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

Website : www.bhilwaraenvergy.com / www.lnjbhilwara.com

Bhilwara Energy Limited

Group Salient Features

• The Group has a turnover of Rs. 4,000 crore - Export constitutes 46% (Rs. 1,840

crore).

• One of the largest textile houses in the country with a turnover of over Rs. 2,450 crore

- Export constitutes 42% (Rs. 1,025 crore).

• One of leading manufacturer and exporter of Graphite Electrodes in the country with

turnover of Rs. 1,084 crore - Export constitutes 74% (Rs. 807 crore).

• Largest producer and exporter of Synthetic Blended Yarn and largest range in Greige,

Dyed and Mélange Yarn with total spindleage capacity of nearly 5 Lacs.

• Manufacturer of Wool Blended and Premium Light Weight Fabrics, Worsted Fabric,

Silk Synthetic fashion Fabric and Denim Fabric.

• India's one of the largest vertically integrated Knitwear Company.

• Manufacturer of Flame Retardants, Air – texturized Yarn and Automotive Furnishing

Fabric.

• World's largest single site plant of Graphite Electrodes with a production capacity of

66,000 TPA.

• The Group has 120 MW Thermal Power Plants, approx. 300 MW Hydro Power Plants &

60 MW HFO based Captive Power Plants.

• The Group generated 1,300 Million power units in the year 2009-10.

• A consulting Company providing engineering consultancy services for Hydro Power

Projects.

Group Companies

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20 19

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29 33

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LNJ Bhilwara Group

TEXTILES

GRAPHITE

POWER

INFORMATION TECHNOLOGY

OFFICES

RSWM Limited

1. Kharigram Fibre Dyeing, Spinning Dyed & Grey Yarn

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

3. Mandpam Melange, Cotton Dyed Yarn & Yarn Dyeing

4. Rishabhdev Spinning PV Blended Grey Yarn

5. Ringas Fibre Dyeing & Spinning Dyed Yarn

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

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

8. LNJ Nagar, Mordi Thermal Power

Cheslind Textiles Ltd.

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

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

Maral Overseas Ltd.

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

12. Maral Sarovar Captive Thermal Power

13. Noida Knitted Garments


BSL Ltd.

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

16. Jaisalmer Wind Power Generation

BMD Pvt. Ltd.

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

Bhilwara Technical Textiles Ltd.

18. LNJ Nagar, Mordi Technical Textiles

HEG Ltd.

19. Mandideep Graphite Electrodes

20. Mandideep Captive Thermal Power

21. Tawa Captive Hydro Electric Power

Bhilwara Energy Ltd.

22. Pathankot UBDC Stage III Hydro Electric Power Generation

Malana Power Company Ltd.

23. Malana (Kullu) Hydro Electric Power Generation

AD Hydro Power Ltd.

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

NJC Hydro Power Ltd.

25. Tawang Nyam Jang Chhu Hydro Electric Power Generation

Indo Canadian Consultancy Services Ltd.

26. Noida Power Engineering Services

Bhilwara Scribe Pvt. Ltd.

27. Bhopal Medical Transcription Services

28. Bengaluru Medical Transcription Services

Bhilwara Infotech Ltd.

29. Bengaluru IT Services

Corporate Office

30. Noida (NCR-Delhi)

Regional / Marketing

31. Mumbai 35. Ludhiana

32. Kolkata 36. Amritsar

33. Bengaluru 37. Bhilwara

34. New Delhi

25

01

Corporate Information 02

Message from the Chairman 03

Directors’ Report 05

Annexures to the Directors’ Report 10

Standalone Financial Statements

Auditors’ Report 11

Balance Sheet 14

Schedules 15

Cash Flow Statement 25

Balance Sheet Abstract 26

Statement Pursuant to Sec. 212 27

Consolidated Financial Statements

Auditors’ Report 32

Balance Sheet 33

Profit and Loss Account 34

Schedules 35

Cash Flow Statement 51

Attachments of Annual Report

a. Malana Power Company Limited 55

b. AD Hydro Power Limited 92

c. Indo Canadian Consultancy Services Limited 123

d. NJC Hydro Power Limited 142

e. Green Ventures Private Limited, Nepal 151

CONTENTS

Dear Stakeholders,

2009-10 has been a year of rebound for the global economy from the

widespread crisis amidst ongoing policy support and improving financial

market conditions.

India's growth-inflation dynamics are in contrast to the overall global

scenario. The economy is recovering rapidly from the growth slowdown.

The growth is driven by robust performance of the manufacturing sector

on the back of government and consumer spending. IMF and other

economic agencies have been bullish on Indian economy. IMF has

revised the growth forecast of the Indian economy to 9.5% for 2010 from

8.8% projected earlier, based on robust corporate profits and favourable

financing conditions, which are likely to fuel investments.

Sustenance of such high levels of economic growth and development is

dependent on adequate, cost-effective and quality infrastructure.

Accordingly the ongoing economic reforms have attached a high priority

to the better utilization of existing infrastructure and developments in new

infrastructures so that existing bottlenecks do not inhibit the overall

economic growth.

Power Sector is a key constituent of infrastructure and closely linked to

output. To deliver sustained growth rate of over 8% and to meet the

lifeline energy needs of all citizens, the power sector needs to grow at

ChairmanMessage from the

BOARD OF DIRECTORS

KEY EXECUTIVES

STATUTORY AUDITORS

Chairman

Mr. Ravi Jhunjhunwala

Directors

Mr. Riju Jhunjhunwala

Mr. Rishabh Jhunjhunwala

Dr. Kamal Gupta

Mr. Salil Bhandari

Mr. M. K. Doogar

Mr. Sunil Chawla

Mr. Vimal Banka

Mr. O. P. Ajmera Director - Finance

Mr. Ravi Gupta Company Secretary

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

Chartered Accountants

New Delhi

TECHNICAL CONSULTANTS

BANKERS

CORPORATE OFFICE

REGISTERED OFFICE

RSW International Inc., Canada

Indo Canadian Consultancy Services Limited

Axis Bank Limited

State Bank of India

HDFC Bank Limited

Yes Bank Limited

IDBI Bank Limited

Kotak Mahindra Bank Ltd.

Bhilwara Towers

A-12, Sector - 1

Noida - 201 301 (U.P.)

Phone : 0120 - 2541810, 4390300

Fax : 0120 - 2531648, 2531745

Bhilwara Bhawan

40-41, Community Centre

New Friends Colony,

New Delhi - 110 025

Phone : 011 - 26822997

CORPORATE INFORMATION

02

REPORT DIRECTORS'

Indo Canadian Consultancy Services Limited, NJC Hydro Power Limited and Green Ventures Private Limited, Nepal along with statement pursuant to the provisions of Section 212 of the Companies Act, 1956 is attached to this Annual Report. The Audited Consolidated Balance Sheet for the year 2009-10 is also attached to this Annual Report.

AD Hydro Power Limited’s, Subsidiary of your Company, 192 MW Allian Duhangan HEP is in the advanced stages of commissioning and is likely to be partly operational in first half of the financial year 2010-11. Once the project is commissioned it will add significantly to the top & bottom line of the Company at consolidated level and the Company’s portfolio of operational projects.

Projects specific information is as under:

Nyamjang Chhu HEP in the State of Arunachal Pradesh

The Detailed Project Report (DPR) for this project has already been approved by the State Authority and as of now is with the Central Electricity Authority (CEA) for their approval. The Company expects to get the approval from CEA within the financial year 2010-11. The Company has formed a 100% subsidiary by the name of NJC Hydro Power Limited for the implementation of said project in the current year itself. To speed up the work, the Company has already awarded the contracts for the constructions of two power projects of 7.5 MW (Khangtang- Nalla) and 3.0 MW (Shyaro-Nallah) for this project to ensure smooth availability of power for the construction of main project.

YEAR OF FIRM STRIDE

To the Members

M/s Bhilwara Energy Limited

Dear Member,

On behalf of the Board of Directors, we have pleasure in presenting the Fourth Annual Report of the Board and audited statement of accounts for the year ended 31st March, 2010 together with the Auditors’ Report.

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

As of 31st March, 2010, the Company’s expenditure on various accounts is detailed below:

(Rs. in Million)

Fixed Assets (Gross) 53.79 113. 99

Pre-operative Expenses 917.98 277.67

Investments 1,886.05 1,884.91

Net Current Assets 482.98 600.29

Miscellaneous Expenditure 14.62 6.61

TOTAL 3,355.42 2,883.47

The financial statements of Subsidiaries of your Company, Malana Power Company Limited, AD Hydro Power Limited,

FINANCIAL HIGHLIGHTS

PARTICULARS 31.03.2010 31.03.2009

04 05

1.8 - 2 times the GDP rate of growth. At >8% GDP growth rate, the required installed power generation capacity is likely

to be around 306,000MW in 2016-17 and 425,000MW in 2021-22 against installed capacity of 159,398MW (as of 31st

March 2010), which translates into a YOY capacity addition of 30,000 MW. As compared to that, 22,000 MW has been

added during last five years under APDRP (Accelerated Power Development & Reforms Program). Achieving these

goals would require investments of US $ 250 Billion into the power sector; increasing the role of Hydel & Renewable

Energy in the Energy Mix and; urgent need to develop the alternatives : both in the Fuel & Technology terms.

This scenario presents both immense opportunities and extreme challenges to your Company. The opportunities are in

terms of taking up additional power projects for execution and the challenges shall be for ensuring their execution within

limited timeframe and resources. Successful execution of power projects at hand and new projects can take your

Company to new heights of glory, but this will require raising of bar for achievements of individuals, teams and Company

as a whole.

During the year under consideration, your Company at consolidated level achieved a turnover of Rs. 1,651 million and a

Net Profit of Rs. 981 million.

I am also pleased to inform that despite all unanticipated odd and adverse conditions encountered by us during the

project implementation of Allain-Duhangan, the Allain side of the project has started generating power on 17th of

July,2010. However, for want of completion of dedicated transmission line, the project is being operated at lower

voltage in order to evacuate the power through partly completed dedicated transmission line and State Utility

Transmission System. It has been brought to our notice that such operation at reduced voltage has been successfully

carried out for the first time in the world. I would like to extend appreciation to our technical team and consultants for

making this operation a success. Meanwhile, the work of dedicated transmission line has progressed at very fast pace

and is expected to be completed by middle of next month.Thereafter, the operations would be brought back to normal

voltage and power shall be evacuated through the dedicated transmission line. Further, the excavation of Duhangan

tunnel is also progressing well and it is expected that the Duhangan portion shall be operational in the second quarter

of 2011.

I am also pleased to announce that against our applications for 3 hydro power projects in Nepal, two of our applications

namely for : Mughu Karnali-1 for 194 MW and Humla Karnali-1 for 274 MW have been accepted by the Government of

Nepal and requisite licenses have been granted.

I would also like to share that your Company is sincerely exploring possibilities of adding generation capacities in other

renewable sources like : Solar and Wind.

On behalf of the Board of Directors, I would like to express our sincere gratitude to the Government of India,

Government of Nepal, Government of Himachal Pradesh, Government of Arunachal Pradesh, Government of Punjab,

Himachal Pradesh State Electricity Board, Nepal Electricity Board, PTC India, all Government departments and

agencies, investors, lenders, and bankers for their unending support. I would also take this opportunity to thank our

employees and business associates, who despite all adverse circumstances have been the pillar of strength for the

Company.

With Best Regards,

Ravi Jhunjhunwala

Chairman

07

SHARE CAPITAL

ENVIRONMENT, HEALTH AND SAFETY

HUMAN RESOURCE DEVELOPMENT

During the period under review, the Company has increased its Authorised Capital from Rs. 140 Crore to Rs. 240 Crore.

The Company has during the period converted 1,74,02,203 Warrants into 1,74,02,203 Equity Shares of Rs. 10/- each and forfeited the balance 20,23,512 Warrants, which could not be exercised.

During the period, the Company has also issued Bonus Equity Shares in the ratio 1:2 (one Bonus Equity Share for every two existing Equity Shares held) and accordingly allotted 4,51,98,143 Bonus Equity Shares.

In the upcoming projects, Environment Management Plan comprising international practices, procedure and norms shall be adopted to take care of environment and social impacts on the Projects. Further, Company is committed to IFC to comply with IFC policy and performance standards on Social & Environmental Sustainability for all upcoming projects / acquisitions and also at corporate level.

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

The Company strives to implement the best HR practices so as to ensure that talent retention is ensured at all levels. Training is being continuously imparted to all the employees working throughout the organization.

The Company believes that the value created by the employees should be shared with them and promotes culture of employee ownership in the Company. To convert

this philosophy into reality, the Company has set aside a pool of two million Shares in first go to be given to employees at a formulated strike price as per the detailed ESOP Scheme currently under preparation.

Employee relations continued to be cordial and harmonious at all levels and in all divisions of the Company.

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

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

During the year 2009-10, no employee of the Company was covered as per the provision of Section 217(2A) of the Companies Act, 1956 (the Act), read with the Companies (Particulars of Employees) Rules, 1975, as amended, regarding employees.

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

i) That in the preparation of the annual accounts for the year ended on 31st March 2010, the applicable

DIVIDEND & OTHER APPROPRIATION

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

PARTICULARS OF EMPLOYEES

DIRECTORS’ RESPONSIBILITY STATEMENT

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

The DPR for the project has already been approved by the State Authority. Implementation agreement has already been signed. The Company is now in process of getting the tariff revised for this project with the state authorities. Once this upward revision in tariff takes place, the Company intends to implement this project on fast track. The total land required for this project is estimated at 839 acres comprising Government as well as private land which have already been identified. Out of this, the Government of Punjab has already approved the acquisition of private land totalling 691 acres for which notification u/s 4 of the Land Acquisition Act is to be issued. The irrigation department of the Government of Punjab has already obtained in principle and forest clearance for approximately 104 acres of forest land required to be used by the Company for realignment and remodeling of main UBDC line.

120 MW Likhu HEP and 50 MW Balephi HEP in Nepal

The Company is in the process of preparing tender documents for these projects and simultaneously working on financial closure for the two projects. The Company has approached an Indian Bank for debt syndication for its Likhu project and has also initiated dialogue with international financial institution for debt arrangement of Balephi project. To protect lender as well overall interest of the Company and also to mitigate the risk, the Company has initiated the process of entering into fallback PPA with the competent authority of Nepal to sell power in the intermittent period of construction of Cross Border Transmission Line.

During the year, the Company has also reached to an agreement with Nepalese parties by increasing its stake in the Balephi Jalbidhyut Company Limited from 33.33% to 60% and rationalised its stake in Green Ventures Private Limited from 63.33% to 57%.

Other Projects

For the other projects, Company is under various stages of implementation like signing of MOU, preparation of DPR and other allied activities.

During the year, the Company has submitted DPR for 10 MW Solar PV Power Project in Rajasthan to Rajasthan Renewable Energy Corporation. The Company has also signed a MOU with M/s. PLG Power, Maharashtra for putting up the 10 MW Solar Power plant in Rajasthan.

The Company is exploring various possibilities in Nepal for identification of new projects and obtaining survey licenses. The Company is in advanced stages of receiving some survey licenses and once received would further take the development of these projects.

Your Company has signed Term Sheets with International Finance Corporation (IFC), a member of World Bank Group and India Clean Energy III Limited, Mauritius, whereby they together will invest US$50 million into the Company in the form of Equity. The funds to be raised will be utilised towards development of power projects of the Company, its subsidiaries, SPVs and Joint Ventures and identification of new projects.

The Company has various projects in pipeline for development and execution in coming years. The Company plans to achieve total generating capacity of~2,500 MW in hydro power by 2016-17. The Company envisages developing all hydro power projects under Clean Development Mechanism (CDM) norms.

NEW ENDEAVORS

FUTURE OUTLOOK

Annual Report 2009-1006

Accounting Standards had been followed along with proper explanation relating to material departures;

ii) That the accounting policies have been selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the financial year ended on 31st March, 2010;

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

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

Mr. Sunil Chawla, Directors, retire by rotation and being eligible, offers themselves for re-appointment.

Your Directors are pleased to inform that Company has inducted Mr. Ravi Jhunjhunwala, Dr. Kamal Gupta, Mr. Riju Jhunjhunwala and Mr. Rishabh Jhunjhunwala as an Additional Directors of the Company to hold office upto the date of ensuing general meeting. The Company has received notice u/s 257 of the Companies Act from shareholder of the Company proposing the candidature of Mr. Ravi Jhunjhunwala, Dr. Kamal Gupta, Mr. Riju Jhunjhunwala and Mr. Rishabh Jhunjhunwala as Directors of the Company. The Board recommends their appointement.

DIRECTORS

Further, Mr. B. P. Singh has resigned from the Directorship of the Company. Your Board place on record sincere thanks for the contribution made by him during his tenure.

The audit committee of the Company comprises of three Directors viz Mr. O. P. Ajmera, Mr. Vimal Banka and Mr. B. P. Singh. All the members were present during the meeting of the audit committee and the proceedings of the committee were in accordance with the provisions of the Companies Act, 1956.

M/s. S. S. Kothari Mehta & Co., Chartered Accountants has conveyed their willingness for re-appointment as Statutory Auditors of the Company for the financial year ending on 31st March, 2011. The Company has also received consent letter from M/s. S. S. Kothari Mehta & Co., Chartered Accountants under section 224(1B) of the Companies Act, 1956, being eligible, showing willingness for their appointment as Statutory Auditors of the Company for the financial year ending on 31st march, 2011. The Board recommends for the appointment of M/s. S. S. Kothari Mehta & Co., Chartered Accountants as Statutory Auditors of the Company.

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

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

AUDIT COMMITTEE

AUDITORS

AUDITORS’ REMARKS

PUBLIC DEPOSITS

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

CORPORATE GOVERNANCE

INDUSTRIAL RELATIONS

ACKNOWLEDGEMENTS

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

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

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

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

Your Directors record their grateful appreciation of the encouragement, assistance and co-operation received

from shareholders, Ministry of Power, Government of India, Government of Himachal Pradesh, Himachal Pradesh State Electricity Board, Government of Arunanchal Pradesh, Government of Punjab, Government of Nepal, Nepal Electricity Authority, its lenders and other Government Departments. The Board looks forward to their continued support and co-operation in the coming years as well.

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

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

For and on behalf of the Board of Directors

Vimal Banka O. P. AjmeraDirector Director - Finance

Place : NoidaDate : 3rd June, 2010

Annual Report 2009-1008 09

10

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

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

A. CONSERVATION OF ENERGY – NIL

B. TECHNOLOGY ABSORPTION – NIL

C. FOREIGN EXCHANGE EARNING AND OUTGO - The details of Foreign Exchange Earnings and Outgo during the year 2009-10 are mentioned in Notes to Accounts.

(Rs. in Million)

Foreign Travelling Nil 0.6

Investment in Joint Ventures in Nepal 80.00 125.0


Place : Noida Vimal Banka O. P. AjmeraDate : 3rd June, 2010 Director Director - Finance

Foreign Exchange Outgo This Year Previous Year

REPORT AUDITORS'

To

The members of Bhilwara Energy Limited

We have audited the attached Balance Sheet of

BHILWARA ENERGY LIMITED as at 31st March, 2010

and also the Cash Flow Statement of the Company for

the year ended on that date, annexed thereto. No Profit &

Loss Account has been prepared as the company has

not commenced any commercial operations, necessary

details have been furnished in Schedule-5 'Pre-

operative expenditure (pending allocation). These

financial statements are the responsibility of the

Company's management. Our responsibility is to

express an opinion on these financial statements based

on our audit.

We have conducted our audit in accordance with

auditing standards generally accepted in India. Those

Standards require that we plan and perform the audit to

obtain reasonable assurance about whether the

financial statements are free of material misstatement.

An audit includes examining, on a test basis, evidence

supporting the amounts and disclosures in the financial

statements. An audit also includes assessing the

accounting principles used and significant estimates

made by the management, as well as evaluating the

overall financial statement presentation. We believe that

our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditors' Report) Order,

2003 as amended by Companies (Auditors' Report)

(Amendment) Order, 2004 (Collectively the Order)

issued by the Central Government of India in terms of

Section 227 (4A) of the Companies Act, 1956 and on the

basis of such checks as we considered appropriate and

according to the information and explanations given to

us, we enclose in the Annexure a statement on the

matters specified in paragraphs 4 and 5 of the said Order.

Further to our comments in the Annexure referred to

above, we report that:

a) We have obtained all the information and

explanations which, to the best of our knowledge

and belief, were necessary for the purposes of our

audit;

b) In our opinion, proper books of account, as required

by law, have been kept by the Company so far as

appears from our examination of those books;

c) The Balance Sheet and Cash Flow Statement dealt

with by this report are in agreement with the books of

account;

d) In our opinion, the Balance Sheet and Cash Flow

Statement dealt with by this report comply with the

Accounting Standards referred to in sub - section

(3C) of Section 211 of the Companies Act, 1956.

e) On the basis of written representations received

from the directors as on 31st March, 2010 and taken

on record by the Board of Directors, we report that

none of the directors is disqualified as on 31st

March, 2010 from being appointed as a director in

terms of clause (g) of sub section (1) of section 274 of

the Companies Act, 1956.

f) In our opinion and to the best of our information and

according to the explanations given to us, the said

Accounts read with the Accounting policies and

Notes thereon, give the information required by the

Companies Act, 1956 in the manner so required and

give a true and fair view in conformity with the

accounting principles generally accepted in India:

i) In the case of Balance Sheet, of the state of

affairs of the Company as at 31st March, 2010;

and

ii) In the case of Cash Flow Statement, of the cash

flows for the year ended on that date.

For S. S. Kothari Mehta & Co.

Chartered Accountants

Firm Regn. No. 000756N

Arun K. Tulsian

Partner

Membership No.: 089907

Place : New Delhi

Dated : 3rd June, 2010

11

12


ANNEXURE TO AUDITORS' REPORT

(Annexure referred to in our report of even date)

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

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

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

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

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

(b) The company has not taken any loan, secured or unsecured, from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly clauses 4 (iii) (f) and (g) of the Order are not applicable.

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

5. (a) Based upon the audit procedures applied by us and according to the information and explanations given to us, we are of the opinion that the there are no transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956.

(b) In our opinion, and according to the information and explanations given to us, there are no transactions made in pursuance of contracts

or arrangements required to be entered in the register maintained under section 301 of the Companies Act, 1956 and aggregating during the year to Rupees five lacs or more in respect of reach party.

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

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

8. Maintenance of cost records has not been prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 in respect of any of the activities carried out by the company.

9. (a) According to the examination of records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Sales-tax, Wealth-tax, Service tax, Custom Duty, Excise Duty, Cess and other material statutory dues, as applicable, have been generally regularly deposited with the appropriate authorities during the year and there are no such dues outstanding for more than six months from the date they became payable as on the date of balance sheet.

(b) According to the information and explanations given to us and as per the books and records examined by us, there are no dues of Custom duty, Sales Tax, Wealth Tax, Income Tax, Service Tax, Excise Duty and Cess which have not been deposited on account of any dispute.

10. Since the Company is yet to commence commercial production, no comments are being offered for accumulated losses at the end of the financial year.

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

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

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

13

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

15. The Company has not given any guarantee for loans taken by others from financial institutions / banks.

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

17. On the basis of information and explanations given to us, and on the basis of an overall examination of the balance sheet of the company, the funds raised by the Company on short-term basis of Rs. 110 crore have been applied for long-term investment.

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

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

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

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

For S. S. Kothari Mehta & Co.Chartered AccountantsFirm Regn. No. 000756N

Arun K. TulsianPartnerMembership No.: 089907

Place : New DelhiDated : 3rd June, 2010

14


` in ‘000’Schedules As at

31.03.2010 As at

31.03.2009 SOURCES OF FUNDSShareholders’ FundsShare capital 1 1,755,944 729,941 Reserves and surplus 2 499,479 987,818 Warrants – 9,713 Loans 3 1,100,000 1,156,000 TOTAL 3,355,423 2,883,472

APPLICATION OF FUNDSFixed Assets Gross block 4 13,269 12,089 Less : Depreciation (4,166) (2,169)Net block 9,103 9,920 Capital work-in-progress including capital advances 44,686 104,069 Project and pre-operative expenses (pending allocation)

5 917,983 277,676

971,772 391,665 Investments 6 1,886,047 1,884,901 Current Assets, Loans and AdvancesInventories (Explosive stock) 83 98 Cash and bank balances 7 28,490 31,047 Other current assets 8 3,176 2,828 Loans and advances 9 499,596 634,410

531,345 668,383 Less: Current Liabilities and ProvisionsLiabilities 10 8,964 65,659 Provisions 11 39,400 2,426

48,364 68,085 Net Current Assets 482,981 600,298 Miscellaneous Expenditure 12 14,623 6,608 (to the extent not written off or adjusted) TOTAL 3,355,423 2,883,472 Notes to AccountsThe Schedules referred to above form an integral part of the Balance Sheet.

BALANCE SHEET AS AT 31st MARCH, 2010

As per our report of even dateFor S. S. Kothari Mehta & CoChartered AccountantsFirm Registration No. : 000756N

Arun K. TulsianPartnerMembership No. 089907



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

15

SChEDULE 1: ShARE CAPITAL` in ‘000

As at 31.03.2010

As at 31.03.2009

Authorised200,000,000 (Previous year 100,000,000) Equity shares of ` 10 each 2,000,000 1,000,000

40,00,000 (Previous year Nil ) Cumulative Redeemable Preference Shares of ` 100/– each

400,000 –

2,400,000 1,000,000 Issued, Subscribed and Paid up 1,35,594,428 (Previous year 72,994,082) Equity shares of ` 10 each

fully paid up 1,355,944 729,941

40,00,000 (Previous year Nil) 0.01% Cumulative Redeemable Preference share of ` 100/– each fully paid up

400,000 –

1,755,944 729,941 Of the above ;i) 17,402,203 (Previous year Nil) Equity share have been issued by way of conversion of warrants.ii) 45,198,143 (Previous year Nil) Equity share have been issued as fully paid bonus shares by capitalistion of

Securities Premium Account

SChEDULE 2: RESERVES AND SURPLUS

Capital Reserve Account Opening Balance – – Add : Warrant money forfeited during the year 1,012 – Closing Balance 1,012 – Securities Premium Account Opening Balance 987,818 987,818 Less : Utilised for issue of Bonus Shares during the year 451,981 – Less : Premium on redemption of preference shares. 37,370 Closing Balance 498,467 987,818 499,479 987,818

SChEDULE 3: LOANS

Secured loansTerm Loan From Banks (Note 1) 1,100,000 – From Others (Note 2) – 1,090,000 Unsecured loans Short Term Loan – From Banks – – From Others (Loan From Body corporate) (Note 3) – 66,000

1,100,000 1,156,000

Note 1: Term loan is secured by way of pledge of 3,38,98,607 (Previous year NIL) shares held by Promoters group in the company and first charge by way of hypothecation on the movable assets of the company. Amount due within next one year 1100000 thousand (Previous year ` NIL).Note 2: Term loan is secured by way of pledge of NIL shares (Previous year 271,18,886) shares held by promoter group in the company. Amount due within next one year ` NIL (Previous year ` NIL).Note 3: Amount due within next one year ` NIL (Previous year 66000 thousand)

SCHEDULES TO ACCOUNTS

16


SChEDULE 4: FIXED ASSETS ` in ‘000’

GROSS BLOCK DEPRECIATION NET BLOCKParticulars As At

01.04.2009Additions Sale/

AdjustmentAs At

31.03.2010 Upto

01.04.2009 For The

YearSales/

TransferUpto

31.03.2010 As At

31.03.2010As At

31.03.2009Furniture & Fixtures 703 102 – 805 123 106 – 229 576 579 Computers 939 50 – 989 350 247 – 597 392 590 Other office equipments 586 305 – 891 90 112 – 202 689 496 Vehicles 3,268 – – 3,268 814 635 – 1,449 1,819 2,454 Electrical Equipments & Fittings

643 292 – 935 98 77 – 175 760 546

Project Equipment 5,251 431 – 5,682 611 696 – 1,307 4,375 4,639 Building (Explosive Magazine Stores)

359 – – 359 7 18 – 25 334 352

TOTAL TANGIBLE ASSETS

11,749 1,180 – 12,929 2,093 1,891 – 3,984 8,945 9,656

INTANGIBLE ASSETSSoftware 340 – – 340 76 106 – 182 158 264 TOTAL INTANGIBLE ASSETS

340 – – 340 76 106 – 182 158 264

Total (A) 12,089 1,180 – 13,269 2,169 1,997 – 4,166 9,103 9,920 Capital Work In Progress – – – – – – – – 44,686 104,069 Total (B) – – – – – – – – 44,686 104,069 Total (A+ B) 12,089 1,180 – 13,269 2,169 1,997 – 4,166 53,789 113,989Previous year 4,055 8,484 450 12,089 263 2,001 95 2,169 9,920 3,792

SChEDULE 5: PROjECT AND PRE-OPERATIVE EXPENSES (PENDING ALLOCATION)

As at 31.03.2010

As at 31.03.2009

Personnel ExpensesSalaries , wages and bonus 34,152 15,811 Contribution to provident and other funds 1,517 456 Workmen and staff welfare expenses 1,579 508

37,248 16,775 Administrative and other expensesRent 5,770 1,092 Rates & taxes 52 32 Insurance 304 200 Repairs and maintenance 85,734 404 Travelling expense 10,328 7,857 Conveyance 2,180 918 Vehicle running & hiring expenses 4,290 2,819 Communication expenses 790 411 Director remuneration 2,154 1,195 Audit Fees 341 166 Advertisement 622 566 Legal & professional charges 75,208 58,018 Fee & subscription 945 307 Stores consumption 1,283 1,032 Power and fuel 476 181 Testing & Surveys 3,600 3,234 Consultancy Charges 142,582 73,272 Project processing fee 11,600 11,600 Upfront Premium- NJC 243,080 – Miscellaneous expenses 37,372 30,012 Financial / bank charges 274,121 86,252 Wealth Tax 25 15 Depreciation 4,259 2,263

907,119 281,846 Less : Interest earned (Tax deducted at source ` 806/- thousand, (Previous year ` 4515/- thousand) (net of provision for income tax ` 8695 thousand. upto Previous year 6245 thousand).

