bhilwaraenergy.combhilwaraenergy.com/Uploads/File/BEL_AR-2013.pdf · Contents 001 corporate information 002/003 an overview/The spirit of challenge 004/005 robust pipeline of projects/ehs

Corporate Office:Bhilwara Energy Limited

Bhilwara Towers, A-12, Sector-1,NOIDA - 201 301 (NCR - Delhi), India

Website: www.bhilwaraenergy.com/www.lnjbhilwara.com

The spiriT of challenge

AnnuAl RepoRt 2012-13Annu

Contents

001corporate information

002/003 an overview/The spirit of challenge

004/005robust pipeline of projects/ehs initiatives

006-007accolade for aD hydro power project

008-009 chairman’s Message

010-019 Director’s report

20annex. to the Directors’ report

21standalone financial statements

56 consolidated financial statements

Attachments of Financial Report 90Malana power company limited

125 aD hydro power limited

157 indo canadian consultancy services ltd.

180 nJc hydro power limited

205 Bhilwara green energy limited

229 lnJ power Ventures limited

247 chango Yangthang hydro power ltd.

267 green Ventures private limited, nepal

281 Balephi Jalbidhyut company ltd., nepal

NATIONWIDE NETWORK

BOARD OF DIRECTORS Mr. Ravi Jhunjhunwala, Chairman Mr. Riju Jhunjhunwala, Managing Director Mr. Rishabh Jhunjhunwala, Managing DirectorDr. Kamal Gupta Mr. Sunil Chawla Mr. Anand Prakash Mr. Salil BhandariMr. Ajay Munot

KEY EXECUTIVES Mr. O. P. Ajmera, President & CEO Mr. T Dev Joshi, President & CHROMr. Vipin Arora, Vice PresidentMr. S. P. Bansal, Associate Vice President (Civil) Mr. Ravi Gupta, Company Secretary

STATUTORY AUDITORS M/s S S Kothari Mehta & Co. Chartered Accountants New Delhi

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

FINANCIAL INSTITUTION/BANKERSIL&FS Financial Services LimitedIDBI Bank LimitedYES Bank LimitedHDFC Bank LimitedAXIS Bank LimitedState Bank of IndiaKotak Mahindra Bank Limited

CORPORATE OFFICEBhilwara TowersA-12, Sector-1, Noida -201301 (U.P.)

REGISTERED OFFICEBhilwara Bhawan,40-41, Community Centre,New Friends Colony,New Delhi-110025

CORPORATE INFORMATION

Bhilwara Energy LimitedAnnual Report 2012-13001


AN OVERVIEWBhilwara Energy Limited, a part of $ 1 billion LNJ Bhilwara Group is the flagship entity for the development and operation of Energy businesses both in India and abroad.

The Company has the marquee international partners such as SN Power, AECOM (previously RSW, Inc.) and IFC, Washington.

The Company through its JV entity, Indo Canadian Consultancy Services Ltd., has expertise in Power Project Consultancy with cumulative project experience of over 6,800 MW in Hydro Thermal Projects.


THE SPIRIT OF CHALLENGEBhilwara Energy Limited has successfully commissioned 2 Hydro Electricity Projects with aggregate capacity of 278 MW and has also commissioned two wind power projects aggregating 66.5 MW.

• 86MWMalanaHEPinHimachalPradesh

• 192MWAllain–DuhanganHEPinHimachalPradesh

• 49.5 MW* Wind Power Project in Satara,Maharashtra

• 20 MW Captive Wind Power Project inJaisalmer (Rajasthan)

Wind Power Project of 20 MW is planned to be commissionedinFinancialYear2013-14.

*3MWyettobecommissioned.


ROBUST PIPELINE OF PROJECTS An aggregate capacity of 900 MW of hydro powerprojects to be installed during the course of next 6 years.

Another 272 MW of hydro power projects are in the development stages.

Additional 2 HEPs with an aggregate capacity of 158 MW are in planning stages.

PROJECT PORTFOLIO AT A GLANCE:

Type StatusNo. of Projects

Aggregate Capacity (MW)

Hydro Operational 2 278.0

Wind Operational 2 69.5*

Wind Under Commissioning 1 20.0

Hydro Pre-construction 2 900.0

Hydro Development 2 272.0

Hydro Planning 2 158.0

Total 11 1,697.5

*3MWyettobecommissioned.


EHS INITIATIVESBhilwara Energy Limited developed best practices by nurturing sustainability and safeguarding the environment. It has taken numerous initiatives towards social upliftment and overall development of the areas within and adjoining the project sites. The initiatives include: Environment, Health, Social Welfare, Infrastructure Development, Education, Employment Opportunities, Sports, Culture and Religious activities.

As recognition of its focus towards Sustainability and Safety Management, AD Hydro Power Ltd. were awarded OHSAS 18001:2007 to comply the requirement of Occupational Health & Safety Management System Standard and NS-EN ISO 14001:2004/ISO 14001:2004 for EnvironmentManagement System Standard.

Prior to, Malana Power Company Ltd. was also awarded both the Certifications and continues to maintain its standards.


AD HYDRO ADJUDGED BEST HYDRO POWER PROJECTThe 192 MW Allain Duhangan HEP was conferredRunners-up award for the Best Hydro Power by the Power Line Awards 2013.

The award was presented by Mr.Jyotiraditya Scindia, Minister of State (Independent Charge) for Power, Government of India.

The Power Line Award recognizes excellence and outstanding performances in the Indian Power Sector.



Dear Stakeholder,India's GDP growth is going through a sluggish phase of sub 5 per cent in the current financial year, due to a mix of domestic and external factors. In order to put the nation again on path of over 8 per cent growth, empowered committees like Cabinet Committee on Investment (CCI) and Cabinet Committee on Economic Affairs (CCEA) are working overtime on clearance of stranded projects and; removing bottlenecks for smooth operations of the projects in the energy sector. These steps are expected to revive the industry sentiment and boost investor confidence in the sector, which will certainly help in reducing the gap between demand and supply in the energy sector.

Still a lot needs to be done before the energy sector enters into the high trajectory. Clarity is required on the announced policies and their implementation. The biggest challenge will be minimization of subsidies in power sales, which will improve the financial health of the distribution companies. A positive momentum at the distribution companies end will reduce vulnerability in the backward supply chain consisting of power transmission and generation companies.

As widely anticipated the Southern Grid is likely to get linked to the other grids. The energy starved southern states will get access to power supplies from more generators. Vice versa merchant power producers will get access to more consumers. This is likely to result in buoyancy in energy prices, which will stabilize over a period of time.

Mr. Ravi Jhunjhunwala, Chairman, reviews the Company's working

CHAIRMANS'MESSAGE


In the renewable energy space, there has been a cooling down of the initial enthusiasm shown by the investors for taking up new projects. A lot of this has been on account of uncertainties in the policies related to RPOs to be adopted by different states. Timely land acquisition and R&R issues are also becoming hurdles to the renewable energy projects.

This financial year saw a few milestone achievements by your company and its subsidiaries.

Our first wind power project at Distt. Satara, Maharashtra, is on the verge of fully commissioning. As on date, 31 WTGs (Wind Turbine Generators) are under operations and balance 2 WTGs are likely to be commissioned soon. We have also added another 20MW of wind power in Jaisalmer in Rajasthan under Group Captive Scheme with the entire energy generated is being transferred to our sister concern, RSWM Ltd. under long term PPA.

On behalf of the Board of Directors, I would like to express our sincere gratitude to the Ministry of Power, Ministry of Environment and Forests, Government of India; Central Electricity Authority, Government of Himachal Pradesh, Government of Arunachal Pradesh, Government of

Maharashtra, Government of Punjab, other government agencies, PTC India Limited, International Finance Corporation, Indian Renewable Energy Development Agency Limited (IREDA), lenders, commercial banks, financial institutions, investors, joint venture partners for their unending support. I would also like to express special gratitude to Government of Nepal, Department of Electricity and Nepal Electricity Authority for their co-operation and support for our Likhu-IV HEP. I would also take this opportunity to thank our employees and business associates, who have been the pillar of strength for the Company.

With Best Regards

Ravi JhunjhunwalaChairman

CHALLENGETHE SPIRITCHALLENCHALLEN

CHALLENGETHE SPIRITCHALLEN


Dear Members,

The Directors of the Company are pleased to present their Seventh Annual Report on the business and operations of the Company and Audited Statement of accounts for the year ended 31st March, 2013 together with the Auditors' Report.

(` in Million)

Particulars Consolidated Standalone

For the financial year ended For the financial year ended

31st March 2013

31st March 2012

31st March 2013

31st March 2012

Total Income 4,082.68 3,119.00 94.38 24.08

Total Expenditure 4,310.07 3,433.34 265.69 53.84

Profit/(Loss) before tax (227.39) (314.34) (171.31) (29.76)

Taxes 49.27 53.76 - 5.13

Profit/(Loss) after tax before minority interest (276.66) (368.10) (171.31) (34.89)

Minority Interest 66.49 192.99 - -

Profit/(Loss) after tax & minority interest (210.17) (175.11) (171.31) (34.89)

The Standalone and Audited Consolidated Balance Sheet for the year FY 2012-13 is attached to this Annual Report.

1. FINANCIAL PERFORMANCE

The Members M/s Bhilwara Energy Limited

DIRECTORS' REPORT


2. SUBSIDIARIES, JOINT VENTURES AND SPVs

• Malana Power Company Limited

• AD Hydro Power Limited

• NJC Hydro Power Limited

• Chango Yangthang Hydro Power Limited

• Bhilwara Green Energy Limited

• LNJ Power Ventures Limited

• Indo Canadian Consultancy Services Limited

• Green Ventures Private Limited, Nepal

• Balephi Jalbidhyut Company Limited, Nepal

The statement pursuant to the provisions of Section 212 of the Companies Act, 1956 relating to the Subsidiary Companies, are attached to this Annual Report. In terms of the circular of the Ministry of Corporate Affairs dated 8th February 2011, the Board of Directors has decided not to annex the annual accounts of the Subsidiary Companies in the Annual Report. The annual accounts of the Subsidiary Companies and related detailed information shall be made available to the shareholders of the company and the subsidiary companies seeking such information at any point of time. The annual

accounts of the subsidiary companies shall also be kept for inspection by any shareholder at the registered office of the company and of the Subsidiary Companies. The Company shall furnish a hard copy of details of accounts of Subsidiary Companies to any shareholder on demand. Information in aggregate for each subsidiary in respect of capital, reserves, total assets, total liabilities, detail of investment, turnover, profit before taxation, provision for taxation, profit after taxation, proposed dividend is disclosed in the consolidated balance sheet of the Company.

3. PROJECT STATUS AND INFORMATION

HYDRO POWER PROJECT

86 MW Malana HEP (Himachal Pradesh)

Malana Power Company Ltd.(MPCL), a subsidiary of your company, is engaged in the generation & transmission of energy from its 86 MW Malana Hydro Electric Project in the state of Himachal Pradesh. The Malana HEP is operational plant since 2001. During the period under review, the total income of MPCL was ̀ 912.487 million as compared to ` 1,103.67 million in previous financial year. The Profit after tax of MPCL was

` 156.882 million as compared to ` 246.064 million in previous financial year. The total income has reduced on account of lower generation and lower realization of tariff. During FY 2012-13, the plant availability had been 99.8 per cent. The generation during the period under view, stood at 333.077 million units as compared to 376.178 million units in the previous financial year due to poor hydrology.

192 MW Allain Duhangan HEP (Himachal Pradesh)

AD Hydro Power Ltd (ADHPL), a step down subsidiary of your Company, is engaged in the generation & transmission of energy from its 192 MW Allain Duhangan Hydro Electric Project in the state of Himachal Pradesh.


The total income of ADHPL is ` 2,607.482 million during the period under review as compared to ` 1,878.639 million in previous financial year and Loss is reduced to ` (258.444) million as against ` (557.673) million in the previous financial year. In the previous financial year, the Duhangan side, which accounted for 30% of the capacity, was commissioned in end of February 2012. Accordingly, only 70% of the capacity was available for utilization for FY 2011-12. Hence FY 2012-13 is the first financial year after the commissioning of the project in 2010, for which the full plant capacity was available.

The generation during the period under review stood at 681.167 million units as compared to 527.248 million units in the previous financial year.

780 MW Nyamjang Chhu HEP (Arunachal Pradesh)

NJC Hydro Power Limited (NJC), a wholly owned subsidiary of your company, is engaged in the development of 780 MW Nyamjang Chhu Hydro Electric Project in the state of Arunachal Pradesh. There have been delays for few clearances and issues both at State and Central Government level and the project has not moved as we

had expected. Like, Clearance from State Pollution Control Board for ‘Consent to Establish’ is yet to be received. An NGO, Save Mon Region Federation has filed two writ petitions in National Green Tribunal (NGT) against Stage-I Forest Clearance and Environment Clearance. Whereas petition against Stage-I Forest Clearance has been disposed of, being premature, the Environmental clearance case is being contested in NGT. Further, the Environment clearance issued by MoEF stipulated enhanced release of 30% discharge during monsoon period from ecological angle. This condition shall impact the annual generation by about 18%. We are constantly perusing with authorities and are hopeful that issues will be resolved in due course of time.

7.50 MW Khangteng HEP (Arunachal Pradesh)

The 7.50 MW Khangteng HEP, which is to be utilized for construction power of 780 MW Nyamjang Chhu HEP, is expected to be commissioned in last quarter of 2014. 80% of civil works have been completed and it shall take about 10 months to complete the project.

120 MW Likhu-IV HEP (Nepal)

Green Ventures Private Limited

(GVPL), Nepal, a subsidiary of your company, is developing a 120 MW Likhu-IV Hydro Electric Project in Nepal for export purposes. Due to delays in cross border transmission line and non clarity on wheeling charges, the project is being reviewed regarding its viability. The project is also being assessed by downsizing the capacity to 48 MW for its complete energy generation for domestic consumption within Nepal.

50 MW Balephi HEP (Nepal)

Balephi Jalbidhyut Company Limited (BJCL), Nepal, a subsidiary of your company, is developing a 50 MW Balephi Hydro Electric Project in Nepal. The project has already received all requisite clearances applicable in the country except the generation license. However, due to increase in cost, the viability of the project is being reviewed.

85 MW UBDC Stage-III HEP (Punjab)

After signing the Implementation Agreement for capacity of 75 MW, DPR for the Project was approved by the State Authorities for 85 MW Project. However due to considerable delay in according the approval for compensation for revised capacity and signing the revised Implementation Agreement


for 85 MW, there is a significant increase in the cost of project for which the company has taken up the matter with the State Government and other relevant Authorities for suitable compensation.

180 MW Chango Yangthan HEP (Kinnaur District, Himachal Pradesh)

Chango Yangthang Hydro Power Ltd (CHYPL), a subsidiary of your company, is developing 180 MW Chango Yangthang Hydro Electric Project in the state of Himachal Pradesh. The revised DPR for 180 MW capacity stands filed with CEA/CWA and the Techno-Economic clearance is expected within this financial year. The revised TOR for EIA study for enhanced capacity were approved by MOEF, The EIA studies are in progress through a Environment Consultant and the report is likely to be available by October, 2013. Subsequently public hearing is planned to be conducted at project site for environmental clearance. For various other statutory/non-statutory clearances required for implementation of the project, necessary applications/documents have been filed with all concerned departments and being pursued vigorously for obtaining requisite approvals.

200 MW Bara Bangahal HEP (Chamba District, Himachal Pradesh)

Malana Power Company Ltd (MPCL), a subsidiary of your company, had signed the Pre-Implementation Agreement with Govt. of Himachal Pradesh for implementation of 200 MW Bara Bangahal HEP on river Ravi in Distt Chamba. In view of some part of the project falling under Dhauldhar Wild Life Sanctuary and realizing that the de-notification of sanctuary area will take long time, proposal for implementation of the project in two stages has been got approved from the Govt. of HP. The Supplementary Pre-Implementation Agreement was signed with the Govt. of HP on 3rd December 2012 for development of 92 MW Bara Bangahal Stage-I HEP located outside Dhauldhar Wild Life Sanctuary. Supplementary Pre-Implementation Agreement for the remaining installed capacity will be signed subsequently after receiving permission from competent authority for development of the same within the Wild Life Sanctuary area. The topographical survey, geological investigations for preparation of Detailed Project Report for 92 MW Stage-I have been taken up, which is likely to be completed by March 2014.

For Stage-II, the State Wildlife Department has appointed Himachal Pradesh State Forest Research Institute to study the impact of implementation of Barabangahal HEP on the wildlife. The revised tentative lay-out of the project comprising the scheme in two phases has already been submitted to the State Forest Research Institute.

WIND POWER PROJECTS

49.50 MW Wind Power Project in Distt. Satara, Maharashtra

Bhilwara Green Energy Limited (BGEL), a wholly owned subsidiary of your company, is engaged in developing 49.50 MW Wind power project in Distt. Satara, Maharashtra. The Directors are pleased to inform that out of 33 WTGs with installed capacity of 49.50 MW, 27 Wind Turbine Generators (WTGs) amounting to installed capacity of 40.50 MW were commissioned by 31st March 2013 and have started generating electricity. Another 4 WTGs amounting to installed capacity of 6.0 MW have been commissioned on 6th June 2013. The balance 2 WTGs with installed capacity of 3.0 MW are under different stages of erection and are likely to be commissioned soon. The power generated from this


project is being sold to Maharashtra State Distribution Company Limited (MSEDCL) on long term PPA for 13 years.

The Project is eligible for availing Generation Based Incentives (GBI) provided by MNRE, Government of India. A part of this project i.e. 30 MW commissioned till 31st March 2012 is already registered for availing GBI. Balance 19.50 MW is also eligible for registration for availing GBI and will be registered with the authorities in due course of time.

The Directors are pleased to inform that the project has been registered by UNFCCC as a CDM Project in October 2012.

The Project has been funded by International Finance Corporation, Washington, D.C., (IFC) a member of World Bank Group, Indian Renewable Energy Development Agency Limited (IREDA) and IFCI Limited.

During the period under review, the total income of the company is ` 374.19 million. The Profit After Tax stood at ` 8.84 million. Total saleable generation of the company during current year was 5,15,19,005 units as compared to 1,34,962 units in previous year. The generation of current year is not comparable with

that of previous year as only 20 WTGs (30 MW) was commissioned as of March 2012.

20.0 MW Wind Power Project in Distt. Jaisalmer, Rajasthan

LNJ Power Ventures Limited (LNJ Power), a subsidiary of your company, is engaged in developing 20.0 MW Wind power project in Distt. Jaisalmer, Rajasthan. The Directors’ are pleased to inform that all the 10 WTGs (of 2.0 MW each) with installed capacity of 20.0 MW were commissioned as scheduled by 31st March 2013 and have started generating electricity. The power generated from this Project is being sold to RSWM Ltd. under Group Captive Structure (first of its kind for a Wind Power Project in Rajasthan) on long term PPA for 20 years.

The process of registration of this project to UNFCCC as a CDM project is under process.

The Project has been funded by International Finance Corporation, Washington, D.C., (IFC) a member of World Bank Group and Yes Bank Limited.

New Endeavors

20.0 MW Wind Power Project in Distt. Kohlapur, Maharashtra

The Board is pleased to inform that

company has placed an order for a 20 MW Wind Power Project to be set up in the state of Maharashtra on turnkey basis. This project is being implemented in the company itself. The project is likely to be commissioned in Q3/Q4FY14 and the power generated from this project will be sold to Maharashtra State Distribution Company Limited (MSEDCL) on long term PPA for 13 years. This project is also eligible to receive GBI as per which net units generated by this 20 MW shall earn Rs. 0.50 per kWh with a revised cap of Rs. 100 lakh per MW in the first ten years of project life.

4. FUTURE OUTLOOK

The Indian power sector is currently reeling under an odd situation. The Sector is faced with various challenges on almost every front ranging from availability of fuel, delayed environmental clearances albeit with stringent conditions, funding slowdown and continued deteriorating financial performance of Discoms across the country. On one hand, we have soaring unfulfilled demand for energy; while on the other hand, we have power generating plants kept idle because of lack of demand generated by the state owned utility companies. The mounting debts of the state sector


distribution utilities have resulted in the deterioration of the financial health. As a result, instead of buying adequate power, Discoms have resorted to load shedding;. The merchant tariff of power, both at the short term bilateral power sales agreement and at the power exchanges, has dropped down to considerably low level.

In spite of the record breaking capacity additions in Eleventh Five Year Plan and first year of Twelfth Five Year Plan i.e. 2012-13, the sentiments in the power sector are not very positive. The Government of India has set the capacity addition target of 88,537 MW during 12th Five Year Plan (2012-17). The recent trends are showing that the demand both at base and peak is not rising as was anticipated, because of the reduced industrial activity, while the generation continues to rise with newer capacity additions.

The recent trends are showing that the demand both at base and peak is not rising as anticipated because of the reduced industrial activity, while the generation continues to rise with newer capacity additions. This fact is supplemented by the fact that after the initial spike in merchant power prices at IEX in first few months of 2012-13 against corresponding months of 2011-12, the prices remained subdued.

In 2013-14, the average merchant power prices have further fallen down below the ` 2 per unit mark. With the industrial activity showing no signs of revival, it is unlikely that the merchant power prices will show any signs of major strengthening in the short term.

Though there are number of issues confronting the sector, yet there have been various initiatives taken by the Central/State Governments and its agencies in order to expedite the power potential of the country and to provide an environment that can increase the efficacy of the existing resources.

The Central Government’s strong focus on increasing electricity rates and reducing cross-subsidies has

contributed to the positive trend of tariff revision in the sector. In addition, there was ruling by the Appellate Tribunal for Electricity in November, 2011 that the SERCs must initiate suo moto tariff revision in case the discoms fail to submit ARRs on time. During 2012-13, almost all the states undertook tariff revisions (in the range of 1.5-37 per cent) and the trend is likely to continue in 2013-14. Fourteen states have already incased tariffs for the year and others are expected to follow suit

On the distribution front, the Government has approved the restructuring package. This bailout package is aimed to reduce the debt service burden of the state utilities. However the successful implementation of this bailout package will largely depend upon timely performance of milestones linked to this bailout package. Under this scheme, 50 per cent of the short-term liabilities of discoms would be converted into bonds and issued to them, while the remaining 50 per cent would be rescheduled.

Priority has been given to ensure the connection of Southern Grid to the NEW grid by January 2014. Once completed, this interconnected national grid will facilitate power transmission from hydro power potential rich Northern Region to cater the peak load requirements of power deficit Southern Region. It is imperative to note that according to CEA during 2013-14 India will observe energy deficit of 6.7% and peak deficit of more than 3000 MW. Owing to the grid disturbances last year several regulations has also been passed recently for tightening the frequency band to 49.95 – 50.05 Hz which will further result in increasing the volume of short term bilateral transactions among generating and distribution utilities.

In spite of the recent steps taken by the Government, the power sector is likely to see a dull period for the next couple of years. On the generation front bulk of generating capacity already under construction is expected to be commissioned

in the next 2-3 years, which would further increase the supply position. However the Government’s initiative to improve the financial strength of Discoms may take some time to increase their ability to purchase adequate power and maintain adequate power supply to its end consumer. For a sector constrained by multiple challenges, a lot is expected from the Government for its revival and to ensure that Power Sector plays its role in the efforts to bring back the GDP growth rate in excess of 8 percent. The largest grid failure in the world in end of July 2012had affected 620 million people (around 9% of world population) across 21 states. It had shown that a lot needs to be done for improvement and stabilization of power infrastructure in the country.

The Eighteenth Electric Power Survey (EPS) projects an energy requirement of 1,354.9 BUs and a peak load of about 200 GW for the Twelfth Plan period.

It is estimated that the peak demand supply gap would further increase post FY 2015 on account of decreased capacity addition and fuel cost escalation. Accordingly the merchant tariff is expected to see the increasing trend post FY 2015 primarily due to improvement in the liquidity profile of the Discoms post tariff hike, debt restructuring package and higher fuel prices and high demand supply gap.

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


HYDRO SECTOR

On the hydro power plant front, the capacity additions during 2012-13 has been 501 MW against target of 802 MW. The hydro power plants under construction have been facing problems on account of delays in construction and slowdown in availability of funds. The Uttaranchal unprecedented flood disaster in June 2013 has only added to the woes of the hydro power plants with a large number of operational HEPs facing damage or high silt content resulting in stoppage of operations. The under construction HEPs have faced damages resulting in stoppages of construction and further delays in project implementation. The project costs are likely to shoot up further raising the question on viability. All these recent events have suddenly made the environment for hydro electric plants unfavorable. With passage of time and Government support, it is hoped that the environment will reverse and the momentum will pick up in support of HEPs.

WIND SECTOR

Of the total renewable portfolio, Wind has been the major contributor in capacity addition in the past few years accounting for 69% of total installed capacity of renewable technologies. The installed capacity based on Wind generation has reached 19661 MW as on July 2013 against the Wind power potential of 49,132 MW (as per MNRE and first round of assessment of C-WET in 2012). The potential has since been revised to 102 GW by C-WET in its

assessment exercise of 2012 and excludes offshore capacity in the country. The financial investors, which had earlier dominated the Wind energy, have given way to IPPs with introduction of developer friendly policies and incentives.

A number of new technologies and bigger size (2-2.5 MW) WTGs with higher hub heights (>100 Meters) and larger (>100 Meters) blade spans (swept area) are being introduced in India. Given the moderate wind regime in the country, the newer generation of WTGs shall prove to be more cost effective and will be able to harness the winds with an increased efficiency.

FY 12 had far been the best year for installation of Wind projects in India which has crossed 3000 MW, but with withdrawal of fiscal incentives (Accelerated Depreciation) and lack of clarity on financial (GBI) incentives for FY 2013, the installation of Wind projects got affected and could clock only 1700 MW. The announcement in Budget-2013 of re-introduction of Generation Based Incentive (GBI) with a revised cap of Rs. 100 Lacs per MW (earlier it was ̀ 62 Lacs/ MW) for all the Wind Projects installed in XIIth Plan (i.e. upto March 2017) is definitively a very positive sign by GoI for promotion of Wind Sector in India. The expected installation of Wind projects in FY 14 is in the range of 2000 MWs and the same for FY 15 is more than 2500 MW.

For increasing the stability of the power grid and in line with the Indian Electricity Grid Code (IEGC), CERC has also implemented RRF mechanism with effect from 15th July 2013 for Wind and Solar Projects. In the short term, it may affect the profitability of some of the Wind projects but in the medium to long term it is not likely to impact the profitability and shall definitely increase the stability of the power grid which otherwise get affected due to high intermitting nature of Wind renewable energy based projects like wind.

The momentum of capacity additions in renewable energy need to be maintained/ increased. There are

number of challenges the renewable energy sector is facing including evacuation and transmission to keep pace with capacity addition and overall grid network planning because of location of specific RE potential and intermittent nature of REs. To support this, the GoI is planning various schemes in general and has planned an exclusive “Green Energy Corridor” for transmission of renewable energy. The corridor would be built across seven states over next 5-6 years at an approximate cost of Rs. 43,000 Cr. This shall help synchronization of renewable power projects with the conventional projects in the Indian Grid.

5. RIGHT ISSUE

In view of the tremendous requirement of equity for various projects of the company, the company is exploring various option of raising funds. The company has come out with Right Issue of `105.81 crore at a valuation of INR 2130 crore i.e. at a premium of Rs 129.30 per share. The company is pleased to inform that on the closure of Right Issue on 15th June 2013, a total of 67,11,458 equity shares were subscribed by the shareholders which have since been allotted to them. The company raised INR 93.49 crore from the Right Issue.

6. DIVIDEND

As the construction work is under progress and there are no operations in the Company, no dividend is proposed to be declared during the year under review.

7. PUBLIC DEPOSITS

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

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

Information required to be disclosed under Section 217 (1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the report of Board of Directors) Rules, 1988 has been


given in the Annexure I, forming part of this Report.

9. PARTICULARS OF EMPLOYEES:

During the year 2012-13, 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.

10. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

10.1 INTERNAL CONTROL SYSTEMS

The Company has a proper and adequate internal control system for all its activities to ensure compliance with policies, procedures, applicable Acts and Rules, including safeguarding and protecting its assets against any loss from its unauthorized use of disposition. All transaction are properly documented, authorized, recorded and reported correctly. The systems are reviewed continuously and its improvement and effectiveness is enhanced based on the reports from various fields. The Audit Committee also reviews the adequacy of Internal Control Systems

The Company’s Internal Control Systems are supplemented by Internal Audit covering all financial and operating functions.

10.2 INTERNAL AUDIT

Internal Audit at BEL is an independent, objective and assurance function conscientious for evaluating and improving the effectiveness of risk management, Control, and governance processes. The function prepares annual audit plans based on risk management and conducts extensive reviews covering financial, operational and compliance controls and risk mitigation. Internal audit plans cover matters identified in risk management assessments as well as issues highlighted by the Board, the Audit Committee and senior management. The areas requiring specialized knowledge are reviewed in partnership with external experts.

Internal Audit is conducted across all locations and of all functions by firms of Chartered Accountants, who verify and report on the functioning and effectiveness of internal controls. The Internal Audit reports the progress in implementation of recommendations contained in such reports. Internal audit reports are submitted along with the

Management’s response to the Audit Committee. The Audit Committee of the Board, monitors performance of Internal Audit on time-to-time basis through review of the internal audit plans, audit findings & swiftness of issue resolution through follow ups.

11. DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and of the Articles of Association of the Company, Mr Ravi Jhunjhunwala, Dr. Kamal Gupta and Mr. Salil Bhandari, Directors of the Company, are liable to retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. The Board recommends their re-appointment at the ensuing Annual General Meeting. The aforesaid re-appointment/appointments are subject to the approval of the Members and the necessary resolutions have been incorporated in the notice of the Annual General Meeting.

12. AUDIT COMMITTEE

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

As on date, the Members of the Audit


Committee are: Mr. Salil Bhandari, Mr. Sunil Chawla, and Mr. Anand Prakash. The proceedings of the Committee were in accordance with the provisions of the Companies Act, 1956.

13. DIRECTORS’ RESPONSIBILITY STATEMENT

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

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

ii) that the accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for the financial year 2012-2013.

iii) that the proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions

of The Company’s Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

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

14. AUDITORS

M/s. S. S. Kothari Mehta & Co., Chartered Accountants, Statutory Auditors of the Company, will retire from their office at the ensuing Annual General Meeting. They are, however, eligible for re-appointment. The Company has received consent letter from M/s. S. S. Kothari Mehta & Co., Chartered Accountants, under Section 224(1B) of the Companies Act, 1956, for re-appointment as Statutory Auditors of the Company for the financial year ending on 31st March, 2014. The Board recommends the re-appointment of M/s. S. S. Kothari Mehta & Co., Chartered Accountants, as Statutory Auditors of the Company.

15. AUDITORS’ REMARKS

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

16. HUMAN RESOURCE DEVELOPMENT

Your Company believes that in today's evolving competitive business dynamics, employees’ are the key differentiators. Our people are core to “What we are” and thus we have built a strong alignment between our organization's vision & values. Our employee partnership ethos reflects the Company's long-standing business principles and drives the company's overall performance. While we have continued to equip employees with the necessary skills and attitude to deliver on their current job responsibilities, the prime focus has been to identify, assess, groom and build leadership potential for future.

The Company has a comprehensive HR Policy Manual. The Human Resources Development intervention has provided opportunity for open interaction, communication and feedback. The steps being taken up by the Company’s subsidiaries, SPVs and joint ventures in the field of Human Resources Development have been mentioned in their respective Annual Reports.

The employee relations continued to be cordial and harmonious at


all levels and in all divisions of the Company.

17. ENVIRONMENT, HEALTH AND SAFETY

Your Company has been complying with of all statutory requirements applicable to its scope of activities under Health, Safety and Environment management. The Company is committed in complying with IFC’s policy and performance standards on Social & Environmental Sustainability for all upcoming projects/acquisitions and also at the Corporate level.

In all the upcoming projects of the Company, Environment Management Plan, comprising international best practices, procedure and norms, have been 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 the project area.

Your Company has been regularly monitoring environment at the project sites and surrounding areas. All possible steps are taken to ensure that the Company’s activities have minimum impact on the environment and the ecological balance is returned to what it existed before the start of any project.

The Company ensures availability of adequate health facilities to its employees at all its existing and upcoming locations. The employees are adequately covered under various insurance policies against risk of health and life disasters.

The Company is also committed to provide accident free workplace to its employees and workers all across its locations. The security of employees is one of the prime concerns of the Management. Consistent efforts are being made by the Company to improve safety standards across the locations by taking necessary measures.

The company considers EHS aspects as an integral part of its

contracting procedure and therefore, company has prepared a document “EHS requirement for Contractors” to ensure that contractors are well informed on EHS commitment desired during construction / operation.

The steps being taken up by the Company’s subsidiaries, SPVs and joint ventures in the field of Environment, Health and Safety have been mentioned in their respective Annual Reports.

18. CORPORATE SOCIAL RESPONSIBILITY

Your Company believes that, in its areas of operations, its activities should generate economic benefits and opportunities for an enhanced quality of life for all the stakeholders and the society at large.

As a constructive partner in the communities in which it operates, your Company has been taking concrete action to realize its social responsibility and accordingly has been spending on the schools, health and infrastructure development in the areas surrounding its projects.

The steps being taken up by the Company’s subsidiaries, SPVs and joint ventures in the field of Corporate Social Responsibility have been mentioned in their respective Annual Reports.

19. CORPORATE GOVERNANCE

Corporate Governance is a process that aims to meet shareholders’ aspirations and societal expectations. It is a commitment that is backed by the fundamental belief of maximizing shareholders value, transparency in functioning values and mutual trust amongst all the stakeholders of the organization. In our company, corporate governance philosophy stems from our belief that it is a key element in improving efficiency and growth as well as enhancing investor confidence.

The majority of the Board comprises of Non-Executive Directors who play a critical role in imparting balance to the Board processes, by bringing an independent judgment to bear on issues of strategy, performance,

resources, standards of Company’s conduct, etc. The Audit Committee of the Board meets regularly and provides assurance to the Board on the adequacy of Internal Control Systems and Financial Systems. The Corporate Governance policy followed by the Company represents the value framework, the ethical framework and the moral framework under which business decisions are taken.

20. ACKNOWLEDGEMENTS

Your Directors acknowledge the assistance and continued support provided by the Ministry of Power and Ministry of Environment and Forests (Government of India), Central Electricity Authority, Government of Himachal Pradesh, Government of Arunanchal Pradesh, Government of Maharashtra, Government of Punjab, Government of Rajasthan, Government of Federal Democratic Republic of Nepal, other government agencies, lenders, commercial banks, financial institutions, PTC India Limited and our valued customers & look forward to their continued support and cooperation in the coming years as well. Your Directors also like to express great appreciation for the commitment and contribution of its employees at all levels.

Your Directors also place on record the appreciation for investors for their support and confidence reposed by them in the company.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

Sd/-

RAVI JHUNJHUNWALACHAIRMAN

DIN- 00060972

Sd/-RIJU JHUNJHUNWALA

MANAGING DIRECTORDIN- 00061060

PLACE: NOIDA DATE: 27th August, 2013


ANNEXURE I TO THE DIRECTORS REPORTSTATEMENT OF PARTICULARS PURSUANT TO

THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF

BOARD OF DIRECTORS) RULES, 1988

1. CONSERVATION OF ENERGY - NIL

2. TECHNOLOGY ABSORPTION - NIL

3. FOREIGN EXCHANGE EARNINGS AND OUTGO

(` in million)

2012-13 2011-12

I Foreign Exchange Outgo

Travelling 1.06 2.95

Professional Expenses NIL 2.41

Consultancy Charges NIL NIL

Total 1.06 5.36

II Foreign Exchange Earnings NIL NIL

Total NIL NIL


Sd/- Sd/-

Place: NOIDA

Date: 27th August, 2013

Ravi Jhunjhunwala

Chairman

DIN- 00060972

Riju Jhunjhunwala

Managing Director

DIN- 00061060

21

Independent AudItors’ report

to the Members of BHILWARA ENERGY LIMITEDReport On the Financial StatementsWe have audited the accompanying Financial statements of Bhilwara Energy Limited (‘the Company’) which comprise the Balance sheet as at March 31, 2013, the Statement of Profit and Loss and the Cash Flow statement for the year then ended, and a summary of Significant Accounting Policies and other explanatory information.Management’s Responsibility for the Financial StatementsManagement is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting standards referred to in sub–section (3C) of section 211 of the Companies Act, 1956. this responsibility includes the design, implementation, and maintenance of internal controls relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.Auditors’ ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the standards on Auditing issued by the Institute of Chartered Accountants of India. those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.OpinionIn our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true

and fair view in conformity with the accounting principles generally accepted in India:i) In the case of Balance sheet, of the state of affairs

of the Company as at March 31, 2013;ii) In the case of Statement of Profit and Loss, of the

loss of the Company for the year ended on that date; and

iii) In the case of Cash Flow statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements1) As required by the Companies (Auditors’ report)

order 2003 ( the order), issued by the Central Government of India in terms of section 227(4A) of the Companies Act, 1956, we give in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said order.

2) As required by section 227(3) of the Companies Act 1956, we report that:(a) We have obtained all the information and

explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

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

(c) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance sheet, the Statement of Profit and Loss and the Cash Flow statement dealt with by this report are in compliance with the Accounting standards referred to in section 211(3C) of the Companies Act 1956; and

(e) on the basis of written representations received from directors, as on March 31, 2013 and taken on record by the Board of directors, we report that none of the directors is disqualified as on March 31, 2013 from being appointed as a director in terms of section 274(1)(g) of the Companies Act, 1956.

For S. S. Kothari Mehta & Co.Chartered AccountantsFirm regn. no. 000756n

Arun K. TulsianpartnerMembership no.: 089907

place : new delhidated : 27th August, 2013

22

Annual Report 2012-13

Annexure to Independent Auditors’ Report

(referred to in paragraph 1 under the heading of “Report on other Legal and Regulatory requirements” of our report of even date)

1. (a) the Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) Verification of the fixed assets is being conducted based on a programme designed by the management which, in our opinion, is reasonable having regard to the size of the company and nature of its business. As informed to us, no discrepancies were noticed on such verification as compared to book records.

(c) No substantial part of the fixed assets was disposed off during the year.

2. According to the information and explanations given to us and the records examined by us, the company is not having any inventory, in view of which the related reporting requirement of the order is not applicable to the company.

3. the company has not granted/taken any loans, secured or unsecured, to/from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly clauses 4 (iii) (b) to (d) of the order are not applicable.

4. In our opinion, and according to the information and explanations given to us during the course of audit, there are adequate internal control systems commensurate with size of the company and the nature of its business with regard to purchase of inventory and fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books & records of the company, carried out in accordance with the generally accepted auditing practices in India, we have neither come across nor have we been informed of any instance of major weaknesses in the aforesaid internal control systems.

5. (a) Based upon the audit procedures applied by us and according to the information and explanations given to us, we are of the opinion that the particulars of contracts and arrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section.

(b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and aggregating during the year to Rupees five lakhs or more in respect of each party have been made at

prices which are reasonable having regard to market prices for such transactions, prevailing at the relevant time, where such market prices are available.

6. the company has not accepted any deposits from the public within the meaning of sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 including the Companies (Acceptance of deposits) rules, 1975.

7. In our opinion, the Company has an internal audit system commensurate with its size & nature of its business.

8. the company is implementing power generation project. the Central Government has prescribed cost accounting records under section 209(1) (d) of the Companies Act, 1956 for the power generation activity. since company’s project is under implementation, the prescribed records are not applicable for the year under report.

9. (a) undisputed statutory dues including employees provident fund, investor education and protection fund, employees’ state insurance, income–tax, sales–tax, wealth–tax, service tax, customs duty, excise duty, cess and other material statutory dues have generally been regularly deposited during the year with the appropriate authorities though there has been a slight delay in a few cases.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees’ state insurance, income–tax, wealth–tax, service tax, sales–tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us and as per the books and records examined by us, there are no dues of income–tax, wealth–tax, service tax, sales–tax, customs duty, excise duty and cess which have not been deposited on account of any dispute.

10. the company has accumulated losses as at the end of the financial year which are less than fifty percent of the net worth. The company has incurred cash losses in the current financial year and immediately preceding financial year.

11. According to the information and explanations given to us and as per the books and records examined by us, the company has not defaulted in repayment of dues to any financial institution or banks or debenture holders.

12. According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge

23

of shares, debentures and other securities.

13. the Company does not fall within the category of Chit fund / Nidhi / Mutual Benefit fund / Society and hence the related reporting requirements of the order are not applicable.

14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments and hence the related reporting requirements of the order are not applicable.

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

16. In our opinion, and according to the information and explanations given to us, the term loans raised during the year by the Company have been applied for the purpose for which the said loans were obtained, where such end use has been stipulated by the lender.

17. According to the information and explanations given to us and as per the books and records examined by us, on an overall examination of the Balance sheet of the company, the funds raised by the Company on short–term basis have been applied for long–term investment to the extent of ` 99,24,16, 674/–.

18. the Company has not made any preferential allotment of shares, during the year, to companies and other parties covered in the register maintained under section 301 of the Companies Act, 1956.

19. the company has not issued any debentures during the year nor are there any debentures outstanding at the end of the financial year.

20. the Company has not raised any money through public issues during the year.

21. During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of fraud on or by the Company, noticed and reported during the year, nor have we been informed of such case by the management.

For S. S. Kothari Mehta & Co.Chartered AccountantsFirm regn. no. 000756n

Arun K. TulsianpartnerMembership no.: 089907


24


BALANCE SHEET AS AT 31 MARCH 2013

Particulars Note No. As at 31 March 2013 (Amount in `)

As at 31 March 2012 (Amount in `)

I. EQUITY AND LIABILITIES1 Shareholders’ funds

(a) share capital 2 1,919,144,200 1,919,144,200 (b) reserves and surplus 3 2,175,132,506 2,406,033,113

4,094,276,706 4,325,177,313 2 Share Application Money Pending Allotment 2A 70,000,000 –3 Non–current liabilities

(a) Long–term borrowings 4 – 1,500,000,000 (b) Other Long term liabilities 5 3,573,437 3,308,748 (c) Long–term provisions 6 202,957,357 143,841,798

206,530,794 1,647,150,546 4 Current liabilities

(a) other current liabilities 7 1,587,048,831 14,613,321 (b) short–term provisions 8 94,190 142,715

1,587,143,021 14,756,036 TOTAL 5,957,950,521 5,987,083,895

II. ASSETS1 Non–current assets

(a) Fixed assets(i) tangible assets 9 8,881,848 9,702,663 (ii) Intangible assets – 67,512 (iii) Capital work–in–progress 250,829,627 –(iv) Project & Pre-operative Expenditure

(pending allocation)10 91,615,374 88,929,751

(v) Intangible assets under development 2,805,367 – (b) non–current investments 11 4,484,930,229 4,109,430,229 (c) Long Term Loans and Advances 12 65,174,530 – (d) other non–current assets 13 264,741,629 487,880,056

5,168,978,604 4,696,010,211 2 Current assets

(a) Cash and bank balances 14 22,101,292 19,151,858 (b) short–term loans and advances 15 756,764,743 1,265,523,576 (c) other current assets 16 10,105,882 6,398,250

788,971,917 1,291,073,684 TOTAL 5,957,950,521 5,987,083,895 Significant Accounting Policies 1

The accompanying notes are an integral part of the financial statements

signed in terms of our report of even date For and on behalf of the Board of directors of Bhilwara Energy Limited

For S. S. Kothari Mehta & Co Riju Jhunjhunwala Rishabh JhunjhunwalaChartered Accountants Managing director Managing directorFirm registration no. : 000756n dIn – 00061060 dIn – 03104458

Arun K. Tulsian Ravi Guptapartner Company secretaryMembership no. 089907 M.no. F–5731


25

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31 MARCH 2013

Particulars Note No. Year ended 31 March 2013 (Amount in `)

Year ended 31 March 2012 (Amount in `)

I Incomea revenue from operations (gross) – –

Revenue from operations (net) – – b other Income 17 94,388,541 24,082,914

Total Income 94,388,541 24,082,914 II Expenses

Employee benefit expense 18 24,682,431 21,983,632 Finance cost 19 217,319,540 7,223,355 Depreciation and amortisation expense 20 2,363,722 1,663,922 Other expenses 21 21,325,281 22,971,376 Total expenses 265,690,974 53,842,285

III Profit/(loss) before tax (171,302,433) (29,759,371)IV Tax expense:

Current tax – –Tax for earlier year – (5,135,825)Total tax expense – (5,135,825)

V Profit/(loss) for the year (171,302,433) (34,895,196)VI Earnings per equity share (Par Value of ` 10/– each) 22

Basic (1.13) (0.23)diluted (1.08) (0.23)Significant Accounting Policies 1

The accompanying notes are an integral part of the financial statements





26


CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2013

(Amount in `)PARTICULARS Financial Year

2012–2013Financial Year

2011–2012A. CASH FLOW FROM OPERATING ACTIVITIES

Profit/ Losses after Tax (171,302,433) (34,895,196)Adjustments for :depreciation 2,363,722 1,663,922 Interest paid 217,319,540 7,223,355 Interest received (89,223,482) (24,082,914)(Profit) / Loss on Sale of Fixed Assets (164,081) – dividend Income (978) (978)Cash Generated from Operations (41,007,712) (50,091,811)Direct Taxes Paid – (5,135,825)Operating Profit before working capital changes (41,007,712) (55,227,636)Adjustments for Changes in Working Capital:Inventories – – Loans & advances /Other current assets 663,015,098 (739,974,501)Liabilities and provisions 72,120,015 59,110,261 Net cash from operating activities 694,127,401 (736,091,876)

B. CASH FLOW FROM INVESTMENT ACTIVITIES Acquisition of Fixed Assets (257,582,887) (7,007,822)Sale of Fixed Assets – 196,412,210 Investments (375,500,000) (1,303,625,000)dividend Income 978 978 Interest received 89,223,482 (24,082,914)Net cash from investing activities (543,858,427) (1,138,302,548)

C. CASH FROM FINANCING ACTIVITIES share Application Money received 70,000,000 – Long Term Borrowings – 1,500,000,000 Interest paid (217,319,540) (7,223,355)Net cash from financing activities (147,319,540) 1,492,776,645 Net increase / (decrease) in cash and cash equivalents (A+B+C) 2,949,434 (381,617,779)Cash and cash equivalents at the beginning of the year 19,151,858 400,769,637 Cash and cash equivalents at the end of the year 22,101,292 19,151,858 Components of cash and cash equivalents Cash on hand 219,611 296,632With scheduled banks :In Current Accounts 21,881,681 18,855,226 In deposit Accounts – – TOTAL 22,101,292 19,151,858





27

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2013

1. SIGNIFICANT ACCOUNTING POLICIES

1.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP).The financial statements have been prepared to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended and as applicable from time to time) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis and under the historical cost convention on going concern basis. the accounting policies have been consistently applied in company and are consistent with those used in the previous years.

1.2 USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates. difference between the actual results and estimates are recognized in the period in which the results are known/ materialized.

1.3 FIXED ASSETS

Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

1.4 INTANGIBLE ASSETS

Capital Expenditure on purchase and development of identifiable non–monetary assets without physical substance is recognized as Intangible Assets in accordance with the principles given under As–26– Intangible Assets. These are grouped and separately shown under the schedule of Fixed Assets.

1.5 DEPRECIATION/AMORTISATION

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

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

Remaining Fixed Assets Written down Value Method at the rates prescribed in schedule XIV to the Companies Act, 1956All assets costing ` 5000 or below, are depreciated in full by way of a one time depreciation charge.

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

1.6 IMPAIRMENT OF ASSETS

Specified assets are reviewed for impairment wherever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount for which the asset’s carrying amount exceeds its recoverable amount being the higher of the assets net selling price and its value in use. Value in use is based on the present value of the estimated future cash flows relating to the assets. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (i.e. cash generating units).

previously recognized impairment losses are reversed where the recoverable amount increases because of favorable changes in the estimates used to determine the recoverable amount since the last impairment was recognized. A reversal of asset’s impairment loss is limited to its carrying amount that would have been determined (net of depreciation or amortization) had no impairment loss been recognized in prior years.

1.7 EXPENDITURE INCURRED DURING CONSTRUCTION PERIOD

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

28


1.8 BORROWING COSTS

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

1.9 SEGMENT REPORTING

Identification of segments

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

Inter segment Transfers

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

Allocation of common costs

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

Unallocated items

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

Segment Policies

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

1.10 CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprise cash at bank and cash/ cheques in hand and short term deposits with Banks.

1.11 EMPLOYEE BENEFITS

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

(a) Provident Fund

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

(b) Gratuity

Gratuity is a post employment benefit and is in the nature of a defined benefit plan. The liability recognized in the balance sheet in respect of the gratuity is the present value of the defined benefit/obligation at the balance sheet date less the fair value of plan assets, together with adjustment for unrecognized actuarial gains or losses and past service costs. The defined benefit/ obligation is calculated at or near the balance sheet date by an independent actuary using the projected unit credit method.

Actuarial gains and losses arising from past experience and changes in actuarial assumptions are charged or credited to the Statement of Profit & loss in the year to which such gains or losses relate.

(c) Leave Encashment

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

(d) Other Short Term Benefits

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

1.12 INVESTMENTS

Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long–term investments. Current investments are carried

29

at lower of cost and fair value determined for each category separately. Long–term investments are carried at cost on individual investment basis. However, provision for diminution in value is made to recognize a decline, other than temporary, in the value of the investments in case of long term investments.

1.13 REVENUE RECOGNITION

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

Interest

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

Dividend

dividend on investment with mutual funds and others is recognized when the right to receive payment is established.

1.14 FOREIGN CURRENCY TRANSACTIONS

(i) Initial Recognition

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

(ii) Conversion

Foreign currency monetary items are reported using the closing rate. non–monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non–monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

(iii) Exchange Differences

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

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

1.15 TAXES ON INCOME

Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred tax reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the taxes on income levied by same governing taxation laws. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.

The carrying amount of deferred tax assets are reviewed at each balance sheet date. The Company writes–down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write–down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

MAT credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the Minimum Alternative

30


tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in Guidance note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the statement of profit and loss and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAt Credit entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal income tax during the specified period.

1.16 EARNING PER SHARE

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting period. the weighted average number of equity shares outstanding during the period is adjusted for events of bonus issue, bonus element in a rights issue to existing shareholders, share split and reverse share split (consolidation of shares).

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

1.17 PROVISIONS & CONTINGENT LIABILITIES

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

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

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

31

2. SHARE CAPITAL

Particulars As at 31 March 2013 (Amount in `)


Authorized200,000,000 (previous year 200,000,000) equity shares of ` 10/– each 2,000,000,000 2,000,000,000 4,000,000 (previous year 4,000,000) Cumulative redeemable

preference shares of ` 100/– each400,000,000 400,000,000

2,400,000,000 2,400,000,000 Issued, Subscribed and fully paid–up1,51,914,420 (previous year 151,914,420) equity shares of ` 10/– each

fully paid up1,519,144,200 1,519,144,200

4,000,000 (previous year 4,000,000) 0.01% Cumulative redeemable preference shares of ` 100/– each fully paid up

400,000,000 400,000,000

1,919,144,200 1,919,144,200

(a) Reconciliation of the equity shares outstanding at the beginning and at the end of the reporting period

Equity Shares As at 31 March 2013 As at 31 March 2012 No. of shares (Amount in `) No. of shares (Amount in `)

shares outstanding at the beginning of the year

151,914,420 1,519,144,200 151,914,420 1,519,144,200

shares Issued during the year – – – – shares bought back during the year – – – – Shares outstanding at the end of the year

151,914,420 1,519,144,200 151,914,420 1,519,144,200

(b) Reconciliation of the preferences shares outstanding at the beginning and at the end of the reporting period

Equity Shares As at 31 March 2013 As at 31 March 2012 No. of shares (Amount in `) No. of shares (Amount in `)

shares outstanding at the beginning of the year

4,000,000 400,000,000 4,000,000 400,000,000

shares Issued during the year – – – – shares bought back during the year – – – – Shares outstanding at the end of the year

4,000,000 400,000,000 4,000,000 400,000,000

(c) Shares to be issued to PE Investors The Board of Directors of Bhilwara Energy Limited in its meeting held on 15th March 2012 has approved

issue of equity shares in 2012–13 and onwards not exceeding 3,28,736 shares of face value ` 10/– each at a price of ` 80/– (including premium ` 70/– per share) on preferential basis to the pe's, the same has not yet been allotted.

(d) Terms/rights attached to equity shares/preferences shares:

(i) Terms/rights attached to equity shares the company has only one class of equity shares having par value of ` 10/– per share. each holder

of equity shares is entitled to one vote per share. the company declares and pays dividends in Indian rupees. the dividend proposed by the Board of directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

NOTES TO THE FINANCIAL STATEMENTS

32


In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. the distribution will be in proportion to the number of equity shares held by the shareholders.

(ii) Terms/rights attached to preference shares

the company has issued 0.01% Cumulative redeemable preference shares of ` 100/– each on May 26, 2009 redeemable after five years with put & call option every six months.

(e) Right Issue authorised by the Board of Directors

the Board of directors in their meeting held on 27th February 2013 has approved right issue of upto 93,77,434 equity shares at ` 139.30 per share aggregating upto ` 130,62,76,556/– with a power to the Managing Director to determine the issue size to down size, extend the date of right issue. In exercising of power, right issue was down sized to upto 75,95,714 equity shares with closure date as 15th June 2013. After closure of right issue, total 67,11,458 equity shares were subscribed by the shareholdres and the same have been alloted to the shareholders on 18th June 2013 aggregating ` 93,49,06,099/–.

(f) Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date:

Particulars As at 31 March 2013 No. of shares

As at 31 March 2012 No. of shares




equity shares alloted as fully paid bonus shares by capitalization of securities premium

NIL NIL NIL 45,198,143 NIL

(g) Details of Equity shareholders holding more than 5% shares in the Company

As at 31 March 2013 As at 31 March 2012No. of shares % holding No. of shares % holding

Equity shares of ` 10 each fully paid upravi Jhunjhunwala 19,254,153 12.67 19,254,153 12.67riju Jhunjhunwala 16,329,725 10.75 16,329,725 10.75HEG Limited 39,190,500 25.80 39,190,500 25.80RSWM Limited 26,455,650 17.42 26,455,650 17.42International Finance Corporation 7,962,132 5.24 7,962,132 5.24India Clean Energy III Limited 11,957,860 7.87 11,957,860 7.87TOTAL 121,150,020 79.75 121,150,020 79.75

As per the records of the company, including its register of shareholders/members and other declaration received from the shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership.

(h) Details of preferences shareholders holding more than 5% shares in the Company

As at 31 March 2013 As at 31 March 2012No. of shares % holding No. of shares % holding

Preferences shares of ` 100 each fully paid upHEG Ltd. 4,000,000 100 4,000,000 100 TOTAL 4,000,000 100 4,000,000 100

33

2A. SHARE APPLICATION MONEY PENDING ALLOTMENT

the terms and conditions the shares will be issued pari–passu in all respect with the existing equity shares of the company.

number of shares proposed to be issued 5,02,512 equity shares of ` 10/– each.the Amount of premium ` 6,49,74,880/– (` 129.30 per share)the period before which shares are to be alloted The shares will be alloted before the end of financial

year 2013–14Whether the company has sufficient authorised share capital to cover the share capital amount on allotment of shares out of share application money

Yes, the company has sufficient authorised share capital to cover the share capital amount on allotment of shares out of share application money

Interest accrued on amount due for refund n.Athe period for which the share application money has been provided beyond the period for allotement as mentioned In the share application form alongwith the reasons for such share application money being pending

the money has been received in respect of right Shares for which allotement will be due in financial year 2013–14

3. RESERVES & SURPLUS



Capital ReserveBalance as per last financial statements 1,011,758 1,011,758Add: Additions during the year – –Closing Balance 1,011,758 1,011,758Securities Premium ReserveBalance as per last financial statements 2,505,445,536 2,560,943,252Add: addition during the year – – Less: premium on redemption of preference shares 59,598,174 55,497,716Closing Balance 2,445,847,362 2,505,445,536Surplus/(Deficit) in the statement of profit and lossBalance as per last financial statements (100,424,181) (65,528,985)Profit/(Loss) for the year (171,302,433) (34,895,196)Net surplus/(Net deficit) in the statement of profit & loss (271,726,614) (100,424,181)1TOTAL RESERVES AND SURPLUS 2,175,132,506 2,406,033,113

4. LONG–TERM BORROWINGS

Non-current portion Current maturitiesAs at

31 March 2013 (Amount in `)


As at 31 March 2013

(Amount in `)

As at 31 March 2012

(Amount in `)Secured Loan(a) Term LoansFrom others – 1,500,000,000 1,500,000,000 –

– 1,500,000,000 1,500,000,000 –Amount disclosed under the head "other current liabilities" (refer note no. 7)

(15000,00,00) –

TOTAL – 1,500,000,000 – –

` 150 crores has been raised@ 14.75% interest p.a from IL& FS Financial Services Limited with a pledge of minimum 26% Promoter shareholding in BEL upfront, with an irreveocable Power of Attorney in favour of IL & FS Financial Services Ltd. to sell/dispose the shares in the event of default. The facility is for a period of 24 months. However BEL has the option to repay/ lender has the right to recall the entire loan amount at the end of every 12 months and 18months from the date of first disbursement. A notice of 30 days is required to exercise such option.

34


5. OTHER LONG TERM LIABILITIES



Others security deposits from employees 3,573,437 3,308,748TOTAL 3,573,437 3,308,748

6. LONG TERM PROVISIONS



Provision for employee benefitprovision for gratuity 729,858 637,390provision for leave compensation 2,063,115 2,638,198

TOTAL (a) 2,792,973 3,275,588Other Provisionsprovision for redemption of preference shares 200,164,384 140,566,210

TOTAL (b) 200,164,384 140,566,210 TOTAL LONG TERM PROVISIONS TOTAL (a+ b) 202,957,357 143,841,798

7. OTHER CURRENT LIABILITIES



Current Maturities of long term borrowings 1,500,000,000 – Advance from body corporate 54,000,000 – employee related 2,977,771 5,835,800 statutory dues 5,459,869 5,412,993 others payable 2,675,706 2,103,511 payable to related parties 4,145,744 – Expenses Payable 877,755 322,402 Interest accrued but not due on long term borrowings 16,911,986 938,615

1,587,048,831 14,613,321

8. SHORT TERM PROVISIONS



Provision for employee benefitsprovision for gratuity 10,158 8,483 provision for leave compensation 84,032 134,232 TOTAL 94,190 142,715

35

10. PROJECT AND PRE–OPERATIVE EXPENSES (PENDING ALLOCATION) (All amounts in `)

Particulars Upto 31 March 2012

Additional/Adjustment

during the year

Upto 31 March 2013

Personnel Expensessalaries, wages and bonus 10,418,718 – 10,418,718 Contribution to provident and other funds 764,811 – 764,811 Workmen and staff welfare expenses 584,660 – 584,660 total 11,768,189 – 11,768,189 Administrative and other expensesrent 860,521 96,600 957,121 Rates & taxes 7,096 – 7,096 Insurance 71,256 – 71,256 repairs and maintenance 206,481 800 207,281 Travelling expense 2,351,947 9,951 2,361,898 Conveyance 1,073,066 30,100 1,103,166 Vehicle running & hiring expenses 2,074,958 – 2,074,958 Communication expenses 400,938 55,554 456,492 director remuneration 145,611 – 145,611 Audit Fees 23,075 – 23,075 Advertisement 64,193 – 64,193 Legal & professional charges 10,283,674 992,635 11,276,309 Fee & subscription 140,216 160 140,376 stores consumption – – – power and fuel 346,574 13,070 359,644 Testing & Surveys – – – Consultancy Charges 31,506,338 – 31,506,338 project processing fee 2,867,826 – 2,867,826 upfront premium– nJC – – – Miscellaneous expenses 5,661,753 1,225,309 6,887,062 Financial/bank charges (net of Interest earned of ` nil/–) (previous year ` 21,487,871/–) (Tax deducted at source ` nil/–), (previous year ` nil/–) (net of provision for income tax ` nil/–), (previous year ` 9,641,848).

17,281,717 757 17,282,474Income Tax – – – Wealth Tax – – – depreciation 1,794,322 260,687 2,055,009 Total 77,161,562 2,685,623 79,847,185 GRAND TOTAL 88,929,751 2,685,623 91,615,374

9. FIXED ASSETS (All amounts in `)

Tangible Assets Intangible AssetsParticulars Freehold

BuildingOffice

EquipmentsFurniture

and Fixtures

Computers Electrical Equipment

Project Equipments

Vehicles Total (Tangible

Assets)

Software (Bought

Out)

Total (Intangible

Assets)Cost or valuationAs at 1 April 2011 – 617,424 664,208 1,282,576 647,794 2,919,282 4,227,688 10,358,972 340,000 340,000Additions – 23,000 6,600 533,473 63,726 – 6,284,676 6,911,475 96,347 96,347Transferred to subsidiary co* – 17,194 – 92,400 127,829 1,822,719 1,029,909 3,090,051 – – Disposals – 125,290 – – – – – 125,290 – – As at 31 March 2012 – 497,940 670,808 1,723,649 583,691 1,096,563 9,482,455 14,055,106 436,347 436,347Additions – 31,560 – 214,761 4,133 – 1,910,116 2,160,570 – – Disposals – – – 50,000 – – 848,300 898,300 – – As at 31. 03. 2013 – 529,500 670,808 1,888,410 587,824 1,096,563 10,544,271 15,317,376 436,347 436,347DepreciationAs at 1 April 2011 – 222,824 298,819 711,594 241,859 1,022,009 1,410,017 3,907,122 244,964 244,964Transferred to subsidiary co* – 6,804 77,910 55,067 788,512 701,690 1,629,983 – – Charge for the year – 64,458 66,702 390,648 66,067 263,911 1,280,618 2,132,404 123,871 123,871Disposals 57,100 – – – – – 57100 – – As at 31 March 2012 – 223,378 365,521 1,024,332 252,859 497,408 1,988,945 4,352,443 368,835 368,835Charge for the year – 70,712 55,257 280,516 50,440 83,342 2,016,630 2,556,897 67,512 67,512 Disposals – – – 38,922 – – 434,890 473,812 – – As at 31.03. 2013 – 294,090 420,778 1,265,926 303,299 580,750 3,570,685 6,435,528 436,347 436,347Net BlockAs at 31.03. 2013 – 235,410 250,030 622,484 284,525 515,813 6,973,586 8,881,848 – – As at 31 March 2012 – 274,562 305,287 699,317 330,832 599,155 7,493,510 9,702,663 67,512 67,512 CAPITAL WORK IN PROGRESS

250,829,627.00

36


11. NON CURRENT INVESTMENTS



Trade Investments (valued at cost, except for permanent diminuition in value) Unquoted equity instrumentsInvestment in subsidiaries (unquoted)75,238,123 (Previous Year 75,238,123 ) Equity Shares of ` 10/– each of

Malana Power Company Limited includes 50 equity shares (previous year 50) held jointly with nominees of company.

1,810,338,300 1,810,338,300

1,80,200 (Previous Year 1,80,200) Equity Shares of ` 10/– of Indo Canadian Consultancy Services Limited includes 50 equity shares (previous year 50) held jointly with nominees of company.

42,448,656 42,448,656

56,960,070 (previous year 50,050,070 ) equity shares of 10/– each fully paid up of Bhilwara Green Energy Limited includes 60 equity shares (previous year 60) held jointly with nominees of the company *

569,345,343 500,245,343

10,00,00,000 (previous year 8,00, 50,000 )equity shares of 10/– each fully paid up of NJC Hydro Power Ltd. includes 6 equity shares (previous year 6) held jointly with nominees of company.

1,000,000,000 800,500,000

19,20,000 (previous year 19,20,000 ) equity shares of nr.100/– each fully paid up of Balephi Jalvidyut Co. Ltd. Nepal (overseas subsidiary company).

120,000,000 120,000,000

50,40,000 (previous year 50,40,000) equity shares of nr 100/–each fully paid up of Green Venture Pvt. Ltd. Nepal (Overseas Subsidiary Company).

325,239,250 325,239,250

6,00,00,000 (previous year 5,00,50,000) equity share of 10/– each fully paid up of Chango Yangthang Hydro Power Ltd.

600,000,000 500,500,000

7,40,000 (previous year nil) equity share of 10/– each fully paid up of LNJ Power Ventures Ltd.**

7,400,000 –

Investment in others (unquoted)40,000 (Previous Year 40,000) Equity Shares of ` 100/– each of Green

Venture Renewable India Pvt. Ltd.10,000,000 10,000,000

10,000 (Previous Year 10,000) Equity Shares of ` 10/– each fully paid up of Odetta Realty Pvt. Ltd.

100,000 100,000

Investment in others (quoted)489 (previous year 489) equity shares of ` 10/– each fully paid up

of Punjab & Sind Bank market value of the investment ` 28,484 (previous year ` 62400)

58,680 58,680

TOTAL 4,484,930,229 4,109,430,229 NOTE:Aggregate amount of quoted Investment 58,680 58,680Aggregate amount of unquoted Investment 4,484,871,549 4,109,371,549Market Value of the quoted Investment 28,484 62,400

* BGEL shares held by BEL are pledged in following manner :– 1,48,09,618 shares with IFCI and 4,21,50,392 shares with IDBI Trusteeship Service Limited (on behalf of IREDA

& IFC) face value of ` 10/– each.

** LNJ Power Ventures Limited shares held by BEL are pledged in following manner :– 510000 shares with IDBI Trustship Services Limited (on the behalf of IFC & Yes bank Ltd.) face value of

` 10/– each.

12. LONG TERM LOANS AND ADVANCES



Capital Advances 65,174,530 –TOTAL 65,174,530 –

37

13. OTHER NON CURRENT ASSETS



share Application money (pending for allotment) 252,456,405 481,742,284 Service Tax Receivable 1,049,729 – Security deposit with Govt. departments & others 1,264,000 2,296,718 Advance taxes {net of tax provision of ` nil (previous year ` 51,35,825)}

9,971,495 3,841,054

TOTAL 264,741,629 487,880,056

14. CASH AND BANK BALANCES



Cash and cash equivalentsCash on hand 219,611 296,632 Balances with banks in: – Current accounts 21,881,681 18,855,226 – deposits with original maturity of less than 3 months – – TOTAL 22,101,292 19,151,858

15. SHORT TERM LOANS AND ADVANCES



Loans and advances to related parties (subsidiary companies) 598,921,260 1,156,553,713Loan to body corporate 82,337,493 75,062,720Advances recoverable in cash or kind or for value to be received – Considered good 72,167,769 33,357,946Prepaid Expenses 3,338,221 549,197TOTAL 756,764,743 1,265,523,576

16. OTHER CURRENT ASSETS



Interest accrued on deposits with Banks and others 4,384,222 6,398,250 receivables from related parties 5,721,660 – TOTAL 10,105,882 6,398,250

17. OTHER INCOME



Interest income – Bank deposits and others 12,387,323 19,167,039 – subsidiary company 76,836,159 4,914,897 Profit on sale of assets 164,081 – others (Consultancy charges) 5,000,000 – dividend Income from non current investment 978 978 TOTAL 94,388,541 24,082,914

18. EMPLOYEE BENEFIT EXPENSE



salaries, wages and bonus 23,155,566 20,893,235 Contribution to provident and other funds 1,055,209 952,426 Workmen and staff welfare expenses 471,656 137,971 TOTAL 24,682,431 21,983,632

38


19. FINANCE COST



Interest – on term loans 216,178,598 7,223,355 – others 87,567 – other borrowing costs 1,053,375 – TOTAL 217,319,540 7,223,355

* Interest on term loan represents the interest on fund utilised by the company, net of ` nil/– (previous year ` 2,70,24,933/–) transferred to project.

