which recognizes each period ofservice as giving rise to additional unit of employee benefit entitlement and measures each unit separatelyto build up the final obligation. The obligation for leave encashment is recognized in the same manneras gratuity. Both are in the nature of long term benefits.

The following tables summarise the components of net benefit expense recognised in the profit andloss account and the funded status and amounts recognised in the balance sheet for the respectiveplans:

Profit and Loss Account

Net employee benefit expense (recognised in Employee Cost):

Particulars For the For theyear ended on year ended on

March 31, 2009 March 31, 2008(Rs. ‘000) (Rs. ‘000)

Current Service Cost 2,523 1,665

Interest cost on benefit obligation 659 539

Expected return on plan assets (349) (284)

Net actuarial (gain)/ loss recognised in the period 483 951

Past service cost

Net benefit expense 3,316 2,870

Actual return on plan assets 374 443

41

Balance Sheet

Details of Provision for Gratuity:

Particulars As at As at31-Mar-09 31-Mar-08 (Rs. ‘000) (Rs. ‘000)

Defined benefit obligation 13,092 9,402

Fair value of plan assets 10,773 4,364

Plan asset / (liability) (2,318) (5,038)

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

Particulars As at As at31-Mar-09 31-Mar-08 (Rs. ‘000) (Rs. ‘000)

Opening defined benefit obligation 9,402 6,723

Interest cost 659 539

Current service cost 2,523 1,665

Benefits paid – (636)

Actuarial (gains)/ losses on obligation 507 1,112

Closing defined benefit obligation 13,092 9,402

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

31-Mar-09 31-Mar-08(Rs. ‘000) (Rs. ‘000)

Opening fair value of plan assets 4,364 3,555

Expected return 348 284

Contributions by employer 6,037 1,001


Actuarial gains / (losses) 24 159

Closing fair value of plan assets 10,773 4,364

The Defined benefit obligation amounting to Rs. 13,092 thousand is funded by assets amounting toRs. 10,773 thousand and the Company expects to contribute Rs. 2,318 thousand during the year2009-10.

Principle Actuarial Assumptions


March 31, 2009 March 31, 2008% %

Discount Rate 7.00 8.00

Expected rate of return on assets 8.00 8.00


Withdrawal rate 1 to 3 1 to 3

Leave Encashment Liability

Profit & Loss

Net employee benefits expense (recognised in Employee Cost):

Particulars Earned Leave Earned Leave31.03.09 31.03.08

Current service cost 1,771 688


Expected return on plan assets – –

Net actuarial loss(gain) recognized in the year (2) 45

Net Expense recognized in the Profit & Loss A/c 1,920 838

42


Balance Sheet


– –

Fair value of plan assets at the end of the period – –

Present value of obligations as at the end of the period 3,583 2,161

Funded Status (3,583) (2,161)

Excess of actual over estimated – –

Net Assets/ (Liability) recognized in the balance sheet (3,583) (2,161)



Present value of obligations at the beginning of the period 2,161 1,322



Benefits paid (498) –

Actuarial (gain) / Loss on obligation (2) 45

Present value of obligations at the end of the period 3,192 2,161

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 – –

Principal actuarial assumptions

Particulars Rate (%) Rate (%)31.03.09 31.03.08

a) Discount rate 7.00 8.00

b) Future salary increase 4.50 5.50

c) Expected Rate of return on plan Assets – –

The estimates of rate of escalation in salary considered in actuarial valuation, takes into accountinflation, seniority, promotion and other relevant factors including supply and demand in the employmentmarket. The above information is certified by the actuary.

Disclosure in respect of previous three annual period as required by Revised Accounting Standard-15"Employee Benefits" is not presented as the management considers it impracticable in the absence ofrequisite information.

16. Auditor Remuneration

(Amount in Rs. ‘000)


Audit Fees 1478 1226

Other Services 1509 1259

Out of Pocket Expenses 100 137

43

17. Leases

In case of assets taken on Operating Lease:

(Amount in Rs. ‘000)

Particulars For the year ended For the year endedMarch 31, 2009 March 31, 2008

Lease payments for the year 90,580 46,760

18. Earning per Share as required by Accounting Standard (AS)–20issued by the Institute of Chartered Accountants of India

Profit after tax (in Rs.) 651,304 32,865

Number of Equity Shares (in nos.)

Issues, Subscribed and paid up-opening 72,994,082 66,775,900

Issued during the year – 6,218,182

Closing 72,994,082 72,994,082

Weighted average of above 72,994,082 70,561,803

Basic Earning Per Share Rs. 8.92 Rs. 0.47

Potential Dilutive Share (refer note no. 4 of schedule 19 B) 19,425,715 19,425,715

Diluted Earning Per Share Rs. 7.05 Rs. 0.37

19. Segment Reporting as required by Accounting Standard (AS–17) issued by The Institute of CharteredAccountants of India:-

(Rs. in ‘000)


1 Segment Revenue

a) Power 1,795,438 1,322,117

b) Consultancy 131,757 123,062

Sub Total 1,927,195 1,445,179

Less : Inter Company Revenue 220 1,546

Total Revenue 1,926,975 1,443,633

2 Segment Results (Profit(+) / Loss(-) before Tax and interest from each segment)

Profit before Tax

a) Power 1,440,416 878,441


1,448,506 911,571

Provision for Taxation

– Current Tax & FBT 169,755 161,425

– Deferred Tax 1,684 (101,117)

– Wealth Tax 1 10

Less : Adjustment for Employee Benefits Provision – 1,562 (Net of Tax) - Power

Profit after tax 1,277,066 849,691

3 Other Information

I Segment Assets

a) Power 18,994,122 14,245,450


Total Assets 19,126,704 14,349,310

II Segment Liabilities

a) Power 11,125,445 8,235,611


Total Liabilities 11,192,705 8,276,446

44


III Capital Expenditure (Including Capital work in Progress)

a) Power 4,726,240 5,283,827


Total 4,730,501 5,290,584

IV Depreciation

a) Power 201,292 202,723


Total 205,647 205,849

V Non Cash expenditure other than depreciation

a) Power – –

b) Consultancy – –

Total – –

20. Previous year figures have been regrouped and rearranged where considered necessary to confirm tothis year classification.

(Rs. In ‘000)











45

(Rs. '000)As at As at

31.03.2009 31.03.2008A. Cash flow from Operating activities:

Net (loss)/profit before tax but after exceptional/extraordinary items 1,448,506 911,571Adjustments for:Other non cash adjustment from opening reserves – (1,563)Depreciation 205,647 205,849Interest Expense 103,496 120,779Interest Income (65,262) (5,475)(Profit)/Loss on Fixed Assets sold (Net) (270) (1,736)Operating profit before working capital changes 1,692,117 1,229,425Adjustments for changes in working capital :(Increase)/Decrease in Sundry Debtors (13,357) (56,737)(Increase)/Decrease in Loans & Advances (213,573) (137,475)(Increase)/Decrease in Inventories (85,981) (154,095)(Increase)/Decrease in Liabilities & Provisions 212,043 1,268,468Cash generated from operations 1,591,249 2,149,586Direct Taxes (Paid) / Received (169,756) (161,435)Net cash from operating activities 1,421,493 1,988,151

B. Cash flow from Investing ActivitiesDecrease / (Increase) in Project & Pre operative Expenses (733,803) (1,633,674)Purchase of fixed assets (3,223,769) (12,285,353)Proceeds from Sale of fixed assets 1,136 5,742Opening accumulated depreciation – 600,352Purchase of Investments – (10,000)Interest Received 89,223 15,514Miscellaneous Expenditure – (20,018)Net cash used in investing activities (3,867,213) (13,327,437)

C Cash flow from Financing activities:Proceeds from Issue of Share Capital – 62,182Share Application money (pending allotment) – (4,410)Proceeds from Security Premium – 987,818Proceeds/(Repayment) from Secured loans 2,615,147 7,080,588Proceeds/(Repayment) of unsecured loans 83,333 –Interest Paid (853,004) (544,689)Capital Reserve on Consolidation – 999,035Minority Interest 583,685 2,500,878Net cash used in financing activities 2,429,161 11,081,402Net Increase/(Decrease) in Cash & Cash Equivalents (A+B+C) (16,559) (257,884)Cash and cash equivalents at the beginning of the year 155,905 413,789Cash and cash equivalents at the end of the year 139,346 155,905Components of Cash & Cash EquivalentCash in Hand 3,287 3,688With Scheduled Banks – in Current Account 128,088 133,960– in fixed deposits 4,704 6,228– in margin money account 3,267 12,029

139,346 155,905Notes: 1. The above Cash flow statement has been prepared under the indirect method setout in AS-3 issued by the Institute of

Chartered Accountants of India.2. Figures in brackets indicate cash outgo.


As per our report of even dateFor S.S. Kothari Mehta & CoChartered AccountantsArun K. TulsianPartnerMembership No. 89907Place : New DelhiDated : 13th August, 2009


O. P. Ajmera Director - FinanceVimal Banka DirectorRavi Gupta Company Secretary

46


I. REGISTRATION DETAILS



Date Month Year

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



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

Total Liabilities 1 9 1 2 6 7 0 4 Total Assets 1 9 1 2 6 7 0 4

SOURCES OF FUNDS

Paid-up Capital 7 2 9 9 4 1 Reserves and Surplus 3 0 8 1 0 2 7

Minority Interest 4 1 1 7 1 4 6 Deferred Tax Liability 2 2 1 1 6 9

Warrants 9 7 1 3 Loans 9 7 7 9 0 6 8


Net Fixed Assets 1 8 5 3 0 2 3 Investments 1 0 0 0 0(Incl. P.O.P. exps)

Net Current Assets 1 5 1 5 8 5 Misc. Expenditure 2 6 6 2 6

IV. PERFORMANCE OF COMPANY (Amount in Rs. Thousands)

Turnover & Other Income 2 0 6 1 3 0 6 Total Expenditure 6 1 2 8 0 0

Profit/Loss before Tax 1 4 4 8 5 0 6 Profit/Loss after tax 1 2 7 7 0 6 6

Earning Per Share in Rs. Basic 8 . 9 2 Dividend Rate % N I L

Earning Per Share in Rs. Diluted 7 . 0 5

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



CONSOLIDATED BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE










47

ATTACHMENT

OF

ANNUAL REPORT

LIST OF ATTACHMENTS

Financial Statement of Subsidiaries for the year ended 31st March, 2009

1. Malana Power Company Limited

2. AD Hydro Power Limited

3. Indo Canadian Consultancy Services Limited

4. Green Ventures Pvt. Limited

FINANCIAL RESULT

OF

MALANA POWER COMPANY LIMITED

DIRECTORS’ REPORT

TO THE MEMBERS

MALANA POWER COMPANY LIMITED

FINANCIAL PERFORMANCE (Rs. in Million)

The Directors of the Company are pleased to present their Twelfth Annual Report on the business and operations of the company and audited statement of accounts for the year ended 31st March, 2009 together with the Auditors' Report.

TOTAL TURNOVER 1853.616 1,348.840

Less : Discount on prompt payments/Unscheduled interchange charges 58.178 26.723

Net Sales 1795.438 1322.117

Other Income 133.899 24.339

Total Income 1929.337 1346.456

PROFIT BEFORE INTEREST, DEPRECIATION AND TAX 1746.930 1204.469

Interest 105.222 123.255

PROFIT BEFORE DEPRECIATION AND TAX 1641.708 1081.214

Depreciation 201.292 202.723

Profit Before Tax 1440.416 878.491

Provision for Tax

– Current Tax 163.199 99.533

– MAT credit reverse – 25.299

– Tax for earlier years – 23.373

– Deferred Tax 1.299 (98.887)

– FBT/WT Tax 1.150 1.350

NET PROFIT AFTER DEPRECIATION INTEREST AND TAX (PADIT) 1274.768 827.823

Balance brought forward from previous year 1643.727 752.099

AMOUNT AVAILABLE FOR APPROPRIATION 2918.495 1579.92

APPROPRIATION (5.555) (64,909)

Transfer to debenture redemption reserve adj. for Employee Benefits provision (net of tax Rs. 141000) – 1104

Total (5.555) (63.805)

Surplus carried to Balance Sheet 2,924.050 1,643.727

Basic and diluted Earning Per Share (EPS), (In Rs.) 8.98 6.28

Particulars For the Year ended For the Year ended31.03.2009 31.03.2008

51


Your Company continued its rapid growth during the year and the turnover of the company stood at Rs. 1853.616 Million. The Profit after tax increased to Rs1274.768 Million as against the Profit after tax of Rs 827.823 Million recorded during the previous year. The cash profits from the business also increased to Rs.1477.359. Millions from Rs.956.958 Millions. The Company has delivered 210000 units of VER's during the year, which has earned Rs. 66.50 Millions.

Keeping in view, the financial commitment of the Company, your directors do not propose any dividend for the financial year under review.

During the period under review, the plant availability touched 99.98% and as per the available hydrology data, the generation stood at 360.050 Million, Units. The operation data for the year is as given below:

(In Million Units)

1. Total Generation 326.993 339.825 360.0502. Less: Auxiliary Transmission Loss 3.688 3.732 4.1843. Less: Royalty/Wheeling to Govt. HPSEB 59.488 61.841 65.4794. Total Units sold 265.358 273.827 289.125

To utilize surplus water during monsoon months i.e. from mid June to mid September every year, the Company has undertaken certain measures to enhance the generation capacity of each machine in two phases. In the first phase by increasing the stroke of injectors in both the units, and in second phase by replacing the existing runner by new upgraded runner and existing injectors by bigger jet diameter injectors, in one of the unit.

First phase upgradation in unit 1 was completed in April, 2008 and in unit no-2 first phase up-gradation has been completed in Jan, 2009.

For 2nd phase upgradation in one of the unit supply of equipment has been tied up and 2nd phase upgradation will be completed in May, 2010.

In the first phase, by increasing the stroke of injectors, the generating capacity will be enhanced by 4.0%. In the second phase, the capacity of machine will be enhanced by 6.0% further by replacing the existing runners by new upgraded runners.

The above measures are expected to increase the generation by 7.0 million units over and above the 20% continuous overloading capacity of the machine during monsoon months.

During the year, the company recorded a sale of 289.125 Million units as against 273.826 Million units during the previous year. The company has been selling its generated power to PTC India Ltd. (Formerly Power Trading Corporation of India) on short term contract basis. The present contract with PTC is expiring on 30th June 2009. Your Directors are pleased to inform you that the company has already entered into power sale contract with PTC India Ltd. for another one year from July, 2009 to June, 2010. The Company has finalized sale of Malana Power to Punjab through PTC India Limited for the period July, 2009 to June, 2010.

The market fundamentals are strong as India continues to experience acute supply shortages both in terms of total energy

DIVIDEND

POWER BUSINESS

OPERATIONAL PERFORMANCE

MEASURES TO ENHANCE TH E GENERATION

POWER SALES

THE FUTURE OUTLOOK-INDIAN POWER SECTOR

S. No Particulars 2006-07 2007-08 2008-09

52

and peak capacity. With the Indian Economy growing at more than 7 to 8 percent annually, the demand for power has been outstripping supply. The company believes the power demand and supply gap to widen further with the growing economy and continue to remain over the next few years. India continues to experience acute shortages in energy supply (11%) and peak load capacity (12%). Even under conservative assumptions (i.e. conservative demand growth assumptions and aggressive capacity addition and supply availability assumptions), these shortages are forecast to continue for the foreseeable future. India's economy is growing at 6.7% and current per capita consumption is at 704 kWh, as against the world average of 2,596 kWh. Both energy demand and peak demand are expected to grow at between 7-8% up to 2017 and at 6-7% thereafter. In response, India's 11th 5-year Plan (2007-2012) calls for additional capacity of 78,577MW and its 12th Plan (2012-2017) calls for a further 82,200MW. During the 10th five year plan (2002- 2007), the total capacity addition was 21,180 MW as compared to the planned capacity addition of 41,110 MW. During current five year plan (11th Plan), there is only 12716.7 MW Capacity addition till March, 2009 as against a target of 27396.4 MW.

Energy Demand MU 559264 591373 631757 697961 737052 774324Energy Availability MU 519398 548115 578819 624495 664660 689021Energy Deficit MU 39866 43258 52938 73466 72392 85303Energy Deficit % 7.1% 7.3% 8.4% 10.6% 9.8% 11.0%Peak Demand MW 84574 87906 93255 100715 108886 109809Peak Availability MW 75066 77652 81792 86818 90793 96685Peak Deficit MW 9508 10254 11463 13897 18093 13124Peak Deficit % 11.2% 11.7% 12.3% 13.8% 16.7% 12.0%

Source: CEA

The 2003 Electricity Act introduced a broad swathe of reforms including: unbundling of State Electricity Boards, open access to transmission and ability to develop private transmission projects; and open access to distribution providing customers with choice of suppliers. The Act also recognized trading as a distinct activity and several private companies have entered the trading market. Trading companies create efficient markets for short-term power contracts. These key changes coupled with continued shortages have given boost to the concept of merchant power market.

Volumes of Electricity Traded by Trading Community has increased rapidly from 14,188 GWh in the year 2004-05 to 17,325 GWh in the year 2007-08.

With the ongoing gap between peak supply and demand, marginal prices are driven by consumer willingness to pay. This has increased in recent years due to: (i) increased end consumer willingness to pay as captive power production is becoming more expensive and the opportunity cost of black-outs during this period of economic growth is high; (ii) the credit situation of most State Electricity Boards (“SEBs”) is improving as a result of unbundling, better collection rates, rising tariffs, and a reduction in the gap between average tariff and average cost of supply; (iii) a lower political tolerance to load-shedding and greater inter-state competition to attract commercial activity with the promise of reliable power; (iv) Unscheduled Interchange charges have now been introduced to control unscheduled withdrawal of power during peak hours, with the penalty/benefit for over/under drawing being determined by the frequency (Hz) of the system and reaching a maximum of INR 7.35/kWh at frequencies of less than 49.22 Hz.

National Supply & Demand: Situation

Historical Energy Demand Supply Scenario

FY04 FY05 FY06 FY07 FY08 FY09

53

54


For merchant plants, the tariffs are set by supply and demand at the margin of the market and with the shortfall in supply forecast to continue, the SEB's willingness to pay will drive pricing. As mentioned above multiple factors have driven up the willingness to pay and the average tariff price traded.

Employees are vital to the Company. We have created a favorable work environment that encourages innovation and meritocracy. The Human Resource Development strategy focuses on building the competence, commitment and motivation of employees. Focus of recruitment is to recruit people with a combination of knowledge, skill, experience and attitude in line with the organisational requirements through appropriate manpower plan. The Company recognizes serious dearth of trained expert personnel in power sector. With the expansion of the power market, there is growing requirement for not just qualified engineers, but also for finance, marketing, commercial, IT and HR personnel.

The Company recognizes human resources as a key component for facilitating organization growth and regularly invests in augmenting its human resources with latest tools, equipments and techniques through focused and structured become an attractive employer in the industry.

The company is also committed to provide a zero injury workplace to its employees and workers all across its units. Employees are adequately covered under various insurance policies against risk of health and life disasters. The company continues to empower its employees to achieve business successes.

Your Company has an adequate internal control procedure commensurate with the nature of its business and size of its operations. Internal Audit is conducted at regular interval. The internal control system in all areas of operations, regularly checked by both external and internal auditor that have access to all records and information. The Company also maintains a system of internal control designed to provide reasonable assurance regarding the effectiveness and efficiency of operations, the adequacy of safeguards for assets, the reliability of financial control and compliance with applicable laws and regulations. The Company is continuously upgrading these systems in line with the best available practices. Audit Committee meetings are held where these reports and variance analysis are discussed and action taken. Operational reports are tabled at the Board Meetings after discussions at Audit Committee Meetings.

Internal Audit 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. 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. Quarterly Internal audit reports are submitted along with the management's response to the Audit Committee. The Audit Committee monitors performance of Internal Audit on a periodic basis through review of the internal audit plans, audit findings & swiftness of issue resolution through follow ups.

The Company has planted 85,000 fast growing trees and 900 fruit trees around the Project Area. It is also planning to sow 20,000 trees in next two years and company has also planted local shrub for rehabilitation of dumping site. The disposal of hazardous waste is being done as per approved standard/Norms of Pollution Control Board.

The Company has also contributed towards protection of slopes and banks to prevent soil erosion and loss of land.


INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

INTERNAL CONTROL SYSTEMS

INTERNAL AUDIT

ENVIRONMENT RESPONSIBILITY

CORPORATE SOCIAL RESPONSIBILITY

DISCLOSURE OF PARTICULARS


DIRECTORS' RESPONSIBILITY STATEMENT

DIRECTORS

We are committed to ensuring that our business is conducted in all respects according to rigorous ethical, professional and legal standards. We recognise that our business activities have direct and indirect impacts on the societies in which we operate. We endeavour to manage these in a responsible manner, believing that sound and demonstrable performance in relation to corporate social responsibility and practices is a fundamental part of business success.

We are committed to providing a working environment, which is both safe and fit for the intended purpose and ensures that health and safety issues are a priority for all business operations.

As a constructive partner in the communities in which it operates, company has been taking concrete action to realize its social responsibility and has spent on the infrastructure development including construction, widening of roads and strengthening and construction of bridges.

Your company assessed and prioritized the felt needs of the local community and took initiatives like renovation of temples, constructing school and hospital building to improve the educational and health status of the region. To make our efforts sustainable, we have been providing teachers to the local Govt. school and are also providing free medicines.

Particulars required by the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given in the prescribed format as Annexure-I to the Directors' Report.

Information in accordance with the provisions of Section 217(2A) of the Companies Act, 1956 (the Act), read with the Companies (Particulars of Employees) Rules, 1975, as amended, regarding employees is given in Annexure-II to the Directors' Report.

As required under Section 217 (2AA) of the Companies (Amendment) Act, 2000, the Directors' of your company states hereunder:-

I) that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii) that the accounting policies have been selected and applied consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for the financial year 2008-2009.

iii) that the proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and

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

Ms. Rohini Roshanara Sood was appointed as an Additional Director of the Company with effect from 25th March, 09 until the conclusion of the next annual general meeting. The Board recommends the appointment of Ms. Rohini Roshanara Sood on the Board of the Company.

55

56


Mr. L. N. Jhunjhunwala and Mr. Øistein Andresen, Directors retire by rotation and being eligible, offers themselves for reappointment. During the year, Mr. Einar Stenstadvold resigned from the Board of Directors of the Company on 21st March, 2009. The Board of Directors wishes to place on record their appreciation towards the contribution made by Mr. Einar Stenstadvold as a member of the Board.

During the year, the committee met twice to review company's financial results, internal control systems, risk management policies and internal audit reports. The audit committee of the Company comprises of three members. All the members were present in all the meetings of the audit committee and the proceedings of the committee were in accordance with the provisions of the Companies Act, 1956.

The AD Hydro Power Ltd, a subsidiary company is in the process of developing 192 MW Hydro Electric Project in the state of Himachal Pradesh. The Company had started the construction of the project in early 2005 and the project is likely to be operational by March, 2010.