(26,365) (20,926)

Less -: Profit on Sale of Fixed Assets (19) (19) 917,983 277,676

17

SChEDULE 6: INVESTMENTS (LONG TERM – NON TRADE)` in ‘000’

As at 31.03.2010

As at 31.03.2009

Unquoted – Fully Paid 75,238,123 (Previous Year 75,238,123) Equity Shares of ` 10/- each

of Malana Power Company Limited (Subsidiary company) [includes 50 equity shares (Previous Year 50) held jointly with nominees of the company] Refer Note No. 8 On Schedule

1,810,338 1,810,338

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

10,000 10,000

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

42,449 42,449

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

22,114 22,114

10,333 Equity Shares of NR. 100/- each fully paid up (Previous year Nil/-) of Balephi Jalvidyut Co. Ltd. Nepal (Overseas Associate Company)

646 –

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

500 –

1,886,047 1,884,901

SChEDULE 7: CASh AND BANK BALANCES

Cash in hand 312 220 Balances with scheduled banks: In current accounts 8,178 30,827 Deposits with Bank 20,000 –

28,490 31,047

SChEDULE 8: OThER CURRENT ASSETS

Interest accrued on deposits and others 3,176 2,828 3,176 2,828

SChEDULE 9: LOANS AND ADVANCES

(Unsecured, considered good ) Advances recoverable in cash or in kind or for value to be received* 25,747 227,077 Loan to Subsidiary Companies (Interest free)** 252,630 252,630 Loan to Body Corporates 22,176 20,955 Security deposit with govt. departments & others 5,239 20,029 Share application money ( Pending for allotment ) 193,804 113,719

499,596 634,410

*Advance given to Malana Power Company Ltd. Maximium balance outstanding & year end balance ` 1,98,088/- thousand & ` Nil – respectively. (Previous year 5,01,860/- thousand & Rs.1,25,715/- thousand respectively) **Loan given to Malana Power Company Limited Maximum balance outstanding ` 2,52,630/- thousand (Previous Year Rs.2,52,630/–thousand)

18


SChEDULE 10: LIABILITIES` in ‘000’

As at As at 31.03.2010 31.03.2009

Sundry Creditors * Payable to Micro and Small enterprises – – Payable to others 3,366 19,687 Deposits from employees and others 95 70 Other liabilities 5,503 45,902

8,964 65,659 * Includes amount payable to companies under the same management, maximum balance outstanding & year end balance ` 6604/- & ` 2314/-respectively. (Previous year ` 12071/- & Rs.6675/- respectively)

SChEDULE 11: PROVISIONS

Taxation including Fringe benefit tax (Net of Prepaid tax ) 866 1,872 Provision for Wealth Tax 8 15 Provision for Premium on redemption of preference shares 37,370 – Gratuity 291 149 Leave encashment 865 391

39,400 2,427

SChEDULE 12: MISCELLANEOUS EXPENDITURE (TO ThE EXTENT NOT wRITTEN OFF OR ADjUSTED)

Share issue expenses Balance as per last account 6,608 6,608 Addition during the year 8,015 – 14,623 6,608

19

SChEDULE – 13: SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS

A. SIGNIFICANT ACCOUNTING POLICIES

(1) BASIS OF PREPARATION OF FINANCIAL STATEMENTS

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

(2) USE OF ESTIMATES

The preparation of financial statements requires estimates and assumptions that affect the reported amounts of income and expenses for the period, the reported amounts of assets and liabilities and disclosures relating to contingent liabilities as on the date of financial statements. Difference between the actual results and estimates are recognized in the period in which the results are known /materialized.

(3) FIXED ASSETS

Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition of fixed assets, which take substantial period of time to get ready for its intended use, are also included to the extent they relate to the period till such assets are ready to be put to use.

The carrying amounts of assets are reviewed at each balance sheet date to ascertain if there is any indication of impairment based on internal/external factors.

(4) INTANGIBLE ASSETS

Capital Expenditure on purchase and development of identifiable non-monetary assets without physical substance is recognized as Intangible Assets in accordance with principles given under AS-26- Intangible Assets. These are grouped and separately shown under the Schedule of Fixed Assets. These are amortized over their expected useful life, not exceeding ten years.

(5) VALUATION OF INVENTORIES

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

(6) INVESTMENTS

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

(7) CASh AND CASh EQUIVALENTS

Cash and cash equivalents in the cash flow statement comprise cash at bank and cash / cheques in hand and short term deposits with banks less short term advances from banks.

(8) REVENUE RECOGNITION

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

(9) DEPRECIATION

Depreciation is provided on written down value method at the rates and in the manner prescribed in Schedule – XIV to the Companies Act, 1956.

Depreciation on software is provided on written down value method at the rate of 40% per annum based on its estimated useful life.

(10) EXPENDITURE INCURRED DURING CONSTRUCTION PERIOD

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

(11) MISCELLANEOUS EXPENDITURE TO ThE EXTENT NOT wRITTEN OFF OR ADjUSTED

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

20


(12) TAXES ON INCOME

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

(13) RETIREMENT BENEFITS

Expenses and liabilities in respect of employee benefits are recorded in accordance with AS 15 – Employee Benefits (revised 2005) issued by the ICAI.

(a) Provident Fund

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

(b) Gratuity

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

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

(c) Leave Encashment

Liability in respect of leave encashment becoming due or expected after the balance date is estimated on the basis of an actuarial valuation performed by an independent actuary using the projected unit credit method.

(d) OtherShortTermBenefits

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

(14) PROVISIONS & CONTINGENT LIABILITIES

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

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

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

(15) FOREIGN EXChANGE

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

(16) IMPAIRMENT OF ASSETS

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

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

21

NOTES TO ACCOUNTS

1. CONTINGENT LIABILITIES

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

(b) Liability on Account of Investments committed in Green Ventures Pvt. Ltd. – Nepal, and remaining unpaid is Nepali ` 16,66,667/- (equivalent to INR 10,41,720/- aprox.). (Previous year Nepali ` 16,66,667/- (Equivalent to INR ` 10,41,720/-)

2. Estimated amount of contracts remaining to be executed on capital account as on the date of Balance Sheet (net of advances) are ` 11,35,032 in thousand (Previous Year ` 25,119 /- in thousand).

3. On May 26, 2009 Company has issued 4000000, 0.01% Cumulative Redeemable Preference Shares of ̀ 100/- each at par, redeemable at premium at the end of the fifth year from the date of issue. Preference Shares carry a put & call option at the end of one year from the date of issue and every six month there after and in such event redemption premium to be paid as per terms of issue.

In the absence of any commercial operations, there is no profit & loss account. The coupon liability of 0.01% that amount to ` 39 thousand has not been provided in the books being in the nature of dividend.

4. In the year 2006-07, the Company had issued 1,94,25,715 share warrants of ` 10/- each convertible into equity shares of ` 10/- each at par. During the current financial year 1,74,02,203 share warrants have been converted in fully paid up Equity share of ` 10 each and balance warrants have been forfeited.

5. As the Company has not commenced commercial operations as on March 31, 2010 no Profit and Loss Account has been prepared. A Statement of Project and Pre-operative expenses (pending allocation) has been prepared as per Schedule 5 and expenses incurred during the year ended March 31, 2010 in relation to the construction of the project, have been included under the said Schedule, to be allocated appropriately to the relevant fixed assets at the time of commencement of commercial operations.

6. On the basis of the information so far made available to the Company by its creditors regarding registration under the provisions of Micro, Small and Medium Enterprises Development Act, 2006 (“Act”) there are no such parties as defined under the Act and, therefore, disclosures regarding delay in payment of outstanding amounts and interest payable thereon are not furnished

7. During the year, Company has given undertaking to Yes Bank limited for term loan facilities of ` 260,00,00/- in thousand availed by Malana Power Company Limited, one of the subsidiaries of the company, for not diluting the shareholding in the said company till the full & final payment of the lenders.

8. During the year, Company has incorporated NJC Hydro Power Ltd. 100% wholly owned Subsidiary Company.

9. The Company currently holds 63.33% of the equity shares of the subsidiary Company Green Venture (P) Limited, Nepal. Pursuant to the Share Purchase and Joint Venture Agreement to be entered into between the Company and Triveni Energy Private Limited and Mrs. Nirjala Raut, the shareholding of the company in the subsidiary would reduce to 57%, for this, necessary Board Resolution has been passed on dated December 31, 2009.

10. The Company currently holds 33.33% of the equivalent shares of the subsidiary Company Balephi Jalvidyut Company Limited, Nepal. Pursuant to the Share Purchase and Joint Venture Agreement to be entered into between the Company and Triveni Hydro Power Private Limited, the shareholding of the company in the subsidiary would increase to 60%, for this, necessary Board Resolution has been passed on dated December 31, 2009.

11. EMPLOYEE BENEFITS AS PER AS-15

The Company has adopted Revised Accounting Standard-15 ‘Employee Benefit’ issued by the Institute of Chartered Accountants of India

DefinedContributionPlan (` In 000)

2009-10 2008-09

Employer’s Contribution to Provident fund 830 364

Employer’s Contribution to Superannuation fund Nil 230

22


DefinedBenefitPlan

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

Reconciliation of amount recognized in Balance Sheet

PARTICULARS Gratuity31.03.2010

(` In 000)

Gratuity 31.03.2009

(` In 000)

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

Present value of obligations as at the end of the period 291 149

Net Assets/ ( Liability) recognized in the balance sheet ( 291) ( 149 )

PARTICULARS Leave Encashment

31.03.2010 (` In 000)

Leave Encashment 31.03.2009

(` In 000)

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

Present value of obligations as at the end of the period 865 391

Net Assets/ ( Liability) recognized in the balance sheet (865) (391)

Principal Actuarial Assumptions

a) Economic Assumptions

PARTICULARS Rate (%) 31.03.10

Rate (%) 31.03.09

a) Discount rate 8.10 7.00

b) Future salary increase 5.00 4.50

c) Expected Rate of return on plan Assets 0.00 0.00

b) Demographic Assumptions

PARTICULARS 31.03.10 31.03.09

a) Retirement Age 60 Years 60 Years

b) Mortality Table LIC(1994-96)DulyModified LIC ( 1994-96) Duly Modified

c) Withdrawls Rate Ages withdrawals Rate (%) Ages Withdrawals Rate (%)

Up to 30 Years 3.00% Up to 30 Years 3.00%

Up to 44 Years 2.00% Up to 44 Years 2.00%

Above 44 Years 1.00% Above 44 Years 1.00%

The estimates of rate of escalation in salary considered in actuarial valuation take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary and the entire amount of liability has been considered as expense for the year.

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

23

12. MANAGERIAL REMUNERATION

Details of remuneration & perquisites of Managerial Personnel:

Contribution to salary & other perquisites as expenses for the year Amount (` In 000) 2009-10

Amount (` In 000) 2008-09

Salary 394.02 333.00

Other perquisites 565.43 489.00

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

13. SEGMENTAL REPORTING

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

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

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

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

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

16. RELATED PARTY DISCLOSURES

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

i) Malana Power Company Limited.-Subsidiary.

ii) Green Ventures Private Limited. –Subsidiary.

iii) AD Hydro Power Limited. –Subsidiary of a Subsidiary.

iv) Indo-Canadian Consultancy Services Limited. –Subsidiary.

v) NJC Hydro Power Ltd. – Subsidiary.

(b) Associates and Joint Venture Companies

– Balephi Jalvidhyut Company Limited

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

NONE

(d) Key Management Personnel and their relatives

Mr. O.P. Ajmera

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

NONE

24


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

(` in‘000)31.03.10 31.03.09

i) Parties referred to in item (a) aboveEquity Shares allotted during the year – –Services received 68,850 34,444OthersOutstanding payable 2,314 6,653Loans & Adv.-Amount receivable 252,630 378, 345Investment as at year end.Equity Shares in Malana Power Company Ltd. 18,10,338 18,10,338Equity Shares in Green Venture Pvt. Ltd.-Nepal 22,114 22,114Equity Share in Balephi Jal Vidyut Co. Ltd.-Nepal\ 646 –Equity Shares in Indo Canadian Consultancy Services Ltd. 42,449 42,449Equity Shares in NJC Hydro Power Ltd. 500 –Equity Shares in Green Venture Renewable India Pvt. Ltd. 10,000 10,000Share Application Money (Pending Allotment) Equity Share in Green Venture (P) Ltd- Nepal

149,239 93,718

ii) Parties referred to in item (b) aboveShare Application Money (Pending Allotment) for equity Shares in Balephi Jalvidyut Company Ltd. (Nepal)

44,565 20,000

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

Managerial Remuneration 959 822v) Parties referred to in (e) above NIL NIL

17. Transactions in Foreign Exchange

Sl. No.

Nature of Transaction Amount (` in 000’ ) 2009-2010

Amount (` in 000’ ) 2008-2009

1 Income Nil Nil

2 Expenditure (Foreign Travelling) Nil 636

3 Legal & Professional expenses reimbursement (Foreign) 125 Nil

4 Consultancy received from RSW International Inc. Canada 48,659 Nil

18. Disclosure of other items as required by Part–II of Schedule–VI to the Companies Act, 1956 is not applicable as there are no commercial operations






25

CASH FLOW STATEMENT AS AT MARCH 31, 2010

` in '000'

As at As at

31.03.2010 31.03.2009

A. Cashflowsfrominvestingactivities

Acquisition of Fixed Assets (473,236) (610,733)

Investments (1,146) (586,561)

Interest Received 7,889 20,407

Net cash used in investing activities (466,493) (1,176,888)

B. Cashflowsfromfinancingactivities

Proceeds from Issuance of Share Capital 565,321

Long Term Borrowings (net of repayments) (1,090,000) 1,090,000

Short Term Borrowings (net of repayments) 1,034,000 66,000

Increase in Miscellaneous Expenditure (8,015) -

Provision for Redemption of Preference Shares (37,370) -

Netcashfromfinancingactivities 463,936 1,156,000

Net increase / (decrease) in cash and cash equivalents( A+B) (2,557) (20,888)

Cash and cash equivalents at the beginning of the year 31,047 51,935

Cash and cash equivalents at the end of the year 28,490 31,047

Components of cash and cash equivalents

Cash on hand 312 220

With scheduled banks - on current accounts with bank deposits 28,178 30,827

28,490 31,047






26


I. REGISTRATION DETAILS

Registration No. U31101DL2006PLC148862 State Code 5 5

Balance Sheet Date 3 1 0 3 2 0 1 0

Date Month Year

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

Public Issue – Rights Issue –

Bonus Issue 4 5 1 9 8 1 Private Placement –

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

Total Liabilities 3 4 0 3 7 8 7 Total Assets 3 4 0 3 7 8 7

SOURCES OF FUNDS

Paid-up Capital 1 7 5 5 9 4 4 Reserves and Surplus 4 9 9 4 7 9

Share Application Money – Deferred Tax Liability –

Warrants – Secured Loans 1 1 0 0 0 0 0

Unsecured Loans –

APPLICATION OF FUNDS

Net Fixed Assets 9 7 1 7 7 2 Investments 1 8 8 6 0 4 7 (Incl. P.O.P. exps)

Net Current Assets 4 8 2 9 8 1 Misc. Expenditure 1 4 6 2 3

IV. PERFORMANCE OF COMPANY (Amount in ` Thousands)

Turnover – Total Expenditure –

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

Earning Per Share in ` – Dividend Rate % –

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

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

Product Description H Y D R O E L E C T R I C E N E R G Y

BALANCE ShEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE






27

NAME OF ThE SUBSIDIARY MALANA POwER COMPANY LTD.

1. Financial Period ended March 31, 2010

2. Holding Companies interest 51% in Equity share

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

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

a) Dealt with or provided for in the accounts Nil of the holding Company.

b) Not dealt with or provided for in the Rs. 5,04,497,610.00 accounts of the holding Company.

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

a) Dealt with or provided for in the accounts Nil of the holding Company.

b) Not dealt with or provided for in the Rs. 110,48,61,960.00 accounts of the holding Company.

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



Place : Noida (UP)Dated : 3rd June, 2010

28


NAME OF ThE SUBSIDIARY AD hYDRO POwER LIMITED (Subsidiary of M/s Malana Power Company Ltd.)


2. Holding Company's interest 44.88% in equity shares

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


a) Dealt with or provided for in Nil the accounts of the holding Company.

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

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







29

NAME OF ThE SUBSIDIARY INDO CANADIAN CONSULTANCY SERVICES LTD.


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

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



b) Not dealt with or provided for in the Rs.(44,21,834.00) accounts of the holding Company.



b) Not dealt with or provided for in the Rs.84,65,776.00 accounts of the holding Company.





30



NAME OF ThE SUBSIDIARY NjC hYDRO POwER LIMITED


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

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










31

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


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

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











32


AUDITORS’ REPORT

On Consolidated Financial Statements of Bhilwara Energy Limited and its Subsidiaries

The Board of Directors,

BHILWARA ENERGY LIMITED

We have audited the attached Consolidated Balance Sheet of BHILWARA ENERGY LIMITED, its subsidiaries (Collectively the Group) as at 31st March, 2010, the Consolidated Profit and Loss account and the Consolidated Cash Flow Statement (the Consolidated Financial Statements) for the year then ended. These consolidated financial statements are the responsibility of the company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are prepared, in all material respects, in accordance with identified financial reporting framework and are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

We did not audit the financial statements of subsidiaries, except one subsidiary NJC Hydro Power Limited, whose adjusted financial statements reflect total assets of Rs.27,198,610 thousand as at 31st March, 2010, total revenues of Rs.2,098,568 thousand and total cash flows of Rs.472,914 thousand for the year then ended. These financial statements have been audited by other auditors whose reports have been furnished to us, and our opinion, in so far as it relates to the amounts included in respect of these subsidiaries, is based solely on the report of the other auditors.

We report that the Consolidated Financial Statements have been prepared by the Company in accordance with the requirements of Accounting Standard AS-21, ‘Consolidated Financial Statements’ notified under the Companies (Accounting Standards) Rules,2006 and on the basis of the separate audited financial statements of the Group included in the Consolidated Financial Statements.

The auditors of one of the subsidiaries Malana Power Company Ltd. have mentioned in their audit report without qualifying the report that attention is invited to Note 13 of Schedule 20 of the financial statements of that subsidiary, regarding management’s assessment about obtaining the necessary clearances for execution of the Bara Bangal project (having capital work in progress of Rs. 663,073 thousand as at March 31, 2010) as well as obtaining extension of time limit for submission of Detailed Project Report (DPR). Accordingly, the management believes that no adjustments are required to the financial statements in this regard. The auditors have relied upon such management’s assessment and no adjustments have been made to the financial statements for the above matter.

Based on our audit and on consideration of the reports of other auditors on separate financial statements and on the other financial information of the subsidiaries, in our opinion and to the best of our information and according to the explanations given to us, the attached Consolidated Financial Statements give a true and fair view in conformity with the accounting principles generally accepted in India:

a) In the case of Consolidated Balance Sheet, of the consolidated state of affairs of the Group as at 31st, March 2010;

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

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

For S. S. Kothari Mehta & Co.Chartered AccountantsFirm Regn.no.000756N

Arun K. TulsianPartnerMembership No.: 089907


33

` in ‘000’Schedules As at

31.03.2010 As at

31.03.2009 SOURCES OF FUNDSShare Capital 1 1,755,944 729,941 Reserves and Surplus 2 3,090,041 3,081,027 Warrants – 9,713 Minority Interest 5,036,299 4,117,146 Loans 3 12,759,315 9,779,068 Deferred Tax Liability (net) 4 216,837 221,169 Total 22,858,436 17,938,064 APPLICATION OF FUNDSGross Block 5 4,308,734 4,138,181 Less: Depreciation 1,598,005 1,199,856 Net Block 2,710,728 2,938,325 Capital Work In Progress (Including Capital Advances) 12,751,201 10,778,227 Project & Pre-operative Expenses (Pending Allocation) 6 7,116,379 4,336,373

22,578,308 18,052,925 Investments 7 10,646 10,000 Current Assets, Loans & AdvancesSundry Debtors 8 97,108 70,094 Inventories 9 197,140 240,174 Cash and Bank Balances 10 610,176 139,346 Other Current Assets 11 31,132 30,341 Loans and Advances 12 454,714 557,198

1,390,269 1,037,153 Less: Current Liabilities and ProvisionsLiabilities 13 1,053,855 1,099,143 Provisions 14 101,594 89,497

1,155,448 1,188,640 Net Current Assets 234,821 (151,487)Miscellaneous Expenditure 15 34,660 26,626 (to the extent not written off or adjusted) Total 22,858,436 17,938,064 Notes to Accounts 21The Schedules referred to above form an integral part of the Balance Sheet.

CONSOLIDATED BALANCE SHEET AS AT 31st MARCH, 2010






34


CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31st MARCH, 2010

` in ‘000’Schedules For the

Year Ended 31.03.2010

For the Year Ended 31.03.2009

INCOMETurnover 1,704,334 1,985,373 Less : Discount on Prompt Payments 31,997 37,232 Less : Handling Charges 7,326 –Less : Unscheduled Interchange Charges 13,391 20,946 Less : Inter Company Revenue – 220 Turnover (net) 1,651,620 1,926,975 Other Income 16 446,948 269,614 TOTAL 2,098,568 2,196,589 EXPENDITUREWheeling Cost 15,434 18,148 Personnel Expenses 17 105,021 112,335 Operating and Other Expenses 18 194,582 171,635 Less : Inter Company Revenue – 220 Depreciation 5 205,603 205,647 Financial Expenses 19 427,104 240,538 TOTAL 947,744 748,083 Profit Before Tax and Prior Period Items 1,150,824 1,448,506 Prior Period Income (Represents Surrender Value of Keyman Insurance Policy)

29,531 –

Profit Before Tax 1,180,355 1,448,506 Current Tax (Including Rs. 1,198 Thousand Pertaining to Earlier Years)

204,146 169,756

Deferred Tax Charge / (Credit) (4,332) 1,684 Total Tax Expense 199,814 171,440 Net Profit 980,541 1,277,066 Less: Minority Interest 480,465 625,762 Profit for the Year 500,076 651,304 Balance Brought Forward from Previous Year 674,252 20,115 Profit Available for Appropriation 1,174,328 671,419 APPROPRIATION:Transfer to/(from) Debenture Redemption Reserve (5,556) (5,555)Transfer to/(from) Minority Interest for Share of above 2,722 2,722 Total (2,834) (2,833)Balance Carried Forward 1,177,161 674,252 Earnings Per Share (in Rs.) 20 – Basic 3.97 8.92 – Diluted 3.97 7.05 The Schedules referred to above form an integral part of the Balance Sheet.






35

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET

SCHEDULE 1: SHARE CAPITAL ` in ‘000

As at 31.03.2010

As at 31.03.2009

Authorised200,000,000 (Previous year 100,000,000) Equity shares of ` 10 each 2,000,000 1,000,000

40,00,000 (Previous year Nil ) Cumulative Redeemable Preference Shares of ` 100/– each

400,000 –

Issued, Subscribed and Paid up 1,35,594,428 (Previous year 72,994,082) Equity shares of ` 10 each

fully paid up 1,355,944 729,941

40,00,000 (Previous year Nil) 0.01% Cumulative Redeemable Preference share of ` 100/– each fully paid up

400,000 –

1,755,944 729,941 Of the above :a) 17,402,203 (Previous year Nil) Equity share have been issued by way of conversion of warrants.b) 45,198,143 (Previous year Nil) Equity share have been issued as Fully Paid Bonus Shares by capitalistion of

Securities Premium Account

SCHEDULE 2: RESERVES AND SURPLUS

Capital Reserve on Consolidation (net) 1,399,512 1,399,512 Capital Reserve:Opening Balance – Add: Warrant Money Forfeited During the Year 1,012 Closing Balance 1,012 Securities Premium Account:Opening Balance 987,818 987,818 Less: Utilised for Issue of Bonus Shares During the Year 451,981 Less: Provision for Premium on Redemption of Preference Shares 37,370 Closing Balance 498,467 987,818 Debenture Redemption Reserve Account:Opening Balance 19,445 25,000 Transferred (to)/from Profit and Loss Account (5,556) (5,555)Closing Balance 13,889 19,445 Consolidated Profit & Loss Account 1,177,161 674,252

3,090,041 3,081,027

SCHEDULE 3: LOANS

Secured loansRedeemable Non-Convertible Debentures of Rs.1,000 thousand each (Refer Note 1 Below)

55,555 77,778

Term Loans 12,703,760 8,351,957 Other Short Term Borrowings From Banks – 500,000 Other Short Term Borrowings From Others – 766,000

12,759,315 9,695,735 Unsecured LoansOther Short Term Borrowings From Banks – 83,333 Other Short Term Borrowings From Others –

– 83,333 12,759,315 9,779,068

36


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

As at 31.03.2010

As at 31.03.2009

Differences in Depreciation and Other Differences in Block of Fixed Assets as Per Tax Books and Financial Books

226,327 225,970

Income Taxable on Receipt 258 – Gross Deferred Tax Liabilities 226,585 225,970 Gross Deferred Tax Assets 9,748 4,801 Deferred Tax Liability (net) 216,837 221,169

Notes : 1. Redeemable Non-Convertible Debentures (NCD) are secured by way of first mortgage and charge on land

situated at village Budasan (Gujarat) together with all estate rights etc., present & future, of the Company and further secured by irrevocable and unconditional guarantee extended by Infrastructure Leasing & Financial Services Ltd. (IL&FS). The aforesaid guarantee of IL&FS is secured by way of first charge on all immovable and movable properties, present and future, of the Company on pari-passu basis.150, 7.75% debentures of Rs.1,000 thousand each privately placed with General Insurance Corporation Ltd., New India Assurance Co. Ltd. and Punjab National Bank equally and 100, 7.865% debentures of Rs.1,000 thousand each privately placed with Bank of Baroda were redeemable at par in 36 equal quarterly instalments commencing from 31st December, 2003. However, the above debentures were subject to a call and put option exercisable by the debenture holders and the Company respectively in November, 2007. New India Assurance Co. Ltd (NIA) exercised the call option and 50 debentures of Rs 1,000 thousand each held by NIA were redeemed completely during the financial year 2007-08. Other debenture holders opted to hold the debentures and repayment is being made as per the schedule. Redemption of Rs 722 thousand (previous year Rs 611 thousand) on each debenture has been made till date.

2. Term loans from various banks/financial institutions are secured by way of first mortgage/charge on all the immovable properties wherever situated and hypothecation of all other assets, rights etc., present & future, of the Company on pari-passu basis. Further, the Malana Power Company has provided Corporate Guarantee and has also pledged its Shareholding in the Company for Term Loans taken by its Subsidiary AD Hydro Power Limited. Further in Case of Parent Company i.e Bhilwara Energy Limited, Term Loan is secured by way of pledge of 33,898,607 Equity Shares (Previous Year 21,935,900 Equity Shares) held by Promoter Group.

3. Short Term Loan were secured by subservient charge on moveable fixed assets of the Company.4. Debentures and loans and advances from banks aggregating to Rs. 2,187,467 thousand (Previous year

Rs. 1,598,221 thousand) are repayable within one year.