20. DEPRECIATION & AMORTISATION



depreciation on tangible assets 2,556,897 2,132,404 Amortization of Intangible assets 67,512 123,871

2,624,409 2,256,275 Less: Transferred to Pre–operative expenditure (Note 10) 260,687 592,353 TOTAL 2,363,722 1,663,922

21. OTHER EXPENSES



rent 2,195,195 909,052Travelling & conveyance expenses 4,219,872 4,829,363Business promotion 425,807 1,554,631Conveyance Expenses 886,294 328,091Car Running & Maint. Exp- 1,228,234 890,459Gift & Presentation 908,052 54,823Repair & Maintance 1,144,105 383,484Electricity Expenses 412,710 200,468Internet Charges 482,874 401,255Legal & Professional 2,829,785 7,366,596Printing & Stationery 806,583 671,415Fees and subcription 1,446,363 1,960,471Miscellaneous Expenses 3,221,950 1,871,915Bank charges 26,518 475,904Preliminary expenses written off – –TOTAL (a) 20,949,338 22,609,345 payment to Auditor: – Audit fee 200,000 200,000 – other services 150,000 135,000 – Other expenses 25,943 27,031TOTAL (b) 375,943 362,031TOTAL (a)+(b) 21,325,281 22,971,376

22. Earning Per Share



the basic and diluted earning per share are ae under:Computation of basic earnings per shareNet Loss as per statement of profit and loss (171,302,433) (34,895,196)equity shares at the beginning of the year 151,914,420 151,914,420equity shares at the end of the year 151,914,420 151,914,420Weighted average number of equity shares in calculating basic eps 151,914,420 151,914,420Weighted average number of equity shares in calculating dilutive eps 158,954,614 151,914,420Basic earnings per share (in rupees) (1.13) (0.23)diluted earnings per share (in rupees) (1.08) (0.23)

note: As the dilutive potential equity shares are anti–dilutive in nature as they reduce loss per equity share, they have not been considered for calculating diluted earning per share.

39

23. CONTINGENT LIABILITIES

a) Contingent Liability on account of Projects awarded to the company and acceptance given against the same for which upfront premium is payable post acceptance and before signing of binding Memorandum of Allotment for one project with the state of Arunachal pradesh is ` 5,62,50,000/- (Previous Year ` 5,62,50,000/-).

b) The Company has provided Guarantee in favour of International Finance Corporation ( IFC ) with HEG Ltd. and RSWM Ltd. on joint and several basis on behalf of AD Hydro Power Ltd. for ` 6,00,00,000/- (Previous Year ` 6,00,00,000/-).

c) The company has signed sponsor support agreement with the lenders i.e. IDBI Bank Limited, Everest Bank, Export Import Bank of India, Oriental Bank of Commerce, Punjab & Sind Bank & PTC India Financial Services Private Limited in Green Venture Private Limited (GVPL) to bring 75% of equity component of ` 357,00,00,000/- i.e. 35% of total envisaged Project Cost of ̀ 10,20,00,00,000/-. Against the total amount required to be brought in, the company till March 31, 2013 has contributed ` 53,74,06,290/- towards share capital leaving a balance amount of ` 214,00,93,710/-.

The company has unconditionally & irrevocably agreed that in event of Project Completion Cost exceeding ` 10,20,00,00,000/- the same shall be arranged by the company through additional equity contribution/subordinated unsecured and interest free debt without any recourse to the Project Assets & Rupee Lenders.

d) Bhilwara Green Energy Limited has issued compulsory cconvertible debentures (CCD) with a coupon rate of 12.5% to IFCI Limited of ` 38,82,00,000/– convertible at the end of 36 months to IFCI Ltd. for part financing of the wind energy project.

the Company has provided corporate guarantee to IFCI limited for these debentures.

In the event of any default on the part of Bhilwara Green Energy Limited in payment of any of the amounts i.e. principal Amount, unpaid coupon amount along with penal interest or in the event of default to comply with or perform any of the terms, conditions and covenants contained in the debenture subscription agreement, the company shall upon demand forthwith pay to IFCI all the amounts under the debenture subscription agreement.

e) Put option is available with IFCI Limited to require Bhilwara Energy Limited to purchase the CCDs at put option i.e. Issue price, and accrued coupon along with any default interest( if any) at the end of the 35th month from the date of first disbursement i.e. 20 March 2015.

f) Out of the total investment in Bhilwara Green Energy Limited of 5,69,60,070 shares, 1,48,09,618 shares have been pledged with IFCI Limited as security against CCD of ` 38,82,00,000/–.

g) Bhilwara Green Energy Limited has been sanctioned a term loan of ` 2,23,38,00,000/– , from IredA and International Finance Corporation (IFC) for ` 154,68,00,000/– and ` 68,70,00,000/– respectively for part financing of the Wind Project. As per the agreement the company is liable to bring in additional equity in Bhilwara Green Energy Ltd to cover any deficiency in the Project Cost. Further, the company has pledged 3,70,36,992 shares to IDBI Trusteeship Services Ltd jointly on behalf of IREDA and IFC respectively .

h) LNJ Power Ventures Limited has set up a wind farm of 20 MW for captive consumption by Group Company RSWM Limited in Jaisalmer, Rajasthan in 2012–13.Term loan has been raised in the books of the SPV for ` 43,29,00,000 & ̀ 40,95,00,000 from Yes Bank Limited & International Finance Corporation respectively. Share Pledge Agreement has been signed wherein out of Bhilwara Energy Limited holding of 7,40,000 equity shares, 5,10,000 equity shares have been pledged with IDBI Trusteeship Services Ltd in favour of both the lenders.

Further the company is liable to bring in additional equity in LNJ Power Ventures Limited to cover any deficiency in the Project Cost.

24. (a) As on the date of Balance sheet (net of advances) are ` 46,96,40,010. (Previous Year ` NIL).

(b) Estimated amount of Contracts remaining to be executed on other than capital account and not provided for (net of advances) are ` NIL (Previous Year ` NIL).

25. on May 26, 2009 Company had issued 40,00,000, 0.01% Cumulative redeemable preference shares of ` 100 /– each at par redeemable at premium at the end of the fifth year from the date of issue. Preference Shares carry a put & call option at the end of one year from the date of issue and every six month thereafter and in such event redemption premium to be paid as per terms of issue.

In the absence of distributable profits, the coupon liability of 0.01% amounting to ` 1,54,000 (previous year ` 1,13,973/–) has not been provided in the books being in the nature of dividend. However, redemption premium has been provided for on proportionate basis.

40


26. there are no present obligations requiring provision in accordance with the guiding principles as enunciated in Accounting Standard (AS)–29 as it is not probable that an outflow of resources embodying economic benefit will be required.

27. the Government of India promulgated an Act namely the Micro, small and Medium enterprises (development) Act, 2006 which came into force with effect from october 2006.As per the Act, the Company is required to identify the Micro, Small and Medium enterprises and pay them interest on overdue beyond the specified period irrespective of the terms agreed with the suppliers. As per the information available with the company and relied upon by the auditors, none of the creditors falls under the definition of ‘supplier’ as per section 2(n) of the Act to the extent of information available with the company. In view of the above, the prescribed disclosures under section 22 of the Act are not required to be made.

28. The Company has given undertaking to IDBI Bank Limited and Punjab & Sind Limited for term loan facilities of ` 200,00,00,000 & ` 70,00,00,000 respectively (previous year ` 260,00,00,000, in favour of Yes Bank Ltd.) availed by Malana Power Company Limited, one of the subsidiaries of the company, for not diluting the shareholding in the said company till the full & final payment of the lenders.

29. GRATUITY – DEFINED BENEFIT PLAN AS–15 (UNFUNDED)

The company has a defined gratuity plan. Gratuity is computed as 15 days salary, for every completed year of services or part thereof in excess of 6 months and is payable on retirement/termination/resignation. The benefits vest on the employee completing 5 year of services. The company makes the provision of such gratuity asset/liability in the books of accounts on the basis of actuarial valuation as per the projected unit credit method.

The following tables summarise the components of net benefit expenses recognized in the ‘Project and preoperative expenses’ (pending allocation)’/’Personnel Expenses’ and amount recognized in the balance sheet:

Net employee benefits expenses (recognized in employee cost) (Amount in `)

Particulars For the year endedMarch 31,2013

For the year endedMarch 31,2012

Current service Cost 7,95,190 3,05,119Interest Cost On Benefit obligation (55,174) 23,476Expected return on plan assets – –Net Actuarial (Gain)/ Loss recognized in the period NIL 17,06,946past service cost – –Expenses recognized in the statement of profit & loss account/project and preoperative expenses (pending allocation)

7,40,016 20,35,541

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

Particulars For the year endedMarch 31, 2013

For the year endedMarch 31, 2012

Opening defined benefit obligation NIL 2,86,294Interest cost on benefit obligation (55,174) 23,476Current service cost 7,95,190 3,05,119Benefits paid – (16,75,962)Actuarial (gains)/ losses on obligation 9,36,654 17,06,946Closing defined benefit obligation 7,40,016 6,45,873

Changes in the fair value of plan assets are as follows: (Amount in `)



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

41

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



discount rate 8.10% 8.60%Expected rate of return on assets – –Future salary increase 5.00% 5.00%Withdrawal rate – –

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

Amounts for the current year and previous four years in respect of gratuity are as follows:

(Amount in `)

Particulars For the year ended

March 31, 2013

For the year ended

March 31, 2012

For the year ended

March 31, 2011

For the year ended

March 31, 2010

For the year ended

March 31, 2009

Defined benefit obligation 7,40,016 6,45,873 2,86,294 2,91,112 1,49,133plan assets – – – – –Surplus/ (deficit) (7,40,016) (6,45,873) (2,86,294) (2,91,112) (1,49,133)Experience adjustment on plan liabilities

NIL (17,39,267) 1,61,424 26,738 –

Experience adjustment on plan assets

– – – – –

30. LEAVE ENCASHMENT LIABILITY (UNFUNDED)

Statement of Profit & Loss




Current service Cost 16,57,644 14,87,338Interest Cost On Benefit obligation 537,605 1,47,677Expected return on plan assets – –Net Actuarial (Gain)/ Loss recognized in the period NIL (1,82,032)Expenses recognized in profit & loss account/project and preoperative expenses

21,47,147 14,52,983

Balance Sheet (Amount in `)



Fair value of plan assets at the end of the period 21,47,147 27,72,430present value of obligationFunded status (21,47,147) (27,72,430)Excess of actual over estimated – –net asset/(liability) recognized 21,47,147 27,72,430




present value of obligation at the beginning of the period NIL 18,00,939Interest cost 5,37,605 1,47,677Current service cost 16,57,644 14,87,338Benefits paid NIL (4,81,492)Actuarial (gains)/ losses on obligation NIL (1,82,032)Closing defined benefit obligation 21,47,147 27,72,430

42


Changes in the fair value of the plan assets are as follows: (Amount in `)



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

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

(Amount in `)



discount rate 8.10% 8.60%Expected rate of return on assets – –Future salary increase 5.00% 5.00%

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

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

(Amount in `)


March 31, 2013

For the year ended

March 31, 2012

For the year ended

March 31, 2011

For the year ended

March 31, 2010

For the year ended

March 31, 2009

Defined benefit obligation 21,47,147 27,72,430 18,00,939 8,65,377 3,91,231plan assets – – – – –Surplus/ (deficit) (21,47,147) (27,72,430) (18,00,939) (8,65,377) (3,91,231)Experience adjustment on plan liabilities

NIL 78,272 (3,82,069) 1,79,712 –


– – – – –

Defined Contribution Plan (Amount in `)

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



employer’s Contribution to provident fund* 10,55,209 952,456

31. SEGMENTAL REPORTING

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

32. DERIVATIVE INSTRUMENTS AND FOREIGN CURRENCY EXPOSURES

(a) Foreign currency exposure outstanding as at the Balance Sheet date are ` NIL (Previous year ` NIL).

(b) Particulars of un–hedged foreign currency exposures as at the Balance Sheet date are ` NIL (previous year ` NIL).

43

33. During the year company has received one of the construction power project of 7.5 MW Khangtang HEP project from its subsidiary company. The details of the assets & liabilities transferred to holding company are as under:–

Particulars Amount (In `)Capital work in progress 24,57,50,000/–Loans & advances 9,81,06,865/–total assets 34,38,56,865/–Less:– Current Liability 3,49,75,000/–Net Assets 30,88,81,865/–

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

(Amount in `)

Items of Balances as on

01–04–2011

Charge/(credit) during

the year

Balances as on

01–04–2012

Charge/(credit) during

the year

Balances as on

31–03–2013Deferred Tax liabilityon account of differencein depreciation

(12,64,746) 4,51,108 (8,13,638) 6,34,649 (1,78,989)

Deferred Tax asset on account of provision for employees Benefits & others

15,13,247 (2,01,371) 13,11,876 (3,30,529) 9,81,347

Net deferred tax asset 2,48,501 2,49,737 4,98,238 3,04,120 8,02,358

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

35. on 21st december, 2010, the company has granted 10,68,820 stock options as per Bhilwara energy esop 2010 to its employees including those of subsidiary companies.

Bhilwara Energy Employee Stock Option Plan 2010

Salient features of the plan

parameters/terms of Grant Explanationtotal number of options granted A total of 10,68,820 options are being awarded in the current grant

amounting to 0.70% of the total paid up capital as on the grant date.total number of options accepted 10,68,820total number of Valid options 8,38,617total number of options lapsed 2,30,203Categorization of employees All eligible employees as defined in the plan document.Fair share price ` 82/–Exercise price per option ` 82/–Grant date 21st december, 2010Vesting period the options would vest in the grantee over a period of three years from

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

– 20% of the options would vest at the end of 12 months from the date of grant.



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

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

Exercise Conditions As per Bhilwara energy esop 2010 plan.

no accounting treatment has been made for esop in current accounting period as there is no difference in the fair price of the share and exercise price per option. Moreover, none of the employees has so far exercised any of the options till the close of accounting year.

44


36. RELATED PARTY DISCLOSURES

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

i) Malana Power Company Limited (MPCL) – Subsidiary.

ii) AD Hydro Power Limited (ADHPL) – Subsidiary of a Subsidiary.

iii) Indo Canadian Consultancy Services Limited (ICCS) – Subsidiary.

iv) NJC Hydro Power Limited (NHPL) – Subsidiary.

v) Bhilwara Green Energy Limited (BGEL) – Subsidiary.

vi) Green Ventures Private Limited, Nepal (GVPL) – Subsidiary.

vii) Balephi Jalbidyut Company Limited, Nepal (BLCL) – Subsidiary.

viii) Chango Yangthang Hydro Power Limited (CHY) – Subsidiary.

ix) LNJ Power Ventures Ltd.–Subsidiary.

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

HEG limited

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

Mr. ravi Jhunjhunwala

Mr. riju Jhunjhunwala

Mr. rishabh Jhunjhunwala

(d) Key Management Personnel and their relatives

Mr. ravi Jhunjhunwala

Mr. riju Jhunjhunwala

Mr. rishabh Jhunjhunwala

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

(i) RSWM Limited.

(ii) Bhilwara Scribe Private Limited.

(iii) Deepak Knits & Textiles Private Limited

(iv) Maral Overseas Limited.

(v) Bhilwara Technical Textiles Limited.

(vi) BMD Private Limited.

(vii) Bhilwara Infoway Private Limited.

(viii) Bhilwara Services Private Limited.

(ix) LNJ Bhilwara Textile Anusandhan Vikas Kendra.

(x) HEG Graphite and Services Limited.

(xi) Odetta Realty Private Limited.

(x) BSL Limited.

(xi) HEG Limited.

45

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

(Amount in `) For the year ended

31.03.2013For the year ended

31.03.2012i) Parties referred to in item (a) above

Equity Shares allotted during the year by:–(a) NJC Hydro Power Ltd. (b) Green Venture Pvt Ltd(c) Chango Yangthang Hydro Power Ltd(d) Bhilwara Green Energy Ltd(e) LNJ Power Ventures Ltd

19,95,00,000 –

9,95,00,0006,91,00,000 74,00,000

–30,41,67,00050,00,00,000

50,00,00,000 –

services taken from Indo Canadian Consultancy Services Ltd

2,32,92,474 1,31,37,569

Services Given to LNJ Power Ventures Ltd 50,00,000 –OthersLoans & Adv.–Amount receivable 59,89,21,260 1,15,65,53,713Reimbursement of Expenses(Net) 9,94,24,872 1,11,18,659Investment as at year endEquity Shares in Malana Power Company Ltd. 1,81,03,38,300 1,81,03,38,300equity shares in Indo Canadian Consultancy services Ltd.

4,24,48,666 4,24,48,666

Equity Shares in NJC Hydro Power Ltd. 100,00,00,000 80,05,00,000Equity Shares in Bhilwara Green Energy Ltd. 56,93,45,343 50,02,45,343Equity Shares in Green Venture Pvt. Ltd.–Nepal 32,52,39,250 32,52,39,250Equity Shares in Balephi Jalvidhyut Co. Ltd. – Nepal 12,00,00,000 12,00,00,000Equity shares in Chango Yangthang Hydro Power Ltd 60,00,00,000 50,05,00,000Equity shares in LNJ Power Ventures Ltd 74,00,000 –Share Application Money (Pending Allotment)Green Ventures (P) Ltd– Nepal 21,21,67,040 17,28,52,919Balephi Jalvidhyut Co. Ltd. Nepal 4,02,89,365 4,02,89,365NJC Hydro Power Ltd. – 19,95,00,000Bhilwara Green Energy Ltd – 6,91,00,000Loans & Advances at the year ended/Share ApplicationChango Yangthang Hydro Power Limited 3,84,27,767 9,98,24,851Bhilwara Green Energy Limited 2,54,40,199 39,03,93,845AD Hydro Power limited – 34,20,045Indo Canadian Consultancy services limited 35,74,200 2,21,813Malana power Company limited – 21,94,93,341NJC Hydro power limited 53,02,79,091 44,31,99,818LNJ Power Ventures Ltd 57,21,660 –Loans & Advances given during the year Chango Yangthang Hydro Power Limited 3,45,85,714 9,98,24,851Bhilwara Green Energy Limited 5,37,46,354 39,03,93,845AD Hydro Power Limited – 10,86,883Indo Canadian Consultancy Services Limited 2,95,64,411 1,62,23,277Malana Power Company Limited 36,15,48,367 22,46,27,256NJC Hydro Power Limited 19,14,80,094 59,97,69,482Loans & Advances received back during the yearBhilwara Green Energy Limited 41,87,00,000 56,93,06,574AD Hydro Power Limited 35,13,545 61,60,720NJC Hydro Power Limited 5,00,000Indo Canadian Consultancy Services Limited – 1,60,01,464Malana Power Company Limited 58,10,41,708 51,33,915Project transfer to subsidiaryChango Yangthang Hydro power limited – 60,00,08,202Project transfer from subsidiaryNJC Hydro Power Limited 30,88,81,865 –

46


(Amount in `) For the year ended

31.03.2013For the year ended

31.03.2012Interest received from subsidiary companiesNJC Hydro power Limited 5,48,93,054 –Bhilwara Green Energy Limited 21,82,656 –Malana Power Company Limited 1,97,60,449 49,14,897

ii) Parties referred to in item (b) Reimbursement of Expenses to HEG Ltd 5,06,959 3,81,163premium on redemption of preference shares payable to HEG Ltd

20,01,64,384 14,05,66,210

dividend on preference shares payable (due to losses not provided in the books)

1,54,000 113,973

Expenses for the year on redemption of preference share 5,95,98,174 5,54,97,717iii) Persons referred to in (c) & (d) above

salaries and perquisite paid/payable during the year to Mr. riju Jhunjhunwala

38,97,600 40,02,635

salaries and perquisite paid/payable during the year to Mr. rishabh Jhunjhunwala

38,97,600 40,02,635

purchase of shares of subsidiary Company– (Chango Yangthang Hydro Power Limited) from Mr. ravi Jhunjhunwala

– 4,00,000

purchase of shares of subsidiary Company– (Chango Yangthang Hydro Power Limited) from Mr. riju Jhunjhunwala

– 49,980

purchase of shares of subsidiary Company– (Chango Yangthang Hydro Power Limited) from Mr. rishabh Jhunjhunwala

– 49,980

Purchase of Shares of Subsidiary Company– (LNJ Power Ventures Limited) from Mr. Ravi Jhunjhunwala

100 –

iv) Persons referred to in (e) aboveRent Paid to RSWM Ltd. 1,22,20,700 45,45,258Reimbursement of expenses to BSL Ltd. 1,75.545 107,660Reimbursement of Expenses to RSWM Ltd. 75,74,161 30,72,714Equity shares in Odetta Realty Private Ltd – 1,00,000

37. TRANSACTIONS IN FOREIGN EXCHANGE (Amount in `)

Sl. No.

Nature of Transaction For the year endedMarch 31, 2013


1 Income Nil nil2 Expenditure (Foreign Travelling) 10,60,501 29,53,2243 Legal & Professional expenses reimbursement (Foreign) Nil 2,409,5314 Consultancy Charges Nil nil

38. The company is paying rentals for office premises taken on rent which are not in the nature of lease agreements. therefore, disclosure requirements of Accounting standards As–19 are not applicable.

39. disclosure of other items as required by part–II of schedule–VI to the Companies Act, 1956 is not applicable.

40. Previous year figures have been regroup/reclassified whenever considered necessary.


For S. S. Kothari Mehta & Co. Riju Jhunjhunwala Rishabh JhunjhunwalaChartered Accountants Managing director Managing directorFirm registration no. : 000756n dIn – 00061060 dIn – 03104458

Arun K. Tulsian Ravi Guptapartner Company secretaryMembership no. 089907 M. no. F–5731


47

Name of the subsidiary Malana Power Company Ltd.

1. Financial period ended March 31, 2013

2. Extent of the interest of holding company 51% in Equity share in the subsidiary company

3. shares held by the holding company in subsidiary 75,238,123 equity shares of ` 10/– each fully paid.

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

a) dealt with or provided for in nil the accounts of the holding company.

b) not dealt with or provided for in the ` 8,00,09,820.00 accounts of the holding company.

5. The net aggregate of profits or Losses for the previous years of the subsidiary since it became the company’s subsidiary concerns the members of the holding Company


b) not dealt with or provided for in the ` 1,77,17,25,171.00 accounts of the holding company.

STATEMENT PuRSuANT TO SECTION 212 OF THE COMPANIES ACT,1956 RELATING TO SuBSIDIARY COMPANIES

For and on behalf of the Board of directors

Riju Jhunjhunwala Rishabh Jhunjhunwala Managing director Managing director dIn – 00061060 dIn – 03104458

Ravi Guptaplace : noida, u.p. Company secretarydated : 27th August, 2013 M.no. F–5731

48


Name of the subsidiary AD Hydro Power Ltd. (Subsidiary of M/s Malana Power Company Ltd)


2. Extent of the interest of holding 44.88% in equity shares company in the subsidiary company

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


a) dealt with or provided for in NIL the accounts of the holding company.

b) not dealt with or provided for in the ` (11,59,89,667.00) accounts of the holding company.




STATEMENT PuRSuANT TO SECTION 212 OF THE COMPANIES ACT, 1956 RELATING TO SuBSIDIARY COMPANIES




49

Name of the subsidiary Indo Canadian Consultancy Services Ltd.


2 Extent of the interest of the holding company 51% in equity shares in the subsidiary Company

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



b) not dealt with or provided for in the ` (6,96,058.00) accounts of the holding company.








50


Name of the subsidiary NJC Hydro Power Limited


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

3. shares held by the holding company in subsidiary 10,00,00,000 equity shares of ` 10/– each fully paid up.






b) not dealt with or provided for in the n.A. accounts of the holding company.





51

STATEMENT PuRSuANT TO SECTION 212 OF THE COMPANIES ACT,1956, RELATING TO SuBSIDIARY COMPANIES

Name of the subsidiary Bhilwara Green Energy Ltd.



3. shares held by the holding company in subsidiary 5,69,60,070 equity shares of ` 10/– each fully paid.



b) not dealt with or provided for in the ` 88,45,002.00 accounts of the holding company.







52


Name of the subsidiary Chango Yangthang Hydro Power Ltd.



3. shares held by the holding company in subsidiary 6,00,00,000 equity shares of ` 10/– each fully paid.






b) not dealt with or provided for in the ` (486.00) accounts of the holding company.





53


Name of the subsidiary LNJ Power Ventures Ltd.



3. shares held by the holding company in subsidiary 7,40,000 equity shares of ` 10/– each fully paid.






b) not dealt with or provided for in the nil accounts of the holding company.




54


Name of the subsidiary Green Venture Pvt Ltd., Nepal


2. Extent of the interest of holding company 75.70% in equity shares in the subsidiary company

3. shares held by the holding company in subsidiary 50,40,000 equity shares of nepali ` 100/– each fully paid up.







STATEMENT PuRSuANT TO SECTION 212 OF THE COMPANIES ACT,1956, RELATING TO SuBSIDIARY COMPANIES




55


Name of the subsidiary Balephi Jalbidhyut Company Ltd., Nepal


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

3. shares held by the holding company in subsidiary 19,20,000 equity shares of nepali ` 100/– each fully paid up.










56


INDEPENDENT AUDITORS’ REPORT ON CONSOLIDATED FINANCIAL STATEMENTS OF BHILWARA ENERGY LIMITED AND ITS SUBSIDIARIES

The Board of Directors ofBHILWARA ENERGY LIMITEDWe have audited the accompanying consolidated financial statements of Bhilwara Energy Limited (‘the Company’) and its subsidiaries (collectively referred to as “the Group”), which comprise the Consolidated Balance Sheet as at March 31, 2013, the Consolidated Statement of Profit and Loss and the Consolidated Cash Flow statement for the year then ended and significant accounting policies and other explanatory information.Management’s responsibility for the Consolidated Financial StatementsManagement is responsible for the preparation of these consolidated financial statements that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Group in accordance with the Accounting Standards referred to in sub–section (3C) of section 211 of the Companies Act, 1956 (‘the Act’). This responsibility includes the design, implementation and maintenance of internal controls relevant to the preparation and presentation of the consolidated financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditors’ ResponsibilityOur responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the Company’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Other MattersWe did not audit the financial statements of eight subsidiaries, except one subsidiary NJC Hydro Power Limited, whose financial statements reflect total assets of ` 3,69,931.39 lacs (previous year 3,68,564.03 lacs) as at March 31, 2013, total revenues of ` 39,882.89 lacs (previous year ` 30,949.18 lacs) and net cash inflows amounting to ` 3,271.52 lacs (previous year outflows ` 4,098.95 lacs) for the year then ended as considered in the Consolidated Financial Statements. The financial statements and other financial information of these subsidiaries have been audited by other auditors whose reports have been furnished to us and our opinion, in so far as it relates to the amounts included in respect of these subsidiaries, is based solely on the report of the other auditors.OpinionWe report that the consolidated financial statements have been prepared by the company in accordance with the requirements of Accounting Standard (AS) – 21, ‘Consolidated Financial Statements’ notified pursuant to the Companies (Accounting Standards) Rules, 2006 (as amended) and on the basis of the separate audited financial statements of the subsidiaries included in the Consolidated Financial Statements. Based on our audit and on consideration of the report of other auditors on separate financial statements and on the other information of the subsidiary companies and to the best of our information and according to the explanations given to us, we are of the opinion that the attached Consolidated Financial Statements give a true and fair view in conformity with the Accounting Principles generally accepted in India:i. In case of consolidated Balance Sheet, of the

consolidated state of affairs of the Group as at March 31, 2013;

ii. In case of consolidated Statement of Profit and Loss, of the Loss of the Group for the year ended March 31, 2013; and

iii. In case of consolidated Cash Flow statement, of the cash flows of the Group for the year ended March 31, 2013.

For S. S. KOTHARI MEHTA & Co. Chartered AccountantsFirm Regn. No. 000756N

Arun K. TulsianPartnerMembership No. 089907 Place: New DelhiDate : 27th August, 2013

AUDITORS’ REPORT ON CONSOLIDATED FINANCIAL STATEMENTS

57

CONSOLIDATED BALANCE SHEET AS AT 31 MARCH 2013

Particulars Note No.

As at 31 March 2013

(` in Lacs)

As at 31 March 2012

(` in Lacs)I. EqUITY AND LIABILITIES

1. Shareholders’ funds (a) Share capital 2 19,191.44 19,191.44 (b) Reserves and surplus 3 42,801.45 45,512.79 (c) Share application money pending allotment 2A 700.00 –

62,692.89 64,704.23 2. Minority Interest 43,825.90 44,459.143. Non-current liabilities

(a) Long-term borrowings 4 137,393.21 125,615.10 (b) Deferred tax liabilities 5 2,099.36 2,001.69 (c) Other long term liabilities 6 35.73 33.09 (d) Long-term provisions 7 2,444.60 2,042.82

141,972.90 129,692.70 4. Current liabilities

(a) Trade Payables 8 6,762.27 13,990.51 (b) Other current liabilities 9 33,011.10 24,195.38 (c) Short–term provisions 10 254.16 267.26

40,027.52 38,453.16 TOTAL 288,519.22 277,309.23

II. ASSETS1. Non-current assets

(a) Fixed assets(i) Tangible assets 11 230,733.45 224,913.84 (ii) Intangible assets 11 10.50 17.92 (iii) Capital work in progress 11,767.60 18,076.50 (iv) Project & Pre-operative expenses pending

allocation12 24,211.54 18,635.28

(v) Intangible assets under development 28.05 – (b) Goodwill on consolidation 16.77 – (c) Non-current investments 13 101.71 101.71 (d) Long-term loans and advances 14 5,741.92 4,874.81 (e) Other non-current assets 15 526.30 962.49

273,137.85 267,582.54 2. Current assets

(a) Inventories 16 1,593.47 1,533.32 (b) Trade receivables 17 3,071.58 1,717.19 (c) Cash and bank balances 18 5,014.97 1,808.96 (d) Short-term loans and advances 19 3,338.02 2,294.70 (e) Other current assets 20 2,363.34 2,372.52

15,381.37 9,726.69 TOTAL 288,519.22 277,309.23

Significant Accounting Policies 1The accompanying notes are an integral part of the financial statements.

As per our report of even date For and on behalf of the Board of Directors

For S. S. Kothari Mehta & Co Riju Jhunjhunwala Rishabh JhunjhunwalaChartered Accountants Managing Director Managing DirectorFirm Registration No. : 000756N DIN – 00061060 DIN – 03104458

Arun K. Tulsian Ravi GuptaPartner Company SecretaryMembership No. 089907 M.No. F–5731

Place : New DelhiDated : 27th August, 2013

58


CONSOLIDATED STATEMENT OF PROFIT & LOSS FOR THE YEAR ENDED 31 MARCH 2013


For the Year Ended

31 March 2013 (` in Lacs)

For the Year Ended


I. Incomea Revenue from operations (net) 21 36,271.46 30,639.40 b Other Income 22 4,555.32 550.61 Total Income (I) 40,826.77 31,190.01

II. ExpensesWheeling Cost 3,052.72 2,839.62 Employee benefits expense 23 3,012.22 3,176.15 Other expenses 24 4,042.11 4,003.85 Depreciation and amortisation expense 25 15,494.00 11,586.82 Finance costs 26 17,408.90 12,686.43 Preliminary expenses written off 90.72 6.16 Total expenses (II) 43,100.66 34,299.03

III. Earnings before tax and prior period items (2,273.89) (3,109.02)Prior Period expense – 34.33

IV. Profit/(Loss) before tax and Minority Interest (2,273.89) (3,143.35)V. Tax expense

Current tax 411.31 598.05 MAT Credit Entitlement (16.27)Earlier year tax expense – 40.75 Deferred tax charge / (credit) 97.67 (101.19)Total tax expense 492.71 537.61

VI. Loss for the year (2,766.60) (3,680.96)Less: Minority Interest (664.10) (1,929.87)Less: Amount transferred to goodwill on consolidation (0.75) – Loss for the year (2,101.75) (1,751.09)

VII. Earnings per share (nominal value of share ` 10)Basic (in `) 27 (1.38) (1.15)

Diluted (in `) (1.38) (1.15)Significant Accounting Policies 1The accompanying notes are an integral part of the financial statements.





59

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31.03.2013

As at 31 March 2013

(` in Lacs)

As at 31 March 2013

(` in Lacs)A. CASH FLOW FROM OPERATING ACTIVITIES

Profit Before Tax (2,273.89) (3,143.35)Adjustments for:Depreciation 15,494.00 11,586.82 Finance Cost 17,408.90 12,686.43 Interest Income (986.77) (382.82)(Profit) / Loss on Sale of Fixed Assets 12.12 (13.92)Miscellaneous Expenditure 90.72 6.16 Cash Generated from Operations 29,745.07 20,739.32 Direct Taxes Paid 171.20 80.54 Operating Profit Before Working Capital Changes 29,573.87 20,658.78 Adjustments for Changes in Working Capital:Trade Receivables (1,354.39) (584.95)Inventories (60.15) (232.39)Loans & Advances and Other Current Assets (1,636.26) (7,401.83)Liabilities and Provisions 1,978.80 18,099.47 Net Cash from Operating Activities 28,501.87 30,539.08

B. CASH FLOW FROM INVESTING ACTIVITIESAcquisition of Fixed Assets (net) (20,718.20) (36,667.52)Long term Investments – (0.03)Interest Income 986.77 421.97 Sale / Transfer of Fixed Assets 30.45 – Proceeds from Net Cash from Investing Activities (19,700.97) (36,245.58)

C. CASH FLOW FROM FINANCING ACTIVITIESProceeds from share application money 700.00

Long Term Borrowings 11,778.11 11,464.84

Interest Paid (17,408.90) (12,650.82)

Repayment of Share Application Money in subsidiary to Minority (664.10) (941.88)

Net Cash from Financing Activities (5,594.90) (2,127.86)

INCREASE/DECREASE IN CASH OR CASH EqUIVALENTS (A+B+C) 3,206.01 (7,834.36)Cash and Cash Equivalents at the Beginning of the Year 1,808.96 9,643.31 Cash and Cash Equivalents at the Closing of the Year 5,014.97 1,808.96 Components of Cash and Cash EquivalentsCash in hand 15.28 15.39 Balances with Scheduled Banks:

In Current Accounts 3,724.88 1,724.35 In Deposit Accounts 1,206.66 27.76 In Margin Money Accounts 68.14 41.46

TOTAL 5,014.97 1,808.96





60


1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 1.1 Basis of preparation of Financial Statements The financial statements of the company have been prepared in accordance with generally accepted

accounting principles in India (Indian GAAP).The financial statements have been prepared to comply in all material respects with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended and as applicable from time to time) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis and under the historical cost convention on going concern basis. The accounting policies have been consistently applied by the company and are consistent with those used in the previous years.

1.2 Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles

requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

1.3 Fixed Assets Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost

comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition of fixed assets which take substantial period of time to get ready for their intended use are also included to the extent they relate to the period till such assets are ready to be put to use.

Expenditure directly relating to construction activity is capitalized and apportioned to fixed assets on completion of the project. Indirect expenditure incurred during the construction period which is not related to the construction activity nor is incidental thereto is charged to the Statement of Profit and Loss. Income earned during construction period is deducted from the total of the indirect expenditure.

1.4 Investments Current Investments are stated at lower of cost and fair value. Long term Investments are stated at cost

and provision for diminution in their value, other than temporary, is made in the accounts. 1.5 Valuation Of Inventories Inventories comprising of components and stores and spares are valued at lower of cost and net realizable

value. Cost is determined on weighted average basis. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs

of completion and estimated costs necessary to make the sale. 1.6 Depreciation & Amortization (a) Depreciation is provided on written down value method at the rates and in the manner prescribed in

Schedule – XIV to the Companies Act, 1956. (b) Depreciation on software is provided on written down value method at the rate of 40% per annum

based on its estimated useful life. (c) All assets costing Rs 5000 or below, are depreciated in full by way of a one time depreciation

charge. (d) Depreciation on Project equipments (net of their expected realizable value at the completion of the

project) has been provided as per straight line method over the period upto the date of completion of the project.

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

(f) In case of MPCL & ADHPL depreciation on Buildings is provided on straight–line method at the rates based on their estimated useful lives, which corresponds to the rates prescribed in Schedule XIV to the Companies Act, 1956.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2013

61

(g) Depreciation on Roads constructed on land owned by the Company and wind turbine generator is provided on straight line method at the rates based on their estimated useful life of 10 years and 13 years respectively which is higher than the rates prescribed in Schedule XIV of the Companies Act, 1956, as under:

Rate (SLM) Schedule XIV Rate (SLM)

Roads 10.00% 3.34%

Wind Turbine Generator* 7.69% 4.75%

*In case of LNJ Power Ventures Limited the same has been provided on straight line method (SLM) prescribed in Schedule XIV to the Companies Act, 1956 for the plant running on continuous basis.

(h) Leasehold Land (Reserve forests area) is written off over the period of lease. 1.7 Intangible Assets: Capital Expenditure on purchase and development of identifiable non–monetary assets without physical

substance is recognized as Intangible Assets in accordance with principles given under AS–26 – Intangible Assets. These are grouped and separately shown under the schedule of Fixed Assets. These are amortized over their expected useful life.

1.8 Leases Where the company is lessee Leases, where the lessor effectively retains, substantially all the risks and benefits of ownership of the

leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straight line basis over the lease term.

1.9 Revenue Recognition Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company

and the revenue can be reliably measured. Sale of Electricity Revenue from sale of electricity is recognised on the basis of billable electricity (over and above free

supply to HP State Government) scheduled to be transmitted to the customers, which approximates the actual electricity transmitted.

Consultancy Services Revenue comprises income received on account of consultancy fees for the services rendered and

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

applicable. Voluntary Emission Rights (VER) Revenue is recognised as and when the VERs are sold and it is probable that the economic benefits will

flow to the Company. Carbon Credit Entitlement In process of generation of hydro–electric power, the Company also generates carbon emission reduction

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

Sale of Scrap Revenue in respect of sale of scrap is recognized when the significant risks and rewards of ownership of

the goods have passed to the buyer. 1.10 Borrowing Costs Borrowing costs directly attributable to the acquisition, construction or production of an asset that

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

1.11 Expenditure incurred during Construction Period Preliminary project expenditure, capital expenditure, indirect expenditure incidental and related to

construction/ implementation, interest on term loans/ debentures to finance fixed assets and expenditure

62


on start–up/ commissioning of assets forming part of a composite project are capitalized upto the date of commissioning of the project as the cost of respective assets. Income earned during construction period is deducted from the total of the indirect expenditure.

1.12 Employee Benefits Expenses and liabilities in respect of employee benefits are recorded in accordance with Accounting

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

(a) Provident Fund The Company makes contribution to statutory provident fund in accordance with Employees Provident

Fund and Miscellaneous Provisions Act, 1952 which is a defined contribution plan and contribution paid or payable is recognized as an expense in the period in which services are rendered by the employee.

(b) Gratuity Gratuity is a post employment benefit and is in the nature of a defined benefit plan. The liability

recognized in the balance sheet in respect of the gratuity is the present value of the defined benefit/obligation at the balance sheet date less the fair value of plan assets, together with adjustment for unrecognized actuarial gains or losses and past service costs. The defined benefit/ obligation is calculated at or near the balance sheet date by an independent actuary using the projected unit credit method.


(c) Leave Encashment Liability in respect of leave encashment becoming due or expected after the balance sheet date

is estimated on the basis of an actuarial valuation performed by an independent actuary using the projected unit credit method.

(d) Superannuation Benefit The Company makes contribution to superannuation fund which is the post employment benefit in

the nature of a defined contribution plan & contribution paid or payable is recognized as an expense in the period in which services are rendered by the employee.

(e) Other Short Term Benefits Expenses in respect of other short term benefits are recognized on the basis of the amount paid or

payable for the period during which services are rendered by the employee. Liability under continuity loyalty bonus scheme (‘CLB’) is provided for on actuarial valuation basis,

which is done as per projected unit credit method at the end of each financial year. Actuarial gains/losses are immediately taken to statement of profit and loss in the period in which

they, occur and are not deferred. The Company presents its leave, gratuity and CLB liability as current and non–current based on the

actuarial valuation. 1.13 Taxes on Income Provisions for current taxes are made in accordance with the provisions of applicable tax statutes. In Accordance with the Accounting standard AS–22 ‘Accounting for Taxes on Income’, Deferred tax

Liability/Assets arising from timing differences between book and income tax profits is accounted for at the rate of tax substantively enacted by the balance sheet date to the extent these differences are expected to crystallize in later years. However, Deferred Tax assets are recognized only if there is a reasonable/virtual certainty of realization.

1.14 Foreign Currency Translation: (a) Initial Recognition Foreign currency transactions are recorded in the reporting currency, by applying to the foreign

currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

(b) Conversion: Foreign currency monetary items are reported using the closing rate. Non–monetary items which

are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non–monetary items which are carried at fair value

63

or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

(c) Exchange Differences Exchange differences arising on a monetary item that, in substance, form part of the company's

net investment in a non–integral foreign operation is accumulated in a foreign currency translation reserve in the financial statements until the disposal of the net investment, at which time they are recognized as income or as expenses.

1.15 Provisions & Contingent Liabilities (a) Provisions are made when the present obligation as a result of a past event gives rise to a probable

outflow, embodying economic benefits on settlement, and the amount of obligation can be reliably estimated.


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

1.16 Impairment of Assets Specified assets are reviewed for impairment wherever events or changes in circumstances indicate that

the carrying amount may not be recoverable. An impairment loss is recognized for the amount for which the asset’s carrying amount exceeds its recoverable amount being the higher of the asset’s net selling price and its value in use. Value in use is based on the present value of the estimated future cash flows relating to the assets. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (i.e. cash generating units).

Previously recognized impairment losses relating to assets are reversed where the recoverable amount increases because of favourable changes in the estimates used to determine the recoverable amount since the last impairment was recognized. A reversal of asset’s impairment loss is limited to its carrying amount that would have been determined (net of depreciation or amortization) had no impairment loss been recognized in prior years.

1.17 Earning Per Share Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity

shareholders by the weighted average number of equity shares outstanding during the year. Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting year.


1.18 SEGMENT REPORTING Identification of segments The Company’s operating businesses are organized and managed separately according to the nature

of activities and services provided, with each segment representing a strategic business unit distinct from other business units. The analysis of geographical segments is based on the areas in which major operating divisions of the Company operate.

Inter segment Transfers The Company generally accounts for intersegment sales and transfers as if the sales or transfers were to

third parties at current market prices. Allocation of common costs Common allocable costs are allocated to each segment on reasonable basis. Unallocated items It includes general corporate income and expense items which are not allocated to any business

segment. Segment Policies The company prepares its segment information in conformity with the accounting policies adopted for

preparing and presenting the financial statements of the company as a whole. 1.19 Cash & Cash Equivalents Cash & Cash Equivalents comprise cash at bank and cash/cheque in hand and term deposits with

banks.

64


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2. SHARE CAPITAL

Particulars As at 31 March 2013

(` in Lacs)

As at 31 March 2012

(` in Lacs)Authorized200,000,000 (Previous Year 200,000,000) Equity Shares of ` 10/– each 20,000.00 20,000.004,000,000 (Previous Year 4,000,000 ) Cumulative Redeemable

Preference Shares of ` 100/– each 4,000.00 4000.00

Issued, Subscribed and Fully Paid Up1,51,914,420 (Previous Year 151,914,420) Equity Shares of ` 10/– each 15,191.44 15,191.44 4,000,000 (Previous Year 4,000,000) 0.01% Cumulative Redeemable

Preference Shares of ` 100/– each 4,000.00 4,000.00

19,191.44 19,191.44

(a) Reconciliation of the equity shares outstanding at the beginning and at the end of the year

Equity Shares As at 31 March 2013 As at 31 March 2012No. of shares Amount

(` in Lacs) No. of shares Amount

(` in Lacs) Shares outstanding at the beginning of the year

151,914,420 15,191.44 151,914,420 15,191.44

Shares Issued during the year – – – – Shares bought back during the year – – – – Shares outstanding at the end of the year

151,914,420 15,191.44 151,914,420 15,191.44

(b) Reconciliation of the Cumulative preferences shares outstanding at the beginning and at the end of the period

Equity Shares As at 31 March 2013 As at 31 March 2012No. of shares Amount

(in ` Lacs) No. of shares Amount

(in ` Lacs) Shares outstanding at the beginning of the year

4,000,000 4,000.00 4,000,000 4,000.00

Shares Issued during the year – – – – Shares bought back during the year – – – – Shares outstanding at the end of the year

4,000,000 4,000.00 4,000,000 4,000.00

(c) Shares to be issued to PE Investors

The Board of Directors of Bhilwara Energy Limited in its meeting held on 15th March 2012 has approved issue of equity shares in 2012–13 not exceeding 3,28,736 shares of face value ` 10/– each at a price of ` 80/– (including premium ` 70/– per share) on preferential basis to the PE'S, the same have not yet been alloted.

(d) Terms/rights attached to equity shares/preferences shares:

(i) Terms/rights attached to equity shares The company has only one class of equity shares having par value of ` 10/– per share. Each holder

of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

65

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(ii) Terms/rights attached to Cumulative preference shares The company has issued 0.01% Cumulative Redeemable Preference Shares of ` 100/– each on May

26,2009 redeemeble after five years with put & call option every six months.

(e) Rights Issue authorised by the Board of Directors

The Board of directors in their meeting held on 27th February 2013 has approved rights issue of upto 93,77,434 equity shares at ` 139.30 per share aggregating upto `13,062.77 lacs with a power to the Managing Director to determine the issue size, to down size, extend the date of rights issue. In exercise of power, rights issue was down sized to upto 75,95,714 equity shares with closure date as 15th June 2013. After closure of rights issue , total 67,11,458 equity shares were subscribed by the shareholdres and the same have been alloted to the shareholders on 18th June 2013 aggregating ` 9,349.06 lacs.

(f) Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date:

Particulars As at 31 March 2013 (No. of shares)

As at 31 March 2012 (No. of shares)




Equity shares alloted as fully paid bonus shares by capitalization of securities premium reserve

NIL NIL NIL 45,198,143 NIL

(g) Details of equity shareholders holding more than 5% shares in the company

Particulars As at 31 March 2013 As at 31 March 2012

No. of shares % holding No. of shares % holding

Equity shares of ` 10 each fully paid up Name of the Share Holders

Ravi Jhunjhunwala 19,254,153 12.67 19,254,153 12.67

Riju Jhunjhunwala 16,329,725 10.75 16,329,725 10.75

HEG Limited 39,190,500 25.80 39,190,500 25.80

RSWM Limited 26,455,650 17.42 26,455,650 17.42

International Finance Corpoartion 7,962,132 5.24 7,962,132 5.24

India Clean Energy III Limited 11,957,860 7.87 11,957,860 7.87

TOTAL 121,150,020 79.75 121,150,020 79.75

As per the records of the company, including its register of shareholders/members and other declaration received from the shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

(h) Details of Cumulative preferences shareholders holding more than 5% shares in the Company

Particulars As at 31 March 2013 As at 31 March 2012

No. of shares % holding No. of shares % holding

Prefences shares of ` 100 each fully paid up

HEG Ltd. 4,000,000 100 4,000,000 100

TOTAL 4,000,000 100 4,000,000 100

66


NOTE 2A. SHARE APPLICATION MONEY PENDING ALLOTMENT

The terms and conditions The Shares will be issued pari–passu in all respects with the existing equity shares of the company

Number of shares proposed to be issued 5,02,512 Equity Shares of ` 10/– each.

The Amount of Premimum ` 649.75 lacs (` 129.30 per share )

The Period before which shares are to be allotted The share have been issued on 18th June, 2013.

Whether the company has sufficient authorised share capital to cover the share capital amount on allotment of shares out of share application money

Yes, the company has sufficient authorised share capital to cover the share capital amount on allotment of shares out of share application money.

Interest accrued on amount due for refund N.A.

The period for which the share application money has been provided beyond the period for allotement as mentioned In the share application form alongwith the reasons for such share application money being pending

The money has been received in respect of Rights Shares for which allotment has been completed on 18th June, 2013.

NOTE 3. RESERVES & SURPLUS


(` in Lacs)

As at 31 March 2012

(` in Lacs)

Capital Reserve on Consolidation

Balance as per last financial statements 13,995.04 13,995.04

Addition during the year – –

Closing Balance 13,995.04 13,995.04

Capital Reserve

Balance as per last financial statements 10.12 10.12

Add: Warrant money forfeited during the year – –

Closing Balance 10.12 10.12

Securities Premium Reserve


Addition during the year – –

Less: Provision for premium on redemption of preference shares 595.98 554.98

Closing Balance 24,458.47 25,054.45

Debenture Redemption Reserve Account

Balance as per last financial statements 27.77 83.33

Transferred (to)/from statement of Profit and Loss (27.77) (55.56)

Closing Balance – 27.77

Surplus/(deficit) in the consolidated statement of profit and loss


Add : profit/loss for the year (2,101.75) (1,751.09)

Add : transfer from debenture redemption reserve 27.77 55.56

Transfer to/(from) Minority Interest for Share of debenture redemption reserve

(13.61) (27.22)

Net surplus in the consolidated statement of profit & loss 4,337.82 6,425.41

TOTAL RESERVES & SURPLUS 42,801.45 45,512.79

67

NOTE 4: LONG TERM BORROWINGS (` in Lacs)

Long Term Current PortionAs at

31 March 2013As at

31 March 2012As at

31 March 2013As at

31 March 2012Secured LoansDebentures

i) Compulsory Convertible Debentures of ` 1,00,000 each

3,882.00 1,489.00 – –

ii) Nil (previous year : 100), 7.865% redeemable non convertible debentures of ` 10,00,000 each

– – – 55.56

iii) Nil (previous year : 100), 7.75% redeemable non convertible debentures of ` 10,00,000 each

– – – 55.55

Term loansiv) From banks 77,861.78 73,518.88 8,375.00 12,845.69 v) From Financial Institutions 52,975.43 35,607.22 5,865.79 8,827.33 vi) From Others – 15,000.00 15,000.00 –

134,719.21 125,615.10 29,240.79 21,784.13 The above amount includesSecured Borrowings 134,719.21 125,615.10 29,240.79 21,784.13 Amount disclosed under the head "Other current liabilities" (refer note no. 9)

– (29,240.79) (21,784.13)

Unsecured Loansi) Debentures (Related party)

Compulsory Convertible Debentures of `1,00,000 each

2,674.00 – – –

2,674.00 – – – TOTAL 137,393.21 125,615.10 – –

(i) DEBENTURES

A. During the year, the Subsidiary company, Bhilwara Green Energy Limited (BGEL) issued Compulsory Convertible Debentures of `1,900.00 lacs and `493.00 lacs on 20 April, 2012 and 31 January, 2013 respectively to IFCI Ltd. In last financial year the subsidiary company issued convertible debentures worth ` 1,489 lacs on 26 March, 2012. The debentures are convertible after 36 months from the date of issue.

Compulsory Convertible Debentures carry interest @ SBI Base Rate + 2.50% (Subject to a Cap/ Floor of 12.5%/ 11.5%)

These debentures shall be converted into equity shares based on mutually agreed valuation at the end of 3rd year from the date of disbursement.

They are secured by pledge of Bhilwara Energy Limited (Promoter) shareholding in the company over & above the pledge towards the lenders (subject to a maximum of 49% of total Project Equity), Corporate Guarantee of Bhilwara Energy Limited & second charge on project assets.

As on date 1,48,09,618 (1,48,09,618) equity shares held by Bhilwara Energy Limited in the company is pledged with IFCI Limited.

B. During the year, the Subsidiary company, LNJ Power Ventures Ltd issued Compulsory Convertible debentures of ` 2674.00 lacs (Previous year Nil) to RSWM Ltd. The debentures carry interest @ 13.54%. p.a. payable half yearly The debentures are convertible into shares of the issuer after 20 years from date of issue.

68


(ii) DEBENTURES

7.865% and 7.75% redeemable Non Convertible Debenture (NCD) of ` Nil (previous year ` 55.56 lacs) and ` Nil (previous year `55.55 lacs) were secured by way of first mortgage and charge on land situated at village Budasan (Gujarat) together with all estate rights etc., present and future, of the company and further secured by irrevocable and unconditional guarantee extended by Infrastructure Leasing & Financial Services Limited. The aforesaid guarantee is secured by way of first charge on all immovable and movable properties, present and future, of the company on pari passu basis. The lenders have vacated these charge during the year.

(iii) Term Loans from Banks

a) AD Hydro Power Limited (Subsidiary company) has taken Indian rupee term loans from various banks amounting to `50,391.78 lacs (previous year ` 55,116.78 lacs) having interest rates ranging from 8.00% to 14.75% per annum (floating) (previous year 8.00% to 14.75% per annum). These loans are repayable in 40 quarterly principal payments based on mortgage style amortization and the repayment installment starts from October 1, 2010.

b) AD Hydro Power Limited (Subsidiary company) has also taken Indian rupee term loans from a bank amounting to `4,875.36 lacs (previous year ` 5,374.36 lacs) having interest rate of 11.50% per annum (floating) (previous year 13.50% per annum). This loan is repayable in 46 equal quarterly principal payments of ` 125 lacs from October 1, 2011.

c) LNJ Power Ventures Ltd (subsidiary company) has taken rupee term loan from Yes Bank Ltd for ` 3,970 lacs (previous year nil). The loan is secured by way of pari–passu charge on the movable & immovable assets of the Company. The loan carries interest @ 11% p.a. The loan is for a total duration of 14 years 1 month from date of first disbursement. The interest is payable monthly. The loan is secured against 51%of the company shares held by the holding company and 100% of the convertible debentures along with the coupon accrued, issued to RSWM Limited.

d) MPCL subsidiary company has taken Indian Rupee term loans from Banks of `27,000 lacs (previous year ` NIL) carrying interest at base rate plus 1.25% currently @ 11.75% per annum secured against first mortgage and charge on the movable and immovable assets, both present and future, on pari passu basis. These loans is repayable in 40 structured monthly installment ranging from `540 lacs to 1,080 lacs commencing from June 1, 2013.

e) MPCL had taken indian rupee term loan from two banks amounting to ` Nil lacs (previous year ` 358.34 lacs) having interest rates ranging from 9.49% to 11.75%per annum in previous years. These loans were reapid in 40 quarterly principal repayments and the repayments installmets starting from June 30,2003.The company had taken indian rupee term loan from a bank amounting to ` Nil (previous year ` 16456.00 lacs) having interest rate of 12.00% in previous year. The loan has been repaid in 22 quarterly principal payments starting from December 31,2002.

f) MPCL has also taken foreign currency term loans from State Bank of Travancore amounting to ` Nil lacs (previous year ` 163.26 lacs) at rate of interest of 6.71% per annum in previous year which has repaid in repayable in 40 equal quarterly installments of USD 80,000 each starting from 30th June 2003.

g) MPCL has taken Indian rupees term loan from a bank amounting ̀ Nil lacs (Previous Year ̀ 4,000 lacs) having rate of interest 12% per annum in previous year. This loan is repaybale in 25 equal quarterly principal payment starting from May 10, 2011.

h) MPCL has taken indian rupees term loan from a bank amounting ` Nil lacs (Previous Year ` 4,895.83 lacs) having rate of interest 11.30% in previous year. This loan is repaybale in 48 equal quarterly principal payment starting from March 31, 2012. Above Terms loans from various banks are secured by way of first mortgage / charge on all the immovable properties wherever situated and hypothecation of all other assets, rights etc., present & future, of the Company on pari–passu basis.

iv) Term Loans from Financial Institutions

a) In Ad Hydro Power Limited, Subsidiary Company, the term loans from a financial institution (represents loan from IFC, Washington, a minority shareholder) of ` 9,505.18 lacs (previous year ` 10356.47 lacs) was taken during the financial year 2007–08 and carries interest @ 7.51% to 10.18% p.a. The loan is repayable in 40 quarterly installments based on mortgage style amortization starting from 15th October 2010. Further term loan from IFC Washington of ` 18,602.04 lacs (previous year ` 19,578.08 lacs) was taken during the year 2009–10 to 2011–12 and carries interest @ 10.19% to 11.50% p.a. The loan is repayable in 46 quarterly installments based on mortgage style amortization starting from 15th October 2011.

Term loans from banks and a financial institution are secured by way of a first mortgage/charge on all immovable properties wherever situated, both present and future, and hypothecation of all movable assets, rights, etc., present and future, of the Company, on pari passu basis. Further, the holding company, Malana Power Company Limited, has provided corporate guarantee and has also pledged its share holding in the Company.

69

b) AD Hydro Power Limited, Subsidiary Company, has also taken loan of ̀ 10,000 lacs (previous year NIL) from financial institution during the financial year and carries interest @ 13.02% per annum (floating). The loan is repayable in 12 equal structured quarterly principal payment of ` 833.33 lacs each starting from 31st Aug 2013. The lender has a put option to call for full repayment at the end of 12 months. Further, the lender and the Company have a call and put option respectively at the end of 24 months from the first disbursement to recall/repay the entire loan. The loan is secured by subservient charge by way of hypothecation on the entire current assets including inventories, stores and spares, receivables, loans and advances and movable assets including but not limited to money receivables, investments, intangibles, present and future, of the Company.

c) In Malana Power Company Limited, Subsidiary company, the loan from financial institution ̀ Nil (previous year ` 7,000.00 lacs) were secured by way of hypothecation on the entire current assets including inventories, stores and spares, receivables, loans and advances and movable assets including but not limited to money receivables, investments, intangibles, present and future, and demand promissory note executed by the company. The lenders have vacated such charge during the year.

d) Bhilwara Green Energy Limited, subsidiary company has taken term loan of ` 15,000.00 lacs (previous year ` 7,500.00 lacs) from IREDA & ` 5,734.00 lacs (previous year nil) from IFC Washington. The loan from IFC carries a weighted average interest rate of 10.75% and loan from IREDA carries interest @ 12.25%. The loans are secured by paripassu first charge by way of mortgage and hypothecation in favour of IFC and IREDA on all the company's immovable & movable properties (excluding Reserve Forest Land) /assets both existing and future pertaining to 49.50 MW Wind Farm at Satara and pledge equivalent to 51% Equity held by Bhilwara Energy Ltd (Promoter) in the project. However in case of expansion, with the borrower bringing in more equity, the pledge of shares in favour of IREDA shall not fall below 26% of the total capital.

Terms of Repayment are as follows: (Amounts in ` lacs)

Lending Institution Rate of Interest (%)

No of Installments

FY 13–14 FY 14–15 FY 15–16

International Finance Corporation (IFC)

10.75 25* 349.77 446.55 436.25

Indian Renewable Energy Development Agency (IREDA)

12.25 72** 997.69 1,005.42 982.22

* half yearly installments, repayable upto 2025–26 ** 6 installments per year, repayable upto 2024–25

v) Term Loans from others

` 15000.00 lacs (previous year ` 15000.00 lacs) has been raised@ 14.75% interest p.a from IL& FS Financial Services Limited with a pledge of minimum 26% promoter shareholding in BEL upfront, with an irrevocable Power of Attorney in favour of IL& FS Financial Services to sell/dispose off the shares in the event of default. The facility is for a period of 24 months. However BEL has the option to repay/ lender has the right to recall the entire loan amount at the end of every 12 months and 18 months from the date of first disbursement. A notice of 30 days is required to exercise such option.

NOTES 5: DEFERRED TAX LIABILITIES /ASSETS

Particulars As at31 March 2013

(` in Lacs)

As at31 March 2012

(` in Lacs)Difference in depreciation and other differences in block of fixed assets as Per tax books and financial books

2,437.39 2,180.58

Others 5.55 5.18 Gross Deferred Tax Liabilities 2,442.94 2,185.76 Unabsorbed Depreciation 232.47 – Expenses allowed on payment basis 111.11 177.48 Others – 6.59 Gross Deferred Tax Assets 343.58 184.07 NET DEFERRED TAx LIABILITIES 2,099.36 2,001.69

Note : In the case of holding company and ADHPL, net deferred tax assets have not been recognised in the absence of virtual certainty of realising such assets against the future taxable income.

70


NOTES 6: OTHER LONG TERM LIABILITIES


(` in Lacs)

As at31 March 2012

(` in Lacs)OthersSecurity deposit from employees 35.73 33.09 TOTAL 35.73 33.09

NOTE 7: LONG TERM PROVISIONS


(` in Lacs)

As at31 March 2012

(` in Lacs)Provision for employee benefitsProvision for gratuity 20.78 75.98 Provision for leave compensation 296.64 250.76 Provision for superannuation 31.97 – Provision for continuity loyalty bonus 93.57 310.42 Others Provision for redemption of preference shares 2,001.64 1,405.66 TOTAL 2,444.60 2,042.82

NOTE 8 : TRADE PAYABLES


(` in Lacs)

As at31 March 2012

(` in Lacs)Dues of Micro and Small Enterprises – 6.41 Dues of other than Micro and Small Enterprises 6,762.27 13,984.10 TOTAL 6,762.27 13,990.51

NOTE 9: OTHER CURRENT LIABILITIES


(` in Lacs)

As at31 March 2012

(` in Lacs)Current maturities of long term borrowings 29,240.79 21,784.13 Interest accrued but not due on loan from financial institution and banks 914.57 633.06 Advance from body corporate 540.00 – Capital Creditors 1,026.18 – Sundry deposits 25.17 264.83 Employees benefit expenses payable 143.06 128.19 Advance from customers 20.46 7.63 – due to Related Party 428.03 190.99 – due to others 6.26 76.08 Others payable 290.39 750.26 Statutory dues 376.18 360.21TOTAL 33,011.10 24,195.38

NOTE 10: SHORT TERM PROVISIONSParticulars As at


As at31 March 2012

(` in Lacs)Provision for employee benefitsProvision for gratuity 21.88 24.66 Provision for leave compensation 16.91 36.72 Provision for superannuation 7.08 26.35 Provision for medical & LTA 18.27 10.84 Provision for continuity loyalty bonus 70.60 168.51 Others Provision for Wealth Tax 119.42 0.18 TOTAL 254.16 267.26

71

NO

TE–1

1 F

IxE

D A

SS

ETS

Tang

ible

Ass

ets

Inta

ngib

le A

sset

sPa

rtic

ular

sFr

eeho

ld

land

Leas

ehol

d La

ndFr

eeho

ld

Build

ing

Leas

ehol

d Bu

ildin

g (E

xplo

sive

)

Civi

l Wor

kTr

ansm

issi

on

Line

Plan

t and

M

achi

nery

Proj

ect

equi

pmen

tEl

ectri

cal

inst

alla

tion

Offi

ce

equi

pmen

tsFu

rnitu

re a

nd

Fixt

ures

Com

pute

rsVe

hicl

esTo

tal

(Tan

gibl

e As

sets

)

Softw

are

Tota

l (In

tang

ible

As

sets

)Co

st o

r val

uatio

nAs

at 1

Apr

il 20

11 3

,798

.87

808

.44

16,

391.

94

3.5

9 7

8,36

6.60

4

0,98

9.12

7

6,34

5.97

9

4.51

3

45.4

9 1

51.2

3 3

48.5

1 2

88.5

2 5

47.3

4 2

18,4

80.1

4 2

18.6

5 2

18.6

5 Ad

ditio

ns 9

3.93

–

1

3,94

6.03

–

2

2,43

1.92

1

,420

.03

159

.24

46.

87

10.

30

2.2

1 1

2.71

2

6.21

1

27.6

4 3

8,27

7.11

7

.53

7.5

3 D

ispo

sals

–

–

–

–

–

–

–

–

0.9

9 1

4.06

8

.78

62.

42

51.

56

137

.81

82.

60

82.

60

Tran

sfer

red

to s

ubsi

diar

y co

. –

–

–

–

–

–

–

1

8.23

1

.28

0.1

7 –

0

.92

10.

30

30.

90

–

–

Tran

sfer

red

from

sub

sidi

ary

co.

–

–

–

–

–

–

–

18.

23

1.2

8 0

.17

–

0.9

2 1

0.30

3

0.90

–

–

O

ther

adj

ustm

ents

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

– Ex

chan

ge D

iffer

ence

s –

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

Borro

win

g C

osts

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

As a

t 31

Mar

ch 2

012

3,8

92.8

0 8

08.4

4 3

0,33

7.97

3

.59

100

,798

.52

42,

409.

15

76,

505.

20

141

.38

354

.80

139

.38

352

.45

254

.16

644

.02

256

,619

.44

143

.58

143

.58

Addi

tions

249

.83

–

–

–

808

.37

1,7

47.8

1 1

8,42

0.01

2

4.59

1

1.19

3

.52

47.

88

25.

20

68.

34

21,

406.

73

0.7

2 0

.72

Dis

posa

ls –

–

–

–

–

–

9

9.52

–

–

9

.53

18.

51

10.

17

61.

46

199

.19

–

–

Tran

sfer

red

to s

ubsi

diar

y co

. –

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

Tr

ansf

erre

d fro

m s

ubsi

diar

y co

. –

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

O

ther

adj

ustm

ents

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

– Ex

chan

ge D

iffer

ence

s –

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

Borro

win

g C

osts

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

As a

t 31

Mar

ch 2

013

4,1

42.6

3 8

08.4

4 3

0,33

7.97

3

.59

101

,606

.89

44,

156.

96

94,

825.

69

165

.97

365

.99

133

.37

381

.82

269

.19

650

.89

277

,826

.98

144

.30

144

.30

Dep

reci

atio

nAs

at 1

Apr

il 20

11 –

0

.82

1,4

38.5

2 0

.41

9,5

87.2

9 2

,115

.15

6,1

41.0

8 2

8.53

7

9.67

8

3.92

2

00.7

2 2

35.0

5 2

85.9

0 2

0,19

7.04

2

00.4

4 2

00.4

4 C

harg

e fo

r the

yea

r –

5

.89

1,4

67.6

2 0

.16

4,5

17.9

8 2

,292

.27

3,1

70.9

8 2

0.44

1

9.53

1

1.08

3

1.42

2

0.31

6

8.28

1

1,62

5.87

6

.46

6.4

6 D

ispo

sals

–

–

–

–

–

–

–

0.6

4 0

.85

7.3

5 8

.61

60.

27

39.

67

117

.40

81.

24

81.

24

Tran

sfer

red

to s

ubsi

diar

y co

. –

–

–

–

–

–

–

7

.89

0.5

5 0

.06

–

0.7

8 7

.02

16.

30

–

–

Tran

sfer

red

from

sub

sidi

ary

co.

–

–

–

–

–

–

–

7.8

9 0

.55

0.0

7 –

0

.78

7.0

2 1

6.30

–

–

As

at 3

1 M

arch

201

2 –

6

.71

2,9

06.1

4 0

.57

14,

105.

27

4,4

07.4

2 9

,312

.06

48.

32

98.

35

87.

66

223

.53

195

.08

314

.50

31,

705.

60

125

.66

125

.66

Cha

rge

for t

he y

ear

0.0

1 2

6.39

2

,563

.32

0.1

5 5

,579

.90

2,2

93.6

1 4

,879

.07

30.

43

20.

13

9.9

2 3

6.79

2

0.51

8

7.27

1

5,54

7.52

8

.14

8.1

4 D

ispo

sals

–

–

–

–

–

–

79.

19

–

–

7.4

7 1

5.19

9

.39

48.

35

159

.59

–

–

Tran

sfer

red

to s

ubsi

diar

y co

. –

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

Tr

ansf

erre

d fro

m s

ubsi

diar

y co

. –

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

As

at 3

1 M

arch

201

3 3

3.10

5

,469

.46

0.7

2 1

9,68

5.17

6

,701

.03

14,

111.

94

78.

74

118

.47

90.

11

245

.13

206

.20

353

.42

47,

093.

52

133

.80

133

.80

Net

Blo

ck –

As

at 3

1 M

arch

201

3 4

,142

.63

775

.34

24,

868.

51

2.8

7 8

1,92

1.72

3

7,45

5.93

8

0,71

3.75

8

7.22

2

47.5

2 4

3.27

1

36.6

9 6

2.98

2

97.4

7 2

30,7

33.4

5 1

0.50

1

0.49

As

at 3

1 M

arch

201

2 3

,892

.80

801

.73

27,

431.

83

3.0

2 8

6,69

3.25

3

8,00

1.73

6

7,19

3.14

9

3.06

2

56.4

5 5

1.72

1

28.9

2 5

9.07

3

29.5

2 2

24,9

13.8

4 1

7.92

1

7.92

No

tes:

1.

Ad

ditio

n in

clud

e ex

pend

iture

dur

ing

the

cons

truct

ion

perio

d am

ount

ing

to `

Nil

(pre

viou

s ye

ar `

15,0

56.6

6 la

cs) c

apita

lised

und

er fo

llow

ing

head

s:

Par

ticul

ars

Yea

r End

ed 3

1.03

.201

3 Am

ount

(` L

acs)

Y

ear E

nded

31.

03.2

012

Amou

nt (`

Lac

s)

Roa

d &

Build

ing

–

5821

.00

Civ

il Wor

ks

–

96.4

8 P

lant

& M

achi

nery

–

91

39.1

7 To

tal

–

1505

6.66

2.

Dep

reci

atio

n am

ount

ing

to `

Nil

(pre

viou

s ye

ar `

851

.40

lacs

) has

bee

n tra

nsfe

rred

to e

xpen

ditu

re d

urin

g co

nstru

ctio

n pe

riod.