The Annual Report for the year 2008- 09 and Accounts for the year ended on March, 09 as required under Section 212 of the Companies Act, 1956 of the said subsidiary Company is attached.

Statutory Auditors' Report to the members and comments of the Board of Directors thereon annexed hereto and form part of this report as required under Section 217(3) of the Companies Act, 1956.

During the financial year 2008-2009, amounting to Rs. 22.2 Millions have been redeemed.

During the year under review, the inflow of foreign exchange was nil and outflow of foreign exchange was Rs. 18.691 million. (Equivalent of USD 386 Million)

During the year, pursuant to the Provisions of the Companies Act, 1956 and upon receipt of necessary approval of members, the Company allotted 42,61,334 Equity shares of Rs. 10 /- each at a premium of Rs. 125/- per share fully paid up to M/s. Bhilwara Energy Limited and 40,94,221 Equity shares of Rs. 10 /- each at a premium of Rs. 125/- per share fully paid up to M/s S N Power Holding Singapore Pte Ltd on preferential basis.

The Company has not accepted any deposits from the public during the year under report. Information required to be disclosed under Section 217 (1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the report of Board of Directors) Rules, 1988 has been given in Part (B) of the Annexure forming part of this Report.

Your Company has adopted the doctrine of Corporate Governance to ensure greater transparency, accountability and integrity in the affairs of the Company. For MPCL corporate governance is a self-disciplinary code aimed at best practices and achieving a value driven organization. The values of governance code are at focus while determining the corporate mission objective, which in turn determine the course of action of each employee of organization. A Code of Conduct giving ethical guidance and setting clear limits to how individual officers of the Company shall face ethical dilemmas is in place.

The majority of the board comprises of Non-Executive Directors who play a critical role in imparting balance to the Board

AUDIT COMMITTEE

SUBSIDIARY COMPANY

AUDIT REVIEW

REDEMPTION OF DEBENTURES

FOREIGN EXCHANGE EARNINGS AND OUTGO

PREFERENTIAL ISSUE

PUBLIC DEPOSITS


processes by bringing an Independent judgement to bear on issues of strategy, performance, resources, standards of Company conduct etc. The audit committee of the board meets regularly and provides assurance to the Board on the adequacy of internal control systems and financial systems. The Corporate governance policy followed by the company represents the value framework, the ethical framework and the moral framework under which business decisions are taken.

M/s S. R. Batliboi & Co., Chartered Accountants has conveyed their willingness for re-appointment as statutory auditors of the Company for the financial year ending on 31st March, 2010. The Company has also received consent letter from M/s S.R. Batliboi & Co., Chartered Accountants under section 224(1) (b) of the Companies Act, 1956 being eligible showing willingness for their appointment as statutory auditors of the Company for the financial year ending on 31st March, 2010. The Board recommends for the appointment of M/s S. R. Batliboi & Co., Chartered Accountants as Statutory Auditors of the Company.

The observations made by the Auditors with reference to the Notes to the Accounts for the year under report are self-explanatory and require no further comments from the board.

Your Directors record their grateful appreciation of the encouragement, assistance and co-operation received from shareholders, Ministry of Power, Government of Himachal Pradesh, Himachal Pradesh State Electricity Board, Haryana State Electricity Board, Punjab State Electricity Board, Power Trading Corporation Limited, Commercial Banks, Financial Institutions and other Governmental Departments. They thank them for the trust reposed in the Management and wish to thank all employees for their commitment and the achievement and looks forward to their continued support and cooperation in the coming years as well. Your Directors are also appreciative for the generous support provided by the debenture holders.


Place: Noida Ravi JhunjhunwalaDate: 13th August, 2009 Chairman and Managing Director

AUDITORS

AUDITORS' REMARKS

ACKNOWLEDGEMENT

57


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, 2009 are given hereunder:

I. Persons employed for the full year

Mr. Ravi Chairman & MD 24.146 B.Com (Hons) 29 54 1.11.2001Jhunjhunwala MBA

II. Persons employed for the part of the year

Mr. M.M. Madan CEO 2.197 B Tech. (Civil), 31 55 11.09.2008MBA

Name Designation Remuneration(Rs. in Million) Commencement

of Employment

Name Designation Remuneration Qualification Experience Age Date of (Rs. in Million) Commencement

of Employment

Qualification Experience Age Date of

58

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

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

1. CONSERVATION OF ENERGY – NIL

2. TECHNOLOGY ABSORPTION – NIL

3. FOREIGN EXCHANGE EARNINGS AND OUTGO

a) Import of Components/Spares (CIF value) – –b) Travelling Expenses 0.560 6.03c) Professional Expenses 18.120 1.567

Fees and Subscription .011 –Total 18.691 7.60

Others (Sale of Voluntary Emission Rights) 66.528 –

Total 66.528 –

I) Foreign Exchange Outgo This Year Previous YearRs. In Million

II) Foreign Exchange Earnings

59

AUDITORS' REPORT

To

The Members of Malana Power Company Limited

1. We have audited the attached Balance Sheet ofMalana Power Company Limited ('the Company')as at March 31, 2009 and also the Profit and Lossaccount and the cash flow statement for the yearended on that date annexed thereto. Thesefinancial statements are the responsibility of theCompany's management. Our responsibility is toexpress an opinion on these financial statementsbased on our audit.

2. We conducted our audit in accordance withauditing standards generally accepted in India.Those Standards require that we plan and performthe audit to obtain reasonable assurance aboutwhether the financial statements are free ofmaterial misstatement. An audit includesexamining, on a test basis, evidence supportingthe amounts and disclosures in the financialstatements. An audit also includes assessing theaccounting principles used and significantestimates made by management, as well asevaluating the overall f inancial statementpresentation. We believe that our audit provides areasonable basis for our opinion.

3. As required by the Companies (Auditor's Report)Order, 2003 (as amended) issued by the CentralGovernment of India in terms of sub-section (4A)of Section 227 of the Companies Act, 1956, weenclose in the Annexure a statement on the mattersspecified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referredto above, we report that:

i. We have obtained all the information andexplanations, which to the best of ourknowledge and belief were necessary for thepurposes of our audit;

ii. In our opinion, proper books of account asrequired by law have been kept by theCompany so far as appears from ourexamination of those books;

iii. The balance sheet, Profit and Loss Accountand cash flow statement dealt with by thisreport are in agreement with the books ofaccount;

iv. In our opinion, the balance sheet, profit andloss account and cash flow statement dealtwith by this report comply with the accountingstandards referred to in sub-section (3C) ofsection 211 of the Companies Act, 1956.

v. On the basis of the written representationsreceived from the directors, as on March 31,2009, and taken on record by the Board ofDirectors, we report that none of the directorsis disqualified as on March 31, 2009 frombeing appointed as a director in terms ofclause (g) of sub-section (1) of section 274 ofthe Companies Act, 1956.

vi. In our opinion and to the best of ourinformation and according to the explanationsgiven to us, the said accounts give theinformation required by the Companies Act,1956, in the manner so required and give atrue and fair view in conformity with theaccounting principles generally accepted inIndia;

a) in the case of the balance sheet, of thestate of affairs of the Company as atMarch 31, 2009;

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

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

For S. R. BATLIBOI & CO.Chartered Accountants

per Raj AgrawalPartnerMembership No.: 82028

Place : GurgaonDate : August 13, 2009

60


Annexure referred to in paragraph 3 of our report ofeven dateRe: Malana Power Company Limited ('the Company')

(i) (a) The Company has maintained properrecords showing full particulars, includingquantitative details and situation of fixedassets.

(b) Fixed assets have been physically verifiedby the management during the year and nomaterial discrepancies were identified onsuch verification.

(c) There was no substantial disposal of fixedassets during the year.

(ii) (a) The management has conducted physicalverification of inventory at reasonableintervals during the year.

(b) The procedures of physical verification ofinventory followed by the management arereasonable and adequate in relation to thesize of the Company and the nature of itsbusiness.

(c) The Company is maintaining proper recordsof inventory and no material discrepancieswere noticed on physical verification.

(iii) (a) The Company has granted loan to onecompany covered in the register maintainedunder section 301 of the Companies Act,1956. The maximum amount involved duringthe year was Rs. 3,292,519 thousand andthe yearend balance of loan granted to suchcompany was Rs. 1,560,679 thousand.

(b) In our opinion and according to theinformation and explanations given to us, therate of interest and other terms andconditions for such loan is not prima facieprejudicial to the interest of the Company.

(c) As informed to us and as per the terms ofthe draft Subordination Loan agreement withthe lenders shared with us, the loan grantedand interest thereon is re-payable after theproject commences commercial operations.Accordingly, the Company has notdemanded repayment of any such loan andinterest thereon during the year and therehas been no default on part of the party towhom the money has been lent.

(d) There is no overdue amount of loan grantedto companies, firms or other parties listed inthe register maintained under section 301of the Companies Act, 1956.

(e) The Company had taken loan from onecompany covered in the register maintainedunder section 301 of the Companies Act,1956. The maximum amount involved duringthe year was Rs. 150,000 thousand and theyear-end balance of loan taken from suchparty was Nil.

(f) In our opinion and according to theinformation and explanations given to us, therate of interest and other terms andconditions for such loan is not prima facieprejudicial to the interest of the Company.

(g) In respect of loans taken, repayment of theprincipal amount is as stipulated andpayment of interest has been regular.

(iv) In our opinion and according to the informationand explanations given to us, there is an adequateinternal control system commensurate with thesize of the Company and the nature of its business,for the purchase of inventory and fixed assets andfor the sale of power. During the course of ouraudit, no major weakness has been noticed in theinternal control system in respect of these areas.

(v) (a) According to the information andexplanations provided by the management,we are of the opinion that the particulars ofcontracts or arrangements referred to insection 301 of the Act that need to beentered into the register maintained undersection 301 have been so entered.

(b) In our opinion and according to theinformation and explanations given to us, thetransactions made in pursuance of suchcontracts or arrangements exceeding valueof Rupees five lakhs have been entered intoduring the financial year at prices which arereasonable having regard to the prevailingmarket prices at the relevant time.

(vi) The Company has not accepted any deposits fromthe public.

(vii) In our opinion, the Company has an internal auditsystem commensurate with the size and natureof its business.

(viii) We have broadly reviewed the books of accountmaintained by the Company pursuant to the rulesmade by the Central Government for themaintenance of cost records under section209(1)(d) of the Companies Act, 1956, and are ofthe opinion that prima facie, the prescribedaccounts and records have been made andmaintained.

(ix) (a) The Company is regular in depositing withappropriate authorities undisputed statutorydues including provident fund, investoreducation and protection fund, employees'state insurance, income-tax, sales-tax,wealth-tax, service tax, customs duty, exciseduty, cess and other material statutory duesapplicable to it.

(b) According to the information andexplanations given to us, no undisputedamounts payable in respect of providentfund, investor education and protection fund,employees' state insurance, income-tax,wealth-tax, service tax, sales-tax, customs

61

duty, excise duty, cess and other undisputedstatutory dues were outstanding, at the yearend, for a period of more than six monthsfrom the date they became payable.

(c) According to the information andexplanations given to us, there are no duesof income tax, sales-tax, wealth tax, servicetax, customs duty, excise duty and cesswhich have not been deposited on accountof any dispute.

(x) The Company has no accumulated losses at theend of the financial year and it has not incurredcash losses in the current and immediatelypreceding financial year.

(xi) Based on our audit procedures and as per theinformation and explanations given by themanagement, we are of the opinion that theCompany has not defaulted in repayment of duesto a financial institution, bank or debentureholders.

(xii) According to the information and explanationsgiven to us and based on the documents andrecords produced to us, the Company has notgranted loans and advances on the basis ofsecurity by way of pledge of shares, debenturesand other securities.

(xiii) In our opinion, the Company is not a chit fund or anidhi / mutual benefit fund / society. Therefore,the provisions of clause 4(xiii) of the Companies(Auditor's Report) Order, 2003 (as amended) arenot applicable to the Company.

(xiv) In our opinion, the Company is not dealing in ortrading in shares, securities, debentures and otherinvestments. Accordingly, the provisions of clause4(xiv) of the Companies (Auditor's Report) Order,2003 (as amended) are not applicable to theCompany.

(xv) According to the information and explanationsgiven to us, the Company has given guaranteefor loans taken by its subsidiary from banks andfinancial institutions, the terms and conditionswhereof in our opinion are not prima-facieprejudicial to the interest of the Company.

(xvi) Based on information and explanations given tous by the management, term loans were appliedfor the purpose for which the loans were obtained.

(xvii) According to the information and explanationsgiven to us and on an overall examination of thebalance sheet of the Company, we report that nofunds raised on short-term basis have been usedfor long-term investment.

(xviii) The Company has made preferential allotment ofshares to parties and companies covered in theregister maintained under section 301 of the Act.In our opinion, the price at which such shares havebeen issued is not prejudicial to the interest of theCompany.

(xix) According to the information and explanationsgiven to us, the Company has created security orcharge in respect of debentures outstandingduring the year.

(xx) During the year under review, the Company hasnot raised money through public issue; hence,clause 4 (xx) of the Companies (Auditor's Report)Order, 2003 (as amended) is not applicable to theCompany.

(xxi) Based upon the audit procedures performed forthe purpose of reporting the true and fair view ofthe financial statements and as per the informationand explanations given by the management, wereport that no fraud on or by the Company hasbeen noticed or reported during the course of ouraudit.




62


(Rs. '000)

Schedule As at As atMarch 31, 2009 March 31, 2008

SOURCES OF FUNDSShareholders' Funds

Share Capital 1 1,475,257 1,391,702Reserves and surplus 2 6,198,062 3,878,850

7,673,319 5,270,552Loan funds

Secured loans 3 1,399,735 1,630,588Unsecured loans 4 198,261 –

1,597,996 1,630,588Deferred tax liability (net) 5 224,997 223,698

TOTAL 9,496,312 7,124,838APPLICATION OF FUNDSFixed assets 6

Gross block 3,290,738 3,286,337Less : Accumulated depreciation/amortisation 996,809 795,685Net block 2,293,929 2,490,652Capital work in progress (including capital advances) 690,017 638,205

2,983,946 3,128,857Investments 7 4,929,556 3,538,500Current Assets, Loans and Advances

Inventories 8 20,052 19,581Sundry debtors 9 21,608 29,607Cash and bank balances 10 26,152 33,722Other current assets 11 39 28Loans and advances 12 1,857,346 690,280

1,925,197 773,218Less: Current liabilities and provisions

Current liabilities 13 305,711 273,790Provisions 14 36,676 41,947

342,387 315,737Net current assets 1,582,810 457,481

TOTAL 9,496,312 7,124,838Notes to Accounts 20

The Schedules referred to above and notes to accounts form an integral part of the Balance Sheet.



For S. R. Batliboi & Co.Chartered Accountants

per Raj AgrawalPartner


Place : GurgaonDated : August 13, 2009


RAVI JHUNJHUNWALAChairman & Managing Director

ROHINI ROSHANARA SOODDirector

BHARAT SINGHCompany Secretary

63

(Rs. '000)Schedule As at As at

March 31, 2009 March 31, 2008

INCOMETurnover 1,853,616 1,348,840

Less : Discount on prompt payments 37,232 26,723

Less : Unscheduled interchange charges 20,946 –

Turnover (net) 1,795,438 1,322,117

Other income 15 133,899 24,339

TOTAL 1,929,337 1,346,456

EXPENDITUREWheeling cost 18,149 17,141

Personnel expenses 16 32,752 32,005

Operating and other expenses 17 131,506 92,891

Depreciation 6 201,292 202,723

Financial expenses 18 105,222 123,255

TOTAL 488,921 468,015

Profit before tax 1,440,416 878,441

Current tax 163,199 99,533

MAT credit entitlement (availed) / reversed – 25,299

Tax for earlier years – 23,373

Deferred tax charge / (credit) 1,299 (98,887)

Fringe benefit tax 1,150 1,300

Total tax expense 165,648 50,618

Net Profit for the year 1,274,768 827,823

Balance brought forward from previous year 1,643,727 752,099

Profit available for appropriation 2,918,495 1,579,922

APPROPRIATION:Transfer to/(from) Debenture Redemption Reserves (5,555) (64,909)

Adjustment for Employee Benefits provision(previous year net of tax Rs. 141 thousand) – 1,104

TOTAL (5,555) (63,805)

Surplus carried to balance sheet 2,924,050 1,643,727

Earnings per share (In Rupees)

– Basic/Diluted (Nominal value Rs. 10 per share) 19 8.98 6.28


The Schedules referred to above and notes to accounts form an integral part of the Profit and Loss Account.

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31st MARCH, 2009










64


SCHEDULE 1 : SHARE CAPITAL

(Rs. '000)

As at As atMarch 31, 2009 March 31, 2008

Authorised 1,600,000 1,400,000160,000,000 (previous year 140,000,000)equity shares of Rs.10 eachIssued and Subscribed147,525,731 (previous year 139,170,176)equity shares of Rs.10 each 1,475,257 1,391,702Paid-up147,525,731 (previous year 139,170,176)equity shares of Rs.10 each, fully paid up * 1,475,257 1,391,702*Of the above 75,238,123 (Previous year70,976,789) equity shares are held byBhilwara Energy Ltd., the holdingcompany and its nominees.

1,475,257 1,391,702SCHEDULE 2 : RESERVES AND SURPLUS

(Rs. '000)


Securities premium accountBalance as per last account 2,210,123 1,180,493Add: received during the year 1,044,444 3,254,567 1,029,630 2,210,123Debenture redemption reserveBalance as per last account 25,000 89,909Transferred (to)/from profit and loss account (5,555) 19,445 (64,909) 25,000Profit and Loss Account 2,924,050 1,643,727

6,198,062 3,878,850

SCHEDULE 3 : SECURED LOANS(Rs. '000)


Debentures

Redeemable non-convertibledebentures of Rs.1,000 thousand each(Refer Note 1 below) 77,778 100,000

Loans and advances from banks

Term loans (refer note 2 below)

– Rupee loans 755,167 966,748

– Foreign currency loans 66,790 821,957 63,840 1,030,588

Short term loans

– From banks (refer note 3 below) 500,000 500,000

1,399,735 1,630,588

SCHEDULES

65

Notes:

1. Redeemable Non-Convertible Debentures (NCD) are secured by way of first mortgage and charge on landsituated at village Budasan (Gujarat) together with all estate rights etc. present & future of the Company andfurther 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 immovableand 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 Limited and Punjab National Bank equally and 100, 7.865% debentures of Rs.1,000thousand each privately placed with Bank Of Baroda were redeemable at par in 36 equal quarterly installmentscommencing from 31st December, 2003. However, the above debentures were subject to a call and putoption exercisable by the debenture holders or the Company respectively in November, 2007. New IndiaAssurance Limited (NIA) exercised the call option and 50 debentures of Rs. 1000 thousand each held by NIAwere redeemed completely during the last year. The other debenture holders opted to hold the debenturesand repayment is being made as per the schedule. Redemption of Rs 611 thousand (previous year Rs 500thousand) 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 theimmovable properties wherever situated and hypothecation of all other assets, rights etc. present & future ofthe company on pari-passu basis.

3. Short term loan is secured by subservient charge on movable fixed assets of the Company.

4. Debentures and loans and advances from banks aggregating to Rs. 832,221 thousand (Previous year Rs.248,700 thousand) are repayable within one year.

SCHEDULE 4 : UNSECURED LOANS(Rs. '000)


Short-term loans & advances

– From banks 83,333 –

– From holding company 114,928 –

198,261 –

SCHEDULE 5 : DEFERRED TAX LIABILITY (NET)(Rs. '000)


Deferred tax liabilities

Differences in depreciation and other differences in block of fixedassets as per tax books and financial books 224,997 224,388

Gross Deferred Tax Liabilities 224,997 224,388

Deferred tax assets

Effect of expenditure debited to profit and loss account in thecurrent year but allowed for tax purposes in following years – 690

Gross deferred tax assets – 690

Deferred tax liability (net) 224,997 223,698

66


Schedule 6 : FIXED ASSETS(Rs. '000)

Land– Road & Civil Trans Plant & Furniture Office & Vehicles Total Software Total Total Previous

Freehold Building Works mission Machinery & Fittings Other Tangible Intangible Year

Lines Equipments Assets Assets

Gross Block

At at April 1, 2008 21,517 224,958 1,847,265 199,670 956,066 5,735 8,759 10,704 3,274,674 11,663 11,663 3,286,337 3,288,745

Additions – – – – 1,997 138 1,271 1,384 4,790 35 35 4,825 3,087

Deductions/ Adjustments – – – – – 130 96 198 424 – – 424 5,495

As at March 31, 2009 21,517 224,958 1,847,265 199,670 958,063 5,743 9,934 11,890 3,279,040 11,698 11,698 3,290,738 3,286,337

Depreciation

At at April 1, 2008 – 49,074 384,538 70,044 267,846 3,386 5,655 5,820 786,363 9,322 9,322 795,685 595,244

For the year – 7,572 120,357 10,549 58,022 446 1,097 2,417 200,460 832 832 201,292 202,723

Deletions / Adjustments – – – – – 82 59 27 168 – – 168 2,282

As at March 31, 2009 – 56,646 504,895 80,593 325,868 3,750 6,693 8,210 986,655 10,154 10,154 996,809 795,685

Net Block 31.03.2009 21,517 168,312 1,342,370 119,077 632,195 1,993 3,241 3,680 2,292,385 1,544 1,544 2,293,929 2,490,652

Net Block 31.03.2008 21,517 175,884 1,462,727 129,626 688,220 2,349 3,104 4,884 2,488,311 2,341 2,341 2,490,652

Capital Work in Progress

Building under erection 37,430 24,423

Capital Advances 12,839 –

Advance for project allotted

(refer note 3 below) 639,748 613,782

Sub Total 690,017 638,205

Total Fixed Assets as at

March 31, 2009 21,517 168,312 1,342,370 119,077 632,195 1,993 3,241 3,680 2,292,385 1,544 1,544 2,983,946 3,128,857

Notes :

1) Building includes cost of road Rs.122,838 thousand (Previous year 122,838 thousand) constructed on forest land diverted for the project under irrevocable right to use.

2) Transmission Lines includes Rs.4,181 thousand (Previous year Rs. 4,181 thousand) towards cost of land and compensation paid to Forest Department for construction of Transmission towers

under irrevocable right to use.

3) Includes Rs. 27,748 thousand (Previous year Rs. 1,782 thousand) towards consultancy expenses on project allotted.

SCHEDULE 7: INVESTMENTS

(Rs. '000)


Long term investments (at cost) In subsidiary company

Unquoted

430,155,640 (previous year 353,850,000) equity shares ofRs.10 each fully paid of AD Hydro Power Limited 4,301,556 3,538,500(pledged with security trustee on behalf of lenders ofAD Hydro Power Limited)

Share application money pending allotment inAD Hydro Power Limited 628,000 –

4,929,556 3,538,500

SCHEDULE 8: INVENTORIES

(Rs. '000)


Stores and spares 20,052 19,581

20,052 19,581

67

SCHEDULE 9: SUNDRY DEBTORS

(Rs. '000)


(Unsecured, considered good)

Outstanding for a period exceeding six months – –

Other debts 21,608 29,607

21,608 29,607

SCHEDULE 10: CASH AND BANK BALANCES

(Rs. '000)


Cash on hand 318 386

Balances with scheduled banks:

On current accounts 23,815 31,453

On deposit accounts 1,054 1,054

On margin money account 965 829

26,152 33,722

Included in deposit accounts and against margin money are :

– Fixed deposit of Rs 200 thousand (previous year Rs 200 thousand) pledged with the H.P. Government SalesTax Department and Rs 854 thousand (previous year Rs 854 thousand) pledged with Himachal PradeshState Electricity Board.