SCHEDULE 5: FIXED ASSETS ` in ‘000’

GROSS BLOCK DEPRECIATION NET BLOCKParticulars As At

31.03.2009Additions /

AdjustmentSale/

AdjustmentAs At

31.03.2010 Upto

31.03.2009 For The

YearSales/

TransferUpto

31.03.2010 As At

31.03.2010As At

31.03.2009Land - Freehold 35,225 16,439 – 51,664 – – – – 51,664 35,225 Civil Works 1,847,265 – – 1,847,265 504,896 120,357 – 625,253 1,222,012 1,342,369 Roads & Building 479,124 2,525 – 481,649 64,835 12,702 – 77,537 404,112 414,289 Plant & Machinery 958,063 21 – 958,084 325,868 58,486 – 384,354 573,730 632,195 Transmission Lines 199,670 – – 199,670 80,593 10,549 – 91,142 108,528 119,077 Electrical Equipment 27,283 5,244 – 32,527 4,580 1,695 – 6,275 26,252 22,704 Vehicles 51,077 2,335 7,885 45,528 19,453 6,188 1,884 23,756 21,771 31,624 Furniture & Fixtures 27,681 1,735 50 29,366 12,494 3,180 31 15,642 13,724 15,188 Other Equipments 21,326 1,801 1,444 21,684 9,995 2,402 1,132 11,266 10,418 11,331 Computers 21,544 124 – 21,668 14,987 2,644 – 17,631 4,037 6,557 Project Equipment 448,836 149,585 – 598,421 147,494 178,141 – 325,636 272,786 301,342 Software 21,086 121 – 21,208 14,662 4,852 – 19,513 1,694 6,425 Total 4,138,181 179,931 9,379 4,308,734 1,199,856 401,197 3,047 1,598,005 2,710,728 2,938,325 Capital Work In Progress 12,751,201 10,778,227 Total 4,138,181 179,931 9,379 4,308,734 1,199,856 401,197 3,047 1,598,005 15,461,929 13,716,552 Previous Year 3,693,805 445,738 1,362 4,138,181 958,016 242,354 514 1,199,856 14,304,066 11,323,498 Depreciation Transferred to Pre-Operative Expenditure Account

195,593

Previous Year 36,707

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

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

paid to Forest Department for construction of Transmission towers under irrevocable right to use.3) Includes Rs. 51,073 thousand (previous year Rs 27,748 thousand) towards consultancy and other expenses on project

allotted (Also refer Note 13 of Schedule 20).

37

SCHEDULE 6: PROJECT & PRE-OPERATIVE EXPENSES ` in ‘000

As at 31.03.2010

As at 31.03.2009

Personnel ExpensesSalaries, Wages and Bonus 541,805 385,075 Contribution to Provident, Gratuity and Other Funds 43,721 30,519 Workment and Staff Welfare Expenses 39,424 29,648 Total (A) 624,950 445,242 Administrative & Other ExpensesExpenditure on Forest Land (Refer Note No. 10 (c) of Schedule 19 B 269,538 271,848 Rent 64,999 280,242 Rates & Taxes 399 16,950 Insurance 139,050 96,165 Repair & Maintenance 124,770 33,155 Stores Consumption 192,797 127,981 Travelling Expenses 89,590 77,774 Conveyance 24,138 20,496 Vehicle Running & Hiring Expenses 149,065 114,641 Communication Expenses 22,219 16,802 Directors Remuneration 12,024 7,840 Audit Fees 7,119 4,526 Donations and Contributions (other than to Political Parties) 3,591 3,576 Advertisement 678 595 Legal & Professional Charges 207,895 162,116 Fee & Subscription 6,116 4,876 Power & Fuel 17,696 22,406 Testing and Surveys 39,636 35,926 Consultancy Charges 924,696 614,546 Project Processing Fee 254,683 11,601 Miscellaneous Expenses 766,884 330,304 Financial & Bank Charges 431,839 195,033 Fringe Benefit and Wealth Tax 16,692 15 Interest 2,457,308 1,351,309 Depreciation 384,079 188,487 Total (B) 6,607,501 3,989,210 Total (A+B) 7,232,451 4,434,452 Less: Interest Earned 88,359 79,296 Less: Profit on Sale of Fixed Assets 788 19 Less: Scrap Sale 26,925 18,764 Total 7,116,379 4,336,373

SCHEDULE 7: INVESTMENTS

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

10,000 10,000

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

646 –

10,646 10,000

SCHEDULE 8: SUNDRY DEBTORS (Unsecured, Considered Good)

Outstanding for a Period Exceeding Six Months 34,631 23,274 Other Debts 62,477 46,820

97,108 70,094

SCHEDULE 9: INVENTORIESStores and Spares (Including Material Lying With Third Parties Rs. 67,772 Thousand, Previous Year Rs. 116,181 Thousand)

197,140 240,174

197,140 240,174

38


SCHEDULE 10: CASH & BANK BALANCES ` in ‘000

As at 31.03.2010

As at 31.03.2009

Cash in hand 3,366 3,287 Balances with Scheduled Banks: In Current Accounts 175,473 128,088 In Deposit Accounts 425,557 4,704 In Margin Money Account 5,779 3,267

610,176 139,346 Note: Fixed Deposit and Margin Money include Rs. 400 Thousand (Previous Year Rs. 1,254 Thousand) Pledged with Government departments and HPSEB.

SCHEDULE 11: OTHER CURRENT ASSETS

Interest Accrued on Deposits and Others 3,415 3,025 Surrender Value of Keyman Insurance Policy 767 –Advance Tax & TDS (Net of Provisions) 26,950 27,316

31,132 30,341

SCHEDULE 12: LOANS AND ADVANCES (Unsecured, considered good)

Loans to Employees 3,389 5,175 Loan to Body Corporates 22,176 20,955 Loan to Subsidiary Company (Long Term) (1) –Advances for Projects 289,136 –Security Deposit with Government Department & Others 11,668 26,192 Other Advances Recoverable in Cash or in Kind or For Value To Be Received

83,780 484,876

Share Application Money (Pending for Allotment) 44,565 20,000 454,714 557,198

SCHEDULE 13: CURRENT LIABILITIES

Sundry Creditors (a) Outstanding Dues of Micro & Small Enterprises * – –(b) Outstanding Dues of Creditors other than Micro & Small Enterprises 889,851 822,992 Deposits from Holding Company (Refer Note No. 10 of Schedule 20) – –Advance from Customers 5,327 2,432 Deposits from Contractors and Others 83,291 126,536 Interest Accrued But Not Due on Loan from Institutions 41,857 26,643 Other Liabilities 33,528 120,540

1,053,855 1,099,143

SCHEDULE 14: PROVISIONS

Provision for Tax ( Net of Advance Tax Rs 465,487 Thousand (Previous Year Rs. 280,234 Thousand))

7,335 40,543

Provision for Premium on Redemption of Preference Shares 37,370 –Provision for Gratuity 1,403 2,289 Provision for Long Term Compensated Absences 14,898 10,368 Provision for Continuity Linked Bonus 40,588 36,297

101,594 89,497

SCHEDULE 15: MISCELLANEOUS EXPENDITURE (to the extent not written off or adjusted)

Share Issue ExpensesOpening Balance 26,626 26,626Add: Incurred During the Year 8,034 –Closing Balance 34,660 26,626

39

SCHEDuLES FORMING PART OF THE CONSOLIDATED PROFIT & LOSS ACCOuNT

SCHEDULE 16: OTHER INCOME ` in ‘000



Interest from Subsidiary Company (Gross, Tax Deducted at Source Rs. 49,788 Thousand (Previous Year Rs. 14,647 Thousand ) (See Note)

359,288 199,923

Interest on Bank Deposits (Gross, Tax Deducted at Source Rs. 203 Thousand, (Previous Year Rs. 56 Thousand))

1,227 622

Interest on Income Tax Refund – 517 Foreign Exchange Fluctuation (net) 8,012 – Profit on Sale/Discard of Fixed Assets (net) – 270 Sale of Voluntary Emission Reductions 75,982 66,528 unspent Liabilities Written Back 1,200 – Surrender Value of Keyman Insurance Policy 767 – Miscellaneous Income 472 1,754

446,948 269,614 Note: Interest Paid by Subsidiary Company Transferred to Pre–Operative Expenses.

SCHEDULE 17: PERSONNEL EXPENSES

Salaries , Wages and Other Expenses 91,514 98,300 Contribution to Provident Fund, Gratuity & Other Funds 4,494 7,483 Long Term Compensated Absences 3,195 1,660 Workmen and Staff Welfare Expenses 5,818 4,892

105,021 112,335

SCHEDULE 18: OPERATING AND OTHER EXPENSES

Power and Fuel 5,982 7,282 Repairs and Maintenance – Plant & Machinery 51,920 27,722 – Civil Works 316 307 – Buildings 1,504 701 – Others 2,302 4,225 Rent 18,811 21,176 Rates and Taxes 3,344 7,046 Insurance 5,709 12,456 Traveling & Conveyance 9,914 10,371 Legal & Professional Expenses 6,054 –Director's Remuneration 38,547 9,503 Commission to Managing Director 12,457 14,643 Auditor's Remuneration :– Audit Fee 908 635 – Fees for International Reporting – 348 – Fees for Special Audit 303 – – Fees for Certification 276 239 – Out of Pocket Expenses 7 4 Loss on Fixed Assets Sold /Discarded (net) 223 – Foreign Exchange Fluctuation (net) – 17,043 Donations and Contributions (other than to Political Parties) 763 1,217 Expenses on Sale of Voluntary Emission Reductions (Including Commission)

15,453 9,978

Bad Debts 3 1,575 Miscellaneous Expenses 19,785 25,164

194,582 171,635

40


SCHEDULE 19: FINANCIAL EXPENSES ` in ‘000



Interest– On Term Loans and Debentures 311,832 101,293 – To Banks 12,030 136,486 – To Others 198 1,000 Bank Charges Including Guarantee Commission and Processing Fees (Net of Upfront Fees / Commitment Charges Reimbursed by Subsidiary Company Rs 8,273 Thousand, (Previous Year Rs 7,750 thousand))

103,044 1,759

427,104 240,538

SCHEDULE 20: EARNING PER SHARE

Net Profit as Per Profit and Loss Account 500,076 651,304 Equity Shares at the Beginnning of the Year 72,994,082 72,994,082 Equity Shares at the End of the Year 135,594,428 72,994,082 Weighted Average Number of Equity Shares in Calculating Basic EPS 126,011,297 72,994,082 Potential Dilutive Shares – 19,425,715 Weighted Average Number of Equity Shares in Calculating Dilutive EPS 126,011,297 92,419,797 Basic Earnings Per Share (in Rupees) 3.97 8.92 Diluted Earnings Per Share (in Rupees) 3.97 7.05

41

Schedule – 21

SIGNIFICANT ACCOUNTING POLICIES & NOTES TO ACCOUNTS

A. SIGNIFICANT ACCOUNTING POLICIES

Basis of Preparation of Financial Statements1. Financial statements are prepared on historical cost convention and on the accounting principles of

going concern in accordance with Generally Accepted Accounting Principles (“GAAP), comprising of the mandatory Accounting Standards, Guidance Notes and other pronouncements issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956. The accounts are prepared on accrual basis. The accounting policies applied by the Company are consistent with those used in the previous year.

Use of Estimates2. The preparation of financial statements in conformity with generally accepted accounting principles requires

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

Fixed Assets3. Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost comprises

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

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors.

Investments4. Current Investments are stated at lower of cost and fair value .Long term Investments are stated at cost

and provision for diminution in their value, other than temporary, is made in the accounts.

Valuation of Inventories5. Inventories comprising of components and stores and spares are valued at lower of cost and net realizable

value. Cost is determined on weighted average basis.

Depreciation6. (i) Depreciation is provided on written down value method at the rates and in the manner prescribed in

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

based on its estimated useful life. (iii) Depreciation on Project equipments (net of their expected realizable value at the completion of the

project) has been provided as per straight line method over the period upto the revised expected date of completion of the project i.e. March 31, 2010.

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

Intangible Assets7. Capital Expenditure on purchase and development of identifiable non–monetary assets without physical

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

8. Leases (Where the Company is the Lessee) Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased

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

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

and the revenue can be reliably measured.

42


Sale of Electricity Revenue from sale of electricity is recognised on the basis of billable electricity (over and above free supply

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

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

on accrual basis, whereas tender fee is recognized on receipt basis. Interest Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate

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

flow to the Company.

10. Expenditure Incurred During Construction Period Preliminary project expenditure, capital expenditure, indirect expenditure incidental and related to

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

11. Miscellaneous Expenditure to the extent not written off or adjusted Preliminary / Share Issue Expenses will be amortized / adjusted in the manner to be decided by the Board

of Directors, starting from the year in which the Company commences its commercial operations.

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

Standard 15 – Employee Benefits (revised 2005) issued by the ICAI.Provident Fund(a)

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

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

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

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

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

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

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

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

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

payable for the period during which services are rendered by the employee.

13. Taxes on IncomeProvisions for current taxes are made in accordance with the provisions of applicable tax statutes.(a) In Accordance with the Accounting standard AS–22 ‘Accounting for Taxes on Income’ issued by (b) the ICAI, Deferred tax Liability/Assets arising from timing differences between book and income

43

tax profits is accounted for at the current rate of tax to the extent these differences are expected to crystallize in later years. However, Deferred Tax assets are recognized only if there is a reasonable/virtual certainty of realization.

14. Foreign Currency Transactions Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency

amount the exchange rate between the reporting currency and the foreign currency at the date of transactions. Any difference on subsequent realization is credited / charged to revenue account.

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

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

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

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

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

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

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

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

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

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

18. Cash & Cash Equivalents Cash and Cash equivalents in the cash flow statement comprise cash at bank and cash/cheques in hand

and short term reports with banks less short term advances from banks.

Notes to AccountsB.

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

company with those of its subsidiaries as on 31st March 2010, in accordance with Accounting Standard 21 (AS 21) – Consolidated Financial Statements issued by The Institute of Chartered Accountant.

(a) The subsidiary companies considered in the consolidated financial statements are:Name of Subsidiary Country of

IncorporationProportion of Ownership As on 31st March 2010 (%)

Malana Power Company Limited INDIA 51.0%Indo Canadian Consultancy Services Limited INDIA 51.0%Green Ventures Private Limited NEPAL 63.3%AD Hydro Power Limited(A subsidiary of Malana Power Company Limited)

INDIA 44.9%

NJC Hydro Power Ltd. INDIA 100%

44


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

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

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

2. CONTINGENT LIABILITIES Contingent liabilities not provided for:

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

(b) Liability on Account of Investments committed in Green Ventures Pvt. Ltd. –Nepal, and remaining unpaid is Nepali Rs. 1,667 thousand (equivalent to INR 1,042 thousand). (Previous year INR 1,042 thousand)

(c) Guarantee given for loans availed by AD Hydro Power Limited, subsidiary company, amounting to Rs. 800,000 thousand (Previous year Rs. 450,000 thousand).

(d) Claims made against the Company not acknowledged as debts amounting to Rs.693,790 thousand (previous year 369,175 thousand)

(e) Bank Guarantees outstanding amounting to Rs. 6,094 thousand (previous year Rs. 5,594 thousand)

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

3. Estimated amount of contracts remaining to be executed on capital account as on the date of Balance Sheet (net of advances) are Rs. 3,015,636 thousand (Previous Year Figure Rs. 1,389,680 thousand).

4. During the year, holding Company has given undertaking to Yes Bank limited for term loan facilities of Rs.2,600,000/–in thousand availed by Malana Power Company Limited one of the subsidiaries of the company, for not diluting the shareholding in the said company till the full & final payment of the lenders.

5. On May 26, 2009 Company has issued 4,000,000,0.01% Cumulative Redeemable Preference Shares of Rs. 100/– each at par, redeemable at premium at the end of the fifth year from the date of issue. Preference Shares carry a put & call option at the end of one year from the date of issue and every six month thereafter and in such event redemption premium to be paid as per terms of issue.

In absence of any commercial operations, there is no profit & loss account. The coupon liability of 0.01% that amount to Rs. 39 in thousand has not been provided in the books being in the nature of dividend.

6. In the year 2006-07, the Company had issued 19,425,715 share warrants of Rs 10/- each convertible into equity shares of Rs. 10/- each at par. During the current financial year 17,402,203 share warrants have been converted in fully paid up Equity share of Rs.10 each and balance warrants have been forfeited.

7. There are no unprovided present obligations requiring provision in accordance with the guiding principles as ennunciated in AS-29 as it is not probable that an outflow of resources embodying economic benefit will be required.

8. Prior Period Items Includes : Expenses 829 thousand (previous year 404 thousand) Income 1,832 thousand (previous year 3 thousand)

9. The subsidiary Company, Malana Power Company Limited, is eligible for tax holiday under Section 80-IA of the Income Tax Act, 1961. In view of unabsorbed depreciation in the initial years, the Company has not availed the tax holiday benefit up to accounting year 2006-07. However, based on its profitability, it has decided to avail the deduction from the accounting year 2007-08 and will continue to avail it till accounting year 2015-16. The Company is liable to pay Income-Tax for the year under the provisions of Section 115JB of the Income-Tax Act, 1961.

10. (a) Land includes Rs. 5,677 thousand paid to Deputy Commissioner, Kullu towards transfer of government’s agriculture land measuring 10.76 hectare for which the execution of lease deed is pending.

(b) Land includes Rs. 298,070 thousand paid for 12.51 hectares land, out of which mutation for execution of 9.75 hectares in favour of Company has been completed. Apart from notified land, 2.76 hectares land has been acquired directly from the villagers and the mutation is in progress.

45

(c) Rs. 778,180 thousand paid to Divisional Forest Officer, Kullu on account of use of forest land measuring 264.36 hectares represents amount paid towards loss of environment value, compulsory afforestation, cost of tree felling and Catchment Area Treatment Plan.

11. On account of various reasons beyond the control of the Company (like significant geological problems experienced in tunneling work and others), the project in ADHPL has undergone significant cost over–runs and the total estimated cost of the project has gone up from Rs. 8,956,000 thousand to Rs. 20,212,820 thousand. In view of the management, such increase in estimated project cost has not affected the going concern assumption of the Company. Further, based on financial projections (including the projected tariff), arrived at after considering the past experience of running similar power project and renewable source of fuel, the management believes that profits are expected to accrue once the project commences commercial operation and hence, no adjustment is required to the carrying amount of fixed assets on account of impairment.

12. In an earlier year, the Company had given an upfront premium of Rs. 612,000 thousand for 200 MW Bara Banghal HEP project in state of Himachal Pradesh. Further, the Company has incurred expenses in the nature of consultant fees and other expenses of Rs. 51,073 thousand in relation to this project. Thus, an amount of Rs. 663,073 thousand is appearing as capital work in progress in respect of this project as at March 31, 2010.

Approx. 21.46 hectares of land for the said project falls under the Dhauladhar WildLife Sanctuary, where no construction is permitted. The Company has filed an impleadment application with the Supreme Court of India for giving direction to the Wildlife Authority for processing and granting the technical clearance for the said project. Further, as per the terms of the Pre–Implementation Agreement signed with the State Government of Himachal Pradesh, the upfront premium of Rs 612,000 thousand will get forfeited if the Detailed Project report (‘DPR’) of the project is not submitted by October 31, 2010, for which the Company has filed an application with the authorities for the extension of time limit for the submission of said DPR. Pending the decision on application by the Supreme Court of India for grant of the clearance and by the State Government for extension of the time limit, the Board of Directors are confident that the Company will get the necessary approvals shortly and will be able to complete the project within specified time frame and no provision there against is required in these financial statements.

13. Interest from subsidiary company in Schedule 16 – Other Income and interest received from subsidiary company and Bank Charges in Schedule 18 – Financial Expenses represents due to Malana Power Company Limited (MPCL) from its subsidiary AD Hydro Power Limited (ADHPL) which has been added to Project and Preoperative Expenses in ADHPL. Similarly Interest received by Bhilwara Energy Limited (BEL) from its subsidiary MPCL has been reduced from Project and Preoperative Expenses in BEL. Consultancy charges received by (Indo Canadian Consultancy Services Limited) ICCSL from BEL, ADHPL and MPCL has been added to Project and Preoperative Expenses in respective Companies.

14. Derivative instruments and un–hedged foreign currency exposures. (a) There are no foreign currency exposure outstanding as at Balance Sheet date. (b) Particulars of un–hedged foreign currency exposures as at Balance Sheet date are as follows:

Particulars 2009–10 2008–09

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

Rs. 66,790,400 (USD 1,280,000 @ closing rate of 1USD=Rs. 52.18)

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

Rs. 8,495,410 (CHF 187,000 @ closing rate of 1CHF= Rs. 45.43

Creditor for Engineering Fees and Supervisory Manpower Support

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

Rs. 16,712,000 (CAD 400,000 @ closing rate of 1 CAD = Rs. 41.78)

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

Rs. 1,240,380 (EURO 18,000 @ closing rate of 1 EURO = Rs. 68.91)

15. RELATED PARTY DISCLOSURES(a) Enterprises that directly or indirectly through one or more intermediaries control or are controlled by

or under common control with the reporting enterprise. None

46


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

SN Power Holding Singapore Pte. Ltd. RSW International Inc.(c) Individuals owning directly or indirectly, an interest in the voting power of the reporting enterprise that

gives them control or significant influence over the enterprise, and relatives of any such individual. None(d) Key Management Personnel and relatives of such personnel: Mr. Ravi Jhunjhunwala Mrs. Rita Jhunjhunwala Mr. Riju Jhunjhunwala Mr. Rishabh Jhunjhunwala Mr. R.P. Goel Mr. O.P.Ajmera(e) Enterprises over which any person described in (c) or (d) is able to exercise significant influence. HEG Limited RSWM Limited SN Power Global Services Pte. Ltd. The following transactions were carried out with the related parties in the ordinary course of

business:

Particulars 2009–10(Rs’000)

2008–09(Rs’000)

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

Allotment of Shares- – 40,942Security Premium on allotment of Shares- – 511,778Consultancy Charges Paid- 85,540 –Balance Payable- 277Balance Receivable- 2,595 14,668

With parties referred to in item (c) above Nil NilWith parties referred to in item (d) above –

Rent Paid- 3,775 3,480Remuneration Paid- 55,177 27,646Balance Payable- 12,457 14,643

With parties referred to in item (e) aboveRent Paid- 3,878 3,620unsecured loan taken and repaid- – 150,000Interest Expense- – 3,345Consultancy Services Rendered- 778 979Consultancy Services Received- 116,004 –Reimbursement of Expenses paid- 2,763 2,812Amount Receivable- – 157Amount Payable- 49,034 31,968

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

are as under: (Rs.’000)

Particulars For the year ended on

March 31, 2010

For the year ended on

March 31, 2009 (Rs.’000) (Rs.’000)

Employer’s contribution to Provident Fund 10,813 10,844Employer’s contribution to Superannuation Fund 2,849 3,296

47

Defined Benefit Plan The employees gratuity fund is a defined benefit plan, the present value of obligation is determined based

on actuarial valuation using the projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in the same manner as gratuity. Both are in the nature of long term benefits.

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

Profit and Loss AccountNet employee benefits expense (recognised in Employee Cost):

Particulars For the year ended

on March 31, 2010 (Rs.’000)

For the year ended

on March 31, 2009 (Rs.’000)

Current Service Cost 2,473 2,504Interest cost on benefit obligation 965 658Expected return on plan assets (861) (349)Net actuarial (gain)/ loss recognised in the period (1,616) 501Net benefit expense 961 3,316Actual return on plan assets 102 29

Balance Sheet Details of Provision for Gratuity:

Particulars As at 31–Mar–10

(Rs.’000)

As at 31–Mar–09

(Rs.’000)Defined benefit obligation 13,621 13,091Fair value of plan assets 12,935 10,773Plan asset / (liability) (687) (2,020)

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


(Rs.’000)

As at 31–Mar–09

(Rs.’000)

Opening defined benefit obligation 13,092 9,402

Interest cost 965 658

Current service cost 2,473 2,504

Benefits paid (2,364) –

Actuarial (gains)/ losses on obligation (543) 526

Closing defined benefit obligation 13,622 13,091

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


(Rs.’000)

As at 31–Mar–09

(Rs.’000)

Opening fair value of plan assets 10,775 4,364

Expected return 861 349

Contributions by employer 2,592 6,037

Benefits paid (2,365) –

Actuarial gains / (losses) 1,072 24

Closing fair value of plan assets 12,936 10,774

The Defined benefit obligation amounting to Rs. 13,622 thousand is funded by assets amounting to Rs. 12,936 thousand and the Company expects to contribute Rs. 687 thousand during the year 2010–11.

48


Principle Actuarial AssumptionsParticulars For the year ended

on March 31, 2010(Rs.’000)

%

For the year ended on March 31, 2009

(Rs.’000)%

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

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

Particulars Earned Leave 31.03.2010

(Rs.’000)

Earned Leave 31.03.2009

(Rs.’000)Current service cost 3,896 3,231Interest cost on benefit obligation 698 511Expected return on plan assets – –Net actuarial loss(gain) recognized in the year 2,257 (993)Net Expense recognized in the Profit & Loss A/c 6,851 2,749

Balance SheetParticulars Earned Leave

31.03.10(Rs.’000)

Earned Leave 31.03.09(Rs.’000)

Fair value of plan assets at the end of the period – –Present value of obligations as at the end of the period 13,602 9,549Funded Status (13,602) (9,549)Excess of actual over estimated – –Net Assets/ ( Liability) recognized in the balance sheet (13,602) (9,549)


Particulars Earned Leave 31.03.10(Rs.’000)

Earned Leave 31.03.09 (Rs.’000)

Present value of obligations at the beginning of the period 9,549 7,298

Interest cost 698 511

Current service cost 3,896 3,231

Benefits paid (2,799) (498)

Actuarial (gain) / Loss on obligation 2,257 (993)

Present value of obligations at the end of the period 13,602 9,549

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

Particulars Earned Leave 31.03.10 (Rs.’000)

Earned Leave 31.03.09(Rs.’000)

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

Expected return on the plan assets – –

Contributions – –

Benefits paid – –

Actuarial gain / (loss) on plan assets – –

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

49

Principal actuarial assumptionsPARTICULARS Rate (%) 31.03.10 Rate (%) 31.03.09a) Discount rate 7.8 7.00b) Future salary increase – –c) Expected Rate of return on plan Assets 5.0 4.5

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

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

17. Auditor Remuneration


Audit Fees 2,649 1,265

Other Services 1,343 1,517

Out of Pocket Expenses 170 100

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


March 31, 2010

For the year ended

March 31, 2009

Lease payments for the year 41,137 90,580

19. Segment Reporting as required by Accounting Standard (AS–17) issued by the Institute of Chartered Accountants of India:–

(Rs. In ‘000)

Particulars 2009-10 2008-09

1 Segment Revenue

a) Power 1,566,725 1,795,438

b) Consultancy 84,895 131,757

Sub Total 1,651,620 1,927,195

Less : Inter-segment Revenue – 220

Net Segment Revenue 1,651,620 1,926,975

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

Profit before Tax

a) Power 1,194,484 1,440,416

b) Consultancy (14,129) 8,090

1,180,355 1,448,506

Provision for Taxation

– Current Tax & FBT 204,146 169,756

– Deferred Tax (4,332) 1,684

Profit after tax 980,541 1,277,066

3 Other Information

I Segment Assets

a) Power 23,891,294 18,994,123


Total Assets 24,013,884 19,126,704

50


(Rs. In ‘000)


II Segment Liabilities

a) Power 14,074,954 11,125,445


Total Liabilities 14,140,893 11,192,705

III Capital Expenditure

(Including Capital work in Progress)

a) Power 4,931,105 4,721,881


Total 4,932,911 4,726,142

IV Depreciation

a) Power 199,646 201,292


Total 205,603 205,647

V Non Cash expenditure other than depreciation

a) Power – –

b) Consultancy – –

Total – –

20. Previous year figures have been regrouped and rearranged wherever considered necessary to confirm to this year classification.






51

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2010

` in ‘000’For the

Year Ended31.03.2010

For the Year Ended31.03.2009

CASH FLOW FROM OPERATING ACTIVITIESProfit Before Tax 1,180,355 1,448,506 Adjustments for:Depreciation 205,603 205,647 Interest Paid 427,104 240,538 Interest Received 360,515 201,062 (Profit) / Loss on Sale of Fixed Assets 223 (270)Cash Generated from Operations 1,452,770 1,693,359 Direct Taxes Paid 204,146 169,756 Operating Profit Before Working Capital Changes 1,248,624 1,523,603 Adjustments for Changes in Working Capital:Sundry Debtors (27,014) (13,357)Inventories 316 (470)Loans & Advances and Other Current Assets (60,322) 176,841 Liabilities and Provisions (364,022) (155,307)Net Cash from Operating Activities 797,580 1,531,310 CASH FLOW FROM INVESTING ACTIVITIESAcquisition of Fixed Assets (net) (4,195,647) (4,790,559)Investments (646) – Interest Received 360,515 201,062 Net Cash from Investing Activities (3,835,779) (4,589,497)CASH FLOW FROM FINANCING ACTIVITIESProceeds from Issuance of Preference Shares 400,000 – Proceeds from Conversion of Warrants 165,321 – Long Term Borrowings 4,329,580 1,849,147 Short Term Borrowings (1,349,333) 849,333 Interest Paid (427,104) (240,538)Miscellaneous Expenditure (8,034) – Provision for Redemption of Preference Shares (37,370) – Minority Interest 435,966 583,685 Net Cash from Financing Activities 3,509,027 3,041,627 INCREASE IN CASH OR CASH EQUIVALENTS 470,829 (16,559)Cash and Cash Equivalents at the Beginning of the Year 139,346 155,905 Cash and Cash Equivalents at the Closing of the Year 610,176 139,346 Components of Cash and Cash EquivalentCash in hand 3,366 3,287 Balances with Scheduled Banks: In Current Accounts 175,473 128,088 In Deposit Accounts 425,557 4,704 In Margin Money Account 5,779 3,267 Total 610,176 139,346


Arun K. TulsianPartnerMembership No. 089907Place : New DelhiDated : 3rd June, 2010



ATTACHMENT

OF

ANNUAL REPORTS

LIST OF ATTACHMENTS

Financial Statement of Subsidiaries for the year ended 31st March, 2010

1. Malana Power Company Limited

2. AD Hydro Power Limited

3. Indo Canadian Consultancy Services Limited

4. NJC Hydro Power Limited

5. Green Ventures Private Limited (Nepal)

FINANCIAL RESULTSOF

MALANA POWER COMPANY LIMITED

Dear Stakeholders,

2009-10 has been an year of rebound for the global economy from the


market conditions.