3.

Gro

ss b

lock

of t

rans

mis

sion

line

incl

udes

pay

men

t for

'Rig

ht to

use

' am

ount

ing

to `

5,25

3.98

lacs

(pre

viou

s ye

ar `

5,25

3.98

lacs

). R

ight

to u

se' is

a ir

revo

cabl

e pe

rpet

ual r

ight

of u

se o

f lan

d, b

ut th

e ow

ners

hip

of la

nd d

oes

not v

est w

ith th

e C

ompa

ny.

4.

The

depr

ecia

tion

char

ged

durin

g th

e ye

ar in

clud

es `

Nil

lacs

(pre

viou

s ye

ar `

77.

33 la

cs) p

erta

inin

g to

ear

lier y

ears

.M

PCL:

1.

Roa

d &

Build

ing

incl

udes

cos

t of r

oad

`1,2

28.3

8 la

cs (P

revi

ous

year

1,2

28.3

8 la

cs) c

onst

ruct

ed o

n fo

rest

land

dive

rted

for t

he p

roje

ct u

nder

irre

voca

ble

right

to u

se.

2.

Tran

smis

sion

Lin

e in

clud

es `

41.

81 la

cs (P

revi

ous

year

` 4

1.81

lacs

) tow

ards

cos

t of l

and

and

com

pens

atio

n pa

id to

For

est D

epar

tmen

t for

con

stru

ctio

n of

Tra

nsm

issi

on to

wer

s un

der i

rrevo

cabl

e rig

ht to

use

.BG

EL:

1.

An a

pplic

atio

n fo

r tra

nsfe

r of L

ease

hold

land

for 2

0 W

TG lo

catio

ns is

pen

ding

for a

ppro

val f

rom

Chi

ef C

onse

rvat

or o

f For

est &

Nod

al O

ffice

r Nag

pur.

2.

The

leas

ehol

d la

nd a

mou

nt `

.800

.00

lacs

(20

WTG

@ `

40.

00 la

cs p

er W

TG) i

s be

ing

writ

ten

off d

urin

g th

e le

ase

perio

d of

30

year

s. T

he a

mou

nt h

as b

een

paid

for a

ccqu

isiti

on/s

ite d

evel

opm

ent &

pai

d to

Ren

ewab

le E

nerg

y G

ener

atio

n Pr

ivate

Ltd

.3.

D

epre

ciat

ion

allo

cate

d to

pre

oper

ative

exp

ense

s of

` 6

1.10

lacs

and

in p

revi

ous

year

` 4

5.52

lacs

.

72


NOTE 12: PROJECT & PRE–OPERATIVE ExPENSES (PENDING ALLOCATION)


(` in Lacs)

Addition/adjustment

during the year (` in Lacs)

As at31 March 2012

(` in Lacs)

Personnel Expenses

Salaries, Wages and Bonus 1,644.88 547.44 1,097.44

Contribution to Provident, Gratuity and Other Funds 86.79 46.68 40.11

Workmen and Staff Welfare Expenses 60.22 28.27 31.95

Total (A) 1,791.89 622.39 1,169.50

Administrative & Other Expenses

Rent 280.81 95.10 185.71

Rates & Taxes 2.62 (12.03) 14.65

Insurance 5.39 (4.49) 9.88

Repair & Maintenance 909.58 13.34 896.24

Stores Consumption 22.03 0.41 21.62

Traveling Expenses 350.28 21.42 328.86

Conveyance 69.87 24.67 45.20

Vehicle Running & Hiring Expenses 163.06 25.34 137.72

Communication Expenses 21.23 (4.82) 26.05

Directors Remuneration 1.46 (0.00) 1.46

Audit Fees 8.20 (3.70) 11.90

Donations and Contributions (other than to Political Parties) 3.20 – 3.20

Advertisement 58.37 5.53 52.84

Legal & Professional Charges 1,289.99 229.68 1,060.31

Fee & Subscription 67.34 19.68 47.66

Power & Fuel 56.98 31.72 25.26

Testing and Surveys 21.75 (57.48) 79.23

Consultancy Charges 7,844.91 3,748.80 4,096.11

Project Processing Fee 6,364.93 (116.74) 6,481.67

Miscellaneous Expenses 910.15 (61.88) 972.03

Tem Loan Processing Fee – (139.64) 139.64

Financial & Bank Charges 3,319.15 622.02 2,697.13

Interest 726.06 636.79 89.27

Depreciation 110.42 (72.49) 182.91

Total (B) 22,607.75 5,001.20 17,606.55

Total (A+B) 24,399.64 5,623.59 18,776.05

Less: Interest Earned (Tax Deducted at Source ` Nil previous year `1.20 lacs) (net of provision for income tax ` Nil lacs, previous year ` 1.40 lacs)

(124.93) (47.24) (77.69)

Less: Profit on Sale of Fixed Assets (13.77) (0.09) (13.68)

Less: Scrap Sale / Misc. Income (48.67) – (48.67)

Less: Land Acquisition expenses (0.73) – (0.73)

TOTAL 24,211.54 5,576.26 18,635.28

73

NOTE 13: NON CURRENT INVESTMENTS


(` in Lacs)

As at31 March 2012

(` in Lacs)Trade – Long Term, at CostInvestment in Equity InstrumentsUnquoted – Fully Paid40,000 (Previous Year 40,000) Equity Shares of ` 100/– each of Green Venture Renewable India Pvt. Ltd.

100.00 100.00

10,000 (Previous Year 10,000) Equity Shares of ` 10/– each fully paid up of Odetta Realty Private Limited

1.00 1.00

Non Trade – Currentquoted489 (Previous Year 489) Equity Shares of ` 10/– each of Punjab & Sind Bank

0.59 0.59

Investment in other listed shares in Nepal 0.12 0.10 101.71 101.69

Note: Aggregate Book Value of Investments:Unquoted 101.00 101.00 quoted 0.71 0.69 Market value of the quoted investments 0.28 0.62

NOTE 14. LONG TERM LOANS AND ADVANCES


(` in Lacs)

As at31 March 2012

(` in Lacs)Retention Money 16.21 8.03 Security Deposit 140.00 0.05 Capital Advances 1,835.89 1,543.67 Advance for Bara Banghal project (including ` 537.71 lacs (previous year ` 537.71 lacs) towards consultancy and other expenses on the project) (refer note no. 33 (i))

6,660.77 6,657.71

Less : Provision against upfront premium/other expenditure for Bara Banghal

(3,597.71) (3,597.71)

Advance Tax (Net of provision ` 4,343.70 lacs) (previous year 6,567.95 lacs) 236.10 – Inter corporate Deposit with financial institution 328.18 – Others – – Loans to employees 47.66 37.83 Loans to directors – 16.92 Security deposits 57.91 208.31 Others 16.91 – TOTAL 5,741.92 4,874.81

74


NOTE 15. OTHER NON CURRENT ASSETS


(` in Lacs)

As at31 March 2012

(` in Lacs)Unsecured, considered good unless stated otherwiseBalance with Banks: Deposits with original maturity period of more than 12 months* 42.63 259.52 Security Deposits 24.28 23.54 Prepaid taxes {net of tax provision of ` 6,904.24 lacs (Previous year of ` 6,317.80 lacs)}

426.51 597.71

Advances recoverable in cash or kind 15.78 – Miscellaneous expenses not written off – 66.08 Surrender value of keyman insurance policy 17.10 15.64 TOTAL 526.30 962.49

* Fixed deposit of ̀ 4.00 lacs (Previous year ̀ 4.00 lacs) pledged with the Himachal Pradesh Government Sales Tax department and ` 8.54 lacs (Previous year ` 8.54 lacs) pledged with Himachal Pradesh State Electricity Board.

NOTE 16. INVENTORIES(valued at lower of cost and net realisable value)


(` in Lacs)

As at31 March 2012

(` in Lacs)Stores and spares * 1,564.81 1,501.94 Scrap 27.41 30.99 Explosives 1.25 0.39 TOTAL 1,593.47 1,533.32

* including material lying with third parties ` 15.39 lacs, (previous year ` 35.03 lacs)

NOTE 17. TRADE RECEIVABLESUnsecured considered good unless stated otherwise:


(` in Lacs)

As at31 March 2012

(` in Lacs)Outstanding for a period exceeding six months from the date they due for payment

475.14 1,303.47

Less: Provision for Doubtful debts – (14.37)Total (a) 475.14 1,289.10 Other Receivables Other Receivables 2,596.44 428.09 Total (b) 2,596.44 428.09 TOTAL (a+b) 3,071.58 1,717.19

NOTE 18. CASH AND BANK BALANCES


(` in Lacs)

As at31 March 2012

(` in Lacs)Cash and cash equivalents Cash on hand 15.28 15.39 Balances with banks in: Current accounts 3,724.88 1,724.35 Margin money (held as security) 68.14 41.46 Deposits with original maturity period of more than 12 months 14.01 218.06 Deposits with original maturity period of more than 3 months but less than 12 months

1,235.28 69.22

Less– Amount disclosed under non current assets (Note 15 above) (42.63) (259.52)TOTAL 5,014.97 1,808.96

In MPCL Fixed Deposit of ` 2.00 lacs (previous year ` 2.00 lacs) pledged with the H.P. Government Sales Tax Department and ` 8.54 lacs (previous year ` 8.54 lacs) pledged with Himachal Pradesh State Electricity Board

In ICCS Fixed Deposits for ` 36.47 lacs are pledged with various authorities/parties.

75

NOTE 19. SHORT TERM LOANS AND ADVANCES


(` in Lacs)

As at31 March 2012

(` in Lacs)Security Deposits 16.39 11.56 Loans and advances to related parties 13.42 – Loans and Advance to employees 55.25 68.43 Loan to Body Corporate 823.37 750.63 Other advances recoverable in cash or in kind or for value to be received 2,187.42 1,405.68 Others/Capital advances 142.78 – Prepaid Expenses 83.11 33.76 MAT credit entitlement 16.27 – Unamortized misc expenditure – 24.64

TOTAL 3,338.02 2,294.70

NOTE 20. OTHER CURRENT ASSETS


(` in Lacs)

As at31 March 2012

(` in Lacs)Interest accrued on banks deposits 74.02 80.30 Advance for Land 89.99 89.67 Fixed Assets (Project Equipment) held for sale (at net book value or estimated net realisable value, whichever is lower)

2,199.32 2,202.55

TOTAL 2,363.34 2,372.52

NOTE 21. REVENUE FROM OPERATIONS



For the year ended


Revenue from Operations Sale of power 33,106.92 27,772.92 Sale of service 1,135.20 1,166.45 Revenue from Operations (Gross) 34,242.12 28,939.37 Transmission charges received 2,787.05 1,808.89 Less : Discount on prompt payments (472.04) (429.79)Less : Handling charges (149.34) (136.31)Less : Unscheduled interchange charges/(credit) (136.33) 457.24 Revenue from Operations (Net) 36,271.46 30,639.40

NOTE 22. OTHER INCOME



For the year ended


Interest Income on Loan to subsidiary company 552.90 – Interest on bank deposits and others 333.53 313.18 Interest on others 100.34 69.64 Others (Consultancy Charges) 50.00 – Sale of emission reductions (VERs & CERs) 2,874.80 170.67 Expenses on sale of VER & CER (including commission) (102.01) (41.50)Excess provision/ credit balances written back – 13.10 Surrender Value of Keyman Insurance Policy 1.46 5.43 Profit on sale of fixed assets 7.14 14.89 Miscellaneous income* 737.15 5.20 TOTAL 4,555.32 550.61

(* Miscellaneous income includes the amount of ̀ 650.00 Lacs received by the company from Regen Powertech Pvt Ltd on account of generation loss arising out of loss in high wind season due to delay in operationalising the sub station.

76


NOTE 23. EMPLOYEE BENEFITS ExPENSES



For the year ended


Salaries, wages and bonus 2,686.66 2,815.26 Contribution to provident and other funds 136.25 157.91 Gratuity expenses (Refer Note no. 45 of Consol Notes to Accounts) 21.42 37.05 Leave compensation expenses 6.66 32.95 Workmen and staff welfare expenses 161.23 132.98 TOTAL 3,012.22 3,176.15

NOTE 24. OTHER ExPENSES



For the year ended


Stores spares & other consumable 355.22 133.52 – –

Rent 265.22 283.84 Power and fuel 167.10 193.79 Repair and maintenance – Buildings 17.36 23.21 – Plant and machinery 304.33 812.69 – Civil works 240.98 160.20 – Others 279.37 69.40 Rates and taxes 60.53 3.45 Fee & Subcription 54.30 19.60 Insurance 598.63 572.40 Payment to auditor (refer details below) 43.33 35.36 Communication cost 32.86 31.82 Printing and stationery 14.05 13.28 Travelling and conveyance 204.58 223.87 Membership fees and subscriptions 23.39 15.83 Consultancy Services Charges – 1.87 Legal and professional fees 446.75 463.71 Bad debts and advances written off 11.60 35.64 Balances/Advances written off – 9.70 Exchange fluctuation ( net) 20.52 28.84 Donations and contributions (other than to political parties) 8.59 6.77 Loss on sale of fixed assets (net) 19.26 4.79 Open access charges – 15.15 Security arrangements expenses 159.28 116.79 Social welfare expenses 148.20 101.58 Vehicle running & hiring charges 215.94 181.50 Provision for Wealth Tax – 0.19 Gift & Presentation 9.08 0.55 Fixed Assets Written off – Provision for doubtful debts and advances – 24.40 Bank charges 1.31 58.91 Business Promotion 4.26 15.55 Miscellaneous expenses 336.08 345.66 TOTAL 4,042.11 4,003.85

77



For the year ended


Payment to AuditorAs Auditor:– Audit fee 23.81 18.99 – Fees for special audit 5.65 5.52 – Fee for international reporting 7.20 7.72 In other capacity – – Fee for certification 0.86 1.10 – Out of pocket expenses 2.43 2.03 – Fees for other services 3.37 – TOTAL 43.33 35.36

NOTE 25. DEPRECIATION AND AMORTISATION ExPENSE



For the year ended


Depreciation on tangible assets 15,547.52 11,625.87 Amortization of Intangible assets 8.14 6.47 Less: Transfer to preoperative expenses (61.66) (45.52)TOTAL 15,494.00 11,586.82

NOTE 26. FINANCE COST



For the year ended


Interest – on term loans from banks 13,270.62 12,482.68 – on debentures 282.78 19.57 – on term loans from others * 3,497.20 72.23 – Income Tax 14.72 9.71 Upfront fee and loan processing fee 85.67 94.47 Other Bank Charges 247.38 Exchange differences to the extent considered as adjustment to borrowing costs

– 7.76

Other Borrowing Cost 10.53 – TOTAL 17,408.90 12,686.43

* Represents the interest on fund utilised by the company, net of ` Nil lacs (Previous year ` 270.24 lacs) transferred to project.

NOTE 27. EARNING PER SHARE



For the year ended


The basic and diluted earning per share are as under:Net Loss as Per Statement of Profit and Loss (2,101.75) (1,751.09)Equity Shares at the Beginning of the Year 151,914,420 151,914,420 Equity Shares at the End of the Year 151,914,420 151,914,420 Weighted Average Number of Equity Shares in Calculating Basic EPS 151,914,420 151,914,420 Weighted Average Number of Equity Shares in Calculating Dilutive EPS* 158,954,614 151,914,420 Basic Earnings Per Share (in Rupees) (1.38) (1.15)Diluted Earnings Per Share (in Rupees) (1.38) (1.15)

Note: As the dilutive potential equity shares are anti–dilutive in nature as they reduce loss per equity share, they have not been considered for calculating diluted earning per share.

78


28. BASIS OF CONSOLIDATION The Consolidated Financial Statements have been prepared by consolidating the financial statements of the

company with those of its subsidiaries as on 31st March 2013, in accordance with Accounting Standard 21 (AS 21) – Consolidated Financial Statements notified by Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956.

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

Name of Subsidiary Country of Incorporation

Proportion ofOwnershipAs on 31st

March 2013 (%)

Proportion of OwnershipAs on 31st

March 2012 (%)NJC Hydro Power Limited (NJCHPL) India 100.0% 100.0%Bhilwara Green Energy Limited (BGEL) India 100.0% 100.0%Malana Power Company Limited (MPCL) India 51.0% 51.0%Indo Canadian Consultancy Services Limited (ICCSL) India 51.0% 51.0%AD Hydro Power Limited (ADHPL)(A subsidiary of MPCL)

India 44.9% 44.9%

Balephi Jalvidyut Company Limited (BJCL) Nepal 94.6% 94.6%Green Ventures Private Limited (GVPL) Nepal 75.71% 75.71%Chango Yangthang Hydro Power Limited (CHY) India 100% 100%LNJ Power Ventures Ltd (LNJP) India 74% –

(b) The financial statements of parent company and its subsidiaries have been consolidated on line by line basis by adding together book value of like items of assets, liabilities, incomes and expenses after eliminating intra group balances and the unrealized profit / losses on intra group transactions and are presented, to the extent possible, in the same manner as the Company’s independent financial statements.

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

Particulars / Subsidiaries

MPCL ADHPL ICCSL NJCHPL BGEL GVPL* BJCL* CHY LNJP

Capital 14,752.57 56,015.28 35.33 10,000.00 5,696.00 6,269.53 1,775.70 6,000.00 100.00Reserves 80,234.33 (19,426.53) 58.42 (71.84) 35.71 – – (34.23) (23.05)Total Assets 1,24,504.98 1,86,638.67 1,066.57 15,516.08 31,833.14 994.36 64.44 6,349.56 11,692.47Total Liabilities 29,518.08 1,50,049.91 972.82 5,587.92 26,101.43 11.57 4.20 398.80 11,615.52Investment (except in subsidiary)

– – – – – 0.13 – – –

Turnover 8,998.40 23,134.77 1,135.20 – 3,002.87 – – – 0.21Profit before Taxation 1,974.44 (2,584.44) 64.76 (71.84) 97.14 – – (33.82) (7.12)Provision for Taxation 405.62 – 78.40 – 8.68 – – – –Profit after Taxation 1,568.82 (2,584.44) (13.65) (71.84) 88.45 – – (33.82) (7.12)

Previous year figures (information for the year ended March 31, 2012)Particulars / Subsidiaries

MPCL ADHPL ICCSL NJCHPL BGEL GVPL* BJCL* CHY

Capital 14,752.57 56,015.28 35.33 10,000.00** 5,005.01 4,160.63 1,269.17 5,005.00Reserves 78,665.48 (16,842.05) 72.06 (52.74) – – (0.41)

Total Assets 1,31,095.59 1,92,960.10 843.20 14,998.84 30,002.35 5,874.23 1,779.91 6,008.65Total Liabilities 37,677.51 1,53,786.90 735.80 4,998.84 24,359.07 299.19 1.31 1,004.06Investment (except in subsidiary)

– – – – – 0.13 – –

Turnover 10,743.10 18,739.15 1,166.45 – – – – –Profit before Taxation 2,989.09 (5,576.73) (207.61) (50.10) – – (0.41)

Provision for Taxation 598.05 – (42.20) – – – – –Profit after Taxation 2,460.64 (5,576.73) (165.41) – (50.10) – – (0.41)

* Exchange Rate 100 INR (Indian Rupees) = 160 NPR (Nepali Rupees) ** Includes share application money ` 1995 Lacs

(d) Figures pertaining to the subsidiary companies have been reclassified wherever necessary to bring them in line with parent company’s financial statements.

(e) Investments other than in subsidiaries have been accounted for in accordance with Accounting Standard 13 (AS 13) – Accounting for Investments.

79

29. CONTINGENT LIABILITIES Contingent liabilities not provided for: In case of holding company (a) The company has provided guarantee in favour of International Finance Corporation (IFC) with HEG Ltd.

and RSWM Ltd. on joint and several basis on behalf of AD Hydro Power Ltd. for ` 600 lacs (Previous Year ` 600 lacs).

In case of MPCL (b) Guarantee given by MPCL for loans availed by ADHPL, subsidiary company, amounting ` 8,000.00 lacs

(Previous year ` 8,000.00 lacs). (c) Claims made against the Company not acknowledged as debts – Demand from Divisional Forest Officer

in respect of damages to forest trees ` Nil lacs (Previous year – ` 25.90 lacs). (d) In respect of assessment year 2008–09, the Assessing Officer had disallowed certain proportion of the

expenses as expenses incurred towards the exempt income under Section 14A and other expenses under the Income Tax Act, 1961 and raised a demand of ` 43.88 lacs. In response to the appeal filed by the company, part relief has been granted by the Commissioner of Income Tax (Appeals). Income tax department and the company have preferred further appeal before the ITAT, New Delhi which is pending for hearing.

(e) In respect of assessment year 2009–10, the Assessing Officer had disallowed certain proportion of the expenses as expenses incurred towards the exempt income under Section 14A, deduction under Section 80IA and other expenses under the Income Tax Act, 1961 and raised a demand of ` 55.81 lacs. In response to appeal filed by the company, part relief has been granted by the Commissioner of Income Tax (Appeals). Income tax department and the company have preferred further appeal before the ITAT, New Delhi which is pending for hearing.

Based on experts inputs, management believes that these demands and any possible demand for other assessment years to be raised by the Income Tax Authorities on similar grounds, is unlikely to crystallize and there is a fair chance of decision in its favour.

In case of ADHPL: (f) (` in lacs)

Particulars 2012–13 2011–12

Claims by contractors / suppliers against the company not acknowledged as debts

NIL 70.00

Claims from customer not acknowledged as debts (for loss of revenue on sale of electricity to HPSEB (also refer (h) below)

316.68 316.68

Demand under The Building & Other ConstructionWorkers Welfare Cess Act, 1996

1,300.33 NIL

Demand under Local Area Development Fund (LADF) from Directorate of Energy, Government of Himachal Pradesh (also refer (i) below)

2,132.00 633.00

The company believes that these claims/demand are not probable to be decided against the Company and therefore, no provision for the above is required.

(g) Due to flooding at its plant, the Company could not supply power to HPSEB for the period from August 20, 2010 to August 28, 2010. Against the same, HPSEB has claimed and withheld the payment of ` 316.68 lacs payable by them against supply of power by the Company for the subsequent period. The Company believes that the non supply was due to ‘forced shutdown’ beyond the control of the Company and thus, force majeure provisions are applicable.

The management is in discussion with the Board officials and is hopeful of resolution of the matter in its favour and release of the payment shortly. Thus, no adjustments have been deemed necessary in the financial statements in this regard.

(h) As per its Hydro Power Policy, the Directorate of Energy, Government of Himachal Pradesh has asked the Company to deposit an amount of ` 3,032.00 lacs towards Local Area Development Fund (LADF) which is 1.5% of final completed cost of the project ` 202130.00 lacs. The Company is contesting the above demand on the following grounds:

i) The agreement dated November 5, 2005 entered by the Company with the State Government stipulates a provision of 1.5% of the total cost reflected in the Detailed Project Report (DPR) which works out to ̀ 1,380.00 lacs as per the Detailed Project Report (‘DPR’) approved by CEA, Government of India. Therefore, subsequent provision in the Hydro Power Policy of 2006 for LADF contribution may not be insisted.

80


ii) The completed cost of the project referred by the government includes the cost of the dedicated 175 Km Transmission Line which otherwise was not required as per the provision in Techno–economic Clearance (TEC) wherein the pooling point at Panarsa was to be made available by the Government.

The Company has deposited an amount of ` 399.00 lacs towards LADF and has also incurred expenses of ` 1,134.00 lacs against the same. Out of this approved expense, an amount of ` 633.00 lacs is being disputed by the concerned Department on the recommendation of District Administration as not permissible expense, which has been contested by the Company.

Pending any further directions or conclusion by the State Government, no additional provision has been deemed necessary in the financial statements in this regard.

In case of ICCSL (i) Contingent Liability on account of Bank Guarantees (net of Margin Money) is ` 35.94 lacs (Previous year

` 45.65 Lacs).30. CAPITAL COMMITMENTS & OTHER COMMITMENTS: A) Estimated amount of contracts remaining to be executed on capital account as on the date of Balance

Sheet (net of advances) are as below:(` in lacs)

31 March 2013 31 March 2012Holding Company 4,696.40 NilSubsidiaries:MPCL 6,120.00 6,120.00NJC HPL 13,427.68 19,695.97BGEL 622.00 1,507.00AD HPL 430.25 2,204.83

B) Other Commitments In case of Holding Company

(a) The company has signed Sponsor support agreement with the lenders of Green Ventures Private Limited (GVNL) i.e IDBI Bank Limited, Everest Bank, Export Import Bank of India, Oriental Bank of Commerce, Punjab & Sind Bank & PTC India Financial Services Private Limited to contribute 75% of equity component of ` 35,700 lacs. Against the total amount required to be brought in the company till March 31, 2013, the company has contributed ` 5,374 lacs towards share capital.

The company has also agreed that in event of Project Completion Cost exceeding ` 1,02,000 lacs the same shall be arranged by the company through additional equity contribution/subordinated debt without any recourse to the Project Assets & Rupee Lenders.

(b) Bhilwara Green Energy Ltd has issued Compulsory Convertible debentures (CCD) with a coupon rate of 12.5% to IFCI Limited of ` 3,882 Lacs convertible at the end of 36 months for part financing of the wind energy project.

The Company has provided corporate guarantee to IFCI limited for these debentures. In the event of any default on the part of Bhilwara Green Energy Ltd in payment of any of the amounts

i.e. Principal Amount, unpaid coupon amount along with penal interest or in the event of default to comply with or perform any of the terms, conditions and covenants contained in the Debenture Subscription agreement, the company shall upon demand forthwith pay to IFCI Ltd. all the amounts under the Debenture Subscription agreement.

Put option is available with IFCI Ltd. to require the company to purchase the CCDs at issue price and accrued coupon along with any default interest (if any) at the end of the 35th month from the date of first disbursement i.e. 20 March 2015.

Out of the total investment in Bhilwara Green Energy Ltd of 5,69,60,070 shares, 1,48,09,618 shares have been pledged with IFCI Ltd. as security against Compulsory Convertible Debenture of ` 3,882 lacs.

(c) Bhilwara Green Energy Ltd has been sanctioned a loan of ̀ 22,338 lacs from IREDA and International Finance Corporation (IFC) for ` 15,468 lacs and ` 6,870 Lacs respectively for part financing of the Wind Project. As per the agreement, the company is liable to bring in additional equity in Bhilwara Green energy Ltd to cover any deficiency in the Project Cost. Further, the company has pledged 3,70,36,992 shares to IDBI Trusteeship Service Ltd jointly on behalf of IREDA and IFC respectively.

81

(d) LNJ Power Ventures Limited (LNJPVL) has set up a wind farm of 20 MW, for captive consumption by Group Company RSWM Limited, in Jaisalmer, Rajasthan in 2012–13.Term loan has been raised by LNJPVL for `4,329 Lacs & `4,095 Lacs from Yes Bank Limited & International Finance Corporation respectively. Share Pledge Agreement has been signed wherein out of the company holding of 7,40,000 equity shares, 5,10,000 equity shares have been pledged with IDBI Trusteeship Services Ltd in favour of both the lenders.

(e) The Company has given undertaking to IDBI Bank Limited and Punjab & Sind Limited for term loan facilities of ` 20,000 lacs & 7,000 lacs respectively (Previous year `26,000 lacs in favour of Yes Bank Limited) availed by Malana Power Company Limited, one of the subsidiaries of the company, for not diluting the shareholding in the said company till the full & final payment of the lenders.

In case of MPCL

(f) As at March 31, 2013, the Company has committed for non disposal of its investment in subsidiary AD Hydro Power Limited to the consortium lenders (similar commitment was there in the previous year also).

31. During the year, a construction power project, 7.5 MW Khangtang HEP Project, is transferred to the Company from NJC Hydro Power Limited, its subsidiary company. The details in respect of the assets and liabilities transferred to the company from its subsidiary company are as under:

(` in lacs)

Particulars Amount

Capital work in progress 2,457.50

Loans & advances 981.07

Total Assets 3,438.57

Less: Current liability 349.75

Net Assets 3,088.82

32. On May 26, 2009, the company issued 40,00,000, 0.01% Cumulative Redeemable Preference Shares of ` 100 /– each at par, redeemable at premium at the end of the fifth year from the date of issue. Preference Shares carry a put & call option at the end of one year from the date of issue and every six month thereafter and in such event redemption premium to be paid as per terms of issue

In the absence of distributable profits, the coupon liability of 0.01% amounting to ` 1.5 Lacs (Previous year ` 1.14 Lacs) has not been provided in the books being in the nature of dividend. However, redemption premium has been provided for on proportionate basis.

33. (i) In 2010–11, MPCL had given an upfront premium of ` 6,120.00 lacs for 200 MW Bara Banghal HEP project in state of Himachal Pradesh. Further, the Company had incurred expenses in the nature of consultant fees and other expenses of ` 540.76 lacs in relation to this project. Approx. 21.46 hectares of land for the said project falls under the Dhauladhar Wildlife Sanctuary, where no construction is permitted. The Company had filed an impleadment application with the Supreme Court of India for giving direction to the Wildlife Authority for processing and granting the technical clearance for the said project.

Pending the decision on application by the Supreme Court of India for grant of clearance to the project and in view of uncertainties related to such approvals and significant delays in respect of the project as stated above and in accordance with the terms of the Hydro Policy of the State, the company, in the year 2010–11, had created a provision of 50% of the upfront premium of ` 3,060.00 lacs and entire expenses incurred of ` 537.71 lacs till March 31, 2011 (i.e. total provision of ` 3,597.71 lacs) in respect of this project.

While the company has applied for de–notification of area falling under Dhauladhar Wildlife Sanctuary, considering the lengthy process involved and uncertainty of such de–notification, the company had submitted an application for development of the first phase being of 92 MW to be implemented outside the wildlife area. The Government has accorded the approval vide letter dated August 03, 2012 accordingly, the Company has signed a Supplementary Pre–Implementation Agreement dated December 3, 2012 with the Government of Himachal Pradesh. Currently, the Company is in process of carrying out Detailed Project Report (DPR) and assessing viability for the project after which Implementation Agreement will be signed. Pending signing of such agreement, no adjustments have been made in the financial statements in this regard.

82


(ii) In respect of Bara Banghal Project mentioned above, HPSEB has raised a demand of ` 661.05 lacs incurred by HPSEB on surveys and investigations pertaining to the project which, in the opinion of the management, is due and payable only once the Implementation Agreement is signed. Thus, no provision has been made in the financial statements in this regard.

34. The Company has given loan to its subsidiary, AD Hydro Power Limited of which `46,380.00 lacs (principal amount) is outstanding at year end (Previous year ` 52,180.00 lacs).

In view of losses, the subsidiary company requested the Company to waive off the interest from September 17, 2010 till the time the subsidiary company’s operations become profitable. The Board of Directors in their meeting dated March 29, 2011, approved such request of the subsidiary. As the subsidiary company has continued to report losses till March 31, 2013, interest amounting to ` 5,227.19 lacs for the year ended March 31, 2013 (previous year ` 5,272.52 lacs) has not been charged from the subsidiary company.

35. The subsidiary company ADHPL has incurred a loss of ` 2,584.45 lacs during the year ended March 31, 2013 and has accumulated losses of ` 19,426.52 lacs as at March 31, 2013. This is the third year of operations and the first year when plant has operated at full capacity. Losses have been decreasing year on year from ` 11,265.34 lacs in 2010–11, ̀ 5,576.73 lacs in 2011–12 to ̀ 2,584.45 lacs in the current year. Based on financial projections and impairment testing done by the management, the management believes that no impairment is required and the Company will have sufficient cash flows to meet their obligations as and when they fall due in future.

36. Everest Power Private Limited (‘EPPL’) is using the transmission system of the Company. As per the Appellate Tribunal for Electricity’s (‘APTEL’) interim order dated June 20, 2011, an interim Power Transmission Agreement was signed between the Company and EPPL on August 9, 2011. According to the agreement, EPPL has agreed to pay monthly transmission charges of ` 227.76 lacs for the EPPL’s Injected energy / power wheeled through the transmission system of the Company.

Subsequently, EPPL has raised some disputes and has not been paying the monthly transmission charges since October 2012 and there is outstanding receivable of ` 1,640.99 lacs from EPPL as at March 31, 2013. The matter is pending with the Hon’ble Supreme Court and pending final adjudication, the Hon’ble Supreme Court has directed EPPL to pay the monthly transmission charges as per the interim Power Transmission Agreement.

Based on discussion with lawyers, the management is confident that the transmission charges income of ` 2,787.05 lacs (previous year ` 1,808.89 lacs) recorded in the financial statements is appropriate, entire amounts are receivable and any adjustments arising out of the final order on the matter will not be material in relation to the financial statements.

37. Trade receivables include debts outstanding for more than two years amounting to `62.51 Lacs. The Company is in continuous process of working out different modalities of recovery for its remaining long outstanding debts.

38. Retention and Earnest money deposit amounting to ̀ 19.71 lacs is outstanding for recovery from various parties since long. However, the management is hopeful to recover this amount and no provision has been considered at present.

39. Security deposit amounting to ` 12.58 lacs was given to a party which is outstanding for recovery/ adjustment since 2007. However, the management is hopeful to recover this amount and no provision has been considered at present.

40. There are no present obligations requiring provision in accordance with the guiding principles as enunciated in AS–29 as it is not probable that an outflow of resources embodying economic benefits will be required.

41. LEASES In case of assets taken on Operating Lease: Office premises and vehicles are obtained on cancellable operating leases. All these leases have a lease

term varying between 3 to 5 years. There are no restrictions imposed by lease arrangements. There are no subleases.

(Rupees in lacs)

Particulars For the year ended March 31, 2013

For the year ended March 31, 2012

Lease payments for the year(MPCL) 37.09 38.82Lease payments for the year(ADHPL) 264.59 218.95

83

42. Un–hedged foreign currency exposures Particulars of un–hedged foreign currency exposures as at Balance Sheet date are as follows:



Foreign Currency Loan (MPCL) ` Nil ` 163.26 lacs (USD 3.20 lacs @ closing rate of 1USD = ` 51.02)

Creditor for engineering fees (ADHPL) ` Nil (CAD nil ) ` 37.05 lacs (CAD 0.72 lacs @ closing rate of 1CAD = `51.46)

Creditor for Supervisory Manpower Support (ADHPL)

` Nil (USD nil) ` 131.54 lacs (USD 2.58 lacs @ closing rate of USD = ` 51.02)

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

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

(Amount in Lacs)Parameters/Terms of Grant ExplanationTotal number of options granted A total of 1,068,820 options amounting to 0.70% of the total paid

up capital as on the grant date.Total number of options accepted 10,68,820Total number of Valid options 8,38,617Total number of options lapsed 2,30,203Categorization of employees All eligible employees as defined in the plan document.Fair Share Price ` 82/–Exercise price per option ` 82/–Grant Date 21st December, 2010Vesting Period The options would vest in the grantee over a period of three years

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




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

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

Exercise Conditions As per Bhilwara Energy ESOP 2010 plan.

No accounting treatment has been made for ESOP in current accounting period as there is no difference in the fair price of the share and exercise price per option. Moreover, none of the employees has so far exercised any of the options till the close of accounting year.


(a) Enterprises that directly or indirectly through one or more intermediaries control or are controlled by or under common control with the reporting enterprise.

None

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

SN Power Holding Singapore Pte. Limited RSW International Inc. AECOM Technology Corp. HEG Limited

84



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

(d) Key Management Personnel and relatives of such personnel:

Mr. Ravi Jhunjhunwala Mr. Riju Jhunjhunwala Mr. Rishabh Jhunjhunwala Mrs. Rita Jhunjhunwala (Relative) Mr. R.P Goel


SN Power Global Services Pte. Limited

Statkraft Norfund Power Invest Norway

Aadi Marketing Company Private Limited

Bhilwara Infotechnology Limited

RSWM Limited

Bhilwara Scribe Private Limited

Deepak Knits & Textiles Private Limited

Maral Overseas Limited

Bhilwara Technical Textiles Limited

BMD Renewable Energy Private Limited

BMD Power Private Limited

Essay Marketing Company Limited

Giltedged Industrial Security Limited

India Tex Fab Marketing Limited

Investors India Limited

Kalati Holdings Private Limited

LNJ Financial Services Limited

Nikita Electrotrades Private Limited

NIvedan Vanijya Niyojan Limited

Purvi Vanijya Niyojan Limited

Raghav Commercial Limited

Raghav Knits & Textiles Private Limited

Shashi Commercial Co. Limited

Veronia Tie–Up Private Limited

Bhilwara Infoway Private Limited

Bhilwara Services Private Limited

LNJ Bhilwara Textile Anusandhan Vikas Kendra

HEG Graphite and Services Limited

Odetta Realty Private Limited

BSL Limited

HEG Limited

85


Particulars 2012-13 (` in lacs)

2011-12 (` in lacs)

With parties referred to in item (a) above – –

With parties referred to in item (b) above

– Consultancy services rendered by ICCSL to AECOM 15.40 10.55

– Consultancy services rendered by ICCSL to HEG 1.48 3.45

– Reimbursement of expenses paid by MPCL to HEG 2.97 2.70

– Reimbursement of expenses paid by BEL to HEG 5.07 3.81

– Balance Receivable from AECOM by ICCSL Nil 24.92

– Premium on Redemption of Preference Shares Payable by BEL to HEG

2,001.64 1,405.66

– Dividend on Preference Shares Payable by BEL to HEG (due to losses not provided in the books)

1.54 1.14

– Provision for the year for Redemption of preference Shares by BEL to HEG

595.98 554.98

With parties referred to in item (c) above

– Remuneration paid to Mr. Ravi Jhunjhunwala by MPCL 119.38 113.35

– Rent paid to Mr. Riju Jhunjhunwala by MPCL 15.53 14.84

– Rent paid to Mr. Rishabh Jhunjhunwala by MPCL 15.53 14.84

– Remuneration paid to Mr. Riju Jhunjhunwala by BEL 38.98 40.03

– Remuneration paid to Mr. Rishabh Jhunjhunwala by BEL 38.98 40.03

– Purchase of shares of CYHPL from Mr. Ravi Jhunjhunwala Nil 4.00

– Purchase of shares of CYHPL from Mr. Riju Jhunjhunwala Nil 0.50

– Purchase of shares of CYHPL from Mr. Rishabh Jhunjhunwala Nil 0.50

– Purchase of shares of LNJPVL from Mr. Ravi Jhunjhunwala 0.001 Nil

With parties referred to in item (d) above, other than those included in (c) above

– Rent paid to Mrs. Rita Jhunjhunwala by MPCL 16.01 15.29

– Remuneration paid to Mr. R P Goel by ADHPL 40.02 37.67

With parties referred to in item (e) above

– Services rendered to BMD by ICCSL 17.30 25.34

– Services rendered to RSWM by ICCSL Nil 0.79

– Services rendered to BEL by ICCSL 232.92 131.38

– Services rendered to NJCHPL by ICCSL 286.52 380.54

– Reimbursement of expenses received from RSWM by ICCSL Nil 105.13

– Reimbursement of expenses paid to RSWM by ICCSL Nil 84.49

– Rent paid to RSWM by ICCSL 136.31 67.71

– Rent paid to RSWM by MPCL 36.92 38.78

– Reimbursement of expenses paid to RSWM by MPCL 18.60 15.40

– Consultancy charges paid to SNPG by ADHPL 27.25 447.08

– Reimbursement of expenses paid to Statkraft by ADHPL 2.11 13.89

– Rent paid to RSWM by BEL 122.21 45.45

– Reimbursement of expenses paid to RSWM by BEL 75.74 30.73

86



2011-12 (` in lacs)

– Reimbursement of expenses paid to BSL Limited by BEL 1.76 1.08

– Services rendered to LNJPVL by BEL 50.00 Nil

– Interest received from NJCHPL to BEL 548.93 Nil

– Interest received from BGEL to BEL 3.97 Nil

– Sale of electricity by RSWM by LNJPVL 0.22 Nil

– Interest paid to RSWM by LNJPVL 55.39 Nil

– CCD issued to RSWM by LNJPVL 2,674.00 Nil

– Equity shares issued to RSWM by LNJPVL 26.00 Nil

– Bank Charges paid by RSWM for LNJPVL 1.97 Nil

– Equity Shares in Odetta Realty Private Ltd. Nil 1.00

– Amount receivable from BMD by ICCSL Nil 2.12

– Amount payable to RSWM by ICCSL 98.07 152.19

– Amount payable to RSWM by LNJPVL 2,702.18 Nil

– Amount payable to SN Power Global by ADHPL Nil 131.55

45. AS–15 ‘EMPLOYEE BENEFITS’ Defined Contribution Plan

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

Particulars For the year ended on March 31, 2013

(` in lacs)

For the year ended on March 31, 2012

(` in lacs)

Employer’s contribution to Provident Fund 139.87 144.77

Employer’s contribution to Superannuation Fund 23.56 27.16

Gratuity:

Defined Benefit Plan

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

The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the respective plans:

Statement of Profit and Loss:

Net employee benefits expense (recognized in Employee Cost):

Particulars For the year ended on March 31, 2013

(` in lacs)

For the year ended on March 31, 2012

(` in lacs)

Current Service Cost 53.74 37.93

Interest cost on benefit obligation 19.30 17.08

Expected return on plan assets (13.60) (3.76)

Net actuarial (gain)/ loss recognised in the period (16.78) 26.77

Net benefit expense 42.66 78.02

Actual return on plan assets 0.34 0.59

87

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

Particulars As at 31-Mar-13 (` in lacs)

As at 31-Mar-12 (` in lacs)

Opening defined benefit obligation 259.96 204.89

Interest cost 19.30 17.07

Current service cost 53.74 37.93

Benefits paid (31.13) (27.90)

Actuarial (gains)/ losses on obligation (0.66) 27.97

Closing defined benefit obligation 301.21 259.96

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



Opening fair value of plan assets 159.25 129.46

Expected return 13.60 10.44

Contributions by employer 105.22 29.28

Benefits paid (31.13) (11.14)

Actuarial gains / (losses) 11.61 1.20

Closing fair value of plan assets 258.55 159.25

Details of Provision for Gratuity in respect of current year and previous four years are as follows:






Defined benefit obligation

(301.21) (259.96) (204.89) (136.21) (130.91)

Fair value of plan assets

258.55 159.25 129.46 129.35 107.73

Plan asset / (liability)

(42.66)* (100.71) (75.43) (6.86) (20.20)

Experience adjustment on plan liabilities

(5.56) (34.70) (10.08) (3.59) 1.48


5.04 0.73 (0.68) 10.5 0.31

* Out of the above, ` 13.84 (previous year ` Nil) lacs related to NJCHPL has been transferred to pre–operative expense.

Principal Actuarial Assumptions

Particulars For the year ended on

March 31, 2013

For the year ended on

March 31, 2012


March 31, 2011


March 31, 2010


March 31, 2009% % % % %

Discount Rate 8.08 8.55 8.1 7.8 7.0Expected rate of return on assets

8.00 8.00 6.0 6.0 6.0

Future Salary Increase

6.20 6.75 6.9 5.0 4.8

Withdrawal rate 1 to3 1 to 3 1 to 3 1 to 3 1 to 3 The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation,

seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

88


46. Segment Reporting as required by Accounting Standard (AS–17)(` in lacs)

Particulars 2012-13 2011-12

1 Segment Revenue

a) Power 35,136 17,683

b) Consultancy 1135 1,166

Sub Total 36,271 18,849

Less : Inter–segment Revenue 63 17

Net Segment Revenue 36,208 18,832

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

Profit before Tax

a) Power (2,339) (3,261)

b) Consultancy 65 (165)

(2,274) (3,426)

Provision for Taxation

– Current Tax 395 661

– Deferred Tax 98 (101)

Profit after tax (2,767) (3,986)

3 Other Information

I Segment Assets

a) Power 2,87,666 2,76,466

b) Consultancy 961 1,027

Total Assets 2,88,627 2,77,493

II Segment Liabilities

a) Power 1,81,242 1,67,226

b) Consultancy 867 920

Total Liabilities 1,82,109 1,68,146

III Capital Expenditure (Including Capital work in Progress)

a) Power 2,66,701 2,61,630


Total 2,66,751 2,61,643

IV Depreciation

a) Power 15,476 11,567


Total 15,495 11,587

V Non Cash expenditure other than depreciation

a) Power – –

b) Consultancy – –

Total – –

89

47. The Government of India has promulgated an Act namely The Micro, Small and Medium Enterprises (Development) Act, 2006 which came into force with effect from October 2, 2006. As per the Act, the Company is required to identify the Micro, Small and Medium suppliers and pay them interest on overdue beyond the specified period irrespective of the terms agreed with the suppliers. As per the information available with the Company and relied upon by the auditors, none of the creditors falls under the definition of ‘supplier’ as per the Section 2(n) of the Act. In view of the above, the prescribed disclosures under Section 22 of the Act are not required to be made.

48. PREVIOUS YEAR FIGURES

Previous year figures have been regrouped / reclassified, where necessary, to conform to this year’s classification.





AttAchments

of

AnnuAl RepoRt

list of AttAchments

Annual Report of subsidiaries for the year ended 31st march, 2013

1. malana Power company Limited 92

2. AD hydro Power Limited 125

3. Indo canadian consultancy services Limited 157

4. nJc hydro Power Limited 180

5. Bhilwara Green energy Limited 205

6. LnJ Power Ventures Limited 229

7. chango Yangthang hydro Power Limited 247

8. Green Ventures Private Limited, nepal 267

9. Balephi Jalbidhyut company Limited, nepal 281

AnnuAL RePoRtof

mAlAnA poWeR compAnY limiteD

93

chAiRmAn & mAnAGinG DiRectoRmr. Ravi Jhunjhunwala

DiRectoRsmr. L. n. Jhunjhunwalamr. erik KniveDr. Kamal Guptamr. R. P. Goelmr. Bidyut shomemr. Lars ellegard

KeY eXecutiVesMr. O. P. Ajmera, Chief Executive Officermr. V. D. Bhatia, Vice President (operations) compAnY secRetARYmr. Bharat singh stAtutoRY AuDitoRsm/s. s. R. Batliboi & co. LLP, Gurgaon inteRnAl AuDitoRsm/s. Ashim & Associates, new Delhi technicAl consultAntsm/s. RsW Inc., canadam/s. Indo canadian consultancy services Ltd., noida

coRPoRAte InfoRmAtIon

BAnKeRs / finAnciAl institutionsPunjab & sind BankIDBI Bank Limited

coRpoRAte officeBhilwara towersA–12, sector – 1noida – 201 301 (ncR–Delhi)Phone : 0120 – 4390000 (ePABX)fax : 0120 – 4277841Website : www.malanapower.com

ReGisteReD office & WoRKs Village chowki, P.o. JariDistt. Kullu (h.P.)Phone : 01902–276074 – 78fax : 01902 – 276078

liAison officeBhilwara Bhawan40–41, community centrenew friends colonynew Delhi – 110 025Phone : 011–26822997

94


chAIRmAns’ sPeech

Dear stakeholder,

India's GDP growth is going through a sluggish phase of sub 5 per cent in the current financial year, due to a mix of domestic and external factors. In order to put the nation again on path of over 8 per cent growth, empowered committees like cabinet committee on Investment (ccI) and cabinet committee on economic Affairs (cceA) are working overtime on clearance of stranded projects and; removing bottlenecks for smooth operations of the projects in the energy sector. these steps are expected to revive the industry sentiment and boost investor confidence in the sector, which will certainly help in reducing the gap between demand and supply in the energy sector.

still a lot needs to be done before the energy sector enters into the high trajectory. clarity is required on the announced policies and their implementation. the biggest challenge will be minimization of subsidies in power sales, which will improve the financial health of the distribution companies. A positive momentum at the distribution companies end will reduce vulnerability in the backward supply chain consisting of power transmission and generation companies.

As widely anticipated the southern Grid is likely to get linked to the other grids. the energy starved southern states will get access to power supplies from more generators. Vice versa merchant power producers will get access to more consumers. this is likely to result in buoyancy in energy prices, which will stabilize over a period of time.

on behalf of the Board of Directors, I would like to express our sincere gratitude to the ministry of Power and ministry of environment and forests, Government of India, central electricity Authority, Government of himachal Pradesh, other government agencies, Ptc India Limited, International finance corporation, lenders, commercial banks, financial institutions, joint venture partners for their unending support. I would also take this opportunity to thank our employees and business associates, who have been the pillar of strength for the company.

With Best Regards

Ravi Jhunjhunwalachairman

95

DIRectoRS' RePoRt

to the membersmalana Power company Limitedthe Directors of the company are pleased to present their fifteenth Annual Report on the business and operations of the company and Audited statement of accounts for the year ended 31st march, 2013 together with the Auditors' Report.1.0 finAnciAl peRfoRmAnce (` in million)

particularsfor the

Year ended 31.03.2013

for the Year ended 31.03.2012

totAl tuRnoVeR 946.241 1,089.703less : Discount on prompt payments / unscheduled interchange charges

46.401 15.393

net sales 899.840 1,074.310other income 12.647 29.457total income 912.487 1,103.767pRofit BefoRe inteRest, DepReciAtion AnD tAX 729.075 900.576

Interest 331.942 399.006pRofit BefoRe DepReciAtion AnD tAX 397.133 501.570

Depreciation 199.689 199.228Profit Before Tax and Prior period items 197.444 302.342

Prior Period expenses (travelling expenses) – 3.433

pRofit BefoRe tAX 197.444 298.909Provision for Tax– current tax 39.504 59.805– Deferred tax charge/(credit) 1.058 (6.960)net pRofit AfteR DepReciAtion, inteRest AnD tAX (pAt)

156.882 246.064

Balance brought forward from previous yearAmount AVAilABle foR AppRopRiAtion 4,766.089 4,603.651

AppRopRiAtiontransfer from debenture redemption reserves

2.777 5.556

total 2.777 5.556surplus carried to Balance sheet 4,768.866 4,609.207

Basic and diluted earning per share (eps), (in `)

1.06 1.67

Due to poor hydrology across the region the generation during the year stood at 333.077 million Kwh as compared to 376.178 million Kwh in the previous year. though the plant availability for generation of power was 99.8%. Beside, inspite of overall power deficit rising from 8.5% in 2011-12 to 8.7% in

2012-13 merchant tariff during the year remain subdued as most of Discoms have restored to load shedding instead of buying adequate power due to their poor financial strength.this has overall impacted the bottom line of the company by about 100 million Rupees as compared to previous year. the operation data for the year is as given below:

(in million units)

s. no.

particulars 2012–13 2011–12

1 total Generation 333.077 376.178 2 Less: Auxiliary &

transmission Loss 3.734 3.700

3 Less: Royalty/Wheeling to Govt. of hP

60.599 68.535

4 Less: Impact of unschedule Interchange energy /Poc Loss

8.019 11.760

5 total units sold 260.724 292.183 2.0 suBsiDiARY compAnY the AD hydro Power Ltd, a subsidiary of your

company, is engaged in operation, maintenance and generation of 192 mW hydro electric project in the state of himachal Pradesh.

The Annual Report for the financial year 2012- 13 and Accounts for the year ended on 31st march, 2013, as required under section 212 of the companies Act, 1956 of the said subsidiary company, is attached.

3.0 neW pRoJects Bara Banghal hep the company was allotted 200 mW Bara Banghal

heP on River Ravi in Indus Basin located in District chamba in himachal Pradesh on 28th April, 2008. however in view of some part of project falling under Dhauladhar Wild Life sanctuary (DWLs), the implementation of this project was divided in two stages : the first stage (capacity of 92MW) to be developed outside the DWLs; and the second stage to be taken up for implementation after de-notification of area falling under DWLs. Accordingly the company approached to the state Govt of himachal Pradesh to develop the project in two phases, which was approved by the state Government in August 2012. the company has signed supplementary Pre-Implementation Agreement with GoHP for Bara Banghal HEP Stage-I (92 MW) on 3rd December 2012. Presently the technical consultants are carrying out field investigations, topographical survey and are working on Detailed Project Report for 92 mW stage–I.

96


For Stage-II, the State Wildlife Department has appointed himachal Pradesh state forest Research Institute to study the impact of implementation of Barabangahal heP on the wildlife. the revised tentative lay-out of the project comprising the scheme in two phases has already been submitted to the state forest Research Institute.

4.0 the futuRe outlooK the Indian power sector is currently reeling under

an odd situation. the sector is faced with various challenges on almost every front ranging from availability of fuel, delayed environmental clearances albeit with stringent conditions, funding slowdown and continued deteriorating financial performance of Discoms across the country. on one hand, we have soaring unfulfilled demand for energy; while on the other hand, we have power generating plants kept idle because of lack of demand generated by the state owned utility companies. the mounting debts of the state sector distribution utilities have resulted in the deterioration of the financial health. As a result, instead of buying adequate power, Discoms have resorted to load shedding;. the merchant tariff of power, both at the short term bilateral power sales agreement and at the power exchanges, has dropped down to considerably low level.

In spite of the record breaking capacity additions in Eleventh Five Year Plan and first year of Twelfth Five Year Plan i.e. 2012-13, the sentiments in the power sector are not very positive. the Government of India has set the capacity addition target of 88,537 mW during 12th Five Year Plan (2012-17). The recent trends are showing that the demand both at base and peak is not rising as was anticipated, because of the reduced industrial activity, while the generation continues to rise with newer capacity additions.

though there are number of issues confronting the sector, yet there have been various initiatives taken by the central/state Governments and its agencies in order to expedite the power potential of the country and to provide an environment that can increase the efficacy of the existing resources.

the central Government’s strong focus on increasing electricity rates and reducing cross-subsidies has contributed to the positive trend of tariff revision in the sector. In addition, there was ruling by the Appellate tribunal for electricity in november, 2011 that the seRcs must initiate suo moto tariff revision in case the discoms fail to submit ARRs on time. During 2012-13, almost all the states undertook tariff revisions (in the range of 1.5-37 per cent) and the trend is likely to continue in 2013-14. Fourteen states have already incased tariffs for the year and others are expected to follow suit

on the distribution front, the Government has approved the restructuring package. this bailout package is aimed to reduce the debt service burden of the state utilities. however the successful implementation of this bailout package will largely depend upon timely performance of milestones linked to this bailout package. under this scheme, 50 per

cent of the short-term liabilities of discoms would be converted into bonds and issued to them, while the remaining 50 per cent would be rescheduled.

Priority has been given to ensure the connection of southern Grid to the neW grid by January 2014. once completed, this interconnected national grid will facilitate power transmission from hydro power potential rich northern Region to cater the peak load requirements of power deficit Southern Region. It is imperative to note that according to ceA during 2013-14 India will observe energy deficit of 6.7% and peak deficit of more than 3000 MW. Owing to the grid disturbances last year several regulations has also been passed recently for tightening the frequency band to 49.95 – 50.05 hz which will further result in increasing the volume of short term bilateral transactions among generating and distribution utilities.

In spite of the recent steps taken by the Government, the power sector is likely to see a dull period for the next couple of years. on the generation front bulk of generating capacity already under construction is expected to be commissioned in the next 2-3 years, which would further increase the supply position. however the Government’s initiative to improve the financial strength of Discoms may take some time to increase their ability to purchase adequate power and maintain adequate power supply to its end consumer. for a sector constrained by multiple challenges, a lot is expected from the Government for its revival and to ensure that Power sector plays its role in the efforts to bring back the GDP growth rate in excess of 8 percent. the largest grid failure in the world in end of July 2012had affected 620 million people (around 9% of world population) across 21 states. It had shown that a lot needs to be done for improvement and stabilization of power infrastructure in the country.

the eighteenth electric Power survey (ePs) projects an energy requirement of 1,354.9 Bus and a peak load of about 200 GW for the twelfth Plan period.

It is estimated that the peak demand supply gap would further increase post fY 2015 on account of decreased capacity addition and fuel cost escalation. Accordingly the merchant tariff is expected to see the increasing trend post fY 2015 primarily due to improvement in the liquidity profile of the Discoms post tariff hike, debt restructuring package and higher fuel prices and high demand supply gap.


5.0 DiViDenD Keeping in view the financial commitment of the

company, your Directors’ do not propose any dividend for the financial year under review.

6.0 ReDemption of DeBentuRes During the financial year 2012-2013, debentures

amounting to ` 11.11 million have been redeemed.7.0 puBlic Deposits the company has not accepted any deposits from

the public during the year under reporting.

97

8.0 eneRGY conseRVAtion, technoloGY ABsoRption AnD foReiGn eXchAnGe eARninGs & outGo

Information required to be disclosed under section 217 (1)(e) of the companies Act, 1956 read with companies (Disclosure of Particulars in the report of Board of Directors) Rules, 1988 has been given in the Annexure I, forming part of this Report.

9.0 pARticulARs of emploYees: Information in accordance with the provisions

of section 217(2A) of the companies Act, 1956 (the Act), read with the companies (Particulars of employees) Rules, 1975, as amended, regarding employees is given in Annexure-II to the Directors' Report.

10.0 inteRnAl contRol sYstems AnD theiR ADeQuAcY

10.1 inteRnAl contRol sYstems the company has proper and adequate internal

control systems in place for all its business activities to ensure compliance with policies, procedures, applicable Acts and Rules and best practices in the industry. All transactions are properly documented, authorized, recorded and reported correctly. the Company has well defined Management Reports on key performance indicators. the systems are reviewed continuously and its improvement and effectiveness is enhanced based on the reports from various fields. The Audit Committee reviews the adequacy of Internal control systems. the company’s Internal control systems are supplemented by Internal Audit covering all financial and operating functions.

10.2 inteRnAl AuDit Internal Audit at mPcL is an independent,

objective and assurance function conscientious for evaluating and improving the effectiveness of risk management, control, and governance processes. the function prepares annual audit plans based on risk management and conducts extensive reviews covering financial, operational and compliance controls and risk mitigation. Internal audit plans cover matters identified in risk management assessments as well as issues highlighted by the Board, the Audit committee and senior management. the areas requiring specialized knowledge are reviewed in partnership with external experts.

Internal Audit is conducted across all locations and of all functions by firms of Chartered Accountants, who verify and report on the functioning and effectiveness of internal controls. the Internal Audit reports the progress in implementation of recommendations contained in such reports. Internal audit reports are submitted along with the management’s response to the Audit committee. the Audit committee of the Board, monitors performance of Internal Audit on time-to-time basis through review of the internal audit plans, audit findings & swiftness of issue resolution through follow ups.

11.0 DiRectoRs In accordance with the provisions of the companies

Act, 1956 and of the Articles of Association of the company, mr. R.P. Goel and Dr.Kamal Gupta, Directors of the company, are liable to retire by rotation at the forthcoming Annual General meeting and being eligible, offer themselves for re-appointment. The Board recommends their re-appointment at the ensuing Annual General meeting. the aforesaid reappointments/appointments are subject to the approval of the members’ and the necessary resolutions have been incorporated in the notice of the Annual General meeting.

During the year mr. tor Inge stokke was appointed as Alternate Director to mr. erik Knive with effect from 17th December, 2012. consequent upon the return of mr. erik Knive to the Board, mr. tor Inge Stokke vacates the officer as Alternate Director on 26th June, 2013. the Board of Directors wishes to place on record their appreciation towards the contribution made by mr. tor Inge stokke during his tenure as Alternate Director to mr. erik Knive.

12.0 AuDit committee During the year, the Audit committee met two times

to review Company’s financial results, Internal control systems, Risk management Policies and Internal Audit Reports.

As on date, the Audit committee comprising the following members: mr. Ravi Jhunjhunwala, Dr. Kamal Gupta and mr. erik Knive. the proceedings of the committee have been in accordance with the provisions of the companies Act, 1956.

13.0 DiRectoRs’ ResponsiBilitY stAtement As required under section 217 (2AA) of the

companies (Amendment) Act, 2000, the Directors' of your company states hereunder:-


ii) that the accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the Company for the financial year 2012-2013.

iii) that the proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the company’s Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and


98


14.0 AuDitoRs14.1 stAtutoRY AuDitoRs m/s. s.R. Batliboi & co. LLP, chartered Accountants,

statutory Auditors of the company, will retire from their office at the ensuing Annual General Meeting. They are, however, eligible for re-appointment. The company has received consent letter from m/s. s.R. Batliboi & co. LLP, chartered Accountants, under section 224(1B) of the Companies Act, 1956, for re-appointment as statutory Auditors of the company. The Board recommends the re-appointment of m/s. s. R. Batliboi & co. LLP, chartered Accountants, as statutory Auditors of the company.

14.2 cost AuDitoRs Pursuant to section 233B(2) of the companies Act,

1956, in terms of the central Government's approval, the Board of Directors, on the recommendation of the Audit committee, has appointed m/s.K.G. Goyal & co., cost Accountants, as the cost Auditor of the company for the year. m/s.K. G. Goyal & co., has confirmed that their appointment is within the limits of the section 224(1B) of the companies Act, 1956 and have certified that they are free from any disqualifications specified under Section 233B(5) read with section 224 sub section (3) or sub section (4) of section 226 of the companies Act, 1956.

AuDitoRs’ RemARKs the Auditors’ Report read along with notes to the

Accounts is self-explanatory and requires no further comments from the Board.

15.0 humAn ResouRce DeVelopment the company believes that all commercial activities

should be infused with compassionate action to make the work place better and harmonious. our focus has always been on creating an encouraging and engaging environment for our employees. our employee partnership ethos reflects the Company's long-standing business principles and drives the company's overall performance. While we have continued to equip employees with the necessary skills and attitude to deliver on their current job responsibilities, the prime focus has been to identify, assess, groom and build leadership potential for future.

the company has a comprehensive hR policy to address the various needs and aspiration of our people. many of our activities are focussed on multi-skill training, performance improvement, time management, cross-fuctional team coordination, etc.

In the last week of october, 2013, Global cDm Workshop was conducted. this workshop was attended by executives of company, its subsidiary company AD hydro Power Ltd and representative from sn Power, Philippines and chile.

We also have a robust grievance redressal mechanisam in place for our people. We make sure we give a patient hearing to the issues faced by the employees and follow strict protocols for their resolution.

16.0 enViRonment, heAlth & sAfetY the company has excellent compliance records of

all statutory requirements applicable to its scope of activities under health, safety and environment management. During the year under consideration, your Company fulfilled its commitment to adopt best international ehs practices in its operating plant by being awarded ISO 14001:2004 certification (internationally accreditation for environmental management system) and ohsAs 18001:2007 (internationally recognized assessment specification for occupational health and safety management system). these systems promote a safe and healthy working environment by providing a framework that allows organizations to prevent pollution and reduce potential accidents and improve overall ehs performance.

the company has organized two and half days “Iso 14001 and ohsAs 18001 internal Auditors training Program” from 26th to 28th August, 2012. the training was imparted to 03 participants of mPcL by the competent trainer from certification agency KVQA. An internal audit was conducted by hse consultant on 12th July 2013 as required under the provision of the standards before conducting surveillance audit by the certification agency. The Surveillance audit is fixed on 29th August 2013.

the company celebrates 22nd April as World earth Day by having plantation in local areas. During the financial Year, the company is maintaining 955 trees, which was planted around the premises. the disposal of hazardous waste is being done as per approved standard/norms of Pollution control Board. the company regularly distributes plant saplings to local villagers for plantation.

the company maintains a medical dispensary at Jari with a 24 hour ambulance. the employees are adequately covered under various insurance policies against risk of health and life disasters. Annual health check-ups are carried out for all the employees. Your company also participates in Pulse Polio Programme, organized regularly by Rashtriya Gramin swasthaya mission, himachal Pradesh, at Jari.

the company is also committed to provide an incident and injury free workplace to its employees and workers all across its unit. the safety and security of employees is one of the prime concerns of the management. consistent efforts have been made by the company to improve safety standards of the company by taking measures like intensive safety drives in work area and conducting safety audit, workshop & first aid training, etc. Frequent safety Inspection and audits are conducted in the plant area from time to time. During the year under consideration, the Fire Officer from Directorate of fire services, Government of himachal Pradesh, inspected the Malana HEP and found the fire fighting measures satisfactory. A certificate to this effect was issued by Chief Fire Officer (H.P.).

some of the following activities were carried out during the financial year under consideration:

99

• A lecture on operation of fire extinguisher was organized to promote awareness among project employees regarding fire hazards and fire prevention.

• A training on "Disaster Management” was conducted by national civil Defense college, Nagpur at ADHPL from 7th-10th Nov.’12, where employees from malana participated.

• A training on “Electrical Safety” was conducted by corporate ehs on 28th may 2013

• A training on “First Aid ” was conducted by the Dr. Deepak tikoo on 28th may 2013

• A mock Drill and fire fighting training was conducted by site ehs on 23rd July 2013

• A “First Aid” Training was conducted on 23rd July 2013 by Dr. Atul shehgal

• A specific First Aid Training on “ Snake bite was conducted on 16th August 2013 by Dr. Deepak tikoo

17.0 coRpoRAte sociAl ResponsiBilitY the company ensures that, in its areas of operations,

its activities should generate economic benefits and opportunities for an enhanced quality of life for all the stakeholders and the society at large.

As a constructive partner in the communities in which it operates, your company has been taking concrete action to realize its social responsibility. In the past, the company has been actively involved in local infrastructure development like : construction, widening and strengthening of roads; construction of bridges; construction and maintenance of Village Bhojanalya and local school. Your company also contributes to women empowerment, community development and healthcare.

Your company is : • Running a dispensary which distributes free

medicines and has availability of a doctor twice a week and one dispenser round-the-clock for the benefits of local villagers. Rrunings an acupressure centre with one male and one female acupressure expert for the benefit of local community.

• Providing free 20 nos. of cable network connections to chowki villagers

• Providing free building, infrastructure and water facility to english medium La montessori School-Doonkhra.

Various events like : malana Day, Republic Day, Independence Day, new Year, Vishwakarma Jayanti, Dussehra, Diwali, Janmashtami, Lohari, chowki Village festival, etc. are celebrated in the campus with local participation.

to make efforts sustainable, the company has been providing 3 teachers to the local Govt. school, chowki; contributing for local fairs/festivals; providing free transportation and temporary lodging arrangements for the pilgrims visiting Kullu’s Dussehra festival; providing appliances to handicapped persons for their day-to-day needs; conducting blood donation camps and Pulse Polio

Program and; providing cable facilities for residents of chowki Village.

In the financial year under consideration, the company has also contributed by:

• Providing one dedicated Inverter of suitable capacity for operation theatre at Primary Govt. Health Centre-Jari

• Developing play ground for student of Govt. school, chowki

• Donated sanskrit Books to the Dev Vani sanskriti Pustakalaya (Library) at Dev sadan Kullu.

In the period under consideration, your company spent Rs.1.16 million as against a budgetary provision of Rs. 1.20 million (0.5% of the Net Profit for FY2011-12).

18.0 coRpoRAte GoVeRnAnce the company is committed to the application of

the best management practices, compliance with law, adherence to ethical standards and discharge of social responsibilities. Your company has in all spheres of its activities adequate checks and balances to ensure protection of interest of all stakeholders. Your company also endeavors to share, with its stakeholders’ openly and transparently, information on matters which have a bearing on their economic and reputational interest.

The majority of the Board comprises of Non-executive Directors’ who play a critical role in imparting balance to the Board processes, by bringing an independent judgment to decide on issues of strategy, performance, resources, standards of company’s conduct, etc. the Audit committee of the Board provides assurance to the Board on the adequacy of Internal control systems and financial systems.

19.0 AcKnoWleDGement the Directors’ place on record their sincere

appreciation for the co-operation and support received from the ministry of Power, Government of himachal Pradesh, other government agencies, lenders, commercial banks, financial institutions, Ptc India Limited and our valued customers, who have continued their valuable support and encouragement during the year under review.

the Directors’ also acknowledge and appreciate the commitment displayed by all executives, officers and staff at all levels of the company.

Your involvement as shareholders is greatly valued and appreciated. the Directors look forward to your continuing support.

foR AnD on BehAlf of the BoARD of DiRectoRs

RAVi JhunJhunWAlAchairman and managing Director

(DIn 00060972)

PLAce: noIDADAte: 26th August, 2013

100


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 – • During emptying the reservoir, the 2 blocks of inclined concrete lining towards semi-gravity wall of

reservoir were found to have settled, resulting in damage of the geo-membrane at the joint and creating a gap between toe-wall and concrete lining. The repair work of the same was done, which resulted in reduction of water leakage from 60 lps to 20 lps (equivalent to generation of 1.4 mu per year).