SCHEDULE 11: OTHER CURRENT ASSETS

(Rs. '000)


Interest accrued on deposits and others 39 28

39 28

SCHEDULE 12: LOANS AND ADVANCES

(Rs. '000)


Unsecured, considered good

Loans to employees 3,032 1,302

Loan to subsidiary company (long term) 1,560,679 416,071

Advances for projects (Refer note no. 10 of schedule 20) 252,630 252,630

Other advances recoverable in cash or in kind or for value to be received 38,190 17,462

Deposits - others 2,815 2,815

1,857,346 690,280

Included in Loans and Advances are :

i. Dues from the company under the same management HEG Limited – 500(Maximum amount outstanding during the year Rs. 150,000 thousand(Previous year Rs. 500 thousand)

AD Hydro Power Limited 1,560,679 416,070(Maximum amount outstanding during the year Rs. 3,292,519 thousand(Previous year Rs. 469,044 thousand)

68


SCHEDULE 13: CURRENT LIABILITIES(Rs. '000)


Sundry creditors(a) Outstanding dues of Micro & Small Enterprises * – –(b) Outstanding dues of creditors other than Micro & Small Enterprises 35,747 17,629

(*Refer note no 11 of Schedule 20)Deposits from holding company (Refer note no. 10 of schedule 20) 252,630 252,630Deposits from contractors and others 1,190 1,683Interest accrued but not due on loans 10,787 –Other liabilities 5,357 1,848

305,711 273,790Creditors includesManaging Director's commission payable 14,643 8,947

SCHEDULE 14: PROVISIONS(Rs. '000)


Provision for Fringe Benefit Tax (net of advance fringe benefit taxRs. 3,133 thousand, Previous Year Rs. 1,876 thousand)) 17 124Provision for Wealth Tax 30 50Provision for Income Tax (net of advance tax Rs 280,234 thousand(previous year Rs. 111,454 thousand)) 28,258 32,839Provision for Gratuity 1,002 2,002Provision for Long term compensated absences 2,161 2,030Provision for Continuity Linked Bonus 5,208 4,902

36,676 41,947

SCHEDULE 15: OTHER INCOME(Rs. '000)


Interest from subsidiary company (Gross, tax deducted at sourceRs. 14,647 thousand (previous year Rs. nil)) 64,640 –Interest on bank deposits (Gross, Tax deducted at sourceRs. 56 thousand, Previous year Rs. 1,169 thousand) 248 5,250Interest on income tax refund 517 1,133Insurance claim – 6,492Foreign exchange fluctuation (net) – 7,532Profit on sale/discard on fixed assets (net) 270 1,736Sale of voluntary emission reductions 66,528 –Miscellaneous income 1,696 2,196

133,899 24,339

SCHEDULE 16: PERSONNEL EXPENSES(Rs. '000)


Salaries , wages and other expenses 25,161 26,912Contribution to provident funds 1,806 1,315Contribution to superannuation funds 1,028 886Gratuity expenses 971 312Workmen and staff welfare expenses 3,786 2,580

32,752 32,005

69

SCHEDULE 17: OPERATING AND OTHER EXPENSES

(Rs. '000)


Power and Fuel 3,822 4,741

Repairs and maintenance

– Plant and machinery 27,721 18,919

– Civil works 307 604

– Buildings 701 232

– Others 1,577 1,198

Rent 3,623 1,206

Rates and taxes 1,121 26

Insurance 12,260 15,143

Travelling & conveyance 6,398 9,960

Director's remuneration 9,503 8,987

Commission to Managing Director 14,643 8,947

Auditor's remuneration :

– Fees for statutory audit 552 562

– Fees for international reporting 348 225

– Fees for certification 239 112

– Out of pocket expenses 4 19

Foreign exchange fluctuation (net) 17,042 –

Donations and contributions (other than to political parties) 1,217 3,603

Commission on sale of Voluntary emission reductions 9,978 –

Miscellaneous expenses 20,450 18,407

131,506 92,891

SCHEDULE 18: FINANCIAL EXPENSES

(Rs. '000)


Interest

– On term loans and debentures 101,293 119,932

– To banks 136,481 5,648

– To others 1,000 –

Less : Interest recovered from subsidiary company (135,283) (5,163)

– Bank charges including guarantee commission (net of commitmentcharges reimbursed by subsidiary company Rs. 7,750 thousand(previous year Rs nil) 1,731 2,838

105,222 123,255

SCHEDULE 19 : EARNINGS PER SHARE (EPS)

(Rs. '000)


Net profit as per profit and loss account 1,274,768 827,823

Equity shares at the beginnning of the year 139,170,176 130,933,140

Equity shares at the end of the year 147,525,731 139,170,176

Weighted average number of equity shares in calculating basic/diluted EPS 142,003,986 131,808,864

Basic & Diluted Earnings Per Share (in Rupees) 8.98 6.28

70


SCHEDULE 20: NOTES TO ACCOUNTS

1. Nature of Operations

Malana Power Company Limited (hereinafter referred to as 'the Company') is engaged in the generation ofHydro 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 accountingstandards 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 accrualbasis. The accounting policies have been consistently applied by the Company and are consistent withthose used in the previous year.

(b) Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requiresmanagement to make estimates and assumptions that affect the reported amounts of assets and liabilitiesand disclosure of contingent liabilities at the date of the financial statements and the results of operationsduring the reporting period end. Although these estimates are based upon management's best knowledgeof 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 comprisesthe purchase price and any attributable cost of bringing the asset to its working condition for its intendeduse. Borrowing costs relating to acquisition of fixed assets which takes substantial period of time to getready for its intended use are also included to the extent they relate to the period till such assets are readyto be put to use.

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication ofimpairment based on internal/external factors. An impairment loss is recognized wherever the carryingamount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset'snet selling price and value in use. In assessing value in use, the estimated future cash flows are discountedto their present value at the weighted average cost of capital.

(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 prescribedin Schedule XIV to the Companies Act, 1956.

(ii) On fixed assets other than those covered under (i) above, depreciation is provided on written downvalue method at the rates based on their estimated useful lives, which corresponds to the ratesprescribed in Schedule - XIV to the Companies Act, 1956.

(iii) Depreciation on software is provided on written down value method at the rate of 40% per annumbased on its estimated useful life.

(e) Leases

Where the Company is the lessee

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of theleased item, are classified as operating leases. Operating lease payments are recognized as an expensein the Profit and Loss account on a straight-line basis over the lease term.

(f) Investments

Investments that are readily realisable and intended to be held for not more than a year are classified ascurrent investments. All other investments are classified as long-term investments. Current investmentsare carried at lower of cost and fair value determined on an individual investment basis. Long Terminvestments are carried at cost. However, provision for diminution in value is made to recognize a declineother than temporary in the value of investments.

(g) Inventories

Inventories comprising of components and stores and spares are valued at lower of cost and net realizablevalue. Cost is determined on weighted average basis.

71

(h) Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Companyand 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 freesupply to HP state Government) scheduled to be transmitted to the customers, which approximates theactual electricity transmitted.

Interest

Revenue is recognised on a time proportion basis taking into account the amount outstanding and therate applicable.

Voluntary Emission Rights (VER)

Revenue is recognised as when the VER's are sold and it is probable that the economic benefits will flowto the Company.

(i) Foreign currency translation

Foreign currency transactions

(i) Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currencyamount the exchange rate between the reporting currency and the foreign currency at the date of thetransaction.

(ii) Conversion

Foreign currency monetary items are reported using the closing rate. Non-monetary items which arecarried in terms of historical cost denominated in a foreign currency, are reported using the exchangerate at the date of the transaction.

(iii) Exchange Differences

Exchange differences arising on the settlement of monetary items or on restatement of monetaryitems at rates different from those at which they were initially recorded during the year, or reported inprevious financial statements, are recognised as income or as expenses in the year in whichthey arise.

(j) Retirement and other employee benefits

(i) Retirement benefits in the form of Provident Fund and Superannuation Schemes are definedcontribution schemes and the contributions are charged to the Profit & Loss Account of the year whenthe contributions to the respective funds are due. There are no obligations other than the contributionpayable to the respective fund/trust.

(ii) Gratuity liability is defined benefit obligation and is provided for on the basis of actuarial valuation onprojected unit credit method made at the end of each financial year.

(iii) Short term compensated absences are provided for based on estimates. Long term compensatedabsences are provided for based on actuarial valuation. The actuarial valuation is done as per projectedunit credit method at the end of each financial year.

(iv) Liability under continuity linked loyalty bonus scheme is provided for on actuarial valuation basis,which is done as per projected unit credit method at the end of each financial year.

(v) Actuarial gains/losses are immediately taken to profit and loss account and are not deferred.

(k) Income taxes

Tax expense comprises of current, deferred and fringe benefit tax. Current income tax and fringe benefittax 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 differencesbetween taxable income and accounting income for the year and reversal of timing differences ofearlier years.

72


Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at thebalance sheet date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable rightexists to set off current tax assets against current tax liabilities and the deferred tax assets and deferredtax liabilities relate to the taxes on income levied by same governing taxation laws. Deferred tax assetsare recognised only to the extent that there is reasonable certainty that sufficient future taxable incomewill be available against which such deferred tax assets can be realised. In situations where the Companyhas unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only ifthere is virtual certainty supported by convincing evidence that they can be realised against future taxableprofits.

The carrying amount of deferred tax assets are reviewed at each balance sheet date. The Companywrites-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonablycertain or virtually certain, as the case may be, that sufficient future taxable income will be availableagainst which deferred tax asset can be realised. Any such write-down is reversed to the extent that itbecomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable incomewill be available.

MAT credit is recognised as an asset only when and to the extent there is convincing evidence that theCompany will pay normal income tax during the specified period. In the year in which the MinimumAlternative tax (MAT) credit becomes eligible to be recognized as an asset in accordance with therecommendations 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 CreditEntitlement. The Company reviews the same at each balance sheet date and writes down the carryingamount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect thatthe Company will pay normal Income Tax during the specified period.

(l) Earnings Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable toequity shareholders by the weighted average number of equity shares outstanding during the year. Partlypaid equity shares are treated as a fraction of an equity share to the extent that they were entitled toparticipate in dividends relative to a fully paid equity share during the reporting year.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributableto equity shareholders and the weighted average number of shares outstanding during the period areadjusted for the effects of all dilutive potential equity shares.

(m) Provisions

A provision is recognised when an enterprise has a present obligation as a result of past event and it isprobable that an outflow of resources will be required to settle the obligation, in respect of which a reliableestimate can be made. Provisions are not discounted to its present value and are determined based onbest estimate required to settle the obligation at the balance sheet date. These are reviewed at eachbalance sheet date and adjusted to reflect the current best estimates.

(n) Cash and Cash equivalents

Cash and cash equivalents comprise cash at bank and in hand and short-term investments with an originalmaturity 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' issuedby the Institute of Chartered Accountants of India (ICAI) and hence, there are no additional disclosures to beprovided 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 unabsorbeddepreciation in the initial years, the Company has not availed the tax holiday benefit up to accounting year2006-07. However, based on its profitability, it has decided to avail the deduction from the accounting year2007-08 and will continue to avail it till accounting year 2015-16. The Company is liable to pay Income-Tax forthe year 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.5.7.2001 with the option to avail a further extension for a maximum period of twenty years after renegotiationof terms and conditions.

73

6. Contingent Liabilities not provided for

(a) Guarantee given for loans availed by AD Hydro Power Limited, subsidiary company, amounting Rs. 450,000thousand (Previous year Rs. 450,000 thousand).

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

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

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

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.

7. Capital Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (Net ofadvances) Rs. 761,145 thousand (Previous Year Rs. 645,509 thousand)

8. Related Party Disclosure

(a) Name of related parties

Holding Company Bhilwara Energy Limited

Subsidiary Company AD Hydro Power Limited

Enterprises having significant influence SN Power Holding, Singaporeover the Company

Fellow Subsidiary Companies Indo Canadian Consultancy Services Limited,

Green Ventures Private Limited

Key Management Personnel Mr. Ravi Jhunjhunwala, Chairman & Managing Director

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

Mr. Rishabh Jhunjhunwala (son of the Chairman &Managing Director)

Enterprises owned or significantly HEG Limited, RSWM Limitedinfluenced by key management personnelor their relatives

74


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

Nature of Transaction Holding Company/ Subsidiary/Fellow Key Management Relative of Key Enterprise overEnterprises having subsidiary Personnel Management which key

significant influence Company Personnel managementover the Company personnel/relative

having significantinfluence

2009 2008 2009 2008 2009 2008 2009 2008 2009 2008

Transactions during the year

Rent

a) Mr. Rishabh Jhunjhunwala 1,740 1,646

b) Mr. Riju Jhunjhunwala 1,740 1,646

c) RSWM Limited 3,620 1,153

Consultancy service charges 220 1,546paid to Indo CanadianConsultancy Services Limited.

Remuneration paid to 9,503 8,987Mr. Ravi Jhunjhunwala,

Commission paid to 14,643 8,947Mr. Ravi Jhunjhunwala,

Reimbursement of expenses 2,266 823paid to HEG Limited

Reimbursement of expenses 546 828paid to RWSM Limited

Reimbursement of expenses 1034 167paid to Indo CanadianConsultancy Services Limited

Reimbursement of expenses 3,125 2,939paid to AD Hydro Power Limited

Reimbursement of expenses 10,061 13,685recovered from AD hydroPower Limited

Reimbursement of expenses 698 683recovered from Indo CanadianConsultancy Services Limited

Share application money 1,391,056 –given to AD Hydro PowerLimited (net)

Shares acquired in 763,056 1,628,000AD Hydro Power Limited

Allotment of Shares to 42,613 42,009Bhilwara Energy Limited

Allotment of Shares to 40,942 40,361SN Power Holdings Singapore

Securities Premium on 532,667 525,111Allotment of shares toBhilwara Energy Limited

Securities Premium on Allotment 511,778 504,518of shares to SN PowerHoldings Singapore

Unsecured Loan repaid to 646,602 564,972Bhilwara Energy Limited

Unsecured Loan taken from 761,700 817,482Bhilwara Energy Limited

Unsecured Loan repaid by 2,212,132 1,732,555AD Hydro Power Limited

Unsecured loan taken 150,000 –from HEG Limited

Unsecured loan repaid 150,000 –to HEG Limited

Unsecured Loan given to 3,356,741 2,008,625AD Hydro Power Limited

Interest Expense recovered 199,923 5,163on Unsecured loan given to

75

(Rupees ‘000)

Nature of Transaction Holding Company/ Subsidiary/Fellow Key Management Relative of Key Enterprise overEnterprises having subsidiary Personnel Management which key

significant influence Company Personnel managementover the Company personnel /relative

having significantinfluence

2009 2008 2009 2008 2009 2008 2009 2008 2009 2008

AD Hydro Power Limited

Interest expense on loan 3,345 –from HEG Limited

Sale of fixed assets to – 2,030AD Hydro Power Limited

Balances outstanding asat the year end

Balances Receivable:

Investment in 4,929,556 3,538,500AD Hydro Power Limited

Unsecured Loan given to 1,560,679 416,070AD Hydro Power Limited

Interest amount on 199,923 5,163Unsecured Loan

Receivable from RSWM Ltd. 157 –

Receivable from HEG Limited – 500

Balances Payable:

SN Power Holding, Singapore 277 40

Unsecured Loan taken fromBhilwara Energy Limited 125,715 –

Deposit taken fromBhilwara Energy Limited 252,630 252,630

Indo Canadian Consultancy 1,558 1,001Services Limited

Mr. Ravi Jhunjhunwala 14,643 8,947

Guarantees given by the 450,000 450,000Company on behalf ofAD Hydro Power Limited

Payable to HEG Limited 4,353 –

Payable to RSWM Limited – 387

9. Supplementary Statutory Information (Rs.'000)

2009 2008

(a) Managing Directors Remuneration

Salaries 5,525 5,225

Commission 14,643 8,947

Rent paid 3,315 3,135

Contribution to Provident Fund 663 627

24,146 17,934

Notes:

a) As the future liability for the gratuity and leave encashment is provided on actuarial basis for the company asa whole, the amount pertaining to the directors is not ascertainable and therefore, not included.

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

76


2009 2008

(b) Computation of net profit in accordance with Section 198 readwith Section 349 of the Companies Act, 1956 :

Profit for the year before taxation as per Profit & Loss Account 1,440,416 878,491

Add: Depreciation as per Profit & Loss

Account 201,292 202,723

Directors' remuneration 24,146 17,934

1,665,584 1,099,148

Less: Depreciation u/s 350 of the Companies Act 201,292 202,723

Profit on sale of Fixed Assets 270 1,736

Net Profit in accordance with Section 198 and 349 1,464,292 894,689

Commission @ 1% of Net Profit 14,643 8,947

10. During the previous year, the Company has paid 50% upfront premium of Rs. 252,630 thousand to theGovernment of Himachal Pradesh as first instalment for the 140 MW Chango Yangthang HEP project whichwas awarded to the Company. This amount has been paid by the Company on behalf of its holding company,Bhilwara Energy Limited ('BEL') with an understanding that all rights, obligations, rewards and risks of thisproject will belong to BEL. For making the said payment, a corresponding amount of Rs. 252,630 thousandhad been received from BEL in the previous year, which has been shown under the head 'deposits fromholding company' under 'Current Liabilities' in the financial statements. An agreement has already been enteredinto 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 thereagainst will devolve on the Company.

11. The Government of India has promulgated an Act namely The Micro, Small and Medium EnterprisesDevelopment Act, 2006 which came into force with effect from October 2, 2006. As per the Act, the Companyis required to identify the Micro, Small and Medium suppliers and pay them interest on overdue beyond thespecified period irrespective of the terms agreed with the suppliers. As per the information available with theCompany, none of the creditors fall under the definition of 'supplier' as per the Section 2(n) of the Act. In viewof the above, the prescribed disclosures under Section 22 of the Act are not required to be made.

12. Leases


Office premises and vehicles are obtained on cancellable operating leases. All these leases have a leaseterm varying between 3 to 5 years. There are no restrictions imposed by lease arrangements. There are nosubleases.

(Amount in Rs'000)

Particulars For the For theyear ended year ended

March 31, 2009 March31, 2008


13. Gratuity and Other Post Employment benefit plans (AS 15- Revised)

The Company has a defined benefit gratuity plan. Gratuity (being administered by a Trust) is computed as 15days salary, for every completed year of service or part thereof in excess of 6 months and is payable onretirement / termination / resignation. The benefit vests on the employee completing 5 years of service. TheGratuity plan for the Company is a defined benefit scheme where annual contributions are deposited to aGratuity 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 gratuityasset/ liability in the books of accounts on the basis of actuarial valuation as per the Projected unit creditmethod. Plan assets also include investments and bank balances used to deposit premiums until due to theinsurance company.

77

The following tables summarise the components of net benefit expense recognised in the profit and lossaccount and the funded status and amounts recognised in the balance sheet for the respective plans:

Profit and Loss Account


Particulars For the year For the year ended on ended on

March 31, 2009 March 31, 2008(Rs.'000) (Rs.'000)

Current Service Cost 564 338



Net actuarial (gain)/ loss recognised in the period 286 (162)

Past service cost – –

Net benefit expense 971 312


Balance Sheet


Particulars As at As atMarch 31, 2009 March 31, 2008

(Rs.'000) (Rs.'000)



(1,002) (2,002)

Less: Unrecognised past service cost – –




(Rs.'000) (Rs.'000)



Current service cost 564 338


Actuarial (gains)/ losses on obligation 288 (123)


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


(Rs.'000) (Rs.'000)

Opening fair value of plan assets 1,998 2,217


Contributions by employer 1971 –




The Defined benefit obligation amounting to Rs. 5,133 thousand is funded by assets amounting to Rs. 4,130thousand and the Company expects to contribute Rs. 460 thousand during the year 2009-10.

78


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 thatdate, applicable to the period over which the obligation is to be settled. There has been significant change inexpected rate of return on assets due to the improved stock market scenario.

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

Particulars For the year For the yearended on ended on

March 31, 2009 March 31, 2008(%) (%)





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

Amounts for the current and previous four years are as follows*: (Rs. '000)

2008-09 2007-08


Plan assets 4,130 1,198

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

Experience adjustments on plan liabilities (260) –

Experience adjustments on plan assets 2 –

* As the Company has adopted AS -15 (revised) in the year 2007-08, the above disclosures as required underPara 120 (n) have been made prospectively from the date the Company has first adopted the standard.

Defined Contribution Plan (Rs. '000)

2008-09 2007-08

Contribution to Provident Fund 1,806 1,315

Contribution to Superannuation Fund 1,028 886

2,834 2,201

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


Foreign Currency Loan Rs. 66,790,400 Rs. 63,840,000 (USD 1,280,000 (USD 1,920,000@ closing rate of @ closing rate of

1USD=Rs. 52.18) 1USD=Rs. 39.90)

Advance for equipment Rs. 8,495,410 Nil(CHF 187,000

@ closing rate of1CHF=Rs. 45.43

79

15. Additional information pursuant to the provisions of paragraphs 3, 4C and 4D of Part II of Schedule VI to theCompanies Act, 1956

a) Information in respect of Generation and Turnover:

2008-09 2007-08

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

(ii) Generation M.U. 360.050 339.825

(iii) Less:- Auxiliary Consumption and Associated M.U. 4.185 3.732Transmission Loss

Free Energy to Govt. of H.P. M.U. 53.380 50.414

Free Energy to HPSEB for wheeling of power M.U. 12.099 11.427

(iv) Turnover (including impact of UI Charges - M.U. 289.125 273.827(1.26) M.U., (Previous year (.42) MU))

Rs'000 1,853,616 1,348,840

b) Imported and indigenous stores and spare parts consumed:

Percentage of Value (Rs.'000)total consumption

Stores & Spares 2008-09 2007-08 2008-09 2007-08

Imported – – – –

Indigenously obtained 100.00 100.00 13,218 6,043

100.00 100.00 13,218 6,043

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

2008-09 2007-08(Rs in '000s) (Rs in '000s)

Travelling 560 6,033

Professional Services 18,120 1,567

Fee & Subscription 11 –

d) Earnings in foreign currency (Cash basis)

2008-09 2007-08(Rs in '000s) (Rs in '000s)

Others (Sale of Voluntary

Emission Rights) 66,528 –

16. Previous year figures were audited by another firm of Chartered Accountants. Previous year's figures havebeen regrouped where necessary to confirm to this year's classification.