The growth is driven by robust performance of the manufacturing sector on

the back of government and consumer spending. IMF and other economic

agencies have been bullish on Indian economy. IMF has revised the growth

forecast of the Indian economy to 9.5% for 2010 from 8.8% projected

earlier, based on robust corporate profits and favourable financing

conditions, which are likely to fuel investments.



Accordingly the ongoing economic reforms in India have attached a high

priority to the better utilization of existing infrastructure and developments

in new infrastructures so that existing bottlenecks do not inhibit the overall

economic growth and export dynamism.

Message from the Chairman

Power Sector is a key constituent of infrastructure and closely linked to output. To deliver sustained growth rate of 8%

through 2031-32 and to meet the lifeline energy needs of all citizens ('POWER for All by 2012' : target of 1000 KwHr

(Units) of per capita consumption of electricity), the power sector needs to grow at 1.8 - 2 times the GDP rate of growth. At

>8% GDP growth rate, the required installed power generation capacity is likely to be around 306,000MW in 2016-17

and 425,000MW in 2021-22 against installed capacity of 159,398MW (as of 31st March 2010), which translates into

a YOY capacity addition of 30,000 MW. As compared to that, 22,000 MW has been added during last five years under

APDRP (Accelerated Power Development & Reforms Program). Achieving these goals would require investments of US $

250 Billion into the power sector; increasing the role of Hydel & Renewable Energy in the Energy Mix and; urgent need to

develop the alternatives : both in the Fuel & Technology terms.

During the financial year the turnover of the MPCL stood at Rs. 1,619.439 Millions. The Profit after Tax is Rs. 989.211

Millions and cash profits from business is Rs. 1,189.989 Millions.

On behalf of the Board of Directors, I would like to express our sincere gratitude to the Government of India, Government

of Himachal Pradesh, Himachal Pradesh State Electricity Board, PTC India, all Government departments and agencies,

investors, lenders, and bankers for the unending support. I would also take this opportunity to thank our employees and

business associates, who have been the pillar of strength for the Company.

With best wishes,

Ravi Jhunjhunwala

Chairman


57


TO THE MEMBERS

MALANA POWER COMPANY LIMITED

The Directors of the Company are pleased to present their Thirteenth Annual Report on the business and operations of the Company and

audited statement of accounts for the year ended 31st March, 2010 together with the Auditors’ Report.

Director's Report

58

FINANCIAL PERFORMANCE (In Million)

TOTAL TURNOVER 1619.439 1853.616

Less : Discount on prompt payments/ Unscheduled interchanged charges 52.714 58.178

Net Sales 1566.725 1795.438

Other Income 446.551 133.899

Total Income 2013.275 1929.337

PROFIT BEFORE INTEREST, DEPRECIATION AND TAX 1792.473 1746.930

Interest 426.871 105.222

PROFIT BEFORE DEPRECIATION AND TAX 1365.602 1641.708

Depreciation 199.646 201.292

Profit before tax and prior period income 1165.956 1440.416

Prior Period Income (represents Surrender Value of Keyman Insurance Policy) 28.528 –

Profit before Tax 1194.484 –

Provision for Tax

– Current Tax 204.141 163.199

– MAT credit reverse – –

– Tax for earlier years – –

– Deferred Tax 1.133 1.299

– FBT/WT Tax – 1.150

NET PROFIT AFTER DEPRECIATION AND TAX (PADIT) 989.211 1274.768

Balance brought forward from previous year 2924.050 1643.727

AMOUNT AVAILABLE FOR APPROPRIATION 3913.260 2918.495

APPROPRIATION 5.556 5.555

Transfer to debenture redemption reserve adj. – –

for Employee Benefits provision (net of tax Rs. 141000)

Total 5.556 5.555

Surplus carried to Balance Sheet 3918.816 2924.050

Basic and diluted Earning Per Share (EPS), (In Rs.) 6.71 8.98

Your Company’s turnover for this financial year stood at Rs. 1,619.439 Millions. The Profit after Tax is Rs 989.211 Millions and

cash profits from business is Rs. 1,189.989 Millions. The Company has sold 1,81,223 units of VER’s during the year, which has

earned Rs. 75.982 Millions.

Particulars For the Year ended For the Year ended

31.03.2010 31.03.2009

DIVIDEND

POWER BUSINESS

OPERATIONAL PERFORMANCE

POWER SALES

THE FUTURE OUTLOOK-INDIAN POWER SECTOR

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

review.

During the period under review the plant availability touched 99.94% and as per the available hydrology data the generation stood at

305.790 Million Units. The operation data for the year is as given below:

(In Million Units)

1. Total Generation 339.825 360.050 305.790

2. Less: Auxiliary Transmission Loss 3.732 4.184 3.167

3. Less: Royalty/Wheeling to Govt. HPSEB 61.841 65.479 55.682

4. Less: Impact of Unschedule Interchange Energy 0.425 1.262 2.765

5. Total Units sold 273.827 289.125 244.176

During the year the company recorded a sale of 244.176 Million. The Company has been selling its generated power to PTC India Ltd.

on short term contract basis. The present contract with PTC is expiring on 30th June 2010. Your Directors are pleased to inform you that

the Company has already entered into power sale contract with PTC India Ltd. for another period of three months i.e. from July, 2010 to

September, 2010 for sale of power to Punjab.

Energy is an essential part of the overall development of the country.

S. No Particulars 2007-08 2008-09 2009-10

59


India is one of the fastest growing economies of the world and has been recording high GDP growth over the last few years. Economists

predict that the Indian economy will continue to maintain the same tempo in future also, which will lead to further increase in demand for

electricity due to the fact that the growth in GDP and Power consumption are positively correlated, i.e., both move in the same direction.

India’s power generation capacity increased to 1,59,398 MW as on 31st March 2010 as compared to 1,47,965 MW as on

31st March 2009, an increase of 7.72%. The total energy available increased from 6,89,021 MUs ( 2008-09) to 7,46,493 MUs

(2009-10), an increase of 8.34%.

As per Planning Commission estimates, total electricity requirement in the country at eight per cent GDP growth is projected to cross

1,000 BU by 2011-12 and further rise to 2,118 BU by 2021-22. The Planning Commission has estimated that for an energy

requirement of 1,097 BU in 2011-12 (at eight per cent GDP growth), installed capacity has to be 2,20,000 MW. At the same GDP

growth rate, total installed capacity is required to be 306,000 MW and 425,000 MW in 2016-17 and 2021-22 respectively. Over

the last decade, India’s electricity generation has surged from 480.7 BU in 1999-00 to 771.17 BU in 2009-10. However, there still

exists a wide gap between demand for power and actual supply and this translates into huge opportunity for the power sector

companies to capitalize on.

Increase in power capacity and economic growth over the years have led to rise in per capita consumption of electricity in India from

566.7 KWh in 2002-03 to 704.2 KWh in 2007-08, growing at a CAGR of 3.69 per cent. However, India’s consumption is still one of

the lowest in the world with the global average being around 2,701 KWh.

With the Indian Economy growing at more than 7 to 8 percent annually, the demand for power has been outstripping supply. India

continues to experience acute shortages in energy supply (11.7%) and peak load capacity (13.3%). Both energy demand and peak

demand are expected to grow at between 7-8% up to 2017 and at 6-7% thereafter.

In order to cater to its growing requirement of electricity, India has to reduce its dependency on fossil fuels by looking at other

alternatives of energy which are both cost effective and cleaner in nature. Hydro Power, besides supplementing demand for electricity,

is also one of the better available choices for meeting peak demand. As of March 2009 the total installed capacity of Hydro Power in

India was about 37,000 MW. However, almost 70% of the exploitable hydro power capacity of 1,48,701 MW still remains to be

developed. As per Hydro Power Policy 2008, the Government of India plans to tap the unexploited capacity by end of 14th Five year

plan ( 2022-23 to 2026-27), which means that Hydro Power will see a surge in investment during the next 15 years.

Off late, the Government of India has taken many initiatives starting

from the enactment of Electricity Act 2003, introduction of Open

Access , setting up of Regulatory Commissions at the Centre and

States, unbundling of state electricity boards, modification of mega

power policy, formulation of Competitive Bidding Tariff, facilitation of

trading of surplus/merchant capacity and setting up of Power

Exchanges. All these initiatives have had positive results and attracted

more investment in the power sector.

The short term power market has been gradually consolidating its

position in the Indian power sector. The volume of traded power grew

by 37 per cent during 2009-10 as compared to the previous year.

According to Central Electricity Regulatory Commission (CERC)

estimates, the power exchanges and trading licensees transacted

short term power worth Rs.192.17 billion in 2009.

A notable recent development has been the emergence of industrial

consumers for power procurement through exchanges. During 2009,

over 20 industries procured a total of 154.4 million units (MUs)

through the power exchange (IEX).

For merchant plants, the tariffs are governed by supply and demand in

the market. The current demand-supply gap, which is expected to

continue for at least next 10 years , provides not only investment

opportunities in the power sector but will also boost the sale of power

in the spot market/ on short term contract basis.

The real asset of our company is human resource and thrust for better

utilization of Human resource and improvement in work practice

continued during the year. Training and development at all levels of

employees was given due priority by the company to increase

effectiveness. Special emphasis was given to organization building

and shaping right attitudes, team building and work culture, besides

preparing employees to understand the trends in fast changing

technology and switching over to latest technology for achieving

higher results. During the year from time to time employees of the

company were deputed to various training programmes to further

develop their skill in various areas of operations of the company.

The company is also committed to provide a zero injury workplace to

its employees and workers all across its units. Employees are

adequately covered under various insurance policies against risk of

health and life disasters. The company continues to empower its

employees to achieve business successes.

The Company has proper and adequate systems of internal control to

ensure protection of assets, proper financial and operating functions

and compliance with the policies, procedures, applicable Acts and

Rules. The company’s internal controls are supplemented by

internal/management audits covering all financial and operating

functions. The Audit committee at their meetings regularly review the

financial, operating, internal audit and compliance reports to improve

performance.

HUMAN RESOURCE DEVELOPMENT


INTERNAL CONTROL SYSTEMS

60 61


INTERNAL AUDIT

ENVIRONMENT RESPONSIBILITY

CORPORATE SOCIAL RESPONSIBILITY

Internal Audit at MPCL is an independent, objective and assurance function conscientious for evaluating and improving the

effectiveness of risk management, Control, and governance processes. The function prepares annual audit plans based on risk

management and conducts extensive reviews covering financial, operational and compliance controls and risk mitigation.

Internal audit plans cover matters identified in risk management assessments as well as issues highlighted by the Board, the audit

committee and senior management. Quarterly Internal audit reports are submitted along with the management’s response to the Audit

Committee. The Audit Committee monitors performance of Internal Audit on a periodic basis through review of the internal audit plans,

audit findings & swiftness of issue resolution through follow ups.

The company has planted 650 nos. of deodar saplings along the river bank and also planted 220 nos. of fruit trees viz Apple 150, Kiwi

30, Japani Fruit 25, Cherry 10, Walnut–5 at Doonkhra Housing Complex and Malana Township area. The Company has also

distributed 200 saplings of fruit trees among 20 villagers of village–Chowki. The disposal of hazardous waste is being done as per

approved standard/Norms of Pollution Control Board.

The Company has also contributed towards preparation and fixation of environmental awareness boards from Nehru Kund to Rohtang

Pass as per the request of Pollution Control Board – Badah, Kullu.

The Company recognizes that its operations impact a wide community of stakeholders, including investors, employees, customers,

business associates and local communities and that appropriate attention to the fulfillment of its corporate responsibilities can enhance

overall performance. In structuring its approach to the various aspects of Corporate Social Responsibility, the Company takes account

of guidelines and statements issued by stakeholder representatives and other regulatory bodies. The Company continues to support

local initiatives to improve infrastructure to support other corporate social responsibility initiatives.

We are committed to providing a working environment, which is both safe and fit for the intended purpose and ensures that health and

safety issues are a priority for all business operation

As a constructive partner in the communities in which it operates,

company has been taking concrete action to realize its social

responsibility and has spent on the infrastructure development

including construction, widening of roads and strengthening and

construction of bridges.

Your Company assessed and prioritized the needs of the local

community and took initiatives like renovation of temples, organizing

of local fair/festival, vocational training programme in tailoring,

repair of foot Bridge on river parvati connecting Katgla Village. To

make our efforts sustainable, we had been providing teachers to the

local Govt. school and are also providing free medicines.

Particulars required by the Companies (Disclosure of Particulars in the

Report of Board of Directors) Rules, 1988 are given in the prescribed

format as Annexure-I to the Directors’ Report.

Information in accordance with the provisions of Section 217(2A) of

the Companies Act, 1956 (the Act), read with the Companies

(Particulars of Employees) Rules, 1975, as amended, regarding

employees is given in Annexure-II to the Directors’ Report.

As required under Section 217 (2AA) of the Companies (Amendment)

Act, 2000, the Directors’ of your Company states hereunder:-

i) That in the preparation of the annual accounts, the applicable

Accounting Standards had been followed along with proper

explanation relating to material departures;

ii) that the accounting policies have been selected and applied

consistently and made judgments and estimates that are

reasonable and prudent so as to give a true and fair view of the

state of affairs of the Company at the end of the financial year and

of the profit or loss of the Company for the financial year

2009-2010.

iii) that the proper and sufficient care has been taken for the

maintenance of adequate accounting records in accordance with

the provisions of this Act for safeguarding the assets of the

Company and for preventing and detecting fraud and other

irregularities; and

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

basis.

In accordance with the provisions of the Companies Act, 1956 and of

the Articles of Association of the Company, Mr. Bidyut Shome and

Ms. Rohini Roshanara Sood, Directors of the Company, are liable to

retire by rotation at the forthcoming Annual General Meeting and

being eligible, offer themselves for re-appointment. The Board

recommends their re-appointment at the ensuing Annual General

Meeting. The aforesaid reappointment/appointments are subject to

the approval of the members and the necessary resolutions have been

incorporated in the notice of the Annual General Meeting.

DISCLOSURE OF PARTICULARS



DIRECTORS

62 63


AUDIT COMMITTEE

SUBSIDIARY COMPANY

AUDIT REVIEW

REDEMPTION OF DEBENTURES

FOREIGN EXCHANGE EARNINGS AND OUTGO

PUBLIC DEPOSITS

During the year the committee met three times to review company’s financial results, internal control systems, risk management policies

and internal audit reports. The audit committee of the Company comprises of three members. The proceedings of the committee were in

accordance with the provisions of the Companies Act, 1956.

The AD Hydro Power Ltd, a subsidiary company is in the process of developing 192 MW hydro electric project in the state of Himachal

Pradesh. The Company had started the construction of the project in early 2005 and the project is likely to be operational by July, 2010.

The Annual Report for the year 2009- 10 and Accounts for the year ended on March, 10 as required under Section 212 of the

Companies Act, 1956 of the said subsidiary Company is attached.

Statutory Auditors’ Report to the members and comments of the Board of Directors thereon annexed hereto and form part of this report

as required under Section 217(3) of the Companies Act, 1956.

During the financial year 2009-2010, amounting to Rs. 22.2 Millions have been redeemed.

During the year under review, the inflow of foreign exchange was 75.982 Million and outflow of foreign exchange was Rs. 20.070

million.

The company has not accepted any deposits from the public during the year under report. Information required to be disclosed under

Section 217 (1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the report of Board of Directors)

Rules, 1988 has been given in Part (B) of the Annexure forming part of this Report.


AUDITORS

AUDITORS’ REMARKS

ACKNOWLEDGMENT

The Company’s philosophy on Corporate Governance envisages the

attainment of the highest levels of transparency, accountability and

equity, in all facets of its operations, and all its interactions with the

stakeholders including shareholders, employees, customers,

government, suppliers and lenders and to build the confidence of the

society in general. The Company believes in adopting the philosophy

of professionalism, transparency and accountability in all areas and is

committed to pursue growth by adhering to the highest national and

international standards of Corporate Governance.

The majority of the board comprises of Non-Executive Directors who

play a critical role in imparting balance to the Board processes by

bringing an Independent judgment to bear on issues of strategy,

performance, resources, standards of Company conduct, etc. The

audit committee of the board meets regularly and provides assurance

to the Board on the adequacy of internal control systems and financial

systems. The Corporate governance policy followed by the Company

represents the value framework, the ethical framework and the moral

framework under which business decisions are taken.

M/s S. R. Batliboi & Co., Chartered Accountants, has conveyed their

willingness for re appointment as statutory auditors of the Company

for the financial year ending on 31st March, 2010. The Company has

also received consent letter from S.R. Batliboi & Co., Chartered

Accountants, under section 224(1B) of the Companies Act, 1956

being eligible showing willingness for their appointment as statutory

auditors of the Company for the financial year ending on 31st March,

2011. The Board recommends for the appointment of M/s S.R.

Batliboi & Co., Chartered Accountants, as Statutory Auditors of the

Company.

The observations made by the Auditors with reference to the Notes to

the Accounts for the year under report are self-explanatory and require

no further comments from the Board.

The Directors wish to place on record their deep appreciation for

continued guidance and support received from the Ministry of Power,

Government of Himachal Pradesh, Himachal Pradesh State Electricity

Board, Punjab State Electricity Board, Power Trading Corporation

Limited, Commercial Banks, Financial Institutions and other

Governmental Departments. The Board would also like to express

great appreciation for the commitment and contribution of its

employees at all levels achievement and looks forward to their

continued support and cooperation in the coming years as well.

Last but not least, the Company thanks its shareholders for the trust

reposed in the Management and their unstinted support.


Place: Noida Ravi Jhunjhunwala

Date: 2nd June, 2010 Chairman and Managing Director

64 65


ANNEXURE II TO THE DIRECTORS REPORT

Information pursuant to Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of employees)

Rules, 1975 and forming part of Directors Report for the year ended 31st March 2010 are given hereunder:

I. Persons employed for the full year

1. Mr. Ravi Chairman 51.004 B.Com (Hons), 30 55 1.11.2001

Jhunjhunwala & MD MBA

2. Mr. M.M. CEO 4.532 B Tech. (Civil), 32 56 11.09.2008

Madan MBA

Sl. Qualification Experience Age Date of

No. (Rs. in Million) Commencement

of Employment

Name Designation Remuneration

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

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

1. CONSERVATION OF ENERGY – NIL

2. TECHNOLOGY ABSORPTION – NIL

3. FOREIGN EXCHANGE EARNINGS AND OUTGO:

a) Repair & Maintenance 16.281 –

b) Traveling Expenses 2.066 0.560

c) Professional Expenses 1.570 18.120

d) Fees and Subscription 0.153 0.011

Total 20.070 18.691

Others (Sale of Voluntary Emission Rights) 75.982 66.528

Total 75.982 66.528

I) Foreign Exchange Outgo This Year Previous Year

Rs. In Million

II) Foreign Exchange Earnings

66

67

Auditors' report

To

The Members of Malana Power Company Limited

1. We have audited the attached Balance sheet of Malana power Company Limited (‘the Company’) as at March 31, 2010 and also the Profit and Loss Account and the Cash Flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in india. those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor’s report) order, 2003 (as amended) issued by the Central Government of india in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

4. Without qualifying our opinion, attention is invited to Note 13 of Schedule 20 of the financial statements, regarding management’s assessment about obtaining the necessary clearances for execution of the Bara Bangal project (having capital work in progress of rs. 663,073 thousand as at March 31, 2010) as well as obtaining extension of time limit for submission of detailed project report (dpr). Accordingly, the management believes that no adjustments are required to the financial statements in this regard. We have relied upon such management’s assessment and no adjustments have been made to the financial statements for the above matters.

5. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

i. We have obtained all the information and explanations, which to the best of our knowledge

and belief were necessary for the purposes of our audit;

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

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

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

v. on the basis of the written representations received from the directors, as on March 31, 2010, and taken on record by the Board of directors, we report that none of the directors is disqualified as on March 31, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

vi. in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in india;

a) in the case of the balance sheet, of the state of affairs of the Company as at March 31, 2010;

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

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

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

per Raj Agrawalpartner Membership No.: 82028

place : Gurgaondate : June 2, 2010

68


Annexure referred to in paragraph 3 of our report of even datere: Malana power Company Limited (‘the Company’)

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

(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were identified on such verification.

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

(ii) (a) the management has conducted physical verification of inventory at reasonable intervals during the year.

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) the Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) (a) the Company has granted loan to one Company covered in the register maintained under section 301 of the Companies Act, 1956. the maximum amount involved during the year was rs. 4,262,368 thousand and the year- end balance of loan granted to such company was rs. 3,750,520 thousand.

(b) in our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loan are not prima facie prejudicial to the interest of the Company.

(c) As informed to us and as per the terms of the subordination Loan agreement with the lenders, the loan granted and interest thereon is re-payable after the payment is made to outside lenders and once the project commences commercial operations. Accordingly, the Company has not demanded repayment of any such loan and interest thereon during the year and there has been no default on the part of the party to whom the money has been lent.

(d) there is no overdue amount of loans granted to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

(e) the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, provisions of clauses 4(iii) (f) and (g) of the Companies (Auditor’s report) order, 2003 (as amended) are not applicable to the Company.

(iv) in our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of power. during the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas. during the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system of the company. due to the nature of its business, the Company is not required to sell any services.

(v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register maintained under section 301 have been so entered.

(b) in our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding the value of rupees five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) the Company has not accepted any deposits from the public.

(vii) in our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

(ix) (a) the Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it. the provisions relating to employees’ state insurance are not applicable to the Company.

Further, since the Central Government has till date not prescribed the amount of cess payable under section 441 A of the Companies Act,1956, we are not in a position to comment upon the regularity or otherwise of the company in depositing the same.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education

69

and protection fund, income-tax, sales tax, wealth-tax, service tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

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

(x) the Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a bank or debenture holders. there are no dues outstanding to any financial institution.

(xii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) in our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor’s report) order, 2003 (as amended) are not applicable to the Company.

(xiv) in our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor’s report) order, 2003 (as amended) are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has given guarantee for loans taken by its subsidiary from bank or financial institutions, the terms and conditions whereof, in our opinion, are not prima-facie prejudicial to the interest of the Company.

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

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) the Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

(xix) According to the information and explanations given to us, the Company has created security or charge in respect of debentures outstanding during the year.

(xx) during the year under review, the Company has not raised money through public issues; hence, clause 4 (xx) of the Companies (Auditor’s report) order, 2003 (as amended) is not applicable to the Company.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.




70


BALANCe sHeet As At 31st MArCH, 2010

As per our report of even dateFor S. R. Batliboi & Co.Firm registration No. : 301003e Chartered Accountants

per Raj AgrawalpartnerMembership No. 82028

place : Gurgaon dated : June 2, 2010

For and on behalf of the Board of directors

RAVI JHUNJHUNWALA Chairman & Managing director

ROHINI ROSHANARA SOOd director

BHARAT SINgH Company secretary

place : Noidadate : June 2, 2010

(` ’000) Schedules As at

March 31, 2010As at

March 31, 2009SOURCES OF FUNdSShareholders’ Fundsshare capital 1 1,475,257 1,475,257 reserves and surplus 2 7,187,273 6,198,062 8,662,530 7,673,319 secured loans 3 3,279,315 1,399,735 unsecured loans 4 – 198,261 3,279,315 1,597,996 deferred Tax Liability (net) 5 226,130 224,997 TOTAL 12,167,975 9,496,312 APPLICATION OF FUNdSFixed Assets 6 Gross block 3,288,874 3,290,738 Less : Accumulated depreciation/amortisation 1,194,523 996,809 Net block 2,094,351 2,293,929 Capital work in progress (including capital advances) 735,871 690,017 2,830,222 2,983,946 Investments 7 4,929,556 4,929,556 Current Assets, Loans and Advancesinventories 8 19,736 20,052 sundry debtors 9 41,220 21,608 Cash and bank balances 10 59,123 26,152 other current assets 11 560,029 199,962 Loans and advances 12 4,035,629 1,657,423 4,715,737 1,925,197 Less: Current Liabilities and Provisions Current Liabilities 13 293,935 305,711 provisions 14 13,605 36,676 307,540 342,387 Net Current Assets 4,408,197 1,582,810 TOTAL 12,167,975 9,496,312 Notes to Accounts 20the schedules referred to above and notes to accounts form an integral part of the Balance sheet.

71

proFit ANd Loss ACCouNt For tHe YeAr eNded 31st MArCH, 2010









(` ’000)Schedules For year ended

March 31, 2010For year ended March 31, 2009

INCOME turnover 1,619,439 1,853,616 Less : discount on prompt payments 31,997 37,232 Less : Handling charges 7,325 8,674 Less : unscheduled interchange charges 13,392 12,272 Turnover (net) 1,566,725 1,795,438 other income 15 446,551 269,182 TOTAL 2,013,276 2,064,620 EXPENdITURE Wheeling Cost 15,434 18,149 personnel expenses 16 38,480 32,752 operating and other expenses 17 166,889 131,506 depreciation 6 199,646 201,292 Financial expenses 18 426,871 240,505 TOTAL 847,320 624,204 Profit before tax and prior period items 1,165,956 1,440,416 prior period income (represents surrender value of keyman insurance policy)

28,528 –

Profit before tax 1,194,484 1,440,416 Current tax (including ` 1,198 thousand (previous year rs Nil) pertaining to earlier years)

204,140 163,199

deferred tax charge / (credit) 1,133 1,299 Fringe benefit tax – 1,150 total tax expense 205,273 165,648 Net Profit 989,211 1,274,768 Balance brought forward from previous year 2,924,050 1,643,727 Profit available for appropriation 3,913,261 2,918,495 APPROPRIATION: transfer from debenture redemption reserve 5,556 5,555 TOTAL 5,556 5,555 Surplus carried to balance sheet 3,918,817 2,924,050 Earnings per share (figures are not annualised) (in `) – Basic/diluted (Nominal value ` 10 per share) 19 6.71 8.98 Notes to Accounts 20 The Schedules referred to above and the notes to accounts form an integral part of the Profit and Loss Account.

72


sCHeduLes to tHe ACCouNts

SCHEdULE 1: SHARE CAPITAL(` ’000)

As at March 31, 2010


Authorised 160,000,000 (previous year 160,000,000) equity shares of ` 10 each

1,600,000 1,600,000

Issued and Subscribed 147,525,731 (previous year 147,525,731) equity shares of ` 10 each

1,475,257 1,475,257

Paid-up 147,525,731 (previous year 147,525,731) equity shares of ` 10 each, fully paid up *

1,475,257 1,475,257

*of the above 75,238,123 (previous year 75,238,123) equity shares are held by Bhilwara energy Ltd., the holding Company

1,475,257 1,475,257

SCHEdULE 2: RESERVES ANd SURPLUS(` ’000)



Securities premium account 3,254,567 3,254,567 debenture redemption reserve Balance as per last account 19,445 25,000 Transferred to profit and loss account (5,556) 13,889 (5,555) 19,945Profit and loss account 3,918,817 2,924,050 7,187,273 6,198,062

SCHEdULE 3: SECUREd LOANS(` ’000)



debenturesredeemable Non-Convertible debentures of ` 1,000 thousand each (refer Note 1 below)

55,555 77,778

Loans and advances from banks (refer note 2 below)

term loans– rupee loans 3,180,243 755,167 – Foreign currency loans 43,517 3,223,760 66,790 short term loans– From banks (refer note 3 below) – 500,000 3,279,315 1,399,735

73

Notes:

1. Redeemable Non-Convertible Debentures (NCD) are secured by way of first mortgage and charge on land situated at village Budasan (Gujarat) together with all estate rights etc., present & future, of the Company and further secured by irrevocable and unconditional guarantee extended by infrastructure Leasing & Financial Services Ltd. (IL&FS). The aforesaid guarantee of IL&FS is secured by way of first charge on all immovable and movable properties, present and future, of the Company on pari-passu basis.150, 7.75% debentures of ` 1,000 thousand each privately placed with General insurance Corporation Ltd., New india Assurance Co. Ltd. and punjab National Bank equally and 100, 7.865% debentures of ` 1,000 thousand each privately placed with Bank of Baroda were redeemable at par in 36 equal quarterly instalments commencing from 31st december 2003. However, the above debentures were subject to a call and put option exercisable by the debenture holders and the Company respectively in November 2007. New india Assurance Co. Ltd (NiA) exercised the call option and 50 debentures of ` 1,000 thousand each held by NiA were redeemed completely during the financial year 2007-08. Other debenture holders opted to hold the debentures and repayment is being made as per the schedule. redemption of ` 722 thousand (previous year ` 611 thousand) on each debenture has been made till date.