2. technoloGY ABsoRption – the company has not taken up any new project for technology absorption during the financial Year under

consideration.3. foReiGn eXchAnGe eARninGs AnD outGo

(in ` million)

2012 –13 2011–12I foreign exchange outgo

traveling & conveyance 0.185 0.83 Legal and Professional expenses – –fees and subscription – 1.536others 0.344 –total 0.529 2.366

II foreign exchange earningsothers (sale of Voluntary emission Rights) 10.302 17.067total 10.302 17.067

AnneXuRe ii to the DiRectoRs RepoRtInformation pursuant to section 217 (2A) of the companies Act, 1956 read with the companies (Particulars of employees) Rules, 1975 and forming part of Directors Report for the year ended 31st march 2013 are given hereunder:i. persons employed for the full year

name Designation Remuneration (` in millions )

Qualification experi-ence

Age Date of commencement of

employmentmr. Ravi Jhunjhunwala chairman & mD 11.938 B.com (hons),

mBA32 58 1.11.2001

101

InDePenDent AuDItoR’s RePoRt

to the members of malana power company limitedReport on the financial statementsWe have audited the accompanying financial statements of malana Power company Limited (“the company”), which comprise the Balance sheet as at march 31, 2013, and the Statement of Profit and Loss and Cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information. management’s Responsibility for the financial statementsmanagement is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Accounting standards referred to in sub–section (3c) of section 211 of the companies Act, 1956 (“the Act”). this responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor’s Responsibilityour responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the standards on Auditing issued by the Institute of chartered Accountants of India. those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.opinionIn our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in

the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:(a) in the case of the Balance sheet, of the state of af-

fairs of the company as at march 31, 2013;(b) in the case of the Statement of Profit and Loss, of

the profit for the year ended on that date; and (c) in the case of the cash flow statement, of the cash

flows for the year ended on that date.Report on other legal and Regulatory Requirements1. As required by the companies (Auditor’s Report)

order, 2003 (“the order”) issued by the central Government of India in terms of sub–section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the order.

2. As required by section 227(3) of the Act, we report that: (a) We have obtained all the information and ex-

planations which to the best of our knowledge and belief were necessary for the purpose of our audit;

(b) In our opinion proper books of account as re-quired by law have been kept by the company so far as appears from our examination of those books;

(c) The Balance Sheet, Statement of Profit and Loss, and cash flow statement dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the Balance sheet, statement of Profit and Loss, and Cash Flow Statement comply with the Accounting standards referred to in subsection (3c) of section 211 of the com-panies Act, 1956;

(e) on the basis of written representations received from the directors as on march 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub–section (1) of sec-tion 274 of the companies Act, 1956.

for s.R. Batliboi & co. llpchartered AccountantsIcAI firm Registration number: 301003e

per manoj GuptaPartnermembership number: 83906

Place : GurgaonDate : August 26, 2013

102


Annexure referred to in paragraph 1 under “Report on other legal and Regulatory Requirements” of our report of even dateRe: malana Power company Limited (‘the company’)(i) (a) the company has maintained proper

records showing full particulars, including quantitative details and situation of fixed assets.

(b) Fixed assets have been physically verified by the management during the year. As informed, no material discrepancies were noticed on such verification.

(c) there was no disposal of a substantial part of fixed assets during the year.

(ii) (a) the management has conducted physical verification of inventory at reasonable intervals during the year.

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business. In respect of material lying with third parties, the management has a process of confirmation and reconciliation with the third parties during the year.

(c) the company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) (a) the company has granted loan to one company covered in the register maintained under section 301 of the companies Act, 1956. the maximum amount involved during the year was Rs 52,196.57 lacs and the year–end balance of loan granted to such company was Rs 46,380 lacs (excluding interest accrued on the loan amounting to ` 7,461.13 lacs).

(b) the company covered in register maintained under section 301 of the companies Act, 1956 had requested the company to waive off the interest from september 17, 2010 to march 31, 2011 and henceforth not to charge the interest till the time said company’s operations became profitable, which has been approved by the Board of Directors of the company vide their meeting dated march 29, 2011. Read with above, in our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loans are not prima facie prejudicial to the interest of the company.

(c) As informed to us and as per the terms of the subordination Loan agreement with the lenders, the loan granted and interest thereon is repayable only once all obligations to outside lenders have been paid and discharged in full. Accordingly, the company has not demanded repayment of any such loan and interest thereon during the year and there has been no default on

the part of the parties to whom the money has been lent.

(d) there is no overdue amount of loans granted to companies, firms and other parties listed in the register maintained under section 301 of the companies Act, 1956.

(e) the company has taken loan from one company covered in the register maintained under section 301 of the companies Act, 1956. the maximum amount involved during the year was ` 2,207.01 lacs and the year–end balance of the loan taken from such company was ` nil.

(f) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loan is not prima facie prejudicial to the interest of the company.

(g) the loan taken and interest thereon is re–payable on demand and have been repaid during the year. thus, there has been no default on the part of the company.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of power. During the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the company in respect of these areas. Due to the nature of its business, the company is not required to sell any services.

(v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Act that need to be entered into the register maintained under section 301 have been so entered.

(b) In respect of transactions made in pursuance of such contracts or arrangements and exceeding value of Rupees five lacs have been entered into during the financial year, because of the unique and specialized nature of the items involved and absence of any comparable prices, we are unable to comment whether the transactions were made at prevailing market prices at the relevant time.

(vi) the company has not accepted any deposits from the public.

(vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the books of account maintained by the company pursuant to the rules made by the central Government for the maintenance of cost records under clause (d) of sub–section (1) of section 209 of the companies

103

Act, 1956, related to the generation of electricity from hydro–electric power and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

(ix) (a) the company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, income–tax, sales–tax, wealth–tax, service tax, customs duty, cess and other material statutory dues applicable to the company. the provisions relating to employees’ state insurance, investor education and protection fund and excise duty are not applicable to the company.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, income–tax, sales–tax, wealth–tax, service tax, customs duty, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable. the provisions relating to employees’ state insurance, investor education and protection fund and excise duty are not applicable to the company.

(c) According to the records of the company, the dues outstanding of income–tax, sales–tax, wealth–tax, service tax, custom duty and cess on account of any dispute, are as follows:

name of statute

nature of Dues

Amount (` in lacs)

period to which the amount relates

forum where dispute is pending

Income tax Act, 1961

Disallowance of expenses under section 14A

15.84* Assessment Year 2008–09

Income tax Appellate tribunal, new Delhi

Income tax Act, 1961

Disallowance of expenses under section 14A, excess disallowance claimed u/s 80IA and disallowance of common expenses

17.03* Assessment Year 2009–10

Income tax Appellate tribunal, new Delhi

* though, these demands have been adjusted by the Assessing Officer against refunds for subsequent assessment years, the company has contested the same.

the provisions relating to excise duty are not applicable to the company.

(x) the company has no accumulated losses at the end of the financial year and has not incurred cash losses in the current and in the immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the

company has not defaulted in repayment of dues to a financial institution, banks and debenture holder.

(xii) According to the information and explanations given to us and based on the documents and records produced to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the companies (Auditor’s Report) order, 2003 (as amended) are not applicable to the company.

(xiv) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the companies (Auditor’s Report) order, 2003 (as amended) are not applicable to the company.

(xv) According to the information and explanations given to us, the company has given guarantee for loans taken by its subsidiary from banks and financial institutions, the terms and conditions whereof, in our opinion, are not prima facie prejudicial to the interest of the company.

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

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short–term basis have been used for long–term investment.

(xviii) the company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the companies Act, 1956.

(xix) According to the information and explanation given to us, the company has created security or charge in respect of debentures outstanding during the year.

(xx) the company has not raised any money through public issue during the year.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the year.

for s.R. Batliboi & co. llpchartered AccountantsIcAI firm Registration number: 301003e

per manoj GuptaPartnermembership number: 83906

Place of signature: GurgaonDate: August 26, 2013

104


BALAnce sheet As At 31 mARch 2013

particulars note no.

As at 31 march 2013

(` in lacs)

As at 31 march 2012

(` in lacs) i. eQuitY AnD liABilities

1 shareholders’ funds(a) share capital 3 14,752.57 14,752.57 b) Reserves and surplus 4 80,234.33 78,665.51

94,986.90 93,418.08 2 non–current liabilities

(a) Long–term borrowings 5 24,300.00 18,252.74 (b) Deferred tax liabilities 6 2,196.34 2,185.76 (c) Long–term provisions 7 61.89 93.52

26,558.23 20,532.02 3 current liabilities

(a) short–term borrowings 8 – 2,207.01 (b) trade payable 9 54.36 58.52 (c) other current liabilities 9 2,750.71 14,845.40 (d) short–term provisions 7 154.78 34.56

2,959.85 17,145.49 totAl 124,504.98 131,095.59

ii. Assets1 non–current assets

(a) fixed assets(i) tangible assets 10 16,024.22 18,031.84 (ii) Intangible assets 10 6.07 10.33

(b) non–current investments 11 49,295.56 49,295.56 (c) Long–term loans and advances 12 49,619.90 49,703.08 (d) other non–current assets 13 7,478.23 7,476.77

122,423.98 124,517.58 2 current assets

(a) Inventories 14 216.14 184.19 (b) trade receivables 15 84.94 152.00 (c) cash and bank balances 16 1,640.61 237.11 (d) short–term loans and advances 12 137.05 6,003.26 (e) other current assets 17 2.26 1.45

2,081.00 6,578.01 totAl 124,504.98 131,095.59

Summary of significant accounting policies 2.1The accompanying notes are an integral part of the financial statements

As per our report of even date for and on behalf of the Board of Directors of malana power company limited

for s. R. Batliboi & co. llp Ravi Jhunjhunwala erik Knivechartered Accountants chairman & managing Director Directorfirm Registration no. : 301003e DIn – 00060972 DIn – 05213708

per manoj Gupta o.p. Ajmera Bharat singhPartner Chief Executive Officer Company Secretarymembership no. 83906 m.no. f–6459

Place : Gurgaon Place : noidaDated : 26th August, 2013 Dated : 26th August, 2013

105

particulars note no.

for the year ended 31 march 2013

(` in lacs)

for the year ended 31 march 2012

(` in lacs) i income

a Revenue from operations (net) 18 8,998.40 10,743.10 b other Income 19 126.47 294.57

total income 9,124.87 11,037.67 ii Expenses

Wheeling cost 168.01 189.96 open access charges 166.45 8.05 Employee benefits expense 20 642.59 618.66 other expenses 21 857.07 1,215.24 Depreciation and amortisation expense 22 1,996.89 1,992.28 finance costs 23 3,319.42 3,990.06 Total expenses 7,150.43 8,014.25

iii Profit before tax and prior period items 1,974.44 3,023.42 Prior Period expense – 34.33

iV Profit before tax 1,974.44 2,989.09 V Tax expense

current tax (mAt) 395.04 598.05 Deferred tax charge / (credit) 10.58 (69.60)Total tax expense 405.62 528.45

Vi Profit for the year 1,568.82 2,460.64 Vii earnings per share (nominal value of share `10)

Basic and diluted 24 1.06 1.67 Summary of significant accounting policies 2.1The accompanying notes are an integral part of the financial statements

stAtement of PRofIt & Loss foR the YeAR enDeD mARch 31, 2013





106


particulars for the year ended march 31, 2013

(` in lacs)`

for the year ended march 31, 2012

(` in lacs)cAsh floW fRom opeRAtinG ActiVitiesNet profit before tax 1,974.44 2,989.09 Adjustments for :

Depreciation 1,996.89 1,992.28 Loss on sale of fixed assets 19.26 0.97 Interest expense 3,284.10 3,990.06 surrender value of keyman insurance policy (1.46) – Interest income (17.06) (141.80)

Operating profit before working capital changes 7,256.17 8,830.60 movement in working capital :– (Increase)/decrease in trade receivables 67.06 179.91 – (Increase)/decrease in loans and advances 67.77 (102.52)– (Increase)/decrease in other current assets – (0.33)– (Increase)/decrease in inventories (31.95) 382.60 – (Decrease)/increase in current liability (62.00) 85.44 – (Decrease)/increase in trade payable (4.16) (347.52)– (Decrease)/increase in provision 88.59 10.15 cash generated from operations 7,381.48 9,038.33 Direct tax paid (net of refund) 311.00 631.00 net cash from operating activities (A) 7,070.48 8,407.33 cAsh floW fRom inVestinG ActiVitiesPurchase of fixed assets (including capital work in progress) (16.38) (102.76)Proceeds from sale of fixed assets 9.05 1.96 Interest received 16.00 141.00 fixed deposit placed (10.68) – Loan (given to) / received from subsidiary company 5,800.00 (8,494.59)net cash from / (used in) investing activities (B) 5,797.99 (8,454.39)cAsh floW fRom finAncinG ActiVitiesRepayment of short term loan from holding company (2,207.01) 1,207.01 Repayment of long term loan (5,984.54) (1,734.32)Interest paid (3,284.10) (3,990.06)Net cash from / (used in) financing activities (C) (11,475.65) (4,517.37)net increase / (decrease) in cash and cash equivalents (A+B+c) 1,392.82 (4,564.43)cash and cash equivalents at the beginning of the year 218.28 4,782.71 cash and cash equivalents at the end of the year 1,611.10 218.28 components of cash and cash equivalents cash on hand 5.10 4.31 With banks – on current account 1,606.00 213.97 totAl cAsh & cAsh eQuiVAlents (note no. 16) 1,611.10 218.28

notes:The cash flow statement has been prepared under the indirect method as set out in the Accounting Standard 3 "Cash Flow Statement" of the Companies (Accounting Standard) Rules 2006.





cAsh fLoW stAtement As At mARch 31, 2013

107

1. nature of operations

malana Power company Limited (hereinafter referred to as ‘the company’) is engaged in the generation of hydro electric power and development of hydro power projects. the company has the necessary permission from the Government of himachal Pradesh to own, operate & maintain the project and sell power for a period of forty years from the date of commercial operation i.e. July 5, 2001 with the option to avail a further extension for a maximum period of twenty years after renegotiation of terms and conditions.

2. Basis of preparation of financial statement

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

2.1 Summary of Significant Accounting Policies

(a) use of estimates

The preparation of financial statements in conformity with Indian generally accepted accounting principles requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting year. Although these estimates are based upon management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

(b) Tangible Fixed Assets

fixed assets are stated at cost, less accumulated depreciation / amortisation less impairment losses if any. cost comprises the purchase price and any directly attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition of fixed assets which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use.

Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day–to–day repair and maintenance expenditure and cost of replacing parts, are changed to the statement of profit and loss for the period during which such expenses are incurred.

Gains or losses arising from derecognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized

(c) Depreciation / Amortization on tangible fixed assets

(i) on the assets of generating unit and other Plant & machinery, depreciation is provided on straight–line method at the rates based on their estimated useful lives, which corresponds to the rates prescribed in schedule XIV of the companies Act, 1956.

(ii) On other tangible fixed assets other than those covered under (i) above, depreciation is provided on written down value method at the rates based on their estimated useful lives, which corresponds to the rates prescribed in schedule XIV of the companies Act, 1956.

(d) impairment of assets

the company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the company

notes to the fInAncIAL stAtements

108


estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash–generating unit’s (cGu) net selling price and its value in use. the recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or cGu exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre–tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used.

(e) intangible Asset

Intangible assets acquired separately are measured on initial recognition at cost. following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. computer software are amortized on written down value method at the rate of 40% per annum based on its estimated useful life.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

(f) Borrowing costs

Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.

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

(g) leases

Where the company is the lessee

Leases where the lesser effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the Profit and Loss account on a straight–line basis over the lease term.

(h) investment

Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long–term investments.

Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis. Long–term investments are carried at cost. however, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.

(i) inventories

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

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

(j) Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

Sale of Electricity

Revenue from sale of electricity is recognised on the basis of billable electricity (over and above free supply to himachal Pradesh’s state Government) scheduled to be transmitted to the customers, which approximates the actual electricity transmitted.

Interest

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

109

Voluntary emission rights (VER)

Revenue is recognised as and when the VER’s are certified and sold and it is probable that the economic benefits will flow to the Company.

(k) foreign currency translation

foreign currency transactions and balances

initial Recognition

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

Conversion

foreign currency monetary items are retranslated using exchange rate prevailing at the reporting date. non–monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

Exchange Differences

exchange differences arising on the settlement of monetary items or on reporting company’s monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as income or as expenses in the year in which they arise.

(l) Retirement and other employee benefits

(i) Retirement benefits in the form of Provident Fund and superannuation scheme are a defined contribution scheme and the contributions are charged to the statement of profit and loss of the year when the contributions to the respective funds are due. there are no other obligations other than the contribution payable to the provident fund/trust.

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

(iii) Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short–term employee benefit. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date. the company treats accumulated leave expected to be carried forward beyond twelve months, as long–term employee benefit for measurement purposes. Such long term compensated absences are provided for based on actuarial valuation. the actuarial valuation is done as per projected unit credit method at the year–end.

(iv) Liability under continuity loyalty bonus scheme (‘cLB’) is provided for on actuarial valuation basis, which is done as per projected unit credit method.

(v) Actuarial gains/losses are immediately taken to statement of profit and loss in the period in which they incur and are not deferred.

(vi) the company presents its gratuity and leave as current and non–current based on the actuarial valuation.

(m) Income taxes

tax expense comprises of current and deferred tax. current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income–tax Act, 1961 enacted in India. the tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income originating during the current year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets are recognised for deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.

110


In the situations where the company is entitled to a tax holiday under the Income–tax Act, 1961 enacted in India or tax laws prevailing in the respective tax jurisdictions where it operates, no deferred tax (asset or liability) is recognized in respect of timing differences which reverse during the tax holiday period, to the extent the company’s gross total income is subject to the deduction during the tax holiday period. Deferred tax in respect of timing differences which reverse after the tax holiday period is recognized in the year in which the timing differences originate. however, the company restricts recognition of deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realized. For recognition of deferred taxes, the timing differences which originate first are considered to reverse first.

At each balance sheet date, the company re–assesses unrecognised deferred tax assets. It recognises unrecognised deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realised.

the carrying amount of deferred tax assets are reviewed at each balance sheet date. the company writes–down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write–down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set–off current tax assets against current tax liabilities and the deferred tax assets and deferred taxes relate to the same taxable entity and the same taxation authority.

Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. the company recognizes mAt credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during the specified period, i.e., the period for which mAt credit is allowed to be carried forward. In the year in which the company recognizes mAt credit as an asset in accordance with the Guidance note on Accounting for credit Available in respect of minimum Alternative tax under the Income–tax Act, 1961, the said asset is created by way of credit to the statement of profit and loss and shown as “MAT Credit Entitlement.” The Company reviews the “MAT credit entitlement” asset at each reporting date and writes down the asset to the extent the company does not have convincing evidence that it will pay normal tax during the specified period.

(n) earnings per share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.


(o) provisions

A provision is recognised when the company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on management estimate required to settle the obligation at the Balance sheet date. these are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.

(p) cash and cash equivalents

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

(q) contingent liability

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non–occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. the company does not recognize a contingent liability but discloses its existence in the financial statements.

111

3. shARe cApitAl

As at march 31, 2013

(` in lacs)


(` in lacs)Authorized shares160,000,000 (Previous year 160,000,000) equity shares of ` 10 each 16,000.00 16,000.00 issued, subscribed and fully paid–up shares147,525,731 (Previous year 147,525,731) equity shares of ` 10 each

fully paid 14,752.57 14,752.57


As at march 31, 2013 As at march 31, 2012 no. of shares Amount

(` in lacs) no. of shares Amount

(` in lacs)shares outstanding at the beginning of the year

147,525,731 14,752.57 147,525,731 14,752.57

shares outstanding at the end of the year

147,525,731 14,752.57 147,525,731 14,752.57

(b) terms/rights attached to equity sharesthe company has only one class of equity shares having par value of ` 10 per share. each holder of equity shares is entitled to one vote per share. the dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General meeting.In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. the distribution will be in proportion to the number of equity shares held by the shareholders.

(c) shares held by holding / ultimate holding company and / or their subsidiaries / associates

As at march 31, 2013 As at march 31, 2012 no. of shares Amount

(` in lacs) no. of shares Amount

(` in lacs)Bhilwara energy Limited, the holding company

75,238,123 7,523.80 75,238,123 7,523.80

(d) Details of shareholders holding more than 5% shares in the company

equity shares of ` 10 each fully paid up

As at march 31, 2013 As at march 31, 2012 no. of shares % holding no. of shares % holding

name of the share holdersBhilwara energy Limited 75,238,123 51.00% 75,238,123 51.00%sn Power holding singapore Pte Ltd.

72,287,608 49.00% 72,287,608 49.00%

As per the records of the company, including its register of shareholders/members, the above shareholding represents legal ownership of shares.

4. ReseRVes & suRplus


(` in lacs)


(` in lacs)securities premium account 32,545.67 32,545.67 Debenture Redemption ReserveBalance as per last financial statements 27.77 83.33 Less: amount transferred to the statement of profit and loss (27.77) (55.56)closing Balance – 27.77 Surplus/(deficit) in the statement of profit and lossBalance as per last financial statements 46,092.07 43,575.87 Add: profit for the year 1,568.82 2,460.64 Add: transfer from debenture redemption reserve 27.77 55.56 Net surplus in the statement of profit and loss 47,688.66 46,092.07 totAl ReseRVes AnD suRplus 80,234.33 78,665.51

112


5. lonG teRm BoRRoWinGs

long–term current portion As at

march 31, 2013 (` in lacs)


(` in lacs)


(` in lacs)


(` in lacs)Debenturesnil (previous year : 100), 7.865% redeemable non convertible debentures of ` 1,000,000 each (previous year ` 1,000,000.00 each) (secured)

– – – 55.56

nil (previous year : 100), 7.75% redeemable non convertible debentures of ` 1,000,000 each (previous year ` 1,000,000.o0 each) (secured)

– – – 55.55

term loansfrom banks (secured) 24,300.00 18,252.74 2,700.00 7,620.69 From a financial institution (secured) – – – 7,000.00 totAl 24,300.00 18,252.74 2,700.00 14,731.80 the above amount includessecured Borrowings 24,300.00 18,252.74 2,700.00 14,731.80 Amount disclosed under the head "other current liabilities" (refer note no. 9)

– – (2,700.00) (14,731.80)

24,300.00 18,252.74 – –

7.865% and 7.75% redeemable non–convertible Debentures (ncD) of ` nIL (previous year ` 55.56 lacs) and ` nIL (previous year (` 55.55 lacs) respectively were secured by way of first mortgage and charge on land situated at village Budasan (Gujarat) together with all estate rights etc., present and future, of the company and further secured by irrevocable and unconditional guarantee extended by Infrastructure Leasing & financial Services Ltd. The aforesaid guarantee was secured by way of first charge on all immovable and movable properties, present and future, of the company on pari passu basis. the lenders have vacated these charge during the year.

the company has taken Indian Rupee term loans from Banks ` 27,000 lacs (previous year ` nIL) carring interest at base rate plus 1.25% currently @ 11.75% per annum secured against first mortgage and charge on the movable and immovable assets both present and future on pari passu basis. this loans is repayable in 40 structured monthly installment ranging from ` 540 lacs to 1,080 lacs commencing from June 1,2013.

Indian Rupee term loan ` nIL (previous year ` 25,710.17 lacs) and foreign currency term loan ` nIL (previous year ` 163.26 lacs) were secured by way of first mortgage/charge on all the immovable properties wherever situated and hypothecation off all other assests, rights etc., present and future, of the company on pari passu basis. the lenders have vacated such charge during the year.

Loan from financial institutions ` nIL (previous year ` 7,000 lacs were secured against first charge by way of hypothecation on the entire current assests including inventories, stores and spares, receivables, loans and advances and movable assets including but not limited to money receivable, investments, intangibles present and future and Demand Promissory notes executed by the company. the lenders have vacated such charge during the year.

6. DefeRReD tAX liABilities


(` in lacs)


(` in lacs)Deferred tax liabilityDifferences in depreciation and other differences in block of fixed assets as per tax books and financial books

2,190.79 2,180.58

others 5.55 5.18 DefeRReD tAX liABilities 2,196.34 2,185.76

113

10. tAnGiBle Assets AnD intAnGiBle Assets (` in lacs)


landFreehold Building

Civil Work Transmis-sion Line

Plant and Machinery

Office equip-ments

Furniture and

Fixtures

Comput-ers


Assets)

Software Total (Intangible

Assets)Cost or valuationAs at April 1, 2011 215.17 3,178.63 18,474.66 1,996.70 9,580.93 43.90 62.94 60.33 112.54 33,725.80 116.98 116.98 Additions 79.88 – – 0.86 0.12 0.97 5.99 9.97 97.79 4.97 4.97 Disposals – – – – 2.59 0.30 7.72 9.47 20.08 55.42 55.42 As at March 31, 2012 215.17 3,258.51 18,474.66 1,996.70 9,581.79 41.43 63.61 58.60 113.04 33,803.51 66.53 66.53 Additions – – – 5.25 2.42 0.87 4.06 – 12.60 0.72 0.72 Disposals – – – 99.52 9.53 18.51 9.67 8.64 145.87 – – As at March 31, 2013 215.17 3,258.51 18,474.66 1,996.70 9,487.52 34.32 45.97 52.99 104.40 33,670.24 67.25 67.25 DepreciationAs at April 1, 2011 – 724.86 7,456.10 1,016.61 4,415.31 30.91 44.39 40.30 70.08 13,798.56 109.60 109.60 Charge for the year – 92.81 1,203.67 105.49 566.21 3.48 3.61 4.20 11.19 1,990.66 1.62 1.62 Disposals – – – – – 0.19 0.91 7.51 8.94 17.55 55.02 55.02 As at March 31, 2012 – 817.67 8,659.77 1,122.10 4,981.52 34.20 47.09 36.99 72.33 15,771.67 56.20 56.20 Charge for the period – 97.41 1,203.67 105.49 566.22 3.23 2.72 3.35 9.82 1,991.91 4.98 4.98 Disposals – – – – 79.19 7.47 15.19 9.00 6.71 117.56 – – As at March 31, 2013 – 915.08 9,863.44 1,227.59 5,468.55 29.96 34.62 31.34 75.44 17,646.02 61.18 61.18 Net BlockAs at March 31, 2013 215.17 2,343.43 8,611.22 769.11 4,018.97 4.36 11.35 21.65 28.96 16,024.22 6.07 6.07 As at March 31, 2012 215.17 2,440.84 9,814.89 874.60 4,600.27 7.23 16.52 21.61 40.71 18,031.84 10.33 10.33

Notes : 1) Building includes cost of road Rs.1,228.38 lacs (Previous year 1,228.38 lacs) constructed on forest land diverted for the project under irrevocable right to use. 2) Transmission Lines includes Rs.41.81 lacs (Previous year ` 41.81 lacs) towards cost of land and compensation paid to Forest Department for construction of

Transmission towers under irrevocable right to use.

7. pRoVisions

long–term short–term As at



(` in lacs)


(` in lacs)


(` in lacs)Provision for employee benefitsProvision for gratuity – 13.44 11.46 3.48 Provision for leave benefits 51.33 43.79 1.81 7.83 Provision for continuity linked bonus 10.56 36.29 22.09 23.25

61.89 93.52 35.36 34.56 other provisionProvision for income tax (net of advance tax)

– – 119.42 –

– – 119.42 – totAl 61.89 93.52 154.78 34.56

8. shoRt teRm BoRRoWinGs


(` in lacs)


(` in lacs)short term loan loans & advances from related parties – from Bhilwara energy Limited (holding company) – 2,207.01 totAl – 2,207.01 term loan from holding company was unsecured. the loan granted and interest thereon was repayable on demand. the loan carried an interest rate of 15.25% per annum.

9. tRADe pAYABle AnD otheR cuRRent liABilities


(` in lacs)


(` in lacs)trade payable 54.36 58.52 other current liabilitiescurrent maturities of long term borrowings 2,700.00 14,731.80 Payable to related party – 50.42 sundry deposits 11.28 36.76 statutory dues payable 39.43 26.42 totAl 2,750.71 14,845.40

114


11. non cuRRent inVestments


(` in lacs)


(` in lacs)trade investments (valued at cost unless stated otherwise)unquoted equity instrumentsinvestment in subsidiary492,955,640 (Previous year 492,955,640) equity shares of ` 10 each fully paid of AD hydro Power Limited (pledged with security trustee on behalf of lenders of AD hydro Power Limited)

49,295.56 49,295.56

totAl 49,295.56 49,295.56

12. loAns AnD ADVAnces (unsecured, considered good unless otherwise stated)

long–term short–term As at



(` in lacs)


(` in lacs)


(` in lacs)capital advancesAdvance for bara banghal project (including ` 537.86 lacs towards consultancy and other expenses on the project) (unsecured, considered doubtful)

6,660.77 6,657.71 – –

Less : Provision against upfront premium/other expenditure for bara banghal (refer note 32)

(3,597.71) (3,597.71) – –

Advance tax (net of provision ` 4,343.70 lacs, previous year ` 6,567.95 lacs)

133.32 217.40 – –

Loans and advances to holding company

– – – 12.08

Loans to employees 11.27 13.59 6.34 6.82 security deposits 32.25 32.09 – – Advances recoverable in cash and kind

– – 128.12 167.79

Loans & advance to subsidiary company (refer note 33)

46,380.00 46,380.00 2.59 5,816.57

totAl 49,619.90 49,703.08 137.05 6,003.26

13. otheR non cuRRent Assets (unsecured, considered good unless stated otherwise)


(` in lacs)


(` in lacs) Interest accrued on loan given to subsidiary company (refer note 33) 7,461.13 7,461.13 surrender value of keyman insurance policy 17.10 15.64 totAl 7,478.23 7,476.77

14. inVentoRies (valued at lower of cost and net realisable value)


(` in lacs)


(` in lacs) stores and spares [including material lying with third parties ` 1.17 lacs (previous year ` 1.09 lacs)]

216.14 184.19

totAl 216.14 184.19

115

15. tRADe ReceiVABles (cuRRent)


(` in lacs)


(` in lacs)unsecured, considered good unless stated otherwiseoutstanding for a period exceeding six months from the date they are due for payment

– –

other receivables 84.94 152.00 totAl 84.94 152.00

16. cAsh AnD BAnK BAlAnces


(` in lacs)


(` in lacs)cash and cash equivalentsBalances with banks in: – current accounts 1,606.00 213.97 cash on hand 5.10 4.31

1,611.10 218.28 other bank balancesmargin money deposit (held as security) 27.51 16.83 Deposits with original maturity for more than 3 months but less than 12 months

2.00 2.00

29.51 18.83 totAl 1,640.61 237.11

fixed Deposit of ` 2.00 lacs (previous year ` 2.00 lacs) pledged with the h.P. Government sales tax Department

17. otheR cuRRent Assets


(` in lacs)


(` in lacs)Interest accrued on bank deposits 2.26 1.45 totAl 2.26 1.45

18. ReVenue fRom opeRAtions

for the year ended


for the year ended


Revenue from operationssale of power 9,462.41 10,897.03 Revenue from operations (gross) 9,462.41 10,897.03 Less : Discount on prompt payments 119.15 157.66 Less : handling charges 79.22 88.15 Less : unscheduled interchange charges / (credit) 253.24 (101.59)Less : Professional charges 12.40 9.71 ReVenue fRom opeRAtions (net) 8,998.40 10,743.10

116


19. otheR income

for the year ended


for the year ended


Interest on bank deposits 17.06 141.80 Interest on Income tax refund 12.46 – sale of voluntary emission reductions (VeR) 103.02 170.67 expenses on sale of voluntary emission reductions (including commission)

(15.94) (41.50)

excess provision/ credit balances written back – 13.10 surrender value of keyman insurance policy 1.46 5.43 miscellaneous income 8.41 5.07 totAl 126.47 294.57

20. emploYee Benefits eXpenses

for the year ended


for the year ended


salaries, wages and bonus 442.06 425.10 Director's remuneration 119.38 113.35 contribution to provident and other funds 28.67 28.56 Gratuity expenses (refer note 34) 11.46 16.92 Workmen and staff welfare expenses 41.02 34.73 totAl 642.59 618.66

21. otheR eXpenses

for the year ended


for the year ended


Rent 37.09 38.82 Power and fuel 43.38 32.64 Repair and maintenance – Buildings 8.36 3.88 – Plant and machinery 247.08 632.68 – others 32.60 10.98 Rates and taxes 1.89 2.35 Insurance 153.71 139.03 Payment to auditor (Refer detail below) 12.73 12.41 Director's commission* – – communication costs 20.88 20.69 Printing and stationery 5.98 6.57 travelling and conveyance 61.03 74.71 membership fees and subscriptions 8.93 15.83 Legal and professional fees 61.18 80.01 Exchange fluctuation ( net) 11.88 28.84 social welfare expenses 8.59 6.77 Loss on fixed assets sold/discarded (net) 19.26 0.97 Balances/Advances written off – 9.70 miscellaneous expenses 122.50 98.36 totAl 857.07 1,215.24

*the Board of Directors have decided that the commission to managing director is not to be paid for the year ended march 31, 2013.

117

for the year ended


for the year ended


payment to AuditorAs auditor: – Audit fee 6.74 6.61 – fees for international reporting 3.37 3.31 in other capacity – fees for other services 2.25 2.21 – out of pocket expenses 0.37 0.28 totAl 12.73 12.41

22. DepReciAtion AnD AmoRtisAtion eXpenses

for the year ended


for the year ended


Depreciation on tangible assets 1,991.91 1,990.66 Amortization of Intangible assets 4.98 1.62 totAl 1,996.89 1,992.28

23. finAnce cost

for the year ended


for the year ended


Interest – on term loans from banks and financial institutions 2,982.85 3,810.72 – on debentures 3.26 19.57 – on loan from holding company 197.60 49.15 – on Income tax 14.72 – upfront fees and loan processing charges 85.67 94.47 other bank charges 35.32 8.39 exchange difference to the extent considered as an adjustment to borrowing costs

– 7.76

totAl 3,319.42 3,990.06

24. eARninGs peR shARe (eps)

for the year ended


for the year ended


The following reflects the profit and share data used in the basic and diluted ePs computations:Profit/loss after tax as per statement of profit and loss 1,568.82 2,460.64 Weighted average number of equity shares in calculating basic and diluted ePs

1,475.26 1,475.26

Basic and diluted earnings per share in ` (face value of ` 10) 1.06 1.67

25. seGment RepoRtinG

the company’s activities during the year involved generation of the hydro power (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 ‘segment Reporting’ issued by the companies (Accounting standard) Rules, 2006 and hence, there are no additional disclosures to be provided other than those already provided in the financial statements.

26. the company is eligible for tax holiday under section 80–IA of the Income tax Act, 1961. the company is liable to pay Income–tax for the period under the provisions of section 115JB of the Income–tax Act, 1961.

118


27. continGent liABilities not pRoViDeD foR

(a) Guarantee given for loans availed by AD hydro Power Limited, subsidiary company, amounting ̀ 8,000.00 lacs (Previous year ` 8,000.00 lacs).

(b) Claims made against the Company not acknowledged as debts – Demand from Divisional Forest Officer in respect of damages to forest trees ` nil (Previous year – ` 25.90 lacs).

(c) In respect of assessment year 2008–09, the Assessing Officer had disallowed certain proportion of the expenses as expenses incurred towards the exempt income under section 14A and other expenses under the Income tax Act, 1961 and raised a demand of ` 43.88 lacs. In response to appeal filed by the company, part relief has been granted by the commissioner of Income tax (Appeals). Income tax department and the company have preferred further appeal before the ItAt, new Delhi, which is pending for hearing.

(d) In respect of assessment year 2009–10, the Assessing Officer had disallowed certain proportion of the expenses as expenses incurred towards the exempt income under section 14A, deduction under section 80IA and other expenses under the Income tax Act, 1961 and raised a demand of ` 55.81 lacs. In response to appeal filed by the Company, part relief has been granted by the Commissioner of Income tax (Appeals). Income tax department and the company have preferred further appeal before the ItAt, new Delhi, which is pending for hearing.

Based on expert inputs, management believes that these demand and any possible demand for other assessment years to be raised by Income tax Authorities on similar grounds, is unlikely to crystallize and there is a fair chance of decision in its favor.

28. cApitAl AnD otheR commitments

a) estimated amount of contracts remaining to be executed on capital account (upfront fee) and not provided for (net of advances) ` 6,120.00 lacs (Previous Year ` 6,120.00 lacs) for Bara Banghal heP Project in himachal Pradesh.

b) At march 31, 2013, the company has committed for non disposal of its investment in subsidiary AD hydro Power Limited to the consortium lenders (similar commitment was there in the previous year also).

29. RelAteD pARtY DisclosuRes

(a) names of related parties

holding company Bhilwara energy Limitedsubsidiary company AD hydro Power Limited Enterprises having significant influence over the Company

sn Power holding singapore Pte Ltd. singapore

fellow subsidiary companies Indo canadian consultancy services Limited,Key management personnel mr. Ravi Jhunjhunwala, chairman & managing DirectorRelatives of key management personnel

mrs. Rita Jhunjhunwala (wife of the chairman & managing Director)mr. Riju Jhunjhunwala (son of the chairman & managing Director)mr. Rishabh Jhunjhunwala (son of the chairman & managing Director)

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

heG Limited, RsWm Limited

(b) transaction with related parties

(` in lacs)Nature of Transaction Holding Company/

Enterprises having significant influence over the

Company

Subsidiary/Fellow subsidiary

Company

Key Management Personnel *

Relative of Key Management

Personnel

Enterprise over which key management

personnel / relative having significant

influence2012–13 2011–12 2012–13 2011–12 2012–13 2011–12 2012–13 2011–12 2012–13 2011–12

Transactions during the yearRent a) Mrs.Rita Jhunjhunwala – – – – – – 16.01 15.29 – –

b) Mr. Rishabh Jhunjhunwala – – – – – – 15.53 14.84 – –

c) Mr. Riju Jhunjhunwala – – – – – – 15.53 14.84 – –

d) Rajasthan Spinning and Weaving Mills Limited

– – – – – – – – 36.92 38.78

119

(` in lacs)Nature of Transaction Holding Company/

Enterprises having significant influence over the

Company

Subsidiary/Fellow subsidiary

Company

Key Management Personnel *

Relative of Key Management

Personnel

Enterprise over which key management

personnel / relative having significant

influence2012–13 2011–12 2012–13 2011–12 2012–13 2011–12 2012–13 2011–12 2012–13 2011–12

Consultancy service charges paid to Indo Canadian Consultancy Services Limited

– – 6.58 16.55 – – – – – –

Remuneration paid to Mr. Ravi Jhunjhunwala,

– – – – 119.38 113.35 – – – –

Reimbursement of expenses paid to HEG Limited

– – – – – – – – 2.97 2.70

Reimbursement of expenses paid to RSWM Limited

– – – – – – – – 18.60 15.40

Reimbursement of expenses paid to Bhilwara Energy Limited

2.31 33.74 – – – – – – – –

Reimbursement of expenses recovered from Bhilwara Energy Limited

53.50 44.19 – – – – – – – –

Interest on short term loan from Bhilwara Energy Limtied

197.60 49.15 – – – – – – – –

Reimbursement of expenses paid to Indo Canadian Consultancy Services Limited

– – – 0.02 – – – – – –

Reimbursement of expenses paid to AD Hydro Power Limited

– – 28.45 20.32 – – – – – –

Reimbursement of expenses recovered from AD Hydro Power Limited

– – 5.36 1.15 – – – – – –

Unsecured Loan repaid to Bhilwara Energy Limited (including interest)

5,607.01 2,842.13 – – – – – – – –

Unsecured Loan taken from Bhilwara Energy Limited

3,400.00 4,000.00 – – – – – – – –

Unsecured Loan repaid by AD Hydro Power Limited

– – 13,444.11

3,594.26 – – – – – –

Unsecured Loan given to AD Hydro Power Limited

– – 7,644.11 12,108.02

– – – – – –

Deposit taken from Bhilwara Energy Limited

– 1,403.15

Balances outstanding as at the year endBalances Receivable:Receivable from AD Hydro Power Limited (Reimbursements)

2.59 16.57

Investment in AD Hydro Power Limited – – 49,295.56 49,295.56 – – – – – –

Unsecured Loan recoverable from AD Hydro Power Limited

– – 46,380.00

52,180.00

– – – – – –

Receivable from Bhilwara Energy Limited – 12.08 – – – – – – – –

Interest amount recoverable on Unsecured Loan

– – 7,461.13 7,461.13 – – – – – –

Balances Payable:Loan outstanding from Bhilwara Energy Limited

– 2,207.01 – – – – – – – –

Indo Canadian Consultancy Services Limited

– – – 14.91 – – – – – –

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

– – 8,000.00 8,000.00 – – – – – –

* Remuneration paid does not include provision made for compensated absences and gratuity as the same are determined for the Company as a whole.

30. the Government of India has promulgated an Act namely the micro, small and medium enterprises Development Act, 2006 which came into force with effect from october 2, 2006. As per the Act, the company is required to identify the Micro, Small and Medium suppliers and pay them interest on overdue beyond the specified period irrespective of the terms agreed with the suppliers. As per the information available with the company and

120


relied upon by the auditors, none of the creditors fall under the definition of ‘supplier’ as per the Section 2(n) of the Act. In view of the above, the prescribed disclosures under section 22 of the Act are not required to be made.

31. leAses

in case of assets taken on operating lease:

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

(` in lacs)

particulars for the year ended

march 31, 2013

for the year ended

march 31, 2012Lease payments for the year 37.09 38.82

32. (a) In 2010–11, the company had given an upfront premium of ` 6,120.00 lacs for 200 mW Bara Banghal heP project in state of himachal Pradesh. further, the company had incurred expenses in the nature of consultant fees and other expenses of ` 540.76 lacs in relation to this project. Approx. 21.46 hectares of land for the said project falls under the Dhauladhar Wildlife sanctuary, where no construction is permitted. The Company had filed an impleadment application with the Supreme Court of India for giving direction to the Wildlife Authority for processing and granting the technical clearance for the said project.

Pending the decision on application by the supreme court of India for grant of clearance to the project and in view of uncertainties related to such approvals and significant delays in respect of the project as stated above and in accordance with the terms of the hydro Policy of the state, the company, in the year 2010–11, had created a provision of 50% of the upfront premium of ` 3,060.00 lacs and entire expenses incurred of ` 537.71 lacs till march 31, 2011 (i.e. total provision of ` 3,597.71 lacs) in respect of this project.

While the Company has applied for de–notification of area falling under Dhauladhar Wildlife Sanctuary, considering the lengthy process involved and uncertainty of such de–notification, the Company had submitted an application for development of the first phase being of 92 MW to be implemented outside the wild life area. the Government has accorded the approval vide letter dated August 3, 2012 and accordingly, the company has signed a supplementary Pre–Implementation Agreement dated December 3, 2012 with the Government of himachal Pradesh. currently, the company is in process of carrying out Detailed Project Report (DPR) and assessing viability for the project after which Implementation Agreement will be signed. Pending signing of such agreement, no adjustments have been made in the financial statements in this regard.

(b) In respect to Bara Banghal Project mentioned above, hPseB has raised a demand of ` 661.05 lacs incurred by hPseB on surveys and investigations pertaining to the project which, in the opinion of the management, is due and payable only once the Implementation Agreement is signed. thus, no provision has been made in the financial statements in this regard.

33. the company has given loan to its subsidiary, AD hydro Power Limited of which ` 46,380.00 lacs (principal amount) is outstanding at year end (Previous year ` 52,180.00 lacs).

In view of losses, the subsidiary company requested the company to waive off the interest with effect from September 17, 2010 till the time the subsidiary Company’s operations become profitable. The Board of Directors in their meeting dated march 29, 2011, approved such request of the subsidiary. As the subsidiary company has continued to report losses till march 31, 2013, interest amounting to ` 5,227.19 lacs for the year ended march 31, 2013 (previous year ` 5,272.52 lacs) has not been charged from the subsidiary company.

34. GRAtuitY (As 15 - ReViseD)

The Company has a defined benefit gratuity plan. Gratuity (being administered by a Trust) is computed as 15 days salary for every completed year of service or part thereof in excess of 6 months and is payable on retirement / termination / resignation. The benefit vests on the employee completing 5 years of service. The Gratuity plan for the Company is a defined benefit scheme where annual contributions are deposited with a Gratuity Trust Fund established to provide gratuity benefits. The Trust Fund has taken a Scheme of Insurance, whereby these contributions are transferred to the insurer. the company makes provision of such gratuity asset/ liability in the books of accounts on the basis of actuarial valuation as per the Projected unit credit method.

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

121

Net employee benefits expense (recognised in Employee Cost):


march 31, 2013(` in lacs)

for the year ended


current service cost 7.07 6.05Interest cost on benefit obligation 5.92 4.59expected return on plan assets (5.42) (3.61)net actuarial (gain)/ loss recognised in the year 3.90 9.89Net benefit expense 11.46 16.92Actual return on plan assets 7.31 3.85

Details of provision for Gratuity:

particulars As at march 31, 2013

(` in lacs)

As atmarch 31, 2012

(` in lacs)Defined benefit obligation 92.72 73.94fair value of plan assets 81.26 57.02Surplus / (Deficit) (11.46) (16.92) Less: unrecognised past service cost – – net asset / (liability) recognized in Balance sheet (11.46) (16.92)

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



for the year ended


Opening defined benefit obligation 73.94 54.00Interest cost 5.92 4.59current service cost 7.06 6.05Benefits paid – (0.83)Actuarial (gains)/ losses on obligation 5.80 10.13Closing defined benefit obligation 92.72 73.94

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



for the year ended


opening fair value of plan assets 57.02 45.13expected return 5.42 3.61contributions by employer 16.92 8.87Benefits paid – (0.83)Actuarial gains / (losses) 1.90 0.24closing fair value of plan assets 81.26 57.02

The defined benefit obligation amounting to ` 92.72 lacs is funded by assets amounting to ` 81.26 lacs and the company expects to contribute ` 12.61 lacs during the next year

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


march 31, 2013

for the year ended

march 31, 2012% %

Investments with insurer 100 100

the overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

122


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


march 31, 2013

for the year ended

march 31, 2012% %

Discount Rate 8.00 8.50expected rate of return on assets 9.50 8.00future salary Increase 5.50 6.00Withdrawal rate 1 to 3 1 to 3

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

Amounts for the current and previous four years are as follows: (` in lacs)

particulars for the year ended march

31, 2013

for the year ended march

31, 2012


31, 2011


31, 2010


31, 2009Defined benefit obligation 92.72 73.94 54.00 43.63 51.33Plan assets 81.26 57.02 45.13 44.10 41.30Surplus / (deficit) (11.46) (16.92) (8.87) 0.47 (10.02)experience adjustments on plan liabilities

(5.53) (10.31) (3.47) 0.24 (2.60)

experience adjustments on plan assets

2.75 (0.23) (0.20) 5.47 0.02

Defined Contribution Plan (` in lacs)

particulars for the year ended march

31, 2013

for the year ended march 31,

2012contribution to Provident fund 21.35 20.80contribution to superannuation fund 4.00 4.00total 25.35 24.80

policy on superannuation

On December 19, 2011, the Company has revised its superannuation benefit policy with effect from April 1, 2009, whereby the annual contribution in respect of each member payable by the employer shall be 15% subject to maximum of ` 1.00 lacs per annum. however, as the annual ctc of many employees contains component of superannuation in excess of ` 1.00 lacs, superannuation amount in excess of ` 1.00 lacs in ctc is being paid to the employee subject to tax deducted at source.

35. pARticulARs of unheDGeD foReiGn cuRRencY eXposuRe As At the BAlAnce sheet DAte

particulars march 31, 2013 march 31, 2012foreign currency Loan

nil

` 163.26 lacs (usD 3.20 lacs

@ closing rate of 1usD=` 51.02)

36. impoRteD AnD inDiGenous stoRes AnD spARe pARts consumeD (incluDeD unDeR RespectiVe heADs of pRofit & loss Account) :

particularspercentage of total

consumptionValue

(` in lacs)2012–13 2011–12 2012–13 2011–12

stores & spares – Imported – – – – – Indigenously obtained 100 100 47.60 486.64total 100 100 47.60 486.64

123

37. eARninGs in foReiGn cuRRencY (AccRuAl BAsis)

particulars 2012–13 (` in lacs)

2011–12 (` in lacs)

others (sale of Voluntary emission Rights) 103.02 170.67

38. eXpenDituRe in foReiGn cuRRencY, net of tDs (AccRuAl BAsis)

particulars 2012–13 (` in lacs)

2011–12 (` in lacs)

travelling and conveyance 1.85 8.30membership fees and subscriptions – 15.36Repair and maintenance – others 3.44 –

39. pReVious YeAR’s fiGuRes

Previous year figures have been regrouped / reclassified, where necessary, to conform to this year’s classification.





124


name of the subsidiary AD hydro power limited

financial period ended march 31, 20131.

holding company’s interest 88% in equity shares2.

shares held by the holding company 492,955,640 equity shares 3. in the subsidiary of ` 10 each fully paid up Amounting to ` 49,295.56 lacs

The net aggregate of profits or losses 4. for the current period of the subsidiary concerns the members of the holding company

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

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

The net aggregate of profits or losses 5. for the current period of the subsidiary concerns the members of the holding company

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

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

stAtement PuRsuAnt to sectIon 212 of the comPAnIes Act, 1956, ReLAtInG to suBsIDIARY comPAnIes

for and on behalf of the Board of Directors of malana power company limited

Ravi Jhunjhunwala erik Knivechairman & managing Director DirectorDIn – 00060972 DIn – 05213708

o.p. Ajmera Bharat singhChief Executive Officer Company Secretary m.no. f–6459

Place : noidaDated : 26th August, 2013

AnnuAl RepoRtof

AD HYDRO POWER LIMITED

126


CHAIRMAN Mr. Ravi Jhunjhunwala

DIRECTORSMr. l. n. JhunjhunwalaMr. erik KniveDr. Kamal GuptaMr. Bidyut ShomeMr. lars ellegard

WHOLE TIME DIRECTORMr. R. p. Goel

KEY EXECUTIVESMr. O.P. Ajmera, Chief Executive OfficerMr. V. D. Bhatia, Vice president (operations)Mr. Surya Kant Chahal, In-charge (operations)

COMPANY SECRETARYMr. narayan lodha STATUTORY AUDITORSM/s. S. R. Batliboi & Co. llp, Gurgaon INTERNAL AUDITORSM/s. Ashim & Associates, new Delhi TECHNICAL CONSULTANTSM/s. RSW International Inc., CanadaM/s. Indo Canadian Consultancy Services ltd., noida

CoRpoRAte InfoRMAtIon

BANKERS / FINANCIAL INSTITUTIONSInternational finance Corporation - WashingtonIDBI Bank limitedpunjab & Sind Bankoriental Bank of Commerceunited Bank of India punjab national BankAxis Bank limitedthe Jammu & Kashmir Bank limitedAditya Birla finance limited

CORPORATE OFFICEBhilwara towersA-12, Sector - 1noida - 201 301 (nCR-Delhi)phone : 0120 - 4390000 (epABX) fax : 0120 - 4277841Website : www.adhydropower.com

REGISTERED OFFICE & WORKS Village prini, p.o. tehsil - ManaliDistt. Kullu (H.p.)phone : 01902- 250183 / 184fax : 01902 - 251798

LIAISON OFFICEBhilwara Bhawan40-41, Community Centrenew friends Colonynew Delhi - 110 025phone : 011-26822997

127

Dear Stakeholder,

India's GDP growth is going through a sluggish phase of sub 5 per cent in the current financial year, due to a mix of domestic and external factors. In order to put the nation again on path of over 8 per cent growth, empowered committees like Cabinet Committee on Investment (CCI) and Cabinet Committee on economic Affairs (CCeA) are working overtime on clearance of stranded projects and; removing bottlenecks for smooth operations of the projects in the energy sector. these steps are expected to revive the industry sentiment and boost investor confidence in the sector, which will certainly help in reducing the gap between demand and supply in the energy sector.

Still a lot needs to be done before the energy sector enters into the high trajectory. Clarity is required on the announced policies and their implementation. the biggest challenge will be minimization of subsidies in power sales, which will improve the financial health of the distribution companies. A positive momentum at the distribution companies end will reduce vulnerability in the backward supply chain consisting of power transmission and generation companies.

As widely anticipated the Southern Grid is likely to get linked to the other grids. the energy starved southern states will get access to power supplies from more generators. Vice versa merchant power producers will get access to more consumers. this is likely to result in buoyancy in energy prices, which will stabilize over a period of time.

on behalf of the Board of Directors, I would like to express our sincere gratitude to the Ministry of power and Ministry of environment and forests, Government of India; Central electricity Authority, Government of Himachal pradesh, other government agencies, ptC India limited, International finance Corporation, lenders, commercial banks, financial institutions, joint venture partners for their unending support. I would also take this opportunity to thank our employees and business associates, who have been the pillar of strength for the Company.

With Best Regards


CHAIRMAnS’ SpeeCH

128


DIReCtoRS' RepoRt

TO THE MEMBERSA D HYDRO POWER LIMITEDthe Directors of the Company are pleased to present their tenth Annual Report on the business and operations of the Company and Audited Statement of accounts for the year ended 31st March, 2013 together with the Auditors' Report.1.0 FINANCIAL PERFORMANCE (` in million)

Particulars For the Year ended 31.03.2013

For the Year ended 31.03.2012

TOTAL TURNOVER 2064.142 1,688.519less : Discount on prompt payments

35.289 27.213

less : Handling charges 5.772 4.816Add: unscheduled interchange charges

11.691 36.536

net Sales 2,034.772 1,693.026transmission Charges 278.705 180.889Revenue from operations 2,313.477 1,873.915other Income 294.005 4.724Total Income 2,607.482 1,878.639PROFIT/(LOSS) BEFORE INTEREST, DEPRECIATION AND TAX

1,960.875 1,266.505

Interest 1,049.589 871.772PROFIT/(LOSS) BEFORE DEPRECIATION AND TAX

911.286 394.733

Depreciation 1,169.730 952.406Profit / (Loss) Before Tax (258.444) (557.673)NET PROFIT/(NET LOSS) AFTER DEPRECIATION INTEREST AND TAX

(258.444) (557.673)

Balance brought forward from previous year

(1,684.207) (1,126.534)

NET PROFIT/(NET LOSS) CARRIED TO BALANCE SHEET

(1,942.651) (1,684.207)

EPS (0.46) (1.00) Your Company’s total income during the year stood

at ` 2,607.482 million as compared to ` 1,878.639 million in previous year.

In the previous financial year, the Duhangan side, which accounted for 30% of the capacity, was commissioned in end of february 2012. Accordingly only 70% of the capacity was available for utilization for FY2011-12. Hence FY2012-13 is the first financial year after the commissioning of the project in 2010, for which the full plant capacity is available. Accordingly any comparison with the performances in the previous financial year needs to take the same into account.

the operation data for the year is as given below:(in million units)

S. No. Particulars 2012-13 2011-121 total Generation 681.167 527.248 2 less: Auxiliary &

transmission loss18.108 13.825

3 less: Royalty/Wheeling to Govt. of Hp

79.567 61.611

4 less: Impact of unschedule Interchange energy /poC loss

20.639 13.624

5 total units sold 562.852 438.188 2.0 FUTURE OUTLOOK the Indian power sector is currently reeling under

an odd situation. the Sector is faced with various challenges on almost every front ranging from availability of fuel, delayed environmental clearances albeit with stringent conditions, funding slowdown and continued deteriorating financial performance of Discoms across the country. on one hand, we have soaring unfulfilled demand for energy; while on the other hand, we have power generating plants kept idle because of lack of demand generated by the state owned utility companies. the mounting debts of the state sector distribution utilities have resulted in the deterioration of the financial health. As a result, instead of buying adequate power, Discoms have resorted to load shedding;. the merchant tariff of power, both at the short term bilateral power sales agreement and at the power exchanges, has dropped down to considerably low level.

In spite of the record breaking capacity additions in Eleventh Five Year Plan and first year of Twelfth Five Year plan i.e. 2012-13, the sentiments in the power sector are not very positive. the Government of India has set the capacity addition target of 88,537 MW during 12th five Year plan (2012-17). the recent trends are showing that the demand both at base and peak is not rising as was anticipated, because of the reduced industrial activity, while the generation continues to rise with newer capacity additions.

though there are number of issues confronting the sector, yet there have been various initiatives taken by the Central/State Governments and its agencies in order to expedite the power potential of the country and to provide an environment that can increase the efficacy of the existing resources.

the Central Government’s strong focus on increasing electricity rates and reducing cross-subsidies has contributed to the positive trend of tariff revision in the sector. In addition, there was ruling by the Appellate tribunal for electricity in november, 2011 that the SeRCs must initiate suo moto tariff revision

129

in case the discoms fail to submit ARRs on time. During 2012-13, almost all the states undertook tariff revisions (in the range of 1.5-37 per cent) and the trend is likely to continue in 2013-14. fourteen states have already incased tariffs for the year and others are expected to follow suit

on the distribution front, the Government has approved the restructuring package. this bailout package is aimed to reduce the debt service burden of the state utilities. However the successful implementation of this bailout package will largely depend upon timely performance of milestones linked to this bailout package. under this scheme, 50 per cent of the short-term liabilities of discoms would be converted into bonds and issued to them, while the remaining 50 per cent would be rescheduled.

priority has been given to ensure the connection of Southern Grid to the neW grid by January 2014. once completed, this interconnected national grid will facilitate power transmission from hydro power potential rich northern Region to cater the peak load requirements of power deficit Southern Region. It is imperative to note that according to CeA during 2013-14 India will observe energy deficit of 6.7% and peak deficit of more than 3000 MW. Owing to the grid disturbances last year several regulations has also been passed recently for tightening the frequency band to 49.95 – 50.05 Hz which will further result in increasing the volume of short term bilateral transactions among generating and distribution utilities.

In spite of the recent steps taken by the Government, the power sector is likely to see a dull period for the next couple of years. on the generation front bulk of generating capacity already under construction is expected to be commissioned in the next 2-3 years, which would further increase the supply position. However the Government’s initiative to improve the financial strength of Discoms may take some time to increase their ability to purchase adequate power and maintain adequate power supply to its end consumer. for a sector constrained by multiple challenges, a lot is expected from the Government for its revival and to ensure that power Sector plays its role in the efforts to bring back the GDp growth rate in excess of 8 percent. the largest grid failure in the world in end of July 2012had affected 620 million people (around 9% of world population) across 21 states. It had shown that a lot needs to be done for improvement and stabilization of power infrastructure in the country.

the eighteenth electric power Survey (epS) projects an energy requirement of 1,354.9 Bus and a peak load of about 200 GW for the twelfth plan period.

It is estimated that the peak demand supply gap would further increase post fY 2015 on account of decreased capacity addition and fuel cost escalation. Accordingly the merchant tariff is expected to see the increasing trend post fY 2015 primarily due to improvement in the liquidity profile of the Discoms post tariff hike, debt restructuring package and higher fuel prices and high demand supply gap.


3.0 DIVIDEND Your Directors do not propose any dividends to be

declared during the financial year under review.4.0 PUBLIC DEPOSITS the Company has not accepted any deposits from

the public during the year under reporting. 5.0 ENERGY CONSERVATION, TECHNOLOGY

ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

Information required to be disclosed under Section 217 (1)(e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988 has been given in the Annexure I, forming part of this Report.

6.0 PARTICULARS OF EMPLOYEES: Information in accordance with the provisions

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

7.0 INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

7.1 INTERNAL CONTROL SYSTEMS the Company has proper and adequate internal

control systems in place for all its business activities to ensure compliance with policies, procedures, applicable Acts and Rules and best practices in the industry. All transactions are properly documented, authorized, recorded and reported correctly. the Company has well defined Management Reports on key performance indicators. the systems are reviewed continuously and its improvement and effectiveness is enhanced based on the reports from various fields. The Audit Committee reviews the adequacy of Internal Control Systems. the Company’s Internal Control Systems are supplemented by Internal Audit covering all financial and operating functions.

7.2 INTERNAL AUDIT Internal Audit at ADHpl is an independent,

objective and assurance function conscientious for evaluating and improving the effectiveness of risk management, Control, and governance processes. the function prepares annual audit plans based on risk management and conducts extensive reviews covering financial, operational and compliance controls and risk mitigation. Internal audit plans cover matters identified in risk management assessments as well as issues highlighted by the Board, the Audit Committee and senior management. the areas requiring specialized knowledge are reviewed in partnership with external experts.

Internal Audit is conducted across all locations and of all functions by firms of Chartered Accountants, who verify and report on the functioning and effectiveness of internal controls. the Internal Audit reports the progress in implementation of recommendations contained in such reports. Internal audit reports are submitted along with the Management’s response to the Audit Committee. the Audit Committee of the

130


Board, monitors performance of Internal Audit on time-to-time basis through review of the internal audit plans, audit findings & swiftness of issue resolution through follow ups.

8.0 DIRECTORS In accordance with the provisions of the Companies

Act, 1956 and of the Articles of Association of the Company, Dr. Kamal Gupta and Mr. Bidyut Shome, Directors of the Company, are liable to retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. the Board recommends their re-appointment at the ensuing Annual General Meeting. the aforesaid reappointments/appointments are subject to the approval of the Members and the necessary resolutions have been incorporated in the notice of the Annual General Meeting.

During the year, Mr. tor Inge Stokke was appointed as Alternate Director to Mr. erik Knive with effect from 17th December, 2012. Consequent upon the return of Mr. erik Knive to the Board, Mr. tor Inge Stokke vacates the officer as Alternate Director on 26th June, 2013. the Board of Directors wishes to place on record their appreciation towards the contribution made by Mr. tor Inge Stokke during his tenure as Alternate Director to Mr. erik Knive.

9.0 AUDIT COMMITTEE During the year, the Audit Committee met two times

to review Company’s financial results, Internal Control Systems, Risk Management policies and Internal Audit Reports.

As on date, the Audit Committee comprising the following members : Mr. Ravi Jhunjhunwala, Dr.Kamal Gupta and Mr. erik Knive. the proceedings of the Committee have been in accordance with the provisions of the Companies Act, 1956.

10.0 DIRECTORS’ RESPONSIBILITY STATEMENT As required under Section 217 (2AA) of the

Companies (Amendment) Act, 2000, the Directors' of your company states hereunder:-


ii) that the accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for the financial year 2012-2013.

iii) that the proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Company’s Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and


11.0 AUDITORS11.1 STATUTORY AUDITORS M/s. S.R. Batliboi & Co. llp, Chartered Accountants,

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

11.2 COST AUDITORS pursuant to Section 233B(2) of the Companies Act,

1956, in terms of the Central Government's approval, the Board of Directors, on the recommendation of the Audit Committee, has appointed M/s.K.G. Goyal & Co., Cost Accountants, as the Cost Auditor of the Company for the year. M/s.K. G. Goyal & Co., has confirmed that their appointment is within the limits of the Section 224(1B) of the Companies Act, 1956 and have certified that they are free from any disqualifications specified under Section 233B(5) read with Section 224 sub section (3) or sub section (4) of Section 226 of the Companies Act, 1956.

AUDITORS’ REMARKS the Auditors’ Report read along with notes to the

Accounts is self-explanatory and requires no further comments from the Board.

12.0 HUMAN RESOURCE DEVELOPMENT the Company believes that all commercial activities

should be infused with compassionate action to make the work place better and harmonious. our focus has always been on creating an encouraging and engaging environment for our employees. our employee partnership ethos reflects the Company's long-standing business principles and drives the company's overall performance. While we have continued to equip employees with the necessary skills and attitude to deliver on their current job responsibilities, the prime focus has been to identify, assess, groom and build leadership potential for future.

the company has a comprehensive HR policy to address the various needs and aspiration of our people. Many of our activities are focussed on multi-skill training, performance improvement, time management, cross-fuctional team coordination, etc.

In the last week of october, 2013, Global CDM Workshop was conducted. this workshop was attended by executives of company, its holding company Malana power Company ltd and representative from Sn power, philippines and Chile.We also have a robust grievance redressal mechanisam in place for our people. We make sure we give a patient hearing to the issues faced by the employees and follow strict protocols for their resolution.

13.0 ENVIRONMENT, HEALTH & SAFETY the Company has excellent compliance records of

all statutory requirements applicable to its scope of activities under Health, Safety and environment management. Your Company is committed to adopt best international eHS practices in its operating plant and has voluntarily decided to adopt ISo14001 (International standard on environment

131

management) and oHSAS18001 (International standard on management of occupational safety and health) for managing its eHS Aspects. In this connection an expert agency has visited the plant area and interacted with the site management to frame the road map for certification. Accordingly, site management has developed and implemented ISo/ oHSAS management system in consultation with of expert agency. the plant is now ready for certification audit by the certification agency (KVQA) on 30th and 31st August 2013.

the Company carries out following monitoring activities regularly and as per the applicable statutory requirements:

• Environment monitoring (air, water, noise, etc.) at work site and nearby villages

• Silt analysis from Inlet of Head Regulator Gate, outfall of Desilting chamber & tRt water.

the restoration of Muck Dumping sites of panduropa & Bhujdhar and colony area at panduropa has been completed and is being prepared for handing over to the State forest Department after due process. Restoration works at Khanool muck dumping area is near completion. the Company is utilizing local shrubs for restoration of dumping site in consultation with State forest Department. the Company regularly distributes plant saplings to local villagers for plantation.

to enhance Awareness among local community, the Company celebrated World environment Day on 5th June, 2013, with active participation of the teachers and students from Govt. Higher Secondary School, prini.

the disposal of hazardous waste is being done as per approved standard/norms of pollution Control Board.

the Company maintains a primary health center at prini with in clinical diagnostic laboratory, well experienced medical officer and other paramedical staff. the employees are adequately covered under various insurance policies against risk of health and life disasters. Annual health check-ups are carried out for all the employees.

the Company is also committed to provide a Incident and injury free workplace to its employees and workers all across its unit. the Safety and security of employees is one of the prime concerns of the Management. Consistent efforts have made by the Company to improve safety standards in the Company by taking measures like:

• Intensive safety drives and drills in work area • Conducting safety audit in plant Area. • Conducting safety workshops & first aid trainings

regularly. • Conducting Task force meetings regularly to

review HSe preparation & implementation of JSA/ CSA.

• testing preparedness of emergency Response plan • Conducting Safety Tool box talks regularly by

respective team leaders and Safety personnel at site and transmission line.

• Implementation of access control at strategic locations (Main Gate, power House/ Switchyard,

Reservoir, Duhangan tunnel portal, Adit-3 portal & Allain barrage). Access control registers are being maintained at all locations. Security guards at tunnel portals have especially been instructed to ensure that all tunnel entrants are equipped with necessary ppe’s.

• Implementation of Permit to Work procedure and lock out/tag out procedure.

ADHpl has taken the membership of British Safety Council. this is one step further to embrace international best practices into day-to-day operations. With this, your Company has entered the elite club of multinational companies, who are the members of British Safety Council and are known for their commitment towards HSe.

A road safety week was celebrated at ADHpl and transmission line between 1st and 7th January 2013, in which various training programs and events were organized. the winner was conferred the “Driver of the Year Award 2012-13” which included a cash prize and a certificate of Merit.

A training programme on Avalanche personal protection and rescue operation was conducted by ex-SASe expert Dr. D.K. parashar on April 3, 2013 at IR and Allian barrage site of ADHpl. the theoretical training was followed by practical demonstration of Avalanche personal protection and rescue operation tactics. A lesson on drowning rescue was also imparted by the expert on this occasion.

the company has organized two and half days “ISo 14001 and oHSAS 18001 internal Auditors training program” from 26th to 28th August at ADHpl Site. the training was imparted to 10 participants of ADHPL by the competent trainer from certification agency KVQA.

An Emergency Drill on “flash flood” Scenario was organized on 31st July 2013. the drill was conducted to check the effectiveness of the available communication system and subsequent steps outlined in the “emergency response plan” to prevent or minimize the impact of such occurrence. Drill involved participation from local administration, Government fire Department, Gram Pradhans and the employees of ADHpl. the communication was also established with District administration, SN Power Delhi and the ADHPL Corporate office, noida.

14.0 CORPORATE SOCIAL RESPONSIBILITY the Company believes that, in its areas of operations,

its activities should generate economic benefits and opportunities for an enhanced quality of life for all the stakeholders and the society at large.

As a constructive partner in the communities in which it operates, the Company has been taking concrete action to realize its social responsibility and accordingly has been spending on the infrastructure development including construction, widening and strengthening of roads; construction of bridges; construction and maintenance of Village Bhojanalya and local school. the Company also contributes to women empowerment, community development and healthcare. the Company is :

132


• Running a primary health center at Prini, having well experienced medical officer and other paramedical staff

• organizing a universal vaccination program for children on 08th of every month at the health center

• Helping the district administration in the Pulse polio campaign held on 24 feb 2013 and 24 Mar 2013 with active participation of Company’s paramedic staff .