80


(Rs. '000)


A. Cash flow from operating activities

Net profit before taxation 1,440,416 878,441

Adjustments for:

Depreciation 201,292 202,723

Interest expenses 105,222 125,580

Profit on fixed assets sold / discarded (net) (270) (1,736)

Provision for continuity linked bonus 306 1,595

Provision for gratuity (1,000) 2,002

Provision for compensated absences 131 1,278

Unrealised foreign exchange loss/(gain) 17,042 (7,532)

Interest income (64,888) (11,546)

Operating profit before working capital changes 1,698,251 1,190,805

Movements in working capital:

Decrease / (increase) in sundry debtors 7,999 (12,687)

Decrease / (increase) in loan and advances (21,466) 11,683

(Increase) in inventories (471) (395)

(Decrease) / Increase in current liabilities 21,134 (2,341)

Cash generated from operations 1,705,447 1,187,065

Direct taxes paid (including fringe benefits taxes paid) 169,056 51,182

Net cash from operating activities 1,536,391 1,135,883

B. Cash flows used in investing activities

Purchase of fixed assets (including capital work in progress) (56,637) (628,588)

Purchase of investments (763,056) –

Share application money paid (628,000) (1,488,000)

Loans and advances to subsidiary company (1,144,608) (410,907)

Advances for project alloted – (252,630)

Proceeds from sale of fixed assets 526 4,948

Interest received 64,876 6,091

Net cash (used in) investing activities (2,526,899) (2,769,086)


81

C. Cash flows from financing activities

Proceeds from issuance of share capital 1,127,999 1,112,001

Proceeds from short term borrowings 198,261 752,630

Repayment of long -term borrowings (248,887) (297,226)

Interest paid (94,435) (127,801)

Net cash from financing activities 982,938 1,439,604

Net increase / (decrease) in cash and cash equivalents( A+B+C) (7,570) (193,599)

Cash and cash equivalents at the beginning of the year 32,039 225,638

Cash and cash equivalents at the end of the year 24,469 32,039

Components of cash and cash equivalents

Cash on hand 318 386

With banks – on current accounts 23,815 31,453

– on deposit accounts 200 200

– on margin money account 136 –

24,469 32,039

Notes:

1. Previous year's: figures have been regrouped wherever necessary to confirm to current year classification.

2. Difference in the figure of cash and bank balance as per Schedule 10 and as per above Rs.1,683 thousand(previous year 1,683 thousand) represents long term investment in fixed deposit with an original maturity ofmore than three months.

(Rs. '000)











82


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 Rs. Thousands)


Bonus Issue – Private Placement 8 3 5 5 5

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

Total Liabilities 9 8 3 8 6 9 9 Total Assets 9 8 3 8 6 9 9

SOURCES OF FUNDS

Paid-up Capital 1 4 7 5 2 5 7 Reserves and Surplus 6 1 9 8 0 6 2

Share Application Money – Deferred Tax Liability 2 2 4 9 9 7

Secured Loans 1 3 9 9 7 5 3 Unsecured Loans 1 9 8 2 6 1


Net Fixed Assets 2 9 8 3 9 4 6 Investments 4 9 2 9 5 5 6(Incl. P.O.P. exps)

Net Current Assets 1 5 8 2 8 1 0 Misc. Expenditure –

Accumulated Losses –

4. PERFORMANCE OF COMPANY (Amount in Rs. Thousands)

Turnover 1 9 2 9 3 3 7 Total Expenditure 4 8 8 9 2 1

Profit/Loss before Tax 1 4 4 0 4 1 6 Profit/Loss after tax 1 2 7 4 7 6 8

Earning Per Share (in Rs.) 8 . 9 8 Dividend Per Share (in Rs.) –

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




Place : NoidaDated : August 13, 2009





83

Name of the subsidiary AD Hydro Power Limied

1. Financial period ended March 31, 2009

2. Holding company’s interest 93.51% in equity shares

3. Shares held by the holding company 430,155,640 equity shares of Rs.10 each fullyin the subsidiary paid up Amounting to Rs.43015.564lacs

4. The net aggregate of profits or lossesFor the current period of the subsidiaryconcerns the members of the holding company

a. dealt with or provided for in the accounts Nilof the holding company

b. not dealt with or provided for in the NAaccounts of the holding company

5. The net aggregate of profits or lossesfor the current period of the subsidiaryconcerns the members of the holding company

a. dealt with or provided for in the accounts Nilof the holding company

b. not dealt with or provided for in the NAaccounts of the holding company







FINANCIAL RESULT

OF

AD HYDRO POWER LIMITED


DIRECTORS’ REPORT PROJECT STATUS AND CONSTRUCTION ACTIVITIES

The project commissioning is at an advanced stage and likely to become operational by March 2010. During construction in 2008, the Project encountered serious geological surprises in the excavation of tunnel and delay in statutory clearances for transmission line, which not only resulted into substantial cost overruns but also delayed the commissioning of the project.

The International Finance Corporation, Washington ( IFC ) being lead lender in the project, carried out the detailed appraisal of the project as per the changed conditions and accepted an upper ceiling of a project cost of Rs 20,213 Million for the purposes of financing. All other participating lenders in the project also extended their full support to the project, recognizing the ground realities being faced by the company.

The directors are pleased to inform you that the company has taken measures to overcome the encountered geological problems in tunnel. All civil structures like Allain River Barrage, Intermediate Reservoir, Surge Shaft, Power House, Switch Yard Tail Race Tunnel etc and electro-mechanical work like installation of Turbine, Generator, Transformers, other Aux. equipments (except the water conductor system and transmission line) are almost complete.

In the Water Conductor System also, as on date of this Report, 165 mtrs of excavation in case of Allain Tunnel & 1590 mtrs of excavation in case of Duhangan Tunnel is left.

TO THE MEMBERS

AD HYDRO POWER LIMITED

PROJECT EXPENSES

The Directors of the Company are pleased to present their Sixth Annual Report along with the audited statement of accounts for the financial year ended 31st March, 2009 together with the Auditors' Report thereon.

The Company has not yet started its commercial activities and therefore no Profit and Loss Account has been prepared and the expenditure incurred has been shown under Schedule -6 under the head “Project & Pre-operative Expenses (Pending Allocation)” to the Balance Sheet.

During the financial year ending 31st March, 2009, the following expenditure has been incurred on the project as per the details given below:

(Rs. in Million)

Fixed Assets (Gross) 776.500

Capital Work in Progress 10,570.524

Preoperative Expenses 3232.452

Net Current Assets (670.815)

Miscellaneous 20.018

TOTAL 13,928.679

PARTICULARS AMOUNT

86

87

FUTURE OUTLOOK-POWER SECTOR

The market fundamentals are strong as India continues to experience acute supply shortages both in terms of total energy and peak capacity. With the Indian Economy growing at more than 7 to 8 percent annually, the demand for power has been outstripping supply. The company believes the power demand and supply gap to widen further with the growing economy and continue to remain over the next few years. India continues to experience acute shortages in energy supply (11%) and peak load capacity (12%). Even under conservative assumptions (i.e. conservative demand growth assumptions and aggressive capacity addition and supply availability assumptions), these shortages are forecast to continue for the foreseeable future. India's economy is growing at 6.7% and current per capita consumption is at 704 kWh, as against the world average of 2,596 kWh. Both energy demand and peak demand are expected to grow at between 7-8% up to 2017 and at 6-7% thereafter. In response, India's 11th 5-year Plan (2007-2012) calls for additional capacity of 78,577MW and its 12th Plan (2012-2017) calls for a further 82,200MW. However, to date, India has never fulfilled its ambitions, achieving less than 50% of planned addition in its 10th five year plan and adding just 21,180 MW Capacity as compared to 41,110 MW. Even during current five year plan (11th Plan), there is only 12716.7 MW Capacity addition till March, 2009 as against a target of 27396.4 MW.

In case of Pressure Shaft 680 mtrs of erection is left. In case of Transmission Line also out of total 580 towers 417 towers have already been erected.

The revised Project Cost Ceiling as approved by The International Finance Corporation, Washington now stands at Rs. 20,213 Million and to be financed as follows;-

(Rs. in Million)

Equity Malana Power Company Ltd (88%) 4,928

International Finance Corporation, (12%) 672

Total 5,600

Debt Senior International Finance Corporation, 3,150

Local Lenders 6825

Total 9,975

Debt –Subordinate Malana Power Company Ltd 4638

Total 20,213

As on 31st March, 2009, an amount of Rs. 13,928.679 million has already been incurred on the project with the following means of finance:

(Rs. in Million)

1 Equity contribution from Malana Power Co. Ltd 4,929.557

2 Equity contribution from IFC, W 298.443

3 Senior Debt from International Finance Corporation 1,150

4 Senior Debt from Local Lenders (IDBI, PNB, Axis Bank, PSB & OBC) 5,990

5 Debt from Holding Company (Malana Power Company Ltd.) 1,560.679

Total 13,928.679

STATUS OF FINANCING


88

This has increased in recent years due to: (i) increased end consumer willingness to pay as captive power production is becoming more expensive and the opportunity cost of black-outs during this period of economic growth is high; (ii) the credit situation of most State Electricity Boards (“SEBs”) is improving as a result of unbundling, better collection rates, rising tariffs, and a reduction in the gap between average tariff and average cost of supply; (iii) a lower political tolerance to load-shedding and greater inter-state competition to attract commercial activity with the promise of reliable power; (iv) Unscheduled Interchange charges have now been introduced to control unscheduled withdrawal of power during peak hours, with the penalty/benefit for over/under drawing being determined by the frequency (Hz) of the system and reaching a maximum of INR 7.35/kWh at frequencies of less than 49.22 Hz.

For merchant plants the tariffs are set by supply and demand at the margin of the market and with the shortfall in supply forecast to continue, the SEB's willingness to pay will drive pricing. As mentioned above multiple factors have driven up the willingness to pay and the average tariff price traded.

During the year, Malana Power Company Ltd. has invested an amount of Rs. 1,391 million in the project to meet the capital requirement and as on 31st March, 2009, it has made a total investment of Rs. 4,930 million as equity in the project.

SHARE CAPITAL

National Supply & Demand: Situation

FY04 FY05 FY06 FY07 FY08 FY09

Energy Demand MU 559264 591373 631757 697961 737052 774324

Energy Availability MU 519398 548115 578819 624495 664660 689021

Energy Deficit MU 39866 43258 52938 73466 72392 85303

Energy Deficit % 7.1% 7.3% 8.4% 10.6% 9.8% 11.0%

Peak Demand MW 84574 87906 93255 100715 108886 109809

Peak Availability MW 75066 77652 81792 86818 90793 96685

Peak Deficit MW 9508 10254 11463 13897 18093 13124

Peak Deficit % 11.2% 11.7% 12.3% 13.8% 16.7% 12.0%

Source: CEA

The 2003 Electricity Act introduced a broad swathe of reforms including: unbundling of State Electricity Boards, open access to transmission and ability to develop private transmission projects; and open access to distribution providing customers with choice of suppliers. The Act also recognized trading as a distinct activity and several private companies have entered the trading market. Trading companies create efficient markets for short-term power contracts. These key changes coupled with continued shortages have given boost to the concept of merchant power market.

Volume of Electricity Traded by Trading Community has increased rapidly from 14,188 GWh in the year 2004-05 to 17,325 GWh in the year 2007-08.

With the ongoing gap between peak supply and demand, marginal prices are driven by consumer willingness to pay.

Historical Energy Demand Supply Scenario

89

ENVIRONMENT, HEALTH AND SAFETY

CORPORATE SOCIAL RESPONSIBILITY

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.

The Company continued to face serious challenges regarding occupational health and safety in relation to the construction work. During 2008, the Project experienced a number of fatalities. The fatalities were linked to transportation accidents and rock fall in tunneling. The Company engaged an international safety expert in 2008 and introduced a number of measures to improve its safety performance in the last quarter of 2008, and first quarter of 2009. The Directors have noted that improvements have taken place, but that the company needs to continue to focus on the implementation of best international practice on HSE to avoid the possibility of further serious injuries or fatalities.

The Company is committed to ensuring that it conducts its business in accordance with ethical, professional and legal standards.

As part of the company's social responsibility program it established a child crèche in Manali to take care of the children of migrant labor and also for children in the vicinity villages.

As a constructive partner in the communities in which it operates, your company has been proactive towards its social responsibility and has spent on development of infrastructure in the area.

Your Company's Human Resource Development strategy focuses on building the competence, commitment and motivation of employees. The Company recognizes serious scarcity of trained expert personnel in power sector. With the expansion of the power market, there is growing requirement for not just qualified engineers, but also for finance, marketing, commercial, IT and HR personnel.

The Company recognizes human resource as a key component for facilitating organization growth and regularly invests in augmenting its human resources with latest tools, equipments and techniques through focused and structured become an attractive employer in the industry.

The Company is also committed to provide a zero injury workplace to its employees and workers all across its units, security of employees is one of the prime concerns of the Management. Employees are adequately covered under various insurance policies against risk of health and life disasters. The company continues to empower its employees to achieve business successes. Accordingly suitable changes at Site Management level have also been made.


90

DIVIDEND & OTHER APPROPRIATION

INTERNAL CONTROL SYSTEMS AND THEIR

ADEQUACY

INTERNAL CONTROL SYSTEMS

As the construction work is under progress, without any operation, no dividends are proposed to be declared during the year under operation.

Your Company has an adequate internal control procedure commensurate with the nature of its business and size of its operations. Internal Audit is conducted at regular interval. The internal control system in all areas of operations, regularly checked by both external and internal auditor that have access to all records and information. The Company also maintains a system of internal control designed to provide reasonable assurance regarding the effectiveness and efficiency of operations, the adequacy of safeguards for assets, the reliability of financial control and compliance with applicable laws and regulations. The Company is continuously upgrading these systems in line with the best available practices. Audit Committee meetings are held where these reports and variance analysis are discussed and action taken. Operational reports are tabled at the Board Meetings after discussions at Audit Committee Meetings.

INTERNAL AUDIT


Internal Audit is an independent, objective and assurance function conscientious for evaluating and improving the effectiveness of risk management, Control, and governance processes. The function prepares annual audit plans based on risk management and conducts extensive reviews covering financial, operational and compliance controls and risk mitigation. Areas requiring specialized knowledge are reviewed in partnership with external experts.

Internal audit plans cover matters identified in risk management assessments as well as issues highlighted by the Board, the audit committee and senior management. Quarterly Internal audit reports are submitted along with the management's response to the Audit Committee. The Audit Committee monitors performance of Internal Audit on a periodic basis through review of the internal audit plans, audit findings & swiftness of issue resolution through follow ups.

Information of employees in accordance with the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, is given in Annexure-II to the Directors' Report.

DIRECTORS' RESPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies (Amendment) Act, 2000, the Directors of your company state hereunder:-


91

I) that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii) that the accounting policies have been selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for the financial year 2008-09;

iii) that the proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and

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

Mr. L. N. Jhunjhunwala and Mr. Bidyut Shome retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment there at. During the year, Mr. Einar Stenstadvold resigned on 21st March, 2009 from the directorship and Ms. Rohini Roshanara Sood was appointed as additional director in

DIRECTORS

place of Mr. Einar Stenstadvold, upto the next Annual General Meeting. The Board recommends the appointment of Ms. Rohini Roshanara Sood on the Board of the Company. The Board of Directors wishes to place on record their appreciation towards the contribution made by Mr. Einar Stenstadvold as a member of the Board.

The tenure of Mr. R. P. Goel, Whole Time Director expired on 29th November, 2007 and members in General Meeting held on 29th November, 2007 extended the tenure of Mr. R. P. Goel for another two years from 29th November, 2007 to 28th November, 2009.

During the year the Company met twice to review company's financial results, internal control systems, risk management policies and internal audit reports. The audit committee of the company comprises of three members. All the members were present in all the meetings of the audit committee and the proceedings of the committee were in accordance with the provisions of the Companies Act, 1956.

The Company has received consent letter from S.R. Batliboi & Co. Chartered Accountants under section 224(1)(b) of the Companies Act, 1956 who, being eligible have shown their willingness for appointment as statutory auditors of the Company. The Board recommends the re-

AUDIT COMMITTEE

AUDITORS


92

appointment of M/s S.R. Batliboi & Co. Chartered Accountants as Statutory Auditors of the Company.

The observations made by the Auditors with reference to the Notes to the Accounts for the year under report are self-explanatory and require no further comments.

The Company has not accepted any deposits from the Public during the year under report. Therefore, provisions of Section 58A are not applicable.

Information required to be disclosed under Section 217 (1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the report of Board of Directors) Rules, 1988 has been given in the Annexure I forming part of this Report.

Your Company follows practices of good Corporate Governance with strong belief that corporate governance is a key element in improving efficiency and growth as well as enhancing investor confidence.

The majority of the Board comprises of Non-Executive Directors who impart balance to the Board processes by bringing an independent judgment to bear on issues of strategy, performance, resources, standards of Company conduct, etc. The audit committee of the board meets regularly and provides assurance to the Board on the

AUDITORS' REMARKS

PUBLIC DEPOSITS

E N E R G Y C O N S E R V A T I O N , T E C H N O L O G Y

ABSORPTION AND FOREIGN EXCHANGE EARNINGS

& OUTGO


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.

The Directors are pleased to place on record their appreciation for the continued support received from the lenders of the company namely IFC, IDBI, PSB, OBC, AXIS Bank, PNB, J & K Bank and United Bank of India. The Directors also acknowledge the assistance and continued support provided by the Ministry of Power, Government of India, Government of Himachal Pradesh, Himachal Pradesh State Electricity Board, Commercial Banks and other Government Departments/bodies/authorities and looks forward to their continued support and cooperation in the coming years as well.

The Board would also like to express great appreciation for the commitment and contribution of its employees at all levels. Last but not least, the Company thanks its shareholders for their unstinted support.


Place: Noida Ravi Jhunjhunwala

Date: 13th August, 2009 Chairman

APPRECIATIONS AND ACKNOWLEDGEMENTS

93

ANNEXURE-II TO THE DIRECTORS REPORT

Information pursuant to Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and forming part of the Directors’ Report for the year ended 31st March, 2009 are given hereunder:

Mr. O. P. Ajmera President (Finance) and CFO 3.115 C.A., C.S. 47 yrs. 17-03-1987

Mr. Ashok Joshi President-Project 5.149 B.E. (Civil) 50 yrs. 24-01-1994

Mr. Sharad Kumar Assistant Vice President-Civil 3.12 B.E. (Civil) 48 yrs. 26-04-2000

Name Designation Remuneration Qualification Age Date of (Rs.in Million) Commencement

of Employment

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

1. CONSERVATION OF ENERGY -NIL

2. TECHNOLOGY ABSORPTION - NIL

A. RESEARCH AND DEVELOPMENT ( R& D ) -NIL

B. TECHNOLOGICAL ABSORPTION, ADAPTATION AND INNOVATION-NIL

C. EXPORTS & FOREIGN EXCHANGE EARNING AND OUTGO

(Rs in Million)

I. Foreign Exchange Outgo

Engineering Fee and Consultancy charges 42,321 54,508

Legal and Professional charges – 662


Financial charges – 395

Capital and Project Equipments 122,382 115,239

Total 165,085 172,989

PARTICULARS 2008-09 2007-08

94


AUDITORS' REPORT

To

The Members of AD Hydro Power Limited

1. We have audited the attached Balance Sheet ofAD Hydro Power Limited ('the Company') as atMarch 31, 2009 and the cash flow statement forthe year ended on that date annexed thereto.These financial statements are the responsibilityof the Company's management. Our responsibilityis to express an opinion on these financialstatements based on our audit.

2. We conducted our audit in accordance withauditing standards generally accepted in India.Those Standards require that we plan and performthe audit to obtain reasonable assurance aboutwhether the financial statements are free ofmaterial misstatement. An audit includesexamining, on a test basis, evidence supportingthe amounts and disclosures in the financialstatements. An audit also includes assessing theaccounting principles used and significantestimates made by management, as well asevaluating the overall f inancial statementpresentation. We believe that our audit provides areasonable basis for our opinion.

3. As required by the Companies (Auditor's Report)Order, 2003 (as amended) issued by the CentralGovernment of India in terms of sub-section (4A)of Section 227 of the Companies Act, 1956, weenclose in the Annexure a statement on the mattersspecified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referredto above, we report that:

i. We have obtained all the information andexplanations, which to the best of ourknowledge and belief were necessary for thepurposes of our audit;

ii. In our opinion, proper books of account asrequired by law have been kept by theCompany so far as appears from ourexamination of those books;

iii. The balance sheet and cash flow statementdealt with by this report are in agreement withthe books of account;

iv. In our opinion, the balance sheet and cashflow statement dealt with by this report complywith the accounting standards referred to insub-section (3C) of section 211 of theCompanies Act, 1956;

v. On the basis of the written representationsreceived from the directors, as on March 31,2009, and taken on record by the Board ofDirectors, we report that none of the directorsis disqualified as on March 31, 2009 frombeing appointed as a director in terms ofclause (g) of sub-section (1) of section 274 ofthe Companies Act, 1956.

vi. In our opinion and to the best of ourinformation and according to the explanationsgiven to us, the said accounts give theinformation required by the Companies Act,1956, in the manner so required and give atrue and fair view in conformity with theaccounting principles generally accepted inIndia:

a) in the case of the balance sheet, of thestate of affairs of the Company as atMarch 31, 2009;

b) in the case of cash flow statement, of thecash flows for the year ended on thatdate.



Place: GurgaonDate: August 13, 2009

95

Annexure referred to in paragraph 3 of our report ofeven date

Re: AD Hydro Power Limited ('the Company')

(i) (a) The Company has maintained properrecords showing full particulars, includingquantitative details and situation of fixedassets.

(b) Fixed assets have been physically verifiedby the management during the year and nomaterial discrepancies were identified onsuch verification.

(c) There was no substantial disposal of fixedassets during the year.

(ii) (a) The management has conducted physicalverification of inventory at reasonableintervals during the year.

(b) The procedures of physical verification ofinventory followed by the management arereasonable and adequate in relation to thesize of the Company and the nature of itsbusiness. In respect of the material lying withthird parties, the management has a processof reconciliation and confirmations from thethird parties during the year.

(c) The Company is maintaining proper recordsof inventory and no material discrepancieswere noticed on physical verification.

(iii) (a) As informed, the Company has not grantedany loans, secured or unsecured tocompanies, firms or other parties coveredin the register maintained under section 301of 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 applicableto the Company.

(e) The Company has taken a loan from onecompany covered in the register maintainedunder section 301 of the Companies Act,1956. The maximum amount involved duringthe year was Rs. 3,292,519 thousand andthe year-end balance of loan taken from suchparty was Rs. 1,560,679 thousand.

(f) In our opinion and according to theinformation and explanations given to us, therate of interest and other terms andconditions for such loan is not prima facieprejudicial to the interest of the Company.

(g) As informed to us and as per the terms ofthe draft Subordination Loan agreement withthe lenders shared with us, the loan takenand interest thereon is re-payable after theproject commences commercial operationswhich is yet to be executed. Accordingly, thelenders have not demanded repayment ofany such loan and interest thereon duringthe year and thus, there has been no defaulton part of the Company.