2. Term loans from various banks are secured by way of first mortgage/charge on all the immovable properties wherever situated and hypothecation of all other assets, rights etc., present & future, of the Company on pari-passu basis.

3. Short term loan were secured by subservient charge or movable fixed assets of the Company.

4. debentures and loans and advances from banks aggregating to ` 757,982 thousand (previous year ` 832,221 thousand) are repayable within one year.

SCHEdULE 4 : UNSECUREd LOANS :(` ’000)



Short-term loans & advances – From banks – 83,333 – From holding Company – 114,928

– 198,261

SCHEdULE 5 : dEFERREd TAX LIABILITy (NET) : (` ’000)



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

225,872 224,997

income taxable on receipt 258 – gross deferred Tax Liabilities 226,130 224,997 deferred Tax Assets – – gross deferred Tax Assets – – deferred Tax Liability (Net) 226,130 224,997

74


SCHEdULE 6: FIXEd ASSETS(` ’000)

Land– Freehold

Road & Building

Civil Works Transmission Lines

Plant & Machinery

Furniture & Fittings

Office & Other

Equipments

Vehicles Total Tangible

Assets

Software Total Intangible

Assets

Total Previous Year

Gross Block

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

Additions – – – – 21 11 218 429 679 – – 679 4,825

Deductions/ Adjustments – – – – – – 1,441 1,102 2,543 – – 2,543 424

As at March 31, 2010 21,517 224,958 1,847,265 199,670 958,084 5,754 8,711 11,217 3,277,176 11,698 11,698 3,288,874 3,290,738

Depreciation

At April 1, 2009 – 56,645 504,896 80,593 325,868 3,751 6,692 8,210 986,655 10,154 10,154 996,809 795,685

For the year – 7,572 120,357 10,549 58,486 360 891 928 199,143 503 503 199,646 201,292

Deletions / Adjustments – – – – – – 1,129 803 1,932 – – 1,932 168

As at March 31, 2010 – 64,217 625,253 91,142 384,354 4,111 6,454 8,335 1,183,866 10,657 10,657 1,194,523 996,809

Net Block March 31, 2010 21,517 160,741 1,222,012 108,528 573,730 1,643 2,257 2,882 2,093,310 1,041 1,041 2,094,351 2,293,929

Net Block March 31, 2009 21,517 168,312 1,342,370 119,077 632,195 1,993 3,241 3,680 2,292,385 1,544 1,544 2,293,929

Capital Work in Progress

Building under erection 71,705 37,430

Capital Advances 1,093 12,839

Advance for project allotted (refer note 3 below)

663,073 639,748

Sub Total 735,871 690,017

Total Fixed Assets as at March 31, 2010

21,517 160,741 1,222,012 108,528 573,730 1,643 2,257 2,882 2,093,310 1,041 1,041 2,830,222

Total Fixed Assets as at March 31, 2009

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

Notes :1) Road & Building includes cost of road ` 122,838 thousand (Previous year ` 122,838 thousand) constructed on forest land diverted for the project under irrevocable right to use.2) Transmission Lines includes ` 4,181 thousand (Previous year ` 4,181 thousand) towards cost of land and compensation paid to Forest Department for construction of Transmission towers under irrevocable

right to use.3) Includes ` 51,073 thousand (previous year ` 27,748 thousand) towards consultancy and other expenses on project allotted (Also refer Note 13 of Schedule 20).

SCHEdULE 7 : INVESTMENTS :

(` ’000)



Long Term Investments (At Cost)

In Subsidiary Company Unquoted

492,955,640 (previous year 430,155,640) equity shares of ` 10 each fully paid of Ad Hydro power Limited (pledged with security trustee on behalf of lenders of Ad Hydro power Limited)

4,929,556 4,301,556

share application money pending allottment in Ad Hydro power Limited

– 628,000

4,929,556 4,929,556

SCHEdULE 8: INVENTORIES

(` ’000)



stores and spares (including material lying with third parties ` 2,043 thousand, previous year ` Nil)

19,736 20,052

19,736 20,052

75

SCHEdULE 9: SUNdRy dEBTORS

(` ’000)



(Unsecured, Considered good)

outstanding for a period exceeding six months – –

other debts 41,220 21,608

41,220 21,608

SCHEdULE 10: CASH ANd BANk BALANCES

(` ’000)




Balances with scheduled banks:

on current accounts 25,526 23,815

on deposit accounts 30,200 1,054

on margin money account 2,800 965

59,123 26,152

Included in deposit accounts are :

– Fixed deposit of ` 200 thousand (previous year ` 200 thousand) pledged with the H.p. Government sales tax department and ` Nil thousand (previous year ` 854 thousand) pledged with Himachal prades state electricity Board.

SCHEdULE 11: OTHER CURRENT ASSETS

(` ’000)



interest accrued on deposits and others 51 39

interest accrued on loan given to subsidiary Company 559,211 199,923

surrender Value of Keyman insurance policy 767 -

560,029 199,962

SCHEdULE 12: LOANS ANd AdVANCES

(` ’000)



Unsecured, considered good

Loans to employees 1,944 3,032

Loan to subsidiary Company (long term) 3,750,520 1,360,756

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

other advances recoverable in cash or in kind or for value to be received

27,459 38,190

deposits - others 3,076 2,815

4,035,629 1,657,423

Included in Loans and Advances are :

i. dues from the company under the same Management

Ad Hydro power Limited (Maximum amount outstanding during the year ` 4,262,368

thousand (previous year ` 3,292,519 thousand)

3,750,520 1,360,756

76


SCHEdULE 13: CURRENT LIABILITIES(` ’000)



Sundry creditors (a) outstanding dues of Micro & small enterprises * – – (b) outstanding dues of creditors other than Micro & small

enterprises (*refer note no 11 of schedule 20)32,530 35,747

deposits from holding company (refer note no. 10 of schedule 20) 252,630 252,630 deposits from contractors and others 4,475 1,190 interest accrued on loan from holding Company – 10,787 other liabilities 4,300 5,357

293,935 305,711 Creditors includesManaging director's commission payable 12,457 14,643

Schedule 14: Provisions(` ’000)



Provision for Fringe Benefit Tax (net of advance fringe benefit tax ` Nil, (previous Year ` 3,133 thousand))

– 17

provision for Wealth tax – 30 provision for income tax (net of advance tax ` 465,487 thousand (previous year ` 280,234 thousand))

5,595 28,258

provision for Gratuity – 1,002 provision for Long term compensated absences 3,105 2,161 provision for Continuity Linked Bonus 4,905 5,208

13,605 36,676

SCHEdULE 15: OTHER INCOME(` ’000)

For the year ended March 31, 2010


interest from subsidiary company (Gross, tax deducted at source ` 49,788 thousand (previous year ` 14,647 thousand)

359,288 199,923

interest on bank deposits (Gross, tax deducted at source ` 169 thousand, (previous year ` 56 thousand))

886 248

interest on income tax refund – 517 Foreign exchange fluctuation (net) 8,012 – Profit on sale/discard on fixed assets (net) – 270 sale of voluntary emission reductions 75,982 66,528 unspent liabilities written back 1,200 – surrender Value of keyman insurance policy 767 – Miscellaneous income 416 1,696

446,551 269,182

SCHEdULE 16: PERSONNEL EXPENSES (` ’000)



salaries , wages and other expenses 31,214 25,030 Contribution to provident funds 2,034 1,806 Contribution to superannuation funds 400 1,028 Gratuity expenses – 971 Long term Compensated Absences 943 131 Workmen and staff welfare expenses 3,889 3,786

38,480 32,752

77

SCHEdULE 17: OPERATINg ANd OTHER EXPENSES(` ’000)



power and fuel 3,626 3,822 repairs and maintenance – plant and machinery 51,920 27,721 – Civil works 316 307 – Buildings 706 701 – others 1,081 1,577 rent 3,882 3,623 rates and taxes 3,335 1,121 insurance 5,267 12,260 traveling & Conveyance 8,008 6,398 Legal and professional expenses 6,054 4,231 director's remuneration 38,547 9,503 Commission to managing director 12,457 14,643 Auditor's remuneration : – Audit fee 908 552 – Fees for international reporting – 348 – Fees for special audit 303 – – Fees for certification 276 239 – out of pocket expenses 7 4 Loss on fixed assets sold /discarded (net) 223 – Foreign exchange fluctuation (net) – 17,042 donations and contributions (other than to political parties) 763 1,217 expenses on sale of Voluntary emission reductions (including commission)

15,453 10,481

Miscellaneous expenses 13,757 15,716 166,889 131,506

SCHEdULE 18: FINANCIAL EXPENSES(` ’000)



interest– on term loans and debentures 311,832 101,293 – to banks 12,030 136,481 – to others – 1,000 Bank charges including guarantee commission and processing fees (net of upfront fees / commitment charges reimbursed by subsidiary Company ` 8,273 thousand, (previous year ` 7,750 thousand))

103,009 1,731

426,871 240,505

SCHEdULE 19 : EARNINgS PER SHARE (EPS) (` ’000)



Net profit as per profit and loss account 989,211 1,274,768 equity shares at the beginnning of the year 147,525,731 139,170,176 equity shares at the end of the year 147,525,731 147,525,731 Weighted average number of equity shares in calculating basic/diluted eps

147,525,731 142,003,986

Basic & diluted earnings per share (in rupees) 6.71 8.98

78


SCHEdULE – 20: NOTES TO ACCOUNTS

Nature of Operations1.

Malana power Company Limited (hereinafter referred to as ‘the Company’) is engaged in the generation of hydro electric power and development of hydro power projects.

Statement of Significant Accounting Policies2.

Basis of preparation(a)

The financial statements have been prepared to comply in all material respects with the Notified accounting standards by Companies (Accounting standards) rules, 2006 and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis. the accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

Use of Estimates(b)

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

Fixed Assets(c)

Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition of fixed assets which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use.

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

depreciation(d)

on the assets of generating unit and other plant & Machinery, depreciation is provided on straight-line (i) method at the rates based on their estimated useful lives, which corresponds to the rates prescribed in schedule XiV of the Companies Act, 1956.

On fixed assets other than those covered under (i) above, depreciation is provided on written down value (ii) method at the rates based on their estimated useful lives, which corresponds to the rates prescribed in schedule XiV of the Companies Act, 1956.

Intangible Asset(e)

Computer software purchased from outside are amortized on written down value method at the rate of 40% per annum based on its estimated useful life.

Leases(f)

Where the Company is the lessee

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

Investments(g)

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

79

Inventories(h)

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

Revenue recognition(i)

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

Sale of Electricity

revenue from sale of electricity is recognised on the basis of billable electricity (over and above free supply to Himachal pradesh’s state Government) scheduled to be transmitted to the customers, which approximates the actual electricity transmitted.

Interest

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

Voluntary emission rights (VER)

Revenue is recognised as and when the VER’s are certified and sold and it is probable that the economic benefits will flow to the Company.

(j) Foreign currency translation

Foreign currency transactions

initial recognition(i)

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

Conversion(ii)

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

exchange differences(iii)

exchange differences arising on the settlement of monetary items or on reporting of such monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as income or as expenses in the year in which they arise.

(k) Retirement and other employee benefits

Retirement benefits in the form of Provident Fund and Superannuation Schemes are defined (i) contribution schemes and the contributions are charged to the Profit & Loss Account of the year when the contributions to the respective funds are due. there are no obligations other than the contribution payable to the respective fund/trust.

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

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

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

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

(l) Income taxes

tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected

80


to be paid to the tax authorities in accordance with the income-tax Act, 1961 enacted in india. deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. in situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.

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

MAt credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which the Minimum Alternative tax (MAt) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in Guidance Note issued by the institute of Chartered Accountants of india, the said asset is created by way of a credit to the profit and loss account and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAt Credit entitlement to the extent there is no longer convincing evidence to the effect that the Company will pay normal Income Tax during the specified period.

(m) Earnings Per Share

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

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

(n) Provisions

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

(o) Cash and Cash equivalents

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

the Company’s activities during the year involved generation of the Hydro power (refer Note 1). Considering 3. the nature of Company’s business and operations, there are no separate reportable segments (business and/ or geographical) in accordance with the requirements of Accounting standard 17 ‘segment reporting’ issued by the Companies (Accounting standard) rules, 2006 and hence, there are no additional disclosures to be provided other than those already provided in the financial statements.

the Company is eligible for tax holiday under section 80-iA of the income tax Act, 1961. in view of unabsorbed 4. depreciation in the initial years, the Company has not availed the tax holiday benefit up to accounting year 2006-07. However, based on its profitability, it has decided to avail the deduction from the accounting year 2007-08 and will continue to avail it till accounting year 2015-16. the Company is liable to pay income-tax for the year under the provisions of section 115JB of the income-tax Act, 1961.

the Company has the necessary permission from the Government of Himachal pradesh to own, operate & 5. maintain the project and sell power for a period of forty years from the date of commercial operation i.e. July 5, 2001 with the option to avail a further extension for a maximum period of twenty years after renegotiation of terms and conditions.

81

Contingent Liabilities not provided for6.

(a) Guarantee given for loans availed by Ad Hydro power Limited, subsidiary company, amounting ` 800,000 thousand (previous year ` 450,000 thousand).

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

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

demand of stamp duty and registration fees (ii) ` 40,990 thousand (previous year ` 40,990 thousand).

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

Capital Commitments7.

estimated amount of contracts remaining to be executed on capital account and not provided for (Net of advances) ` 656,016 thousand (previous Year ` 761,145 thousand)

Related Party disclosures8.

Names of related p(a) arties

Holding Company : Bhilwara energy Limited

Subsidiary Company : Ad Hydro power Limited

Enterprises having significant influence over the Company

: sN power Holdings singapore pte. Ltd.

Fellow Subsidiary Companies : indo Canadian Consultancy services Limited,

Green Ventures private Limited

key Management Personnel : Mr. ravi Jhunjhunwala, Chairman & Managing director

Relatives of key Management personnel

: Mrs. rita Jhunjhunwala (Wife of the Chairman & Managing director)

Mr. riju Jhunjhunwala (son of the Chairman & Managing director)

Mr. rishabh Jhunjhunwala (son of the Chairman & Managing director)

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

: HeG Limited, rsWM Limited.

82


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

Nature of Transaction

Holding Company/ Enterprises

having significant influence over the

Company

Subsidiary/Fellow subsidiary Company

key Management Personnel

Relative of key Management

Personnel

Enterprise over which key management

personnel /relative having significant

influence

March 2010

March 2009

March 2010

March 2009

March 2010

March 2009

March 2010

March 2009

March 2010

March 2009

Transactions during the year

rent

a) Mrs.rita Jhunjhunwala 357 –

b) Mr. rishabh Jhunjhunwala 1,709 1,740

c) Mr. riju Jhunjhunwala 1,709 1,740

d) rsWM Limited 3,878 3,620

Consultancy service charges paid to indo Canadian Consultancy services Limited

14,895 220

remuneration paid to Mr. ravi Jhunjhunwala,

10,019 9,503

Commission paid to Mr. ravi Jhunjhunwala,

12,446 14,643

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

28,528 –

reimbursement of expenses paid to HeG Limited

2,382 2,266

reimbursement of expenses paid to rsWM Limited

381 546

reimbursement of expenses paid to indo Canadian Consultancy services Limited

232 1034

reimbursement of expenses paid to Ad Hydro power Limited

1,712 3,125

reimbursement of expenses recovered from Ad Hydro power Limited

15,264 10,061

reimbursement of expenses recovered from indo Canadian Consultancy services Limited

16,685 698

share application money given to Ad Hydro power Limited (net)

– 1,391,056

shares acquired in Ad Hydro power Limited

628,000 763,056

Allotment of shares to Bhilwara energy Limited

– 42,613

Allotment of shares to sN power Holdings singapore

– 40,942

securities premium on Allotment of shares to Bhilwara energy Limited

– 532,667

securities premium on Allotment of shares to sN power Holdings singapore

– 511,778

unsecured Loan repaid to Bhilwara energy Limited (including interest)

202,237 646,602

unsecured Loan taken from Bhilwara energy Limited

76,521 761,700

unsecured Loan repaid by Ad Hydro power Limited

5,189,100 2,212,132

unsecured loan taken from HeG Limited

– 150,000

83

(` ‘000)

Nature of Transaction

Holding Company/ Enterprises

having significant influence over the

Company

Subsidiary/Fellow subsidiary Company

key Management Personnel

Relative of key Management

Personnel

Enterprise over which key management

personnel /relative having significant

influence

unsecured loan repaid to HeG Limited

– 150,000

unsecured Loan given to Ad Hydro power Limited

7,615,100 3,356,741

interest income on unsecured loan given to Ad Hydro power Limited

359,288 199,923

interest expense on loan from HeG Limited

– 3,345

Balances outstanding as at the year end

As at March

31, 2010

As at March

31, 2009

As at March 31,

2010

As at March 31,

2009

As at March

31, 2010

As at March

31, 2009

As at March

31, 2010

As at March

31, 2009

As at dec 31

As at March

31, 2010, 2009

As at March 31,

2009

Balances Receivable:

investment in Ad Hydro power Limited

4,929,556 4,301,556

unsecured Loan given to Ad Hydro power Limited

3,750,520 1,360,756

interest amount recoverable on unsecured Loan

559,211 199,923

share Application Money pending allotment

– 628,000

receivable from rsWM Limited – 157

Balances Payable:

sN power Holdings, singapore – 277

interest payable on unsecured Loan taken from Bhilwara energy Limited

– 125,715

deposit taken from Bhilwara energy Limited

252,630 252,630

indo Canadian Consultancy services Limited

– 1,558

Mr. ravi Jhunjhunwala 12,457 14,643

Guarantees given by the Company on behalf of Ad Hydro power Limited

800,000 450,000

payable to HeG Limited – 4,353

Supplementary Statutory Information 9. (` ’000)

Particulars March 2010 March 2009

(a) Managing director Remuneration

salaries 5,825 5,525

Commission 12,457 14,643

rent paid 3,495 3,315

Contribution to provident Fund 699 663

other perquisites (assignment of Keyman insurance policy) 28,528 –

51,004 24,146

Notes: a) As the future liability for the gratuity and earned leaves is provided on actuarial basis for the Company as a

whole, the amount pertaining to the directors is not ascertainable and therefore, not included. b) perquisites have been considered as per taxable value as per income tax Act, 1961

84


Particulars March 2010 March 2009

(b) Computation of net profit in accordance with Section 198 read with Section 349 of the Companies Act, 1956 :Profit for the year before taxation as per Profit & Loss Account 1,194,484 1,440,417

Add: Depreciation as per Profit & Loss Account 199,646 201,292

directors’ remuneration 51,004 24,146

Loss on sale of Fixed Asset 223 -

1,445,357 1,665,855

Less: depreciation u/s 350 of the Companies Act 199,646 201,292

Profit on sale of Fixed Assets – 270

Net Profit in accordance with Section 198 and 349 1,245,711 1,464,292

Commission @ 1% of Net Profit 12,457 14,643

During the financial year 2007-08, the Company has paid 50% upfront premium of 10. ` 252,630 thousand to the Government of Himachal Pradesh as first instalment for the 140 MW Chango Yangthang HEP project which was awarded to the Company. this amount has been paid by the Company on behalf of its holding company, Bhilwara energy Limited (‘BeL’) with an understanding that all rights, obligations, rewards and risks of this project will belong to BeL. For making the said payment, a corresponding amount of ` 252,630 thousand had been received from BEL in the financial year 2007-08, which has been shown under the head ‘deposits from holding company’ under ‘Current Liabilities’ in the financial statements. An agreement has already been entered into between the two shareholders - sN power and Bhilwara energy Limited and the Company, wherein BeL has agreed that all rights, obligations, rewards and risks of this project will belong to BeL and no liability there against will devolve on the Company.

the Government of india has promulgated an Act namely the Micro, small and Medium enterprises development 11. Act, 2006 which came into force with effect from october 2, 2006. As per the Act, the Company is required to identify the Micro, Small and Medium suppliers and pay them interest on overdue beyond the specified period irrespective of the terms agreed with the suppliers. As per the information available with the Company and relied upon by the auditors, none of the creditors fall under the definition of ‘supplier’ as per the Section 2(n) of the Act. in view of the above, the prescribed disclosures under section 22 of the Act are not required to be made.

Leases12.

In case of assets taken on Operating Lease:

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

(` ‘000)


March 31, 2010

For the year ended

March 31, 2009

Lease payments for the year 3,882 3,623

in an earlier year, the Company had given an upfront premium of 13. ` 612,000 thousand for 200 MW Bara Banghal Hep project in state of Himachal pradesh. Further, the Company has incurred expenses in the nature of consultant fees and other expenses of ` 51,073 thousand in relation to this project. thus, an amount of ` 663,073 thousand is appearing as capital work in progress in respect of this project as at March 31, 2010.

Approx. 21.46 hectares of land for the said project falls under the dhauladhar WildLife sanctuary, where no construction is permitted. The Company has filed an impleadment application with the Supreme Court of India for giving direction to the Wildlife Authority for processing and granting the technical clearance for the said project. Further, as per the terms of the pre-implementation Agreement signed with the state Government of Himachal pradesh, the upfront premium of ` 612,000 thousand will get forfeited if the detailed project report (‘DPR’) of the project is not submitted by October 31, 2010, for which the Company has filed an application with the authorities for the extension of time limit for the submission of said dpr. pending the decision on application by the supreme Court of india for grant of the clearance and by the state Government for extension of the time limit, the Board of Directors are confident that the Company will get the necessary approvals shortly and will be able to complete the project within specified time frame and no provision thereagainst is required in these financial statements.

85

gratuity (AS 15- Revised)14. The Company has a defined benefit gratuity plan. Gratuity (being administered by a Trust) is computed as

15 days salary for every completed year of service or part thereof in excess of 6 months and is payable on retirement/ termination / resignation. The benefit vests on the employee completing 5 years of service. The Gratuity plan for the Company is a defined benefit scheme where annual contributions are deposited with a Gratuity Trust Fund established to provide gratuity benefits. The Trust Fund has taken a Scheme of Insurance, whereby these contributions are transferred to the insurer. the Company makes provision of such gratuity asset/ liability in the books of accounts on the basis of actuarial valuation as per the projected unit credit method.

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

Profit and Loss Account Net employee benefits expense (recognised in Employee Cost):

Particulars For the year ended on March 31, 2010

(` ’000)


(` ’000)Current service Cost 490 564

Interest cost on benefit obligation 385 280expected return on plan assets (330) (160)Net actuarial (gain)/ loss recognised in the year (592) 286past service cost - -Net benefit expense (47) 971Actual return on plan assets 877 162

Balance Sheet details of Provision for gratuity:

Particulars As at March 31, 2010 (` ’000)

As at March 31, 2009 (` ’000)

Defined benefit obligation 4,363 5,133Fair value of plan assets 4,410 4,130

47 (1,002) Less: unrecognised past service cost - - plan asset / (liability) 47 (1,002)


Particulars For the year ended March 31, 2010

(` ’000)

For the year endedMarch 31, 2009

(` ’000)Opening defined benefit obligation 5,133 4,000interest cost 385 280Current service cost 490 564Benefits paid (1,600) -Actuarial (gains)/ losses on obligation (45) 288Closing defined benefit obligation 4,363 5,133



(` ’000)

For the year endedMarch 31, 2009

(` ’000)opening fair value of plan assets 4,130 1,998expected return 330 160Contributions by employer 1,002 1971Benefits paid (1,600) –Actuarial gains / (losses) 547 2Closing fair value of plan assets 4,410 4,130

The Defined benefit obligation amounting to ` 4,363 thousand is funded by assets amounting to ` 4,410 thousand and the Company expects to contribute ` 1,002 thousand during the year 2010-11.

86


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



% %

investments with insurer 100 100

the overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

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

Particulars For the year ended on March 31, 2010


% %

discount rate 7.50 7.00

expected rate of return on assets 8.00 8.00

Future salary increase 5.00 4.50

Withdrawal rate 1 to 3 1 to 3

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

Amounts for the current and previous four years are as follows*:

(` ‘000s)




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

plan assets 4,410 4,130 1,198

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

experience adjustments on plan liabilities 24 (260) -

experience adjustments on plan assets 547 2 -

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

Defined Contribution Plan

(` ‘000s)



Contribution to provident Fund 2034 1,806

Contribution to superannuation Fund 400 1,028

2,434 2,834

Particulars of Unhedged Foreign Currency Exposure as at the Balance Sheet date15.


Foreign Currency Loan ` 43,516,800 (USd 960,000 @

closing rate of 1USd = ` 45.33)

` 66,790,400 (usd 1,280,000 @

closing rate of 1usd = ` 52.18)

provision against equipment supplied ` 2,846,356 (CHF 66,816 @ closing rate of

1CHF = ` 42.60)

` 8,495,410 (CHF 187,000 @

closing rate of 1CHF = ` 45.43)

87

Additional information pursuant to the provisions of paragraphs 3, 4C and 4d of Part II of Schedule VI 16. to the Companies Act, 1956

a) Information in respect of generation and Turnover:

2009-10 2008-09(i) installed capacity (technically estimated) 86 MW 86 MW(ii) Generation M.u. 305.790 360.050(iii) Less:- Auxiliary Consumption and Associated

transmission LossM.u. 3.167 4.185

Free energy to Govt. of H.p. M.u. 45.393 53.380Free energy to HpseB for wheeling of power M.u. 10.289 12.099

(iv) turnover (including impact of ui Charges – (2.764 ) M.u., (previous year (1.26) Mu))

M.u. 244.176 289.125

` ’000 1,619,439 1,853,616

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

Percentage of total consumption

Value (` ’000)

Stores & Spares 2009-10 2008-09 2009-10 2008-09imported 70.72 – 28,902 –indigenously obtained 29.28 100.00 11,967 13,218

100.00 100.00 40,869 13,218

c) Expenditure in foreign currency, net of TdS (Cash basis)

2009-10 (` ‘000)

2008-09 (` ‘000)

travelling 2,066 560professional services 1,570 18,120repair & Maintenance 16,281 –Fee & subscription 153 11others 1 -

d) Earnings in foreign currency (Cash basis) 2009-10

2009-10 (` ‘000)

2008-09 (` ‘000)

others (sale of Voluntary emission rights) 75,982 66,528

Previous year’s figures have been regrouped where necessary to confirm to this year’s classification. 17.









88


CAsH FLoW stAteMeNt As At MArCH 31, 2010

Particulars March 2010` ’000

March 2009` ’000

A. Cash flow from operating activities

Net profit before taxation 1,194,485 1,440,416

Adjustments for:

depreciation 199,646 201,292

interest expenses 323,862 105,222

(Profit) / Loss on fixed assets sold / discarded (net) 223 (270)

provision for / (reversal of) continuity linked bonus (303) 306

provision for / (reversal of) gratuity (1,002) (1,000)

provision for / (reversal of) compensated absences 944 131

unrealised foreign exchange loss/(gain) (8,012) 17,042

interest income (360,174) (64,888)

Operating profit before working capital changes 1,349,669 1,698,251

Movements in working capital:

(increase) / decrease in sundry debtors (19,612) 7,999

(increase) in other current assets (767) –

decrease / (increase) in loan and advances 11,559 (21,466)

decrease / (increase) in inventories 316 (471)

(decrease) / increase in current liabilities (989) 21,134

Cash generated from operations 1,340,176 1,705,447

direct taxes paid (Net of refund) 226,851 169,056

Net cash from operating activities 1,113,325 1,536,391

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

Purchase of fixed assets (including capital work in progress)

(46,533) (56,637)

purchase of investments – (763,056)

share application money paid – (628,000)

Loans and advances to subsidiary Company (2,389,764) (1,144,608)

Proceeds from sale of fixed assets 388 526

interest received (including received from subsidiary) 873 64,876

Net cash from/ (used in) investing activities (2,435,036) (2,526,899)

89

Particulars March 2010` ’000

March 2009` ’000

C. Cash flows from financing activities

proceeds from issuance of share capital – 1,127,999

Fixed deposits redeemed 1,683 –

proceeds from / (repayments of) short term borrowings (698,261) 198,261

(repayment of) long –term borrowings (622,408) (248,887)

proceeds from long –term borrowings 3,010,000 –

interest paid (334,649) (94,435)

Net cash from financing activities 1,356,365 982,938

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

34,654 (7,570)

Cash and cash equivalents at the beginning of the year

24,469 32,039




With banks – on current accounts 25,526 23,815

– on deposit accounts 30,200 200

– on margin money account 2,800 136

59,123 24,469

Notes:

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









90


1. REgISTRATION dETAILS

registration No. 1 9 9 5 9 state Code 0 6

Balance sheet date 3 1 0 3 2 0 1 0

date Month Year

2. CAPITAL RAISEd dURINg THE yEAR (Amount in ` Thousands)

public issue – rights issue –

Bonus issue – private placement –

3. POSITION OF MOBILISATION ANd dEPLOyMENT OF FUNdS (Amount in ` Thousands)

total Liabilities 1 2 4 7 5 5 1 5 total Assets 1 2 4 7 5 5 1 5

SOURCES OF FUNdS

paid-up Capital 1 4 7 5 2 5 7 reserves and surplus 7 1 8 7 2 7 3

share Application Money – deferred tax Liability 2 2 6 1 3 0

secured Loans 3 2 7 9 3 1 5 unsecured Loans –

APPLICATION OF FUNdS

Net Fixed Assets 2 8 3 0 2 2 2 investments 4 9 2 9 5 5 6 (incl. p.o.p. exps)

Net Current Assets 4 4 0 8 1 9 7 Misc. expenditure –

Accumulated Losses –

4. PERFORMANCE OF COMPANy (Amount in ` Thousands)

turnover 2 0 1 3 2 7 6 total expenditure 8 1 8 7 9 2

Profit/Loss before Tax 1 1 9 4 4 8 4 Profit/Loss after tax 9 8 9 2 1 1

earning per share (in `) 6 . 7 1 dividend per share (in `) –

5. gENERIC NAMES OF PRINCIPAL PROdUCTS/SERVICES OF COMPANy (as per monetary terms)

item Code No. (itC Code) 9 8 0 1 0 0

product description H Y d r o e L e C t r i C e N e r G Y

BALANCE SHEET ABSTRACT ANd COMPANy'S gENERAL BUSINESS PROFILE

place : Noidadated : June 2, 2010





91

Name of the subsidiary Ad Hydro Power Limied

Financial period ended March 31, 20101.