Various events like : Republic Day, Independence Day, new Year, Vishwakarma Jayanti, Dussehra, Diwali, Janmashtami, lohari, etc. are celebrated in the campus.

to make efforts sustainable, the Company has been sponsoring celebration of annual functions in the nearby Government schools; contributing for local fairs/festivals; providing appliances to handicapped persons for their day-to-day needs; conducting blood donation camps and pulse polio program. the Company has also provided material help to victims of fire in Vashistha Village.

15.0 CORPORATE GOVERNANCE the Company is committed to the application of

the best management practices, compliance with law, adherence to ethical standards and discharge of social responsibilities. the Company has in all spheres of its activities adequate checks and balances to ensure protection of interest of all stakeholders. Your Company also endeavors to share, with its stakeholders’ openly and transparently, information on matters which have a bearing on their economic and reputational interest.

the majority of the Board comprises of non-executive Directors’ who play a critical role in imparting balance to the Board processes, by bringing an independent judgment to decide on issues of strategy, performance, resources, standards of Company’s conduct, etc. the Audit Committee of the Board provides assurance to the Board on the adequacy of Internal Control Systems and financial Systems.

16.0 ACKNOWLEDGEMENT the Directors’ place on record their sincere

appreciation for the co-operation and support received from the Ministry of power, Government of Himachal pradesh, other government agencies, lenders, commercial banks, financial institutions, ptC India limited and our valued customers, who have continued their valuable support and encouragement during the year under review.

the Directors’ also acknowledge and appreciate the commitment displayed by all executives, officers and staff at all levels of the Company.

Your involvement as shareholders is greatly valued and appreciated. the Directors look forward to your continuing support.

For and on Behalf of the Board of Directors


place : noida DIn : 00060972Date : 26th August, 2013

ANNEXURE I TO THE DIRECTORS’ REPORTSTATEMENT OF PARTICULARS PURSUANT TO

THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 19881. ConSeRVAtIon of eneRGY - • CFL lamps are being replaced by LEDs in phased manner2. teCHnoloGY ABSoRptIon -

• The Company has engaged a consultant for providing weather and avalanche forecast to the Project during Snow season from mid Dec’ 2012 to mid Apr’ 2013.

3. foReIGn eXCHAnGe eARnInGS AnD outGo (in ` million)

2012-13 2011-12I foreign exchange outgo

legal and professional charges 3.658 53.732traveling 0.189 1.729financial charges 0.547 0.515CeR expenses 4.949 -others 0.041 -Total 9.384 55.976

II foreign exchange earningsOthers (Sale of Certified Emission Rights) 277.178 nilTotal 277.178 nil

ANNEXURE II TO THE DIRECTORS REPORT Information pursuant to Section 217 (2A) of the Companies Act, 1956 read with the Companies (particulars of employees)

Rules, 1975 and forming part of Directors Report for the year ended 31st March 2013 are given hereunder:I. Persons employed for the full year

Name Designation Remuneration (Rs. in Millions)

Qualification Experience Age Date of Commencement of

EmploymentnIl

133

InDepenDent AuDItoR’S RepoRt

To the Members of AD Hydro Power LimitedReport on the Financial StatementsWe have audited the accompanying financial statements of AD Hydro power limited (“the Company”), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information. Management’s Responsibility for the Financial StatementsManagement is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 (“the Act”). this responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor’s Responsibilityour responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.OpinionIn our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in

the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:(a) in the case of the Balance Sheet, of the state of

affairs of the Company as at March 31, 2013;(b) in the case of the Statement of Profit and Loss, of

the loss for the year ended on that date; and (c) in the case of the Cash flow Statement, of the

cash flows for the year ended on that date.Report on Other Legal and Regulatory Requirements1. As required by the Companies (Auditor’s Report)

order, 2003 (“the order”) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the order.

2. As required by section 227(3) of the Act, we report that: (a) We have obtained all the information and

explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

(b) In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

(c) The Balance Sheet, Statement of Profit and loss, and Cash flow Statement dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

(e) on the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

For S.R. Batliboi & Co. LLPChartered AccountantsICAI firm Registration number: 301003e

per Manoj GuptapartnerMembership number: 83906

place of Signature: GurgaonDate: August 26, 2013

134


Annexure referred to in paragraph 1 under “Report on Other Legal and Regulatory Requirements” of our report of even date

Re: AD Hydro power limited (‘the Company’)

(i) (a) the Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were identified on such verification.

(c) there was no disposal of a substantial part of fixed assets during the year.

(ii) (a) the management has conducted physical verification of inventory at reasonable intervals during the year.

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. In respect of material lying with third parties, the management has a process of confirmations and reconciliations with the third parties during the year.

(c) the Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) (a) As informed, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, provisions of clause 4(iii) (a), (b), (c) and (d) of the Companies (Auditor’s Report) order, 2003 (as amended) are not applicable to the Company.

(b) the Company has taken loan from one Company covered in the register maintained under Section 301 of the Companies Act, 1956. the maximum amount involved during the year was ` 52,196.57 lacs and the year-end balance of loan taken from such Company was ` 46,380.00 lacs (excluding interest accrued on the loan amounting to ` 7,461.13 lacs).

(c) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loan is not prima facie prejudicial to the interest of the Company.

(d) As informed to us and as per the terms of the Subordination loan agreement with the lenders, the loan taken and interest thereon is re-payable only once all obligations to outside lenders have been paid and discharged in full. Accordingly, the lending

company has not demanded repayment of any such loan and interest thereon during the year and thus, there has been no default on the part of the Company.

(iv) As per the information and explanations given to us, certain fixed assets and inventories purchased are of specialized nature for which comparable prices are not available. Read with above, in our opinion, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of power and scrap. During the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the Company in respect of these areas. Due to the nature of its business, the Company is not required to sell any services.

(v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register maintained under section 301 have been so entered.

(b) In respect of transactions made in pursuance of such contracts or arrangements and exceeding value of ` five lacs entered into during the financial year, because of the unique and specialized nature of the items involved and absence of any comparable prices, we are unable to comment whether the transactions were made at prevailing market prices at the relevant time.

(vi) the Company has not accepted any deposits from the public.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209 (1)(d) of the Companies Act, 1956, related to the generation of electricity from hydro-electric power and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

(ix) (a) the Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to the Company. the provisions relating to employees’ state insurance are not applicable to the Company.

135

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable. the provisions relating to employees’ state insurance are not applicable to the Company.

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

Name of Statute

Nature of Dues

Amount (` in lacs)

Period to which the amount relates

Forum where

dispute is

pendingthe Building & other Construction Workers Welfare Cess Act, 1996

Demand for Building & other Construction Workers Welfare Cess

1,300.33 January 1, 2005 to July

31, 2012

High Court of Himachal pradesh

(x) the Company’s accumulated losses at the end of the financial year are less than fifty percent of its net worth and it has not incurred cash losses in the current and immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, the Company has delayed in repayment of dues to a financial institution. The Company has delayed in payment of principal and interest on loan during the year by 2 days, resulting in levy of penal interest of an aggregate amount of ` 0.54 lacs by the said financial institution, the details of which are as under:

Nature of dues Amount (` in Lacs)

Due date Actual date of payment

principal repayment

439.97 April 15, 2012 April 17, 2012

Interest 746.77 April 15, 2012 April 17, 2012

the Company has not defaulted in repayment of dues to banks. there are no dues outstanding to debenture holders.

(xii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not

granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor’s Report) order, 2003 (as amended) are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks and financial institutions.

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

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) the Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

(xix) the Company did not have any outstanding debentures during the year.

(xx) the Company has not raised any money through public issue during the year.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For S.R. Batliboi & Co. LLPChartered AccountantsICAI firm Registration number: 301003e

per Manoj GuptapartnerMembership number: 83906

place of Signature: GurgaonDate: August 26, 2013

136


BAlAnCe SHeet AS At 31 MARCH, 2013

As per our report of even date

for S. R. Batliboi & Co. LLPChartered Accountantsfirm Registration no. : 301003e

per Manoj GuptapartnerMembership no. 83906

place : Gurgaon Dated : August 26, 2013

for and on behalf of the Board of Directors of AD Hydro power limited

Ravi Jhunjhunwala Erik Knive Director Director DIn: 00060972 DIn: 05213708

O. P. Ajmera Narayan Lodha Chief Executive Officer Company Secretary M.no.: 32746

place : noidaDate : August 26, 2013

Particulars Note No. As at 31 March 2013

(` in lacs)

As at 31 March 2012

(` in lacs) I. EQUITY AND LIABILITIES

1. Shareholders’ funds (a) Share capital 3 56,015.28 56,015.28 (b) Reserves and surplus 4 (19,426.51) (16,842.07)

36,588.77 39,173.21 2. Non-current liabilities

(a) long-term borrowings 5 129,560.67 129,753.36 (b) other long term liabilities 6 7,461.13 7,461.13 (c) long-term provisions 7 96.90 84.53

137,118.70 137,299.02 3. Current liabilities

(a) Short-term borrowings 8 - 5,800.00 (b) trade payables 9 960.29 1,825.59 (c) other current liabilities 9 11,919.53 8,749.99 (d) Short-term provisions 7 51.39 112.30

12,931.21 16,487.88 TOTAL 186,638.68 192,960.11

II. ASSETS1. Non-current assets

(a) fixed assets(i) tangible assets 10 177,996.88 186,897.55 (ii) Capital work-in-progress 11 130.72 289.57

(b) long-term loans and advances 12 492.47 181.70 (c) other non-current assets 13 42.63 71.71

178,662.70 187,440.53 2. Current assets

(a) Inventories 14 1,376.08 1,348.74 (b) trade receivables 15 2,131.87 1,258.30 (c) Cash and bank balances 16 1,418.73 436.70 (d) Short-term loans and advances 12 846.44 265.88 (e) other current assets 17 2,202.86 2,209.96

7,975.98 5,519.58 TOTAL 186,638.68 192,960.11

Summary of significant accounting policies 2.1The accompanying notes are an integral part of the financial statements

137

StAteMent of pRofIt & loSS foR tHe YeAR enDeD MARCH 31, 2013

Particulars Note No. Year ended 31 March 2013

(` in lacs)

Year ended 31 March 2012

(` in lacs) I. Income

a Revenue from operations (net) 18 23,134.77 18,739.15 b other Income 19 2,940.05 47.23

Total Income 26,074.82 18,786.38 II. Expenses

Bulk power transmission charges 2,447.13 2,649.66 open Access Charges 271.13 7.10 Employee benefits expense 20 1,294.97 1,294.94 other expenses 21 2,452.84 2,170.69 Depreciation expense 22 11,697.30 9,524.06

finance costs 23 10,495.89 8,716.66 Total expenses 28,659.26 24,363.11

III. Loss before tax (2,584.44) (5,576.73)IV. Net loss carried to balance sheet (2,584.44) (5,576.73)V. Earnings per share (nominal value of share ` 10)

Basic and diluted 24 (0.46) (1.00)Summary of significant accounting policies 2.1The accompanying notes are an integral part of the financial statements









138



` In lacs


` In lacs CASH FLOW FROM OPERATING ACTIVITIESNet profit before tax (2,584.44) (5,576.73)Adjustments for :

Depreciation 11,697.30 9,524.06 provision for doubtful advances - 24.40 Profit on sale of assets (5.50) (11.77)Interest expense 10,283.83 8,671.96 Interest income (103.06) (35.42)

Operating profit before working capital changes 19,288.13 12,596.50 Movement in working capital :

- (Increase)/decrease in trade receivables (873.57) (715.56) - (Increase)/decrease in loans and advances (465.18) (104.53) - (Increase)/decrease in inventories (27.34) (150.73)- (Decrease)/increase in trade payable and current liabilities (886.89) (1,891.09)- (Decrease)/increase in provision (48.53) 1.09

Cash generated from operations 16,986.62 9,735.68 Direct tax (paid) /refund (52.46) (40.16)Net cash from operating activities (A) 16,934.16 9,695.52 CASH FLOW FROM INVESTING ACTIVITIESPurchase of fixed assets (including capital work in progress & capital advances) (2,601.09) (6,421.87)Inter Corporate Deposit Given (328.18) - fixed deposit redeemed 29.08 5.00 Proceeds from sale of fixed assets (including project equipment) 14.84 49.36 Interest received 106.92 26.62 Net cash from / (used in) investing activities (B) (2,778.42) (6,340.89)CASH FLOW FROM FINANCING ACTIVITIES(Repayment of) long -term borrowings (7,052.33) (5,909.21)proceeds from long -term borrowings 10,000.00 2,750.00 proceeds of long term subordination debt from holding company 0.00 2,678.02 proceeds from / (repayment of) Short term loan from holding company (5,800.00) 5,816.57 Interest paid (10,321.39) (8,645.73)Net cash flow from / (used in) financing activities (C) (13,173.72) (3,310.35)Net Increase in cash and cash equivalents (A+B+C) 982.02 44.28 Cash and cash equivalents at the beginning of the year 436.70 392.42 Cash and cash equivalents at the end of the year 1,418.72 436.70 Components of cash and cash equivalents

Cash on hand 1.84 2.45 With banks - on current account 1,416.89 434.25

TOTAL CASH & CASH EQUIVALENTS (REFER NOTE 16) 1,418.72 436.70 The cash flow statement has been prepared under the indirect method as set out in the Accounting Standard 3 "Cash Flow Statement" of the Companies (Accounting Standard) Rules 2006.

CASH floW StAteMent AS At 31 MARCH, 2013









139

SCHeDuleS

1. Nature of Operations

AD Hydro power limited (hereinafter referred to as ‘the Company’) is engaged in the generation of hydro electric power. the Company has set up 192 MW hydro electric power generation project, out of which, part of the project (Allain side) has started commercial production in 2010-11 and balance portion of the project on Duhangan side has started commercial production in 2011-12.

the Company has the necessary permission from the Government of Himachal pradesh to own, operate & maintain the project and sell power for a period of forty years from the date of commercial operation i.e. July 29, 2010 with the option to avail a further extension for a maximum period of twenty years after renegotiation of terms and conditions.

2. Basis of preparation of financial statements

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention.


2.1 Summary of Significant Accounting Policies

(a) Use of estimates

The preparation of financial statements in conformity with Indian generally accepted accounting principles requires the management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and disclosure of contingent liabilities, at the date of the financial statements and the results of operations during the reporting year. Although these estimates are based upon management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

(b) Tangible Fixed Assets

fixed assets are stated at cost, less accumulated depreciation / amortisation less impairment losses if any. Cost comprises the purchase price and any directly attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition of fixed assets which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use.

Expenditure directly relating to construction activity is capitalized and apportioned to fixed assets on completion of the project. Indirect expenditure incurred during the construction period which is not related to the construction activity nor is incidental thereto has been charged to the statement of profit and Loss account. Income earned during construction period is deducted from the total of the indirect expenditure.

Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are changed to the statement of profit and loss for the period during which such expenses are incurred.

Gains or losses arising from derecognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

(c) Impairment of assets

the Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or

140


cash-generating unit’s (CGu) net selling price and its value in use. the recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGu exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used.

(d) Depreciation

(i) Depreciation on Buildings is provided on straight-line method at the rates based on their estimated useful lives, which corresponds to the rates prescribed in Schedule XIV of the Companies Act, 1956.

(ii) Depreciation on project equipments (net of their expected realizable value at the completion of the project) has been provided as per straight line method over the period upto the date of completion of the project.

(iii) Depreciation on the assets of generating unit and other plant & Machinery, is provided on straight-line method at the rates based on their estimated useful lives, which corresponds to the rates prescribed in Schedule XIV of the Companies Act, 1956

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

Rate Schedule(SlM) XIV Rate (SlM)

Road 10.00% 3.34%

(v) Depreciation on fixed assets other than those covered under (i) to (iv) above is provided on written down value method at the rates based on their estimated useful lives, which corresponds to the rates prescribed in Schedule XIV of the Companies Act, 1956.

(e) Borrowing Costs

Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.

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

(f) Leases

Where the Company is the lessee

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the statement of profit and loss account on a straight-line basis over the lease term.

(g) Inventories

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


(h) Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

Sale of Electricity

Revenue from sale of electricity is recognised on the basis of billable electricity (over and above free supply to Himachal pradesh’s State Government) scheduled to be transmitted to the customers, which approximates the actual electricity transmitted.

141

Interest

Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable. Interest income is included under the head “other income” in the statement of profit and loss.

Sale of Scrap

Revenue in respect of sale of scrap is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer.

CarbonCreditEntitlement/CertifiedEmissionReductions(“CER’)

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

(i) Foreign currency translation

foreign currency transactions and balances

(i) InitialRecognition


(ii) Conversion

foreign currency monetary items are retranslated using exchange rate prevailing at the reporting date. non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

(iii) ExchangeDifferences

exchange differences arising on the settlement of monetary items or on reporting Company’s monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as income or as expenses in the year in which they arise.

(j) Retirement and other employee benefits

(i) Retirement benefits in the form of Provident Fund and superannuation scheme are a defined contribution scheme and the contributions are charged to the statement of profit and loss of the year when the contributions to the respective funds are due. there are no other obligations other than the contribution payable to the provident fund/trust.

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

(iii) Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short-term employee benefit. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date. the Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long term compensated absences are provided for based on actuarial valuation. the actuarial valuation is done as per projected unit credit method at the year-end.

(iv) liability under continuity loyalty bonus scheme (‘ClB’) is provided for on actuarial valuation basis, which is done as per projected unit credit method.

(v) Actuarial gains/losses are immediately taken to statement of profit and loss in the period in which they incur and are not deferred.

(vi) the Company presents its gratuity and leave as current and non-current based on the actuarial valuation.

(k) Income taxes

tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961 enacted in India. the tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

142


Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income originating during the current year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets are recognised for deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.

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

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

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set-off current tax assets against current tax liabilities and the deferred tax assets and deferred taxes relate to the same taxable entity and the same taxation authority.

(l) Earnings Per Share



(m) Provisions

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. provisions are not discounted to its present value and are determined based on management estimate required to settle the obligation at the Balance Sheet date. these are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.

(n) Cash and Cash equivalents

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

(o) Contingent Liability

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. the Company does not recognize a contingent liability but discloses its existence in the financial statements.

143

3. SHARE CAPITAL


(` in lacs)

As at 31 March 2012

(` in lacs)Authorized Shares700,000,000 (previous year 700,000,000) equity shares of ` 10 each 70,000.00 70,000.00 Issued, Subscribed and fully paid-up shares560,152,841 (previous year 560,152,841) equity shares of ` 10 each fully paid

56,015.28 56,015.28


As at 31 March 2013 As at 31 March 2012 No. of shares Amount

(` in lacs) No. of shares Amount

(` in lacs)Shares outstanding at the beginning of the year

560,152,841 56,015.28 560,152,841 56,015.28

Shares outstanding at the end of the year

560,152,841 56,015.28 560,152,841 56,015.28

(b) Terms/rights attached to equity shares

the Company has only one class of equity shares having par value of ` 10 per share. each holder of equity shares is entitled to one vote per share. the dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. the distribution will be in proportion to the number of equity shares held by the shareholders.

(c) Shares held by holding / ultimate holding company and / or their subsidiaries / associates

As at 31 March 2013 As at 31 March 2012 No. of shares Amount

(` in lacs) No. of shares Amount

(` in lacs)Malana power Company limited, the holding company, alongwith its nominees

492,955,640 49,295.56 492,955,640 49,295.56

(d) Details of shareholders holding more than 5% shares in the Company

Equity shares of ` 10 each fully paid up

As at 31 March 2013 As at 31 March 2012

Name of the Share Holders No. of shares % Holding no. of shares % Holding Malana power Company limited

492,955,640 88% 492,955,640 88%

International finance Corporation, Washington

67,197,201 12% 67,197,201 12%

As per the records of the Company, including its register of shareholders/members, the above shareholding represents legal ownership of shares.


As at 31 March 2013

(` in lacs)

As at 31 March 2012

(` in lacs)Surplus/(deficit) in the statement of profit and lossBalance as per last financial statements (16,842.07) (11,265.34)Add loss for the year (2,584.44) (5,576.73)Net deficit in the statement of profit and loss (19,426.51) (16,842.07)Total reserves and surplus (19,426.51) (16,842.07)

144


5. LONG TERM BORROWINGS

Non current portion Current maturities As at

31 March 2013 (` in lacs)

As at 31 March 2012

(` in lacs)

As at 31 March 2013

(` in lacs)

As at 31 March 2012

(` in lacs) Term loansfrom banks (secured) 49,591.78 55,266.14 5,675.00 5,225.00 From financial institution (secured) 33,588.89 28,107.22 4,518.33 1,827.33 Other loan and advancesloan and advances from related party - holding company (unsecured) (refer note 34)

46,380.00 46,380.00 - -

TOTAL 129,560.67 129,753.36 10,193.33 7,052.33 the above amount includesSecured Borrowings 83,180.67 83,373.36 10,193.33 7,052.33 unsecured Borrowings 46,380.00 46,380.00 - - Amount disclosed under the head "other current liabilities" - (Note 9)

- - (10,193.33) (7,052.33)

TOTAL 129,560.67 129,753.36 - -

the Company has taken Indian Rupee term loans from various banks amounting to ` 50,391.78 lacs (previous year ` 55,116.78.00 lacs) having interest rates ranging from 8.00% to 14.75% per annum (floating) (previous year 8.00% to 14.75% per annum). these loans are repayable in 40 quarterly principal payments based on mortgage style amortization and the repayment instalment starting from october 1, 2010.

the Company has also taken Indian Rupee term loans from a bank amounting to ` 4,875.00 lacs (previous year ` 5,375.00 lacs) having interest rate of 11.50% per annum (floating) (previous year 13.50% per annum). This loan is repayable in 46 equal Quarterly principal payments of ` 125 lacs from october 1, 2011.

Term loan from a financial institution (represents loan from IFC, Washington, a minority shareholder) of ` 9,505.18 lacs (previous year ` 10,356.47 lacs) was taken during the financial year 2007–08 and carries interest @ 7.51% to 10.18% p.a. the loan is repayable in 40 quarterly installments based on mortgage style amortization starting from 15th october 2010. further term loan from IfC Washington of ` 18,602.04 lacs (previous year ` 19,578.08 lacs) was taken during the years 2009–10 to 2011-12 and carries interest @ 10.19% to 11.50% p.a. the loan is repayable in 46 quarterly installments based on mortgage style amortization starting from 15th october 2011.

The above term loans from banks and financial institution are secured by way of a first mortgage/charge on all immovable properties wherever situated, both present and future, and hypothecation of all movable assets, rights, etc., present and future, of the Company, on pari passu basis. further, the holding company, Malana power Company limited, has provided corporate guarantee and has also pledged its share holding in the Company.

the Company has also taken loan of ` 10,000 lacs (previous year Nil) from another financial institution during the current year and carries interest @ 13.02% per annum (floating). The loan is repayable in 12 equal structured quarterly principal payment of ` 833.33 lacs each starting from 31st Aug 2013. the lender has a put option to call for full repayment at the end of 12 months. further, the lender and the Company have a call and put option respectively at the end of 24 months from the first disbursement to recall/repay the entire loan. the loan is secured by subservient charge by way of hypothecation on the entire current assets inculding inventories, stores and spares, receivables, loans and advances and movable assets including but not limited to money receivables, investments, intangibles present and future, of the Company.

term loan from holding company is unsecured and is given by the holding company as per the terms of the Subordinated loan Agreement with lenders. the loan granted and interest thereon is repayable only once all obligations to the outside lenders have been paid and discharged in full. the loan carries no interest (also refer Note 34 of the financial statements).

145

6. OTHER LONG TERM LIABILITIES

As at 31 March 2013

(` in lacs)

As at 31 March 2012

(` in lacs)Interest accrued but not due on loan from holding company (refer note 34) 7,461.13 7,461.13 TOTAL 7,461.13 7,461.13

7. PROVISIONS

Long term Short term As at


As at 31 March 2012

(` in lacs)

As at 31 March 2013

(` in lacs)

As at 31 March 2012

(` in lacs)

Provision for employee benefitsprovision for gratuity - 1.71 9.96 18.34 Provision for leave benefits 64.93 64.43 5.91 14.39 provision for continuity linked bonus 31.97 18.39 35.52 79.57 TOTAL 96.90 84.53 51.39 112.30

8. SHORT TERMS BORROWINGS

As at 31 March 2013

(` in lacs)

As at 31 March 2012

(` in lacs) Loans & advances from related parties- from Malana power Company limited (holding Company) (unsecured) (refer note 34)

- 5,800.00

TOTAL - 5,800.00

9. TRADE PAYABLE AND OTHER CURRENT LIABILITIES

As at 31 March 2013

(` in lacs)

As at 31 March 2012

(` in lacs) trade payable 960.29 1,825.59 Other current liabilitiesCapital creditors 1,026.18 937.88 Current maturities of long term borrowings 10,193.33 7,052.33 Deposit from contractors and others 8.12 12.90 Due to related party 2.59 16.57 Interest accrued but not due on loan from financial institution 586.11 623.67 Statutory dues payable 103.20 106.64 TOTAL 11,919.53 8,749.99

146


10. TANGIBLE ASSETS (` in lacs)

Tangible Assets

Particulars Freehold land (also refer

note 39)

Freehold Building

Civil Work Transmis-sion Line

Plant and Machinery

Pr oject equip-

ment

Electrical installa-

tion

Office equipments

Furniture and Fixtures

Computers Vehicles Total (Tangible

Assets)

At Cost

As at 1 April 2011 2,993.39 13,213.31 59,891.94 38,992.42 48,547.00 38.23 327.50 80.82 257.05 112.71 169.66 164,624.03

Additions - 13,866.15 22,431.92 1,420.03 153.87 36.42 2.50 1.03 4.49 3.50 18.18 37,938.09

Disposals - - - - - - - 7.41 1.40 11.61 20.40 40.82

As at 31 March 2012 2,993.39 27,079.46 82,323.86 40,412.45 48,700.87 74.65 330.00 74.44 260.14 104.60 167.44 202,521.30

Additions 39.83 - 808.37 1,747.81 175.31 2.00 10.10 - 2.54 8.36 8.42 2,802.74

Disposals - - - - - - - - - - 42.12 42.12

As at 31 March 2013 3,033.22 27,079.46 83,132.23 42,160.26 48,876.18 76.65 340.10 74.44 262.68 112.96 133.75 205,281.92

Depreciation

As at 1 April 2011 - 713.66 2,131.19 1,098.54 1,725.06 8.89 71.57 40.96 122.94 98.56 122.08 6,133.44

Charge for the year - 1,374.81 3,314.31 2,186.78 2,575.18 14.33 17.65 5.44 18.06 6.02 11.48 9,524.06

Disposals - - - - - - - 4.47 1.15 10.96 17.17 33.75

As at 31 March 2012 - 2,088.47 5,445.50 3,285.32 4,300.24 23.22 89.22 41.93 139.85 93.62 116.39 15,623.75

Charge for the year - 2,465.91 4,376.23 2,188.12 2,580.86 22.72 17.81 4.49 19.34 4.74 17.07 11,697.30

Disposals - - - - - - - - - - 36.01 36.01

As at 31 March 2013 4,554.38 9,821.73 5,473.44 6,881.10 45.94 107.02 46.43 159.19 98.35 97.45 27,285.04

Net Block -

As at 31 March 2013 3,033.22 22,525.08 73,310.50 36,686.81 41,995.08 30.71 233.07 28.01 103.49 14.61 36.29 177,996.88

As at 31 March 2012 2,993.39 24,990.99 76,878.36 37,127.13 44,400.63 51.43 240.78 32.51 120.29 10.98 51.06 186,897.55

Notes :

1. Addition include expenditure during the construction period amounting to ` Nil (previous year ` 15,056.65 lacs) capitalised under following heads:

Amount (` lacs)

Amount (` lacs)

Road & Building - 5,821.00 Civil Works - 96.48 Plant & Machinery - 9,139.17 Total - 15,056.65

2. Depreciation amounting to ` Nil (previous year ` 851.40 lacs) has been transferred to expenditure during construction period.

3. Gross block of transmission line includes payment for 'Right to use' amounting to ` 5,253.98 lacs. Right to use' is a irrevocable perpetual right of use of land, but the ownership of land does not vest with the Company.

4. The depreciation charged during the year includes ` Nil lacs (previous year ` 77.33 lacs) pertaining to earlier years.

5. Land includes ` 3,020.53 lacs paid for 12.58 hectares land, out of which mutation for execution of 9.73 hectares in favour of Company has been completed. Apart from notified land, 2.80 hectares land has been acquired directly from the villagers and the mutation is in progress.

11. CAPITAL WORK IN PROGRESS (` in lacs)

As at 31 March 2012

Additions / Adjustments

during the year

Capitalised during the year

As at 31 March 2013

CivilHead race tunnel - 808.37 808.37 - Plant & MachinerySwitch Yard- Mechanical - 46.11 46.11 - turbine & Generators - 102.88 102.88 - Transmission Line - 1,747.81 1,747.81 - Assets under capitalisation 5.40 111.09 - 116.49 Capital stocks 284.17 (269.95) - 14.22 - includes stocks lying with third parties ` 14.22 lacs (previous year ` 284.17 lacs)TOTAL 289.57 2,546.31 2,705.17 130.72

147

12. LOANS AND ADVANCES (unsecured, considered good unless otherwise stated)

Long-term Short-term As at


As at 31 March 2012

(` in lacs)

As at 31 March 2013

(` in lacs)

As at 31 March 2012

(` in lacs) Capital advances - 81.44 126.95 - Advance tax, tax deducted at source (net of provision for tax ` 14.95 lacs)

102.77 50.32 - -

loans to employees 36.39 24.24 7.39 14.21 Security deposits (unsecured, considered good)

25.13 25.70 - -

Advances recoverable in cash or in kind for value to be received

- - 712.10 251.67

Inter corporate deposit with financial institution

328.18 - - -

Advances recoverable in cash or in kind for value to be received (unsecured, considered doubtful)

- - 24.40 24.40

less: provision for doubtful advances - - (24.40) (24.40)TOTAL 492.47 181.70 846.44 265.88


As at 31 March 2013

(` in lacs)

As at 31 March 2012

(` in lacs) Balance with Banks: Deposits with original maturity period of more than 12 months 42.63 71.71 fixed deposit of ` 2.00 lacs (previous year ` 2.00 lacs) pledged with the H.p. Government Sales tax DepartmentTOTAL 42.63 71.71

14. INVENTORIES (valued at lower of cost and net realisable value)

As at 31 March 2013

(` in lacs)

As at 31 March 2012

(` in lacs) Stores and spares [including stock lying with third parties ` 14.22 lacs (previous year ` 33.94 lacs)]

1,348.67 1,317.75

Scrap 27.41 30.99 TOTAL 1,376.08 1,348.74

15. TRADE RECEIVABLES (unsecured, considered good unless stated otherwise)

As at 31 March 2013

(` in lacs)

As at 31 March 2012

(` in lacs) outstanding for a period exceeding six months from the date they are due for payment (refer note 38(a))

316.68 316.68

other receivables (refer note 37) 1,815.19 941.62 TOTAL 2,131.87 1,258.30

148



As at 31 March 2013

(` in lacs)

As at 31 March 2012

(` in lacs) Cash and cash equivalentsBalances with banks in: - Current accounts 1,416.89 434.25 Cash on hand 1.84 2.45

1,418.73 436.70 Other bank balancesMargin money (held as security) 40.63 69.71 Deposits with original maturity for more than 12 months 2.00 2.00

42.63 71.71 less: Amount disclosed under non current assets (note 13) (42.63) (71.71)TOTAL 1,418.73 436.70

17. OTHER CURRENT ASSETS

As at 31 March 2013

(` in lacs)

As at 31 March 2012

(` in lacs) Interest accrued on banks deposits 3.54 7.41 fixed assets (project equipment) held for sale (at net book value or estimated net realisable value, whichever is lower)

2,199.32 2,202.55

TOTAL 2,202.86 2,209.96

18. REVENUE FROM OPERATIONS

For the year ended


For the year ended


Revenue from OperationsSale of PowerRevenue from operations (Gross) 20,641.42 16,885.19 less : Discount on prompt payments (352.89) (272.13)less : Handling charges (nRlDC charges)/ptC professional charges (57.72) (48.16)less : unscheduled interchange (charges) / credit 116.91 365.36 Other operating incometransmission charges received (refer note 37) 2,787.05 1,808.89 REVENUE FROM OPERATIONS (NET) 23,134.77 18,739.15

19. OTHER INCOME

For the year ended


For the year ended


Interest income onBank deposits 88.01 35.42 others 87.88 -

Sale of certified emission reductions 2,771.78 - Expenses on sale of certified emission reductions (86.07) - Profit on sale of assets 5.50 11.77 Miscellaneous income 72.95 0.04 TOTAL 2,940.05 47.23

149

20. EMPLOYEE BENEFITS EXPENSES

For the year ended


For the year ended


Salaries, wages and bonus 1,086.44 1,059.59 Director's remuneration 40.02 37.67 Contribution to provident and other funds 53.93 58.21 Gratuity expenses (refer note 30) 9.96 20.13 leave compensation expenses 6.66 32.95 Workmen and staff welfare expenses 97.96 86.39 TOTAL 1,294.97 1,294.94

21. OTHER EXPENSES

For the year ended


For the year ended


Stores, spares & other consumables 355.22 133.52 Rent 71.85 89.10 power and fuel 95.29 134.58 Repair and maintenance - Buildings 0.14 7.21 - Civil works 240.98 160.20 - plant and machinery 57.25 180.01 - others 228.29 45.17 Rates and taxes 25.76 0.91 Insurance 382.62 423.83 payment to auditor (refer details below) 17.27 16.92 traveling and conveyance 59.21 78.67 legal and professional expenses 263.40 294.00 Security arrangement expense 159.28 116.79 Exchange fluctuation ( net) 8.64 1.06 Social welfare expenses (refer note 38(b)) 148.20 101.58 Vehicle running & hiring expenses 198.67 170.49 provision for doubtful advances - 24.40 Miscellaneous expenses 140.77 192.25 TOTAL 2,452.84 2,170.69Payment to AuditorAs Auditor: - Audit fee 6.75 6.62 - fees for International reporting 4.49 4.41 In other capacity - fees for other services 3.37 3.31 - Fees for certification 0.86 1.10 - out of pocket expenses 1.80 1.48

17.27 16.92

22. DEPRECIATION EXPENSE

For the year ended


For the year ended


Depreciation on tangible assets 11,697.30 9,524.06 TOTAL 11,697.30 9,524.06

150


23. FINANCE COST

For the year ended


For the year ended


Interest - on term loan 10,283.83 8,671.96 - Bank Charges 212.06 44.70 TOTAL 10,495.89 8,716.66

24. EARNINGS / (LOSS) PER SHARE (EPS)

The following reflects the profit and share data used in the basic and diluted EPS computations:

For the year ended


For the year ended


Profit/ (loss) after tax as per statement of profit and loss (2,584.44) (5,576.73)Weighted average number of equity shares in calculating basic and diluted epS

5,601.53 5,601.53

Basic and diluted earnings / (loss) per share in ` (0.46) (1.00)

25. SEGMENT REPORTING

the Company’s activities during the year involved generation of the Hydro power (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 ‘Segment Reporting’ issued by the Companies (Accounting Standard) Rules, 2006 and hence, there are no additional disclosures to be provided other than those already provided in the financial statements.


(a) Names of related parties

Ultimate Holding Company Bhilwara energy limitedEnterprises having significant influence over the Company

Sn power Global Services pte. limitedSn power Holding Singapore pte. limitedStatkraft norfund power Invest norway

Holding Company Malana power Company limitedKey Management Personnel Mr. R. p. Goel, Whole time Director.Fellow Subsidiaries Indo Canadian Consultancy Services limited.

(b) Transactions with related parties

(` In lacs)Nature of Transaction Ultimate

Holding Company

Holding Company/ Enterprises

having significant influence over the

Company

Key Management Personnel*

Fellow Subsidiary

2012-13 2011-12 2012-13 2011-12 2012-13 2011-12 2012-13 2011-12Transactions during the yearRemuneration paid to Mr. Rp Goel

- - - - 40.02 37.67 - -

Consultancy charges to Indo Canadian Consultancy Services limited

- - - - - - 54.18 24.54

Consultancy charges to Sn power Global Services pte. limited

- - 27.25 447.08 - - - -

151

(` In lacs)Nature of Transaction Ultimate

Holding Company

Holding Company/ Enterprises

having significant influence over the

Company

Key Management Personnel*

Fellow Subsidiary

2012-13 2011-12 2012-13 2011-12 2012-13 2011-12 2012-13 2011-12Reimbursement of expenses incurred by Malana power Company limited on behalf of the Company

- - 5.36 1.15 - - - -

Reimbursement of expenses incurred on behalf of Malana power Company limited

- - 28.45 20.31 - - - -

Reimbursement of expenses incurred by Indo Canadian Consultancy Services limited on behalf of the Company

- - - - - - - 36.10

Reimbursement of expenses incurred on behalf of Indo Canadian Consultancy Services limited

- - - - - - - 0.16

Reimbursement of expenses incurred by Statkraft norfund power Invest norway on behalf of the Company

- - 2.11 13.89 - - - -

Reimbursement of expenses incurred by Bhilwara energy limited on behalf of the Company

0.29 49.98 - - - - - -

Reimbursement of expenses incurred on behalf of Bhilwara energy limited

14.42 22.17 - - - - - -

unsecured loan taken from Malana power Company limited

- - 7,644.11 12,108.02 - - - -

unsecured loan repaid to Malana power Company limited

- - 13,444.11 3,594.26 - - - -

Balances outstanding as at the year endBalances Payable:Indo Canadian Consultancy Services limited

- 16.22 - - - - - -

Bhilwara energy limited - 34.20 - - - - - -Sn power Global Services pte. limited

- - - 131.55 - - - -

Malana power Company limited (reimbursements)

2.59 (16.57)

unsecured loan outstanding to Malana power Company limited

- - 46,380.00 52,180.00 - - - -

Interest payable on unsecured loan from Malana power Company limited

- - 7,461.13 7,461.13 - - - -

Guarantees given by the Malana power Company limited on behalf of the Company

- - 8,000.00 8,000.00 - - - -

* Remuneration paid does not include provision made for compensated absences and gratuity as the same are determined for the Company as a whole.

152


27. CAPITAL AND OTHER COMMITMENTS

estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) ` 430.25 lacs (previous Year ` 2,204.83 lacs)

28. UNHEDGED FOREIGN CURRENCY EXPOSURE AT THE BALANCE SHEET DATE

Particulars 2012-13 2011-12Creditor for engineering fees Nil ` 37.05 lacs

(CAD 0.72 lacs @ closing rate of 1CAD = ` 51.46)

Creditor for Supervisory Manpower Support Nil ` 131.54 lacs (uSD 2.58 lacs

@ closing rate of 1uSD = ` 51.02)

29. the Government of India has promulgated an Act namely the Micro, Small and Medium enterprises Development Act, 2006 which came into force with effect from october 2, 2006. As per the Act, the Company is required to identify the Micro, Small and Medium suppliers and pay them interest on overdue beyond the specified period irrespective of the terms agreed with the suppliers. As per the information available with the Company and relied upon by the auditors, none of the creditors fall under the definition of ‘supplier’ as per the Section 2(n) of the Act. In view of the above, the prescribed disclosures under Section 22 of the Act are not required to be made.

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

The Company has a defined benefit gratuity plan. Gratuity (being administered by a Trust) is computed as 15 days salary, for every completed year of service or part thereof in excess of 6 months and is payable on retirement / termination / resignation. The benefit vests on the employee completing 5 years of service. The Gratuity plan for the Company is a defined benefit scheme where annual contributions are deposited with a Gratuity Trust Fund established to provide gratuity benefits. The Trust Fund has taken a Scheme of Insurance, whereby these contributions are transferred to the insurer. the Company makes provision of such gratuity asset/ liability in the books of accounts on the basis of actuarial valuation as per the projected unit credit method.

The following tables summarise the components of net benefit expense recognised in ‘Employee benefits expenses’ and the funded status and amounts recognised in the balance sheet:

Statement of Profit and Loss Account

Net employee benefits expense (recognised in Employee Cost):


March 31, 2013(` in lacs)

For the year ended

March 31, 2012(` in lacs)

Current Service Cost 10.30 12.39Interest cost on benefit obligation 6.28 5.43expected return on plan assets (4.68) (3.49)net actuarial (gain)/ loss recognised in the period (1.94) 5.80past service cost - -Net benefit expense 9.96 20.13Actual return on plan assets (6.97) (4.44)

Balance Sheet

Details of Provision for Gratuity:

Particulars As atMarch 31, 2013

(` in lacs)

As atMarch 31, 2012

(` in lacs)Defined benefit obligation 65.18 78.54fair value of plan assets 55.22 58.49Surplus / (Deficit) (9.96) (20.05)less: unrecognised past service cost - -net asset / (liability) recognized in Balance Sheet (9.96) (20.05)

153



(` in lacs)

As atMarch 31, 2012

(` in lacs)Opening defined benefit obligation 78.54 63.90Interest cost 6.28 5.43Current service cost 10.30 12.39Benefits paid (30.29) (9.93)Actuarial (gains)/ losses on obligation 0.35 6.76Closing defined benefit obligation 65.18 78.54

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


(` in lacs)

As atMarch 31, 2012

(` in lacs)opening fair value of plan assets 58.49 43.57expected return 4.68 3.49Contributions by employer 20.05 20.41Benefits paid (30.29) (9.93)Actuarial gains / (losses) 2.29 0.96Closing fair value of plan assets 55.22 58.49

The Defined benefit obligation amounting to ̀ 65.18 lacs is funded by assets amounting to ̀ 52.22 lacs and the Company expects to contribute ` 14.49 lacs during the next year.

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


As atMarch 31, 2012

% %Investments with insurer 100 100

the overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

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


March 31, 2013

For the year ended

March 31, 2012% %

Discount Rate 8.00 8.50expected rate of return on assets 8.00 8.00future Salary Increase 5.50 6.00Withdrawal rate 1 to 3 1 to 3

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

Amounts for the current and previous four years are as follows:

For the year ended March

31, 2013


31, 2012


31, 2011


31, 2010


31, 2009Defined benefit obligation 65.18 78.54 63.90 56.90 45.30plan assets 55.22 58.49 43.49 45.78 33.93Surplus / (deficit) (9.96) (20.05) (20.41) (11.12) (11.38)experience adjustments on plan liabilities

(0.03) (7.00) (8.22) (4.10) 1.12

experience adjustments on plan assets

2.29 0.96 (0.48) 5.03 0.29

154


Defined Contribution Plan (` in lacs)

Particulars 2012–13 2011–12Contribution to provident fund 41.08 56.57Contribution to Superannuation fund 8.93 10.50

50.01 67.07

31. the Company has incurred a loss of ̀ 2,584.45 lacs during the year ended March 31, 2013 and has accumulated losses of ` 19,426.52 lacs as at March 31, 2013. This is the third year of operations and the first year when plant has operated at full capacity. losses have been decreasing year on year from ` 11,265.34 lacs in 2010-11, ` 5,576.73 lacs in 2011-12 to ` 2,584.45 lacs in the current year. Based on financial projections and impairment testing done by the management, the management believes that no impairment is required and the Company will have sufficient cash flows to meet their obligations as and when they fall due in future.

32. In accordance with Accounting Standard 22 ‘Accounting for taxes on Income’, issued by the Companies (Accounting Standard) Rules, 2006, deferred tax assets have not been recognised in the books due to losses brought forward and incurred during the year and absence of virtual certainty of future taxable profits in view of tax holiday available to the Company.

33. LEASES

In case of assets taken on Operating Lease:

Office premises, vehicles, equipments, guest houses and godowns are obtained on cancellable operating leases. All these leases have a lease terms varying between 3 to 5 years. there are no restrictions imposed by lease arrangements. there are no subleases.

(` in lacs)


March 31, 2013

For the year ended

March 31, 2012lease payments for the year 264.59 218.95

34. the Company has taken loan from its holding company, Malana power Company limited of which ` 53,841.13 lacs (` 59,657.70 lacs in previous year) (including principal and interest amount) is outstanding at year end.

In view of losses, the Company has requested its holding company to waive off the interest with effect from September 17, 2010 till the time the Company’s operations become profitable. The Board of Directors of its holding company in their meeting dated March 29, 2011 have approved such request. Accordingly, interest amounting to ` 5,227.19 lacs for the year ended March 31, 2013 (previous year ` 5,272.52 lacs) has not been charged from the subsidiary company.

35. EXPENDITURE IN FOREIGN CURRENCY (ACCRUAL BASIS)


2011-12 (` in lacs)

legal and professional charges 36.58 537.32traveling and conveyance 1.89 17.29finance cost 5.47 5.15expenses on sale of CeR expenses 49.49 nilMiscellaneous expenses 0.41 nil

36. EARNINGS IN FOREIGN CURRENCY (ACCRUAL BASIS)


2011-12 (` in lacs)

Others (Sale of Certified Emission Rights) 2,771.78 nil

37. everest power private limited (‘eppl’) is using the transmission system of the Company. As per the Appellate tribunal for electricity’s (‘Aptel’) interim order dated June 20, 2011, an interim power transmission Agreement was signed between the Company and eppl on August 9, 2011. According to the agreement, eppl has agreed to pay monthly transmission charges of ` 227.76 lacs for the eppl’s Injected energy / power wheeled through the transmission system of the Company.

155

Subsequently, eppl has raised some disputes and has not been paying the monthly transmission charges since october 2012 and there is outstanding receivable of ` 1,640.99 lacs from eppl as at March 31, 2013. The matter is pending with the Hon’ble Supreme Court and pending final adjudication, the Hon’ble Supreme Court has directed eppl to pay the monthly transmission charges as per the interim power transmission Agreement.

Based on discussion with lawyers, the management is confident that the transmission charges income of ` 2,787.05 lacs (previous year ` 1,808.89 lacs) recorded in the financial statements is appropriate, entire amounts are receivable and any adjustments arising out of the final order on the matter, will not be material in relation to the financial statements.



2011-12 (` in lacs)

Claims by contractors / suppliers against the Company not acknowledged as debts

Nil 70.00

Claim from customer not acknowledged as debts (for loss of revenue on sale of electricity to HpSeB) (also refer (a) below

316.68 316.68

Demand under the Building & other Construction Workers Welfare Cess Act, 1996

1,300.33 nil

Demand under local Area Development fund (lADf) from Directorate of energy, Government of Himachal pradesh (also refer (b) below)

2,132.00 633.00

the Company believes that these claims/demand are not probable to be decided against the Company and therefore, no provision for the above is required.

a) During 2010-11, due to flooding at its plant, the Company could not supply power to HPSEB for the period from August 20, 2010 to August 28, 2010. Against the same, HpSeB has claimed and withheld the payment of ` 316.68 lacs payable by them against supply of power by the Company for the subsequent period. the Company believes that the non supply was due to ‘forced shutdown’ beyond the control of the Company and thus, force majeure provisions are applicable.

The management is in discussion with the Board officials and is hopeful of resolution of the matter in its favour and release of the payment. Thus, no adjustments have been made in the financial statements in this regard.

b) As per its Hydro power policy, the Directorate of energy, Government of Himachal pradesh has asked the Company to deposit an amount of ` 3,032.00 lacs towards local Area Development fund (lADf) which is 1.5% of final completed cost of the project ` 202,130.00 lacs. the Company is contesting the above demand on the following grounds:

i) the agreement dated november 5, 2005 entered by the Company with the State Government stipulates a provision of 1.5% of the total cost reflected in the Detailed Project Report (DPR) which works out to ̀ 1,380.00 lacs as per the Detailed project Report (‘DpR’) approved by CeA, Government of India. therefore, subsequent provision in the Hydro power policy of 2006 for lADf contribution may not be insisted.

ii) the completed cost of the project referred by the government includes the cost of the dedicated 175 Km transmission line which otherwise was not required as per the provision in techno-economic Clearance (teC) wherein the pooling point at panarsa was to be made available by the Government.

the Company has deposited an amount of ` 399.00 lacs towards lADf and has also incurred expenses of ` 1,134.00 lacs against the same. out of this approved expense, an amount of ` 633.00 lacs is being disputed by the concerned Department on the recommendation of District Administration as not permissible expense, which has been contested by the Company.

pending any further directions or conclusion by the State Government, no additional provision has been deemed necessary in the financial statements in this regard.

156


39. IMPORTED AND INDIGENOUS STORES AND SPARE PARTS CONSUMED (INCLUDED UNDER ‘STATEMENT OF PROFIT & LOSS ACCOUNT’):

Percentage of totalconsumption

Value (` lacs)

Stores & Spares March 2013 March 2012 March 2013 March 2012Imported 0.04 0.21 1.25 0.24Indigenously obtained 99.96 99.79 324.63 111.56

100.00 100.00 325.88 111.80

40. PREVIOUS YEAR FIGURES

Previous year figures have been regrouped / reclassified, where necessary, to conform to this year’s classification









157

AnnuAl RepoRtof

Indo CanadIan ConsultanCyservICes ltd.

158


BanKersIcIcI Bank limitedYes Bank limitedHdfc Bank limitedAxIs Bank limitedstate Bank of India uco Bank

CorPorate oFFICeBhilwara towersA-12, sector-1, noida-201301 (u.p.)

reGIstered oFFICeBhilwara Bhawan,40-41, community centre,new friends colony,new delhi - 110025

Board oF dIreCtorsMr. l. n. Jhunjhunwala Mr. Ravi JhunjhunwalaMr. Rishabh JhunjhunwalaMr. claudio VissaMr. George p dick

Key eXeCutIvesMr. Rakesh Mahajan, director - civil designMr. s. K. Garg, General Manager - civilMr. s. K. datta, General Manager - civil

statutory audItorsM/s KRA & Associateschartered Accountantsnew delhi

JoInt venture PartnerM/s RsW Inc., canada

coRpoRAte InfoRMAtIon

159

dIRectoRs' RepoRt

to the Members

the directors have pleasure in presenting the 18th Annual Report together with the Audited statements of Accounts for the year ended 31st March 2013.

Financial Performance

(` in lacs)

Particulars Current year

Previous year

Gross Revenue 1154.33 1183.57

expenditure 1070.97 1371.63

Profit before Depreciation & Tax 83.86 (188.05)

depreciation 18.60 19.55

Profit/(Loss) before Tax 64.76 (207.60)

prior period Income – –

provision for taxation (for earlier year)

– (10.61)

Wealth tax – –

deferred tax Assets 78.40 (31.59)

Profit/(Loss) After Tax (13.64) (165.40)

Add/(Less): Profit/(Loss) brought forward from previous year

56.09 221.49

Profit/(Loss) brought forward 42.45 56.09

dividend

the directors do not recommend any dividend for the year 2012-13.

review of Performance

during the financial year, the company has seen a significant downtrend in business scenario for hydro power projects. this sector in India saw a large slowdown resulting in reduction in number of new assignments for the company as well as hold up of work on a few ongoing assignments. due to this changed scenario, company was forced to cut down on its expenditure and also reduce its manpower cost. company however continued to provide design and engineering services to several hydro projects ranging in size from 5MW to about 1000 MW in India sub continent and in Africa.

The Company carried out site identification, preparation of feasibility study, detailed design and project reports and engineering of hydro project in complex and varied geological, topographic climatic and hydrological conditions in association with its Joint Ventures partner, RsW Inc. (part of AecoM, usA) the company has gained specialized knowledge and experience in the field of engineering of hydro projects of small, medium and

large capacity, transmission line and substation projects. the company has been providing consultancy to several clients for hydro projects implementation including services for investigations, due diligence studies, preparation of prefeasibility reports and detailed project reports, detailed design and drawings, technical specification, construction supervision, system engineering, etc. till date Iccs has completed detailed design of 18 hydropower projects and 4 thermal power projects with installed capacity of about 500 MW and the projects are in successful operation. dpR and detailed engineering for about 15 projects having installed capacity of 1200 MW are under progress. the company has bagged 10 new contracts during the financial year 2012-13 including detailed design of Hanu (9 MW), dah (9 MW) and Baitarni (24 MW) projects. company also won the consultancy contract for remedial measures for treatment of surge shaft for Bhilangana project. the company successfully witnessed the testing of transmission line towers for 220 kV transmission line if Africa. this assignment was undertaken on behalf of RsW Inc. the company is actively pursuing with new consultancy opportunities for large hydro power projects in India including Bajoli Holi Hep, pakal dul Hep and Ratle Hep. the company derives the strength from its experienced staff having core knowledge in specialized areas of qualifications. Experts from RSW, Inc provide significant contribution from their experience of several projects in different areas, magnitude and difficult conditions, during the year, company has completed the design and engineering work of Beas Kund, Balsio and Ranja Ala dunadi projects. the company is pursuing the techno economic clearance of dpR of chango Yangthang Hep (capacity revised from 140 to 180 MW) for Bel and advising Mpcl on operation and maintenance issues for Malana and Allain duhangan projects.

Iccs is hopeful of getting new international assignments based on opportunities available in African countries like Mali, Rwanda, Kenya, nigeria and Burundi for consultancy assignment in hydro power development.

Infrastructure development

during the year, company has maintained its current assets of computers, peripherals and software and added a new A0 size scanner cum plotter for printing of drawings. the company possesses the state of the art design and project management software. the company is equipped with latest software in civil, electrical and Mechanical engineering which comprises nIsA finite element package for analysis, Ms project and primavera software for project Management, stAAd software for structural analysis, etAp software for electrical system analysis and Auto cad software for drafting, flAc 2d for rock support design and Hammer for water hammer analysis.

160


Human resource development

the company from its inception has given special attention to human resource development and total quality management at different levels. today, Iccs has a work force of 57 engineers and technicians. the requirement of work force has been realigned with the current business scenario. efforts are being aimed towards imparting technical skills and improve productivity of the company.

the information of employees getting salary in excess of the limit as specified under the provisions of sub section (2A) of section 217 of the companies Act, 1956 who were employed throughout or for a part of the financial year under review is given as an annexure – I forming part of the report.

directors’ responsibility statement

Your directors would like to inform members that audited accounts containing the financial statements for the year 2012-13 are in full conformity with the requirements of the Act and they believe that the financial statements reflect fairly the form and substance of transactions carried out during the year and they fully present the company’s financial condition and results of operations. these financial statements are audited by the Statutory Auditors M/s KRA & Associates, chartered Accountants.

Your Directors further confirm that pursuant to Section 217 2(AA):

(i) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) Appropriate accounting policies have been selected and applied consistently and they have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company on 31st March, 2013 and of the profit of the Company for the year ended on that date;

(iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(iv) Annual accounts have been prepared on a going concern basis.

auditors

the term of appointment of M/s. KRA & Associates, chartered Accountants, auditors of the company, expires on the conclusion of the forthcoming Annual General Meeting and being eligible, they are recommended for reappointment.

Public deposits

the company has not accepted any deposits from the public during the year under report. therefore, provisions of section 58A of the companies Act, 1956 are not applicable.

directors

shri. Ravi Jhunjhunwala and Mr. claudio Vissa, directors retire from the Board by rotation at the ensuing Annual General Meeting of the company and being eligible, offer themselves for re-appointment.

during the year, Mr. emilien Marquis resigned from the Board of directors of the company on 16th october, 2012. the Board of directors wishes to place on record appreciation towards the contribution made by Mr. emilien Marquis during his tenure as director of the company.

energy Conservation and technology absorption

the information required pursuant to the companies (disclosure of particulars in the report of Board of directors) Rules, 1988 pertaining to energy conservation and technology Absorption is not applicable.

Foreign exchange earnings and outgo

During the financial year 2012 -13 the inflow of foreign exchange was ̀ 25.95 lacs against services rendered to foreign clients and outflow of foreign exchange was nil towards travelling.

acknowledgements

the directors wish to place on record their appreciation for continued cooperation extend by various departments of the central and state Government, financial Institutions and the Bankers. the directors also express their appreciation to employees for their dedicated services rendered to the company.

on BeHalF oF tHe Board oF dIreCtors

rishabh Jhunjhunwala chairman

place : noida (u.p.)date : 24th August, 2013

161

annexure-I

Information pursuant to section 217 (2a) of the Companies act, 1956 read with the Companies (Particulars of employees) rules, 1975 ad forming part of directors report for the year ended 31st March, 2013 are given hereunder.

I. Persons employed for the full year

name designation remuneration (` in lacs)

Qualification experience age Commencement of employment

Mr. Rakesh Mahajan director- civil 73.25 B.e . (c iv i l )M.tech (civil) MBA

33 53 1998

162


AudItoRs' RepoRt

the Members of Indo Canadian Consultancy services limited1. We have audited the accompanying financial

statements of Indo canadian consultancy services limited (‘the company’) (“the company”), which comprise the Balance sheet as at 31st March, 2013, the Statement of Profit and Loss and the cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management’s responsibility for the Financial statements

2. Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting standards referred to in sub-section (3c) of section 211 of the companies Act, 1956 (“the Act”). this responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

auditor’s responsibility3. our responsibility is to express an opinion on

these financial statements based on our audit. We conducted our audit in accordance with the standards on Auditing issued by the Institute of chartered Accountants of India. those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

opinion6. In our opinion and to the best of our information

and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) In the case of the Balance sheet, of the state of affairs of the company as at 31st March 2013;

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

c) In the case of cash flow statement of the cash flow for the year ended on that date.

7. As required by the companies (Auditor’s Report) order, 2003 (“the order”) issued by the central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the order.

8. As required by section 227(3) of the Act, we report that: a) We have obtained all the information and


b) In our opinion proper books of account as required by law have been kept by the company so far as appears from our examination of those books

c) The Balance Sheet , Statement of Profit and loss and cash flow statement dealt with by this Report are in agreement with the books of accounts.

d) In our opinion, the Balance sheet , statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the Accounting standards referred to in subsection (3c) of section 211 of the companies Act, 1956;

e) on the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the companies Act, 1956.

for Kra & assoCIateschartered AccountantsfRn: 002352n

shyamal KumarpartnerM.no: 509325

place: new delhi date : 24th August, 2013

163

anneXure to tHe audItor's rePort

annexure referred to in Paragraph 7 of the auditors’ report to the Members of Indo Canadian Consultancy services limited (on the accounts as at and for the year ended 31st March 2013)

i) a) the company is in the process of updating records showing full particulars, including quantitative details and situation of fixed assets

b) No fixed assets have been physically verified by the management during the year.

c) the company has not disposed off substantial part of the fixed assets during the year.

ii) the company does not have any inventory at any time during the year , hence clause (ii) of this order is not applicable.

iii) a) the company has neither taken nor given any loan from / to companies, and firms or other parties listed in the register(s) maintained under section 301 of the companies Act 1956. Hence, other parts of this clause are not applicable.

iv) In our opinion and according to the information and explanation given to us, company has internal control procedures commensurate with the size of the company and the nature of its business with regard to purchase of fixed assets and the sale of services. However the process of contract costing and allocation of manpower costing, party account reconciliation, realization of old outstanding amount from trade receivables & advances and interdepartmental reconciliation needs to be strengthened.

v) a) According to the information and explanation given to us, the transaction made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the companies act, 1956 have been so entered.

b) In our opinion and according to the information and explanations given to us transactions made in pursuance of the contracts or arrangements entered in the register maintained u/s 301 of the companies Act’1956 exceeding ̀ five lacs , in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market price at the relevant time. However, considering the specific services for which comparable market prices were not available at relevant time, we are unable to offer our comment and, in such cases we have relied upon the representation of the management.

vi) In our opinion and according to the information and explanation given to us, the company has not accepted any deposits from public.

vii) In our opinion, the company has an internal audit system which is commensurate with the size and nature of its business.

viii) We were informed that the maintenance of cost record under section 209(1)(d) of the companies act, 1956 is not applicable to the company .

(ix) a) the company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, Investor education protection fund, employees’ state insurance, income tax , sales tax, wealth tax, custom duty, excise duty, cess and other material statutory dues applicable to it. According to the information and explanation given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, custom duty, excise duty and cess were in arrears, as at 31st March’2013 for a period of more than six month from the date they became payable.

b) According to the records of the company and the information and explanations given to us, no disputed amount payable in respect of sale tax, income tax, customs duty, wealth tax, excise duty and cess as at 31st March, 2013 which were outstanding for a period of more than six month from the date they became payable.

x) the company is not having accumulated losses at the end of the financial year ended March 31st, 2013. the company has not incurred cash loss during the current financial year but incurred cash loss in the immediately preceding financial year.

xi) According to the information and explanations given to us the company has not taken any loan from bank / financial institution, hence this clause is not applicable to the company.

xii) According to the information and explanations given to us the company has not granted loans and advances on the basis of security by way of pledge of shares, debenture and other securities.

xiii) In our opinion, the company is not a chit fund or a nidhi mutual benefit fund /society. Therefore, the provisions of clause 4(xiii) of the order are not applicable to the company.

xiv) According to the information and explanation given to us, the company is not dealing or trading in shares, securities, debentures and other investments.

164


xv) According to the information and explanations given to us the company has not given guarantees for loans taken by others from banks or financial institutions.

xvi) According to the information and explanations given to us the company has not taken any loan and hence this clause is not applicable on the company.

xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that the no funds raised on short-term basis have been used for long term investment.

xviii) the company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the act.

xix) the company has not issued any debentures.

xx) the company has not raised any money by public issue.

xxi) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the period covered by our audit.

for Kra & assoCIates chartered AccountantsfRn: 002352n

shyamal KumarpartnerM.no: 509325

place : new delhi date : 24th August, 2013

165

BAlAnce sHeet As At 31st MARcH, 2013

As per our report of even date attached.

For Kra & assoCIateschartered Accountantsfirm Regn. no. 002352n

sHyaMal KuMarpartnerMembership no. 509325

place : noidadate : 24th August, 2013

For and on behalf of the Board of directors ofIndo-Canadian Consultancy services ltd

ravi Jhunjhunwala director

dIn : 00060972

rishabh Jhunjhunwala director

dIn : 03104458

(Amount in `)

Particulars note no. as at 31st March 2013

as at 31st March 2012

I eQuIty and lIaBIlItIes1 shareholders’ funds

share capital 1 3,533,000 3,533,000 Reserves and surplus 2 5,841,651 7,206,471

9,374,651 10,739,471 2 non-current liabilities

long-term provisions 3 20,053,647 42,635,055 20,053,647 42,635,055

3 Current liabilities trade payables 4 1,163,153 641,246 other current liabilities 5 60,854,647 37,213,990 short-term provisions 6 4,401,115 11,496,521

66,418,915 49,351,757 total 95,847,213 102,726,284

II. assets1 non-current assets (i) fixed assets 7(a) tangible assets (net) 4,598,900 5,209,602 (b) Intangible assets (net) 359,089 598,485

deferred tax assets (net) 8 10,566,832 18,407,216 long-term loans and advances 9 1,621,300 807,856

17,146,121 25,023,159 2 Current assets (short term)

trade receivables 10 26,425,701 29,963,565 cash and bank balances 11 11,490,392 7,037,450 short-term loans and advances 12 39,865,245 39,956,106 other current assets 13 919,754 746,004

78,701,092 77,703,125 total 95,847,213 102,726,284

Summary of significant accounting policies AThe accompanying notes are an integral part of the financial statements

166


stAteMent of pRofIt & loss foR tHe YeAR ended 31st MARcH, 2013

(Amount in `)

Particulars note no. year ended 31st March

2013

year ended 31st March

2012I Income

a Revenue from operations (gross) 14 113,519,829 116,644,896 b other Income 15 1,913,169 1,712,834

total Income 115,432,998 118,357,730 II expenses

Employee benefit expense 16 76,903,774 104,046,317 other expenses 17 30,193,529 33,116,720 total expenses 107,097,303 137,163,037

III earnings before interest, tax, depreciation and amortisation (eBItda) (I-II)

8,335,695 (18,805,307)

depreciation and amortisation expense 7 1,860,131 1,955,149 Iv Profit/ (Loss) before tax 6,475,564 (20,760,456)v tax expense

excess tax provision written back – (1,061,105)earlier years tax expenses – – deferred tax charge / (credit) 7,840,384 (3,159,069)total tax expense 7,840,384 (4,220,174)

vI Profit / (Loss) for the year (1,364,820) (16,540,282)vII earnings per share (In `) 18

Basic / diluted (3.86) (46.82)outstanding no of equity shares 353,300 353,300 face value per share (`) 10 10

Summary of significant accounting policies AThe accompanying notes are an integral part of the financial statements







dIn : 00060972


dIn : 03104458

167

(Amount in `)Particulars 31.03.2013 31.03.2012a. CasH FloW FroM oPeratInG aCtIvItIes

Profit/ (Loss) before tax 6,475,564 (20,760,456)add: depreciation 1,860,131 1,955,149 provision for bad & doubtful debtsInterest 33,112 13,384 Bad debts written off 1,160,025 3,564,057 Loss on fixed assets sold /discarded 382,319 less: 9,528,832 (14,845,547)Interest income 1,334,912 1,392,778 Profit on sale of assets – 312,079 Operating Profit before working capital changes 8,193,920 (16,550,404)Changes in working capitaldecrease /(Increase) in trade receivable 2,377,839 (5,411,984)decrease /(Increase) in loans & advances /other current assets 2,826,204 (4,882,146)Increase / (decrease) in liabilities and provisions (5,514,250) 18,553,652 net cash from operating activities before taxes paid 7,883,713 (8,290,882)Taxes paid / (Refunded) (3,548,787) 6,098,304 net cash from operating activities 4,334,926 (2,192,578)

B. CasH FloWs FroM InvestInG aCtIvItIes Addition in fixed Assets (Net) (1,010,034) (2,679,772)sale of fixed Assets 1,136,584 Interest received 1,161,162 1,235,597 net cash from investing activities 151,128 (307,591)

C. CasH FroM FInanCInG aCtIvItIes Interest paid (33,112) (13,384)Net cash from financing activities (33,112) (13,384)Increase in cash and cash equivalents 4,452,942 (2,513,553)opening cash or cash equivalents 7,037,450 9,551,003closing cash or cash equivalents 11,490,392 7,037,450 Components of cash and cash equivalents cash on hand 172,098 103,998 With scheduled banks - on current accounts 7,671,522 3,335,241 fixed deposit 3,646,772 3,598,211 total 11,490,392 7,037,450

cAsH floW stAteMent As At 31st MARcH, 2013







dIn : 00060972


dIn : 03104458

168


notes : a – sIGnIFICant aCCountInG PolICIes

1) during the year the company reported loss of ` 13,64,820. the company has revamped its business plan for a turnaround in the operations of the company. the operational cost has been realigned with the present business structure. The company is hopeful to achieve break even in the financial year 2013-14. With the possibilities of new businesses being revived in the next two years the company will be in a position to generate profit in the next couple of years.

2) notes on Business activities

Indo cAnAdIAn consultAncY seRVIces lIMIted (hereinafter referred to as “the company “) is engaged in consultancy services, including comprehensive engineering consultancy for hydro-electric, thermal and non-conventional energy power projects.

3) Significant Accounting Policies

a) Basis of Preparation:

The financial statements are prepared and presented under the historical cost convention, in accordance with the Indian Generally Accepted Accounting principle (“GAAp”), comply with the mandatory accounting standards issued by the Institute of Chartered Accountants of India (“ICAI”) and notified under The Company Accounting standards Rule’2006 and the presentation requirements of the companies Act, 1956.

All income and expenditure having a material bearing on the financial statements are recognized on an accrual basis.

b) use of estimates

The preparation of financial statements is in conformity under the GAAP requires management to make estimates and assumptions that effect the reported amounts of assets and liabilities, disclosure of contingents assets and liabilities at the date of financial statements and the results of operations during the reporting period. Actual result could be different from these estimates. Any changes in estimates are adjusted prospectively in the current and future period.

contingencies are recorded when it is probable that a liability will be incurred and the amount can be reasonably estimated.

c) revenue recognition

(i) Revenue is recognized to the extent that is probable that the economic benefit will flow to the company and revenue can be reliably measured.

this being a service company, revenue is recognized on billing basis which is billed with achievement of defined milestones i.e. ‘Contract milestones’.

(ii) Interest income is recognized on time proportion basis.

d) Fixed assets

(i) tangible assets

fixed assets are stated at cost of acquisition less accumulated depreciation. the cost included all expenditure incurred up to the date of installation of the Assets. Depreciation on fixed assets (including second hand assets) has been provided on Written down method using the rates prescribed in schedule xIV to the companies Act, 1956.