(iv) In our opinion and according to the informationand explanations given to us, there is an adequateinternal control system commensurate with thesize of the Company and the nature of its business,for the purchase of inventory and fixed assets andfor sale of scrap. During the course of our audit,no major weakness has been noticed in theinternal control system in respect of these areas.Due to nature of its business, the Company is notrequired to sell any services.

(v) (a) According to the information andexplanations provided by the management,we are of the opinion that the particulars ofcontracts or arrangements referred to insection 301 of the Act that need to be enteredinto the register maintained under section301 have been so entered.

(b) In our opinion and according to theinformation and explanations given to us, thetransactions made in pursuance of suchcontracts or arrangements exceeding valueof Rupees five lakhs have been entered intoduring the financial year at prices which arereasonable having regard to the prevailingmarket prices at the relevant time.

(vi) The Company has not accepted any deposits fromthe public.

(vii) In our opinion, the Company has an internal auditsystem commensurate with the size and natureof its business.

(viii) The Company is in construction phase and is yetto commence commercial operations. Accordingly,the provisions of clause 4(viii) of the Companies(Auditor's report) Order, 2003 (as amended) is notapplicable to the Company.

(ix) (a) Undisputed statutory dues includingprovident fund, investor education andprotection fund, or employees' stateinsurance, income-tax, sales-tax, wealth-tax,service tax, customs duty, excise duty, cesshave generally been regularly deposited withthe appropriate authorities except for duesrelated to income tax and sales tax whichhave not been regularly deposited with theappropriate authorities in certain cases,though the delays in deposit have not beenserious.

(b) According to the information andexplanations given to us, no undisputedamounts payable in respect of providentfund, investor education and protection fund,employees' state insurance, income-tax,wealth-tax, service tax, sales-tax, customsduty, excise duty, cess and other undisputedstatutory dues were outstanding, at the yearend, for a period of more than six monthsfrom the date they became payable.

96


(c) According to the information and explanationgiven to us, there are no dues of income tax,sales-tax, wealth tax, service tax, customsduty, excise duty and cess which have notbeen deposited on account of any dispute.

(x) As the Company is yet to commence commercialoperations as on March 31, 2009, the Profit & Lossaccount has not been prepared. Hence we arenot required to comment on whether or not theaccumulated losses at the end of the financial yearis fifty per cent or more of its net worth and whetherit has incurred cash losses in such financial yearand in the immediately preceding financial year.

(xi) Based on our audit procedures and as per theinformation and explanations given by themanagement, we are of the opinion that theCompany has not defaulted in repayment of duesto a financial institutions or banks. The Companyhas no outstanding dues in respect of debentureholders.

(xii) According to the information and explanationsgiven to us and based on the documents andrecords produced to us, the Company has notgranted loans and advances on the basis ofsecurity by way of pledge of shares, debenturesand other securities.

(xiii) In our opinion, the Company is not a chit fund or anidhi / mutual benefit fund / society. Therefore,the provisions of clause 4(xiii) of the Companies(Auditor's Report) Order, 2003 (as amended) arenot applicable to the Company.

(xiv) In our opinion, the Company is not dealing in ortrading in shares, securities, debentures and otherinvestments. Accordingly, the provisions of clause4(xiv) of the Companies (Auditor's Report) Order,2003 (as amended) are not applicable to theCompany.

(xv) According to the information and explanationsgiven to us, the Company has not given anyguarantee for loans taken by others from bank orfinancial institutions.

(xvi) Based on information and explanations given tous by the management, term loans were appliedfor the purpose for which the loans were obtained.

(xvii) As informed and as per the terms of the financingplan approved by the lenders of the Company,the Holding Company is required to provideSubordinated Debt to the Company. However,pending the execution of the Subordination Debtagreement between the Company and its holdingcompany, the Company has taken bridge loan

from its Holding Company which, on the executionof the said agreement, will be converted into along term loan. The Company has used abovefunds raised on above basis for long-terminvestment. At the close of the year, the Companyhas invested an amount of Rs. 1,560,679 thousandfor the construction of a commercial hydro powergeneration project by the Company.

(xviii)The Company has made preferential allotment ofshares to parties and companies covered in theregister maintained under section 301 of the Act.In our opinion, the price at which shares have beenissued is not prejudicial to the interest of theCompany.

(xix) The Company did not have any outstandingdebentures during the year.

(xx) During the year under review the Company hasnot raised money through public issue; henceclause 4 (xx) of the Companies (Auditor's report)Order, 2003 (as amended) is not applicable to theCompany.

(xxi) We have been informed that the Company hasmade payments of Rs. 2,439 thousand foracquisition of right to use of certain plots of land.However, later on, the Company realized thatthese persons were not the actual land ownersand it had to make payments to the actual landowners also. The Company has filed suits for therecovery of the amounts paid to the parties whowere not actual land owners. Other than this,based upon the audit procedures performed forthe purpose of reporting the true and fair view ofthe financial statements and as per the informationand explanations given by the management, wereport that no fraud on or by the Company hasbeen noticed or reported during the course of ouraudit.




97

(Rs. '000)

Schedule As at As atMarch 31, 2009 March 31, 2008

SOURCES OF FUNDSShareholders' Funds

Share capital 1 4,600,000 3,836,944Share application money (pending allotment) 628,000 –

5,228,000 3,836,944Loan Funds

Secured loans 2 7,140,000 5,450,000Unsecured loans 3 1,560,679 416,070

8,700,679 5,866,070TOTAL 13,928,679 9,703,014

APPLICATION OF FUNDSFixed Assets

Gross block 4 776,500 381,883Less : Accumulated depreciation 185,722 151,140Net block 590,778 230,743Capital work-in-progress includingcapital advances 5 10,570,524 7,949,503Project and pre-operative expenses(pending allocation) 6 3,418,174 2,157,934

14,579,476 10,338,180Current assets, loans and advances

Inventories 7 220,024 134,514Cash and bank balances 8 69,303 48,522Other current assets 9 158 6,109Loans and advances 10 36,559 30,660

326,044 219,805Less: Current liabilities and provisionsCurrent liabilities 11 980,366 858,326Provisions 12 16,493 16,663

996,859 874,989Net Current assets (670,815) (655,184)Miscellaneous expenditure 13 20,018 20,018(to the extent not written off or adjusted)TOTAL 13,928,679 9,703,014Notes to accounts 14

The Schedules referred to above form an integral part of the Balance Sheet.








RAVI JHUNJHUNWALADirector


SANDEEP CHANDNACompany Secretary

98


SCHEDULE 1 : SHARE CAPITAL

(Rs. '000)


Authorised

700,000,000 (Previous year 700,000,000 )equity shares of Rs.10 each 7,000,000 7,000,000

Issued, Subscribed and Paid up

460,000,000 (Previous year 383,694,360)equity shares of Rs.10 each 4,600,000 3,836,944

430,155,640 (Previous year 353,850,000)equity shares are held by Malana PowerCompany Limited, the Holding Companyalong with its nominees.

4,600,000 3,836,944

SCHEDULE 2 : SECURED LOANS(Rs. '000)


Rupee term loans

– From banks 5,290,000 4,300,000

– From institutions 1,150,000 1,150,000

Short term loans

– From others 700,000 –

7,140,000 5,450,000

Notes:

1. Term loans from banks and institutions are secured by way of a first mortgage/charge on all immovableproperties 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 CompanyLimited, has provided corporate guarantee & has also pledged its share holding in the Company.

2. Rupee term loans from institution is from IFC, Washington, a minority shareholder.

3. Short term loans include amount payable within one year Rs 700,00 thousand (previous year Rs nil).

SCHEDULE 3 : UNSECURED LOANS(Rs. '000)


Short Term loan

– From holding company 1,560,679 416,070

1,560,679 416,070

SCHEDULES

99

SCHEDULE 5 : CAPITAL WORK IN PROGRESS(Rs. '000)

PARTICULARS As At Additions during As AtApril 1, 2008 the year (net) March 31, 2009

Land - freehold (Refer note no. 6(a) & (b) of schedule 14) 300,726 3,019 303,745

Road 1,138,204 156,516 1,294,720

Buildings 190,640 (176,054)* 14,586

Head race tunnel 682,787 893,976 1,576,763

Pressure shaft/ penstock 372,447 139,580 512,027

Upstream/ barrage 766,695 471,639 1,238,334

Power house 862,113 103,967 966,080

Switch Yard- Mechanical 83,719 82,842 166,561

Switch Yard Civil 60,616 32,806 93,422

Engineering fees 330,002 53,464 383,466

Consultancy charges 128,787 29,021 157,808

Construction power 36,988 9,872 46,860

Transmission line

– Right to use 157,872 81,615 239,487

– Expenditure on forest land(Refer Note no 6 (c) of Schedule 14) – 270,803 270,803

– Capital advances 27,860 (6,815) 21,045

– Others 1,003,727 317,603 1,321,330

Turbine & Generators 729,561 204,743 934,304

Gates 27,558 49,585 77,143

Valves 1,227 17,558 18,785

Power Cables 46,514 29,448 75,962

Power Transformer 175,280 – 175,280

Equipments Under Installation 3,229 1,558 4,787

Electro & mechanical auxilliary services 5,127 32,990 38,117

EOT Crane 22,185 385 22,570

Other capital expenditure 45,111 – 45,111

Capital stocks 303,054 (4,529) 298,525

– includes stocks lying with third parties Rs.251,027 thousand(Previous year Rs. 255,117thousand)

Capital advances 447,474 (174,571) 272,903

Total 7,949,503 2,621,021 10,570,524

* additions to buildings are net of buildings capitalised during the year.


(Rs. '000)GROSS BLOCK DEPRECIATION NET BLOCK

Particulars Opening Additions Deduction As at Opening For the Deletion As At As At As At

April 1, March 31, April 1, year March 31, March 31, March 31

2008 2009 2008 2009 2009 2008

Buildings 50,684 202,279 – 252,963 3,154 5,029 – 8,183 244,780 47,530

Project equipments 253,994 189,539 – 443,533 126,809 20,036 – 146,845 296,688 127,185

Electrical installation 25,736 116 – 25,852 2,542 1,541 – 4,083 21,769 23,194

Furniture & fixtures 17,633 1,455 – 19,088 5,619 2,326 – 7,945 11,143 12,014

Computers 10,541 379 – 10,920 5,610 2,083 – 7,693 3,227 4,931

Office equipments 6,632 591 – 7,223 1,909 750 – 2,659 4,564 4,723

Vehicles 16,663 564 306 16,921 5,497 2,928 111 8,314 8,607 11,166

Total 381,883 394,923 306 776,500 151,140 34,693 111 185,722 590,778 230,743

Previous Year 236,388 146,514 1,019 381,883 46,470 105,040 370 151,140 230,743 189,918

100


SCHEDULE 6: PROJECT AND PRE-OPERATIVE EXPENSES (PENDING ALLOCATION)(Rs. '000)


Personnel Expenses

Salaries, wages and bonus 260,423 104,614 365,037

Contribution to provident funds 16,408 5,769 22,177

Contribution to superannuation funds 2,513 1,249 3,762

Gratuity expenses 3,024 1,100 4,124

Workmen and staff welfare expenses 21,666 7,474 29,140

304,034 120,206 424,240

Administrative and other expenses

Rent 30,046 13,795 43,841

Rates & taxes 236 15 251

Insurance 72,136 23,515 95,651

Repairs and maintenance

– Plant and machinery 13,129 11,966 25,095

– Civil works 783 1,029 1,812

– Buildings 2,799 446 3,245

– Others 2,353 171 2,524

Travelling expense 55,181 13,096 68,277

Conveyance 16,532 3,025 19,557

Vehicle running & hiring expenses 77,325 34,109 111,434

Communication expenses 11,073 4,945 16,018

Auditor's Remuneration :

– Audit Fees 1,702 552 2,254

– Other Services 922 922 1,844

– Out of Pocket Expenses 118 96 214

Charity and donations (other than to political parties) 3,576 – 3,576

Director remuneration 3,967 2,678 6,645

Tender expenses 12,389 1,057 13,446

Legal & professional charges 61,969 29,698 91,667

Expenditure on forest land (Refer note no 6 (c) of Schedule 14) 255,726 16,122 271,848

Environment health and safety 1,918 4,770 6,688

Fee & subscription 3,613 956 4,569

Stores consumption 83,321 43,628 126,949

Hiring of equipment 191,093 43,593 234,686

Power and fuel (net of recoveries of 43,467 thousands(previous year Rs 32,715 thousands) 20,705 1,481 22,186

Installation charges 3,612 – 3,612

Security arrangement expense 23,469 20,427 43,896

Social welfare expenses 85,472 39,140 124,612

Miscellaneous expenses (net of recoveries Rs. 4,870thousand (Previous year Rs. 2,347 thousand) 41,090 19,902 60,992

Fringe benefit tax 11,467 5,200 16,667

Interest on Term Loan 590,218 554,020 1,144,238

Interest to Holding Company 5,163 199,923 205,086

101

Interest on Others 1,985 – 1,985

Financial/bank charges (includes commitment chargesreimbursed to holding company Rs. 7,750 thousand(previous year Rs nil) 71,918 36,797 108,715

Depreciation 151,516 34,693 186,209

1,908,522 1,161,767 3,070,289

Less : Interest earned (Tax deducted at sourceRs. 130 thousand, Previous year Rs. 3,266 thousand)(net of provision for income tax Rs. 195 thousand(Previous year Rs. 5,133 thousand)) (54,622) (2,969) (57,591)

Less : Scrap sale – (18,764) (18,764)

2,157,934 1,260,240 3,418,174

SCHEDULE 7: INVENTORIES(Rs. '000)


Stores and spares (including stocks lying with third partiesRs 116,181 thousand (previous year Rs 55,575 thousands) 220,024 134,514

220,024 134,514

SCHEDULE 8: CASH AND BANK BALANCES(Rs. '000)


Cash on hand 2,708 2,586

Balances with scheduled banks:

On current accounts 64,093 32,441

On deposit accounts 200 2,295

On margin money accounts 2,302 11,200

69,303 48,522

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 9: OTHER CURRENT ASSETS(Rs. '000)


Interest accrued on deposits 158 6,109

158 6,109

SCHEDULE 10: LOANS AND ADVANCES (Unsecured, considered good)(Rs. '000)


Loans to employees 451 1,169

Advances recoverable in cash or in kind or for value to be received 32,052 26,095

Security deposit 3,347 3,345

Advance income tax / tax deducted at source (net of provision for tax ofRs. 17,719 thousand (previous year Rs 17,524 thousand) 709 51

36,559 30,660

(Rs. '000)


102


SCHEDULE 11: LIABILITIES(Rs. '000)


Sundry creditors *(a) Outstanding dues of Micro & Small Enterprises – –(b) Outstanding dues of creditors other than Micro & Small Enterprises 768,100 626,362Deposits from contractors and others 125,276 182,898Interest accrued but not due on loans 26,643 22,208Other liabilities 60,347 26,858

980,366 858,326* refer note no. 15 in schedule 14

SCHEDULE 12: PROVISIONS(Rs. '000)


Provision for Fringe Benefit Tax (net of advance fringe benefit taxRs. 15,172 thousand (previous year Rs 11,072 thousand)) 1,495 395

Provision for Wealth Tax 40 60

Provision for Gratuity 1,138 2,000

Provision for Leave encashment 3,805 3,107

Provision for Continuity Linked Bonus 10,015 11,101

16,493 16,663

SCHEDULE 13: MISCELLANEOUS EXPENDITURE (to the extent not written off or adjusted)(Rs. '000)


Share issue expenses

Balance as per last account 20,018 15,820

Add : Incurred during the year – 4,198

20,018 20,018

103

SCHEDULE - 14: NOTES TO ACCOUNTS

1. Nature of Operations

AD Hydro Power Limited (hereinafter referred to as 'the Company') is in the process of setting up of a 192 MWhydro electric power generation plant. The Company is still in the construction stage and has not yet commencedcommercial power generation during the year ended March 31, 2009.

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 accountingstandards 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 accrualbasis. The accounting policies have been consistently applied by the Company and are consistent withthose used in the previous year.

(b) Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requiresmanagements to make estimates and assumptions that affect the reported amounts of assets and liabilitiesand disclosure of contingent liabilities at the date of the financial statements and the results of operationsduring the reporting period end. Although these estimates are based upon management's best knowledgeof 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 comprisesthe purchase price and any attributable cost of bringing the asset to its working condition for its intendeduse. Borrowing costs relating to acquisition of fixed assets which takes substantial period of time to getready for its intended use are also included to the extent they relate to the period till such assets are readyto be put to use.

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication ofimpairment based on internal/external factors. An impairment loss is recognized wherever the carryingamount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assetsnet selling price and value in use. In assessing value in use, the estimated future cash flows are discountedto their present value at the weighted average cost of capital.

(d) Expenditure on new projects

Expenditure directly relating to construction activity is capitalised. Indirect expenditure incurred duringconstruction period is capitalised as part of the indirect construction cost to the extent to which theexpenditure is indirectly related to construction or is incidental thereto. Income earned during constructionperiod is deducted from the total of the indirect expenditure.

(e) Depreciation

i. On Plant & Machinery and Building, depreciation is provided on straight-line method at the ratesbased on their estimated useful lives, which corresponds to the rates prescribed in Schedule - XIV tothe Companies Act, 1956.

ii. On fixed assets other than those covered under (i) above, depreciation is provided on written downvalue method at the rates based on their estimated useful lives, which corresponds to the ratesprescribed in Schedule - XIV to the Companies Act, 1956.

iii. Depreciation on Project equipments (net of their expected realizable value at the completion of theproject) has been provided as per straight line method over the period upto the revised expected dateof completion of the project i.e. March 31, 2010.

(f) Leases

Where the Company is the lessee

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of theleased item, are classified as operating leases. Operating lease payments are recognized as an expensein the Schedule of Project and pre-operative expenses (pending allocation) on a straight-line basis overthe lease term.

104


(g) Inventories

Inventories comprising of stores and spares are valued at lower of cost and net realizable value. Cost isdetermined on a weighted average basis.

(h) Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Companyand the revenue can be reliably measured.

Interest

Revenue is recognised on a time proportion basis taking into account the amount outstanding and therate applicable.

Sale of Scrap

Revenue in respect of sale of scrap is recognized when the significant risks and rewards of ownership ofthe goods have passed to the buyer.

(i) Miscellaneous Expenditure to the extent not written off or adjusted

Preliminary/share issue expenses will be amortized / adjusted in the manner to be decided by the Boardof Directors starting from the year in which the Company commences its commercial operations.

(j) Foreign currency translation

Foreign currency transactions

(i) Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currencyamount the exchange rate between the reporting currency and the foreign currency at the date of thetransaction.

(ii) Conversion

Foreign currency monetary items are reported using the closing rate. Non-monetary items which arecarried in terms of historical cost denominated in a foreign currency, are reported using the exchangerate at the date of the transaction.

(iii) Exchange Differences

Exchange differences arising on the settlement of monetary items or on restatement of monetaryitems at rates different from those at which they were initially recorded during the year, or reported inprevious financial statements, are recognised as income or as expenses in the year in which theyarise.

(k) Retirement and other employee benefits

(i) Retirement benefits in the form of Provident Fund and Superannuation Schemes are definedcontribution schemes and the contributions are charged to the Expenses / Project & PreoperativeExpenses (pending allocation) in the year when the contributions to the respective funds are due.There are no obligations other than the contribution payable to the respective fund/trust.

(ii) Gratuity liability is defined benefit obligation and is provided for on the basis of actuarial valuation onprojected unit credit method made at the end of each financial year. The amount paid/ payable inrespect of present value of liability for past services is charged to the Expenses / Project & PreoperativeExpenses (pending allocation).

(iii) Short term compensated absences are provided for based on estimates. Long term compensatedabsences are provided for based on actuarial valuation. The actuarial valuation is done as per projectedunit 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.

(v) Actuarial gains/losses are immediately taken to profit and loss account and are not deferred.

(l) Provisions

A provision is recognised when an enterprise has a present obligation as a result of past event and it isprobable that an outflow of resources will be required to settle the obligation, in respect of which a reliable

105

estimate can be made. Provisions are not discounted to its present value and are determined based onbest estimate required to settle the obligation at the balance sheet date. These are reviewed at eachbalance sheet date and adjusted to reflect the current best estimates.

(m) Income taxes

Current income tax on interest income is measured at the amount expected to be paid to the tax authoritiesin accordance with the Income Tax Act, 1961 enacted in India and is netted from such income. Fringebenefit tax is measured at the amount expected to be paid to the tax authorities in accordance with theIncome Tax Act, 1961. Deferred income taxes reflect the impact of current year timing differences betweentaxable 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 thebalance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certaintythat sufficient future taxable income will be available against which such deferred tax assets can berealised. In situations where the Company has unabsorbed depreciation or carry forward tax losses, alldeferred tax assets are recognised only if there is virtual certainty supported by convincing evidence thatthey can be realised against future taxable profits.

(n) Cash and Cash equivalents

Cash and cash equivalents comprise cash at bank and in hand and short-term investments with an originalmaturity of three months or less.

3. As the Company has not commenced commercial operations as of March 31, 2009, no Profit and Loss Accounthas been prepared, but in lieu thereof, a statement of Project and Pre-operative expenses (pending allocation)has been prepared as per Schedule 6 and expenses incurred upto the year ended March 31, 2009 in relationto the construction of the project, have been included under the said Schedule, to be allocated appropriatelyat the time of commencement of commercial operations. Necessary details as required under Part II of ScheduleVI of the Companies Act, 1956 have been disclosed under Schedule 6 in respect of the said expenditure.

4. The Company has signed a Quadripartite Agreement on 5th November, 2005 with Rajasthan Spinning &Weaving Mills Ltd (RSWM) (the holder of Implementation rights /promoter), Malana Power Company Limitedand Government of Himachal Pradesh for transfer of the project from RSWM to the Company to give effect toImplementation Agreement signed between RSWM and Government of Himachal Pradesh.

5. As per the Shareholders' Agreement between International Finance Corporation (IFC), Washington and MalanaPower Company Limited (the holding company) and revised financial plan of IFC, IFC has agreed to subscribeto 12% of the total share capital of the Company. However, as at the year end, Malana Power CompanyLimited has infused their share of the agreed capital contribution of 88%, while out of the agreed equityinfusion from IFC of Rs 672,000 thousand, contribution of Rs. 374,000 thousand from IFC is pending as onMarch 31, 2009.

6. (a) Land includes Rs. 5,677 thousand paid to Deputy Commissioner, Kullu towards transfer of government'sagriculture land measuring 10.76 hectare for which the execution of lease deed is pending.

(b) Land includes Rs. 298,070 thousand paid for 12.38 hectares land, out of which mutation for execution of9.75 hectares in favour of Company has been completed. Apart from notified land, 2.63 hectares land hasbeen acquired directly from the villagers and the mutation is in progress.

(c) Rs. 542,651 thousand paid to Divisional Forest Officer, Kullu on account of use of forest land measuring111.475 hectares represents amount paid towards loss of environment value, compulsory afforestation,cost of tree felling and Catchment Area Treatment Plan.

7. Related Party Disclosure

(a) Name of related parties

Ultimate Holding Company Bhilwara Energy Limited

Holding Company Malana Power Company Limited

Key Management Personnel Mr. R. P. Goel, Whole Time Director.