Holding company’s interest 88% in equity shares2.

shares held by the holding company 492,955,640 equity shares 3. in the subsidiary of ` 10 each fully paid up Amounting to ` 49,295.56 lacs

The net aggregate of profits or losses 4. For the current period of the subsidiary concerns the members of the holding company

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

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

The net aggregate of profits or losses 5. for the current period of the subsidiary concerns the members of the holding company

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

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

stAteMeNt pursuANt to seCtioN 212 oF tHe CoMpANies ACt, 1956, reLAtiNG to suBsidiArY CoMpANies

place : Noida dated : June 2, 2010





92


FiNANCiAL resuLtsoF

Ad HydRO POWER LIMITEd

Dear Stakeholders,

2009-10 has been a year of rebound for the global economy from the


market conditions.



The growth is driven by robust performance of the manufacturing sector

on the back of government and consumer spending. IMF and other

economic agencies have been bullish on Indian economy. IMF has

revised the growth forecast of the Indian economy to 9.5% for 2010 from

8.8% projected earlier, based on robust corporate profits and favourable

financing conditions, which are likely to fuel investments.



Accordingly the ongoing economic reforms have attached a high priority

to the better utilization of existing infrastructure and developments in new

infrastructures so that existing bottlenecks do not inhibit the overall

economic growth.

Message from the Chairman

PROJECT STATUS AND CONSTRUCTION ACTIVITIES

The commissioning of Allain Side of the Project is at an

advanced stage and is likely to become operational by July,

2010. On completion, this would constitute 70% of the total

capacity of generation of electricity. During construction, in the

past and in 2009, the Project encountered serious geological

surprises in the excavation of tunnel and delay in statutory

clearances for transmission line, which not only resulted into

substantial cost overruns but also delayed the commissioning

of the project.

The International Finance Corporation, Washington (IFC)

being lead lender in the project, carried out the detailed

appraisal of the project as per the changed conditions and

accepted an upper ceiling of the project cost of Rs 20,213

Million for the purposes of financing. All other participating

lenders in the project also extended their full support to the

project, recognizing the ground realities being faced by the

company.

For the Duhangan Side of the Project, the Directors wish to

inform that the excavation work at the Duhangan side is in

progress and is expected to be completed by December, 2010.

The work on Transmission Line is going on at a fast pace, and

is likely to be completed by July/August, 2010. Work on Plan B

of Transmission Line is also progressing well, and is likely to be

completed by end June, 2010.


Directors’ Report

94

TO THE MEMBERS

AD HYDRO POWER LIMITED

PROJECT EXPENSES

The Directors of the Company are pleased to present their

Seventh Annual Report along with the audited statement of

accounts for the financial year ended 31st March, 2010

together with the Auditors' Report thereon.

The Company has not yet started its commercial activities and

therefore no Profit and Loss Account has been prepared and

the expenditure incurred has been shown under Schedule -6

under the head “Project & Pre-operative Expenses (Pending

Allocation)” to the Balance Sheet.

During the financial year ending 31st March, 2010, the

following expenditure has been incurred on the project as per

the details given below:

(Amount in ` Million)

Fixed Assets ( Gross ) 934.624

Capital Work in Progress 11,970.644

Preoperative Expenses 5,648.625

Net Current Assets (841.863)

Miscellaneous 20.018

TOTAL 17,732.048

PARTICULARS AMOUNT

Power Sector is a key constituent of infrastructure and closely linked to output. To deliver sustained growth rate of over

8% and to meet the lifeline energy needs of all citizens, the power sector needs to grow at 1.8 - 2 times the GDP rate of

growth. At >8% GDP growth rate, the required installed power generation capacity is likely to be around 306,000MW in

2016-17 and 425,000MW in 2021-22 against installed capacity of 159,398MW (as of 31st March 2010), which

translates into a YOY capacity addition of 30,000 MW. As compared to that, 22,000 MW has been added during last five

years under APDRP (Accelerated Power Development & Reforms Program). Achieving these goals would require

investments of US $ 250 Billion into the power sector; increasing the role of Hydel & Renewable Energy in the Energy

Mix and; urgent need to develop the alternatives : both in the Fuel & Technology terms.

I am also pleased to inform that despite all unanticipated odd and adverse conditions encountered by us during the

project implementation of Allain-Duhangan, the Allain side of the project is likely to start generating power by the

second half of July, 2010. Further the excavation of Duhangan tunnel is also progressing well and it is expected that the

Duhangan portion shall be operational in the second quarter of 2011.

On behalf of the Board of Directors, I would like to express our sincere gratitude to the Government of India,

Government of Himachal Pradesh, Himachal Pradesh State Electricity Board, PTC India, all Government departments

and agencies, investors, lenders, and bankers for their unending support. I would also take this opportunity to thank our

employees and business associates, who despite all adverse circumstances have been the pillar of strength for the

Company.

With best wishes,

Ravi Jhunjhunwala

Chairman

95

its position in the Indian power sector. The volume of traded

power grew by 37 per cent during 2009-10 as compared to the

previous year. According to Central Electricity Regulatory

Commission (CERC) estimates, the power exchanges and

trading licensees transacted short term power worth

Rs.192.17 billion in 2009.

A notable recent development has been the emergence of

industrial consumers for power procurement through

exchanges. During 2009, over 20 industries procured a total of

154.4 million units (MUs) through the power exchange (IEX).

For merchant plants, the tariffs are governed by supply and

demand in the market. The current demand-supply gap, which

is expected to continue for at least next 10 years , provides not

only investment opportunities in the power sector but will also

boost the sale of power in the spot market/ on short term

contract basis.

During the year under review, an allotment of 62,800,000

equity shares was made at par to Malana Power Company

Limited, and 37,352,841 equity shares were allotted at par to

IFC, Washington.

The total paid up equity capital of the Company stands at

` 5,601 million as on the date of this report.

Your Company has adopted and implemented Environmental

Management Plan as per the norms of IFC, Washington to

address various environmental and social issues. It also

includes Public consultation and disclosure plan through mode

of local community participation, consultation, and dialogues.

SHARE CAPITAL

ENVIRONMENT, HEALTH AND SAFETY

consumption is still one of the lowest in the world with the global

average being around 2,701 KWh.

With the Indian Economy growing at more than 7 to 8 percent

annually, the demand for power has been outstripping supply.

India continues to experience acute shortages in energy

supply (11.7%) and peak load capacity (13.3%). Both energy

demand and peak demand are expected to grow at between 7-

8% up to 2017 and at 6-7% thereafter.

In order to cater to its growing requirement of electricity, India

has to reduce its dependency on fossil fuels by looking at other

alternatives of energy which are both cost effective and cleaner

in nature. Hydro Power, besides supplementing demand for

electricity, is also one of the better available choices for

meeting peak demand. As of March 2009 the total installed

capacity of Hydro Power in India was about 37,000 MW.

However, almost 70% of the exploitable hydro power capacity

of 1,48,701 MW still remains to be developed. As per Hydro

Power Policy 2008, the Government of India plans to tap the

unexploited capacity by end of 14th Five year plan ( 2022-23 to

2026-27), which means that Hydro Power will see a surge in

investment during the next 15 years.

Of late, the Government of India has taken many initiatives

starting from the enactment of Electricity Act 2003, introduction

of Open Access , setting up of Regulatory Commissions at the

Centre and States, unbundling of state electricity boards,

modification of mega power policy, formulation of Competitive

Bidding Tariff, facilitation of trading of surplus/merchant

capacity and setting up of Power Exchanges. All these

initiatives have had positive results and attracted more

investment in the power sector.

The short term power market has been gradually consolidating

97

India is one of the fastest growing economies of the world and

has been recording high GDP growth over the last few years.

Economists predict that the Indian economy will continue to

maintain the same tempo in future also, which will lead to

further increase in demand for electricity due to the fact that the

growth in GDP and Power consumption are positively

correlated, i.e., both move in the same direction.

India’s power generation capacity increased to 1,59,398 MW

as on 31st March 2010 as compared to 1,47,965 MW as on

31st March 2009, an increase of 7.72%. The total energy

available increased from 6,89,021 MUs ( 2008-09) to 7,46,493

MUs (2009-10 ), an increase of 8.34%.

As per Planning Commission estimates, total electricity

requirement in the country at eight per cent GDP growth is

projected to cross 1,000 BU by 2011-12 and further rise to

2,118 BU by 2021-22. The Planning Commission has

estimated that for an energy requirement of 1,097 BU in 2011-

12 (at eight per cent GDP growth), installed capacity has to be

2,20,000 MW. At the same GDP growth rate, total installed

capacity is required to be 306,000 Mw and 425,000 MW in

2016-17 and 2021-22 respectively. Over the last decade,

India’s electricity generation has surged from 480.7 BU in

1999-00 to 771.17 BU in 2009-10. However, there still exists a

wide gap between demand for power and actual supply and

this translates into huge opportunity for the power sector

companies to capitalize on.

Increase in power capacity and economic growth over the

years have led to rise in per capita consumption of electricity in

India from 566.7 KWh in 2002-03 to 704.2 KWh in 2007-08,

growing at a CAGR of 3.69 per cent. However, India’s

The Company will, in all likelihood, be commencing

commercial generation of electricity by end June, 2010 or early

July, 2010.

The revised Project Cost Ceiling for financing purposes as

approved by The International Finance Corporation,

Washington now stands at Rs 20,213 Million and to be

financed as follows;-

(` in Million)

Equity Malana Power Company Ltd (88%) 4,928

International Finance Corporation, (12%) 672

Total 5,600

Debt Senior IFC, IDBI and other commercial banks 9,975

Debt –Subordinate Malana Power Company Ltd 4638

Total 20,213

As on 31st March 2010, an amount of ̀ 17,732.048 million has already been

incurred on the project with the following means of finance:

(` in Million)

1 Equity contribution from Malana Power Co. Ltd 4,929.556

2 Equity contribution from IFC, W 671.972

3 Senior Debt from International Finance Corporation 2,150.000

4 Senior Debt from Local Lenders

(IDBI, PNB, Axis Bank, PSB & OBC) 6,230.000

5 Debt from Holding Company

(Malana Power Company Ltd.) 3,750.520

Total 17,732.048

Energy is an essential part of the overall development of the

country.

STATUS OF FINANCING

THE FUTURE OUTLOOK-INDIAN POWER SECTOR

96


– Medicines are provided free of cost to the laboures and the

villagers residing in the project affected area.

– The Company has well equipped 3 ambulances having

Oxygen cylinders, IV fluid and first aid boxes at both the

sites.

– Health department of the Company is also involved in the

activities like, Pulse Polio Immunization programme, STD/

HIV–AIDS awareness programme, universal

immunization programme for children & antenatal women

etc.

– Bio medical waste is managed according to WHO

guidelines and sent to Municipal Corporation, Kullu for

further handling after segregation at health centre.

– A Community hall at Sethan has been completed and

inaugurated .

– Provision of drinking water facility for Sethan village has

been completed.

– Provision of Irrigation water for Sethan village is under

progress and likely to be completed by end of September.

– Construction of Buddhist Gompa temple in Prini is under

progress.

– Construction of 2nd storey of Govt. school building at Aleo

has been completed

– First Aid Training of laborers and Engineer/ Supervisors

has been conducted by External agency.

– In house training for EHS&S personnel has been started

on regular basis during EHS&S departmental meeting

held every week on Wednesday.

– Fire fighting & Fire prevention training for site staff,

security personnel & Contractors Engineer has been

imparted by third party.

– A hoarding for Environment Awareness installed at Manali

tourist town.

– Equipments of worth 30 Lacs (Smoke meter for Petrol &

Diesel, BOD Incubator, HVS, Noise meter) have been

provided to HP State Pollution Control Board on kind basis

for Environmental monitoring & Pollution Control

measures.

– Construction of Jamdagani Rishi temple at Jagatsukh is

nearing completion.

– Construction of Panchayat Bhavan at Jagatsukh is

completed.

– “Job Safety Analysis”, sling safety, training for Supervisors

and above level was conducted at various Project site

locations.

– Training regarding Frost bite and its prevention has been

given by AD Hydro health department at all the project

sites.

– Drivers training is being done on regular interval.

– Award of “Renewal of Consent to Establish under Water

(Prevention & Control of pollution) Act, 1974 and Air

(Prevention & Control of pollution) Act, 1981” up to March

31, 2010 from H.P. State pollution Control Board vide

letter number HPSPCB (20)/A.D. HEP–Kullu /

09–17036–38 which was due since 2005.

– All the previous Show cause notices issued under Water

(Prevention & Control of pollution) Act, 1974 and Air

98

– Work of Slogan writing for Govt. High School, Prini;

– Stadium for Jamdagni Temple at Prini, RD 2000 Allain

Road;

– Govt. Primary School at Prini (Double Storey);

– Shifting and laying of water supply line from Prini to Chalet

Village;

– Modification and placing of dustbins.

– The Company has established and is maintaining solid

waste management system at the site.

– For providing education to the children of workers at site, a

creche has been operational.

– For ensuring road safety in the site area, the Company has

made an expenditure of Rs 6.55 million for the

construction of Parapets along Project roads that are

nearing completion. Further, at both Allain and Duhangan

sites, one additional road barrier has been set up to ensure

road safety.

– The Company has one primary health centre at Prini,

having well experienced medical officer and other

paramedical staff. Project has also two first aid centers at

Hamta Potato farm and Duhangan weir site with trained

First Aiders.

– Primary health centre at Prini is having all basic facilities

for emergency handling including well equipped

diagnostic laboratory.

– Weekly health check up of employees is being carried out

every Friday on voluntary basis.

99

The Directors have pleasure in informing the members that

during the year, IFC has chosen ADHPL as one of the eight

projects across the globe for efforts made towards social

causes and in recognition IFC has proposed visit of Blackstone

Mission (consultant to IFC) in the last week of June 2010

During the year under review, there were a total of 15 total

reported injuries. One unfortunate fatality occurred on the

transmission line, there were 13 Lost Time Injuries (LTI) and 1

Medical Treatment Injury (MTI) at the site. A very detailed

analysis and reporting has been prepared on the cause of the

accident and eventually the Fatality. Based on the findings;

trainings, tool box discussions, Job safety analysis have been

framed and are being practiced so that the chances of such

accidents are minimized.

We should also mention about the TRI’s and state that the HSE

focus put in place has brought this down from 42 reported

injuries and 10 fatalities in 2008-09.

The Company is committed to ensuring that it conducts its

business in accordance with ethical, professional and legal

standards.

As a constructive partner in the communities in which it

operates, your company has been proactive towards its social

responsibility. Some of the major activities undertaken during

the year by the company towards fulfilling its social

responsibility objectives are: .

Completion of work on:

– P.C.C. playground at Govt. Middle School, Aleo;

– C/O Double Storey building for G.S., Aleo;

CORPORATE SOCIAL RESPONSIBILITY


Internal audit plans cover matters identified in risk

management assessments as well as issues highlighted by the

Board, the audit committee and senior management. Quarterly

Internal audit reports are submitted along with the

management’s response to the Audit Committee. The Audit

Committee monitors performance of Internal Audit on a

periodic basis through review of the internal audit plans, audit

findings & swiftness of issue resolution through follow ups.

Information of employees in accordance with the provisions of

Section 217(2A) of the Companies Act, 1956, read with the

Companies (Particulars of Employees) Rules, 1975, is given in

Annexure-II to the Directors’ Report.

As required under Section 217 (2AA) of the Companies

(Amendment) Act, 2000, the Directors of your Company state

hereunder:-

i) That in the preparation of the annual accounts, the

applicable accounting standards had been followed along

with proper explanation relating to material departures;

ii) that the accounting policies have been selected and

applied consistently and made judgments and estimates

that are reasonable and prudent so as to give a true and

fair view of the state of affairs of the company at the end of

the financial year and of the profit or loss of the Company

for the financial year 2009-10;

iii) that the proper and sufficient care has been taken for the

maintenance of adequate accounting records in

accordance with the provisions of this Act for safeguarding



the assets of the Company and for preventing and

detecting fraud and other irregularities; and

iv) that the annual accounts have been prepared on going

concern basis.

Mr. Ravi Jhunjhunwala and Mr. Øistein Andresen retire by

rotation at the ensuing Annual General Meeting and being

eligible, offer themselves for reappointment there at.

Mr. R. P. Goel was appointed as Whole Time Director with

effect from 29th November 2009 for a period of two years.

During the year the Company met thrice to review Company’s

financial results, internal control systems, risk management

policies and internal audit reports. The audit committee of the

Company comprises of three members.

The Company has received consent letter from S.R. Batliboi &

Co., Chartered Accountants under section 224(1B) of the

Companies Act, 1956 who, being eligible have shown their

willingness for appointment as statutory auditors of the

Company. The Board recommends the re-appointment of

M/s S.R. Batliboi & Co., Chartered Accountants as Statutory

Auditors of the Company.

The observations made by the Auditors with reference to the

Notes to the Accounts for the year under report are self-

explanatory and require no further comments.

DIRECTORS

AUDIT COMMITTEE

AUDITORS

AUDITORS’ REMARKS

100

(Prevention & Control of pollution) Act, 1981 have been

revoked by Himachal Pradesh State Pollution Control

Board vide letter number HPSPCB (20) / Allain Duhangan

HEP – Kullu /09–13010–11.

– National Safety Day was celebrated on March 4, 2010 with

big fervour.

Your Company’s Human Resources Development strategy

focuses on building the competence, commitment and

motivation of employees. The Company recognizes serious

scarcity of trained expert personnel in power sector. With the

expansion of the power market, there is growing requirement

for not just qualified engineers, but also for finance, marketing,

commercial, IT and HR personnel.

The Company recognizes human resources as a key

component for facilitating organization growth and regularly

invests in augmenting its human resources with latest tools,

equipments and techniques through focused and structured

become an attractive employer in the industry.

The Company is also committed to provide a zero injury

workplace to its employees and workers all across its units,

security of employees is one of the prime concerns of the

Management. Employees are adequately covered under

various insurance policies against risk of health and life

disasters. The company continues to empower its employees

to achieve business successes. Accordingly suitable changes

at Site Management level have also been made.

As the construction work is under progress, without any

HUMAN RESOURCES DEVELOPMENT

DIVIDEND & OTHER APPROPRIATION

operation, no dividends are proposed to be declared during the

year under operation.

INTERNAL CONTROL SYSTEMS

Your Company has an adequate internal control procedure

commensurate with the nature of its business and size of its

operations. Internal Audit is conducted at regular interval. The

internal control system in all areas of operations, regularly

checked by both external and internal auditors that have

access to all records and information. The Company also

maintains a system of internal control designed to provide

reasonable assurance regarding the effectiveness and

efficiency of operations, the adequacy of safeguards for

assets, the reliability of financial control and compliance with

applicable laws and regulations. The Company is continuously

upgrading these systems in line with the best available

practices. Audit Committee meetings are held where these

reports and variance analysis are discussed and action taken.

Operational reports are tabled at the Board Meetings after

discussions at Audit Committee Meetings.

INTERNAL AUDIT

Internal Audit is an independent, objective and assurance

function conscientious for evaluating and improving the

effectiveness of risk management, Control, and governance

processes. The function prepares annual audit plans based on

risk management and conducts extensive reviews covering

financial, operational and compliance controls and risk

mitigation. Areas requiring specialized knowledge are

reviewed in partnership with external experts.


101


102

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

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

1. CONSERVATION OF ENERGY -NIL

2. TECHNOLOGY ABSORPTION - NIL

A. RESEARCH AND DEVELOPMENT ( R & D ) -NIL

B. TECHNOLOGICAL ABSORPTION, ADAPTATION AND INNOVATION-NIL

C. EXPORTS & FOREIGN EXCHANGE EARNING AND OUTGO

(` in Million)

I. Foreign Exchange Outgo

Engineering Fee and Consultancy charges 64.609 42.321

Legal and Professional charges 117.565 –

Travelling 0.254 0.382

Financial charges 0.969 –

Capital and Project Equipments 101.743 122.382

Total 285.140 165.085

PARTICULARS 2009-10 2008-09

ANNEXURE-II TO THE DIRECTORS REPORT

Information pursuant to Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and forming part of the Directors’ Report for the year ended 31st March, 2010 are given hereunder:

Mr. O. P. Ajmera President (Finance) and CFO 3.572 C.A., C.S. 48 yrs. 17-03-1987

Name Designation Remuneration Qualification Age Date of (` in Million) Commencement

of Employment

PUBLIC DEPOSITS

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION

AND FOREIGN EXCHANGE EARNINGS & OUTGO


The Company has not accepted any deposits from the Public

during the year under report. Therefore, provisions of Section

58A are not applicable.

Information required to be disclosed under Section 217 (1)(e)

of the Companies Act, 1956 read with Companies (Disclosure

of Particulars in the report of Board of Directors) Rules, 1988

has been given in the Annexure I forming part of this Report.

Your Company follows practices of good Corporate

Governance with strong belief that corporate governance is a

key element in improving efficiency and growth as well as

enhancing investor confidence.

The majority of the Board comprises of Non-Executive

Directors who impart balance to the Board processes by

bringing an independent judgment to bear on issues of

strategy, performance, resources, standards of Company

conduct, etc. The audit committee of the board meets regularly

and provides assurance to the Board on the adequacy of

internal control systems and financial systems. The Corporate

governance policy followed by the company represents the

value framework, the ethical framework and the moral

framework under which business decisions are taken.

APPRECIATIONS AND ACKNOWLEDGEMENTS

The Directors are pleased to place on record their appreciation for

the continued support received from the lenders of the Company

namely IFC, IDBI, PSB, OBC, AXIS Bank, PNB, J & K Bank and

United Bank of India. The Directors also acknowledge the

assistance and continued support provided by the Ministry of

Power, Government of India, Government of Himachal Pradesh,

Himachal Pradesh State Electricity Board, Commercial Banks and

other Government Departments / Bodies / Authorities and looks

forward to their continued support and cooperation in the coming

years as well.

The Board would also like to express great appreciation for the

commitment and contribution of its employees at all levels. Last but

not least, the Company thanks its shareholders for their unstinted

support.


Place: Noida Ravi Jhunjhunwala

Date: June 02, 2010 Chairman

103


104


Auditors' report

To

The Members of AD Hydro Power Limited

1. We have audited the attached Balance sheet of Ad Hydro power Limited (‘the Company’) as at March 31, 2010 and the Cash Flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in india. those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor’s report) order, 2003 (as amended) issued by the Central Government of india in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

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

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

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

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

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

v. on the basis of the written representations received from the directors, as on March 31, 2010, and taken on record by the Board of directors, we report that none of the directors is disqualified as on March 31, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

vi. in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in india;

a) in the case of the balance sheet, of the state of affairs of the Company as at March 31, 2010;

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



place: Gurgaondate: June 2, 2010

105

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

re: Ad Hydro power Limited ('the Company')

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

(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were identified on such verification.

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

(ii) (a) the management has conducted physical verification of inventory at reasonable intervals during the year.

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. in respect of material lying with third parties, the management has a process of confirmations and reconciliations with the third parties during the year.

(c) the Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) (a) As informed, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, provisions of clauses 4(iii) (a), (b), (c) and (d) of the Companies (Auditor’s report ) order, 2003 (as amended) are not applicable to the Company.

(e) the Company has taken loan from one company covered in the register maintained under section 301 of the Companies Act, 1956. the maximum amount involved during the year was rs. 4,262,368 thousand and the year-end balance of loan taken from such company was rs.3,750,520 thousand.

(f) in our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loan are not prima facie prejudicial to the interest of the Company.

(g) As informed to us and as per the terms of the subordination Loan agreement with the lenders, the loan taken and interest thereon is re-payable after the payment is made to outside lenders and once the project commences commercial operations. Accordingly, the lenders have not demanded repayment of any such loan and interest thereon during the year and thus, there has been no default on the part of the Company.

(iv) in our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of scrap. during the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas. since the Company has not yet commenced commercial production, the Company has not sold any services. during the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system of the company.

(v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register maintained under section 301 have been so entered.

(b) in our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding the value of rupees five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) the Company has not accepted any deposits from the public.

(vii) in our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) the Company is in construction phase and is yet to commence operations. Accordingly, the provisions of clause 4(viii) of the Companies (Auditor’s report) order 2003 (as amended) are not applicable to the Company.

(ix) (a) undisputed statutory dues including provident fund, investor education and protection fund, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess have generally been regularly deposited with the appropriate authorities though there has been delay in one case of dues related to income tax. the provisions relating to employees’ state insurance are not applicable to the Company.

Further, since the Central Governent has till date not prescribed the amount of cess payable under section 441 A of the Companies Act,1956, we are not in a position to comment upon the regularity or otherwise of the company in depositing the same.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education

106


and protection fund, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the information and explanation given to us, there are no dues of income tax, sales-tax, wealth tax, service tax, customs duty, excise duty and cess which have not been deposited on account of any dispute.

(x) As the Company is yet to commence commercial operations as on March 31, 2010, the Profit & Loss Account has not been prepared. Hence, we are not required to comment on whether or not the accumulated losses at the end of financial year is fifty percent or more of its net worth and whether it has incurred cash losses in the current and immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution or bank. The Company has no outstanding dues in respect of debenture holders.

(xii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) in our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor’s report) order, 2003 (as amended) are not applicable to the Company.

(xiv) in our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor’s report) order, 2003 (as amended) are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

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

(xvii) According to the information and explanations given to us and on an overall examination of the Balance sheet and Cash Flow statement of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) the Company has made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956. in our opinion, the price at which shares have been issued is not prejudicial to the interest of the Company.

(xix) the Company did not have any outstanding debentures during the the year.

(xx) during the year under review, the Company has not raised money through public issues: hence, clause 4 (xx) of the Companies (Auditor’s report) order, 2003 (as amended) is not applicable to the Company.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.


per Raj AgrawalPartner Membership No.: 82028


107

BALANCe sHeet As At 31st MArCH, 2010

As per our report of even dateFor S. R. Batliboi & Co.Chartered AccountantsFirm registration No. : 301003e




RAVI JHUNJHUNWALA director

ROHINI ROSHANARA SOOD director

SANDeeP CHANDNA Company secretary


(` ’000)schedules As at

March 31, 2010As at

March 31, 2009SOURCeS OF FUNDSShareholders' Fundsshare capital 1 5,601,528 4,600,000 share application money (pending allotment) – 628,000

5,601,528 5,228,000 Loan funds secured loans 2 8,380,000 7,140,000 unsecured loans 3 3,750,520 1,360,756

12,130,520 8,500,756 TOTAL 17,732,048 13,728,756 APPLICATION OF FUNDS Fixed Assets Gross block 4 934,624 776,500 Less : Accumulated depreciation 376,400 185,722 Net block 558,224 590,778 Capital work-in-progress including capital advances

5 11,970,645 9,984,140

project and pre-operative expenses (pending allocation)

6 6,025,024 4,004,558

18,553,893 14,579,476 Current Assets, Loans and Advances inventories 7 177,321 220,024 Cash and bank balances 8 499,766 69,303 other current assets 9 188 158 Loans and advances 10 23,329 36,559

700,604 326,044 Less: Current Liabilities and Provisions Current liabilities 11 1,523,854 1,180,289 provisions 12 18,613 16,493

1,542,467 1,196,782 Net Current Assets (841,863) (870,738)Miscellaneous expenditure (to the extent not written off or adjusted)

13 20,018 20,018

TOTAL 17,732,048 13,728,756 Notes to accounts 14

the schedules referred to above form an integral part of the Balance sheet.