Assets costing less then ` 5,000 are depreciated at the rate of 100% as per management, the rates are indicative of the estimated useful lives of these assets.

(ii) Intangible assets

computers software is amortized over useful life or license period of software; whichever is shorter.

notes foRMInG pARt of tHe fInAncIAl stAteMents

169

e) Impairment of assets

the company assess at each balance sheet date whether there is an indication that any assets may be impaired . Based on internal/external factors if any impairment indicator exists , the company estimates the asset’s recoverable amount . An Impairment loss is recognized wherever the carrying amount of assets exceeds its recoverable amount. the recoverable amount is greater of the assets net selling price and its use. In assessing value in use, the estimated future cash flows are discounted to the present value by using weighted average cost of capital. A previously recognized impairment loss is increased or reversed depending upon change in circumstances.

After impairment depreciation is provided on the revised carrying amount of the assets over its remaining life.

f) Foreign Currency transactions

transactions denominated in foreign currencies are initially recorded at the exchange rate prevailing on the day the transaction.

All exchange gain/loss on restatement of monetary items as at balance sheet date are recognized in the Statement of Profit and Loss .

g) taxation

Tax expense comprise current tax and deferred tax (reflecting the tax effects of timing difference between accounting income and taxable income for the year). current tax is provided as per provisions of the Income Tax Act ‘1961. The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax charge rates that have been enacted or substantively enacted by the balance sheet date.

deferred tax is recognized, subject to the consideration of prudence, on timing difference, being the timing difference between taxable incomes and accounting income originated in one period and are capable of reversal in one or more subsequent periods and to the extent there is reasonable certainty that the assets can be realized in future. However, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognized only if there is a virtual certainty of realization of such assets. deferred tax assets are reviewed as at each balance sheet date and written down or written-up to reflect the amount that is reasonably/virtually certain (as the case may be) to be realized.

h) Employees Benefits:

Expenses and Liabilities in respect of employee’s benefits are recorded in accordance with revised Accounting Standard 15- Employee Benefits.

(i) Provident Fund

the company makes contribution to statutory contribution fund in accordance with employees provident Fund and Miscellaneous Provision Act, 1952 which is defined contribution plan and contribution paid or payable is recognized as an expense in the period in which services are rendered by the employee.

(ii) Gratuity

Gratuity is a post employment benefit and is in the nature of a defined benefit plan. The liability recognized in the balance sheet in respect of gratuity is the present value of defined benefit/obligation at the balance sheet date less the fair value of plan assets, together with adjustment for unrecognized actuarial gains or losses and past service costs. The defined benefit/obligation is calculated at or near the balance sheet date by and independent actuary using the projected unit credit method.

Actuarial gains and losses arising from past experience and changes in actuarial assumptions are charges or credited to the Statement of Profit and Loss in the year to which such gains or losses relate

Gratuity liability which is expected to payable within next 12 months from Balance sheet (as per estimates made by actuary) is treated as current liability and balance liability has been considered as non-current liability.

(iii) leave encashment

liability in respect of leave encashment becoming due or expected after the balance sheet is estimated on the basis of an actuarial valuation performed by an independent actuary using projected unit credit method

leave liability which is expected to utilized within next 12 months from Balance sheet (as per estimates made by actuary) is treated as current liability and balance liability has been considered as non-current liability.

170


1. sHare CaPItal (Amount in `)

Particulars as at 31st March 2013


authorized shares

10,00,000 (previous year 10,00,000) equity shares of ` 10 each 10,000,000 10,000,000

Issued, subscribed and fully paid-up shares

3,53,300 (previous year 353300) equity shares of ` 10 each fully paid 3,533,000 3,533,000

note :

(a) reconciliation of the shares outstanding at the beginning and at the end of the reporting period

equity shares as at 31st March 2013no. of shares amount (`)

shares outstanding at the beginning of the year 353,300 3,533,000 shares Issued during the year – –shares bought back during the year – –shares outstanding at the end of the year 353,300 3,533,000


the company has only one class of equity shares having par value of ̀ 10 per share. each holder of equity shares is entitled to one vote per share. the company declares and pays dividends in Indian rupees. the dividend proposed by the Board of directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.


(iv) Superannuation Benefit

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

(v) Other short term benefits

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

i) Provisions & Contingent Liabilities/ Assets

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

(ii) contingent liability is disclosed after careful evaluation of facts, uncertainties and possibility of reimbursement, unless the possibility of an outflow of resources embodying economic benefits in remote.

(iii) provisions and contingent liabilities / Assets are reviewed at each Balance sheet date and adjusted to reflect the current best estimates.

k) earning Per share


For the Purpose of calculating diluted earning per share, the net profit or loss for the period attributable to equity shareholders is divided by the weighted average number of equity shares outstanding during the period as adjusted for the effects of all dilutive potential equity shares.

171

(c) details of shareholders holding more than 5% shares in the Company

as at 31st March 2013 as at 31st March 2012

no. of shares % holding no. of shares % holding

equity shares of ` 10 each fully paid up

Bhilwara energy ltd (Holding company)

180,200 51 180,200 51

RsW Inc. 173,100 49 173,100 49


2. reserves & surPlus (Amount in `)



Capital reserve – –securities Premium account 1,597,500 1,597,500Surplus/(deficit) in the statement of profit and loss Balance as per last financial statements 5,608,971 22,149,253Profit / (Loss) for the year (1,364,820) (16,540,282)less: Appropriations – – Net surplus in the statement of profit & loss 4,244,151 5,608,971total reserves and surplus 5,841,651 7,206,471

3. lonG terM ProvIsIons (Amount in `)



Provision for employee benefitsprovision for gratuity (net) – 5,445,065provision for leave compensation 11,752,408 11,616,216provision for clB 8,301,239 25,573,774total 20,053,647 42,635,055

4. trade PayaBles (Amount in `)



due to MsMes – – others 1,163,153 641,246total 1,163,153 641,246

5. otHer Current lIaBIlItIes (Amount in `)



Employees Benefit Expenses Payable 4,282,450 7,615,258Advance from customers 1,234,182 9,880,606sundry deposits (staff) 1,389,437 1,093,805provision for expenses – – due to related company parties 50,246,447 15,219,480– due to others – 27,565tds payable 2,287,483 2,133,536pf payable 572,833 697,939service tax payable 835,665 256,842other payables 6,150 288,959total 60,854,647 37,213,990

172


6. sHort terM ProvIsIons (Amount in `)



Provision for employee benefitsprovision for gratuity (net) – 274,541provision for leave compensation 629,510 1,315,681provision for superannuation 707,713 2,235,415provision for Medical and ltA 1,765,309 1,083,742provision for clB 1,298,583 6,568,722othersprovision for Wealth tax – 18,420total 4,401,115 11,496,521

7. FIXed assets (Amount in `)

Gross BloCK dePreCIatIon net BloCKat the

beginning of the

year

at the end of the

year

at the beginning

of the year

at the end of the

year

Particulars as at01-apr-12

addi. dur. the year

dedn. dur.the year

as at31-Mar-13

upto01-apr-12

addi. dur. the

Period/ year

dedn. dur. the

Period/year

upto31-Mar-13

as at31-Mar-13

as at31-Mar-12

tangible assetsfurniture & fixtures 124,994 100,262 – 225,256 95,043 24,034 – 119,077 106,179 29,951 Office Equipments 1,234,629 9,444 – 1,244,073 692,654 86,147 – 778,801 465,272 541,975 computers & computer peripherals

5,822,162 900,328 – 6,722,490 4,966,134 573,537 – 5,539,671 1,182,819 856,028

Motor Vehicles 5,634,215 – – 5,634,215 2,096,289 903,116 – 2,999,405 2,634,810 3,537,926 electrical equipments 703,626 – – 703,626 459,905 33,902 – 493,807 209,819 243,721 total tangible assets 13,519,626 1,010,034 – 14,529,660 8,310,025 1,620,736 9,930,761 4,598,900 5,209,602 previous Year 18,430,075 2,626,342 7,536,792 13,519,625 13,125,561 1,609,469 6,425,005 8,310,025 5,209,601 5,304,514 Intangible assetssoftware 7,162,221 0 0 7,162,221 6,563,737 239,395 0 6,803,132 359,089 598,485 total Intangible assets 7,162,221 – – 7,162,221 6,563,737 239,395 – 6,803,132 359,089 598,485 previous Year 9,826,459 53,430 2,717,668 7,162,221 8,840,688 345,680 2,622,631 6,563,737 598,484 985,771

8. DEFERRED TAX ASSETS/(LIABILITY) (NET) (Amount in `)



Deferred tax Assets/(Liabilities)depreciation Adjustments 215,427 214,434provision for doubtful debts and advances – 444,108expenses allowed on payment basis 10,351,405 17,748,674deferred tax liability (net) 10,566,832 18,407,216

As a matter of prudence the company has not recognized deferred tax assets on unabsorbed depreciation and business loss computed as per Income tax laws.

9. lonG terM loans and advanCes (Amount in `)



Advances recoverable in cash or kind or for value to be received– Retention Money 1,621,300.00 802,856.00 – security deposit – 5,000.00 total 1,621,300.00 807,856.00

173

10. trade reCeIvaBles (Amount in `)



outstanding for a period exceeding six months from the date they are due for paymentunsecured, considered good 15,671,631 7,774,680unsecured, considered good from group cos. 173,985 3,366,011unsecured, considered doubtful – 1,437,241

15,845,616 12,577,932provision for doubtful receivables – 1,437,241

15,845,616 11,140,691other receivablesunsecured, considered good 10,580,085 18,822,874

10,580,085 18,822,874total 26,425,701 29,963,565

11. CasH and BanK BalanCes (Amount in `)



Cash and cash equivalentscash on hand 172,098 103,998cheques on hand – –Balances with banks in:– current accounts 7,671,522 3,335,241 7,843,620 3,439,239other bank balancesdeposits with original maturity period of more than 3 months but less than 12 months

2,646,772 2,273,211

– deposits with original maturity of more than 12 months^ 1,000,000 1,325,000* All the fixed deposits are pledged with various authorities/ parties.^ includes deposit Rs.100,000/- is pledged and originally matured in 2005 but not renewed, hence no interest given by the bank onward 2005.

3,646,772 3,598,211

total 11,490,392 7,037,450

12. sHort terM loans and advanCes (Amount in `)



security and other deposits 1,607,960 1,150,953Advances recoverable in cash or kind or for value to be received(unsecured considered good)

from others 2,920,638 5,827,585from related parties – 1,378,750

Advance against salary – 494,530staff Advance 3,762,980 3,079,408Advance tax, tds /tcs (net of provision) 31,573,667 28,024,880total 39,865,245 39,956,106

security deposit and earnest Money deposit is outstanding for recovery from various parties since long. However, the management is hopeful to recover this amount and no provision has been considered at present.

13. otHer Current assets (Amount in `)



Interest accrued on deposits with Banks 919,754 746,004

total 919,754 746,004

174


14. revenue FroM oPeratIons (Amount in `)

Particulars year ended 31st March 2013

year ended 31st March 2012

revenue from operationssale of services 113,519,829 116,644,896Revenue from operations (net) 113,519,829 116,644,896details of sale of services:consultancy income 113,519,829 116,644,896

15. otHer InCoMe (Amount in `)



Interest Income on– Bank deposits 1,334,912 1,392,778Profit on sale of assets – 312,079Miscellaneous income (includes forex gain of ` 186,709 (pY nil)) 578,257 7,977total 1,913,169 1,712,834

16 eMPloyee BeneFIt eXPenses (Amount in `)



salaries, wages and bonus 71,268,738 96,848,012contribution to provident and other funds 4,087,050 6,150,097Workmen and staff welfare expenses 1,547,986 1,048,208total 76,903,774 104,046,317

17. otHer eXPenses (Amount in `)



Rent 13,432,919 14,683,176car running & maintenance 280,870 210,070Insurance 1,011,200 906,773legal and professional 4,712,154 3,082,137traveling expenses 2,342,470 1,891,676electricity 2,430,688 2,456,106Bad debts Written off 1,160,025 3,564,057Repair & Maintenance - Building 885,834 1,211,967Repair & Maintenance -others 703,424 941,133Audit fee 120,548 100,000provision for Wealth tax – 18,615foreign exchange losses – – fixed Assets Written off – 382,319Miscellaneous expenses* 3,113,397 3,668,691total 30,193,529 33,116,720

* Including prior period expenses of ` 388,665 (pY ` 12,140)

18. earning Per share (Amount in `)



Computation of basic earnings per shareProfit/(Loss) Attributable to Equity Shareholder (1,364,820) (16,540,282)number of equity shareholder outstanding 353,300 353,300 Profit/(Loss) after Tax (1,364,820) (16,540,282)Weighted average number of equity shares in calculating basic eps 353,300 353,300

(3.86) (46.82)

175

notes-19 : ContInGent lIaBIlItIes (Amount in `)



(a) Bank Guarantees (net of Margin Money) 35,93,688 45,64,993

notes-20

1. the following disclosures have been made as required by the accounting standard – 15 (employees Benefit):

Employee Benefits

Defined Contribution Plan

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



employer’s contribution to provident fund (including Admin charges) 40,87,050 39,89,221

employer’s contribution to superannuation fund 10,63,000 12,65,830

Defined Benefit Plan

The employee’s gratuity fund scheme managed by trust is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the projected unit credit method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for Leave encashment is recognized in the same manner as gratuity. the company is maintaining fund with IcIcI prudential.


Net Employee Benefits expenses (Recognized in Employee Cost) (Amount in `)

Particulars Gratuity 31.03.2013

Gratuity 31.03.2012

current service cost 13,55,433 16,43,465

Interest cost on benefit obligation 868,746 6,81,463

expected return on plan assets (3,50,568) (3,34,453)

net actuarial loss (gain) recognized in the year (21,72,841) (5,98,781)

Net Expense recognized in the Statement Profit & Loss . (299,230) 13,91,694

Balance sheet (Amount in `)


Gratuity 31.03.2012

fair value of plan assets at the end of the period 1,22,14,380 43,82,095

present value of obligations as at the end of the period 1,08,10,238 1,01,01,701

funded status 14,04,142 (57,19,606)

excess of actual over estimated

net Assets/ ( liability) recognized in the balance sheet (14,04,142) 57,19,606



Gratuity 31.03.2012

present value of obligations at the beginning of the period (01/04/2012) 1,01,01,701 84,13,120

Interest cost 868,746 6,81,463

current service cost 13,55,433 16,43,465

Benefits paid (84,417) (37,566)

Actuarial (gain) / loss on obligation (14,31,225) (5,98,781)

present value of obligations at the end of the period (31/03/2013) 1,08,10,238 1,01,01,701

176




Gratuity 31.03.2012

fair value of plan assets at the beginning of the period 43,82,095 40,85,208expected return on the plan assets 3,50,568 3,34,453contributionsBenefits paid (84,417) (37,566)Actuarial gain / (loss) on plan assets 7,41,616fair value of plan assets as at the end of the period 1,22,14,380 43,82,095

Principal actuarial assumptions

a) economic assumptions

Particulars rate (%) 31.03.2013

rate (%) 31.03.2012

a) discount rate 8.20 8.60b) future salary increase 10.00 10.00-c) expected Rate of return on plan Assets 8.00 8.00

b) demographic assumptions

Particulars 31.03.2013 31.03.2012a) Retirement Age 60 years 60 Yearsb) Mortality table lIC ( 1994-96)

Duly ModifiedlIc ( 1994-96) Duly Modified

c) Withdrawals Rate ages Withdrawals rate (%)

Ages Withdrawals Rate (%)

upto 30 year 3.00% upto 30 Year 3.00%31- 44 years 2.00% 31- 44 Years 2.00%

above 44 year1.00% Above 44 Year1.00%

earned leave


Net Employee Benefits Expenses (Amount in `)

Particulars earned leave 31.03.2013

earned leave 31.03.2012

current service cost 11,46,671 19,43,906Interest cost on benefit obligation 11,12,143 9,47,377expected return on plan assets – –net actuarial loss (gain) recognized in the year (11,70,768) (3,84,723)Net Expense recognized in the Statement of Profit & Loss 10,88,046 25,06,560

Balance sheet (In `)



fair value of plan assets at the end of the period – –present value of obligations as at the end of the period 1,23,81,918 1,29,31,897funded status (1,23,81,918) (1,29,31,897)excess of actual over estimatednet Assets/ ( liability) recognized in the balance sheet 1,23,81,918 1,29,31,897

177




present value of obligations at the beginning of the period (01/04/2012) 1,29,31,897 1,16,96,014Interest cost 11,12,143 9,47,377current service cost 11,46,671 19,43,906Benefits paid (16,38,025) (12,70,677)Actuarial (gain) / loss on obligation (11,70,768) (3,84,723)present value of obligations at the end of the period 1,23,81,918 1,29,31,897

Principal actuarial assumptions

a) economic assumptions

Particulars year ended 31.03.2013

year ended 31.03.2012

a) discount rate as on 31.03.2013 8.20 8.60b) future salary increase 10.00 10.00c) expected Rate of return on plan Assets 0.00 0.00

b) demographic assumptions



a) Retirement Age 60 years 60 Yearsb) Mortality table lIC ( 1994-96)

Duly ModifiedlIc ( 1994-96) Duly Modified

c) Withdrawals Rate ages Withdrawals rate (%)

Ages Withdrawals Rate (%)

upto 30 years 3.00% upto 30 Years 3.00%31- 44 years 2.00% 31- 44 Years 2.00%

above 44 years 1.00% Above 44 Years 1.00%

c) during the year the management reassessed unpaid liability related to continuity loyalty Bonus ( clB) and written back a sum of ` 145,97,428 which got adjusted with the current year employee benefit expenses.

notes-21

1) related Party dIsClosures

(a) enterprises that directly or indirectly through one or more intermediaries, control or are controlled by or are under common control with the reporting enterprise.

name of related Party relationship1. Bhilwara energy limited. Holding company2. Ad Hydro power limited. fellow subsidiary co.3. Malana power company limited. fellow subsidiary co.4. nJc Hydro power limited fellow subsidiary co.5. Green Ventures pvt. ltd. fellow subsidiary co.6. lnJ power Ventures ltd fellow subsidiary co.7. Bhilwara Green energy ltd fellow subsidiary co.

(b) associates and joint ventures of the reporting enterprise and the investing party or venturer in respect of which the reporting enterprise is a joint venture.

AecoM technology corp.


none

178



Mr. Ravi Jhunjhunwala

Mr. Rishabh Jhunjhunwala

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

HeG ltd.

RsWM ltd.

Bsl ltd

BMd ltd.

note: Related Party relationship is as identified by the company and relied upon by the auditors.

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

(Amount in `)

sr no.

name of related party

services rendered

reimburse-ment of

expenses received

reimburse-ment of

expenses paid

rent Paid amount receivable

amount Payable

Period 2012-13 2012-13 2012-13 2012-13 2012-13 2012-131 Ad Hydro power 5,418,481

ltd (2,453,895) (16,300) (3,660,099) (1,621,513)2 Bhilwara energy 449,440 41,84,109

ltd (13,137,570) (2,860,042) (85,197)3 BMd pvt. ltd 1,729,981

(2,533,591) (212,158)4 Malana power 927,576

company ltd (1,654,500) (2,100) (1,491,150)5 RsWM ltd 13,631,278 9,806,660

(79,416) (10,513,184) (8,448,641) (6,770,838) (15,219,480)6 AecoM 1,539,860

technology corp. (1,054,998) (2,492,239)7 HeG ltd 147,970

(344,688)8 nJc Hydro power 28,651,800 69,70,076

ltd. (38,053,500)9 Bsl ltd10 lnJ power

Venture ltd. (1,378,750)11 chango Yang

thang Hydro power ltd.

27,421,072 1,479,170

(Previous year figures are in bracket).

notes-22 : transaCtIons In ForeIGn eXCHanGe (In `)

nature of transaction year ended 31.03.2013


expenditure (foreign travelling) nil nilIncome 186,709 52,44,336

179

notes-23 : audItor reMuneratIon (Amount in `)



statutory Audit fees 1,10,000 1,00,000other services –Reimbursement of expenditure

notes-24

the company has not received the required information from suppliers regarding their status under the Micro, small and Medium enterprises development Act, 2006. Hence disclosures relating to amounts unpaid as at the year end together with interest paid/payable, as required, under the Act, have not been made.

notes-25

trade Receivables include debts outstanding for more than two years amounting to ` 62,51,204. the company is in continuous process of working out different modalities of recovery for its remaining long outstanding debts.

notes-26

i) Retention and earnest money deposit amounting to ̀ 19,71,300 is outstanding for recovery from various parties since long. However, the management is hopeful to recover this amount and no provision has been considered at present.

ii) security deposit amounting to ` 12,57,960 was given to a party is outstanding for recovery / adjustment since 2007. However, the management is hopeful to recover this amount and no provision has been considered at present.

notes-27

In the opinion of the Management and to the best of their knowledge and believe, the value on realization of current assets, loan & Advances in the ordinary course of business would not be less than the amount at which they are stated in the Balance sheet.

notes-28

Balances of some of the trade Receivables, advances from customers and loans and advances are subject to confirmations from the respective parties and consequential adjustments arising from reconciliation, if any. The management however is of the view that there will be no material adjustments in this regard.

notes-29

Previous year figures have been regrouped where necessary. Amount in decimals have been rounded off to the nearest rupee.







dIn : 00060972


dIn : 03104458

180


AnnuAl RepoRtof

NJC Hydro Power Ltd.

181

BoArd oF dIreCtorSMr. Ravi JhunjhunwalaMr. Riju JhunjhunwalaMr. Rishabh JhunjhunwalaMr. o. p. Ajmera

Key eXeCUtIVeSMr. V. K. Kapoor, president – projectsMr. C. p. Bhatnagar, General Manager – Commercial

StAtUtory AUdItorSM/s S S Kothari Mehta & Co.Chartered Accountants new Delhi teCHNICAL CoNSULtANtSM/s RSW Inc., CanadaM/s Indo Canadian Consultancy Services limited

BANKerS / FINANCIAL INStItUtIoNSState Bank of IndiaHDfC Bank limited

reGIStered oFFICe Bhilwara Bhawan,40–41, Community Centre,new friends Colony,new Delhi – 110025

CorPorAte oFFICeBhilwara towersA–12, Sector – 1noida – 201 301 (nCR–Delhi)


182


DIReCtoRS' RepoRt

to tHe MeMBerS,

M/s NJC Hydro Power LIMIted

Dear Members,

the Directors of the Company are pleased to present their fourth Annual Report on the business and operations of the Company and Audited Statement of accounts for the year ended 31st March, 2013 together with the Auditors' Report.

1. FINANCIAL HIGHLIGHtS (` in Million)

particulars 31st March 2013*

total Income NILtotal expenditure 7.184Profit/(Loss) before tax (7.184)taxes NILProfit/(Loss) After tax (7.184)

*The Company has prepared its first standalone profit & loss account during the year under review. So, the comparable figures for the financial year ended 31st March 2012 are not available.

As of 31st March, 2013, the Company’s expenditure on various accounts is detailed below:

(` in Million)

PArtICULArS 31.03.2013 31.03.2012fixed Assets (Gross) including Capital Work–in–progress

111.48 300.87

preoperative expenses

1,312.90 1,024.80

other non–Current AssetsCurrent Assets

118.538.69

152.7021.51

totAL 1,551.60 1,499.88

2. ProJeCt StAtUS ANd INForMAtIoN

780 MW nyamjang Chhu Hep in the state of Arunachal pradesh

Your company, a wholly owned subsidiary of Bhilwara energy limited (Bel), is engaged in the development of 780 MW nyamjang Chhu Hydro electric project in the state of Arunachal pradesh. there have been delays for few clearances and issues both at State and Central Government level and the project has not moved as we had expected. like, Clearance from State pollution Control Board for ‘Consent to establish’ is yet to be received. An NGO, Save Mon Region Federation has filed two writ petitions in national Green tribunal (nGt) against Stage-I forest Clearance and environment

Clearance. Whereas petition against Stage-I forest Clearance has been disposed of, being premature, the environmental clearance case is being contested in nGt. further, the environment clearance issued by Moef stipulated enhanced release of 30% discharge during monsoon period from ecological angle. this condition shall impact the annual generation by about 18%. We are constantly perusing with authorities and are hopeful that issues will be resolved in due course of time.

3. dIVIdeNd

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

4. PUBLIC dePoSItS

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

5. eNerGy CoNSerVAtIoN, teCHNoLoGy AB-SorPtIoN ANd ForeIGN eXCHANGe eArN-INGS & oUtGo


6. PArtICULArS oF eMPLoyeeS:

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

7. INterNAL CoNtroL SySteMS ANd tHeIr AdeQUACy

the Company has proper and adequate systems in place for internal controls to ensure protection of assets, proper financial and operating functions and compliance with the policies, procedure, applicable Acts and Rules. the standard systems adopted by its parent company, Bel, have been used for the development of these internal control systems.

8. dIreCtorS

During the period under review, Mr Sanjay Kumar Mittal resigned from the post of Managing Director as well as Director w.e.f. 31st July 2013. the Board of Directors wishes to place on record sincere thanks & appreciation towards the contributions made by Mr Sanjay Kumar Mittal during his tenures as Managing Director of the Company.

183

In accordance with the provisions of the Companies Act, 1956 and of the Articles of Association of the Company, Mr. Rishabh Jhunjhunwala and Mr. o p Ajmera, Directors of the Company, are liable to retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. the Board recommends their re-appointment at the ensuing Annual General Meeting.

the aforesaid appointment/re-appointments are subject to the approval of the Members and the necessary resolutions have been incorporated.

9. AUdIt CoMMIttee

During the year, the Audit Committee met twice to review Company’s financial results and Internal Audit Reports.

As on date, the Members of the Audit Committee are: Mr. Riju Jhunjhunwala, Mr Rishabh Jhunjhunwala and Mr om prakash Ajmera.

10. dIreCtorS’ reSPoNSIBILIty StAteMeNt

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


ii) that the accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the financial year 2012-2013.

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


11. AUdItorS

M/s S. S. Kothari Mehta & Co., Chartered Accountants, Statutory Auditors of the Company, will retire from their office at the ensuing Annual General Meeting. they are, however, eligible for re-appointment. M/s. S. S. Kothari Mehta & Co., Chartered Accountants, have conveyed their willingness for re-appointment as statutory auditors of the Company for the financial year ending on 31st March, 2014. 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, confirming their eligibility and showing their willingness for appointment as statutory auditors of the Company for the financial year ending on 31st March, 2014. the Board recommends for the appointment of M/s. S. S. Kothari Mehta & Co., Chartered Accountants, as Statutory Auditors of the Company.

12. AUdItorS’ reMArKS

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

13. HUMAN reSoUrCe deVeLoPMeNt

the Company believes in today's evolving competitive business dynamics, employees’ are the key differentiators. our people are core to “What we are” and thus we have built a strong alignment between our organization's vision & values. Our employee partnership ethos reflects the Company's long-standing business principles and drives the company's overall performance. While we have continued to equip employees with the necessary skills and attitude to deliver on their current job responsibilities, the prime focus has been to identify, assess, groom and build leadership potential for future.

the Company has a comprehensive HR policy Manual, which is in line with the HR policy Manual of Bel. the Human Resources Development intervention has provided opportunity for open interaction, communication and feedback at the project site.

the employee relations continued to be cordial and harmonious at all levels and in all divisions of the Company.

14. eNVIroNMeNt, HeALtH ANd SAFety

the Company has adopted an environment Management plan (eMp), comprising of international best practices, procedure and norms, to take care of environment and social impacts of the projects. the eMp involves mitigation, monitoring and institutional measures to eliminate, offset or reduce adverse environmental and social impacts in or around the project area.

the Company is also committed to provide a zero injury workplace to its employees and workers all across the project. Security of employees is one of the prime concerns of the Management. Consistent efforts were made by the Company to improve safety standards in the Company by taking measures.

15. CorPorAte SoCIAL reSPoNSIBILIty

the Company believes that, in its areas of operations, its activities should generate economic benefits and opportunities for an enhanced quality of life for all the stakeholders and the society at large.

184


As a constructive partner in the communities in which it operates, the Company has been taking concrete action to honour its social responsibility and accordingly has been spending on the infrastructure development including construction, widening and strengthening of roads; construction of footpaths, bridges; etc. Your Company also contributes to women empowerment, community development and healthcare. Drinking water supply and community toilets have been built as a part of CSR activity in the neighbourhood villages. the Company is running a dispensary where about 20-30 patients from the nearby villages are examined and treated everyday by Company’s Doctor & Staff. the Company also has inducted an ambulance fitted with latest facilities for emergency medical aid, for the benefit of the employees and local community.

16. CorPorAte GoVerNANCe

the Company is committed to the application of the best management practices, compliance with law, adherence to ethical standards and discharge of social responsibilities. the Company has in all spheres of its activities adequate checks and balances to ensure protection of interest of all stakeholders. the Company also endeavors to share, with its stakeholders’ openly and transparently, information on matters which have a bearing on their economic and reputational interest.

the majority of the Board comprises of non-executive Directors’ who play a critical role in imparting balance to the Board processes, by bringing an independent judgment to decide

on issues of strategy, performance, resources, standards of Company’s conduct, etc. the Audit Committee of the Board provides assurance to the Board on the adequacy of Internal Control Systems and financial Systems.

17. ACKNowLedGeMeNtS

Your Directors’ acknowledge the assistance and continued support provided by the Ministry of power and Ministry of environment and forests (Government of India), Central electricity Authority, Government of Arunanchal pradesh, other government agencies, lenders, commercial banks, financial institutions, PTC India Limited and our valued customers & look forward to their continued support and cooperation in the coming years as well. Your Directors’ also like to express great appreciation for the commitment and contribution of its employees at all levels.



riju JhunjhunwalaDirector

DIn - 00061060

rishabh Jhunjhunwala Director

DIn - 03104458place : noidaDate : 26th August 2013

185

ANNeXUre I to tHe dIreCtorS’ rePortStAteMeNt oF PArtICULArS PUrSUANt to

tHe CoMPANIeS (dISCLoSUre oF PArtICULArS IN tHe rePort oF BoArd oF dIreCtorS) rULeS, 1988

1. ConSeRVAtIon of eneRGY – nIl

2. teCHnoloGY ABSoRptIon – nIl

3. foReIGn eXCHAnGe eARnInGS AnD outGo (in ` million)

2012–13 2011–12

I. foreign exchange outgo

Import of Components/Spares (CIf value) nIl nIl

travelling nIl nIl

professional expenses nIl nIl

Consultancy Charges 40.1964 138.472

fees and Subscription nIl nIl

total 40.1964 138.472

II. foreign exchange earnings nIl nIl

total NIL NIL

ANNeXUre II to tHe dIreCtorS’ rePort Information pursuant to Section 217 (2A) of the Companies Act, 1956 read with the Companies

(Particulars of employees) rules, 1975 and forming part of directors report for the year ended 31st March 2013 are given hereunder:

1. Persons employed for the full/part of the year

Name designation remuneration (` in Millions)

Qualification experience Age date of Commencement of employment

Mr Sanjay Kumar Mittal

Managing Director

9.594 B.e. (electrical) 31 Years 53 12.12.2011

Mr Vinod Kumar Kapoor

president–projects

6.813 B.Sc (engg–Civil), pG Diploma in Hydro power Development and pG Diploma in Management (finance)

37 Years 59 31.10.2011

186


to the Members of NJC Hydro Power LIMIted

report on the Financial StatementsWe have audited the accompanying financial Statements of NJC Hydro Power Limited (“the Company”) which comprise the Balance Sheet as at March 31, 2013, the Statement of Profit and Loss and the Cash flow Statement for the year then ended, and a summary of Significant Accounting Policies and other explanatory information.

Management’s responsibility for the Financial StatementsManagement is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub–section (3C) of section 211 of the Companies Act, 1956. this responsibility includes the design, implementation, and maintenance of internal controls relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors’ responsibilityour responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

opinionIn our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies

Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in Indiai) In the case of Balance Sheet, of the state of affairs

of the Company as at March 31, 2013;ii) In the case of Statement of Profit and Loss, of the

loss of the Company for the year ended on that date; and

iii) In the case of Cash flow Statement, of the cash flows for the year ended on that date.

report on other Legal and regulatory requirements1) As required by the Companies (Auditors’ Report)

order 2003 (the order), issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, we give in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said order.

2) As required by section 227(3) of the Companies Act 1956, we report that:(a) We have obtained all the information and

explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

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

(c) The Balance Sheet, the Statement of Profit and loss and the Cash flow Statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act 1956; and

(e) on the basis of written representations received from Directors, as on March 31, 2013 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31, 2013 from being appointed as a director in terms of Section 274(1)(g) of the Companies Act, 1956.

For S.S. Kothari Mehta & Co.Chartered Accountants

firm Regn. no. 000756n

Arun K. tulsianpartner

place: new Delhi M. no. 089907Date : 26th August, 2013

InDepenDent AuDItoRS’ RepoRt

187

Annexure to Independent Auditors’ report

(Referred to in paragraph 1 under the heading of “Report on other legal and Regulatory requirements” of our report of even date)


(b) Verification of the fixed assets is being conducted based on a programme designed by the management which, in our opinion, is reasonable having regard to the size of the company and nature of its business. As informed to us, no discrepancies were noticed on such verification as compared to book records.

(c) No substantial part of the fixed assets was disposed off during the year.

2. (a) According to the information and explanations given to us and the records examined by us, the management has conducted physical verification of inventory at reasonable intervals during the year.

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) the company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

3. (a) the company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) Since there are no such loans, reporting on terms & conditions of the loans, repayment of the principal amount and interest due thereon and overdue amounts is not required.

(c) the Company has taken short terms unsecured advances in the nature of loans from its holding company, the maximum amount outstanding during the year and the year-end balance of such loan is ` 53,02,79,091/-.

(d) the terms & conditions of this short term advance in the nature of loan is not prejudicial to the interest of the company. the interest is being serviced as per mutual understanding with the holding company. the amount is repayable on demand in view of which there are no overdue amounts at the year-end.

4. In our opinion, and according to the information and explanations given to us during the course of audit, there are adequate internal control systems commensurate with size of the company and the nature of its business with regard to purchase of inventory and fixed assets. Further, on the basis of our examination of the books & records of the company, carried out in accordance with the generally accepted auditing practices in India, we have neither come across nor have we been informed of any instance of major weaknesses in the aforesaid internal control systems.

5. (a) Based upon the audit procedures applied by us and according to the information and explanations given to us, we are of the opinion that the particulars of contracts and arrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section.

(b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and aggregating during the year to Rupees five lakhs or more in respect of each party have been made at prices which are reasonable having regard to market prices for such transactions, prevailing at the relevant time, where such market prices are available.

6. the Company has not accepted any deposits from the public within the meaning of sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 including the Companies (Acceptance of Deposits) Rules, 1975.


8. the company is implementing power generation project. the Central Government has prescribed cost accounting records under section 209(1) (d) of the Companies Act, 1956 for the power generation activity. Since company’s project is under implementation, the prescribed records are not applicable for the year under report.

9. (a) undisputed statutory dues including provident fund, investor education and protection fund, employees’ state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues have generally been regularly

188


deposited during the year with the appropriate authorities though there has been a slight delay in a few cases.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of employees provident fund, investor education and protection fund, employees’ state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us and as per the books and records examined by us, there are no dues of income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess which have not been deposited on account of any dispute.

10. As the company has been in existence for less than five years, the reporting on accumulated losses and cash losses is not applicable.

11. the Company does not have any dues payable to any financial institutions, banks or debenture holders.

12. According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.



15. the Company has not given any guarantee for loans taken by others from financial institutions and banks.

16. there are no term loans raised during the year by the company.

17. on the basis of information and explanations given to us, and on the basis of an overall examination of the balance sheet of the company, the funds raised by the Company on short-term basis have been applied for long-term investment to the extent of ` 54,99,81,641/-.

18. the Company has not made any preferential allotment of shares, during the year, to companies and other parties covered in the register maintained under section 301 of the Companies Act, 1956.

19. the Company has not issued any debentures during the year nor are there any debentures outstanding at the end of the year.



For S.S. Kothari Mehta & Co.Chartered Accountants

firm Regn. no. 000756n

Arun K. tulsianpartner

place: new Delhi M. no. 089907Date : 26th August, 2013

189





I. eQUIty ANd LIABILItIeS1 Shareholders’ funds

(a) Share capital 2 1,000,000,000 800,500,000 (b) Share application money pending allotment – 199,500,000 (c) Reserves & Surplus 3 (7,184,395) –

992,815,605 1,000,000,000 2. Non Current liabilities

(a) long term provisions 4 5,570,730 –3. Current liabilities

(a) other current liabilities 5 552,980,521 499,883,401 (b) Short term provisions 6 241,206 –

553,221,727 499,883,401 totAL 1,551,608,062 1,499,883,401

II. ASSetS1. Non–current assets

(a) Fixed assets(i) tangible assets 7 15,001,867 7,373,852 (ii) Intangible assets 83,488 92,764 (iii) Capital work–in–progress 96,392,922 293,403,808 (iv) project & pre–operative expenditure (pending allocation) 8 1,312,904,303 1,024,798,085

(b) long–term loans and advances 9 118,414,666 146,035,910 (c) other non–current assets 10 114,500 6,664,710

1,542,911,746 1,478,369,129 2. Current assets

(a) Inventories 11 125,180 39,121 (b) Cash and bank balances 12 518,966 10,020,461 (c) Short–term loans and advances 13 8,052,170 11,454,690

8,696,316 21,514,272 totAL 1,551,608,062 1,499,883,401

Significant Accounting Policies 1The accompanying notes are an integral part of the financial statements

Signed in terms of our report of even date for and on behalf of the Board of Directors of for S.S. Kothari Mehta & Co. NJC Hydro Power LtdChartered Accountantsfirm Regn no. 000756n

Arun K. tulsian riju Jhunjhunwala rishabh Jhunjhunwala partnerMembership no. 089907

DirectorDIn–00061060

Director DIn–03104458

place : new DelhiDated : 26th August 2013

190









I. Income(a) Revenue from operations (gross) –

revenue from operations (net) –(b) other Income –total Income –

II. expensesEmployee benefit expense –other expenses 14 7,184,395 Depreciation and amortisation expense –finance cost –total expenses 7,184,395

III. Profit/(loss) before tax (7,184,395)IV. tax expense:

Current tax –tax for earlier year –total tax expense –

V. Profit/(loss) for the year (7,184,395)VI. earnings per equity share 15

(Par Value of ` 10/– each)Basic (0.09)Diluted (0.09)

Significant Accounting Policies 1The accompanying notes are an integral part of the financial statements

StAteMeNt oF ProFIt ANd LoSS For tHe yeAr eNded 31St MArCH, 2013

191







(Amount in `)PArtICULArS As at

31 March 2013As at

31 March 2012CASH FLow FroM oPerAtING ACtIVItIeSProfit Before Tax (7,184,395) – Adjustments for:Miscellaneous expenditure 6,607,910 – Cash Generated from operations (576,485) – Direct taxes paid – – Operating Profit Before Working Capital Changes (576,485) – Adjustments for Changes in working Capital:Inventories (86,059) 52,418 preliminary expenses written off – 6,607,910 loans & Advances and other Current Assets 30,966,064 (10,779,883)liabilities and provisions 58,909,056 460,273,425 Net Cash from operating Activities 89,212,576 456,153,870 CASH FLow FroM INVeStING ACtIVItIeSAcquisition of fixed Assets (98,714,071) (604,646,214)Net Cash from Investing Activities (98,714,071) (604,646,214)CASH FLow FroM FINANCING ACtIVItIeSproceeds from Issuance of equity Shares – 156,569,664 Share Issue expenses – – Net Cash from Financing Activities – 156,569,664 Net Increase /(decrease) in cash and cash equivalents (9,501,495) 8,077,320 Cash and Cash equivalents at the Beginning of the Year 10,020,461 1,943,141 Cash and Cash equivalents at the Closing of the Year 518,966 10,020,461 Components of Cash and Cash equivalentCash in hand 173,088 133,470 Balances with Scheduled Banks:In Current Accounts 345,878 9,886,991 totAL 518,966 10,020,461

192


noteS to tHe fInAnCIAl StAteMentS foR tHe YeAR enDeD MARCH 31, 2013

1. SIGNIFICANt ACCoUNtING PoLICIeS

1.1 BASIS oF PrePArAtIoN oF FINANCIAL StAteMeNtS

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The financial statements have been prepared to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended and as applicable from time to time) and the relevant provisions of the Companies Act, 1956. the financial statements have been prepared on accrual basis and under the historical cost convention on going concern basis. the accounting policies have been consistently applied in company and are consistent with those used in the previous years.

1.2 USe oF eStIMAteS

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates. Difference between the actual results and estimates are recognized in the period in which the results are known/ materialized.

1.3 FIXed ASSetS

fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

1.4 INtANGIBLe ASSetS

Capital expenditure on purchase and development of identifiable non-monetary assets without physical substance is recognized as Intangible Assets in accordance with the principles given under AS-26- Intangible Assets. these are grouped and separately shown under the schedule of fixed Assets.

1.5 dePreCIAtIoN/AMortISAtIoN

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

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

Remaining fixed Assets Written Down Value Method at the rates prescribed in Schedule XIV to the Companies Act, 1956.All assets costing ` 5000/- or below are depreciated in full by way of a one time depreciation charge.

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

1.6 IMPAIrMeNt oF ASSetS

Specified assets are reviewed for impairment wherever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount for which the asset’s carrying amount exceeds its recoverable amount being the higher of the assets net selling price and its value in use. Value in use is based on the present value of the estimated future cash flows relating to the assets. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (i.e. cash generating units).

previously recognized impairment losses are reversed where the recoverable amount increases because of favorable changes in the estimates used to determine the recoverable amount since the last impairment was recognized. A reversal of asset’s impairment loss is limited to its carrying amount that would have been determined (net of depreciation or amortization) had no impairment loss been recognized in prior years.

1.7 eXPeNdItUre INCUrred dUrING CoNStrUCtIoN PerIod

preliminary project expenditure, capital expenditure, indirect expenditure incidental and related to construction/

193

implementation, interest on term loans/ debentures to finance fixed assets and expenditure on start-up/ commissioning of assets forming part of a composite project are capitalized up to the date of commissioning of the project as the cost of respective assets. Income earned during construction period is deducted from the total of the indirect expenditure.

1.8 LeASeS

where the company is lessee

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

where the company is Lessor

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

1.9 GoVerNMeNt GrANtS ANd SUBSIdIeS

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

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

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

1.10 BorrowING CoStS


1.11 SeGMeNt rePortING



Inter segment transfers




Unallocated items

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

Segment Policies


1.12 eMPLoyee BeNeFItS

Expenses and liabilities in respect of employee benefits are recorded in accordance with Accounting Standard 15 - “Employee Benefits”.

(a) Provident Fund


194


(b) Gratuity

Gratuity is a post employment benefit and is in the nature of a defined benefit plan. The liability recognized in the balance sheet in respect of the gratuity is the present value of the defined benefit/obligation at the balance sheet date less the fair value of plan assets, together with adjustment for unrecognized actuarial gains or losses and past service costs. The defined benefit/ obligation is calculated at or near the balance sheet date by an independent actuary using the projected unit credit method.


(c) Leave encashment

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



1.13 VALUAtIoN oF INVeNtorIeS

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


1.14 INVeStMeNtS

Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and fair value determined for each category separately. long-term investments are carried at cost on individual investment basis. However, provision for diminution in value is made to recognize a decline, other than temporary, in the value of the investments in case of long term investments.

1.15 reVeNUe reCoGNItIoN


Interest

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

dividend

Dividend on investment with mutual funds and others is recognized, when the right to receive payment is established.

1.16 ForeIGN CUrreNCy trANSACtIoNS

(i) Initial recognition


(ii) Conversion

foreign currency monetary items are reported using the closing rate. non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

(iii) exchange differences

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

195

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

1.17 tAXeS oN INCoMe

tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income tax Act. Deferred tax reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.

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

the carrying amount of deferred tax assets are reviewed at each balance sheet date. the Company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

MAt credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the Minimum Alternative tax (MAt) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in Guidance note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the profit and loss account and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAt Credit entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal income tax during the specified period.

1.18 eArNING Per SHAre



1.19 ProVISIoNS & CoNtINGeNt LIABILItIeS


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

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

1.20 CASH ANd CASH eQUIVALeNtS

Cash and cash equivalents comprise cash at bank and cash/ cheques in hand and short term deposits with Banks.

196


noteS to tHe fInAnCIAl StAteMentS foR tHe YeAR enDeD MARCH 31, 2013

2. SHAre CAPItAL



Authorized 10,00,00,000 (previous year 10,00,00,000) equity shares of ` 10/– each 1,000,000,000 1,000,000,000 Issued, Subscribed and fully paid–up 10,00,00,000 (previous year 8,00,50,000) equity shares of ` 10/– each fully paid up

1,000,000,000 800,500,000

Note

(a) reconciliation of the shares outstanding at the beginning and at the end of the reporting period

equity Shares As at 31 March 2013 As at 31 March 2012 No. of shares (Amount in `) No. of shares (Amount in `)

Shares outstanding at the beginning of the year

80,050,000 800,500,000 80,050,000 800,500,000

Shares Issued during the year 19,950,000 199,500,000 – – Shares bought back during the year – – – – Shares outstanding at the end of the year

100,000,000 1,000,000,000 80,050,000 800,500,000

(b) terms/rights attached to equity shares

the company has only one class of equity shares having par value of ̀ 10/– per share. each holder of equity shares is entitled to one vote per share. the company declares and pays dividends in Indian rupees. the dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.


(c) details of shareholders holding more than 5% shares in the Company

Particulars As at 31 March 2013 As at 31 March 2012 No. of shares % holding No. of shares % holding

equity shares of ` 10 each fully paid upBhilwara energy limited* 100,000,000 100 80,050,000 100

100,000,000 100 80,050,000 100

*Includes 6 equity shares held with nominees

As per the records of the company, including its register of shareholders/members and other declaration received from the from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

(d) details of shares held by its holding Company

Particulars As at 31 March 2013 As at 31 March 2012 No. of shares % holding No. of shares % holding

equity shares of ` 10 each fully paid upBhilwara energy limited* 100,000,000 100 80,050,000 100

100,000,000 100 80,050,000 100

*Includes 6 equity shares held with nominees

(e) Aggregate number of shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date – NIL.

197

3. reSerVeS & SUrPLUS



Surplus/(Deficit) in the statement of profit and lossBalance as per last financial statements – – Profit/(Loss) for the year (7,184,395) – Net surplus/(Net deficit) in the statement of profit & loss (7,184,395) – totAL reSerVeS ANd SUrPLUS (7,184,395) –

4. LoNG terM ProVISIoNS



provision for gratuity 1,348,002 provision for leave encashment 4,222,728 totAL 5,570,730 –

5. otHer CUrreNt LIABILItIeS



loans from related parties (Holding Company) 530,279,091 443,199,818 Statutory dues 6,320,047 9,739,071 employee related 6,614,603 – others 9,766,780 46,944,512 totAL 552,980,521 499,883,401

6. SHort terM ProVISIoNS



provision for gratuity 35,895 – provision for leave encashment 205,311 –totAL 241,206 –

7. FIXed ASSetS (Amounts in `)

Tangible Assets Intangible AssetsParticulars Leasehold

Building (Explosive)

Office equipments

Furniture and

Fixtures


Project Equipments


Assets)

Software Total (Intangible

Assets)Cost or valuationAs at 1 April 2011 359,140 280,605 183,291 153,052 348,375 2,709,111 1,166,111 5,199,685

Additions 52,780 665,530 720,820 716,235 1,045,300 1,391,136 4,591,801 107,625 107,625

Disposals – – – – – – – – – –

As at 31 March 2012 359,140 333,385 848,821 873,872 1,064,610 3,754,411 2,557,247 9,791,486 107,625 107,625

Additions 70,830 4,346,012 114,040 91,420 2,258,675 3,982,195 10,863,172 – –

Disposals – – – – – – – – – –

As at 31 March 2013 359,140 404,215 5,194,833 987,912 1,156,030 6,013,086 6,539,442 20,654,658 107,625 107,625As at 1 April 2011 41,099 75,443 56,126 119,892 61,542 877,726 234,081 1,465,909 –

Depreciation – –

Charge for the year 15,902 35,090 114,322 112,478 83,169 346,501 244,263 951,725 14,861 14,861

As at 31 March 2012 57,001 110,533 170,448 232,370 144,711 1,224,227 478,344 2,417,634 14,861 14,861

Charge for the year 15,107 37,657 793,370 283,478 137,040 543,795 1,424,710 3,235,157 9,276 9,276

Disposals – – – – – – – – – –

As at 31 March 2013 72,108 148,190 963,818 515,848 281,751 1,768,022 1,903,054 5,652,791 24,137 24,137 Net BlockAs at 31 March 2013 287,032 256,025 4,231,015 472,064 874,279 4,245,064 4,636,388 15,001,867 83,488 83,488As at 31 March 2012 302,139 222,852 678,373 641,502 919,899 2,530,184 2,078,903 7,373,852 92,764 92,764

198


8. ProJeCt ANd Pre-oPerAtIVe eXPeNdItUre (PeNdING ALLoCAtIoN) (Amount in `)

Particulars Upto 31.03.2012 Addiona/Adjustment

during the year

Upto 31.03.2013

Personnel expensesSalaries, wages and bonus 58,057,124 77,294,021 135,351,145 Contribution to provident and other funds 2,667,592 4,454,959 7,122,551 Workmen and staff welfare expenses 2,032,554 2,601,576 4,634,130 totAL 62,757,270 84,350,556 147,107,826 Administrative and other expensesRent 10,623,735 13,303,606 23,927,341 Rates & taxes 237,156 1,917 239,073 Insurance 155,188 182,189 337,377 Repairs and maintenance 88,685,891 1,548,951 90,234,842 travelling expense 23,277,198 5,724,942 29,002,140 Conveyance 2,416,283 1,844,018 4,260,301 Vehicle running & hiring expenses 7,010,997 6,290,409 13,301,406 Communication expenses 777,013 747,798 1,524,811 Audit fees* 410,035 (410,305) – Advertisement 4,919,416 639,066 5,558,482 legal & professional charges 60,013,969 22,950,609 82,964,578 fee & subscription 4,096,654 349,250 4,445,904 Stores consumption 2,162,207 39,121 2,201,328 power and fuel 1,945,052 3,329,050 5,274,102 testing & Surveys 1,336,411 319,870 1,656,281 Consultancy Charges 290,579,330 61,337,324 351,916,654 project processing fee 11,600,000 – 11,600,000 upfront premium 243,080,000 – 243,080,000 Miscellaneous expenses 41,015,521 24,322,965 65,338,486 financial / bank charges 164,214,610 57,990,179 222,204,789 Depreciation 3,484,149 3,244,433 6,728,582 totAL 962,040,815 203,755,662 1,165,796,477 GrANd totAL 1,024,798,085 288,106,218 1,312,904,303

(* Transferred to statement of profit and loss)

9. LoNG terM LoANS ANd AdVANCeS



Capital Advances 118,414,666 146,035,910 totAL 118,414,666 146,035,910

10. otHer NoN CUrreNt ASSetS



Security Deposit 114,500 56,800 Miscellaneous expenses not written off (pending allocation)preliminary expenses – 6,607,910 totAL 114,500 6,664,710

11. INVeNtorIeS (As taken, valued and certified by the management)



explosives 125,180 39,121 totAL 125,180 39,121

199

12. CASH ANd BANK BALANCeS



Cash and cash equivalentsCash on hand 173,088 133,470 Balances with banks in: – Current accounts 345,878 9,886,991 totAL 518,966 10,020,461

13. SHort terM LoANS ANd AdVANCeS



loans and advances to related parties 6,676,630 10,057,612 Advances recoverable in cash or kind or for value to be received – considered good 1,375,540 1,397,078 totAL 8,052,170 11,454,690

14. otHer eXPeNSeS


fee & Subscription 1,000 Audit fee* 575,485 preliminary expenses written off 6,607,910 totAL 7,184,395

(* Includes ` 1,65,450 for the year and ` 4,10,035 cumulative upto last year)

15. eArNING Per SHAre


the basic and diluted earning per share are as under:Computation of basic earnings per shareProfit/Loss after Tax (7,184,395)Weighted average number of equity shares in calculating basic epS 80,159,315 Basic earnings per share in Rupees of face value of ` 10/– (0.09)Computation of diluted earning per sharetotal operations for the year. (7,184,395)Weighted average number of equity shares in calculating diluted epS 80,159,315 Diluted earnings per share in Rupees of face value of ` 10/– (0.09)

16. CoNtINGeNt LIABILItIeS

As per information available with the management as certified by them, there is no contingent liability as at 31st March, 2013 (previous year ` nIl).

17. (a) estimated amount of contracts remaining to be executed on capital account and not provided for as on the date of Balance Sheet (net of advances) are ` 134,27,67,522 (previous Year ` 196,95,97,985).

(b) estimated amount of contracts remaining to be executed on other than capital account and not provided for (net of advance) ` nil (previous Year ` nil).

18. the company is implementing a hydro electric power project in the state of Arunachal pradesh. presently all activities are being carried out in process of project implementation and all direct and indirect expenditure is related to the project and, hence, forms part of thereof. preliminary expenses/RoC expenses are charged off to statement of profit & loss as period cost & other relevant details have been furnished in the note no.8 ‘project & pre-operative expenditure (pending allocation). Balance standing in this account at this of project commissioning will be allocated to the relevant assets.

200


19. Movement of deferred tax items in accordance with Accounting Standard AS–22 ‘Accounting for taxes on Income’ is as under.

Item of deferred tax

Balance as on 1-4-2012

Charge / (Credit)during the year

Balance as on 31-03-2013

Deferred tax Asset on account of preliminary expenses written off.

nil 22,46,028 22,46,028

20. the Government of India promulgated an Act namely the Micro, Small and Medium enterprises (Development) Act, 2006 which came into force with effect from october 2, 2006.As per the Act, the Company is required to identify the Micro, Small and Medium enterprises and pay them interest on overdue beyond the specified period irrespective of the terms agreed with the suppliers. As per the information available with the company and relied upon by the auditors, none of the creditors falls under the definition of ‘supplier’ as per the section 2(n) of the Act to the extent of information available with the company. In view of the above, the prescribed disclosures under Section 22 of the Act are not required to be made.

21. SeGMeNtAL rePortING:

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

22. there are no present obligations requiring provision in accordance with the guiding principles as enunciated in Accounting Standard (AS)–29 as it is not probable that an outflow of resources embodying economic benefit will be required.

23. derIVAtIVe INStrUMeNtS ANd ForeIGN CUrreNCy eXPoSUreS:

(a) there is no foreign currency exposure outstanding as at the Balance Sheet date are nIl (previous year ` nIl).

(b) particulars of un–hedged foreign currency exposures as at the Balance Sheet date are nIl (previous year ` nIl).

24. trANSFer oF ProJeCt

During the year, company has transferred one of the construction power project of 7.5 MW Khangtang Hep project to its holding company, which required to be set up for implementation of 780 MW project of the company. the details of the assets & liabilities transferred to holding company are as under:–

Particulars Amount in `Capital work in progress 24,57,50,000loans & advances 9,81,06,865total assets 34,38,56,865less:- Current liability 3,49,75,000Net Assets 30,88,81,865

25. GrAtUIty – deFINed BeNeFIt PLAN AS–15 (UNFUNded)

The company has a defined gratuity plan. Gratuity is computed as 15 days salary, for every completed year of services or part thereof in excess of 6 months and is payable on retirement/termination/resignation. the benefits vest on the employee completing 5 year of services. The company makes the provision of such gratuity asset/liability in the books of accounts on the basis of actuarial valuation as per the projected unit credit method.

The following tables summarise the components of net benefit expenses recognized in the ‘Project and preoperative expenses’ (pending allocation)’/’personnel expenses’ and amount recognized in the balance sheet:



Current Service Cost 14,86,905Interest Cost On Benefit obligation (1,03,008)expected return on plan assets –net Actuarial (Gain)/ loss recognized in the period NILpast Service cost –Expenses recognized in the statement of profit & loss account/project and preoperative expenses (pending allocation)

13,83,897

201



Opening defined benefit obligation NILInterest cost on benefit obligation (1,03,008)Current service cost 14,86,905Benefits paid Actuarial (gains)/ losses on obligation NILClosing defined benefit obligation 13,83,897

Changes in the fair value of plan assets are as follows: (Amount in `)


March 31, 2013opening fair value of plan assets –expected return –Contribution by employer –Benefits paid –Actuarial gains/ (losses) on obligation –Closing fair value of plan assets –

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


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

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

Amounts for the current year and previous four years in respect of gratuity are as follows:

(Amount in `)


Defined benefit obligation 13,83,897plan assets –Surplus/ (deficit) (13,83,897)experience adjustment on plan liabilities NILexperience adjustment on plan assets –

As the company has adopted AS 15 in the year 2012–13, the above disclosure required under para 120 (n) have been made prospectively from the date the company has first adopted the standard.

26. LeAVe eNCASHMeNt LIABILIty (UNFUNded)




Current Service Cost 33,47,886Interest Cost On Benefit obligation 10,80,153expected return on plan assets –net Actuarial (Gain)/ loss recognized in the period nIlExpenses recognized in profit & loss account/project and preoperative expenses

44,28,039

202


Balance Sheet (Amount in `)


fair value of plan assets at the end of the period 44,28,039present value of obligationfunded status (44,28,039)excess of actual over estimatednet asset/(liability) recognized 44,28,039



present value of obligation at the beginning of the period NILInterest cost 10,80,153Current service cost 33,47,886Benefits paid NILActuarial (gains)/ losses on obligation NILClosing defined benefit obligation 44,28,039



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

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

(Amount in `)

Particulars For the year ended31.03.2013

For the year ended 31.3.2012

Discount Rate 8.10% 8.60%expected rate of return on assets – –future salary increase 5.00% 5.00%

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

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

(Amount in `)


Defined benefit obligation 44,28,039plan assets –Surplus/ (deficit) (44,28,039)experience adjustment on plan liabilities NILexperience adjustment on plan assets –

As the company has adopted AS 15 in the year 2012–13, the above disclosure required under para 120 (n) have been made prospectively from the date the company has first adopted the standard.

203

Defined Contribution Plan (Amount in `)

Contribution to Defined Plan, recognized as expenses for the year are as under For the year endedMarch 31, 2013

employer’s Contribution to provident fund* 26,51,904

27. reLAted PArty dISCLoSUreS

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

i) Bhilwara energy limited – Holding Company

ii) Malana power Company limited – fellow Subsidiary.

iii) AD Hydro power limited – Subsidiary of fellow Subsidiary

iv) Indo Canadian Consultancy Services limited – fellow Subsidiary

v) Bhilwara Green energy limited – fellow Subsidiary

vi) Green Ventures private limited, nepal – fellow Subsidiary

vii) Balephi Jalbidyut Company limited, nepal – fellow Subsidiary

viii) Chango Yangthang Hydro power limited – fellow Subsidiary

ix) lnJ power Ventures ltd. – fellow Subsidiary

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

HeG limited (Associate of Holding Company)



Mr. Riju Jhunjhunwala







(i) RSWM limited.

(ii) Bhilwara Scribe private limited.

(iii) Deepak Knits & textiles private limited

(iv) Maral overseas limited.

(v) Bhilwara technical textiles limited.

(vi) BMD private limited.

(vii) Bhilwara Infoway private limited.

(viii) Bhilwara Services private limited.

(ix) lnJ Bhilwara textile Anusandhan Vikas Kendra.

(x) HeG Graphite and Services limited.

(xi) odetta Realty private limited.

(xii) BSl limited.

(xiii) HeG limited.

204


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

(Amount in `)

31.03.2013 31.03.2012i) Parties referred to in item (a) above

transaction during the year:Interest reimbursement to holding company 5,48,93,054 81,22,906expenses reimbursement to holding company 1,57,67,062 1,93,79,857Indo Canadian Consultancy Services limited (Consultancy Services) 2,86,51,800 3,97,29,060loan taken from holding company 53,02,93,802 44,31,99,818Share Application money received from holding company 15,65,69,664equity Shares issued to holding company during the year. 19,95,00,000 –Assets & liabilities transferred from holding company (Refer note no.7 of the notes to the financial statement)

– 84,29,30,336

project transferred to holding company 30,88,81,865 –outstanding Payable:Bhilwara energy ltd – loan 53,02,93,802 44,31,99,818Share Application money pending allotment – 19,95,00,000Balance receivable: Indo Canadian Consultancy Services ltd. 69,76,630 1,00,57,612

ii) Parties referred to in item (b) above NIL nIliii) Persons referred to in (c) above NIL nIliv) Persons referred to in (d) above NIL nIlv) Persons referred to in (e) above NIL nIl

28. eXPeNdItUre IN ForeIGN CUrreNCy: (Amount in `)

Sr No

Nature of transaction For the year ended March

31,2013


20121 Consultancy Charges 4,01,96,401 13,84,72,500

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

30. Disclosure of other items as required in the Statement of profit and loss by revised Schedule–VI of the Companies Act, 1956 is not applicable to the Company.

31. Previous year figures have been regrouped/reclassified whenever necessary and confirm to this year classification with references to the point no. 16 above, this is the first year when the company has prepared statement of profit & loss. Therefore previous year figures are not applicable to the statement of profit & loss.


riju Jhunjhunwala rishabh Jhunjhunwala Arun K. tulsianpartnerMembership no. 089907




205

AnnuAl RepoRtof

BHILWARA GREEN ENERGY LIMITED (Formerly Bhilwara Mannvit Green Energy Limited)

206


BOARD OF DIRECTORSMr. Ravi Jhunjhunwala



Mr. o. p. Ajmera

KEY EXECUTIVESMr. parish Gupta, Chief of B.D. & Mgmt (Wind energy)

Mr. o. p. taneja, Advisor

FINANCIAL INSTITUTIONSIndian Renewable energy Development Agency ltd.

International finance Corporation, Washington, D.C.

IfCI limited

BANKERSpunjab & Sind Bank

Yes Bank limited

HDfC Bank limited

STATUTORY AUDITORSM/s Doogar & Associates

Chartered Accountants

new Delhi

CORPORATE OFFICEBhilwara towers

A-12, Sector-1,

noida - 201301 (u.p.)

REGISTERED OFFICEBhilwara Bhawan,

40-41, Community Centre,

new friends Colony,

new Delhi-110025


207

To,

THE MEMBERS,

M/s BHILWARA GREEN ENERGY LIMITED

Dear Member,

Your Directors have pleasure in presenting their eighteenth Annual Report on the business and operations of the Company and Audited Statement of accounts for the year ended 31st March, 2013 together with the Auditors’ Report.

1. FINANCIAL HIGHLIGHTS (` in Million)

Particulars



Income from operation 300.286 0.725other Income 73.909 nIltotal Income 374.195 0.725expenditure 364.482 5.735pRofIt/(loSS) BefoRe tAX 9.713 (5.010)

tax 0.868 nIlpRofIt/(loSS) AfteR tAX 8.845 (5.010)

Basic earnings per Share (epS) (In `) 0.17 (1.19)

During the period under review, the total income of the company is ` 374.19 million. The Profit After tax stood at ` 8.84 million. total saleable generation of the company during current year is 5,15,19,005 units as compared to 1,34,962 units in previous year. the generation of current year is not comparable with that of previous year as only 20 WtGs (30 MW) was commissioned as of March 2012.


49.50 MW Wind Power Project in District Satara, Maharashtra

Your company, a wholly owned subsidiary of Bhilwara energy limited, is engaged in developing 49.50 MW Wind power project in Distt. Satara, Maharashtra. the Directors’ are pleased to inform that out of 33 WtGs with installed capacity of 49.50 MW, 27 Wind turbine Generators (WtGs) amounting to installed capacity of 40.50 MW were commissioned by 31st March 2013 and have started generating electricity. Another 4 WtGs amounting to installed capacity of 6.0 MW have been commissioned on 3rd June 2013. the balance 2 WtGs with installed capacity of 3.0 MW are under different stages of execution and are likely to be commissioned soon. the date-wise commissioning of the WtGs is as under:-

DIReCtoRS' RepoRt

Date of Commissioning

No of WTGs Commissioned

MW Commissioned

22.03.2012 9 13.50 MW30.03.2012 7 10.50 MW31.03.2012 4 6.00 MW30.05.2012 3 4.50 MW29.09.2012 4 6.00 MW03.06.2013 4 6.00 MW

Total 31 WTGs 46.50 MW the power generated from this project is being

sold to Maharashtra State Distribution Company limited (MSeDCl) on long term ppA for 13 years.

the project is eligible for availing Generation Based Incentives (GBI) provided by MnRe, Government of India. A part of this project i.e. 30 MW commissioned till 31st March 2012 is already registered for availing GBI. Balance 19.50 MW is also eligible for registration for availing GBI and will be registered with the authorities in due course of time.

the Directors are pleased to inform that the project has been registered by unfCCC as a CDM project in october 2012.

CeRC has mandated the forecasting of power generation by Wind power projects from 15th July 2013 onwards and in line with the prevailing RRf mechanism. As this project falls under the RRf, suitable technical agencies for forecasting and coordination with SDCl have been appointed, you can expect some negative effects on profits due to the inaccurate forecasting in the beginning and we shall strive to improve upon the same with time.

the project has been funded by International finance Corporation, Washington, D.C., (IfC) a member of World Bank Group, Indian Renewable energy Development Agency limited (IReDA) and IfCI limited.

3. DIVIDEND

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

4. PUBLIC DEPOSITS


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


208


6. PARTICULARS OF EMPLOYEES: During the year 2012-13, 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.

7. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

7.1 INTERNAL CONTROL SYSTEMS the Company has proper and adequate systems

for internal controls to ensure protection of assets, proper financial and operating functions and compliance with the policies, procedure, applicable Acts and Rules. the Company’s Internal Control Systems are supplemented by Internal Audit covering all financial and operating functions.

7.2 INTERNAL AUDIT Internal Audit at BGel is an independent,

objective and assurance function conscientious for evaluating and improving the effectiveness of risk management, Control, and governance processes. the function prepares annual audit plans based on risk management and conducts extensive reviews covering financial, operational and compliance controls and risk mitigation. Internal audit plans cover matters identified in risk management assessments as well as issues highlighted by the Board, the Audit Committee and senior management. the areas requiring specialized knowledge are reviewed in partnership with external experts.

Internal Audit is conducted across all functions by firms of Chartered Accountants, who verify and report on the functioning and effectiveness of internal controls. the Internal Audit reports the progress in implementation of recommendations contained in such reports. Internal audit reports are submitted along with the Management’s response to the Audit Committee. the Audit Committee of the Board, monitors performance of Internal Audit on time-to-time basis through review of the internal audit plans, audit findings & swiftness of issue resolution through follow ups.

8. DIRECTORS In accordance with the provisions of the Companies

Act, 1956 and of the Articles of Association of the Company, Mr. Rishabh Jhunjhunwala, Director and Mr o p Ajmera, Director of the Company, are liable to retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. the Board recommends their re-appointment at the ensuing Annual General Meeting.

9. DIRECTORS’ RESPONSIBILITY STATEMENT As required under Section 217 (2AA) of the

Companies (Amendment) Act, 2000, the Directors’ of your company states hereunder:-

i) that in the preparation of the annual accounts,

the applicable accounting standards had been followed along with proper explanation relating to material departures;




10. AUDIT COMMITTEE

During the year, the Audit Committee met twice to review Company’s financial results, Internal Control Systems, Risk Management policies and Internal Audit Reports.

As on date, the Members of the Audit Committee are: Mr. Riju Jhunjhunwala, Mr. Rishabh Jhunjhunwala, and Mr. o p Ajmera. the proceedings of the Committee were in accordance with the provisions of the Companies Act, 1956.

11. AUDITORS

11.1 STATUTORY AUDITORS

M/s. Doogar & Associates, Chartered Accountants, Statutory Auditors of the Company, will retire from their office at the ensuing Annual General Meeting. they are, however, eligible for re-appointment. the Company has received consent letter from M/s. Doogar & Associates, Chartered Accountants, under Section 224(1B) of the Companies Act, 1956, for re-appointment as Statutory Auditors of the Company for the financial year ending on 31st March, 2014. the Board recommends the re-appointment of M/s. Doogar & Associates, as Statutory Auditors of the Company.