Fellow Subsidiary Indo Canadian Consultancy Services Limited,Green Ventures Private Limited

106


(b) Transaction with related parties (Rs. ‘000)

Nature of Transaction Ultimate Holding Holding Company Key Management Fellow Subsidiary

Company Personnel

2009 2008 2009 2008 2009 2008 2009 2008

Transactions during the year

Remuneration paid to Mr. R. P. Goel 2,678 1,941

Consultancy charges paid to Indo

Canadian Consultancy Services Limited 29,022 52,795

Reimbursement of expenses incurred by

Malana Power Company Limited on

behalf of the company 10,061 13,685

Reimbursement of expenses incurred on

behalf of Malana Power Company Limited 3,125 2,939


Indo Canadian Consultancy Services

Limited on behalf of the company 2,324 1,027

Reimbursement of expenses incurred on

behalf of Indo Canadian Consultancy

Services Limited 382 110

Share application money received from

Malana Power Company Limited (net) 1,391,056 –

Shares Capital allotted to

Malana Power Company Limited 763,056 1,628,000

Fixed Assets transferred to

Bhilwara Energy Limited – 525


Bhilwara Energy Limited on behalf

of the Company 1,097 652

Reimbursement of expenses incurred

on behalf of Bhilwara Energy Limited 1,199 1,177

Unsecured Loan taken from

Malana Power Company Limited 3,356,741 2,008,625

Unsecured Loan repaid to

Malana Power Company Limited 2,212,132 1,732,555

Interest Expense on Unsecured loan taken

from Malana Power Company Limited 199,923 5,163

Sale of fixed assets to

AD Hydro Power Limited – 2,030

Balances outstanding as at the year end

Balances Receivable :

Bhilwara Energy Limited 626 525

Balances Payable:

Indo Canadian Consultancy

Services Limited 3,392 13,195

Unsecured Loan taken from

Malana Power Company Limited 1,560,679 416,070

Interest amount on Unsecured Loan from

Malana Power Company Limited 199,923 5,163

Guarantees given by the

Malana Power Company Limited on

behalf of the Company 450,000 450,000

Note : In the opinion of the management, the transactions reported herein are on arms length basis.

107

8. Contingent Liabilities (Not provided for)(Rs.'000)

Particulars 2009 2008

Bank guarantee outstanding 2,000 2,000

Claims against the Company not acknowledged as debts* 324,764 –

* The Company believes that these claims are not probable to be decided against the Company and therefore,no provision for the above is required.

9. Capital Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (Net ofadvances) Rs. 603,416 thousand (Previous Year Rs. 2,665,897 thousand).

10. The Company provides depreciation on the project equipment as per straight line method over the period uptothe expected date of completion of the project. Since the expected date of completion of project has beenextended from March 31, 2009 to March 31, 2010, the depreciation of the project equipments is provided overthe revised expected date of completion. Accordingly, the depreciation charge on project equipments in thecurrent year is lower by Rs. 291,385 thousand.

11. On account of various reasons beyond the control of the Company (like significant geological problemsexperienced in tunneling work and others), the project has undergone significant cost over-runs and the totalestimated cost of the project has gone up from Rs. 8,956,000 thousand to Rs. 20,212,820 thousand. In viewof the management, such increase in estimated project cost has not affected the going concern assumption ofthe Company. Further, based on financial projections, the management believes that profits are expected toaccrue once the project commences commercial operation. Accordingly, no adjustment is required to thecarrying amount of fixed assets on account of impairment.

12. Unhedged foreign currency exposure at the balance sheet date


Creditor for engineering fees Rs. 16,712,000 (CAD 400,000@ closing rate of 1CAD = Rs. 41.78) Nil

Rs. 1,240,380 (EURO 18,000@ closing rate of 1EURO = Rs. 68.91) Nil

13. Statutory Supplementary Information

(Rs.'000)

2009 2008

(a) Directors Remuneration


Allowances 1,076 758

2,678 1,941

Notes:a) As the future liability for the gratuity and leave encashment is provided on actuarial basis for the company

as a whole, the amount pertaining to the directors is not ascertainable and therefore, not included.b) Perquisites have been considered as per taxable value as per Income Tax Act, 1961c) In absence of profits, remuneration to director is paid within the limits prescribed in Schedule XIII of the

Companies Act, 1956.

(b) Expenditure in foreign currency (net of TDS) (Rs.'000)

2009 2008

Engineering Fees and Consultancy charge 42,321 54,508

Legal and Professional charges – 662


Financial charges – 395

42,703 57,750

108


(c) Value of imports calculated on CIF basis (Rs.'000)

2009 2008

Capital Goods – 36,605

Project Equipments 122,382 78,634

122,382 115,239

14. Additional information pursuant to the provisions of paragraphs 3, 4C and 4D of Part II of Schedule VI to theCompanies Act, 1956

a) Imported and indigenous stores and spare parts consumed:

Percentage of total consumption Value (Rs.'000)

Stores & Spares 2009 2008 2009 2008

Imported 19.01 24.84 3,552 5,093

Indigenously obtained 80.99 75.16 15,131 15,406

100.00 100.00 18,683 20,499

15. The Government of India has promulgated an Act namely The Micro, Small and Medium EnterprisesDevelopment Act, 2006 which came into force with effect from October 2, 2006. As per the Act, the Companyis required to identify the Micro, Small and Medium suppliers and pay them interest on overdue beyond thespecified period irrespective of the terms agreed with the suppliers. As per the information available with theCompany, none of the creditors fall under the definition of 'supplier' as per the Section 2(n) of the Act. In viewof the above, the prescribed disclosures under Section 22 of the Act are not required to be made.

16. Gratuity -Defined benefit plan (AS 15- Revised)

The Company has a defined benefit gratuity plan. Gratuity (being administered by a Trust) is computed as 15days salary, for every completed year of service or part thereof in excess of 6 months and is payable onretirement / termination / resignation. The benefit vests on the employee completing 5 years of service. TheGratuity plan for the Company is a defined benefit scheme where annual contributions are deposited to aGratuity 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 gratuityasset/ liability in the books of accounts on the basis of actuarial valuation as per the Projected unit creditmethod.

The following tables summarise the components of net benefit expense recognised in the profit and lossaccount and the funded status and amounts recognised in the balance sheet for the respective plans:

Schedule of Project and pre-operative expenses (pending allotment)



March 31, 2009 March 31, 2008(Rs.'000) (Rs.'000)

Current Service Cost 1,091 934



Net actuarial (gain)/ loss recognised in the period (119) 912

Past service cost – –

Net benefit expense 1,099 1,932


109

Balance Sheet



(Rs.'000) (Rs.'000)



(1,138) (2,000)

Less: Unrecognised past service cost –




(Rs.'000) (Rs.'000)





Actuarial (gains)/ losses on obligation 90 992


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


(Rs.'000) (Rs.'000)

Opening fair value of plan assets 1,298 291


Contributions by employer 1,962 1,001




The Defined benefit obligation amounting to Rs. 4,530 thousand is funded by assets amounting to Rs. 3,393thousand and the Company expects to contribute Rs 1,442 thousand during the year 2009-10.

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 thatdate, applicable to the period over which the obligation is to be settled. There has been significant change inexpected rate of return on assets due to the improved stock market scenario.

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


March 31, 2009 March 31, 2008(%) (%)





110


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

Amounts for the current and previous four years are as follows*: (Rs. '000)

2008-09 2007-08


Plan assets 3,393 1,298

Surplus / (deficit) (1,138) (2,000)

Experience adjustments on plan liabilities 112 –

Experience adjustments on plan assets 29 –

* As the Company has adopted AS -15 (revised) in the year 2007-08, the above disclosures as requiredunder Para 120 (n) have been made prospectively from the date the Company has first adopted the standard.

Defined Contribution Plan (Rs. '000)

2008-09 2007-08

Contribution to Provident Fund 5,768 4,646

Contribution to Superannuation Fund 1,249 1,072

7,017 5,718

17. Leases


Office premises, vehicles, equipments, guest houses and godowns are obtained on cancellable operatingleases. All these leases have a lease terms varying between 3 to 5 years. There are no restrictions imposedby lease arrangements. There are no subleases.

(Rs. '000)

Particulars For the For theyear ended year ended

March 31, 2009 March 31,2008


18. In accordance with Accounting Standard 22 'Accounting for Taxes on Income', issued by the Institute ofChartered Accountants of India, in view of the fact that the Company is under the stage of setting up the hydropower project, deferred tax assets have not been accounted for in the books since it is not virtually certainwhether the Company will be able to take advantage of such assets.

19. Segment Information

The Company's activities during the year involved setting up of the Hydro power project (Refer Note 1).Considering the nature of Company's business and operations, there are no separate reportable segments(business and/ or geographical) in accordance with the requirements of Accounting Standard 17 'SegmentReporting' issued by the Institute of Chartered Accountants of India (ICAI) and hence, there are no additionaldisclosures to be provided other than those already provided in the financial statements.

20. Previous year figures were audited by another firm of Chartered Accountants. Previous year's figures havebeen regrouped where necessary to confirm to this year's classification.










111










(Rs. '000)


A. Cash flows from investing activities

Acquisition of fixed assets (3,464,426) (4,181,582)

Proceeds from sale of fixed assets – 721

Fixed deposit redeemed 10,993 881,518

Interest received 9,050 17,704

Net cash (used in) investing activities (3,444,383) (3,281,639)

B. Cash flows from financing activities

Proceeds from issuance of share capital 763,056 1,576,100

Share application money received 628,000 (4,198)

Proceeds from long term borrowings 2,834,609 2,014,244

Interest paid (749,508) (421,079)

Net cash from financing activities 3,476,157 3,165,067

Net increase / (decrease) in cash and cash equivalents (A+B) 31,774 (116,572)

Cash and cash equivalents at the beginning of the year 35,027 151,599

Cash and cash equivalents at the end of the year 66,801 35,027

Components of cash and cash equivalents

Cash on hand 2,708 2,586

With scheduled banks - on current accounts 64,093 32,441

66,801 35,027


112



Registration No. 2 6 1 0 8 State Code 0 6


Date Month Year



Bonus Issue – Private Placement 7 6 3 0 5 6


Total Liabilities 1 4 9 2 5 5 3 8 Total Assets 1 4 9 2 5 5 3 8

SOURCES OF FUNDS

Paid-up Capital 4 6 0 0 0 0 0 Reserves and Surplus –

Share Application Money 6 2 8 0 0 0 Deferred Tax Liability –

Secured Loans 7 1 4 0 0 0 0 Unsecured Loans 1 5 6 0 6 7 9


Net Fixed Assets 3 4 1 8 1 7 4 Investments –(Incl. P.O.P. exps)

Net Current Assets ( 6 7 0 8 1 5 ) Misc. Expenditure 2 0 0 1 8

Accumulated Losses –


Turnover – Total Expenditure –

Profit/Loss before Tax – Profit/Loss after tax –

Earning Per Share (in Rs.) – Dividend Per Share (in Rs.) –










FINANCIAL RESULT'SOF

INDO CANADIAN CONSULTANCYSERVICES LTD.

114


DIRECTORS' REPORT

To The Members

The Directors have pleasure in presenting the 14thAnnual Report together with the Audited statements ofAccounts for the year ended 31st March, 2009.

Financial Performance(Rs. in lacs)

Particulars Current PreviousYear Year

Gross Revenue 1321.89 1232.89

Expenditure 1197.44 870.33

Profit beforeDepreciation & Tax 124.45 362.56

Depreciation 43.55 31.26

Profit/(Loss) before Tax 80.90 331.30

Deferred Tax Assets 3.85 (22.30)

Profit/(Loss) After Tax 22.98 229.71

Add/(Less): Profit/(Loss)brought forward fromprevious year 578.93 349.21

Profit/(Loss) carried forward 601.91 578.92

Dividend

The Directors do not recommend any dividend for theyear 2008-09.

Review of Performance

During the financial year, the Company designedseveral projects and provided its technical consultancyservices to hydro projects ranging in size from 5MW toabout 1000 MW in India, Sri Lanka and Nepal. TheCompany carried out site identification, preparation offeasibility study, detailed design and project reports andengineering of hydro projects in complex and variedgeological, topographic climatic and hydrologicalconditions in association with its Joint Venture partner,RSW Inc. The company has gained specializedknowledge and experience in the field of engineeringof hydro projects of small, medium and large capacity,transmission line and sub-station projects upto 765 KVand thermal projects upto 100 MW capacity. TheCompany has been providing consultancy to severalclients for hydro projects implementation includingservices for investigations, techno-economicevaluations, hydraulic design and drawings technicalspecification, construction supervision, systemengineering. Till date, ICCS has completed detaileddesign of projects with installed capacity of about 150MW and these projects have been commissioned. DPRand detailed engineering of 3500 MW are underprogress. The Company has bagged several contractsduring the year financial year 2008-09 includingOmkareshwar project in Madhya Pradesh and tender

stage engineering for Kanthalapali Project (about 450MW), Rupsiabagar Khasiabara HEP (261 MW) and SainjHEP (100 MW). The company derives the strength fromthe experience staff having core knowledge inspecialized areas of qualification and experts from RSW,Inc. bring in their years of experience of several projectsin different areas, magnitude and difficult conditions.During the year, Company has completed the work ofpreparation of DPR for Nyamjang Chhu HEP inArunachal Pradesh for Bhilwara Energy Limited. Basedon investigations and optimization studies carried outby the Company, the project capacity has beenincreased from 290 MW to 900 MW.

Infrastructure Development

It has been a steady growth for the Company over theyears in terms of expanding its current assets ofComputers, peripherals and software. The Companypossesses the state-of-the-art design and projectmanagement software. The Company is equipped withlatest software in Civil, Electrical and MechanicalEngineering which comprises NISA Finite ElementPackage for analysis, Primevara Software for ProjectManagement, Staad Software for structural analysis,ETAP Software for electrical system analysis and AutoCad Civil 2009 for drafting, FLAC2D for rock supportdesign and Hammer for water hammer analysis.

Human Resource Development

The Company from its inception has given specialattention to human resources development and totalquality management at different levels. Today, theCompany is a strong force of about 100 Engineers andtechnicians. Efforts are being aimed towards impartingtechnical skills and improve productivity of the Company.During the year, employees getting salary exceedingthe limit prescribed under Section 217(2A) of theCompanies Act, 1956 are detailed in Annexure –I.

Directors’ Responsibility Statement

Your Directors would like to inform members that auditedaccounts containing the Financial Statements for theyear 2008-09 are in full conformity with the requirementsof the Act and they believe that the financial statementsreflect fairly the form and substance of transactionscarried out during the year and they fully present theCompany’s financial condition and results of operations.These financial statements are audited by the StatutoryAuditors, M/s. BGJC & Associates, CharteredAccountants.

Your Directors further confirm that pursuant to Section217 (2AA):

(i) in the preparation of the annual accounts, theapplicable accounting standards have beenfollowed along with proper explanation relating tomaterial departures;

115

(ii) appropriate accounting policies have been selectedand applied consistently and they have madejudgements and estimates that are reasonable andprudent so as to give a true and fair view of thestate of affairs of the Company as on 31st March,2009 and of the profit of the Company for the yearended on that date;

(iii) proper and sufficient care has been taken for themaintenance of adequate accounting records inaccordance with the provisions of this Act forsafeguarding the assets of the Company and forpreventing and detecting fraud and otherirregularities;

(iv) The Annual Accounts have been prepared on agoing concern basis.

Public Deposits

Your company has not accepted any fixed deposits fromthe public during the period under Report.

Directors

Mr. L. N. Jhunjhunwala, Director and Mr. Emile Marquis,Director retire from the Board by rotation at the ensuingAnnual General Meeting of the Company and beingeligible, offer themselves for re-appointment.

Auditors

The term of appointment of M/s BGJC & Associates,Chartered Accountants, Statutory Auditors of theCompany, expires on the conclusion of the forthcomingAnnual General Meeting and being eligible, they arerecommended for re-appointment.

Annexure - 1

Information pursuant to Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars ofEmployees) Rules, 1975 and forming part of Directors' Report for the year ended 31st March, 2009 are givenhereunder:

I. Persons employed for the full year

Name Designation Remuneration Qualification Experience Age Commencement(Rs. in Lacs) of Employment

Mr. U.C. Dubey President – Elect. 29.91 B.E (Elect) 38 60 1998

Mr. Rakesh Mahajan President – Civil 32.93 B.E (Civil), 29 49 1998M Tech (Civil),MBA

Energy Conservation, Technology Absorption andForeign Exchange

The information required pursuant to the Companies(Disclosure of particulars in the report of the Board ofDirectors) Rules, 1988 pertaining to Energyconservation, Technology Absorption are not applicable.However, during the financial year 2008-09, theCompany has not incurred any expenditure in ForeignExchange during the financial year 2008-09.

Acknowledgements

The Directors wish to place on record their appreciationfor continued co-operation extended by variousdepartments of the Central and State Governments,Financial Institutions and the Bankers. The Directorsalso express their appreciation to employees for theirdedicated services rendered to the Company.

For and on behalf of the Board of DirectorsINDO CANADIAN CONSULTANCY SERVICES LTD.

RAVI JHUNJHUNWALAChairman

Place: NoidaDate: August 13, 2009

116


AUDITORS' REPORT

AUDITORS' REPORT TO THE MEMBERS OF INDOCANADIAN CONSULTANCY SERVICES LTD.

We have audited the attached Balance Sheet of INDOCANADIAN CONSULTANCY SERVICES LTD as atMarch 31, 2009 and the Profit & Loss Account of theCompany for the year ended on that date annexedthere to.

These financial statements are the responsibility of thecompany's management. Our responsibility is to expressan opinion on these financial statements based on ouraudit.

We have conducted our audit in accordance withauditing standards generally accepted in India. Thesestandards require that we plan and perform the audit toobtain reasonable assurance about whether the financialstatements are free of material misstatement. An auditincludes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements.An audit also includes assessing the accountingprinciples used and significant estimates made bymanagement, as well as evaluating the overall financialstatement presentation. We believe that our auditprovides 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 ofsection 227 (4A) of the Companies Act, 1956, we givein the annexure hereto a statement on the mattersspecified in paragraph 4 & 5 of the said Order as under.

Further to our comments in the annexure referred to inparagraph 1 above, we report that:

a) We have obtained all the information andexplanations, which to the best of our knowledgeand belief were necessary for the purpose of ouraudit.

b) In our opinion, the Company has kept proper booksof accounts, as required by law so far, as appearsfrom our examination of the books.

c) The Balance Sheet and the Profit & Loss Accountsreferred to in this report are in agreement with theBooks of Accounts of the company.

d) In our opinion, the Balance Sheet and Profit & LossAccount dealt with the report are in the compliancewith the Accounting Standard referred to in Section211 (3C) of the Companies Act 1956, in so far asthey apply to the company.

e) On the basis of the written representations receivedfrom the directors, and taken on record by theBoard of Directors, we report that none of thedirectors is disqualified as on 31st March, 2009from being appointed as a Director in terms ofclause (g) of sub-section (1) of section 274 of theCompanies Act, 1956.

f) In our opinion and to the best of our informationand according to the explanations given to us, thesaid Balance Sheet and Profit and Loss Accountread together with the significant AccountingPolicies and other notes there on give theinformation required by the Companies Act 1956,in the manner so required and give a true and fairview:

I. In the case of Balance Sheet, of the state ofaffairs of the Company as at March 31, 2009and

II. In the case of Profit & Loss Account, of theprofit of the Company for the year ended onthat date.

For BGJC & ASSOCIATESChartered Accountants

DARSHAN CHHAJERPartnerMembership No. : 88308


117

ANNEXURE TO AUDITORS' REPORT

ANNEXURE REFERRED TO IN PARAGRAPH 1 OFTHE AUDITORS' REPORT TO THE MEMBERS OFINDO CANADIAN CONSULTANCY SERVICES LTDON THE ACCOUNTS FOR THE YEAR ENDED 31STMARCH 2009.

i) a) The company has maintained proper recordsshowing full particulars, includingquantitative details and situation of fixedassets.

b) The fixed assets have been physicallyverified by the management during the year.

c) During the year, in our opinion and accordingto the information and explanations given tous, we are of the opinion that a substantialpart of the fixed assets has not beendisposed off by the company.

ii) a) The Company has not taken any loansecured or unsecured, during the year from,companies, and firms or other parties listedin the register(s) maintained under section301 of the Companies Act 1956.

b) The company has not granted any loan tocompanies, firms or other parties coveredin the register maintained under section 301of the companies Act, 1956.

iii) In our opinion and according to the informationand explanation given to us, there are adequateinternal control procedures commensurate with thesize of the company and the nature of its businesswith regard to purchase of fixed assets and thesale of services.

iv) a) According to the information and explanationgiven to us, we are of the opinion that thetransaction made in pursuance of contractsor arrangement entered in the registermaintained under section 301 of thecompanies act, 1956 have been so entered.

b) In our opinion and according to theinformation and explanations given to useach of these transactions have been madeat prices which are reasonable having regardto the prevailing market price at the relevanttime.

v) In our opinion and according to the informationand explanation given to us, the company has notaccepted any deposits from public, hence thisclause is not applicable.

vi) In our opinion, the company has no internal auditsystem commensurate with the size and natureof its business.

vii) We were informed that the company is not requiredto maintain any cost record under section209(1)(d) of the companies act, 1956.

viii) a) The company is regular in depositing withappropriate authorities undisputed statutorydues including provident fund, Investoreducation protection fund, employees' stateinsurance, income tax , sales tax, wealth tax,custom duty, excise duty, cess and othermaterial statutory dues applicable to it.According to the information and explanationgiven to us, no undisputed amounts payablein respect of income tax, wealth tax, salestax, custom duty, excise duty and cess werein arrears as at 31.03.2009 for a period ofmore than six months from the date theybecame payable.

b) According to the records of the company andthe information and explanations given to us,no disputed amount payable in respect ofsale tax, income tax, customs duty, wealthtax, excise duty and cess as at 31st March,2009 which were outstanding for a period ofmore than six months from the date theybecame payable.

ix) The Company does not have any accumulatedlosses at the end of the financial year and hencethe related clause is not applicable on theCompany.

x) According to the information and explanationsgiven to us, the company has not defaulted inrepayment of dues to financial institution and bank.

xi) According to the information and explanationsgiven to us, the company has not granted loansand advances on the basis of security by way ofpledge of shares, debentures and other securities.

xii) In our opinion, the company is not a chit fund or anidhi mutual benefit fund /society. Therefore, theprovisions of clause 4(xiii) of the Companies(Auditor's Report) Order, 2003 are not applicableto the company.

xiii) According to the information and explanation givento us, the company is not dealing or trading inshares, securities, debentures and otherinvestments.

xiv) According to the information and explanationsgiven to us, the company has not given guaranteesfor loans taken by others from banks or financialinstitutions.

xv) According to the information and explanationsgiven to us, the company has not taken any loanand hence the related clause is not applicable onthe Company.