108


sCHeduLes

SCHeDULe 1: SHARe CAPITAL

(` ’000)



Authorised

700,000,000 (previous year 700,000,000) equity shares of ` 10 each

7,000,000 7,000,000

Issued, subscribed and paid up

560,152,841 (previous year 460,000,000) equity shares of ` 10 each

5,601,528 4,600,000

492,955,640 (previous year 430,155,640) equity shares are held by Malana power Company Limited, the Holding Company along with its nominees.

5,601,528 4,600,000

SCHeDULe 2: SeCUReD LOANS

(` ’000)



rupee term loans

– From banks 6,230,000 5,290,000

– From an institution 2,150,000 1,150,000

short term loans

– From others – 700,000

8,380,000 7,140,000

Note:

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

2. rupee term loan from an institution represents loan from iFC, Washington, a minority shareholder.3. Loans include amounts payable within one year ` 329,485 thousand (previous year ` 700,000 thousand)

SCHeDULe 3: UNSeCUReD LOANS

(` ’000)



Long term loan

– From Holding Company 3,750,520 1,360,756

3,750,520 1,360,756

Loans include amounts payable within one year ` Nil (previous year ` Nil)

109

SCHeDULe - 4 : FIXeD ASSeTS (` ’000)

GROSS BLOCK DePReCIATION NeT BLOCK

particulars As atApril 1,

2009

Additions deduction As atMarch 31,

2010

As atApril 1,

2009

For the year

deletion As atMarch 31,

2010

As atMarch 31,

2010

As atMarch 31,

2009

Buildings 252,963 2,525 – 255,488 8,183 5,070 – 13,253 242,235 244,780

project equipments 443,533 149,154 – 592,687 146,846 177,443 – 324,289 268,398 296,688

electrical installation 25,852 4,952 – 30,804 4,082 1,559 – 5,641 25,163 21,769

Furniture & fixtures 19,088 678 – 19,766 7,945 2,352 – 10,297 9,469 11,143

Computers 10,920 74 – 10,994 7,693 1,301 – 8,994 2,000 3,227

Office equipments 7,223 699 3 7,919 2,659 725 3 3,381 4,538 4,564

Vehicles 16,921 45 – 16,966 8,314 2,231 – 10,545 6,421 8,607

Total 776,500 158,127 3 934,624 185,722 190,681 3 376,400 558,224 590,778

previous Year 381,883 394,923 306 776,500 151,140 34,693 111 185,722 590,778 230,743

SCHeDULe – 5 : CAPITAL WORK IN PROGReSS(` ’000)

particulars As atApril 1, 2009

Additions during the Year (Net)

As atMarch 31, 2010

Land – freehold (Refer note no. 5(a) & (b) of schedule 14 )

303,745 3,046 306,791

roads 1,294,720 82,894 1,377,614

Buildings 14,586 5,713 20,299

Head race tunnel 1,576,763 667,980 2,244,743

pressure shaft/ penstock 512,027 157,319 669,346

upstream/ barrage 1,238,334 8,658 1,246,992

power house 966,080 20,938 987,018

switch Yard– Mechanical 166,561 28,529 195,090

switch Yard Civil 93,422 1,457 94,879

Construction power 41,471 2,138 43,609

transmission line

– right to use 239,487 142,026 381,513

– expenditure on forest land (refer Note no 5 (c) of schedule 14)

270,803 233,847 504,650

– others 1,321,331 321,187 1,642,518

Turbine & Generators 934,303 289,725 1,224,028

Gates 77,143 21,362 98,505

Valves 18,785 10,075 28,860

power Cables 75,962 28,966 104,928

power transformer 175,280 39,059 214,339

equipments under installation 4,787 629 5,416

Electro & mechanical auxilliary services 43,507 31,147 74,654

eot Crane 22,570 – 22,570

Capital stocks 298,525 (67,570) 230,955

– includes stocks lying with third parties ` 204,345 thousand (previous year ` 251,027thousand)

Capital advances 293,948 (42,620) 251,328

Total 9,984,140 1,986,505 11,970,645

110


SCHeDULe 6: PROJeCT AND PRe-OPeRATIVe eXPeNSeS (PeNDING ALLOCATION)

(` ’000)Particulars As at

April 1, 2009Additions during

the YearAs at

March 31, 2010Personnel expensessalaries , wages and bonus 363,916 135,633 499,549 Contribution to provident funds 22,177 5,839 28,016 Contribution to superannuation funds 3,762 1,059 4,821 Gratuity expenses 4,124 1,112 5,236 Long term compensated absence 1,121 3,010 4,131 Workmen and staff welfare expenses 29,140 8,705 37,845

424,240 155,358 579,598 Administrative and other expensesrent 43,841 13,430 57,271 Rates & taxes 251 95 346 insurance 95,651 42,729 138,380 repairs and maintenance – plant and machinery 25,095 5,790 30,885 – Civil works 1,812 – 1,812 – Buildings 3,245 34 3,279 – others 2,524 375 2,899 travelling expense 68,277 8,952 77,229 Conveyance 19,557 2,401 21,958 Vehicle running & hiring expenses 111,434 32,641 144,075 Communication expenses 16,018 4,836 20,854 Auditor's remuneration : – Audit Fees 2,254 552 2,806 – international reporting 1,231 426 1,657 – special Audit Fees – 524 524 – other services 613 641 1,254 – out of pocket expenses 214 163 377 Charity and donations (other than to political parties) 3,576 15 3,591 director remuneration 6,645 3,225 9,870 tender expenses 13,446 559 14,005 Legal & professional charges 104,089 28,585 132,674 engineering fees {Additions include ` 36,816 thousand pertaining to prior period (previous Year ` Nil)}

383,466 218,212 601,678

Consultancy charges 157,808 22,628 180,436 Test & Survey Expenditure 32,692 – 32,692 expenditure on forest land (refer note no 5 (c) of schedule 14)

271,848 (2,310) 269,538

environment health and safety 6,688 11,422 18,110 Fee & subscription 4,569 602 5,171 Consumption of stores, spares and Consumables 126,949 64,565 191,514 Hiring of equipment 234,686 19,651 254,337 power and fuel (net of recoveries of ` 36,155 thousand (previous year ` 43,467 thousand)

22,186 (4,966) 17,220

installation charges 3,612 – 3,612 security arrangement expense 43,896 22,647 66,543

111

(` ’000)Particulars As at

April 1, 2009Additions during

the YearAs at

March 31, 2010social welfare expenses 124,612 16,383 140,995 Miscellaneous expenses (net of recoveries ` 5,747 thousand (previous year ` 4,870 thousand)

60,988 16,048 77,036

Fringe benefit tax 16,667 – 16,667 interest on term Loan 1,144,238 746,711 1,890,949 interest to Holding Company 205,086 356,248 561,334 interest on others 1,985 3,040 5,025 Financial / bank charges (includes commitment charges / upfront fee reimbursed to holding Company ` 8,273 thousand (previous year ` 7,750 thousand)

108,715 49,003 157,718

depreciation 186,209 190,681 376,890 3,656,673 1,876,538 5,533,211

Less : interest earned (tax deducted at source ` 504 thousand, previous year ` 130 thousand) (net of provision for income tax ` 1,629 thousand (previous year ` 195 thousand))

(57,591) (3,308) (60,899)

Less : scrap sale (18,764) (8,122) (26,886) 4,004,558 2,020,466 6,025,024

SCHeDULe 7: INVeNTORIeS(` ’000)



stores and spares (including stocks lying with third parties ` 65,729 thousand (previous year ` 116,181 thousands)

177,321 220,024

177,321 220,024

SCHeDULe 8: CASH AND BANK BALANCeS(` ’000)



Cash on hand 2,227 2,708 Balances with scheduled banks: on current accounts 124,360 64,093 on deposit accounts 370,200 200 on margin money accounts 2,979 2,302

499,766 69,303 included in deposit accounts is :

Fixed deposit of ` 200 thousand (previous year ` 200 thousand) pledged with the H.p. Government sales tax department

SCHeDULe 9: OTHeR CURReNT ASSeTS(` ’000)



interest accrued on deposits 188 158 188 158

112


SCHeDULe 10: LOANS AND ADVANCeS (Unsecured & considered good)

(` ’000) As at

March 31, 2010 As at

March 31, 2009 Loans to employees 1,445 451 Advances recoverable in cash or in kind or for value to be received

18,531 32,052

security deposit 3,353 3,347 Advance income tax / tax deducted at source (net of provision for tax of ` Nil thousand (previous year ` 17,719 thousand))

– 709

23,329 36,559

SCHeDULe 11: CURReNT LIABILITIeS(` ’000)



sundry creditors *(a) Outstanding dues of Micro & Small Enterprises – – (b) Outstanding dues of creditors other than Micro & Small enterprises

822,165 768,100

deposits from contractors and others 83,196 125,276 interest accrued but not due on loan from an institution 41,857 26,643 interest accrued but not due on loan from holding company 559,211 199,923 other liabilities 17,425 60,347

1,523,854 1,180,289 * refer note no. 13 in schedule 14

SCHeDULe 12: PROVISIONS(` ’000)



provision for tax (Net of advance tax / tax deducted at source ` 19,861 thousand, (previous year ` Nil))

866 –

Provision for Fringe Benefit Tax (net of advance fringe benefit tax ` Nil thousand (previous year ` 15,172 thousand))

– 1,495

provision for Wealth tax – 40 provision for Gratuity 1,112 1,138 provision for Long term compensated absences 5,108 3,805 provision for Continuity Linked Bonus 11,527 10,015

18,613 16,493

SCHeDULe 13: MISCeLLANeOUS eXPeNDITURe (to the extent not written off or adjusted)

(` ’000) As at

March 31, 2010 As at

March 31, 2009 share issue expenses Balance as per last account 20,018 20,018

20,018 20,018

113

SCHeDULe – 14: NOTeS TO ACCOUNTS

1. Nature of Operations

Ad Hydro power Limited (hereinafter referred to as ‘the Company’) is in the process of setting up a 192 MW hydro electric power generation plant. the Company is still in the construction stage and has not yet commenced commercial power generation during the period ended March 31, 2010.

2. StatementofSignificantAccountingPolicies

(a) Basis of preparation

The financial statements have been prepared to comply in all material respects with the Notified accounting standards by Companies (Accounting standards) rules, 2006 and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis. the accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

(b) Use of estimates

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

(c) Fixed Assets

Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition of fixed assets which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use.

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

(d) expenditure on new projects

Expenditure directly relating to construction activity is capitalized and classified as “Capital work in Progress” and will be apportioned to fixed assets on completion of the project. Indirect expenditure incurred during construction period is capitalized as part of the indirect construction cost to the extent to which the expenditure is indirectly related to construction or is incidental thereto. income earned during construction period is deducted from the total of the indirect expenditure.

(e) Depreciation

(i) depreciation on Building is provided on straight–line method at the rates based on their estimated useful lives, which corresponds to the rates prescribed in schedule XiV of the Companies Act, 1956.

(ii) depreciation on project equipments (net of their expected realizable value at the completion of the project) has been provided as per straight line method over the period upto the expected date of completion of the project i.e. June 30, 2010.

(iii) On fixed assets other than those covered under (i) & (ii) above, depreciation is provided on written down value method at the rates based on their estimated useful lives, which corresponds to the rates prescribed in schedule XiV of the Companies Act, 1956.

(f) Leases

Where the Company is the lessee

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the schedule of project and pre-operative expenses (pending allocation) on a straight-line basis over the lease term.

114


(g) Inventories

inventories comprising of stores and spares are valued at lower of cost and net realizable value. Cost is determined on a weighted average basis.

(h) Revenue recognition

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

Interest

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

Sale of Scrap

Revenue in respect of sale of scrap is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer.

(i) Miscellaneous expenditure to the extent not written off or adjusted

preliminary/share issue expenses will be amortized / adjusted in the manner to be decided by the Board of directors, starting from the year in which the Company commences its commercial operations.

(j) Foreign currency translation

Foreign currency transactions

(i) initial recognition

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

(ii) Conversion

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

(iii) exchange differences

exchange differences arising on the settlement of monetary items or on reporting of such monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as income or as expenses in the year in which they arise.

(k) Retirementandotheremployeebenefits

(i) Retirement benefits in the form of Provident Fund and Superannuation Schemes are defined contribution schemes and the contributions are charged to the Expenses / Project & Preoperative expenses (pending allocation) in the year when the contributions to the respective funds are due. there are no obligations other than the contribution payable to the respective fund/trust.

(ii) Gratuity liability is defined benefit obligation and is provided for on the basis of actuarial valuation on projected unit credit method made at the end of each financial year. The amount paid/ payable in respect of present value of liability for past services is charged to the Expenses / Project & Preoperative expenses (pending allocation).

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

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

(v) Actuarial gains/losses are immediately taken to Expenses / Project & Preoperative Expenses (pending allocation) and are not deferred.

115

(l) Provisions

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

(m) Income Taxes

Current income tax on interest income is measured at the amount expected to be paid to the tax authorities in accordance with the income tax Act, 1961 enacted in india and is netted from such interest income. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. in situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.

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

(n) Cash and Cash equivalents

Cash and cash equivalents comprise cash at bank and in hand and short–term investments with an original maturity of three months or less.

3. As the Company has not commenced commercial operations as of March 31, 2010, no Profit and Loss Account has been prepared, but in lieu thereof, a statement of project and pre–operative expenses (pending allocation) has been prepared as per schedule 6 and expenses incurred upto the year ended March 31, 2010 in relation to the construction of the project, have been included under the said schedule, to be allocated appropriately at the time of commencement of commercial operations. Necessary details as required under part ii of schedule Vi of the Companies Act, 1956 have been disclosed under schedule 6 in respect of the said expenses.

4. the Company has signed a Quadripartite Agreement on 5th November, 2005 with Rajasthan Spinning & Weaving Mills Ltd (rsWM) (the holder of implementation rights /promoter), Malana power Company Limited and Government of Himachal pradesh for transfer of the project from rsWM to the Company to give effect to implementation Agreement signed between rsWM and Government of Himachal pradesh.

(5) (a) Land includes ` 5,677 thousand paid to deputy Commissioner, Kullu towards transfer of government’s agriculture land measuring 10.76 hectare, for which the execution of lease deed is pending.

(b) Land includes ` 298,070 thousand paid for 12.51 hectares land, out of which mutation for execution of 9.75 hectares in favour of Company has been completed. Apart from notified land, 2.76 hectares land has been acquired directly from the villagers and the mutation is in progress.

(c) ` 778,180 thousand paid to Divisional Forest Officer, Kullu on account of use of forest land measuring 264.36 hectares represents amount paid towards loss of environment value, compulsory afforestation, cost of tree felling and Catchment Area treatment plan.

6. Related Party Disclosures

(a) Names of related parties:

Ultimate Holding Company : Bhilwara energy Limited

Enterpriseshavingsignificantinfluenceover the Company

: sN power Global services pte. Ltd.sN power Holding singapore pte. Ltd.

Holding Company : Malana power Company Limited

Key Management Personnel : Mr. r. p. Goel, Whole time director

Fellow Subsidiary : indo Canadian Consultancy services Limited Green Ventures pvt Limited

116


(b) Transactions with related parties(` ’000)

Nature of Transaction Ultimate Holding Company

Holding Company/ enterprises

havingsignificantinfluenceoverthe

Company

Key Management Personnel

Fellow Subsidiary

March 2010

March 2009

March 2010

March 2009

March 2010

March 2009

March 2010

March 2009

Transactions during the year

remuneration paid to Mr. r.p. Goel 3,225 2,678

Consultancy charges to indo Canadian Consultancy services Limited

22,628 29,022

Consultancy charges to sN power Holdings singapore pte. Ltd.

36,817 –

Consultancy charges to sN power Global services pte. Ltd.

116,004 –

reimbursement of expenses incurred by Malana power Company Limited on behalf of the Company

15,264 10,061

reimbursement of expenses incurred on behalf of Malana power Company Limited

1,712 3,125

reimbursement of expenses incurred by indo Canadian Consultancy services Limited on behalf of the Company

7,260 2,324

reimbursement of expenses incurred on behalf of indo Canadian Consultancy services Limited

30 382

share application money received from Malana power Company Limited (net)

– 1,391,056

shares Capital allotted to Malana power Company Limited

628,000 763,056

reimbursement of expenses incurred by Bhilwara energy Limited on behalf of the Company

1,450 1,097

reimbursement of expenses incurred on behalf of Bhilwara energy Limited

1,055 1,119

unsecured Loan taken from Malana power Company Limited

7,615,100 3,356,741

unsecured Loan repaid to Malana power Company Limited

5,189,100 2,212,132

interest expense on unsecured loan taken from Malana power Company Limited

359,288 199,923

Balances outstanding as at the year end

Investments:

share application money pending allotment – 628,000

investment by Malana power Company Limited 4,929,556 4,301,556

Balances Receivable:

Bhilwara energy Limited – 626

Balances Payable:

indo Canadian Consultancy services Limited – 3,392

sN power Global services pte. Ltd. 20,149 –

unsecured Loan taken from Malana power Company Limited

3,750,520 1,360,756

interest accrued on unsecured Loan from Malana power Company Limited

559,211 199,923

Guarantees given by the Malana power Company Limited on behalf of the Company

800,000 450,000

117

7. Contingent Liabilities (Not provided for)

(` ’000)

Particulars 2009–10 2008–09Bank guarantee outstanding 2,500 2,000Claims by contractors / suppliers against the Company not acknowledged as debts*

649,249 324,764

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

8. Capital Commitments

estimated amount of contracts remaining to be executed on capital account and not provided for (Net of advances) ` 1,224,588 thousand (previous Year ` 603,416 thousand)

9. On account of various reasons beyond the control of the Company (like significant geological problems experienced in tunneling work and others), the project has undergone significant cost over-runs and the total estimated cost of the project has gone up from ` 8,956,000 thousand to ` 20,212,820 thousand. Management is of the view that such increase in estimated project cost has not affected the going concern assumption of the Company. Further, based on financial projections (including the projected tariff), arrived at after considering the past experience of running similar power project and renewable source of fuel, management believes that profits are expected to accrue once the project commences commercial operation and hence, no adjustments are required to the carrying amount of fixed assets on account of impairment.

10. Unhedged foreign currency exposure at the balance sheet date


Creditor for engineering Fees

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

` 16,712,000 (CAd 400,000 @ closing rate of 1CAd = ` 41.78)` 1,240,380 (euro 18,000 @ closing rate of 1euro = ` 68.91)

Creditor for supervisory Manpower support

` 19,571,401 (USD 431,754 @ closing rate of USD = ` 45.33)

Nil

11. Statutory Supplementary Information

(` ’000)March 2010 March 2009

(a) Directors Remunerationsalaries, wages and bonus 1,942 1,602Allowances 1,283 1,076

3,225 2,678Notes:a) As the future liability for the gratuity and earned leaves is provided on actuarial basis for the Company as

a whole, the amount pertaining to the director is not ascertainable and therefore, not included.b) perquisites have been considered as per taxable value as per income tax Act, 1961c) In the absence of profits, remuneration to Director is paid within the limits prescribed in Schedule XIII of

the Companies Act, 1956.

(b) expenditure in foreign currency (net of TDS) (` ’000)March 2010 March 2009

engineering Fees and Consultancy charges 64,609 42,321Legal and professional charges 117,565 –travelling 254 382Financial charges 969 –

183,397 42,703

(c) Value of Imports calculated on CIF basis (` ’000)March 2010 March 2009

project equipments 101,743 122,382101,743 122,382

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12. Additional information pursuant to the provisions of paragraphs 3, 4C and 4d of part ii of schedule Vi to the Companies Act, 1956

a) Imported and indigenous stores and spare parts consumed:Percentage of total consumption Value (` ’000)

Stores & Spares March 2010 March 2009 March 2010 March 2009imported 10.03 08.14 6,476 3,552indigenously obtained 89.97 91.86 58,089 40,076

100.00 100.00 64,565 43,628

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

14. Gratuity–Definedbenefitplan(AS15–Revised)

The Company has a defined benefit gratuity plan. Gratuity (being administered by a Trust) is computed as 15 days salary, for every completed year of service or part thereof in excess of 6 months and is payable on retirement / termination / resignation. The benefit vests on the employee completing 5 years of service. The Gratuity plan for the Company is a defined benefit scheme where annual contributions are deposited with a Gratuity Trust Fund established to provide gratuity benefits. The Trust Fund has taken a Scheme of Insurance, whereby these contributions are transferred to the insurer. the Company makes provision of such gratuity asset / liability in the books of accounts on the basis of actuarial valuation as per the projected unit credit method.

The following tables summarise the components of net benefit expense recognised in the Expenses / Project & Preoperative Expenses (pending allocation) and the funded status and amounts recognised in the balance sheet:

Schedule of Project and pre–operative expenses (pending allotment)

Netemployeebenefitsexpense(recognisedinEmployeeCost):


March 31, 2010 (` ’000)

For the year ended

March 31, 2009 (` ’000)

Current service Cost 1,154 1,091

Interest cost on benefit obligation 340 231expected return on plan assets (271) (104)Net actuarial (gain)/ loss recognised in the period (111) (119)past service cost – –Net benefit expense 1,112 1,099

Actual return on plan assets (775) (133)

Balance Sheet

Details of Provision for Gratuity:

Particulars As atMarch 31, 2010

(` ’000)

As atMarch 31, 2009

(` ’000)Defined benefit obligation 5,690 4,530Fair value of plan assets 4,578 3,393

(1,112) (1,138)Less: unrecognised past service costplan asset / (liability) (1,112) (1,138)

119

Changesinthepresentvalueofthedefinedbenefitobligationareasfollows:


(` ’000)

As atMarch 31, 2009

(` ’000)Opening defined benefit obligation 4,530 3,298interest cost 340 231Current service cost 1,154 1,091Benefits paid (726) –Actuarial (gains)/ losses on obligation 393 (90)Closing defined benefit obligation 5,690 4,530



(` ’000)

As atMarch 31, 2009

(` ’000)opening fair value of plan assets 3,393 1,298expected return 271 104Contributions by employer 1,138 1,962Benefits paid (727) –Actuarial gains / (losses) 503 29Closing fair value of plan assets 4,578 3,393

The Defined benefit obligation amounting to ` 5,690 thousand is funded by assets amounting to ` 4,578 thousand and the Company expects to contribute ` 1,112 thousand during the 2010-11.

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


As atMarch 31, 2009

% %investments with insurer 100 100

the overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

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


March 31, 2010


March 31, 2009% %

discount rate 7.50 7.00expected rate of return on assets 8.00 8.00Future salary increase 5.00 5.50Withdrawal rate 1 to 3 1 to 3

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

Amounts for the current and previous four years are as follows*:


March 31, 2010


March 31, 2009


March 31, 2008Defined benefit obligations 5,690 4,530 3,298plan assets 4,578 3,393 1,298Surplus / (deficit) (1,112) (1,138) (2000)experience adjustments on plan liabilities (410) 112 –experience adjustments on plan assets 503 29 –

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

120


DefinedContributionPlan

(` ’000)Particulars 2009-10 2008-09Contribution to provident Fund 5,840 5,768Contribution to superannuation Fund 1,059 1,249

6,899 7,017

15. Leases

In case of assets taken on Operating Lease:

Office premises, vehicles, equipments, guest houses and godowns are obtained on cancellable operating leases. All these leases have a lease terms varying between 3 to 5 years. there are no restrictions imposed by lease arrangements. there are no subleases.

(` ’000)


March 31, 2010

For the year ended

March 31, 2009 Lease payments for the year 37,255 86,957

16. in accordance with Accounting standard 22 ‘Accounting for taxes on income’, issued by the institute of Chartered Accountants of india, in view of the fact that the Company is under the stage of setting up the hydro power project, deferred tax assets have not been accounted for in the books since it is not virtually certain whether the Company will be able to take advantage of such items.

17. the Company has not undertaken reconciliation during the year with one of its key contractors / suppliers having payables aggregating to ` 8,780 thousand, advances recoverable of ` 45,375 thousand and inventory lying with him of ` 84,163 thousand as at March 31, 2010. subsequent to the year end, the management is in the process of seeking confirmation from this contractor / supplier for the balances outstanding. In the opinion of the management, such advances / inventory are fully recoverable and consequential adjustments required on reconciliation of the balances payable to / receivable from this contractor / supplier will not be material in relation to the financial statements of the Company and the same will be adjusted in the financial statements as and when the reconciliation is completed.

18. Segment Information

the Company’s activities during the year involved setting up of the Hydro power project (refer Note 1). Considering the nature of Company’s business and operations, there are no separate reportable segments (business and/ or geographical) in a ccordance with the requirements of Accounting standard 17 ‘segment reporting’ issued by the Companies (Accounting standard) rules, 2006 and hence, there are no additional disclosures to be provided other than those already provided in the financial statements.

19. Previous year’s figures have been regrouped where necessary to confirm to this year’s classification.









121

CAsH FLoW stAteMeNt As At MArCH 31, 2010

(` ’000)



A. Cashflowsfrom/(usedin)investingactivities Acquisition of fixed assets (2,795,607) (3,464,426)

Fixed deposit redeemed 2,302 10,993

Fixed deposit (placed) (2,979) –

interest received 3,278 9,050

Net cash (used in) investing activities (2,793,006) (3,444,383)

B. Cashflowsfromfinancingactivitiesproceeds from issuance of share capital 373,528 763,056

share application money received – 628,000

proceeds from long term borrowings 3,629,764 2,834,609

interest paid (780,500) (749,508)

Netcashfromfinancingactivities 3,222,792 3,476,157

Net increase / (decrease) in cash and cash equivalents (A+B) 429,786 31,774

Cash and cash equivalents at the beginning of the year 66,801 35,027


Components of cash and cash equivalents Cash on hand 2,227 2,708

With scheduled banks – on current accounts 124,360 64,093

With scheduled banks – on deposit accounts 370,000 –

496,587 66,801

Note:

1 Difference in the figure of cash and bank balance as per schedule 8 and as per above of Rs 3,179 thousand (Previous year Rs 2,502 thousand) represents long term investment in fixed deposit with an original maturity of more than three months.









122


1. ReGISTRATION DeTAILS

registration No. 2 6 1 0 8 state Code 0 6

Balance sheet date 3 1 0 3 2 0 1 0

date Month Year

2. CAPITAL RAISeD DURING THe yeAR (Amount in ` Thousands)

public issue – rights issue –

Bonus issue – private placement 1 0 0 1 5 2 8

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

total Liabilities 1 9 2 7 4 5 1 5 total Assets 1 9 2 7 4 5 1 5

SOURCeS OF FUNDS

paid-up Capital 5 6 0 1 5 2 8 reserves and surplus –

share Application Money – deferred tax Liability –

secured Loans 8 3 8 0 0 0 0 unsecured Loans 3 7 5 0 5 2 0

APPLICATION OF FUNDS

Net Fixed Assets 6 0 2 5 0 2 4 investments – (incl. p.o.p. exps)

Net Current Assets ( 8 4 1 8 6 3 ) Misc. expenditure 2 0 0 1 8

Accumulated Losses –

4. PeRFORMANCe OF COMPANy (Amount in ` Thousands)

turnover – total expenditure –


earning per share (in `) – dividend per share (in `) –

5. GeNeRIC NAMeS OF PRINCIPAL PRODUCTS/SeRVICeS OF COMPANy (as per monetary terms)

item Code No. (itC Code) 9 8 0 1 0 0

product description H y d r o e l e c t r i c e n e r g y

BALANCe SHeeT ABSTRACT AND COMPANy'S GeNeRAL BUSINeSS PROFILe

place : Noidadated : June 2, 2010





123

Financial ResultsoF

Indo CanadIan ConsultanCyservICes ltd.

124


DiRectoRs' RePoRt

to the Membersthe Directors have pleasure in presenting the 15th annual Report together with the audited statements of accounts for the year ended 31st March 2010.

Financial Performance(Rs. in lacs)

Particulars Current year Previous Year

Gross Revenue 852.91 1321.89

expenditure 944.72 1197.44

Profit before Depreciation & tax

(91.81) 124.45

Depreciation 59.57 43.55

Profit/(Loss) before tax

(151.38) 80.90

Prior Period income 10.03 –

Deferred tax assets 54.65 3.85

Profit/(Loss) After Tax (86.70) 22.98

Add/(Less): Profit/(Loss) brought forward from previous year

601.91 578.93

Profit/(Loss) brought forward

515.21 601.91

dividend

the Directors do not recommend any dividend for the year 2009-10.

review of Performance

During the financial year, the company designed several projects and provided its technical consultancy services to hydro and thermal projects ranging in size from 5MW to about 1000 MW in India, Rwanda and Nepal. The Company carried out site identification, preparation of feasibility study, detailed design and project reports and engineering of hydro project in complex and varied geological, topographic climatic and hydrological conditions in association with its Joint Ventures partner, RsW inc. the company has gained specialized knowledge and experience in the field of engineering of hydro projects of small, medium and large capacity, transmission line and substation projects up to 765 KV. the company is providing consultancy to several clients for hydro projects implementation including services for investigations, due diligence studies, preparation of pre feasibility reports and detailed project reports, detailed design and drawings, technical specification, construction supervision, system engineering etc. Till date iccs has completed detailed design of 12 hydro power

projects and four thermal power projects with installed capacity of about 450 MW and these projects have been commissioned. DPR and detailed engineering for about 32 projects having installed capacity of 3500 MW are under progress. The Company has bagged several contracts during the year financial year 2009- 10 including tender engineering for Vishnugad Pipalkoti project (444 MW) in Uttarakhand and preparation of feasibility report of Kali Gandaki Koban project (about 350 MW) in Nepal. the company derives the strength from the experience staff having core knowledge in specialized areas of qualifications. Experts from RSW, Inc provide significant contribution from their experience of several projects in different areas, magnitude and difficult conditions. During the year, Company has taken up the work of Techno economic approval of DPR for nyamjang chhu HeP (900 MW) in arunachal Pradesh for Bhilwara energy limited. The company is also in the process of finalizing the DPR of chango Yangthang HeP (140 MW) for Bel.