11.2 COST AUDITORS

pursuant to Section 233B(2) of the Companies Act, 1956, in terms of the Central Government’s approval, the Board of Directors, on the recommendation of the Audit Committee, has appointed M/s. K.G. Goyal & Co., Cost Accountants, as the Cost Auditor of the Company for the year. M/s. K. G. Goyal & Co., has confirmed that their appointment is within the limits of the Section 224(1B) of the Companies Act, 1956 and have certified that they are free from any disqualifications specified under Section 233B(5) read with Section 224 sub section (3) or sub section (4) of Section 226 of the Companies Act, 1956.

209


the Auditors’ Report read along with notes to the Accounts is self explanatory and require no further comments from the Board.

13. ENVIRONMENT, HEALTH AND SAFETY

At the inception of the project, eIA study has been conducted. environment Management plan, comprising of international best practices, procedure and norms, shall be adopted to take care of environment and social impacts on the projects. environmental Management plan involves mitigation, monitoring and institutional measures to eliminate, offset or reduce adverse environmental and social impacts in or around the project area.

further, the Company is committed to IfC to comply with IfC policy and performance standards on Social & environmental Sustainability for the project.

14. CORPORATE SOCIAL RESPONSIBILITY

We believe that, wherever we operate, our activities should generate economic benefits and opportunities for an enhanced quality of life for society at large; that our relationships should be honest and open; and that we should be held accountable for our actions.

As a constructive partner in the communities in which it operates, your Company will be taking

concrete action to carry out its social responsibility and addressing health and education requirements of the nearby region.


Your Directors’ acknowledge the assistance and continued support provided by the Ministry of power and Ministry of environment and forests (Government of India), Government of Maharashtra, other government agencies like C-Wet, MeDA, MSetCl, lenders like IfC, Washington, Indian Renewable energy Development Agency limited, IfCI ltd, and our business partners and consultants for the project & look forward to their continued support and cooperation in the coming years as well. Your Directors’ also like to express great appreciation for the commitment and contribution of its employees at all levels.


For and on behalf of the Board of Directors

Riju Jhunjhunwala Rishabh JhunjhunwalaDirector DirectorDIn-00061060 DIn-03104458

place : noida Date : 24th August, 2013

ANNEXURE I TO THE DIRECTORS’ REPORTSTATEMENT OF PARTICULARS PURSUANT TO

THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 19881. CONSERVATION OF ENERGY – nIl2. TECHNOLOGY ABSORPTION

• The technology for wind power project has been provided by Vensys Energy AG, a well known German company in the field of Wind Energy, through their business partners in India, who are acting as the EPC cum project Developer. the operations and maintenance of the wind farm is also with the project De-veloper. our team has been extensively involved during all the phases of manufacturing, quality control, micro-siting, erection and commissioning. the operations of the commissioned WtGs are being monitored on a daily basis. the maintenance of the WtGs is also being monitored on an ongoing basis.

• The operations of the wind power plant is monitored through SCADA, for which suitable training has been provided to our staff through site visits and live generation systems.

3. FOREIGN EXCHANGE EARNINGS AND OUTGO (in ` million)

2012-13 2011-12I. foreign exchange outgo nIl nIl

Total NIL nIlII. foreign exchange earnings nIl nIl

Total NIL nIl


Riju Jhunjhunwala Rishabh Jhunjhunwalaplace : noida Director DirectorDate : 24th August, 2013 DIn-00061060 DIn-03104458

210


AuDItoRS' RepoRt

To the members of Bhilwara Green Energy Limited

Report on the financial statements

We have audited the accompanying financial statements of Bhilwara Green energy limited (“the Company”), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s responsibility for the financial statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the company in accordance with the accounting principles generally accepted in India, including accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 (“the Act”). this responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility

our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and

according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the company as at March 31, 2013;

(b) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

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

Report on other legal and regulatory requirements

1. As required by the Companies (Auditor’s Report) order, 2003 (“the order”) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure ‘A’ a statement on the matters specified in paragraphs 4 and 5 of the order.

2. As required by section 227(3) of the Act, we report that:

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

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

c. The Balance Sheet, Statement of Profit and Loss, and Cash flow Statement dealt with by this report are in agreement with the books of account;

d. In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

e. on the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

for Doogar & AssociatesChartered Accountants

firm Regn no. 000561n

Mukesh Goyalplace : new Delhi Mg. partnerDate : 24th August, 2013 Membership no.081810

211

AnneXuRe ‘A’ to AuDItoRS’ RepoRt

(Annexure referred to in our report of even date)


(b) Verification of the fixed assets is being conducted by the management based on a programme designed to cover all assets, which, in our opinion, is reasonable having regard to the size of the Company and nature of its business. As informed to us, no discrepancies were noticed on such verification as compared to book records.

(c) None of the fixed assets was disposed off during the year.

2. According to the Information and explanation given to us and the records examined by us, the company is not having any inventory, in view of which the related reporting requirement of the order clause 4(ii) (a) to (c) is not applicable to the company.

3. (a) According to the information and explanations given to us, the company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii) (a) to (d) of the order are not applicable to the company and hence not commented upon.

(b) According to information and explanations given to us, the company has taken short term advances in the nature of unsecured loan from the holding company covered in the register maintained under section 301 of the Companies Act, 1956. the maximum amount outstanding at any time during the year was ` 39,03,93,845 and the year end balance was ` 2,54,40,199.

(c) the terms and conditions of this short term advances in the nature of loan taken from holding company are not prejudicial to the interest of the company. the interest is being serviced as per mutual understanding with the holding company. the amount is repayable on demand in view of which there are no overdue payments at the year end.

4. In our opinion, and according to the information and explanations given to us during the course of audit, there are adequate internal control systems commensurate with size of the company and the nature of its business with regard to purchase of

fixed assets and for the sale of goods. Further, on the basis of our examination of the books & records of the company, carried out in accordance with the generally accepted auditing practices in India, we have neither come across nor have we been informed of any instance of major weaknesses in the aforesaid internal control systems.

5. Based upon the audit procedures applied by us and according to the information and explanations given to us, we are of the opinion that the particulars of contracts and arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register maintained under section 301 have been so entered.

6. the Company has not accepted any deposits from the public within the meaning of sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 including the Companies (Acceptance of Deposits) Rules, 1975.


8. We have broadly reviewed the Cost Accounting records, maintained by the Company pursuant to the Rules prescribed by the Central Government for the maintenance of cost records under Clause (d) of Sub-Section (1) of Section 209 of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained.

9. (a) the Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, income tax and other material dues applicable to the company. However, during the year there were minor delays in depositing dues of income tax deducted at source.

(b) According to information and explanation given to us, no undisputed amount payable in respect of provident fund, income tax and other material statutory dues were outstanding at the year end, for a period of more than 6 months from the date they became payable except the interest on late payment of statutory dues pertaining to current year amounting to ` 22,130.

10. there are no accumulated losses in the Company at the end of the financial year. There are no cash losses during the financial year. However, the company has incurred cash losses during the preceding financial year.

212


11. According to the information and explanations given to us and as per the books and records examined by us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders.

12. According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.



15. the company has not given any guarantee for loans taken by others from that financial institution.

16. In our opinion, and according to the information and explanations given to us, the term loans raised during the year by the Company have been applied for the purpose for which the said loans were obtained, where such end use has been stipulated by the lender.

17. According to the information and explanations given to us and as per the books and records

examined by us, no short term funds were raised by the company during the year.

18. the Company has made preferential allotment of shares during the year to its holding company, which is covered in the register maintained under section 301 of the Companies Act, 1956.

19. the company has created necessary securities and other charges for debentures issued during the year.



for Doogar & AssociatesChartered Accountants

firm Regn no. 000561n

Mukesh Goyal Mg. partner Membership no.081810place : new DelhiDate : 24th August, 2013

213


Particulars NotesAs at

31 March 2013 (`)

As at 31 March 2012

(`)I. EQUITY AND LIABILITIES

1 Shareholders’ funds(a) Share capital 3 569,600,700 500,500,700 (b) Reserves and surplus 4 3,571,396 (5,273,606)

573,172,096 495,227,094 2 Share Application Money Pending allotment – 69,100,000

– 69,100,000 3 Non-current liabilities

(a) long-term borrowings 5 2,326,853,600 898,900,000 (b) Deferred tax liabilities 7 868,475 –

2,327,722,075 898,900,000 4 Current liabilities

(a) trade payable 6 107,729,043 1,140,420,000 (b) other current liabilities 8 164,919,718 396,587,446 (c) Short-term provisions 9 9,771,936 –

282,420,697 1,537,007,446 TOTAL 3,183,314,868 3,000,234,540

II. ASSETS1 Non-current assets

(a) fixed assets(i) tangible assets 10(a) 2,410,619,502 1,905,463,353 (ii) p & M work-in-progress 10(b) 491,000,000 1,035,900,000 (iii) pre-operative expenses pending allocation 11 89,139,754 34,297,505

(b) long-term loans and advances 12 52,085 15,052,085 (c) other non-current assets 13 1,517,873 –

2,992,329,214 2,990,712,943 2 Current assets

(a) trade receivables 14 59,028,925 725,080 (b) Cash and bank balances 15 103,879,961 2,956,308 (c) Short-term loans and advances 12 28,076,768 5,840,209

190,985,654 9,521,597 TOTAL 3,183,314,868 3,000,234,540

Summary of significant accounting policies 2The accompanying notes are an integral part of the financial statements

Signed in terms of our report of even dateFor Doogar & AssociatesChartered Accountantsfirm Regn no:000561n

for and on behalf of the Board of Directors ofBHILWARA GREEN ENERGY LTD

Mukesh Goyal Riju Jhunjhunwala Rishabh JhunjhunwalaMg. partner M.no. 081810

DirectorDIn-00061060


place : new DelhiDate : 24th August, 2013

214


Particulars Notes

Year ended 31st March,

2013 (`)

Year ended 31st March,

2012 (`)

I. Revenue from operations (Gross) 16 300,286,715 725,080 less: excise Duty – – Revenue from operations (Net) 300,286,715 725,080

II. Other Income 17 73,909,073 – III. Total Revenue (I + II) 374,195,788 725,080 IV. Expenses

Employee benefit expense 18 5,880,881 225,148 other expenses 19 20,124,756 1,109,129 Depreciation and amortization expense 20 175,285,399 3,429,926 finance costs 21 163,191,275 971,452 Total Expenses 364,482,311 5,735,655

V. Profit/(loss) before exceptional and extraordinary items and tax (III - IV)

9,713,477 (5,010,575)

VI. Exceptional items/ Extraordinary items – – VII. Profit/(loss) before tax (V -VI) 9,713,477 (5,010,575)VIII. Tax expense:

(1) Current taxCurrent tax (MAt) 1,627,196 – MAt Credit entitlement (1,627,196) – net Current tax – –

(2) Deferred tax charge/ (credit) 868,475 IX. Profit (loss) for the period from continuing operations

(VII - VIII) 8,845,002 (5,010,575)

X. Profit (loss) for the period 8,845,002 (5,010,575)XI. Earnings per equity share: (Par value of ` 10 each)

Basic epS (`) 22 0.17 (1.19)The accompanying notes are an integral part of the financial statements

StAteMent of pRofIt AnD loSS foR tHe YeAR enDeD 31St MARCH, 2013







215

Particulars 2012–2013 (`)

2011–2012 (`)

CASH FLOW FROM OPERATING ACTIVITIESProfit/(Loss) Before Tax 9,713,477 (5,010,575)Adjustments for :Add: Depreciation 175,285,399 3,429,926

Interest paid 163,191,275 971,452 less: Interest received (8,909,073) –

(Profit) / Loss on Sale of Fixed Assets – – preliminary exps Written off –

Operating Profit before working capital changes 339,281,078 (609,197)Working CapitalSundry Debtors (58,303,845) (725,080)Inventories – – loans & advances /other current assets (8,754,432) (20,892,294)Deferred tax Assets (868,475) – liabilities and provisions (1,256,213,945) 1,536,992,446 Income tax 1,627,196 – Net cash from Operating Activities (983,232,423) 1,514,765,875 CASH FLOW FROM INVESTMENT ACTIVITIES Acquisition of fixed Assets 190,383,797 2,979,090,784 Sale of fixed Assets – – Investments – – Interest Received (8,909,073) – Net cash from investing activities (181,474,724) (2,979,090,784)CASH FROM FINANCING ACTIVITIES proceeds from Issuance of equity Shares – 569,100,000 long term Borrowings 1,428,822,075 898,900,000 Short term Borrowings – – Interest paid (163,191,275) (971,452)Net cash from financing activities 1,265,630,800 1,467,028,548 Net increase / (decrease) in cash and cash equivalents 100,923,653 2,703,639 Cash and cash equivalents at the beginning of the year 2,956,308 252,669 Cash and cash equivalents at the end of the year 103,879,961 2,956,308 Components of Cash & Cash Equivalent:Cash on hand 9,873 36,503 With scheduled banks :

In Current Accounts 1,738,838 2,919,805 In Deposit Accounts 102,131,250

TOTAL 103,879,961 2,956,308

CASH floW StAteMent foR tHe YeAR enDeD 31 MARCH, 2013







216


1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The financial statements have been prepared to comply in all material respects with the Accounting Standards notified by Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis. the accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 Use of estimates


2.2 Fixed & Intangible assets

Fixed Assets


Intangible Assets

Capital Expenditure on purchase and development of identifiable non-monetary assets without physical substance is recognized as Intangible Assets in accordance with the principles given under AS-26: Intangible Assets. these are grouped and separately shown under the schedule of fixed Assets.

2.3 Depreciation & Amortisation

(a) Tangible Assets

On Plant and Machineries (Wind turbine generator)

Based on technical opinion obtained, the estimated useful life of each WtG is considered as 13 years. Accordingly the rate of depreciation has been provided on straight line method @ 7.69% p.a. the following methods of depreciation are used by the company for remaining fixed assets:

Fixed Assets other than Plant & Machinery:

Written down Value Method at the rates prescribed in Schedule XIV of the Companies Act,1956

Leasehold Land

lease hold land (Reserve forests area) is written off over the period of lease.

(b) Intangible Assets

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

2.4 Impairment of assets

Specified assets are reviewed for impairment wherever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount for which the assets carrying amount exceeds its recoverable amount being the higher of the assets net selling price and its value in use. Value in use is based on the present value of the estimated future cash flows relating to the assets. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (i.e. cash generating units).

previously recognized impairment losses are reversed where the recoverable amount increases because of favorable changes in the estimates used to determine the recoverable amount since the last impairment was recognized. A reversal of assets impairment loss is limited to its carrying amount that would have been determined (net of depreciation or amortization) had no impairment loss been recognized in prior years.

noteS to tHe fInAnCIAl StAteMentS

217

2.5 Project & Pre-operative Expenses

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

2.6 Borrowing Costs


2.7 Segment Reporting







Unallocated items

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

Segment Policies


2.8 Employee Benefits

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

(a) Provident Fund


(b) Gratuity

Gratuity is a post employment benefit and is in the nature of a defined benefit plan. The liability recognized in the Balance Sheet in respect of the gratuity is the present value of the defined benefit/obligation at the balance sheet date less the fair value of plan assets, together with adjustment for unrecognized actuarial gains or losses and past service costs. The defined benefit/ obligation are calculated at or near the balance sheet date by an independent actuary using the projected unit credit method.

Actuarial gains and losses arising from past experience and changes in actuarial assumptions are charged or credited to the Statement of Profit and Loss in the year to which such gains or losses relate.


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



218


2.9 Valuation of Inventories

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


2.10 Revenue Recognition

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

Sale of Electricity:

Revenue from sale of electricity is recognized on the basis of billable electricity actually transmitted to customers.

Interest:


Dividend

Dividend on investment with mutual funds and others is recognized on declaration basis.

Voluntary Emission Rights (VER):

Revenue is recognized as and when the VERs are certified and sold and it’s probable that the economic benefits will flow to the company.

2.11 Taxes on Income

tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961. Deferred tax reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the taxes on income levied by same governing taxation laws. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits. In the current year deferred tax has not been recognized since there is no virtual certainty of realization due to business profits in the coming year


the carrying amount of deferred tax assets are reviewed at each balance sheet date. the Company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

MAt credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the Minimum Alternative tax (MAt) credit becomes eligible to be recognized as an asset inaccordance with the recommendations contained in Guidance note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the Statement of Profit and Loss and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAt Credit entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income tax during the specified period.

2.12 Earning per share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting period. the weighted average number of equity shares outstanding during the period is adjusted for events of bonus issue, bonus element in a rights issue to existing shareholders, share split and reverse share split (consolidation of shares)

219


2.13 Provisions & Contingent liabilities




2.14 Cash and cash equivalents

Cash and cash equivalents comprise cash and cash on deposit with banks and corporations. the Company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

3. SHARE CAPITAL

ParticularsAs at

31 March, 2013 Amount (`)

As at 31 March, 2012

Amount (`)Authorized 6,00,00,000 (previous year 6,00,00,000) equity shares of ` 10 each 600,000,000 600,000,000 Issued, Subscribed and fully paid-up 5,69,60,070 (previous year 5,00,50,070) equity shares of ` 10 each fully paid up

569,600,700 500,500,700

Notes:

(a) Reconciliation of the shares outstanding at the beginning and at the end of the reporting period

Particulars 2012-13 2011-12

No. of shares Amount (`) No of Shares Amount (`)Equity SharesShares outstanding at the beginning of the year

50,050,070 500,500,700 50,070 500,700

Shares Issued during the year 6,910,000 69,100,000 50,000,000 500,000,000 Shares bought back during the year – – – –Shares outstanding at the end of the year

56,960,070 569,600,700 50,050,070 500,500,700

(b) Terms/rights attached to Equity Shares

the company has only one class of equity shares having par value of ̀ 10 per share. each holder of equity shares is entitled to one vote per share. In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. the distribution will be in proportion to the number of equity shares held by the shareholders.

(c) Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date:

ParticularsAs at

31 March 2013 (No. of Shares)

As at 31 March 2012 (No. of Shares)

equity shares allotted as fully paid bonus shares by capitalization of securities premium

NIL nIl

equity shares allotted as fully paid bonus shares by capitalization of profit

NIL nIl

equity shares issued consequent to amalgamation of a subsidiary company

NIL nIl

220



ParticularsMarch, 2013 March, 2012

No. of shares % holding No. of shares % holdingEquity shares of `10 each fully paid upBhilwara energy limited 56,960,070 100 50,050,070 100



ParticularsAs at



Amount (`)Surplus/(deficit) in the Statement of Profit and LossBalance as per last financial statements (5,273,606) (263,031)Profit/(Loss) for the year 8,845,002 (5,010,575)Net surplus/(deficit) in the statement of Profit & Loss 3,571,396 (5,273,606)TOTAL 3,571,396 (5,273,606)

5. LONG-TERM BORROWINGS

Particulars

Long-term Current maturitiesAs at

31 March 2013 Amount (`)

As at 31 March 2012

Amount (`)

As at 31 March 2013

Amount (`)

As at 31 March 2012

Amount (`)Secured(a) Debentures

Compulsory Convertible Debentures * 388,200,000 148,900,000 – – (b) Term Loans – –

From Financial Institutions International finance Corporation (IfC)**

538,422,600 – 34,977,400 –

Indian Renewable energy Development Agency ltd (IReDA)***

1,400,231,000 750,000,000 99,769,000 –

2,326,853,600 898,900,000 134,746,400 – Amount disclosed under the head "other current liabilities"

– – (134,746,400) –

(note no.8)TOTAL 2,326,853,600 898,900,000 – –

*(A) Debentures

i) Compulsory Convertible Debentures carries interest @ SBI Base Rate + 2.50% (Subject to a Cap/ floor of 12.5%/ 11.5%)

ii) During the year, the company issued Compulsory Convertible Debentures worth ` 19,00,00,000 and ` 4,93,00,000 on 20 April, 2012 and 31 January, 2013 respectively to IFCI Ltd. In last financial year, the company issued Compulsorily Convertible Debentures worth ` 14,89,00,000 on 26 March, 2012 to IfCI ltd. the debentures are convertible after 36 months from the date of issue.

iii) Compulsory Convertible Debentures shall be converted into equity share based on mutually agreed valuation at the end of 3rd year from the date of disbursement.

iv) the Compulsory Convertible Debentures are secured by pledge of Bhilwara energy limited (promoter) shareholding in the company over & above to the pledge towards the lenders (subject to a maximum of 49% of total project equity), Corporate Guarantee of Bhilwara energy limited & second charge on project assests.

v) As on date, 1,48,09,618 equity shares held by Bhilwara energy ltd in the company is pledged with IfCI ltd.

221

**(B) Term Loans-IFC

i) International finance Corporation (IfC) has sanctioned a term loan ` 68,70,00,000 at weighted average rate of interest of 10.75%. the loan is secured by the followings :-

a) Pari Passu first charge by the way of mortgage in favour of IFC on all the company's immovable properties (excluding Reserve forest land) /assets both existing and future pertaining to the project.

b) Pari Passu first charge by the way of Hypothetication in favour of IFC of company's all movable assets/ properties both existing and future pertaining to the project.

c) pledge equivalent to 74% equity held by Bhilwara energy ltd (promoter) in the company. further, pledge of 26% equity has to be made, which is now pledged with IfCI ltd upon release by IfCI ltd.

d) As on date, 4,21,50,392 equity Shares are pledged with IDBI trusteeship Services ltd. (Security trustee) on behalf of IReDA & IfC.

e) Charge/Assignment over project documents and authorisation, bank accounts, revenue and receivables, subordinated loan advanced by sponsor and forest land facilitation letter.

f) Amount repayable in the next one year `. 3,49,77,400.

***(C) Term Loans-IREDA

i) Indian Renewable energy Development Agency limited (IReDA) has sanctioned a term loan ` 154,68,00,000 in previous year at rate of interest of 12.25%. the loan is secured by the followings:-

a) Pari Passu first charge by the way of mortgage in favour of IREDA on all the company's immovable properties (excluding Reserve forest land) /assets both existing and future pertaining to the project.

b) Pari Passu first charge by the way of Hypothetication in favour of IREDA of company's all movable assets/ properties both existing and future pertaining to the project.

c) pledge equivalent to 51% equity held by Bhilwara energy ltd (promoter) in the company. However, in case of expansion, the company bringing in more equity, the pledge of share should not fall below 26% of the total equity of the company.

d) As on date, 4,21,50,392 equity shares are pledged with IDBI trusteeship Services ltd. (Security trustee) on behalf of IReDA & IfC.

e) Amount repayable in the next one year ` 99,769,000

Terms of Repayment are as follows:

Lending Institution

Rate of Interest

(%)

No. of Installments

FY 13-14 (Amount `)

FY 14-15 (Amount `)

FY 15-16 (Amount `)

FY 16-17 (Amount `)

FY 17-18 (Amount `)

International finance Corporation

10.75 25* 34,977,400 44,655,000 43,625,000 46,373,000 50,666,000

Indian Renew-able energy Development Agency

12.25 72** 99,769,000 100,542,000 98,222,000 104,409,000 114,154,000

* Half-yearly Installments, repayable upto 2025-26 ** 6 Installments per year, repayable upto 2024-25

6. TRADE PAYABLE

ParticularsAs at



Amount (`)Tradeoutstanding dues of creditors - Due to Directors – – - Due to others 107,729,043 1,140,420,000 TOTAL 107,729,043 1,140,420,000

222


7. DEFERRED TAX (NET)

ParticularsAs at



Amount (`)Deferred tax liabilities*Arising on account of Timing differencesAccumulated Depreciation 24,874,933 – Deferred tax assetspreliminary expenses 759,473 – unabsorbed Depreciation 23,246,985 – Net deferred tax Assets/ (Liability) (868,475) – Movement – – opening Balance – – Addition/ (deduction) during the year – – Closing Balance (868,475) –

* Also Refer note no 25

8. OTHER CURRENT LIABILITIES

ParticularsAs at



Amount (`)Current maturities of long-term borrowings (note no.5) 134,746,400 – Employees Benefit Expenses Payable 441,139 – Interest accrued but due on borrowings 2,147,969 550,726 Amount payable to others 626,148 1,462,558 Amount due to Holding Company 25,440,199 390,393,845 outstanding dues of creditors 202,391 – Statutory dues 1,315,472 4,180,317 TOTAL 164,919,718 396,587,446

9. PROVISIONS

Particulars

Long–term Short–termAs at


As at 31 March 2012

Amount (`)

As at 31 March 2013

Amount (`)

As at 31 March 2012

Amount (`)Provision for Employee Benefitsprovision for ltA – – 62,071 – Othersprovision for term loan interest recoverable (Regen)

– – 8,082,669 –

provision for Income tax (MAt) – – 1,627,196 – TOTAL – – 9,771,936 –

223

10. TANGIBLE ASSETS AND INTANGIBLE ASSETS


land Amount (`)

Leasehold Land

Amount (`)

Plant and Machinery

Amount (`)

Office equipments Amount (`)

Furniture and Fixtures

Amount (`)

Computers Amount(`)

Total (Tangible

Assets) Amount (`)

Software Amount (`)

Total (Intangible

Assets) Amount (`)

Cost or valuationAs at 1 April 2011Additions 12,000,000 80,000,000 1,816,765,394 39,242 96,651 1,908,901,287 – Disposals – – Other adjustments – – – Exchange Differences – – – Borrowing Costs – – As at 31 March 2012 12,000,000 80,000,000 1,816,765,394 39,242 – 96,651 1,908,901,287 – – Additions 16,000,000 664,392,348 49,200 680,441,548.00 – Disposals – – Other adjustments – – Exchange Differences – – Borrowing Costs – As at 31 March 2013 28,000,000 80,000,000 2,481,157,742 39,242 – 145,851 2,589,342,835 – – Depreciation As at 1 April 2011

– –

Charge for the year 547,945 2,881,981 1,805 6,203 3,437,934 – Disposals – – As at 31 March 2012 – 547,945 2,881,981 1,805 – 6,203 3,437,934 – – Charge for the year 2,600,000 172,633,929 5,208 46,262 175,285,399Disposals – – As at 31 March 2013 – 3,147,945 175,515,910 7,013 – 52,465 178,723,333 – – Net Block As at 31 March 2013 28,000,000 76,852,055 2,305,641,832 32,229 – 93,386 2,410,619,502 – – As at 31 March 2012 12,000,000 79,452,055 1,813,883,413 37,437 – 90,448 1,905,463,353 – – (10)(b)Capital Work In Progress 491,000,000

Notes:

1. An application for transfer of Leasehold land for 20 WTG locations is pending for approval from Chief Conservator of Forest & Nodal Officer Nagpur.

2. The leasehold land amount ` 80,000,000/-(20 WTG @ ` 4000000 per WTG) will be written off during the lease period of 30 years. The amount has been paid for acquisition/site development & paid to Renewable Energy Generation Private Ltd.

3. Last Year Depreciation allocated for Preoperative expenses ` 3155 & balance amount of ` 4853 to Plant & Machinery.

11. PROJECT AND PRE-OPERATIVE EXPENSES (PENDING ALLOCATION)

ParticularsAs at



Amount (`)Employee Benefit ExpensesSalaries, wages & bonus 2,994,340 2,801,816 Contribution to provident and other funds 126,146 115,341 Workmen and staff welfare expenses 104,740 114,635 TOTAL (A) 3,225,226 3,031,792 Administrative and other expensesRepairs and maintenance 1,021 538 travelling expense 562,333 552,828 Conveyance 190,362 186,832 Communication expenses 35,197 30,810 legal & professional charges 4,788,990 7,329,019 fee & subscription 1,114,071 132,530 finance Charges 6,517,056 13,964,052 Interest paid 72,606,004 8,927,106 financial / bank charges 45,445 92,965 Miscellaneous expenses 52,593 45,878 Depreciation 1,456 3,155 TOTAL (B) 85,914,528 31,265,713 TOTAL (A+B) 89,139,754 34,297,505

224


12. LOANS AND ADVANCES

Particulars

Long-term Short-termAs at


As at 31 March 2012

Amount (`)

As at 31 March 2013

Amount (`)

As at 31 March 2012

Amount (`)Unsecured considered goods (unless otherwise stated)Capital Advances – – – – Security Deposits 52,085 15,052,085 – – loans and advances to related parties (Subsidiary Companies)Other Loans and Advancesprepaid expenses – – 4,973,488 3,376,209 unamortized Misc expenditure – – 2,464,000 GBI Claim Receivable – – 20,585,177 – MAt Credit Receivable 1,627,196 tDS Receivable – – 890,907 – TOTAL 52,085 15,052,085 28,076,768 5,840,209


ParticularsAs at



Amount (`)Interset Accured on fDR 1,517,873 – TOTAL 1,517,873 –

14. TRADE RECEIVABLES

ParticularsAs at



Amount (`)Trade receivables outstanding for a period less than six months from the date they are due for payment

Secured, considered good – – unsecured, considered good 59,028,925 725,080 unsecured, considered doubtful – – less: provision for doubtful debts – – TOTAL 59,028,925 725,080

15. CASH AND BANK BALANCES (CURRENT)

ParticularsAs at



Amount (`)Cash and cash equivalentsCash in hand 9,873 36,503 Cheques in hand – – Balances with banks in:– Current Accounts 1,738,838 2,919,805 – Deposits with original maturity for more than 3 months but less than

12 months 102,131,250 –

TOTAL 103,879,961 2,956,308

225

16. REVENUE FROM OPERATIONS

ParticularsYear ended


Year ended 31 March, 2012

Amount (`)Sale of products and services 279,701,538 725,080 Generatin Based Incentive Claim 20,585,177 – Revenue from Operations (Gross) 300,286,715 725,080 less: excise Duty – – Revenue from Operations (Net) 300,286,715 725,080 TOTAL 300,286,715 725,080

17. OTHER INCOME




Amount (`)Interest income– Bank deposits and others 8,909,073 – – Subsidiary company – – Generation loss Received (Refer foot note below) 65,000,000 – TOTAL 73,909,073 –

other Income includes the amount of ` 6,50,00,000 received by the company from Regen powertech pvt. ltd. on account of generation loss arising out of loss in High Wind Season due to delay in operationalising the Sub Station.

18. EMPLOYEE BENEFIT EXPENSES




Amount (`)Salaries, wages and bonus 5,452,588 214,073 Contribution to provident and other funds 222,766 11,075 Workmen and staff welfare expenses 205,527 –TOTAL 5,880,881 225,148

19. OTHER EXPENSES




Amount (`)Insurance 5,218,746 46,762 travelling & conveyance expenses 1,203,262 – legal & professional 4,649,173 362,097 fees and subscription 5,427,484 – prelimininary expenses w/o 2,464,000 616,000 term loan processing fees 324,488 – Bank charges 104,394 – Miscellaneous expenses 620,849 – TOTAL (A) 20,012,396 1,024,859 Payment to AuditorAs Auditor:– Audit fee 112,360 84,270 – limited Review – – In Other Capacity:– other services – – TOTAL (B) 112,360 84,270 TOTAL (A+B) 20,124,756 1,109,129

226


20. DEPRECIATION & AMORTISATION




Amount (`)Depreciation on tangible assets 175,285,399 3,433,081Amortization of Intangible assets – –

175,285,399 3,433,081 less: transferred to pre-operative expenditure – 3,155 less: transferred to Advance recoverable in cash or kind or for value to be received

– –

TOTAL 175,285,399 3,429,926

21. FINANCE COST




Amount (`)Interest ExpenseHolding company 1,785,809 – term loans 133,453,513 971,452 Debentures 27,951,953 – TOTAL 163,191,275 971,452

22. EARNING PER SHARE

ParticularsAs at



Amount (`)The Basic and Diluted Earning Per Share is as under:Net Profit After Tax 8,845,002 (5,010,575)Weighted average number of equity shares outstanding 51,962,152 4,216,738 Basic earning per Share (`) 0.17 (1.19)Face Value per Equity Share (`) 10 10

23. CONTINGENT LIABILITIES – NIL (Previous Year NIL)

As per information available with the management as certified by them, there is no contingent liability as at 31st March, 2013

24. OBLIGATIONS AND COMMITMENT OUTSTANDING

Capital contracts remaining to be executed on capital account and not provided for as on the date of Balance Sheet (net of advances) are ` 6,22,00,000 (previous Year 15,07,00,000)

25. DEFERRED TAX ASSETS/ LIABILITIES

Movement of deferred tax items in accordance with Accounting Standard – 22 ‘Accounting for taxes on Income” as under:

During the previous year, deferred tax asset was not recognized in the absence of virtual certainity of project dependent upon prevailing conditions then.

(Amount in `)

Items of deferred tax Balance as on01-4-2012

Changes during

the year

Balance as on31-03-2013

Deferred tax liabilities (a) (20,707,657) (2,48,74,933) (41,67,276)Depreciation – –Deferred tax Asset (b) 22,086,610 2,40,06,458 19,19,848unabsorbed Depreciation –net Deferred tax asset (b)-(a) 1,378,953 (8,68,475) (22,47,428)

227


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

27. DERIVATIVE INSTRUMENTS AND FOREIGN CURRENCY EXPOSURES

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

(b) particulars of un-hedged foreign currency exposures as at Balance Sheet date are nIl


a) Enterprises that directly or indirectly through one or more intermediaries, control or are controlled by or are under common control with the reporting enterprise (this includes holding companies, subsidiaries and fellow subsidiaries).i) Bhilwara energy limited - Holding Companyii) Malana power Company limited - fellow Subsidiary.iii) AD Hydro power limited - fellow Subsidiaryiv) Indo-Canadian Consultancy Services limited - fellow Subsidiaryv) Green Ventures Private Limited, Nepal - Fellow Subsidiaryvi) Balephi Jalvidyut Company limited, nepal - fellow Subsidiaryvii) Chango Yangthang Hydro power ltd. - fellow Subsidiaryviii) nJC Hydro power ltd. - fellow Subsidiaryix) LNJ Power Ventures Ltd. - Fellow Subsidiary

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

n.A

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




d) Key Management Personnel and their relatives




e) Enterprises over which any person described in (c) or (d) is able to exercise significant influence.i) Aadi Marketing Company pvt ltd ii) Bhilwara Infotechonology ltdiii) Bhilwara Services pvt ltd.iv) Bhilwara technical textiles ltd v) BMD power pvt ltd vi) BMD Renewable energy pvt ltdvii) essay Marketing Company ltdviii) Giltedged Industrial Security ltd ix) HeG limited x) HeG Graphite and Service ltd.xi) India tex fab Marketing ltdxii) Investors India ltdxiii) Kalati Holdings pvt ltdxiv) lnJ financial Services ltdxv) LNJ Bhilwara Textiles Ansuandhan Vikas Kendra

228


xvi) Maral overseas ltdxvii) nikita electrotrades pvt ltdxviii) Nivedan Vanijya Niyojan Ltdxix) Purvi Vanijya Niyojan Ltdxx) Raghav Commercial ltdxxi) Raghav Knits & textiles pvt ltdxxii) RSWM limitedxxiii) Shashi Commercial Co ltdxxiv) Veronia Tie-Up Pvt Ltd


(Amount in `)

31.03.2013 31.03.2012i) parties referred to in item (a) above

Share Application pending allotment: Bhilwara energy limited – 6,91,00,000Shares issued during the year: Bhilwara energy limited 6,91,00,000 –Amount payable- Bhilwara energy limited 2,54,40,199 39,03,93,845

ii) parties referred to in item (b) above NIL nIliii) persons referred to in (c) above NIL nIliv) persons referred to in (d) above NIL nIlv) persons referred to in (e) above NIL nIl

29. AUDITORS REMUNERATION PAID/ PAYABLE DURING THE YEAR (Amount in `)

31.03.13 31.03.12Statutory Auditors fee 1,12,360 84,270other Services NIL nIlReimbursement of expenses NIL nIlTotal 1,12,360 84,270

30. OTHER DISCLOSURES:(a) Value of import calculated:

(i) Raw Material nIl(ii) Components & Spare parts nIl(iii) Capital Goods nIl

(b) Expenditure in foreign currency nIl (c) Total value of imported raw materials nIl(d) Amount remitted in Foreign Currency nIl(e) Earning in foreign exchange nIl

31. Previous year figures have been regrouped and rearranged where necessary and confirm to this year classification.







229

ANNUAL REPORTOf

LNJ POWER VENTURES LIMITED

230


BOARD OF DIRECTORSMr. Riju JhunjhunwalaMr. Rishabh JhunjhunwalaMr. O. P. Ajmera

KEy EXECUTIVES Mr. Parish Gupta, Chief of B.D. & Mgmt. (Wind Energy)

FINANCIAL INSTITUTIONSInternational finance Corporation, Washingtons DC, USAYes Bank

STATUTORy AUDITORS M/s KRA & AssociatesChartered AccountantsNew Delhi

REgISTERED OFFICEBhilwara Bhawan40-41, Community CentreNew friends ColonyNew Delhi - 110025

CORPORATE OFFICEBhilwara TowersA-12, Sector-1Noida - 201301 (UP)

CORPORATE INfORMATION

231

DIRECTORS’ REPORT

To,

THE MEMBERS,

M/s LNJ POWER VENTURES LIMITED

Dear Member,

Your Directors have pleasure in presenting their Eighteenth Annual Report on the business and operations of the Company and Audited Statement of accounts for the year ended 31st March, 2013 together with the Auditors' Report.

1. FINANCIAL HIgHLIgHTS

(figure in `)

Particulars For the year ended 31.03.2013

for the Year ended 31.03.2012

Income from Operation 21,773 -Other Income 2,14,897 -Total Income 2,36,670 NILExpenditure 9,48,985 10,945PROFIT/(LOSS) BEFORE TAX

(7,12,315) (10,945)

Tax NIL NILPROFIT/(LOSS) AFTER TAX

(7,12,315) (10,945)

Basic Earnings Per Share (EPS) (In `)

(8.76) (0.22)

During the year under review, the company reported Loss of ` 7.12 lac on an income of ` 2.36 lac. This was on account of commissioning of the 20 MW wind power project during the end of March 2013, which resulted into generation of only 3,786 units whereas Depreciation of ` 4.70 lac and finance cost of ` 3.94 lac was charged on commissioned project to Profit & Loss Account.

The benefits from revenues from the operations of the Wind Turbine Generators (WTGs) will accrue in the next financial year i.e. from FY 2013-14. The Company expects yearly generation of 40.03 Mn units at P-75 and yearly revenue of ` 23.01 Cr.


20 MW Wind Power Project in District Jaisalmer, Rajasthan

During the year, your company became subsidiary of M/s Bhilwara Energy Limited (BEL) for developing 20 MW Wind power project in Distt. Jaisalmer, Rajasthan under Group Captive Scheme along with M/s RSWM Limited (RSWM). The entire equity of the company is held by BEL & RSWM in ratio 74:26. The total cost for setting up of the project was ̀ 117.24 crore. The project was funded in Debt:Equity ratio of 71.85:28.15.

The Project has been funded by International finance Corporation, Washington, D.C., (IfC) a member of World Bank Group and Yes Bank Limited.

The Directors’ are pleased to inform that all the 10 WTGs (of 2.0 MW each) with installed capacity of 20.0 MW were commissioned as scheduled by 31st March 2013 and have started generating electricity. The power generated from this Project is being sold to M/s RSWM Ltd. under Group Captive Structure (first of its kind for a Wind Power Project in Rajasthan) on long term PPA for 20 years.

The registration of this project to UNfCCC as a CDM project is under process.

CERC has mandated the forecasting of power generation by Wind Power Projects from 15th July 2013 onwards and in line with the prevailing RRf mechanism. As this Project falls under the RRf, suitable technical agencies for forecasting and coordination with SDCL have been appointed, you can expect some negative effects on profits due to the inaccurate forecasting in the beginning and we shall strive to improve upon the same with time.

3. ALLOTMENT OF EQUITy SHARES

To finance the setting up of 20 MW project, your company has allotted 2,60,000 fresh equity shares of Rs 10/- each at par to M/s RSWM Limited and 6,89,930 fresh equity shares of Rs 10/- each at par to M/s Bhilwara Energy Limited.

4. ALLOTMENT OF COMPULSORILy CONVERTIBLE DEBENTURES (CCD)

To finance the setting up of 20 MW project, your company has signed Debenture Subscription Agreement with M/s RSWM Limited whereby RSWM will subscribe unsecured 3200 Compulsorily Convertible Debentures (CCDs) of `1 lac aggregating to ̀ 32 crore. The CCD will carry coupon of 13.54% payable half yearly. The CCDs has a maturity period of 20 years and shall be convertible in equity shares based on fair market valuation to be done by independent agency, at the end of 20th year from the date of disbursement.

In accordance with Debenture Subscription Agreement, during the year 2012-13, RSWM subscribed 2,674 CCD of Rs 1 lac each aggregating to Rs 26.74 crore and accordingly company issued the CCDs on 21st March 2013. During the year 2013-14, RSWM subscribed the balance 526 CCD of Rs 1 lac each aggregating to Rs 5.26 crore and accordingly company issued the CCDs on 10th May 2013.

5. DIVIDEND

Due to loss during the year, your Directors’ do not propose any dividend for the financial year under

232


review.

6. PUBLIC DEPOSITS

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

7. ENERgy CONSERVATION, TECHNOLOgy ABSORPTION AND FOREIgN EXCHANgE EARNINgS & OUTgO

Information required to be disclosed under Section 217 (1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the report of Board of Directors) Rules, 1988 has been given in the Annexure I, forming part of this Report.

8. PARTICULARS OF EMPLOyEES

During the year 2012-13, 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.

9. DIRECTORS

During the period under review, Mr Riju Jhunjhunwala and Mr Rishabh Jhunjhunwala were appointed as an Additional Directors of the Company w.e.f. 6th December 2012 until the conclusion of the next Annual General Meeting. The Board recommends the regularization of the appointment of Mr Riju Jhunjhunwala and Mr Rishabh Jhunjhunwala as Directors of the company.

During the year, Mr Vimal Banka and Mr Bhaskar Pratap Singh resigned from the Board of Directors of the Company. The Board wishes to place on record the heartfelt appreciation towards the contribution made by both of them during their tenure as Directors of the Company.

In accordance with the provisions of the Companies Act, 1956 and of the Articles of Association of the Company, Mr O P Ajmera, Director of the Company, is liable to retire by rotation at the forthcoming Annual General Meeting and being eligible, offer himself for re-appointment. The Board recommends their re-appointment at the ensuing Annual General Meeting.

10. DIRECTORS’ RESPONSIBILITy STATEMENT

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



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


11. AUDITORS

Due to pre-occupation, during the year, M/s Singhal Rajeev and Associates, Chartered Accountants has resigned from the Statutory Auditors of the Company. The Board of Directors placed on records the sincere thanks and appreciation for the contribution made by them during their tenure as statutory auditors of the company.

The Company had in their Extra-Ordinary General Meeting held on 9th february 2013 had appointed M/s KRA & Associates, Chartered Accountants as Statutory Auditors of the Company for the financial year 2012-13. M/s KRA & Associates, Chartered Accountants, Statutory Auditors of the Company, will retire from their office at the ensuing Annual General Meeting. They are, however, eligible for re-appointment. M/s KRA & Associates, Chartered Accountants, has conveyed their willingness for re-appointment as statutory auditors of the Company for the financial year ending on 31st March, 2014. The Company has also received consent letter from M/s KRA & Associates, Chartered Accountants, under Section 224(1B) of the Companies Act, 1956, confirming their eligibility and showing their willingness for appointment as statutory auditors of the Company for the financial year ending on 31st March, 2014. The Board recommends for the appointment of M/s KRA & Associates, Chartered Accountants, as Statutory Auditors of the Company.


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

13. ENVIRONMENT, HEALTH AND SAFETy

At the inception of the project, EIA study has been conducted. Environment Management Plan, comprising of international best practices, procedure and norms, shall be adopted to take care of environment and social impacts on the Projects. Environmental Management Plan involves mitigation, monitoring and institutional measures to eliminate, offset or reduce adverse environmental and social impacts in or around the project area.

further, the Company is committed to IfC to comply with IfC policy and performance standards on Social & Environmental Sustainability for the project.

14. CORPORATE SOCIAL RESPONSIBILITy

We believe that, wherever we operate, our activities should generate economic benefits and opportunities for an enhanced quality of life for society at large; that our relationships should be

233

honest and open; and that we should be held accountable for our actions.

As a constructive partner in the communities in which it operates, your Company will be taking concrete action to carry out its social responsibility and addressing health and education requirements of the nearby region.

15. ACKNOWLEDgEMENTS

Your Directors’ acknowledge the assistance and continued support provided by the Government of Rajasthan, other government agencies like RRECL, lenders like IfC, Washington and Yes Bank Ltd and our business partners and consultants for the project & look forward to their continued support and cooperation in the coming years as well. Your Directors’ also like to express great appreciation for the commitment and contribution of its employees at all levels.


fOR AND ON BEHALf Of THE BOARD Of DIRECTORS

Riju JhunjhunwalaDirector

Din-00061060

Rishabh JhunjhunwalaDirector

Din-03104458

PLACE: NOIDA DATE: 24th August 2013

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 -

• The technology for wind power project has been provided by AMSC Austria – subsidiary of USA based American Superconductors Corporation (AMSC) a well known company in the field of Wind Energy, through their business partners in India, who are acting as the EPC cum Project Developer. The operations and maintenance of the wind farm is also with the Project Developer. Our team has been extensively involved during all the phases of manufacturing, quality control, micro-siting, erection and commissioning. The operations of the commissioned WTGs are being monitored on a daily basis. The maintenance of the WTGs is also being monitored on an ongoing basis.

• The operations of the wind power plant is monitored through SCADA, for which suitable training has been provided to our staff through site visits and live generation systems.

3. FOREIgN EXCHANgE EARNINgS AND OUTgO (in ` million)

2012-13 2011-12I. foreign Exchange Outgo NIL NIL

Total NIL NILII. foreign Exchange Earnings NIL NIL

Total NIL NIL

fOR AND ON BEHALf Of THE BOARD Of DIRECTORS

Riju JhunjhunwalaDirector

Din-00061060

Rishabh JhunjhunwalaDirector

Din-03104458

PLACE: NOIDA DATE: 24th August 2013

234


INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS LNJ POWER VENTURES LIMITED.

1. We have audited the accompanying financial statements of LNJ Power Ventures Limited (“the Company”), which comprise the Balance Sheet as at 31st March, 2013, the Statement of Profit and Loss and the Cash flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

2. Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 (“the Act”). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

3. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

6. In our opinion and to the best of our information and according to the explanations given to us, the

financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March ‘ 2013;

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

c) In the case of Cash flow Statement of the cash flow for the year ended on that date.

7. As required by the Companies (Auditor’s Report) Order, 2003 (“the Order”) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

8. As required by section 227(3) of the Act, we report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books

c) The Balance Sheet and Statement of Profit and Loss dealt with by this Report are in agreement with the books of accounts.

d) In our opinion, the Balance Sheet and Statement of Profit and Loss comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

e) On the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

For KRA & ASSOCIATESChartered AccountantsfRN: 002352N

Shyamal KumarPartnerM.No. 509325

Place: New DelhiDate : 24th August, 2013

235

ANNEXURE REFERRED TO IN PARAgRAPH 7 OF THE AUDITOR’S REPORT TO THE MEMBERS OF LNJ POWER VENTURES LIMITED ON THE ACCOUNTS FOR THE yEAR ENDED 31ST MARCH 2013.

(i) (a) According to the information & explanation given to us, the company is in the process of preparing the fixed assets register.

(b) As per the information and explanation given to us, during the current year the assets were capitalized on March 29 & 30, 2013. Hence, the verification shall be done in next year.

(c) In our opinion & according to the information and explanation given to us, there was no disposal of a substantial part of fixed assets during the year.

(ii) There was no inventory during the company. Accordingly Paragraph 4 (ii) of the Order is not applicable.

(iii) The company has not granted or taken any loan to/ from parties covered under register required to be maintained u/s 301 of The Companies Act, 1956. Accordingly, clause 4(iii) of the Order is not applicable.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of fixed assets & for sale of electricity generated. During the course of our audit, we have not observed any major instance of weakness or continuing failure to correct any major weaknesses in the internal controls of the company in respect of these areas.

(v) (a) In our opinion & according to the information and explanations given to us by the management, the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that are required to be entered in the register maintained u/s 301 have been so entered.

(b) In our opinion and according to the information and explanation given to us by the management, the transactions made in pursuance of such contracts or arrangement exceeding value of Rupees five lacs have been entered into during the financial year, however, in the absence of comparable transactions with other parties we are unable to offer any comment at reasonability of price charged compared with prevailing market price at the relevant times.

(vi) The Company has not accepted any deposits from the public covered under section 58A and 58AA of the Companies Act, 1956.

(vii) The requirement of internal audit was not applicable to the company for the period under the report.

(viii) The maintenance of cost records under clause (d) of sub section (1) of section 209 of the act is applicable to the electricity generation activities of company but the company has exemption to maintain cost records as it had not crossed threshold limit of net worth and turnover for the year.

(ix) (a) According to the records of the company, undisputed statutory dues including Provident fund, Investor Education and Protection fund, Employees’ State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess etc to the extent applicable and any other statutory dues have generally been regularly deposited with the appropriate authorities.

(b) According to the information and explanations given to us by the management, there were no outstanding statutory dues in arrears as at 31st of March, 2013 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, there were no dues of income tax, wealth tax, service tax, sales tax, customs duty and excise duty which have not been deposited on account of any dispute.

(x) The Company has accumulated losses at the end of financial year which are less than fifty percent of net worth. The company has incurred cash losses in the current financial year & in the immediately preceding financial years.

(xi) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the company has not defaulted in repayment of dues to a financial institution, bank or debenture holders. The company has no outstanding at year end in respect of dues to a financial institution, bank or debenture holders.

(xii) In our opinion and according to the information and explanations given to us, the company has not granted any loans and advances on the basis of security by way pledge of shares, debentures and other securities.

(xiii) In our opinion, the company is not a chit fund or a Nidhi / mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of Order are not applicable to the Company.

(xiv) In our opinion & according to information and explanations given to us, the company is not dealing or trading in shares, securities, mutual fund units & other investments.

(xv) According to the information and explanations given to us, the company has not given any guarantees for loan taken by others from bank or financial institution.

236


(xvi) Based on information & explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(xvii) According to information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) The Company has made preferential allotment of shares to companies covered in the register maintained under section 301 of the Companies Act, 1956. The price of allotment prima facie is not prejudicial to the interest of the company.

(xix) Based on information & explanations given to us by the management, the company has not created any security or charge for the compulsory convertible debentures issued by it.

(xx) The Company has not raised any money through a public issue during the year.

(xxi) Based upon audit procedures performed and according to the information and explanations given to us by the management and to the best of our knowledge, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For KRA & ASSOCIATESChartered AccountantsfRN: 002352N

Shyamal KumarPartnerM.No. 509325

Place: New DelhiDate : 24th August, 2013

237

BALANCE SHEET AS AT MARCH 31, 2013

As per our report of even date attached

For KRA & ASSOCIATES FOR LNJ POWER VENTURES LIMITEDChartered Accountantsfirm Reg. No.002352N

Shyamal Kumar Riju Jhunjhunwala O.P. Ajmera Partner Director DirectorMembership No.509325 DIN:00061060 DIN:00322834

Place : New Delhi Dated : 24th August 2013

Particulars Notes As at March 31, 2013

(Amount in `)

As at March 31, 2012

(Amount in `)EQUITy AND LIABILITIESShareholders’ fundsShare capital 2 10,000,000 500,700 Reserves and surplus 3 (2,304,609) (1,592,294)

Non-current liabilitiesLong-term borrowings 4 664,400,601 –

Current liabilitiesTrade payables 465,870,000 – Other current liabilities 5 31,281,087 1,396,750 TOTAL 1,169,247,079 305,156 ASSETSNon-current assetsFixed assetsTangible assets (Net) 6 1,163,957,512 –

Current assetsTrade receivables (Secured, Considered good)

21,773 –

Cash and bank balances 7 3,684,327 305,156 Short-term loans and advances 8 1,583,467 –TOTAL 1,169,247,079 305,156 Significant Accounting Policies 1The accompanying notes are an integral part of financial statements

238




Shyamal Kumar Riju Jhunjhunwala O.P. Ajmera Partner Director DirectorMembership No.509325 DIN:00061060 DIN:00322834


STATEMENT Of PROfIT & LOSS fOR THE YEAR ENDED MARCH 31, 2013

Particulars Notes For the year 2012–13

(Amount in `)

For the year 2011–12

(Amount in `)Income:Revenue from operations (power sale) 21,773 – Other income 9 214,897 – Total income 236,670 – Expenses:finance costs 10 393,909 – Other expenses 11 84,180 10,945 Depreciation & ammortization expense 470,896 – Total expenses 948,985 10,945 Loss before tax (712,315) (10,945)Tax expense – – Loss after tax (712,315) (10,945)Earnings per share (Nominal value ` 10 per share)

12

Basic (8.76) (0.22)Diluted (8.76) (0.22)Significant Accounting policies 1The accompanying notes are an integral part of financial statements

239

CASH fLOW STATEMENT fOR THE YEAR ENDED MARCH 31, 2013

Particulars year ended March 31, 2013

(Amount in `)

year ended March 31, 2012

(Amount in `)CASH FLOW FROM OPERATINg ACTIVITIESProfit/(Loss) Before Tax (712,315) (10,945)Adjustments for :Depreciation 470,896 – Interest received (214,897) – Cash generated from Operations (456,316) (10,945)Direct Taxes Paid – – Operating Profit before working capital changes (456,316) (10,945)Adjustments for Changes in Working Capital:Trade receivables (21,773) – Loans & advances /Other current assets (1,583,467)Liabilities and provisions 495,754,337 3,000 Net cash from operating activities 493,692,781 (7,945)CASH FLOW FROM INVESTMENT ACTIVITIES Acquisition of fixed Assets 1,164,428,408 – Interest Received (214,897) – Net cash from investing activities (1,164,213,511) – CASH FROM FINANCINg ACTIVITIES Proceeds from Issuance of Equity Shares 9,499,300 – Long Term Borrowings 664,400,601 – Net cash from financing activities 673,899,901 – Net increase / (decrease) in cash and cash equivalents 3,379,171 (7,945)Cash and cash equivalents at the beginning of the year 305,156 313,101 Cash and cash equivalents at the end of the year 3,684,327 305,156 Components of cash and cash equivalents:Cash on hand 48,841 6,852 With scheduled banks :In Current Accounts 3,635,486 298,304Cash and cash equivalents at the end of the year 3,684,327 305,156



Shyamal Kumar Riju Jhunjhunwala O.P. Ajmera Partner Director DirectorMembership No.509325 DIN: 00061060 DIN: 00322834


240


SCHEDULES TO ACCOUNTS

NOTE1: SIgNIFICANT ACCOUNTINg POLICIES

(1) BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The financial statements have been prepared to comply in all material respects with the Accounting Standards notified by Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

(2) USE OF ESTIMATES


(3) CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprise cash and cash on deposit with banks and corporations. The Company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

(4) FIXED ASSETS

fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Borrowing cots relating to acquisition of fixed assets which take substantial period of time to get ready for there intended use are also included to the extent they relate to the period till such assets are ready to put to use.

Expenditure directly relating to construction activity is capitalized & apportioned to fixed assets on completion of the project. Indirect expenditure incurred during there construction period which is not related to the construction activity nor is incidental thereto has been charged to the Statement of Profit & Loss.

(5) INTANgIBLE ASSETS

Capital Expenditure on purchase and development of identifiable non-monetary assets without physical substance is recognized as Intangible Assets in accordance with the principles given under AS-26: Intangible Assets. These are grouped and separately shown under the schedule of fixed Assets.

(6) DEPRECIATION/AMORTISATION

(a) Tangible Assets:

Depreciation on Plant & Machinery on Straight Line Method prescribed in Schedule XIV of the Companies Act, 1956 for plants running on continuous basis.

Fixed Assets other than Plant & Machinery:

Written down Value Method at the rates prescribed in Schedule XIV of the Companies Act, 1956.

Leasehold Land

Lease hold land (Reserve forests area) is written off over the period of lease.

(b) Intangible Assets

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

(7) REVENUE RECOgNITION

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

241

Sale of Electricity:

Revenue from sale of electricity is recognized on the basis of billable electricity actually transmitted to customer.

Interest:


Dividend

Dividend on investment with mutual funds and others is recognized when the right to receive such dividend is established.

Voluntary Emission Rights (VER):

Revenue is recognized as and when the VERs are certified and sold and it’s probable that the economic benefits will flow to the company.

(8) RETIREMENT BENEFITS

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

(a) Provident Fund

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

(b) gratuity

Gratuity is a post employment benefit and is in the nature of a defined benefit plan. The liability recognized in the Balance Sheet in respect of the gratuity is the present value of the defined benefit/obligation at the balance sheet date less the fair value of plan assets, together with adjustment for unrecognized actuarial gains or losses and past service costs. The defined benefit/ obligation are calculated at or near the balance sheet date by an independent actuary using the projected unit credit method.

Actuarial gains and losses arising from past experience and changes in actuarial assumptions are charged or credited to the Statement of Profit and Loss in the year to which such gains or losses relate.


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



(9) BORROWINg COSTS


(10) EARNINg PER SHARE

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the period is adjusted for events of bonus issue, bonus element in a rights issue to existing shareholders, share split and reverse share split (consolidation of shares).


242


(11) TAXES ON INCOME

Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961. Deferred tax reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.



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

MAT credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the Minimum Alternative tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the Statement of Profit and Loss and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specified period.

(12) IMPAIRMENT OF ASSETS

Specified assets are reviewed for impairment wherever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount for which the assets carrying amount exceeds its recoverable amount being the higher of the assets net selling price and its value in use. Value in use is based on the present value of the estimated future cash flows relating to the assets. for the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (i.e. cash generating units).

Previously recognized impairment losses are reversed where the recoverable amount increases because of favorable changes in the estimates used to determine the recoverable amount since the last impairment was recognized. A reversal of assets impairment loss is limited to its carrying amount that would have been determined (net of depreciation or amortization) had no impairment loss been recognized in prior years.

(13) PROVISIONS & CONTINgENT LIABILITIES



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

243

NOTES FORMINg PART OF THE FINANCIAL STATEMENTS

NOTE-2: SHARE CAPITAL

Particulars As at March 31, 2013

(Amount in `)


(Amount in `)Authorised10,00,000 Equity Shares of ` 10/-each 10,000,000 10,000,000

10,000,000 10,000,000 Issued, Subscribed and fully paid-up 10,00,000 (Previous Year 50,070) Equity Shares of ` 10/- each fully paid up 10,000,000 500,700 10,000,000 500,700

(a) Reconciliation of the shares outstanding at the beginning and at the end of the reporting period



Shares outstanding at the beginning of the year 50,070 500,700 Shares Issued during the year 949,930 – Shares bought back during the year – – Shares outstanding at the end of the year 1,000,000 500,700

(b) Details of shareholders holding more than 5% shares in the Company

Name of Shareholder As at March 31, 2013 As at March 31, 2012No. of shares % holding No. of shares % holding

Expert fabrics & Textile Pvt. Limited

– 20,000 39.94%

Ganga Yamuna Auto Pvt. Limited

– 15,000 29.96%

Raghav Commercial Ltd. – 15,000 29.96%Bhilwara Energy Limited 740,000 74.00% – – RSWM Limited 260,000 26.00% – –

NOTE-3: RESERVES & SURPLUS


(Amount in `)


(Amount in `)(Deficit) in the Statement of Profit and LossBalance as per last financial statements (1,592,294) (1,581,349)(Loss) for the year (712,315) (10,945)Net (deficit) in the statement of Profit & Loss (2,304,609) (1,592,294)

NOTE-4: LONg-TERM BORROWINgS


(Amount in `)


(Amount in `)SECURED:Term Loan from bank * 397,000,601 UNSECURED:Related Party:Compulsorily Convertible Debenture (RSWM Limited) 267,400,000 – TOTAL 664,400,601 –

*Term loan from Yes Bank Secured by pari passu charge along with IfC on moveable & immoveable assets of the Company. The loan carries a interest of 11% p.a. The loan is for a total duration of 14 years 1 month from the date of the first disbursement. The interest is payable monthly. The loan is further secured by 51% of the company shares held by the holding company and 100% of the convertible debenture along with coupon accrued, issued to RSWM Limited.

244


NOTE-5: OTHER CURRENT LIABILITIES


(Amount in `)


(Amount in `)Due to related parties 5,637,490 – Statutory dues 5,886,116 – Interest accrued but not due 5,703,440 – Other payables 14,054,041 1,396,750 TOTAL 31,281,087 1,396,750

NOTE-6: FIXED ASSETS

(Amount in `)Particulars gross Block Depreciation Net Block

Balance As at

01.04.2012

Additions during the

year

Balance As at

31.03.2013

Balance As at

01.04.2012

Additions during

the year

Balance As at

31.03.2013

Balance As at

31.03.2013

Balance As at

31.03.2012Tangible AssetsLand-leasehold – 5,000,000 5,000,000 – 1,279 1,279 4,998,721 – Plant & machinery (wind mills)

– 1,159,428,408 1,159,428,408 – 469,617 469,617 1,158,958,791 –

Total – 1,164,428,408 1,164,428,408 – 470,896 470,896 1,163,957,512 – Previous Year – – – – – – – – Capital Work-in-progress

– – – – – – – –

Previous Year – – – – – – – –

NOTE-7: CASH & BANK BALANCES


(Amount in `)


(Amount in `)Cash on hand (as certified by management) 48,841 6,852 Balances with banks in: – – – Current accounts 3,635,486 298,304 TOTAL 3,684,327 305,156

NOTE-8: SHORT-TERM LOANS & ADVANCES


(Amount in `)


(Amount in `)Others 1,583,467 – TOTAL 1,583,467 –

NOTE-9: OTHER INCOME


(Amount in `)


(Amount in `)Interest income (On fixed deposit) 214,897 – TOTAL 214,897 –

NOTE-10: FINANCE COSTS


(Amount in `)


(Amount in `)Interest expenses 393,909 – TOTAL 393,909 –

245

NOTE-11: OTHER EXPENSES


(Amount in `)


(Amount in `)Audit fee 56,180 3,000 fee and Subscription 2,000 4,045 Legal & Professional expenses 26,000 3,600 Insurance Charges – 300 TOTAL 84,180 10,945

NOTE-12: EARNINgS PER SHARE


(Amount in `)


(Amount in `)(Loss) after Tax (712,315) (10,945)Weighted average number of equity shares 81,301 50,070 Basic & Diluted EPS (8.76) (0.22)

NOTES TO ACCOUNTS

13. CONTINgENT LIABILITIES

As per information available with the management as certified by them, there is no contingent liability as at 31st March, 2013.

14. Employees are on the rolls of the Holding Company (BEL) & provision for retirement benefits will be in the books of the holding company.

15. Recognition of deferred tax assets has been restricted to the extent of deferred tax liabilities available. Net deferred tax assets have not been accounted for in the absences of virtual certainty of realizing such assets against future taxable income.

16. The Government of India has promulgated an act namely The Micro, Small and Medium Enterprises (Development) Act, 2006 which came into force with effect from October 2, 2006.As per the Act, the Company is required to identify the Micro, Small and Medium enterprises and pay them interest on overdue beyond the specified period irrespective of the terms agreed with the suppliers. As per the information available with the company and relied upon by the auditors, none of the creditors falls under the definition of ‘supplier’ as per the section 2(n) of the Act to the extent of information available with the company. In view of the above, the prescribed disclosures under Section 22 of the Act are not required to be made.

17. SEgMENTAL REPORTINg

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

18. DERIVATIVE INSTRUMENTS AND FOREIgN CURRENCy EXPOSURES.

(a) There is no foreign currency exposure outstanding as at Balance Sheet date.(b) Particulars of un-hedged foreign currency exposures as at Balance Sheet date are NIL

19. RELATED PARTy DISCLOSURES

a. List of related parties

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

i. Bhilwara Energy Limited - Holding Company. ii. Malana Power Company Limited- fellow Subsidiary. iii. AD Hydro Power Limited – Fellow Subsidiary iv. Indo-Canadian Consultancy Services Limited. – Fellow Subsidiary v. Green Ventures Private Limited, Nepal – Fellow Subsidiary vi. Balephi Jalbidyut Company Limited, Nepal – Fellow Subsidiary vii. Chango Yangthang Hydro Power Ltd. - fellow Subsidiary viii. NJC Hydro Power Ltd. - fellow Subsidiary

246



None

(c) Key Management Personnel and their relatives

i. Mr. Riju Jhunjhunwalaii. Mr. Rishabh Jhunjhunwalaiii. Mr. O.P Ajmera

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

i. HEG Limited.ii. RSWM Limited.

b. Transactions during the year (Amount in `)

2012-13 2011-12Parties referred to in item (a) above– Technical/financial services received (net of TDS) 50,56,200 NIL– Reimbursement of expenses 3,84,560 NIL– Balance outstanding as on March 31, 2013 54,40,760 NILPersons referred to in (d) above– Sale of electricity 21,773 NIL– Interest paid (net of TDS) 55,39,529 NIL– CCD issued 26,74,00,000 NIL– Equity shares issued 26,00,000 NIL– Bank charges paid 1,96,730 NIL– Balance outstanding as on March 31, 2013 27,02,18,503 NIL

20. DISCLOSURE REQUIRED UNDER AS-18 Amount of borrowing cost capitalized during the period is ` 3,52,29,785/-

21. AUDITORS’ REMUNERATION

Particulars 2012–13 2011–12Statutory Audit fee 50,000 3,000Other services 15,000 –Reimbursement of expenses – –TOTAL 65,000 3,000

22. OTHER DISCLOSURES:(a) Value of import calculated:

(i) Raw Material NIL(ii) Components & Spare Parts NIL(iii) Capital Goods NIL

(b) Expenditure in foreign currency NIL(c) Total value of imported raw materials NIL(d) Amount remitted in Foreign Currency NIL(e) Earning in foreign exchange NIL

23. Previous year figures have been regrouped and rearranged where necessary and confirm to this year classification.


For KRA & ASSOCIATES For and on behalf of Board of Directors of Chartered Accountants LNJ Power Ventures Limitedfirm Reg. No.002352N

Shyamal Kumar Riju Jhunjhunwala O.P. Ajmera Partner Director DirectorMembership No.509325 DIN: 00061060 DIN:00322834


247

Chango Yangthang Hydro Power Limited

AnnuAl RepoRtof

CHANGO YANGTHANG HYDRO POWER LIMITED

248


BOARD OF DIRECTORSMr. Riju JhunjhunwalaMr. Rishabh JhunjhunwalaMr. o. p. Ajmera

KEY ExECuTIvEMr. S. p. Bansal, Associate Vice president (Civil)

BANKERSYes Bank limited

STATuTORY AuDITORSM/s Doogar & AssociatesChartered Accountantsnew Delhi

CORPORATE OFFICEBhilwara towersA–12, Sector–1, noida – 201301 (u.p.)

REGISTERED OFFICEVillage & Post Office–ChangoSub–tehsil Hangrang,District Kinnaur, City pooh–172111Himachal pradesh


249


DIReCtoRS RepoRt

TO THE MEMBERS,

M/s CHANGO YANGTHANG HYDRO POWER LIMITED

Dear Member,

the Directors of the Company are pleased to present their Second Annual Report on the business and operations of the Company and Audited Statement of accounts for the year ended 31st March, 2013 together with the Auditors’ Report.

1. FINANCIAL HIGHLIGHTS (` in Million)

Particulars 31.03.2013 31.03.2012total Income NIL nIltotal expenditure 3.38 0.041Profit/(Loss) before tax (3.38) (0.041)taxes NIL nIlProfit/(Loss) After tax (3.38) (0.041)earning per shares in ` (0.07) (0.26)

the Company has not yet started its commercial activities.

As of 31st March, 2013, the Company’s expenditure on various accounts is detailed below:

(` in Million)

PARTICuLARS 31.03.2013 31.03.2012fixed Assets including Capital Work-in-progress

9.95 10.18

project & pre-operative expenses

610.97 576.17

Security Deposit 14.00 14.00Current Assets 1.53 0.50

Total 636.45 600.862. PROJECT STATuS AND INFORMATION

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

Your company, a wholly owned subsidiary of M/s Bhilwara energy limited, is developing 180MW Chango Yangthang Hydro electric project in the state of Himachal pradesh. the revised DpR for 180 MW capacity stands filed with CEA/CWA and the techno-economic clearance is expected within this financial year. The revised TOR for EIA study for enhanced capacity were approved by Moef, the eIA studies are in progress through a environment Consultant and the report is likely to be available by october, 2013. Subsequently public hearing is planned to be conducted at project site for environmental clearance. for various other statutory/non-statutory clearances required for implementation of the project,

necessary applications/documents have been filed with all concerned departments and being pursued vigorously for obtaining requisite approvals.