118


xvi) According to the information and explanationsgiven to us and on an overall examination of thebalance sheet of the company, we report that theno funds raised on short-term basis have beenused for long term investment. No long-term fundshave been used to finance short-term assetsexcept permanent working capital.

xvii) According to the information and explanationsgiven to us, the company has not madepreferential allotment of shares to parties andcompanies covered in the register maintainedunder section 301 of the act.

xviii) According to the information and explanationsgiven to us, during the period covered by our auditreport, the company has not issued debentures.

xix) According to the information and explanationsgiven to us, during the period covered by our auditreport, no public issue has been made by thecompany.

xx) According to the information and explanationsgiven to us, no fraud on or by the company hasbeen noticed or reported during the course of ouraudit.


DARSHAN CHHAJERPartnerMembership No. : 88308


119

(Rs. '000)


SOURCE OF FUNDS

Shareholder's Funds

SHARE CAPITAL 1 3,533 3,533

Reserves & Surplus

Profit and Loss Account 2 61,789 59,491

65,322 63,024


Fixed Assets

Gross Block 3 25,495 21,416

Less : Depreciation 15,106 10,892

Net Block 10,389 10,524

Current Assets, Loans & Advances 4

Sundry Debtors 79,967 52,138

Cash & Bank Balance 11,230 21,142

Other Current Assets 17,801 10,596

Loans & Advances 9,366 5,246

118,364 89,122

Less: Current Liabilities & Provisions 5 67,259 40,835

Net Current Assets 51,105 48,287

Deferred Tax Assets 3,828 4,213

65,322 63,024

Significant Accounting Policies & Notes to Accounts 9

Schedules 1 to 8 form an integral part of the Balance Sheet.


As per our report of even date attached


Darshan ChhajerPartner



For Indo Canadian Consultancy Services Ltd.

Ravi JhunjhunwalaDirector

B. P. SinghDirector

120


(Rs. '000)

Schedules Year Ended Year Ended31.03.2009 31.03.2008

INCOME

Professional Charges 131,757 123,062

Other Income 6 432 227

132,189 123,289

EXPENDITURE

Personnel Expenses 7 79,583 55,953

Administrative & other expenses 8 40,161 31,080

119,744 87,033

PROFIT/(LOSS) BEFORE DEPRECIATION 12,445 36,256

DEPRECIATION 4,355 3,125

PROFIT/(LOSS) AFTER DEPRECIATION 8,090 33,130

DEFERRED TAX ASSETS 385 (2,230)

PROVISION FOR TAXATION 4,450 11,261

FRINGE BENEFIT TAX 956 659

WEALTH TAX 1 10

ADJUSTMENT FOR EMPLOYEE BENEFITSPROVISION (NET OF TAX RS.2,36,248) – 459

PROFIT/(LOSS) AFTER TAX 2,298 22,972

PROFIT/(LOSS) BROUGHT FORWARD 57,893 34,921

PROFIT/(LOSS) CARRIED FORWARD 60,191 57,893

Significant Accounting Policies & Notes to Accounts 9

Schedules 1 to 8 form an integralpart of the Balance Sheet.

PROFIT & LOSS ACCOUNT FOR THE PERIOD ENDED 31st MARCH, 2009

As per our report of even date attached







B. P. SinghDirector

121



As at As at31.03.2009 31.03.2008

Authorised

10,00,000 Equity shares of Rs.10 each 10,000 10,000

Issued, Subscribed and Paid up

3,53,300 (Previous year 3,53,300) 3,533 3,533Equity shares of Rs.10 each fully paid-up

3,533 3,533

* Of the above 1,80,200 Equity Shares are held by Bhilwara Energy Limited, the Holding Company.

SCHEDULE 2 : RESERVES AND SURPLUS

Share Premium 1,598 1,598

Profit & Loss Account 60,191 57,893

61,789 59,491

SCHEDULE 3 : FIXED ASSETS

Rs. in '000GROSS BLOCK DEPRECIATION NET BLOCK

Particulars As at Addi. Dur. Dedn. Dur. As at Upto Addi.Dur. Dedn. Dur. Upto As At As At

01.04.08 the Year the Year 31.03.09 01.04.08 the Year the Year 31.03.09 31.03.09 31.03.08

Tangible Assets

Furniture & Fixtures 871 (17) 80 774 680 34 57 657 117 191

Office Equipments 1,302 173 – 1,475 344 177 – 521 954 958

Computers & Computer

Peripherals 8,062 1,673 50 9,685 5,593 1,396 45 6,944 2,741 2,469

Motor Vehicles 3,724 – 52 3,672 1,610 545 40 2,115 1,557 2,114

Electrical Equipments 788 – – 788 332 68 – 400 388 456

Project Equipments 53 – – 53 35 2 – 37 16 18

Total Tangible Assets 14,800 1,829 182 16,447 8,594 2,222 142 10,674 5,773 6,206

Intangible Assets

Software 6,616 2,432 – 9,048 2,298 2,133 – 4,431 4,617 4,318

Total Intangible Assets 6,616 2,432 – 9,048 2,298 2,133 – 4,431 4,617 4,318

Total 21,416 4,261 182 25,495 10,892 4,355 142 15,106 10,390 10,524

Previous Year 15,218 6,757 559 21,416 8,182 3,126 415 10,892 10,524 7,036

122


SCHEDULE 4 : CURRENT ASSETS, LOANS & ADVANCES

(Rs. '000)

As at As at31.03.2009 31.03.2008

Sundry Debtors

Sundry Debtors (Unsecured , considered good by the Management)

– Outstanding for more than Six Months 24,372 4,580

– Others 55,595 47,558

79,967 52,138

Cash & Bank Balances

Cash in hand (As certified by the Management) 41 22

Fixed Deposits ( Pledged as a security to Clients ) 3,450 2,879

Balance with Scheduled Banks in Current Account 7,739 18,241

11,230 21,142

Loans & Advances

Advances recoverable in cash or in kind for value to be received(Unsecured considered good by Management) 9,366 5,246

Other Current Assets

Advance Tax & TDS (Net of Provisions) 17,801 10,596

27,167 15,842

TOTAL 118,364 89,122

SCHEDULE - 5 : CURRENT LIABILITIES & PROVISIONS

Current Liabilities

Sundry Creditors

– Micro small and medium Enterprises * – –

– Others 30,825 12,871

Other Liabilities 8,905 10,240

Advance from Customers 2,432 2,075

Provisions

– Retirement benefits & Leave Encashment 4,011 4,265

– Continuity Liability Bonus 21,074 11,257

– Wealth Tax 1 9

– Fringe Benefits Tax (Net of Advances) 12 118

TOTAL 67,260 40,835

* Supplier / Vendors have not provided their status under Micro, Small and Medium Enterprises DevelopmentAct, 2006 and hence disclosure relating to amount unpaid as at year end together with interest paid / payableunder this Act have not been given.

SCHEDULE 6 : OTHER INCOME

Interest received {TDS Rs. 27,291 (Previous year Rs.30,611)} 374 225

Tender Fee Received 10 –

Misc. Income 48 2

432 227

123

SCHEDULE 7 : PERSONNEL EXPENSES

(Rs. '000)

As at As at31.03.2009 31.03.2008

Salaries, wages and other expenses 74,799 50,858

Contiribution to provident and other funds 3,677 4,097

Workmen and staff welfare expenses 1,107 998

79,583 55,953

SCHEDULE 8 : ADMINISTRATIVE & OTHER EXPENSES

Rent 17,554 11,153

Repair & Maintenance 950 658

Rates & Taxes 4 2

Insurance 196 110

Legal and Professional 5,921 2,262

Travelling Expenses 3,973 3,128

Electricity 3,460 2,701

Bad Debts 1,575 3,897

Repair & Maintenance 1,698 2,428

Telephone 850 1,072

Establishment Expenses 868 654

Project Expenses 1,038 500

Printing & Stationery 882 668

Advertisement Expenses – 350

Fee and Subscription 439 173

Audit Fees & Out of pocket expenses 83 52

Gift & Presentation 203 288

Interest 5 362

Bank Guarantee Charges 2 239

Bank Charges 27 61

Miscellaneous Expenses 433 323

40,161 31,081

124


SCHEDULE 9: SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNT

1) Notes on Business Activities

The Company is a consultancy firm registered on 9th Jan, 1995. The company is mainly engaged in providingall kinds of consultancy including comprehensive Engineering Consultancy for hydro-electric, thermal andnon-conventional energy power projects.

2) Significant Accounting Policies

a) Basis of Preparation

The financial statements are prepared and presented under the historical cost convention, in accordancewith the Indian Generally Accepted Accounting Principle (“GAAP”), comply with the accounting standardsissued by the Institute of Chartered Accountants of India (“ICAI”) and the presentation requirements ofthe Companies Act, 1956.

All income and expenditure having a material bearing on the financial statements are recognized on anaccrual basis except in case of Tender fee which is booked on receipt basis.

b) Use of Estimates

The preparation of financial statements is in conformity under the GAAP requires management tomake estimates and assumptions that effect the reported amounts of assets and liabilities, disclosureof contingents assets and liabilities at the date of financial statements and the results of operationsduring the reporting period. Actual result could be different from these estimates. Any changes inestimates 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 bereasonably estimated.

c) Revenue Recognition

Revenue comprises income received on account of consultancy fees received for the services renderedon accrual basis, whereas tender fee is recognized on receipt basis.

d) Fixed Assets

Fixed assets are stated at cost of acquisition less accumulated depreciation. The cost included allexpenditure incurred up to the date of installation of the Assets. Depreciation has been provided onWritten 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 ratesare indicative of the estimated useful lives of these assets.

e) Foreign

All transactions denominated in foreign currencies are translated at the rate of exchange on the daythe transaction occurs.

f) Taxation

Income Tax expense comprise current tax i.e. amount of tax for the year determined in accordancewith the Income Tax Act, 1961, Fringe benefit tax and deferred tax charge of credit (reflecting the taxeffects of timing difference between accounting income and taxable income for the year). The deferredtax charge or credit and the corresponding deferred tax liabilities or assets are recognized using thetax 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 canbe realized in future; however, where there is unabsorbed depreciation or carried forward loss undertaxation laws, deferred tax assets are recognized only if there is a virtual certainty of realization of suchassets. Deferred tax assets are reviewed as at each balance sheet date and written down or written-upto reflect the amount that is reasonably/virtually certain (as the case may be) to be realized.

g) Employees Benefits:

Expenses and Liabilities in respect of employees benefits are recorded in accordance with revisedAccounting Standard 15- Employee Benefits(Revised 2005) issued by ICAI.

(a) Provident Fund

The company makes contribution to statutory contribution fund in accordance with EmployeesProvident Fund and Miscellaneous Provision Act, 1952 which is defined contribution plan andcontribution paid or payable is recognized as an expense in the period in which services arerendered by the employee.

125

(b) Gratuity

Gratuity is a post employment benefit and is in the nature of a defined benefit plan. The liabilityrecognized 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 adjustmentfor unrecognized actuarial gains or losses and past service costs. The defined benefit/obligationis calculated at or near the balance sheet date by and independent actuary using the projectedunit credit method.

Actuarial gains and losses arising from past experience and changes in actuarial assumptionsare charges or credited to the profit and loss account in the year to which such gains or lossesrelate.


Liability in respect of leave encashment becoming due or expected after the balance sheet isestimated on the basis of an actuarial valuation performed by an independent actuary usingprojected unit credit method.


The Company makes contribution to superannuation fund which is a post employment benefit inthe nature of a defined contribution plan & contribution paid or payable is recognized as expensesin the period in which services is rendered by the employee.

(e) Other short term benefits


(h) Taxes on Income

(a) Provisions for current taxes are made in accordance with the provisions of applicable tax statutes.

(b) In Accordance with the Accounting standard AS-22 ‘Accounting for Taxes on Income’ issued bythe ICAI, Deferred tax Liability/Assets arising from timing differences between book and incometax profits is accounted for at the current rate of tax to the extent these differences are expectedto crystallize in later years. However, Deferred Tax assets are recognized only if there is areasonable/virtual certainty of realization.

NOTES TO ACCOUNTS

1) Consequent to the adoption of Accounting Standard 15 on Employee Benefits as notified by the Companies(Accounting Standards) Rule, 2006 w.e.f April 1, 2007, the following disclosures have been made as requiredby the standards:

Employee Benefits

Defined Contribution Plan Amount (Rs. in Lacs)

Contribution to Defined Plan, recognized as expenses 2008-09 2007-08for the year are as under

Employer’s Contribution to Provident fund 29.06 20.86

Employer’s Contribution to Superannuation fund 7.89 3.85


The employee’s gratuity fund scheme managed by trust is a defined benefit plan. The present value ofobligation is determined based on actuarial valuation using the projected Unit Credit method, which recognizeseach period of service as giving rise to additional unit of employee benefit entitlement and measures eachunit separately to build up the final obligation. The obligation for Leave encashment is recognized in thesame manner as gratuity. The company is maintaining fund with ICICI prudential.

Profit & Loss (Rs. '000)

PARTICULARS Gratuity Gratuity31.03.09 31.03.08

Current service cost 719.01 392.53

Interest cost on benefit obligation 147.29 116.56

Expected return on plan assets (85.42) 83.76

Net actuarial loss(gain) recognized in the year 315.85 201.09

Net Expense recognized in the Profit & Loss A/c 1096.73 626.41

126


(Rs. 000)


Fair value of plan assets at the end of the period 3250.48 1067.72

Present value of obligations as at the end of the period 3279.50 2104.12

Funded Status (29.02) (1036.40)

Excess of actual over estimated (6.77) 41.49

Net Assets/ ( Liability) recognized in the balance sheet (29.02) (1036.40)



Present value of obligations at the beginning 2104.12 1456.96of the period (01/04/2008)

Interest cost 147.29 116.56


Benefits paid Nil (104.50)

Actuarial (Gain) / Loss on obligation 309.08 242.58

Present value of obligations at the end of the period (31/03/2009) 3179.50 2104.12


PARTICULARS Gratuity LeaveEncashment

Fair value of plan assets at the beginning of the period 1067.72 1046.97

Expected return on the plan assets 85.42 83.76

Contributions 2104.12 –

Benefits paid – (104.50)

Actuarial gain / (loss) on plan assets (6.77) 41.49

Fair value of plan assets as at the end of the period 3250.48 1067.72


a) Economic Assumptions

PARTICULARS Rate (%) Rate (%)31.03.09 31.03.08

a) Discount rate as on 31.03.2009 7.00 8.00


c) Expected Rate of return on plan Assets 8.00 8.00

b) Demographic Assumptions

PARTICULARS 31.03.09 31.03.08

a) Retirement Age 60 Years 60 Years

b) Mortality Table LIC (1994-96) LIC (1994-96)Duly Modified Duly Modified

c) Withdrawals Rate Ages Withdrawals Ages WithdrawalsRate (%) Rate (%)

Upto 30 Years Upto 30 Years3.00% 3.00%

Upto 44 Years Upto 44 Years

2.00% 2.00%

Above 44 Years Above 44 Years1.00% 1.00%

127

Earned Leave liability

Profit & Loss (Rs. 000)

PARTICULARS Earned Leave Earned Leave 31.03.09 31.03.08


Interest cost on benefit obligation 151.26 105.79

Expected return on plan assets – –

Net actuarial loss(gain) recognized in the year (1.68) 44.67

Net Expense recognized in the Profit & Loss A/c 1528.95 838.37

Balance Sheet (Rs. 000)

PARTICULARS Earned Leave Earned Leave31.03.09 31.03.08

Fair value of plan assets at the end of the period – –

Present value of obligations as at the end of the period 3192.01 2160.79

Funded Status (3192.01) (2160.79)

Excess of actual over estimated – –

Net Assets/ (Liability) recognized in the balance sheet (3192.01) (2160.79)



Present value of obligations at the beginning 2160.79 1322.42of the period (01/04/2008)

Interest cost 151.26 105.79


Benefits paid (497.73) –

Actuarial (gain) / Loss on obligation (1.68) 44.67

Present value of obligations at the end of the period (31/03/2009) 3192.01 2160.79



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 – –


a) Economic Assumptions

PARTICULARS Rate (%) Rate (%)31.03.09 31.03.08

a) Discount rate as on 31.03.2009 7.00 8.00


c) Expected Rate of return on plan Assets 0.00 0.00

128


b) Demographic Assumptions

PARTICULARS 31.03.09 31.03.08

a) Retirement Age 60 Years 60 Years

b) Mortality Table LIC (1994-96) LIC (1994-96)Duly Modified Duly Modified

c) Withdrawals Rate Ages Withdrawals Ages WithdrawalsRate (%) Rate (%)

Upto 30 Years Upto 30 Years3.00% 3.00%

Upto 44 Years Upto 44 Years

2.00% 2.00%

Above 44 Years Above 44 Years1.00% 1.00%

2) Stock in trade

NIL

3) Prior Period Items Includes expenses 4,03,749.00

Income (3,400.00)

5) AS-22

A. Deferred Tax resulting from timing difference between Book Profit and Tax Profit is reversible insubsequent years.

B. Following are the major components of Deferred Tax Assets/ (Liabilities).

(Rs. in Lacs)

Deferred Tax Liabilities As at 31.3.2009 As at 31.3.2008

Provision for Depreciation (9.73) (6.99)

Leave Encashment & CLB disallowed 48.01 49.12

Net Deferred Tax Assets 38.28 42.13

(6) RELATED PARTY DISCLOSURES

(a) Enterprises that directly or indirectly through one or more intermediaries, control or are controlled by orare under common control with the reporting enterprise (this includes holding companies, subsidiaries andfellow subsidiaries).

i. AD Hydro Power Limited.

ii. Bhilwara Energy Limited.

iii. BMD Private Limited.

iv. Malana Power Company Limited.

v. HEG Limited

vi. Maral Overseas Limited.

(b) Associates & joint Ventures

NONE

(c) Individuals owning directly or indirectly, an interest in the voting power of the reporting enterprise thatgives them control or significant influence over the enterprise, and relatives of any such individual.

NONE

(d) Key Management Personnel and their relatives

Mr. O. P. Ajmera

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

NONE

Note: Related Party relationship is as identified by the company and relied upon by the Auditors.

129


(Rs. in‘000)

This Year Previous Year

(i) Parties referred to in item (a) above

Services rendered 72,001.59 85,035.71

Loans & Adv.-Amount receivable 40,709.89 32,031.40

(7) There are no unprovided present obligations requiring provision in accordance with the guiding principles asannunciated in AS-29 as it is not probable that an outflow of resources embodying economic benefit will berequired.

(8) Auditor Remuneration Amount (Rs.)

Particulars 31.03.09 31.03.08

Audit Fees 82.73 56.18

(9) M/s. Bhilwara Energy Limited has acquired more than 51% holding in the Company. Hence, it becomes theholding Company.

(10) Previous year figures have been regrouped where necessary. Amount in decimals have been rounded off tothe nearest rupee.







B. P. SinghDirector

130





Date Month Year





Total Liabilities 6 5 3 2 2 Total Assets 6 5 3 2 2

SOURCES OF FUNDS

Paid-up Capital 3 5 3 3 Reserves and Surplus 6 1 7 8 9

Secured Loans – Unsecured Loans –


Net Fixed Assets 1 0 3 8 9 Investments –

Net Current Assets 5 1 1 0 5 Misc. Expenditure –

Accumulated Losses – Deferred Tax Assets 3 8 2 8


Turnover 1 3 2 1 8 9 Total Expenditure 1 2 4 0 9 9

Profit/Loss before Tax 8 0 9 0 Profit/Loss after tax 2 2 9 8

Earning Per Share in Rs. 6 . 5 0 Dividend Rate % –


Item Code No. (ITC Code) N A

Product Description N A








B. P. SinghDirector

FINANCIAL RESULT'SOF

GREEN VENTURES PVT. LTD.(NEPAL)

132


AUDITORS' REPORT

To

The Shareholders of Green Ventures (P) Ltd.

We have audited the accompanying Balance Sheet ofGreen Ventures (P.) Ltd. as of 31 March 2009 and therelated statements of Cash flows for the period of 1 April2008 to 31 March 2009.

These financial statements are the responsibility of thecompany's management. Our responsibility is to expressan opinion on these financial statements based on ouraudit.

We conducted our audit in accordance with NepalStandards of Auditing or relevant practices. ThoseStandards or relevant practices require that we plan andperform the audit to obtain reasonable assurance aboutwhether the financial statements are free of materialmisstatement. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includesassessing the accounting principles used andsignificant estimates made by the management, as wellas evaluating the overall f inancial statementpresentation. We believe that our audit provides areasonable basis for our opinion.

As per the provisions of the Companies Act, 2063 westate that:

1) We have received prompt replies to our queriesand explanations asked for.

2) The books of accounts have been maintained asrequired by law.

3) The Balance Sheet and Cash flow statementscomply with the books of accounts maintained bythe company.

4) The business of the Company appears to havebeen conducted satisfactorily in so far as appearsfrom our examination of the books and records ofthe Company.

5) In our opinion and to the best of our informationand according to the explanations given to us andfrom our examination of the books of account ofthe Company, we have not come across the caseswhere the Board or any member thereof or anyemployee thereof or any employee of the Companyhas acted contrary to the provisions of the law orcaused loss or damage to the Company ormisappropriated to the funds of the Company.

In our opinion, the financial statements give a true andfair view of the financial position of the company as of31 March 2009 and its cash flows for the period from1 April 2008 to 31 March 2009 in accordance with NepalAccounting Standards or relevant practices and complywith Company Act, 2063

Narayan Bajaj, FCANarayan Bajaj & AssociatesChartered Accountants

Date : 26th April, 2009Place : Kathmandu

133

Green Ventures Pvt. Ltd. (Nepal)

(Nepali Rs.)


SOURCE OF FUNDSShareholders' Funds

Share capital 1 227,025,000.00 9,479,159.08

Reserve and Surplus 2

Total Shareholders' Fund 227,025,000.00 9,479,159.08

Mid-term & Long term Loans– Secured

– Unsecured 3

Gross total 227,025,000.00 9,479,159.08

APPLICATION OF FUNDFixed Assets 4 53,295,113.96 126,716.28

Work-in-progress 5 – –

Investment in Share 6 – –

Current AssetsInventory 7 – –

Trade & Other Receivables 8 2,714,445.69 1,240,000.00

Cash and Bank Balance 9 2,581,951.19 936,064.17

Prepaid expenses, Advances & Deposits 10 82,044,033.90 4,865,207.43

Total Current Assets 87,340,430.78 7,041,271.60

Less: Current Liabilities & ProvisionsTrade & Other Payables 11 232,809.66 575,329.00

Provisions 12 – –

Total Current Liabilities 232,809.66 575,329.00

Net Current Assets 87,107,621.12 6,465,942.60

Pre-Operating Expenses Pertainig to Capitalisation 13 86,404,134.23 2,668,369.48

Accumulated Pre-operating Expenses 218,130.72 218,130.72

Gross Total 227,025,000.00 9,479,159.08

Contingent Liabilities 14




Narayan Bajaj, FCA DirectorNarayan Bajaj & AssociatesChartered Accountants


134


STATEMET OF CHANGES IN EQUITY

FOR THE PERIOD FROM 1 APRIL, 2008 TO 31 MARCH, 2009

Particulars Share Capital General Retained TotalReserve Earnings

Opening Balance (1 April 2008)

Share Capital 1,500,000.00 1,500,000.00

Advance Against Share Capital

Bhilwara Energy Ltd., India – –

Triveni Energy (P) Ltd. Nepal 7,979,159.08 7,979,159.08

New Share Issued 28,500,000.00 28,500,000.00


Bhilwara Energy Ltd., India 149,950,000.00 149,950,000.00

Triveni Energy (P) Ltd., Nepal 39,095,840.92 39,095,840.92

Closing Balance (31 March, 2009) 227,025,000.00 – – 227,025,000.00




135



SCHEDULE 1 : SHARE CAPITAL(Nepali Rs.)