3. DIvIDEND

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

4. PuBLIC DEPOSITS


5. ENERGY CONSERvATION, TECHNOLOGY ABSORPTION AND FOREIGN ExCHANGE EARNINGS & OuTGO


6. PARTICuLARS OF EMPLOYEES:

During the year 2012-13, 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.

7. INTERNAL CONTROL SYSTEMS AND THEIR ADEQuACY

the Company has proper and adequate systems for internal controls to ensure protection of assets, proper financial and operating functions and compliance with the policies, procedure, applicable Acts and Rules.

8. DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and of the Articles of Association of the Company, Mr Rishabh Jhunjhunwala, Director is liable to retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. the Board recommends his re-appointment at the ensuing Annual General Meeting.

the aforesaid re-appointment is subject to the approval of the Members and the necessary resolutions have been incorporated in the notice of the Annual General Meeting.

9. AuDIT COMMITTEE

During the year, the Audit Committee was constituted. As on date, the Members of the Audit Committee are: Mr. Riju Jhunjhunwala, Mr. Rishabh Jhunjhunwala and Mr. om prakash Ajmera. the

250


proceedings of the Committee were in accordance with the provisions of the Companies Act, 1956.

10. DIRECTORS’ RESPONSIBILITY STATEMENT

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





11. AuDITORS

M/s Doogar & Associates, Chartered Accountants, Statutory Auditors of the Company, will retire from their office at the ensuing Annual General Meeting. they are, however, eligible for re-appointment. M/s Doogar & Associates, Chartered Accountants, has conveyed their willingness for re-appointment as statutory auditors of the Company for the financial year ending on 31st March, 2014. the Company

has also received consent letter from M/s Doogar & Associates, Chartered Accountants, under Section 224(1B) of the Companies Act, 1956, confirming their eligibility and showing their willingness for appointment as statutory auditors of the Company for the financial year ending on 31st March, 2014. the Board recommends for the appointment of M/s Doogar & Associates, Chartered Accountants, as Statutory Auditors of the Company.

12. AuDITORS’ REMARKS

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


Your Directors’ acknowledge the assistance and continued support provided by the Ministry of power, Ministry of environment and forests (Government of India), Central electricity Authority, Government of Himachal pradesh, other government agencies. Your company look forward to their continued support and co-operation in the coming years as well. Your Directors’ also like to express great appreciation for the commitment and contribution of its employees at all levels.


For and on behalf of the Board of Directors

Riju Jhunjhunwala Rishabh Jhunjhunwala Director Director(DIn : 00061060) (DIn : 03104458)

place : noida Date : 24th August, 2013

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

ConSeRVAtIon of eneRGY – nIl1.

teCHnoloGY ABSoRptIon – nIl2.

foReIGn eXCHAnGe eARnInGS AnD outGo – nIl3.


place : noida Riju Jhunjhunwala Rishabh JhunjhunwalaDate : 24th August, 2013 Director Director

(DIn : 00061060) (DIn : 03104458)

251


AuDItoRS' RepoRt

To the members of Chango Yangthang Hydro Power LimitedReport on the financial statementsWe have audited the accompanying financial statements of Chango Yangthang Hydro power limited (“the Company”), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.Management’s responsibility for the financial statementsManagement is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the company in accordance with the accounting principles generally accepted in India, including accounting standards referred to in sub–section (3C) of section 211 of the Companies Act, 1956 (“the Act”). this responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or errorAuditor’s responsibilityour responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.Opinion In our opinion and to the best of our information and according to the explanations given to us, the financial

statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:(a) in the case of the Balance Sheet, of the state of

affairs of the company as at March 31, 2013;(b) in the case of the Statement of Profit and Loss, of

the loss for the year ended on that date; and(c) in the case of the Cash flow Statement, of the

cash flows for the year ended on that date.Report on other legal and regulatory requirements1. As required by the Companies (Auditor’s Report)

order, 2003 (“the order”) issued by the Central Government of India in terms of sub–section (4A) of section 227 of the Act, we give in the Annexure ‘A’ a statement on the matters specified in paragraphs 4 and 5 of the order.

2. As required by section 227(3) of the Act, we report that:a. We have obtained all the information and


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

c. The Balance Sheet, Statement of Profit and loss, and Cash flow Statement dealt with by this report are in agreement with the books of account;

d. In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the accounting standards referred to in sub–section (3C) of section 211 of the Companies Act, 1956;

e. on the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub–section (1) of section 274 of the Companies Act, 1956.

For Doogar & Associates Chartered Accountants firm Regn no. 000561n

Mukesh Goyal Mg. partnerM. no.081810

place: new DelhiDate : 24th August, 2013

252


ANNExuRE ‘A’ TO AuDITORS’ REPORT


(b) Verification of the fixed assets is being conducted by the management based on a programme designed to cover all assets, which, in our opinion, is reasonable having regard to the size of the Company and nature of its business. As informed to us, no discrepancies were noticed on such verification as compared to book records.

(c) None of the fixed assets was disposed off during the year under report.

2. According to the Information and explanation given to us and the records examined by us, the company is not having any inventory, in view of which the related reporting requirement of the order clause 4(ii) (a) to (c) is not applicable to the company.

3. (a) According to the information and explanations given to us, the company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii) (a) to (d) of the order are not applicable to the company and hence not commented upon.

(b) According to information and explanations given to us, the company has taken short term advances in the nature of unsecured loan from the holding company covered in the register maintained under section 301 of the Companies Act, 1956. the maximum amount outstanding at any time during the year was ` 12,78,05,740 and the year end balance was ` 3,84,27,768.

(c) the terms and conditions of this Short term advances in the nature of loan taken from holding company is not prejudicial to the interest of the company. the interest is being serviced as per mutual understanding with the holding company. the amount is repayable on demand in view of which there are no overdue payments at the year end.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business, for the purchase of fixed assets and for the sale of goods. Further, on the basis of our examination of the books & records of the company, carried out in accordance with the generally accepted auditing practices in India, we have neither came across nor have we been informed of any instance of major weaknesses in the aforesaid internal control systems.

5. (a) Based upon the audit procedures applied by us and according to the information and explanations given to us, we are of the opinion that the particulars of contracts and arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register maintained under section 301 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements have been entered in the register maintained under Section 301 of the Companies Act, 1956 and aggregating during the year to Rupees five lacs or more in respect of the party have been made at the prices which are reasonable having regard to market prices for such transactions, prevailing at the relevant time.

6. the company has not accepted any deposits from the public within the meaning of Sections 58A and 58 AA or any other relevant provisions of the Companies Act. 1956 including the companies (Acceptance of Deposits) Rules, 1975.

7. the requirements of internal audit are not applicable to the company for the year under report.

8. Maintenance of cost records is not required by the Central Government under Section 209(1) (d) of the Companies Act, 1956 in respect of the activities carried out by the company for the year under report.

9. (a) the company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, income tax and other material dues, whichever applicable. However, during the year there were minor delays in depositing dues of income tax deducted at source

(b) According to information and explanation given to us, no undisputed amount payable in respect of provident fund, income tax and other material statutory dues were outstanding at the year end, for a period of more than 6 months from the date they became payable.

10. The Company’s accumulated losses at the end of the financial year are less than fifty percent of its net worth. The company has incurred cash losses during the financial year and in the immediately preceding financial year.

253


11. Based on our audit procedures and as per the information and explanations given by the management, and as explained in the financial statements, the company has not taken any loans from any financial institution or bank during the year under report.

12. According to the information and explanations given to us and based on the documents and records produced before us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor’s Report) order, 2003 (as amended) are not applicable to the company.

14. In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor’s Report) order, 2003 (as amended) are not applicable to the company.

15. According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or financial institutions.

16. According to the information and explanations given to us, the Company has not raise any term loans during the year.

17. According to information and explanations given to us and on an overall examination of the balance sheet of the company, the company has not raised any short term funds during the year.

18. the Company has made preferential allotment of shares during the year to its holding company which is covered in the register maintained under section 301 of the Companies Act 1956.

19. the Company has not issued any debentures during the year.

20. the Company has not raised any money by way of public issue, during the year.

21. During the course of our examination of the books and records of the company carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of fraud on or by the Company, noticed and reported during the year, nor have been informed of such case by the management.

For Doogar & Associates Chartered Accountants firm Regn no. 000561n

Mukesh GoyalMg. partner M. no.081810

place: new DelhiDate : 24th August, 2013

254


Particulars Notes As at 31 March 2013

(`)

As at 31 March 2012

(`)I. EQuITY AND LIABILITIES

1 Shareholders’ funds (a) Share Capital 3 600,000,000 500,500,000 (b) Reserves and surplus 4 (3,422,869) (41,327)

596,577,131 500,458,673 2 Current liabilities

(a) other current liabilities 5 39,879,755 100,405,501 39,879,755 100,405,501

TOTAL 636,456,886 600,864,174 II. ASSETS

1 Non–current assets(a) fixed assets(i) tangible assets 6 1,227,201 1,460,068 (ii) Capital work–in–progress 8,725,246 8,725,246 (iii) project & pre–operative project expenses 7 610,969,674 576,178,860 (b) long term loans & Advances 9 14,000,000 14,000,000

634,922,121 600,364,174 2 Current assets

(a) Cash and Bank Balances 8 45,667 500,000 (b) Short term loans & Advances 9 1,489,098 –

1,534,765 500,000 TOTAL 636,456,886 600,864,174



for and on behalf of the Board of DirectorsChango Yangthang Hydro Power Ltd.

Riju Jhunjhunwala Rishabh JhunjhunwalaDirector DirectorDIn – 00061060 DIn – 03104458

As per report of even date

For Doogar & Associates Chartered Accountantsfirm Regn.no: 000561n

Mukesh GoyalMg. partnerM.no. 081810


255


StAteMent of pRofIt AnD loSS foR tHe YeAR enDeD 31 MARCH, 2013

Particulars Notes Year ended 31 March 2013

(`)

Year ended 31 March 2012

(`)I. Revenue from operations (gross) – –

less: excise Duty – – Revenue from operations (net) – –

II. Other Income – – III. Total Income (I + II) – – Iv. Expenses

other expenses 10 3,381,542 41,327 finance Cost – – total expenses 3,381,542 41,327

v. Profit/(loss) before tax (3,381,542) (41,327)vI. Tax Expense – – vII. Profit/(loss) for the year (3,381,542) (41,327)vIII. Earnings per equity share

(Nominal value of Equity Share ` 10/– each)Basic epS 11 (0.07) (0.26)








256


for and on behalf of the Board of DirectorsChangoYangthang Hydro Power Ltd.







particulars For the Year ended 31 March 2013

(`)

For the Year ended 31 March 2012

(`)CASH FLOW FROM OPERATING ACTIvITIESNet Profit Before Tax (3,381,542) (41,327)Adjustments for:Depreciation – – Interest paid – – Interest Received – – provision against upfront premium / other expenditure for Bara Banghal project

– –

(Profit) / Loss on Sale of Fixed Assets – – Miscellaneous expenditure – – Operating Profit Before Working Capital Changes (3,381,542) (41,327)Adjustments for Changes in Working Capital: – (Increase)/decrease in loans and advances (1,489,098) – – (Increase)/decrease in current liabilities (60,525,746) 100,405,501 Cash generated from operations (65,396,386) 100,364,174 Direct tax (paid)/refund – – Net Cash from Operating Activities (A) (65,396,386) 100,364,174 CASH FLOW FROM INvESTING ACTIvITIESpurchase of fixed Assets (13,900) (1,460,068)Capital work–in–progress – (8,725,246)project & pre–operative project expenses (34,544,047) (576,178,860)net Cash from Investing Activities (B) (34,557,947) (586,364,174)CASH FLOW FROM FINANCING ACTIvITIESproceeds from Issuance of equity Shares 99,500,000 500,500,000 net Cash from financing Activities (C) 99,500,000 500,500,000 net Increase /(decrease) in cash and cash equivalents (A+B+C) (454,333) 14,500,000 Cash and Cash equivalents at the Beginning of the Year 500,000 – Cash and Cash equivalents at the end of the Year 45,667 14,500,000 Components of Cash and Cash EquivalentsCash on hand 39036 – Balances with Scheduled Banks:In Current Accounts 6,631 500,000 In Deposit Accounts – – In Margin Money Account – – Total Cash & Cash equivalents (Note No. 7 ) 45,667 500,000 The Cash flow statement has been prepared under the indirect method as set out in the Accounting Standard 3 "Cash flow Statement" of the companies (Accounting Standard) Rules 2006."

257


1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The financial statements have been prepared to comply in all material respects with the Accounting Standards notified under Companies (Accounting Standards) Rules, 2006, (as amended and as applicable from time to time) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention on going concern basis.


2. SuMMARY OF SIGNIFICANT ACCOuNTING POLICIES

(2.1) uSE OF ESTIMATES

The preparation of financial statements are in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates. Difference between the actual results and estimates are recognized in the period in which the results are known/ materialized.

(2.2) FIxED ASSETS


(2.3) INTANGIBLE ASSETS

Capital Expenditure on purchase and development of identifiable non–monetary assets without physical substance is recognized as Intangible Assets in accordance with the principles given under AS–26 “Intangible Assets”. these are grouped and separately shown under the schedule of fixed Assets.

(2.4) DEPRECIATION/AMORTISATION

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

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

fixed Assets other than Software Written Down Value Method at the rates prescribed in Schedule XIV to the Companies Act, 1956

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

(2.5) IMPAIRMENT OF ASSETS

Specified assets are reviewed for impairment wherever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount for which the assets carrying amount exceeds its recoverable amount being the higher of the assets net selling price and its value in use. Value in use is based on the present value of the estimated future cash flows relating to the assets. for the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (i.e. cash generating units).

previously recognized impairment losses are reversed where the recoverable amount increases because of favorable changes in the estimates used to determine the recoverable amount since the last impairment was recognized. A reversal of assets impairment loss is limited to its carrying amount that would have been determined (net of depreciation or amortization) had no impairment loss been recognized in prior years.

noteS foRMInG pARt of tHe fInAnCIAl StAteMentS

258


(2.6) LEASES

Where the company is lessee

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straight–line basis over the lease term.

Where the company is lessor

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

(2.7) PREOPERATIvE ExPENSES:

preliminary project expenditure, capital expenditure, indirect expenditure incidental and related to construction/ implementation, interest on term loans/ debentures to finance fixed assets and expenditure on start–up/ commissioning of assets forming part of a composite project are capitalized up to the date of commissioning of the project as the cost of respective assets. Income earned during construction period is deducted from the total of the indirect expenditure.

(2.8) BORROWING COST


(2.9) SEGMENT REPORTING

Identification of segment






unallocated items

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

Segment Policies


(2.10)vALuATION OF INvENTORIES

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


(2.11) INvESTMENTS

Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long–term investments. Current investments are carried at lower of cost and fair value determined for each category separately. long–term investments are carried at cost on individual investment basis. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments in case of long term investments.

259


(2.12) REvENuE RECOGNITION


Interest


Dividend

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

(2.13) FOREIGN CuRRENCY TRANSACTIONS

(i) Initial Recognition


(ii) Conversion

foreign currency monetary items are reported using the closing rate. non–monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non–monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

(iii) Exchange Differences

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

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

(2.14) TAxES ON INCOME

tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred tax reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.


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

the carrying amount of deferred tax assets are reviewed at each balance sheet date. the Company writes–down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write–down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

260


MAt credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the Minimum Alternative tax (MAt) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in Guidance note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the Statement of profit and loss and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAt Credit entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specified period.

(2.15) EARNING PER SHARE



(2.16) PROvISIONS & CONTINGENT LIABILITIES

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



(2.17) CASH AND CASH EQuIvALENTS

Cash and cash equivalents in the cash flow statement comprise cash at bank and cash/ cheques in hand and short term deposits with Banks less short term advances from Banks.

261


3. SHARE CAPITAL

Particulars As at 31 March, 2013

Amount (`)


Amount (`)Authorized Shares60,000,000 (previous year 60,000,000) equity shares of ` 10 each) 600,000,000 600,000,000Issued, Subscribed and fully paidup equity shares60,000,000 (previous year 50,050,000) equity shares of ` 10 each fully paid up

600,000,000 500,500,000


As at 31 March, 2013 As at 31 March, 2012 No. of shares Amount (`) No. of shares Amount (`)

Equity Shares Shares outstanding at the beginning of the year

50,050,000 500,500,000 – –

Shares Issued during the year 9,950,000 99,500,000 50,050,000 500,500,000 Shares bought back during the year

– – – –

Shares outstanding at the end of the year

60,000,000 600,000,000 50,050,000 500,500,000


the company has only one class of equity shares having par value of ̀ 10 per share. each holder of equity shares is entitled to one vote per share.


(c) Shares held by holding/ ultimate holding company and/or their subsidiaries/associates

As at 31 March, 2013 As at 31 March, 2012 No. of shares Amount (`) No. of shares Amount (`)

Bhilwara energy limited (holding company)

60,000,000 600,000,000 50,050,000 500,500,000

60,000,000 600,000,000 50,050,000 500,500,000


As at 31 March, 2013 As at 31 March, 2012 No. of shares % Holding No. of shares % Holding

Equity Shares of ` 10 each fully paid upBhilwara energy ltd 60,000,000 100 50,050,000 100

As per the records of the company, including its register of shareholders/members and other declaration received from the shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.

(e) Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date:

As at 31 March, 2013 (No. of shares)

As at 31 March, 2012 (No. of shares)

equity shares allotted as fully paid bonus shares by capitalization of securities premium

NIL nIl

equity shares allotted as fully paid bonus shares by capitalization of profit

NIL nIl

equity shares issued consequent to amalgamation of a subsidiary company

NIL nIl

262


4. RESERvES & SuRPLuS


Amount (`)


Amount (`)

Surplus/(deficit) in the Statement of Profit and LossBalance as per last financial statements (41,327) – Add:– Profit/(Loss) for the year (3,381,542) (41,327)Net Surplus/(Deficit) in the statement of Profit & Loss (3,422,869) (41,327)TOTAL (3,422,869) (41,327)

5. OTHER CuRRENT LIABILITIES


Amount (`)


Amount (`)other current liabilitiesEmployees Benefit Expenses Payable 278,835 – outstanding dues of creditors 496,109 580,650 Due to Related party ( Bhilwara energy ltd) 38,427,768 99,824,851 Statutory dues payable 677,043 – TOTAL 39,879,755 100,405,501

6. TANGIBLE ASSETS (Amounts in `)

Particulars Office equipments


Project Equipments

vehicles Total

Cost or valuationAs at 1 April 2011Additions – transfer from Holding Co 17,194 92,400 127,829 1,822,719 1,029,909 3,090,051 Disposals – other adjustments – – exchange Differences – – Borrowing Costs – As at 31 March 2012 17,194 92,400 127,829 1,822,719 1,029,909 3,090,051 Additions 13,900 13,900 transfer from Holding Co – – – – – – Disposals – other adjustments – – exchange Differences – – Borrowing Costs – As at 31 March 2013 17,194 92,400 141,729 1,822,719 1,029,909 3,103,951 DepreciationAs at 1 April 2011Charge for the year – transfer from Holding co 6,804 77,910 55,067 788,512 701,690 1,629,983 Disposals – As at 31 March 2012 6,804 77,910 55,067 788,512 701,690 1,629,983 Charge for the year 1,445 5,796 10,693 143,857 84,976 246,767 transfer from Holding co – – – – – – Disposals – As at 31 March 2013 8,249 83,706 65,760 932,369 786,666 1,876,750 net BlockAs at 31 March 2013 8,945 8,694 75,969 890,350 243,243 1,227,201 As at 31 March 2012 10,390 14,490 72,762 1,034,207 328,219 1,460,068

263


7. PROJECT AND PRE–OPERATIvE ExPENSES (PENDING ALLOCATION)


Amount (`)


Amount (`)Employee Benifits ExpensesSalaries , wages and bonus 15,723,675 11,280,222 Contribution to provident and other funds 665,717 462,831 Workmen and staff welfare expenses 698,096 423,552 TOTAL (A) 17,087,488 12,166,605 Rent 3,196,673 2,664,358 Rates & taxes 16,233 15,934 Insurance 130,168 120,918 Repairs and maintenance 514,424 381,006 travelling expense 3,101,475 2,716,709 Conveyance 1,432,865 1,008,458 Vehicle running & hiring expenses 929,800 789,810 Communication expenses 106,114 98,670 Audit fees 115,753 115,753 Advertisement 213,951 202,951 legal & professional charges 29,969,273 28,395,525 fee & subscription 1,033,866 319,779 power and fuel 63,754 63,754 testing & Surveys 518,824 518,824 upfront fee 378,945,000 378,945,000 Consultancy Charges 66,735,227 41,477,094 Miscellaneous expenses 18,736,645 18,303,858 financial charges/ Bank Charges 85,864,687 85,863,167 Depreciation 2,257,454 2,010,687 TOTAL (B) 593,882,186 564,012,255 TOTAL (A+B) 610,969,674 576,178,860



Amount (`)


Amount (`)Cash and cash equivalentsCash on Hand 39,036 – Balances with banks in current Account 6,631 500,000 TOTAL 45,667 500,000

9. LOANS AND ADvANCES

Long–term Short–termAs at



Amount (`)


Amount (`)


Amount (`)Security Deposits 14,000,000 14,000,000 – – loans and advances to related parties

– – 1,479,167 –

Advances recoverable in cash or kind or for value to be received

– – 800 –

prepaid expenses – – 9,131 – TOTAL 14,000,000 14,000,000 1,489,098 –

264


10. OTHER ExPENSES

Particulars Year ended 31 March, 2013

Amount (`)


Amount (`)Rates and taxes 3,287,810 19,327payment to Auditor (refer details below) 93,732 22,000TOTAL 3,381,542 41,327

Particulars Year ended 31 March, 2013

Amount (`)


Amount (`)Payment to AuditorAs Auditor: – Audit fee 81,372 22,000 – limited Review – – In Other Capacity: – Fees for certification – – – other services 12,360 – TOTAL 93,732 22,000.00

11. EARNING PER SHARE


Amount (`)


Amount (`)The following reflects the profit and share data used in the basic and diluted EPS computations:Profit/loss after tax as per statement of profit and loss (3,381,542) (41,327)Weighted average number of equity shares in calculating basic and diluted epS

50,104,521 160,411

Basic earnings per share in Rupees ( face value of `10 ) (0.07) (0.26)


As per information available with the management as certified by them, there is no contingent liability as at 31st March, 2013.

13. Capital contracts remaining to be executed on capital account and not provided for as on the date of Balance Sheet (net of advances) is nIl.

14. Since, there are no employees in the company, no provision for employee benefits have been made.

15. there are no adjustments on account of Deferred tax liability or Deferred tax Asset in respect of current period as well as earlier period since there are no timing differences between the book income and taxable income.

16. the Government of India promulgated an act namely the Micro, Small and Medium enterprises (Development) Act, 2006 which came into force with effect from october 2,2006.As per the Act, the Company is required to identify the Micro, Small and Medium enterprises and pay them interest on overdue beyond the specified period irrespective of the terms agreed with the suppliers. As per the information available with the company and relied upon by the auditors, none of the creditors falls under the definition of ‘supplier’ as per the section 2(n) of the Act to the extent of information available with the company. In view of the above, the prescribed disclosures under Section 22 of the Act are not required to be made.


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

18. DERIvATIvE INSTRuMENTS AND FOREIGN CuRRENCY ExPOSuRES.

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

(b) particulars of un–hedged foreign currency exposures as at the Balance Sheet date are nIl.

265


19. RELATED PARTY DISCLOSuRES

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

i) Bhilwara energy limited – Holding Company

ii) Malana power Company limited – fellow Subsidiary

iii) AD Hydro power limited – Subsidiary of fellow Subsidiary

iv) Indo Canadian Consultancy Services limited – fellow Subsidiary

v) Bhilwara Green energy limited – fellow Subsidiary

vi) Green Ventures private limited, nepal – fellow Subsidiary

vii) Balephi Jalbidyut Company limited, nepal – fellow Subsidiary

viii) nJC Hydro power limited – fellow Subsidiary

ix) lnJ power Ventures limited – fellow Subsidiary


n.A.









i) Aadi Marketing Company pvt ltd

ii) Bhilwara Infotechonology ltd

iii) Bhilwara Services pvt ltd.

iv) Bhilwara technical textiles ltd

v) BMD power pvt ltd

vi) BMD Renewable energy pvt ltd

vii) essay Marketing Company ltd

viii) Giltedged Industrial Security ltd

ix) HeG limited

x) HeG Graphite and Service ltd.

xi) India tex fab Marketing ltd

xii) Investors India ltd

xiii) Kalati Holdings pvt ltd

xiv) lnJ financial Services ltd

xv) lnJ Bhilwara textiles Ansuandhan Vikas Kendra

xvi) Maral overseas ltd

266


xvii) nikita electrotrades pvt ltd

xviii) nivedan Vanijya niyojan ltd

xix) purvi Vanijya niyojan ltd

xx) Raghav Commercial ltd

xxi) Raghav Knits & textiles pvt ltd

xxii) RSWM limited

xxiii) Shashi Commercial Co ltd

xxiv) Veronia tie–up pvt ltd

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


(`)

As at 31 March 2012

(`)i) Parties referred to in item (a) above

a) equity Shares issued to Bhilwara energy ltd. during the Year 99,500,000 500,000,000b) loans & Advances received from Bhilwara energy ltd. 38,102,916 599,824,851c) Amount due to Bhilwara energy ltd 38,427,768 99,824,851d) Value of services received from Indo Canadian Consultancy

ltd. 25,258,133 nIl

e) Amount due from Indo Canadian Consultancy ltd. 1,479,167 nIlii) Parties referred to in item (b) above NIL nIliii) Persons referred to in (c) above NIL nIliv) Persons referred to in (d) above NIL nIlv) Persons referred to in (e) above NIL nIl

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

21. OTHER DISCLOSuRES:

(a) Value of import calculated:

(i) Raw Material nIl

(ii) Components & Spare parts nIl

(iii) Capital Goods nIl

(b) expenditure in foreign currency nIl

(c) total value of imported raw materials nIl

(d) Amount remitted in foreign Currency nIl

(e) earning in foreign exchange nIl







AnnuAl RepoRtof

Green Ventures PVt. Ltd.(nePaL)

268


268

BOard OF dIreCtOrsMr. Riju JhunjhunwalaMr. Rishabh Jhunjhunwala Mr. S. C. SanghaiMr. o. p. AjmeraMr. t. C. Agarwal

KeY eXeCutIVesMr. Vipin Arora, Vice president - Civil

BanKers/FInanCIaL InstItutIOnsIDBI Bank limitedexport-Import Bank of Indiaoriental Bank of Commercepunjab & Sind BankptC India financial Services limited everest Bank limited, nepal

statutOrY audItOrsM/s n. K. oli & AssociatesChartered Accountantsnepal

reGIstered OFFICetriveni Complex,5th floor, putlisadak,Kathmandu, nepal

IndIa OFFICeBhilwara towersA-12, Sector-1noida -201301, u.p.Indiaphone : +91-120-4390300fax : +91-120-4277841


269

AuDItoRS' RepoRt

to

the shareholders of Green Ventures PVt. Ltd., nePaL

We have audited the accompanying Balance Sheet of Green Ventures Pvt. Ltd. (the “Company”) as of March 31, 2013, the related statements of Cash flow and Statement of Changes in equity for the period from April 01, 2012 to March 31, 2013.

These financial statements are the responsibility of the Company’s management. our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with nepal Standards on Auditing or relevant practices. those standards or relevant practices require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosers in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As per the provisions of the Companies Act, 2063 we state that:

1. We have received prompt replies to our queries and explanations asked for.

2. the books of accents have been maintained as required by the law.

3. the Balance Sheet and Cash flow statements comply with the books of accounts maintained by the Company.

4. the business of the Company appears to have been conducted satisfactorily in so far as appears from our examination of the books and records of the Company.

5. In our opinion and to the best of our information and according to the explanations given to us from our examination of the books of accounts of the Company, we have not come across the cases where the Board or any member thereof or any employee thereof or any employee of the Company has acted contrary to the provisions of the law or caused loss or damage to the Company or misappropriated the funds of the Company.

In our opinion, the financial statements give a true and fair view of the financial position of the Company as of March 31, 2013 and its Cash flow and Changes in equity for the period from April 01, 2012 to March 31, 2013.

CA, naresh K. oil For and on behalf of n. K. Oli & associates Chartered Accountants

Date : April 11, 2013place : Kathmandu, nepal

270


(nepali `)

schedules as at 31 March, 2013

as at 31 March, 2012

sOurCe OF Funds

Shareholders' fund

Share Capital 1 1,003,125,000 892,007,065

Reserve & Surplus 2 – –

total shareholders' Fund 1,003,125,000 892,007,065

Mid-term & long term loans

- Secured – –

- unsecured 3 – –

GrOss tOtaL 1,003,125,000 892,007,065

aPPLICatIOn OF Fund

fixed Assets 4 599,693,119 601,957,832

Work-in-progress 5 – –

Investment in Share 6 20,000 20,000

Current assets

Inventory 7 – –

trade & other Receivables 8 5,077,084 3,970,831

Cash and Bank Balance 9 85,777,875 141,766,343

prepaid expenses, Advances & Deposits 10 68,243,781 26,144,246

total Current assets 159,098,740 171,881,420

less :Current liabilities & provisions

trade & other payables 11 1,851,600 47,870,478

provisions 12 – –

total Current Liabilities 1,851,600 47,870,478

net Current assets 157,247,140 124,010,942

pre-operating expenses pertaining to Capitalisation 13 246,164,741 166,018,291

GrOss tOtaL 1,003,125,000 892,007,065

Contingent liabilities 14

notes to Accounts 15

BAlAnCe SHeet AS At MARCH 31, 2013


Ca. naresh K. OliFor and on behalf of n.K. Oli & associates subhash Chandra sanghaiChartered Accountants Director


271

StAteMent of CHAngeS In equIty foR tHe peRIoD fRoM ApRIl 01, 2012 to MARCH 31, 2013

(nepali `)

Particulars share Capital General reserve

retained earnings

total

Opening Balance (april 01, 2012)

share Capital 665,700,000 – – 665,700,000

Pending share application Money –

BHIlWARA eneRgy ltD., InDIA 225,832,065 – – 225,832,065

tRIVenI eneRgy (p) ltD., nepAl 475,000 – – 475,000

during the Period (from april 01, 2012 to March 31, 2013)

share Capital –

BHIlWARA eneRgy ltD., InDIA – – – –

tRIVenI eneRgy (p) ltD., nepal – – – –

Pending share application Money

BHIlWARA eneRgy ltD., India 111,117,935 – – 111,117,935

tRIVenI eneRgy (p) ltD., nepal – – – –

CLOsInG BaLanCe (March 31, 2013) 1,003,125,000 – – 1,003,125,000




272


(nepali `)

s.no.

Particulars For the period ending on

March 31, 2013

For the period ending on

March 31, 2012a. Cash FLOw FrOM OPeratInG aCtIVItIes1. Net Profit / Loss before tax and extraordinary items

add:1. Depreciation & Write offs 2,621,463 3,323,988 2. expenses written off – – 3. Interest expense – – 4. Accumulated pre-operating expenses – – 5. Decrease (Increase) in pre-operating expenses pending for

Capitalisation (80,146,450) 184,893,639

2. Operating Cash flow before Change of Working Capital1. Decrease (Increase) in Current assets

(other than Cash & Bank Balance) (43,205,789) 29,801,807

2. Increase (Decrease) in Current liabilities (46,018,878) 44,122,778 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) (166,749,653) 262,142,211

B. Cash FLOw FrOM InVestInG aCtIVItIes1. Interest /Dividend received – – 2. Sale (purchase) of fixed assets or Investment (356,750) (521,962,524)3. Sale (purchase) of Investments – (4,000)4. Decrease (Increase) in loans, advances and deposits – – 5. Decrease (Increase) in Construction Work In progress – – Net cash flow from Investing Activities (B) (356,750) (521,966,524)

C. Cash FLOw FrOM FInanCInG aCtIVItIes1. Issue of shares (except bonus shares) – 635,700,000 2. pending Share Application Money utilized for issue of shares – (635,700,000)3. pending Share Application Money 111,117,935 343,983,175 4. Dividends paid – – 5. Investment in Shares – – 6. others – – Net cash flow from Financing Activities (C) 111,117,935 343,983,175 net Increase (decrease) in cash and cash equivalents = (a+B+C) (55,988,468) 84,158,862 Cash and cash equivalents at the beginning of the year 141,766,343 57,607,481 Cash and cash equivalents at the end of the year 85,777,875 141,766,343

CASH floW StAteMent foR tHe peRIoD fRoM ApRIl 01, 2012 to MARCH 31, 2013




273

SCHeDuleS to ACCountS

sCheduLe 1 : share CaPItaL (nepali `)

s. no.

Particulars as on 31 March, 2013

as on 31 March, 2012

a. authorised

equity Share

5,00,00,000 Shares @ 100 per Share 5,000,000,000 5,000,000,000

B. Issued

equity Share

50,00,000 Shares @ 100 per Share 5,000,000,000 5,000,000,000

C. Called and subscribed

equity Share

6,657,000 Shares @ 100 per Share 665,700,000 665,700,000

d. Paid up

equity Share

6,657,000 Shares @ 100 per Share 665,700,000 665,700,000

total (a) 665,700,000 665,700,000

advance against share Capital

BHIlWARA eneRgy ltD., InDIA 336,950,000 225,832,065

tRIVenI eneRgy (p) ltD., nepAl 475,000 475,000

total (B) 337,425,000 226,307,065

total (a+B) 1,003,125,000 892,007,065

sCheduLe 2 : reserVe & surPLus (nepali `)

s. no.



a. general Reserves – –

B. Retained earnings – –

total – –

sCheduLe 3 : MId - terM & LOnG terM LOans (nepali `)

s. no.



a. secured Loan – –

1. long term loan – –

2. Debenture – –

B. unsecured Loan – –

1. long term loan – –

2. Debenture – –

3. other unsecured loan: – –

total – –

274


sCheduLe 5: wOrK In PrOGress (nepali `)

s no.


As on 31 March, 2012

1 Work in progress: – –

total – –

sCheduLe 6: InVestMent (nepali `)

s no.



A. Investment on listed companies 20,000 16,000

B. Investment on non-listed companies – –

total 20,000 16,000

sCheduLe 7: InVentOrIes (nepali `)

s no.



A. Store, Spare parts, loose tools – –

B. Stock – –

total – –

sCheduLe 4: FIXed assets (nepali `) Particulars Dep.

RateCost Price (GROSS BLOCK) DEPRECIATION Balance (NET BLOCK)

Balance as on April 1, 2012

Addition During the

Period

Sales/Adjus. During the

period

Balance as on March 31,

2013

Accumulated upto March

31, 2012

For The Period


Period


31, 2013


2013


2012

A. Land

LAND 0% 81,218,932 – – 81,218,932 – – – – 81,218,932 81,218,932

Total 81,218,932 – – 81,218,932 – – – – 81,218,932 81,218,932

B. Building

Leasehold Developments 5% 1,349,995 – – 1,349,995 197,813 62,879 – 260,692 1,089,303 1,152,182

Total 1,349,995 – – 1,349,995 197,813 62,879 – 260,692 1,089,303 1,152,182

C. Vehicles

KIA SORENTO BA.6.CH 6385 20% 3,797,609 – – 3,797,609 1,837,044 383,119 – 2,220,163 1,577,445 1,960,565

TOYOTA HILUX (BA.6.CH 7514) 20% 2,757,463 – – 2,757,463 1,345,642 282,364 – 1,628,006 1,129,456 1,411,821


TOYOTA CORROLA CAR (BA.6.CH 8529) 20% 3,897,917 – – 3,897,917 1,884,104 399,147 – 2,283,251 1,614,666 2,013,813


Hero Honda Spls. Ba 28 Pa 9877 20% – 43,000 – 43,000 – – – – 43,000 –

YAMAHA BIKE BA 29 PA 3809 20% – 58,000 – 58,000 – – – – 58,000 –

YAMAHA BIKE BA 29 PA 3831 20% – 58,000 – 58,000 – – – – 58,000 –

YAMAHA BIKE BA 29 PA 3824 20% 129,970 – – 129,970 63,425 13,309 – 76,734 53,236 66,545

YAMAHA BIKE BA 29 PA 3836 20% 129,970 – – 129,970 63,425 13,309 – 76,734 53,236 66,545

Total 16,460,191 159,000 – 16,619,191 8,001,309 1,703,867 – 9,705,176 6,914,015 8,458,882

D. Furniture & Off. Equipt.

Site Furniture & Office Equipments 25% 2,264,581 – – 2,264,581 1,248,951 217,332 – 1,466,283 798,297 1,015,630

Office Equiptment 25% 2,085,362 – – 2,085,362 977,119 225,432 – 1,202,551 882,811 1,108,243

Furniture and Fixture 25% 3,726,874 – – 3,726,874 1,826,324 354,092 – 2,180,416 1,546,457 1,900,550

Total 8,076,817 – – 8,076,817 4,052,394 796,856 – 4,849,250 3,227,567 4,024,423

E. Plant & Machineries

Generator 5 K.VA 15% 300,015 – – 300,015 90,005 38,252 – 128,257 171,758 210,011

Current Meter Machine 15% 152,776 197,750 350,526 42,985 19,610 – 62,595 287,930 109,791

Total 452,791 197,750 – 650,541 132,990 57,862 – 190,852 459,689 319,802

F. Capital Work In Progress

Capital Work In Progress 506,783,611 – 506,783,611 – – – – 506,783,611 506,783,611

Total 506,783,611 – – 506,783,611 – – – – 506,783,611 506,783,611

This period end Balance: 614,342,337 356,750 – 614,699,087 12,384,506 2,621,463 – 15,005,969 599,693,118 601,957,832

275

sCheduLe 8: trade & Other reCeIVaBLes (nepali `)

s no.



A. Advance Income tax 2,370,215 1,263,962 B. Advance to Director

nirajala Raut 2,706,869 2,706,869 total 5,077,084 3,970,831

sCheduLe 9: Cash & Other BaLanCe (nepali `)

s. no.



A. Cash Balance 254,861.36 337,292 B. Bank Balances1. Clean energy Development Bank ltd. 10,314.87 10,315 2. Commerz & trust Bank 0010000147-CA 73,166.77 92,609 3. everest Bank ltd. A/c no. 00100105200970 3,057,658.32 100,678,094 4. nIC Bank ltd. C/A no. 004460C 50,403,770.68 8,998,951 5. nepal Bank ltd. 2-11-65431 5,000.00 5,000 6. nepal Bank ltd. CA 4021 7,000.00 10,000 7. nIB Bank no. 012-4528100 1,890,652.42 1,210,961 8. nMB Bank ltd.- 004 00000 283 C – 346,670 9. RBB 109006583601 Current Account 10,049.00 10,049 10. RBB 2967 okhal Dhunga Current Account 5,466.00 5,466 11. RBB 407 Charikot 9,000.00 10,000 12. SCB 01-1985426-01 25,000.00 25,000 13. SCB 02-1985426-01 Short call Deposit 25,935.64 25,936 14. Clean energy fD f1083032301 30,000,000.00 30,000,000

total 85,777,875.06 141,766,343

sCheduLe 10: PrePaId eXPenses, adVanCes, LOans & dePOsIts (nepali `)

s. no.



A. Advances to party Annex A 60,258,219 16,944,838 B. Advances to Staff Annex B 599,579 1,863,425 C. land Acquisition Advance Annex C 5,813,983 5,763,983 D. letter of Credit Annex D 1,572,000 1,572,000

total 68,243,781 26,144,246

sCheduLe 11: trade & Other PaYaBLes (nepali `)

s. no.



1. other payables (Annex e) 1,850,065 47,864,032 2. tDS payables 1,535 6,446

total 1,851,600 47,870,478

sCheduLe 12: PrOVIsIOns FOr InCOMe taX (nepali `)

s. no.



– –– –

total – –

276


sCheduLe 13: Pre-OPeratInG eXPenses PertaInInG tO CaPItaLIsatIOn (nepali `)

s. no.



a Licence & Registration Expenses: 2,500,000 – licence Renew expenses 2,500,000 –

B Survey Expenses: 8,070,293 156,010,119 geo-technical Investigation 587,001 3,789,884 Survey expenses 7,483,292 152,220,235

C PPA Expenses – 4,730,000 ppA expenses 4,730,000

d Bridge Construction: 3,004,275 7,565,966 Bridge Civil Works 3,004,275 7,565,966

e transmission Line: 50,000 – transmission line expenses: 50,000 –

F road Construction: 36,612,798 113,389,286 Road Construction expenses 36,612,798 113,389,286

G Land acquisition: 5,485,200 2,575,000 land Compesnsation expenses 5,485,200 2,575,000

h Administrative Expenses: 24,423,884 37,619,602 1 Office expenses (Annex F) 1,624,150 741,105 2 Dashain expenses [Staffs] 1,302,126 924,360 3 Dashain expenses [others] 194,259 456,874 4 Insurance premium expenses 94,291 85,304 5 Audit fee 151,255 146,900 6 Advertising expenses – 1,917,239 7 telephone, Communication & Internet expenses 319,757 400,714 9 guest entertainment expenses 415,676 240,542 10 Miscellaneous expenses (Annex g) 2,748,611 16,219,974 11 Office Rent 1,161,978 907,826 12 Repair and Maintainance 244,042 158,291 13 printing Stationary 156,608 124,694 14 tangal House expenses 1,339,031 918,805 15 Salary Office Staff 14,266,946 13,086,155 16 Salary Site Staff 573,845 571,011 17 Site Visit expenses 613,081 491,913 18 translation work expenses 6,707 19 Project Site Office expenses 1,000,360 579,264 20 travelling expenses 771,297 836,447 21 Vehicle expenses 2,203,423 1,312,789 22 Membership fees – 100,000 23 Depreciation on fixed Assets 2,621,463 3,298,539 24 Assets Written off – 25,449 25 less: other Income (10,000) (432,000)26 less: Interest Income (7,375,022) (5,270,702)27 less: land Acquisition Capitalized – (221,890)

I Less: Expenses Capitalized – (506,783,611)1 Survey expenses Capitalized – (177,462,935)2 Bridge & Civil Works expenses Capitalized – (21,144,864)3 Road Construction expenses Capitalized – (308,175,813)

total for the Period [april 01, 2012 to March 31, 2013] 80,146,450 (184,893,639)Add: Accumulated expenses up to March 31, 2012 166,018,291 350,911,930 Total Accumulated Expenses up to March 31, 2013 246,164,741 166,018,291

277

sCheduLe - 15: sIGnIFICant aCCOuntInG POLICIes & nOtes tO aCCOunt

a. sIGnIFICant aCCOuntInG POLICIes 1. Accounting Conventions:

the financial Statements are prepared under historical cost conventions on accrual concept and are in accordance with nepal Accounting Standards and other prevalent statutory requirement of nepal. the Accounting policies are applied consistently by the company.

2. use of estimates: The preparation of financial statements in conformity with generally accepted accounting principles

requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Differences between actual and estimates are recognized in the period in which the results are known/materilized.

3. fixed Assets: fixed Assets are stated at cost and the cost includes all the expenses incurred up to putting the assets

in use.4. Depreciation: Depreciation on fixed assets are provided following WDV method. A full year depreciation is charged in

the year of purchase/acquisition and no depreciation is charged in the year of sale/disposal.5. going Concern: financial statement of concern is presented in going concern basis.6. Figures in the financial statements have been expressed in nearest rupees.

B. notes to accounts:1. Income Statement Profit & Loss Statement has not been prepared in view of construction period of the company.2. Regrouping of figures: Previous period figures have been regrouped/rearranged wherever necessary and the figures have been

restated.

sCheduLe 14: COntInGent LIaBILItIes (nepali `)

s. no.



= – –total – –

anneXure a : adVanCe tO the PartY (nepali `)

s. no.

name of the Party as on 31 March, 2013


1 AnK Construction Co. pvt. ltd. - D to Sirse 8,317,137 –

2 AnK Construction Co. pvt. ltd. - pH to SS 6,362,600 –

3 Amar Jibi ghimire 50,000 –

4 ekikrit Byapar Company pvt. ltd. 2,800,000 2,800,000

5 Rasuwa RCC-JV 3,276,694 –

6 Mainawati Steel Industries pvt. ltd. – 1,983,840

7 Meh Consultants pvt. ltd. – 975,000

8 Apex Construction co. pvt. ltd 1,751,417 –

9 RASuWA SBA JV pH to IntAKe 7,600,000 10,885,998

10 RASuWA SVA JoInt VentuReS 8,285,998 –

11 Rasuwa Khimti Sibalaya JV 21,000,000 –

12 IteCo CeMAt ICgS JV 300,000 300,000

13 Ramechap Sherpa Construction pvt. ltd. 514,373 –

total 60,258,219.00 16,944,838

278


anneXure B : adVanCe tO staFFadVanCe aGaInst OFFICe wOrK (nepali `)

s. no.

name of staff as on 31 March, 2013


Advance for Office Works1 Badri Rijal 39,835 5,014 2 Site Office Salary & Rent 8,696 – 3 Bijay Bahadur Karki 54,211 – 4 Chandra Bahadur (Sirse House) 103,631 115,631 5 Jai Kumar Singh 2,500 30,100 6 Jyoti Karki 25,000 18,000 7 Mithila pandey 181,500 181,500 8 o.p. Soni – 16,000 9 Achyuttam lal Shrestha – 6,000

10 Ajay Singh – 16,000 11 Anuj Shrestha – 10,000 12 nirajan Karki – 750 13 Ramesh Mahat 16,000 – 14 Rajendra Acharya (Rasuwa) – 1,000,000 15 Shyam lal Shrestha 10,000 5,000 16 uttam lamichhane Magar – 10,000 17 yubraj Acharya 10,000 – 18 Vipin Arora 20,000 20,000 advance against salary1 Bishnu neupane – 165,000 2 Badri pd. Rijal 25,000 – 3 Jyoti Karki 6,000 3,000 4 Kishore yadav – 7,500 5 niranjan Karki – 5,000 6 Ramesh Mahat – 10,000 7 Shrawan Kumar Shah – 6,500 8 uttam lamichhane Magar – 12,000 9 yubraj Acharya 4,000 –

10 uma Shankar Kamti 40,000 120,000 11 Vipin Arora 53,206 100,430

total 599,579 1,863,425

anneXure-C : adVanCes FOr Land aCquIsItIOn (nepali `)

s no.



1 Khil nath timilsina 250,000 250,000

2 prem Kumari poudel 5,263,983 5,263,983

3 Saroj Sunuwar 300,000 250,000

total 5,813,983 5,763,983

anneXure-d : Letter OF CredIt/Guarantee (nepali `)

s no.



1 Clean energy CeDB:pB006/2011 1,572,000 1,572,000

total 1,572,000 1,572,000

279

anneXure e : Other PaYaBLe (nepali `)

s. no.

name of staff as on 31 March, 2013


1 Rasuwa SBA Joint Venture – 46,291,946 2 Bhilwara energy (purchase Bill) 850,065 – 3 Sidhi Raj timalsina 1,000,000 1,000,000 4 united Advertising & Marketing – 572,086

total 1,850,065 47,864,032

anneXure-F : detaIL OF OFFICe eXPenses (nepali `)

details For the period ending on

March 31, 2013


March 31, 2012 Bank Charges 381,301 402,967

Accidental expenses 886,077 –

postage and Courier 37,380 9,447

Office tea expenses 76,420 –

electricity expenses 81,259 81,423

Account Software (Swastic) 28,250 Meeting expenses 133,463 245,280

local Conveyance – 1,988

total 1,624,150 741,105

anneXure-G : detaIL OF MIsCeLLaneOus eXPenses (nepali `)

details For the period ending on

March 31, 2013


March 31, 2012 Medicine expenses 27,720 24,081

Miscellaneous expenses 1,719,611 15,308,204

fooding expenses – 3,192

parking expenses 6,720 7,145

Office Tea & Snacks – 68,690

photo copy 12,891 89,958

Water expenses 43,484 27,126

Internet expenses 146,900 –

Office Inventory (Consumable Goods) 70,476 11,983

Office Equipments 120 14,800

generator fuel exp. 486,000 393,700

generator Repair expenses 52,701 30,942

topo Sheet expenses – 1,350

topo graphical Data expenses 15,400 –

Rate fluctuation Expenses 78,590 –

news paper 2,600 3,070

transportation expenses – 2,118

Books & periodicals 775 4,830

Capital Increase expenses – 69,800

Advertising expenses 59,623 –

Donation expenses 25,000 158,985

total 2,748,611 16,219,974

280


detaILs OF adVanCe taX (nepali `)

Particulars this Year amount

Last Year amount

Bank of Asia ltd. 13,724 13,724

nIC Bank ltd. 889,737 414,507

nMB BAnK ltD. 136,907 97,018

nIB Bank ltd. 012-01020015066 (4528100) 28,276 22,643

Clean energy Development Bank ltd. 1,101,082 516,082

Commerz and trust Bank ltd. 42,405 41,903

Sanima Bikash Bank ltd. 1,731 1,731

Maha laxmi finance ltd. 156,352 156,352

tOtaL 2,370,215.08 1,263,962

detaIL OF share CaPItaL (nepali `)

Particulars amount Bhilwara energy ltd. 504,000,000

nirjala Raut 1,500,000

triveni energy (p) ltd. 160,200,000

tOtaL 665,700,000

281

Balephi Jalbidyut Co. Ltd. (Nepal)

aNNUaL rEPOrTOf

BALEPHI JALBIDYUT CO. LTD.(NEPAL)

282


BOARD OF DIRECTORSMr. riju JhunjhunwalaMr. rishabh JhunjhunwalaMr. S. C. SanghaiMr. O. P. ajmeraMr. T. C. agarwal

KEY EXECUTIVES Mr. Vipin arora, Vice President - Civil

STATUTORY AUDITORS M/s N. K. Oli & associatesChartered accountantsNepal

REGISTERED OFFICETriveni Complex,5th floor, Putlisadak,Kathmandu, Nepal

INDIA OFFICEBhilwara Towersa-12, Sector-1Noida -201301, U.P.IndiaPhone : +91-120-4390300fax : +91-120-4277841

COrPOraTE INfOrMaTION

283


aUdITOrS' rEPOrT

TO THE SHAREHOLDERS’ OF BALEPHI JALBIDYUT CO. LTO., NEPAL

We have audited the accompanying Balance Sheet of Balephi Jalbidyut Co. Ltd. (the “Company”) as of March 31, 2013 and the related statements of Cash flow and Statement of Changes in Equity for the period from april 01, 2012 to March 31, 2013.

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with Nepal Standards on auditing or relevant practices. Those standards or relevant practices require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. an audit includes examining, on a test basis, evidence supporting the amounts and disclosers in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

as per the provisions of the Companies act, 2063 we state that:

1. We have received prompt replies to our queries and explanations asked for.

2. The books of accents have been maintained as required by the law.

3. The Balance Sheet and Cash flow statements comply with the books of accounts maintained by the Company.

4. The business of the Company appears to have been conducted satisfactorily in so far as appears from our examination of the books and records of the Company.

5. In our opinion and to the best of our information and according to the explanations given to us from our examination of the books of accounts of the Company, we have not come across the cases where the Board or any member thereof or any employee thereof or any employee of the Company has acted contrary to the provisions of the law or caused loss or damage to the Company or misappropriated the funds of the Company.

In our opinion, the financial statements give a true and fair view of the financial position of the Company as of March 31, 2013 and its Cash flow and Changes in Equity for the period from april 01, 2012 to March 31, 2013.

Ca, Naresh K. OliFor and on behalf of N. K. Oli & Associates

Chartered accountantsdate : april 11, 2013Place : Kathmandu, Nepal

284


BaLaNCE ShEET aS aT MarCh 31, 2013

as per our report of even date

CA. Naresh K. OliFor and on behalf of N.K. Oli & Associates Subhash Chandra SanghaiChartered accountants director

Place : Kathmandu, Nepaldated : april 11, 2013

(Nepali `)

Particulars Schedules As on March 31, 2013

As on March 31, 2012

SOURCES OF FUNDShareholders’ fund

Share Capital 1 284,112,000 284,574,984 reserve & Surplus – – Total Shareholders’ Fund 284,112,000 284,574,984

Mid-term & Long term Loans– Secured – – – Unsecured – – GROSS TOTAL 284,112,000 284,574,984

APPLICATION OF FUNDfixed assets 2 14,211,151 15,599,736 Work-in-progress – – Investment in Share – – Current assets

Inventory – – Trade & Other receivables 3 576,850 549,296 Cash and Bank Balance 4 369,588 4,110,917 Prepaid expenses, advances & deposits 5 9,363,826 9,349,028 Total Current Assets 10,310,264 14,009,241

Less :Current Liabilities & ProvisionsTrade & Other Payables 6 672,132 209,818 Provisions – –

Total Current Liabilities 672,132 209,818 Net Current Assets 9,638,132 13,799,423 Pre-Operating Expenses Pertaining to Capitalization 7 260,262,717 255,175,824

GROSS TOTAL 284,112,000 284,574,984 Contingent LiabilitiesNotes to accounts 8 –

285


STaTEMENT Of ChaNgES IN EqUITy fOr ThE PErIOd frOM aPrIL 01, 2012 TO MarCh 31, 2013

(Nepali `)

Particulars Share Capital General Reserve

Retained Earnings

Total

Opening Balance (April 01, 2012)Share Capital 203,066,700 – – 203,066,700 Pending Share Application Money

BhILWara ENErgy LTd., India 64,462,984 – – 64,462,984 TrIVENI hydrO (P) LTd., Nepal 17,045,300 – – 17,045,300

During the Period (from April 01, 2012 to March 31, 2013)Share Capital – – – – Pending Share Application Money

BhILWara ENErgy LTd., India (462,984) – – (462,984)TrIVENI hydrO (P) LTd., Nepal – – – –

CLOSING BALANCE (March 31, 2013) 284,112,000 – – 284,112,000




286


CaSh fLOW STaTEMENT fOr ThE PErIOd frOM aPrIL 01, 2012 TO MarCh 31, 2013

(Nepali `)

S. No.

Particulars For the period ending on March 31,

2013

For the period ending on March 31,

2012 A. CASH FLOw FROM OPERATING ACTIVITIES1. Net Profit/ Loss before tax and extraordinary items

add: 1. depreciation & Write Offs 1,229,585 1,499,327 2. Expenses written off – – 3. Interest expense – – 4. accumulated Pre-Operating Expenses – – 5. decrease (Increase) in Pre-Operating Expenses Pending for

Capitalisation (5,086,893) (84,168,242)

2. Operating Cash flow before Change of Working Capital1. decrease (Increase) in Current assets (Other than Cash & Bank

Balance) (42,352) 2,071,642

2. Increase (decrease) in Current liabilities 462,314 (204,902)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) (3,437,345) (80,802,175)B. CASH FLOw FROM INVESTING ACTIVITIES

1. Interest /dividend received – – 2. Sale (Purchase) of fixed assets or Investment 159,000 (812,121)3. decrease (Increase) in loans, advances and deposits – – 4. decrease (Increase) in Construction Work In progress – –

Net cash flow from Investing Activities (B) 159,000 (812,121)C. CASH FLOw FROM FINANCING ACTIVITIES

1. Issue of shares (except bonus shares) – – 2. Pending Share application Money (462,984) 63,808,290 3. dividends paid – – 4. Conversion of Pending Share application Money into Share Capital – – 5. Others – –

Net cash flow from Financing Activities ( C) (462,984) 63,808,290 Net Increase (Decrease) in cash and cash equivalents = (A+B+C) (3,741,329) (17,806,006)Cash and cash equivalents at the beginning of the year 4,110,917 21,916,923 Cash and cash equivalents at the end of the year 369,588 4,110,917




287


SChEdULES TO aCCOUNTS

SCHEDULE – 1 : SHARE CAPITAL (Nepali `)

S. No.

Particulars As on March 31, 2013


A. AuthorizedEquity Share5,00,00,000 Shares @ 100 Per Share 1,500,000,000 1,500,000,000

B. IssuedEquity Share50,00,000 Shares @ 100 Per Share 1,500,000,000 1,500,000,000

C. Called and SubscribedEquity Share20,30,667 Shares @ 100 Per Share 203,066,700 203,066,700

D. Paid UpEquity Share20,30,667 Shares @ 100 Per Share 203,066,700 203,066,700 Total (A) 203,066,700 203,066,700 Pending Share Application MoneyBhILWara ENErgy LTd., INdIa 64,000,000 64,462,984 TrIVENI hydrO PVT. LTd., NEPaL 17,045,300 17,045,300 Total (B) 81,045,300 81,508,284 Total (A+B) 284,112,000 284,574,984

288


SCHEDULE – 2 : FIXED ASSETS (Nepali `)Particulars Dep.

Rate Cost Price (Gross Block) Depreciation Balance (Net Block)

Balance as on April 01,

2012

Addition During the

Period


period


2013


31, 2012

For The Period


Period


31, 2013


2013


2012

Pool "A"

Land Purchased – 9,059,508 – – 9,059,508 – – – – 9,059,508 9,059,508

Total 9,059,508 – – 9,059,508 – – – – 9,059,508 9,059,508

B. Building

Leasehold Developments

5% – – – – – – – – –

Total – – – – – – – – – –

Pool "B"

Computer 25% 486,084 – – 486,084 227,050 80,380 – 307,431 178,653 259,034

Site Furnitures & Equipments

25% 752,710 – – 752,710 441,451 78,479 – 519,931 232,780 311,259

Office Equipments 25% 366,549 – – 366,549 184,773 36,281 – 221,054 145,495 181,776

Furniture & Fixtures

25% 756,866 – – 756,866 351,216 84,912 – 436,128 320,738 405,650

Total 2,362,209 – – 2,362,209 1,204,491 280,052 – 1,484,543 877,666 1,157,719

Pool "C"

Bike BA 29 PA 3836

20% 94,416 – 94,416 – 45,500 9,208 54,708 – – 48,916

Motor Cycle BA 29 PA 3809

20% 128,900 – 128,900 – 62,903 13,199 76,102 – – 65,997

Motor Cycle BA 29 PA 3831

20% 128,900 – 128,900 – 62,903 13,199 76,102 – – 65,997

Toyota Hilux (4X4) BA 6 CHA 7613

20% 2,656,742 – – 2,656,742 1,309,023 272,050 – 1,581,074 1,075,669 1,347,719


20% 2,602,206 – – 2,602,206 1,277,841 266,466 – 1,544,307 1,057,898 1,324,364


20% 2,871,230 – – 2,871,230 941,763 294,014 – 1,235,777 1,635,453 1,929,466

Total 8,482,394 – 352,216 8,130,178 3,699,934 868,137 206,913 4,361,158 3,769,020 4,782,459

Pool "D"

Office Generator - 25KVA

15% 590,484 – – 590,484 59,048 79,715 – 138,764 451,720 531,435

Current Measurement Machine

15% 113,904 – – 113,904 45,290 15,377 – 60,667 53,237 68,614

Total 704,388 – – 704,388 104,338 95,092 – 199,431 504,957 600,049

This period end Balance:

20,608,498 – 352,216 20,256,282 5,008,763 1,243,282 206,913 6,045,131 14,211,151 15,599,736

SCHEDULE – 3 : TRADE & OTHER RECEIVABLES (Nepali `)

S. No.



a. advance Income Tax 576,850 549,296 Total 576,850 549,296

289


SCHEDULE – 4 : CASH & OTHER BALANCE (Nepali `)

S. No.



A Cash Balance [Petty Cash] 20,208 129,881 B Bank Balances

1 Everest Bank a/C No. 00100105200971 44,039 137,632 2 Commerz and Trust Bank Ltd. 0010000148 Ca 20,250 36,459 3 Nepal Bank 2711 Chautara 3,000 3,000 4 Nepal Bank C/a 0002-0066005 5,000 5,000 5 NIB acc. No. [Old] 25,000 25,000 6 NIB acc. No. 01201020013157 [Previous No. 3285700] 72,288 600,498 7 NMB Bank Ltd. - 00400000 293 C – 107,241 8 NIC Bank Ltd. a/c No. 154,646 3,041,049 9 Standard Chartered Bank Nepal Ltd. a/C No. 01-2049589-01 25,158 25,158

Total 369,588 4,110,917

SCHEDULE – 5 : PREPAID EXPENSES, ADVANCES, LOANS AND DEPOSITS (Nepali `)

S. No.



a. advances to Party - annex a 22,100 – B. advances to Staff - annex B – 7,302 C. Land acquisition advance - annex C 8,583,726 8,583,726 d. Letter of Credit - annex d 708,000 708,000 E. deposits - annex E 50,000 50,000

Total 9,363,826 9,349,028

SCHEDULE – 6 : TRADE & OTHER PAYABLES (Nepali `)

S. No.



1 Other Payables (annex f) 671,855 208,871 2 TdS payables 277 947

Total 672,132 209,818

290


SCHEDULE – 7 : PRE-OPERATING EXPENSES PERTAINING TO CAPITALIzATION (Nepali `)

S. No.

Particulars For the period ending on

March 31, 2013


March 31, 2012 A License & Registration Expenses: 25,000 25,000

1 License renew Expenses 25,000 25,000 B Survey Expenses: – 1,653,784

1 Consultancy Expenses [Survey] – 1,653,784 C PPA Expenses – – D Bridge Construction: – – E Transmission Line: 2,265,532 802,618

1 Transmission Work Expenses 2,265,532 802,618 2 NEa Processing Expenses – –

F Road Construction: – 75,571,597 1 road Construction Expenses – 75,571,597

G Land Acquisition: – – H Administrative Expenses: 2,796,361 6,115,242

1 Office expenses (Annex G) 28,000 31,213 2 advertisement Expenses – 63,990 3 Office Rent 100,944 377,976 4 Miscellaneous Expenses (annex h) 70,799 3,095,473 5 Printing & Stationery – 16,800 6 Telephone & Communication Expenses 50,729 93,029 7 Salary [Office Staffs] – 757,801 8 Salary [Site Office Staffs] 425,986 397,456 9 Site Office Expenses 159,864 324,096 10 Office Rent [Site Office] 65,010 – 11 Travelling Expenses 47,280 165,620 12 Vehicle Expenses 648,255 722,880 13 Membership Expenses 18,000 18,000 14 audit fee 135,600 135,600 15 depreciation on fixed assets 1,243,282 1,488,327 16 assets Written Off – 11,000 17 Insurance Premium Expenses – 579 18 Less: Profit on Sale of Fixed Assets (13,696) – 19 Less: Land acquisition Expenses – (114,293)20 Less: Interest Income (183,692) (1,470,303)

Total for the Period [April 01, 2012 to March 31, 2013] 5,086,893 84,168,241 Add: Accumulated Expenses up to March 31, 2012 255,175,824 171,007,583 Total Accumulated Expenses up to March 31, 2013 260,262,717 255,175,824

SCHEDULE – 8 : SIGNIFICANT ACCOUNTING POLICIES & NOTES TO ACCOUNT

A. Significant Accounting Policies:

1 Accounting Conventions:

The financial Statements are prepared under historical cost conventions on accrual concept and are in accordance with Nepal accounting Standards and other prevalent statutory requirement of Nepal. The accounting policies are applied consistentely by the company.

2 Use of Estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reported period. differences between actual and estimates are recognized in the period in which the results are known/materilized.

3 Fixed Assets:

fixed assets are stated at cost and the cost includes all the expenses incurred up to putting the assets in use.

291


The Company is in process of obtaining generation License, hence development costs incurred are shown under pre-operating expenditures.

4 Depreciation:

Depreciation on fixed assets are provided following WDV method. A full year depreciation is charged in the year of purchase/acquisition and no depreciation is charged in the year of sale/disposal.

5 Going Concern:

financial statement of concern is presented in going concern basis.

6 Figures in the financial statements have been expressed in nearest rupees.

B. Notes to Accounts:

1 Income Statement

Profit & Loss Statement has not been prepared in view of construction period of the company.

2 Regrouping of figures:

Previous period figures have been regrouped/rearranged wherever necessary and the figures have been restated.

ANNEXURE – A : ADVANCE TO THE PARTY (Nepali `)S.

No.Name of the party As on

March 31, 2013As on

March 31, 20121 Site Office Rent and Salary Advance 22,100 –

Total 22,100 –

ANNEXURE – B : ADVANCES TO STAFF ADVANCE AGAINST OFFICE wORK

S No.

Name of Staff As on March 31, 2013


Advance against office work1 Badri rijal – 7,302

Advance against salaryTotal – 7,302

ANNEXURE – C : ADVANCES FOR LAND ACqUISITION S.


March 31, 2013As on

March 31, 20121 Karna Bd. Sarki 923,438 873,438 2 Shanka Bd. Sarki – 50,000 3 Tanka Bd. Sarki 443,750 443,750 4 Mega Star reality Pvt. Ltd. 7,216,538 7,216,538

Total 8,583,726 8,583,726

ANNExuRE – D : LETTER OF CREDIT/GuARANTEES.


March 31, 2013As on

March 31, 20121 Bank guarantee CTBNgPB001670003 708,000 708,000

Total 708,000 708,000

ANNEXURE – E : DEPOSITSS.


March 31, 2013As on

March 31, 20121 Nepal Electricity authority (Transmission) 50,000 50,000

Total 50,000 50,000

ANNEXURE – F : OTHER PAYABLE S.


March 31, 2013As on

March 31, 20121 P.L. Sanghai 56,999 56,999 2 Bhilwara Energy Ltd (Purchase Bill) 462,984 – 3 Bajra guru Constructions Co. Pvt. Ltd. 151,872 151,872

Total 671,855 208,871

292


ANNEXURE – G : DETAIL OF OFFICE EXPENSES (Nepali `)

Details For the period ending on

March 31, 2013


March 31, 2012 Tangal house Expenses – 23,214 Transportation Expenses 28,000 – Office Expenses – 3,914 Water Expenses – 4,085 Total 28,000 31,213

ANNEXURE – H : DETAIL OF MISCELLANEOUS EXPENSES Details For the period

ending on March 31, 2013


March 31, 2012 guest Entertainment – 7,119 Miscellaneous expenses 4,450 2,927,771 Meeting Expenses 43,705 – Parking Expenses 3,998 4,960 Bank Commission 7,261 7,858 donation – 45,000 Postage & Courier – 250 repair & Maintenance 11,385 44,216 Consumable goods – 24,216 Translation Work Expenses – 21,886 Medical Expenses – 1,697 Local Conveyance – 500 Books & Periodicals – 10,000 Total 70,799 3,095,473

DETAILS OF ADVANCE TAX Particulars This Year

Amount Last Year

Amount Bank of asia Ltd. 33,582 33,582 NIC Bank Ltd. 308,570 288,296 NMB BaNK LTd. 176,208 171,129 NIB Bank Ltd. 012-01020015066 (4528100) 13,017 11,001 Commerz & Trust Bank Ltd. 45,473 45,288 Total 576,850 549,296

DETAIL OF SHARE CAPITAL Particulars Amount Triveni hydropower Pvt. Ltd. 1,754,700 Bhilwara Energy Ltd. 192,000,000 Purushottam Lal Shanghai 25,000 Sushila devi Sanghai 25,000 Subhash Chandra Sanghai 37,000 Kiran Sanghai 50,000 Birendra Kumar Sanghai 50,000 Manju devi Sanghai 25,000 govind Lal Sanghai 50,000 ram Chadra Sanghai 50,000 Triveni Energy Pvt. Ltd. 9,000,000 Total 203,066,700

Contents

001corporate information

002/003 an overview/The spirit of challenge

004/005robust pipeline of projects/ehs initiatives

006-007accolade for aD hydro power project

008-009 chairman’s Message

010-019 Director’s report

20annex. to the Directors’ report

21standalone financial statements

56 consolidated financial statements

Attachments of Financial Report 90Malana power company limited

125 aD hydro power limited

157 indo canadian consultancy services ltd.

180 nJc hydro power limited

205 Bhilwara green energy limited

229 lnJ power Ventures limited

247 chango Yangthang hydro power ltd.

267 green Ventures private limited, nepal

281 Balephi Jalbidhyut company ltd., nepal

NATIONWIDE NETWORK

Corporate Office:Bhilwara Energy Limited

Bhilwara Towers, A-12, Sector-1,NOIDA - 201 301 (NCR - Delhi), India

Website: www.bhilwaraenergy.com/www.lnjbhilwara.com

The spiriT of challenge

AnnuAl RepoRt 2012-13

Documents

bhilwaraenergy.combhilwaraenergy.com/Uploads/File/BEL_AR-2013.pdf · Contents 001 corporate information 002/003 an overview/The spirit of challenge 004/005 robust pipeline of projects/ehs