As on As on31 March, 2009 31 March, 2008

A. Authorised

Equity Share

5,00,00,000 Shares @ 100 Per Share 5,000,000,000.00 250,000,000.00

B. Issued

Equity Share

50,00,000 Shares @ 100 Per Share 5,000,000,000.00 250,000,000.00

C. Subscribed

Equity Share

3,00,000 Shares @ 100 Per Share 30,000,000.00 30,000,000.00

D. Paid Up

Equity Share

3,00,000 Shares @ 100 Per Share 30,000,000.00 1,500,000.00


Bhilwara Energy Ltd., India 149,950,000.00 –

Triveni Energy (P) Ltd., Nepal 47,075,000.00 7,979,159.08

Total 227,025,000.00 9,479,159.08

SCHEDULE 2 : RESERVE & SURPLUS

A. General Reserves – –

B. Retained Earnings. – –

Total – –

SCHEDULE 3 : MEDIUM & LONG TERM LOAN

A. Secured Loan – –

1. Long Term Loan – –

2. Debenture – –

B. Unsecured Loan – –

1. Long Term Loan – –

2. Debenture – –

3. Other Unsecured Loan: – –

Total – –

136


SCHEDULE 5: WORK IN PROGRESS

(Nepali Rs.)


Work in Progress: – –

Total – –

SCHEDULE 6: INVESTMENT

A. Investment on listed companies – –B. Investment on non-listed companies – –C. Investment on Debentures & Bonds – –D. Investment on fixed assets – –E. Other loans advances (More than 1 Year) – –F. Mutual Fund – –G. Other Investment – –

Total – –

SCHEDULE 7: INVENTORIES

A. Store, Spare Parts, Loose Tools – –

B. Stock – –

Total – –

SCHEDULE 8: BUSINESS & OTHER RECEIVABLES

A. Advance Income Tax 7,576,44 –B. Advance to Director

Nirajala Raut 2,706,869.25 1,240,000.00Total 2,714,445.69 1,240,000.00

SCHEDULE 4: FIXED ASSETS (Nepali Rs.)

GROSS BLOCK DEPRECIATION NET BLOCK

Particulars Dep. Balance Addition Sales/ Balance Accumulated For Sales/ Accumulated Balance Balance

Rate as on 1 During Adjus. As on Balance the Adjus. Balance As on As on

April the During 31 Mar Up to 31 year During Up to 31 31 Mar 31 Mar

2009 Year the Year 2009 Mar 08 the year Mar 09 2009 2008

A. LAND 0% – 21,932,606.75 – 21,932,606.75 – – – – 21,932,606.75 –

TOTAL – 21,932,606.75 – 21,932,606.75 – – – – 21,932,606.75 –

B. BUILDING

PRE FABRICATED OFFICE BUILDING 5% 1,349,995.00 – 1,349,995.00 – – – – 1,349,995.00 –

TOTAL – 1,349,995.00 – 1,349,995.00 – – – – 1,349,995.00 –

C. VEHICLES

KIA SORENTO BA 6 CH 6385 20% 3,741,395.80 3,741,395.80 – 3,741,395.80 –

TOYOTA HILUX (BA6CH7514) 20% 2,757,462.50 2,757,462.50 – 2,757,462.50 –

TOYOTA HILUX (BA6CH6653) 20% 2,770,810.00 2,770,810.00 – 2,770,810.00

TOYOTA CARROLA CAR (BA 6 CH 8529) 20% 3,784,917.20 3,784,917.20 – 3,784,917.20

TOYOTA HILUX (BA 6 CH 9366) 20% 2,806,947.81 2,806,947.81 2,806,947.81




YAMAHA BIKE (BA 29 PA 3824) 20% 129,970.00 129,970.00 – 129,970.00

YAMAHA BIKE (BA 29 PA 3836) 20% 129,970.00 129,970.00 – 129,970.00

TOTAL – 24,521,145.71 – 24,521,145.71 – – – 24,521,145.71 –

D. Furniture & Off. Equit.

Site Furn. & Equip. 25% 2,096,158.71 – 2,096,158.71 2,096,158.71

Office Equipment 25% 138,687.50 1,159,338.51 19,687.50 1,278,338.51 31,990.00 21,752.50 – 53,742.50 1,224,596.01 106,697.50

Furniture and Fixutre 25% 45,018.78 2,164,386.75 11,718.78 2,197,686.75 25,000.00 2,075.00 – 27,075.00 2,170,611.75 20,018.78

Total 183,706.28 5,419,883.97 31,406.28 5,572,183.97 56,990.00 23,827.50 – 80,817.50 5,491,366.47 126,716.28

This Year Balances 183,706.28 53,223,631.43 31,406.28 53,375,931.43 56,990.00 23,827.50 – 80,817.50 53,295,113.93 126,716.28

Note: Deprecation has not ben booked in the addition of the Fixed Assets.

137


SCHEDULE 9: CASH & OTHER BALANCE(Nepali Rs.)


A. Cash Balance – 772,293.35B. Bank Balance

1. Bank of Asia (Acc. no. 06CL005121NPR001) 970,726.202. Mahalaxmi Finance Co. Ltd. Acc. No. 10-00009 1,037,082.213. Nepal Bank Ltd. 2-11-65431 20,000.004. Nepal Bank Ltd. CA 4021 10,000.005. NIB Bank no. 012-4528100 405,318.77 163,770.826. RBB 109006583601Current Account 84,849.007. RBB 2967 Okhal Dhunga Current Account 5,466.008. RBB 407 Charikot 10,000.009. SCB 01-1985426-01 –10. SCB 02-1985426-01 Short call Deposit 28,509.0111. Sanima Bank Ltd. A/c no. 10,000.00

Total 2,581,951.19 936,064.17

SCHEDULE 10: PREPAID EXPENSES, ADVANCES, LOANS & DEPOSITS

A. Advances to Party (Annex-A) 60,211,763.25 4,817,488.25B. Advances (Annex-B) 2,310,705.52 15,000.00C. Bank Gurantee & Letter of Credit (Annex-C) 409,948.63 32,719.18D. Land Acquisition Advance (Annex-D) 19,111,615.50 –

Total 82,044,033.90 4,865,207.43

SCHEDULE 11: TRADE & OTHER PAYABLES

1. Expenses payables2. Other Payables

Miscellaneous Payables (Annex-E) 117,899.40 453,571.00TDS payables 48,010.26 120,758.00Aduit Fee Payable (Narayan Bajaj & Associates) 66,900.00 1,000.00Total 232,809.66 575,329.00

SCHEDULE 12: PROVISIONS FOR INCOME TAX

Total – –

SCHEDULE 13: PRE-OPERATING EXPNESES PERTAINING TO CAPITALISATION

Licence & Registration Expenses: 4,630,438.06 1,015,000.00

Company Register Office Expenses 1,450,025.00 15,000.00

Licence Renew Expenses 1,000,000.00

Generation Licence Application Fee 1,000,000.00

Licence Up-grade Expenses 680,413.06 1,000,000.00

Licence Transmission Line Survey 500,000.00

Survey Expenses: 29,329,978.29 30,141.00

Detail Project Report 27,508,704.17

EIA Expenses 996,017.00

Water Flow Survey 825,257.12 30,141.00

Bridge Construction: 20,000.00

Bridge Civil Works 20,000.00

138


Transmission Line : 376,901.00

Transmission Line Expenses 376,901.00

Road Construction 28,536,070.36

Road Construction Expenses 28,536,070.36

Land Acquisition 6,657,426.00

Land Acquisition Expenses 6,657,426.00

Administration Expenses: 14,184,951.04 1,623,228.48

1. Dashein Expenses 741,033.00

2. Depreciation Expenses 23,827.50

3. Interest Income (1,245,743,38)

4. Insurance Expenses 502,469.00

5. Audit Fee 77,800.00

6. Gift Expenses 24,400.00

7. Advertisement Expenses 46,273.00

8. Bank Commission 105,009.48

9. Books & Periodicals 7,680.00

10. Canteen Expenses 42,378.00

11. Clearing Expenses 19,944.00

12. Communication Expenses 27,296.00

13. Donation Expenses 140,000.00

14. Electricity Expenses 62,938.00

15. Guest Entertainment Exp. 194,917.00

16. Internet Expenses 431,547.00

17. Legal Expenses 14,300.00

18. Local Conveyance 34,371.00

19. Medicine Expenses 17,242.00

20. Meeting Expenses 2,377.00

21. Miscellaneous Expenses 1,013,596.28 27,776.00

22. News Paper 9,772.00

23. Office Rent 997,073.00

24. Postage & Courier 11,142.00

25. Repair & Maintenance 120,239.66

26. Security Expenses 67,642.00

27. Telephone Instalation 16,480.00

28. Printing & Stationary 276,146.00 12.352.00

29. Project Site Office Expneses 127,850.00

30. Tangal House Expenses 960,687.33

31. Telephone Expenses 114,705.00 6,750.00

32. Salary ofifce Staff 5,586,608.00 886,994.66

33. Salary Site Staff 289,884.00

34. Site Visit Expenses 257,962.00 510.745.00

35. Traveling Expenses 2,444,840.33 178,610.82

36. Vehicle Expenses 620,364.84

Total 83,735,764.75 2,668,369.48

(Nepali Rs.)


139


SCHEDULE 14: CONTINGENT LIABILITIES

(Nepali Rs.)


Total – –

ADVANCE TO PARTY (ANNEX-A)

(Nepali Rs.)


1. ANK Construction Co. Pvt. Ltd. 18,950,000.00

2. Balephy Jalbidyut Co. Ltd. 220,147.00

3. ITECO Nepal 2,771,800.25 4,465,048.25

4. Mainawati Steel Industries (P) Ltd. 12,366,650.00

5. MEH Consultants (P) Ltd. 475,000.00

6. Nepal Environment & Scientific Ltd. (NESS) 780,600.00 263,700.00

7. S. S. Consult (P) Ltd. 57,000.00

8. R. K. Construction 2,000,000.00

9. Balaju Yantra Shala (P) Ltd. 31,740.00

10. P. S. Ramechhap JV 2,100,000.00

11. Rasuwa-SBA Joint Ventures 19,000,000.00

12. Ravindra Nath 1,547,566.00

Total 60,211,763.25 4,817,488.25

140


ADVANCE (ANNEX-B)

(Nepali Rs.)


Advance for Office Works 1,548,570.52 15,000.00

1. Anil Kumar Dhungana (2,276.00)

2. Badri Rijal 100,000.00

3. Balaji Agency (Custom Clearing) 62,874.00

4. Bandana Marandhar 550.00

5. Baijay Karki 117,433.00

6. Chabi Niroula 16,140.00

7. Chandra Bahadur (Sirse House) 12,715.00

8. Chuda Sapkota 17,495.00

9. Deepak Shrestha (4,768.00)

10. Ganesh Thapa 33,779.00

11. Jyoti Karki 15,000.00

12. Kanchan Panta 28,097.00

13. Krishna Neupane 50,000.00

14. Majuwa Bhumathan (Ramechhap) 2,000.00

15. Markandeya Neupane (22,076.16)

16. Mithila Pandey 81,481.00

17. O.P. Soni 16,000.00

18. Pashupati Kafle 10,000.00

19. Petty Cash Account 516,904.00

20. Prakash Dhungana (400.00)

21. Prakash Pokharel 332,520.68

22. Punya Prasad Bhattarai 5,000.00

23. Ram Sharma 8,790.00

24. Rajendra Tiwary – 15,000.00

25. Rameshwar Dahai 20,150.00

26. Saran KC 27,715.00

27. Sonam Lama 33,892.00

28. Sunil Regmi 37,265.00

29. Tika Lama (4,000.00)

30. Uma Shankar Kamti 3,290.00

31. Uttam Magar 3,000.00

32. Vipin Arora 30,000.00

Advances Against Staff Salary 762,135.00

1. Chuda Sapkota 6,036.00

2. Deepak Shrestha 5,200.00

3. Ganesh Thapa 36,000.00

4. Saran KC 36,000.00

5. Shaum Khatri 4,600.00

6. Sonam Lama 36,000.00

7. Tika Lama 5,000.00

8. Uma Shankar Kamti 185,000.00

9. Uttam Magar 36,000.00

10. Vipin Arora 412,299.00

Total 2,310,705.52 15,000.00

141


BANK GUARANTEE & LETTER OF CREDIT (ANNEX C)

(Nepali Rs.)


1. GUA PS 08/152 (Bank Guaranty) 18,924.02

2. GUA PS 08/231 (Bank Guaranty) 320,300.00

3. Guaranty 012GUACU09-0003 35,362.30

4. Guaranty 012GUACU09-0006 35,362.31

5. L/C no. LCI-08-PS124

6. L/C no. LCI-08-PS32 32,719.18

7. L/C no. LCI-08-PS123

8. L/C no. LCI-08-PS125

Total 409,948.63 32,719.18

LAND ACQUISITION ADVANCE (ANNEX D)

(Nepali Rs.)As on As on

31 March, 09 31 March, 081. Bhaviraj Sunuwar 200,000.002. Bhoj Raj Ghimire 583,907.003. Champak Sunwar 1,100,000.004. Dev Raj Ghimire 1,990,062.505. Dhir Naryan (Kitta No. 1066) 500.006. Ganesh Bahadur Shrestha 5,000.007. Gyan Narayan Shrestha 124,219.008. Hari Kaji Gautam 2,000.009. Jivan Kumar Nepal 2,460,938.0010. Kar Narayan Shrestha 251,562.0011. Khadag Kumari Nepal 1,689,062.0012. Khil Nath Timilsina 250,000.0013. Khayam Ram Sunuwar 300,000.0014. Khil Prasad 7,000.0015. Krishan Raj Ghimire (Kitta No. 1183) 210,000.0016. Lal Prasad Nepal 365,616.0017. Lal Prasad Neapl (Brokrage) 400,000.0018. Lok Kumar Nepal 1,850,000.0019. Lok Prasad Nepal 227,781.0020. Mal Pat (Nar Bahadur Sunuwar) 2,500.0021. Man Kumari Sunuwar 220,000.0022. Man Narayan Shrestha 50,000.0023. Mithu Borali 20,000.0024. Mohan Kumar Nepal 100,000.0025. Mohan Raj Ghimire 1,222,656.0026. Murari Sharma 1,467,969.0027. Nanda Raj Ghimire 320,313.0028. Purna Bahadur Shrestha 25,000.0029. Rabanya Kumar Nepal 100,000.0030. Ram Chandra Nepal 100,000.0031. Seshraj Ghimire 1,000.0032. Saroj Sunuwar 250,000.0033. Surya Kumari Nepal 1,277,344.0034. Surya Prasad Nepal 1,917,187.0035. Yadukul Gautam 20,000.00

Total 19,111,616.50

142


MISCELLONEOUS PAYABLES (ANNEX E)

(Nepali Rs.)


1. PIPCO Agnecy 111,864.40

2. Staff Insurance Payable 6,035.00

3. Balephy Jal Bidhyut Co. Ltd. 453,571.00

Total 117,899.40 453,571.00

SCHEDULE - 15: Significant Accounting Policies & Notes To Account


(1) Accounting Conventions:

The Financial Statements are prepared under historical cost conventions on accrual concept and arein accordance with Nepal Accounting Standards and other applicable laws as prevalent in Nepal. TheAccounting policies are applied consistently by the company.

(2) Use of Estimates:

The preparation of financial statements in conformity with generally accepted accounting principlesrequires estimates and assumption to be made that affect the reported amounts of assets and liabilitiesand disclosure of contingent liabilities on the date of the financial statements and the reported amountsof revenues and expenses during the reported period. Differences between actual and estimates arerecognized in the period in which the results are known/materialized.

(3) Fixed Assets:

Fixed Assets are stated at cost less depreciation and the cost includes all the expenses incurred up toputting the assets into use.

(4) Depreciation:

Depreciation has not been charged in the additional fixed assets during the year.

(5) Going Concern:

The Financial Statements are prepared on the assumption that the Company is a going concern.

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 figureshave been restated.

143



(Rs. '000)

As at As at31.03.2009 31.03.2008

CASH FLOW FROM OPERATING ACTIVITIESA. 1. Net Profit / Loss before tax and extraordinary items

Add:1. Deprecation 23,827.50 –

2. Expenses written off

3. Interest expense

4. Accumulated Pre-Operating Expenses (218,130.72)

5. Decrease (Increase) in Pre-OperatingExpenses Pending for Capitalisation (83,735,764.75) (2,668,369.48)

2. Operating Cash flow before Change of Working Capital1. Decrease (Increase) in Current assets

(Other than Cash & Bank Balance) (78,653,272.16) (6,105,207.43)

2. Increase (Decrease) in Current liabilities (342,519.34) 575,329.00

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) (162,707,728.75) (8,416,378.63)

B. Cash flow from Investing Activites1. Interest / Dividend received

2. Sale (Purchase) of Fixed assets or Investment (53,192,225.15) (126,716.28)

3. Decrease (Increase) in loans, advances and deposits

4. Decrease (Increase) in Construction Work in porogress – –

Net cash flow from Investing Activities (B) (53,192,223.15) (126,716.28))

C. Cash flow from Financing Activities1. Issue of Shares (except bonus shares) 28,500,000.00 1,500,000.00

2. Advance Against Shares 189,045,840.92 7,979,159.08

3. Dividends paid

4. Others

Net cash flow from Financing Activities (C) 217,545,840.92 9,479,159.08

Net Increae (Decrease) in cash and cash equivalents = (A+B+C) 1,645,887.02 936,064.17

Cash and cash equivalents at the beginning of the year 936,064.17 –

Cash and cash equivalents at the end of the year 2,581,951.19 936,064.17




NOTES

LNJ Bhilwara Group Companies

Group Brands

Group Salient Features

• AD Hydro Power Ltd. 192 MW Hydro Power Project at Manali (H.P.) scheduled to be commissioned by the March, 2010.

• The Group is committed to achieve over 3,000 MW of Power Generation by the year 2017.

• Bhilwara Energy Ltd. collaborated with Mannvit Engineering, Iceland for developing Geothermal Power Projects in India and Nepal.

• The Power Generation up from 90 crore units to 113 crore units during the year because of RSWM TPP and Maral TPP being fully operational.

• RSWM's 46 MW and Maral's 10 MW capacity Thermal Power plants running successfully.

• HEG's additional 33 MW Captive Thermal Power Plant running successfully.

• HEG Ltd. has undertaken a capacity expansion to raise its Graphite Electrodes production to 66,000 TPA.

• The exports constitute 46% of the total turnover.

• The Group's Textile Business has 4.83 lacs spindleage.

• The Group employing over 25,000 people and poised to establish its presence in a leadership position in its businesses.

• HEG has won Dun & Bradstreet Corporate Award, 2008 for the best category in Graphite Electrodes.

• RSWM was felicitated with the 14th Rajiv Gandhi National Quality Award and “Niryat Shree” and SRTEPC Awards during the year.

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182

12

22 21

23

29

11

34

33

31 35

9

30

10

20

25

LNJ Bhilwara Group

TEXTILES

GRAPHITE

POWER

INFORMATION TECHNOLOGY

OFFICES

RSWM Limited

1. Kharigram Fibre Dyeing, Spinning Dyed & Grey Yarn

2. Mayur Nagar, Banswara Spinning PV Blended, Cotton & Open End Grey Yarn

3. Mandpam Melange, Cotton Dyed Yarn & Yarn Dyeing

4. Rishabhdev Spinning PV Blended Grey Yarn

5. Ringas Fibre Dyeing & Spinning Dyed Yarn

6. LNJ Nagar, Mordi Weaving & PV Fabric Processing & Finishing

7. LNJ Nagar, Mordi Cotton Ring & Open End Spinning, Denim Fabric Weaving & Rope Dyeing, Processing & Finishing

8. LNJ Nagar, Mordi Thermal Power

Cheslind Textiles Ltd.

9. Bagalur Spinning Cotton, Compact, Gassed & Mercerized Yarn & Knitting

10. Pondicherry Spinning Cotton, Compact, Gassed & Mercerized Yarn & Knitting

Maral Overseas Ltd.

11. Maral Sarovar Cotton Spinning, Knitting, Dyeing & Finishing, Knitted Garments

12. Maral Sarovar Captive Thermal Power



BSL Ltd.

15. Bhilwara PV & Worsted Spinning, PV & Worsted Weaving & Silk Fabric

16. Jaisalmer Wind Power Generation

Bhilwara Spinners Ltd.

17. Bhilwara Spinning PV Blended Grey Yarn

BMD Pvt. Ltd.

18. LNJ Nagar, Mordi Automotive Furnishing Fabric, Flame Retardant Fabric, Furnishing Fabric

Bhilwara Processors Ltd.

19. Bhilwara Dyeing, Processing & Finishing of Fabric

Bhilwara Technical Textiles Ltd.

20. LNJ Nagar, Mordi Technical Textiles

HEG Ltd.

21. Mandideep Graphite Electrodes

22. Mandideep Captive Thermal Power

23. Tawa Captive Hydro Electric Power

Bhilwara Energy Ltd.

24. Pathankot UBDC Stage III Hydro Electric Power Generation

25. Tawang Nyam Jang Chhu Hydro Electric Power Generation

Malana Power Company Ltd.

26. Malana (Kullu) Hydro Electric Power Generation

AD Hydro Power Ltd.

27. Allain-Duhangan Hydro Electric Power Generation(Manali)

Indo Canadian Consultancy Services Ltd.

28. Noida Power Engineering Services

Bhilwara Scribe Pvt. Ltd.

29. Bhopal Medical Transcription Services

30. Bengaluru Medical Transcription Services

Bhilwara Infotech Ltd.

31. Bengaluru IT Services

Corporate Office

32. Noida (NCR-Delhi)

Regional / Marketing

33. Mumbai 37. Ludhiana

34. Kolkata 38. Amritsar

35. Bengaluru 39. Bhilwara

36. New Delhi

CHALLENGES INSPIRE NEW OPPORTUNITIES.


Bhilwara Energy LimitedBhilwara Energy LimitedBhilwara Towers, A-12, Sector I, Noida - 201301 (NCR - Delhi), India

www.bhilwaraenergy.com/www.lnjbhilwara.com

Documents

CHALLENGES INSPIRE NEW OPPORTUNITIES. - …bhilwaraenergy.com/Uploads/File/bel_ar2008_09.pdf · · 2016-09-03CHALLENGES INSPIRE NEW OPPORTUNITIES. Annual Report 2008-2009 ... Cotton