Infrastructure development

It has been a steady growth for Company over the years in terms of expanding its current assets of Computers, peripherals and software. the company possesses the state-of-the-art design and project management software. The Company is equipped with latest software in Civil, electrical and Mechanical engineering which comprises NISA Finite Element Package for analysis, Primevara Software for projects Management, Staad Software for structural analysis, ETAP Software for electrical system analysis and Auto Cad Civil 2009 for drafting, FLAC2D for rock support design and Hammer for water hammer analysis.

Human resource development

the company from its inception has given special attention to human resources development and total quality management at different levels. Today, ICCS is a strong force of about 90 engineers and technicians. Efforts are being aimed towards imparting technical skills and improve productivity of the company. During the year, there was no employee getting salary exceeding the limit prescribed under Section 217(2A) of the Companies Act, 1956 as detailed in Annexure – I.

directors’ responsibility statement

Your Directors would like to inform members that audited accounts containing the Financial statements for the year 2009-10 are in full conformity with the requirements of the Act and they believe that the financial statements reflect fairly the form and substance of transactions carried out during the year and they fully present the company’s financial condition and results of operations. these financial statements are audited by the Statutory Auditors, M/s KRA & Associates, Chartered Accountants.

125

directors

Mr. Ravi Jhunjhunwala and Mr. Claudio Vissa , Directors retire from the Board by rotation at the ensuing Annual General Meeting of the Company and being eligible, offer themselves for re-appointment.

energy Conservation, technology absorption and Foreign exchange

the information required pursuant to the companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988 pertaining to Energy conservation and Technology Absorption and Foreign Exchange Earnings are not applicable. However during the financial year 2009-10 the Company has not incurred any expenditure in Foreign Exchange during the financial year 2009- 10.

acknowledgements

the Directors wish to place on record their appreciation for continued cooperation extend by various Departments of the Central and State Government, Financial Institutions and the Bankers. the Directors also express their appreciation to employees for their dedicated services rendered to the company.

For and on behalf of the Board of DirectorsIndo CanadIan ConsultanCy servICes ltd.

ravI JHunJHunWala chairman

Place: Noida Date: 3rd June, 2010

Your Directors further confirm that pursuant to Section 217 2(AA):

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

(ii) appropriate accounting policies have been selected and applied consistently and they have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company on 31st March, 2010 and of the profit of the Company for the year ended on that date;

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

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

auditors

The term of appointment of M/s. KRA & Associates, Chartered Accountants, auditors of the Company, expires on the conclusion of the forthcoming annual General Meeting and being eligible, they are recommended for reappointment.

Public deposits

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

Information pursuant to Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of employees) Rules, 1975 ad forming part of Directors Report for the year ended 31st March, 2010 are given hereunder.

I. Persons employed for the full year

name designation remuneration (rs in lacs)

Qualification experience age Commencement of employment

sh. Rakesh Mahajan Director - civil 44.32 B.e. ( civil) M tech (civil)

MBa

30 50 1998

II. Persons employed for Part of the year

name designation remuneration (rs in lacs)

Qualification experience age Commencement of employment

Sh. U C Dubey Director- elect 24.48 B.e ( elect) 39 61 1998

126


auDitoRs' RePoRt

audItor's rePort to tHe MeMBers oF Indo CanadIan ConsultanCy servICes ltd.

We have audited the attached Balance sheet of Indo CanandIan ConsultanCy servICes ltd. as at March 31, 2010 and the Profit & Loss Account of the company for the year ended on that date annexed there to.

These financial statements are the responsibility of the company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We have conducted our audit in accordance with auditing standards generally accepted in india. these standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. an audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditor's Report) Order, 2005, issued by the Central Govt. of India in terms of section 227 (4A) of the Companies Act, 1956, we give in the annexure hereto a statement on the matters specified in paragraph 4 & 5 of the said order as under.

Further to our comments in the annexure referred to in paragraph 1 above, we report that:

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.

b) In our opinion, the Company has kept proper books of accounts, as required by law so far, as appears from our examination of the books.

c) The Balance Sheet and the Profit & Loss Accounts referred to in this report are in agreement with the Books of accounts of the company.

d) In our opinion, the Balance Sheet and Profit & Loss A/c dealt with the report are in the compliance with the accounting standard referred to in section 211 (3C) of the Companies Act 1956, in so far as they apply to the company.

e) On the basis of the written representations received from the directors, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the said Balance Sheet and Profit and Loss Account read together with the significant Accounting Policies and other notes there on give the information required by the Companies Act 1956, in the manner so required and give a true and fair view:

I. In the case of Balance Sheet, of the state of affairs of the Company as at March 31,2010 and

II. In the case of Profit & Loss Account, of the loss of the company for the year ended on that date.

For Kra & assoCIateschartered accountants

rohit talwar(Partner)Membership No. 054876


127

anneXure to audItors' rePort

anneXure reFerred to In ParaGraPH 1 oF tHe audItor’s rePort to tHe MeMBers oF Indo CanandIan ConsultanCy servICes ltd on tHe aCCounts For tHe year ended 31st MarCH 2010.

i) a) the company has not maintained proper records showing full particulars, including quantitative details and situation of fixed assets

b) The fixed assets have not been physically verified by the management during the year.

c) During the year, in our opinion and according to the information and explanations given to us, we are of the opinion that a substantial part of the fixed assets has not been disposed off by the company.

ii) a) the company has not taken any loan secured or unsecured, during the year from, companies, and firms or other parties listed in the register(s) maintained under section 301 of the companies act 1956.

b) The company has not granted any loan to companies, firms or other parties covered in the register maintained under section 301 of the companies Act, 1956.

iii) in our opinion and according to the information and explanation given to us, Company does not have internal control procedures commensurate with the size of the company and the nature of its business with regard to purchase of fixed assets and the sale of services.

iv) a) according to the information and explanation given to us, we are of the opinion that the transaction made in pursuance of contracts or arrangement entered in the register maintained under section 301 of the companies act, 1956 have been so entered.

b) In our opinion and according to the information and explanations given to us each of these transactions have been made at prices which are reasonable having regard to the prevailing market price at the relevant time.

v) in our opinion and according to the information and explanation given to us, the company has not accepted any deposits from public , hence this clause is not applicable.

vi) In our opinion, the company has no internal audit system commensurate with the size and nature of its business.

vii) We were informed that the company is not required to maintain any cost record under section 209(1)(d) of the companies act, 1956.

viii) a) the company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, Investor education protection fund, employees’ state insurance, income tax , sales tax, wealth tax, custom duty, excise duty, cess and other material statutory dues applicable to it. according to the information and explanation given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, custom duty, excise duty and cess were in arrears, as at 31.03.2010 for a period of more than six month from the date they became payable.

b) According to the records of the company and the information and explanations given to us, no disputed amount payable in respect of sale tax, income tax, customs duty, wealth tax, excise duty and cess as at 31st March, 2010 which were outstanding for a period of more than six month from the date they became payable.

ix) the company does not have any accumulated losses at the end of the financial year but it has incurred cash loss during the year.

x) according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institution and bank.

xi) according to the information and explanations given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debenture and other securities.

xii) In our opinion, the company is not a chit fund or a nidhi mutual benefit fund /society. Therefore, the provisions of clause 4(xiii) of the companies (Auditor’s Report) Order, 2003 are not applicable to the company.

xiii) according to the information and explanation given to us, the company is not dealing or trading in shares, securities, debentures and other investments.

xiv) according to the information and explanations given to us, the company has not given guarantees for loans taken by others from banks or financial institutions.

xv) according to the information and explanations given to us, the company has not taken any loan and hence the related clause is not applicable on the company.

128


xvi) according to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that the no funds raised on short-term basis have been used for long term investment. No long-term funds have been used to finance short-term assets except permanent working capital.

xvii) according to the information and explanations given to us, the company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the act.

xviii) according to the information and explanations given to us, during the period covered by our audit report, the company has not issued debentures.

xix) according to the information and explanations given to us, during the period covered by our audit report, no public issue has been made by the company.

xx) according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.




129

Balance sHeet as at 31st MARCH, 2010

as per our report of even date attached


rohit talwarPartnerMembership No. 054876


For indo canadian consultancy services ltd.

ravi Jhunjhunwala Director

rishabh Jhunjhunwala Director

` in ‘000’

schedules as at 31.03.2010

as at 31.03.2009

sourCes oF Funds

shareholders’ Funds

shareholder's Funds

share capital 1 3,533 3,533

reserves & surplus

Profit and Loss Account 2 53,118 61,789

56,651 65,322

aPPlICatIon oF Funds

Fixed assets

Gross Block 3 25,717 25,495

Less : Depreciation 19,950 15,105

net Block 5,767 10,389

deferred tax assets 9,293 3,828

Current assets, loans & advances 4

Sundry Debtors 57,920 79,967

cash & Bank Balance 12,735 11,230

other current assets 26,810 17,801

loans & advances 10,065 9,366

107,530 118,364

Current liabilities and Provisions

Current Liabilities 5 35,258 42,161

Provisions 30,682 25,098

net Current assets 41,590 51,104

56,651 65,322

Significant Accounting Policies & Notes to Accounts 9

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

130


PRoFit & loss account FoR tHe PeRioD enDeD 31st MARCH, 2010



rohit talwarPartnerMembership No. 054876





` in ‘000’

schedules For the year ended31.03.2010

For the year ended31.03.2009

InCoMe

Professional charges 84,895 131,757

other income 6 396 432

85,291 132,189

eXPendIture

Personnel expenses 7 66,541 79,183

administrative & other expenses 8 27,926 40,161

94,466 119,344

PROFIT/(LOSS) BEFORE DEPRECIATION (9,175) 12,845

DePReciation 5,957 4,355

Profit/(Loss) before Tax and Prior Period Income (15,132) 8,490

Prior Period income 1,003 400

Deferred tax 5,465 385

Provision for taxation 0 4,450

Fringe Benefit Tax 0 956

Wealth tax-earlier year (6) 1

Profit /(Loss) after Tax (8,670) 2,298

Profit /(Loss) Brought Forward 60,191 57,893

PROFIT/(LOSS) CARRIED FORWARD 51,521 60,191

E.P.S. (in Rs.) Basic/ Diluted (24.54) 6.50

Significant Accounting Policies & Notes to Accounts 9

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

131

scHeDules to accounts

sCHedule 1: sHare CaPItal` in ‘000

as at 31.03.2010

as at 31.03.2009

authorised

10,00,000 Equity Shares of Rs.10/- each 10,000 10,000

Issued, subscribed and Paid up

3,53,300 (Previous year 3,53,300)Equity Shares of Rs.10/- each fully paid-up

3,533 3,533

3,533 3,533

*of the above 1,80,200 Equity Shares are held by Bhilwara Energy Limited, the Holding Company

sCHedule 2: reserves and surPlus

share Premium 1,598 1,598

Profit & Loss Account 51,521 60,191

53,118 61,789

sCHedule 3 : FIXed assets` in ‘000

Gross BloCK dePreCIatIon netBloCK

Particulars as at01.04.09

addi. Dur. the Year

Dedn. Dur. the Year

as at31.03.10

upto01.04.09

addi. Dur. the Year

Dedn. Dur. the Year

upto31.03.10

as at31.03.10

as at31.03.09

tangible assets

Furniture & Fixtures 774 – 50 724 658 23 31 649 75 116

Office Equipments 1,474 35 – 1,509 521 156 – 676 833 954

computers & computer Peripherals

9,685 – – 9,685 6,944 1,096 – 8,040 1,645 2,741

Motor Vehicles 3,672 1,649 1,533 3,789 2,115 379 1,081 1,412 2,377 1,558

electrical equipments

788 – – 788 400 59 – 459 329 389

Project equipments 53 – – 53 37 2 – 40 13 15

total tangible assets

16,446 1,684 1,583 16,548 10,674 1,715 1,112 11,276 5,272 5,772

Intangible assets

software 9,048 121 – 9,170 4,432 4,243 – 8,674 495 4,617

Total Intangible assets

9,048 121 – 9,170 4,432 4,243 – 8,674 495 4,617

total 25,495 1,805 1,583 25,717 15,105 5,957 1,112 19,950 5,767 10,389

Previous Year 21,416 4,261 182 25,495 10,892 4,355 142 15,105 10,389 10,524

132


sCHedule 4: Current assets, loans & advanCes ` in ‘000

as at 31.03.2010

as at 31.03.2009

sundry debtors

Sundry Debtors (Unsecured, considered good by the Management)

– outstanding for more than six Months 34,631 24,372

– others 23,289 55,595

57,920 79,967

Cash & Bank Balances

Cash in hand (As certified by the Management) 171 41

cheques in Hand – 454

Balance with scheduled Banks in current account

– on current accounts 7,407 7,285

– on Fixed Deposits 5,157 3,450

12,735 11,230

other Current assets

advance tax & tDs (net of Provisions) 26,810 17,801

26,810 17,801

loans & advances

Advances recoverable in cash or in kind for value to be received

(Unsecured considered good by Management) 10,065 9,366

10,065 9,366

total 107,530 118,364

sCHedule 5: Current lIaBIlItIes & ProvIsIons

Current liabilities

sundry creditors

– Micro small and medium enterprises * – –

– others 28,969 30,825

Other Liabilities 5,436 8,905

advance from customers 852 2,432

35,258 42,161

Provisions

– Retirement benefits & Leave Encashment 5,820 4,011

– Continuity Liability Bonus 24,156 21,074

– Wealth tax – 1

– Fringe Benefits Tax (Net of Advances) – 12

Provision for LTA and Medical Benefits 706 –

total 30,682 25,098

* Supplier / Vendors have not provided their status under Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid as at year end together with interest paid / payable under this Act have not been given.

133

sCHedule 6: otHer InCoMe ` in ‘000

as at 31.03.2010

as at 31.03.2009

interest received 341 374

other income – 10

Misc. income 55 47

396 432

sCHedule 7: Personnel eXPenses

Salaries, wages and other expenses 62,551 74,799

Contribution to provident and other funds 2,060 3,277

Workmen and staff welfare expenses 1,929 1,107

66,541 79,183

sCHedule 8: adMInIstratIve & otHer eXPenses

Rent 14,929 17,553

Repair & Maintenance (car running & mait) 502 950

Rates & taxes 9 4

insurance 442 196

legal and Professional 2,205 5,921

traveling expenses 1,906 3,973

electricity 2,356 3,460

Bad Debts 3 1,575

Repair & Maintenance Building 798 1,180

Repair & Maintenance others 719 518

telephone 627 850

Establishment Exp. 714 868

Project expenses 514 1,038

Printing & stationery 685 882

Fee and Subscription 455 439

audit Fees 75 83

Gift & Presentation 433 203

interest 198 5

Bank Gurantee charges 8 2

Bank charges 27 27

Miscellaneous expenses 321 433

27,926 40,161

134


schedule 9: sIGnIFICant aCCountInG PolICIes and notes to aCCount

notes on Business activities1)

inDo canaDian consultancY seRVices liMiteD (hereinafter referred to as “the company”) is engaged in consultancy services, including comprehensive engineering consultancy for hydro-electric, thermal and non-conventional energy power projects.

Significant Accounting Policies2)

Basis of Preparationa)

The financial statements are prepared and presented under the historical cost convention, in accordance with the Indian Generally Accepted Accounting Principle (“GAAP”), comply with the mandatory accounting standards issued by the Institute of Chartered Accountants of India (“ICAI”) and the presentation requirements of the Companies Act, 1956.

All income and expenditure having a material bearing on the financial statements are recognized on an accrual basis except in case of Tender fee which is booked on receipt basis.

use of estimatesb)

The preparation of financial statements is in conformity under the GAAP requires management to make estimates and assumptions that effect the reported amounts of assets and liabilities, disclosure of contingents assets and liabilities at the date of financial statements and the results of operations during the reporting period. Actual result could be different from these estimates. Any changes in estimates are adjusted prospectively in the current and future period.

Contingencies are recorded when it is probable that a liability will be incurred and the amount can be reasonably estimated.

revenue recognitionc)

Revenue comprises income received on account of consultancy fees received for the services rendered on accrual basis, whereas tender fee is recognized on receipt basis.

Fixed assetsd)

Fixed assets are stated at cost of acquisition less accumulated depreciation. the cost included all expenditure incurred up to the date of installation of the Assets. Depreciation has been provided on Written down method using the rates prescribed in Schedule XIV to the Companies Act, 1956.

Assets costing less then Rs.5,000 are depreciated at the rate of 100%. As per management, the rates are indicative of the estimated useful lives of these assets.

Intangible assets are amortised over useful life or license period whichever is shorter.

Impairment of assetse)

The carrying amount of assets is reviewed at each balance sheet date if there is indication based on internal/external factors. An Impairment Loss is recognized wherever the carrying amount of assets exceeds its recoverable amount. The recoverable amount is greater of the assets net selling price and its use. In assessing value in use, the estimated future cash flows are discounted to the present value by using weighted average cost of capital. a Previously recognized impairment loss is increased or reversed depending upon change in circumstances.

Foreign Currency transations f)

transactions denominated in foreign currencies are initially recorded at the exchange rate prevailing on the day the transaction.

All exchange gain/loss on restatement of monetary items as at balance Sheet date are recognized in the Profit and Loss Account.

taxationg)

income – tax expense comprise current tax i.e. amount of tax for the year determined in accordance with the Income – Tax Act, 1961, Fringe benefit tax and deferred tax charge of credit (reflecting the tax effects of timing difference between accounting income and taxable income for the year). The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax charge rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future; however, where there is unabsorbed depreciation or carried forward loss under taxation

135

laws, deferred tax assets are recognized only if there is a virtual certainty of realization of such assets. Deferred tax assets are reviewed as at each balance sheet date and written down or written-up to reflect the amount that is reasonably/virtually certain (as the case may be) to be realized.

Employees Benefits:h)

Expenses and Liabilities in respect of employee’s benefits are recorded in accordance with revised Accounting Standard 15 - Employee Benefits.

(i) Provident Fund

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

(ii) Gratuity

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

actuarial gains and losses arising from past experience and changes in actuarial assumptions are charges or credited to the profit and loss account in the year to which such gains or losses relate.

(iii) leave encashment

Liability in respect of leave encashment becoming due or expected after the balance sheet is estimated on the basis of an actuarial valuation performed by an independent actuary using projected unit credit method.

(iv) Superannuation Benefit

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

(v) Other short term benefits

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

i) taxes on Income

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

(ii) Deferred tax is recognized, subject to the consideration of prudence, on timing difference, being the timing difference between taxable incomes and accounting income originated in one period and are capable of reversal in one or more subsequent periods.

j) Provisions & Contingent Liabilities / Assets

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

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

(iii) Provisions and Contingent Liabilities / Assets are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.

k) earning Per share

Basic earning per share are calculated by dividing the net profit or loss for the period attributable to equity Shareholders by the weighted average number of equity shares outstanding during the period.

For the Purpose of calculating diluting earning per share, the net profit or loss for the period attributable to equity Shareholders by the weighted average number of equity shares outstanding during the period are adjusted for the effects of all dilutive Potential equity shares.

136


notes to aCCounts

Contingent liabilities 1. (Rs. in lacs)

PartICulars year ended 31.03.2010

Year ended 31.03.2009

(a) Claims not acknowledge as debts nIl nil

(b) Estimated amount of contracts remaining to be executed on capital account and not provided for

nIl nil

(c) Other claims for which company is contingently liable nIl nil

(d) Bank Guarantees (net of Margin Money) 35.94 35.94

(e) service tax demand under appeal 1.30 nil

The following disclosures have been made as required by the Accounting Standard – 15 (Employees 2. Benefit):

Employee Benefits

Defined Contribution Plan (Rs. in lacs)

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

year ended 31.03.2010


Employer’s Contribution to Provident fund 21.09 29.06

Employer’s Contribution to Superannuation fund 13.90 7.89

Defined Benefit Plan

The employee’s gratuity fund scheme managed by trust is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the projected Unit Credit method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for Leave encashment is recognized in the same manner as gratuity. the company is maintaining fund with icici prudential.

Profit & Loss Account

Net Employee Benefits expenses (Recognized in Employee Cost) (Rs. in thousand)

PartICulars Gratuity31.03.2010

Gratuity 31.03.09

current service cost 655.49 719.00

Interest cost on benefit obligation 229.57 147.29

expected return on plan assets (260.04) (85.42)

net actuarial loss (gain) recognized in the year (871.30) 315.85

Net Expense recognized in the Profit & Loss A/c (246.28) 1,096.72

Balance sheet (Rs. in thousand)


Gratuity 31.03.09

Fair value of plan assets at the end of the period 3,946.57 3,250.48

Present value of obligations as at the end of the period 3,277.18 3,279.50

Funded status 669.39 (29.02)

excess of actual over estimated 22.10 (6.77)

Net Assets/ (Liability) recognized in the balance sheet 669.39 (29.02)

137

Changes in the present value of the defined benefit obligation are as follows: (Rs. in thousand)


Gratuity 31.03.09

Present value of obligations at the beginning of the period (01/04/2009) 3,279.50 2,104.12

interest cost 229.56 147.29

current service cost 655.49 719.01

Benefits paid (38.17) nil

Actuarial (gain) / Loss on obligation (849.20) 309.08

Present value of obligations at the end of the period (31/03/2010) 3,277.18 3,279.50

Changes in the fair value of the plan assets are as follows: (Rs. in thousand)


Gratuity 31.03.09

Fair value of plan assets at the beginning of the period 3,250.48 1,067.71

expected return on the plan assets 260.04 85.42

Contributions 452.12 2,104.12

Benefits paid (38.17) nil

Actuarial gain / (loss) on plan assets 22.10 (6.77)

Fair value of plan assets as at the end of the period 3,946.57 3,250.48

Principal actuarial assumptions

a) economic assumptions

PartICulars rate (%) 31.03.2010

Rate (%) 31.03.2009

a) Discount rate 8.10 7.00


c) expected Rate of return on plan assets 8.00 8.00

b) demographic assumptions

PartICulars 31.03.2010 31.03.2009

a) Retirement age 60 years 60 Years

b) Mortality Table LIC ( 1994-96) Duly Modified LIC ( 1994-96) Duly Modified

c) Withdrawals Rate ages Withdrawals rate (%)upto 30 years 3.00%

31- 44 years 2.00%above 44 years 1.00%

Ages Withdrawals Rate (%)Upto 30 Years 3.00%31- 44 Years 2.00%Above 44 Years 1.00%

earned leave

Profit & Loss

Net Employee Benefits Expenses (Rs. in thousand)

PartICulars earned leave 31.03.2010

earned leave 31.03.2009

current service cost 1,245.53 1,379.37

Interest cost on benefit obligation 223.44 151.26

expected return on plan assets nil nil

net actuarial loss (gain) recognized in the year 163.23 (1.68)

Net Expense recognized in the Profit & Loss A/c 1,632.20 1,528.95

138


Balance sheet (Rs. in thousand)



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

Present value of obligations as at the end of the period 4,524.33 3,192.06

Funded status (4,524.33) ( 3,192.06)

excess of actual over estimated nil nil

Net Assets/ ( Liability) recognized in the balance sheet (4,524.33) (3,192.06)




Present value of obligations at the beginning of the period (01/04/2009)

3,192.06 2,160.79

interest cost 223.44 151.26

current service cost 1,245.53 1,379.37

Benefits paid (299.87) (497.74)

Actuarial (gain) / Loss on obligation 163.23 (1.68)

Present value of obligations at the end of the period 4,524.33 3,192.00

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



Fair value of plan assets at the beginning of the period nil nil

expected return on the plan assets nil nil

Contributions nil nil

Benefits paid nil nil

Actuarial gain / (loss) on plan assets nil nil

Fair value of plan assets as at the end of the period nil nil

Principal actuarial assumptions

a) economic assumptions

PARTICULARS Year Ended 31.03.2010


a) Discount rate as on 31.03.2009 8.10 7.00


c) Expected Rate of return on plan Assets 0.00 0.00

b) demographic assumptions

PartICulars year ended 31.03.2010 Year ended 31.03.2009

a) Retirement age 60 years 60 Years

b) Mortality Table LIC (1994-96) Duly Modified LIC (1994-96) Duly Modified

c) Withdrawals Rate ages Withdrawals rate (%) upto 30 years 3.00% 31- 44 years 2.00% above 44 years 1.00%

Ages Withdrawals Rate (%) Upto 30 Years 3.00% 31- 44 Years 2.00% Above 44 Years 1.00%

139

Prior Period Items 3) (Rs. in lacs)

Prior Period income 18.32

Prior Period expense 8.29

total (net) 10.03

deferred tax (as-22)4)

A. Deferred tax has been accounted for in accordance with the Accounting Standard 22 “Accounting for taxes on income”.

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

Deferred Tax Liabilities as at 31.03.2010

as at 31.3.2009

Depreciation (4.55) ( 9.73)

Deferred tax assets

Employee Benefits 97.48 48.01

net deferred tax assets 92.93 38.28

C. The company has not recognized deferred tax assets on unabsorbed depreciation and business loss computed as per income tax laws.

5) related Party dIsClosures

(a) Enterprises that directly or indirectly through one or more intermediaries, control or are controlled by or are under common control with the reporting enterprise.

name of related Party relationship1. aD Hydro Power limited. associate company

2. Bhilwara energy limited. Holding company

3. Malana Power company limited. associate company

4. nJc Hydro Power limited associate company

5. Green Ventures Pvt. ltd. associate company

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

rsW International Inc.

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

none

(d) Key Management Personnel and their relatives

none (e) Enterprises over which any person described in (c) or (d) is able to exercise significant influence.

HEG Ltd. / RSWM Ltd.

note: Related Party relationship is as identified by the company and relied upon by the Auditors.

140


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

(Figures in rs. ‘000)

sr. no.

this year Previous year

I) For the parties referred to in item (a) above. nIl nil

II) For the persons referred in to item (b) above.

services rendered 45,177 43,775

Outstanding receivable 6,006 46,514

III) For the parties referred in to item (d) above. nIl nil

Iv) For the persons referred in to item (e) above.

Reimbursement of expenses received 22,538 7,103

Reimbursement of expenses paid 11,256 16,014

Rent paid 18,565 19,694

Outstanding payables 28,602 27,615

6. earning Per share (as-20) (in Rs. ‘000)

Basic /Diluted Earning Per Share year ended 31.03.2010


Profit/Loss after Tax attributable to Equity Shareholders (8,670.26) 2,297.95

Weighted Average Number of Equity Shares (No.) 353,300 353,300

nominal Value of equity shares (Rs.) 10 10

earning Per share (Rs.) (24.54) 6.5

7. transactions in Foreign exchange (in Rs. ‘000)

nature of transaction year ended 31.03.2010


expenditure (Foreign travelling) nil 73.38

income nil nil

8. auditor remuneration (in Rs. ‘000)

Particulars year ended 31.03.2010.

year ended 31.03.2009

audit Fees 75.00 75.00

9. The company has not received the required information from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006. Hence disclosures relating to amounts unpaid as at the year end together with interest paid/payable, as required, under the Act, have not been made.

10. Balance of Debtors and Creditors and Loans / Advances is subject to confirmation.

11. Previous year figures have been regrouped where necessary. Amount in decimals have been rounded off to the nearest rupee.







141

1. reGIstratIon detaIls

Registration no. u74899Dl1995Plc064168 state code 5 5

Balance sheet Date 3 1 0 3 2 0 1 0

Date Month Year

2. CaPItal raIsed durInG tHe year (amount in rs. thousands)


Bonus issue – Private Placement –

3. PosItIon oF MoBIlIsatIon and dePloyMent oF Funds (amount in rs. thousands)

Total Liabilities 5 6 6 5 1 Total Assets 5 6 6 5 1

sourCes oF Funds

Paid-up capital 3 5 3 3 Reserves and surplus 5 3 1 1 8

secured loans – unsecured loans –

aPPlICatIon oF Funds

net Fixed assets 5 7 6 7 investments –

net current assets 4 1 5 9 1 Misc. expenditure –

accumulated losses – Deferred tax assets 9 2 9 3

4. PerForManCe oF CoMPany (amount in rs. thousands)

turnover 8 5 2 9 1 total expenditure 1 0 0 4 2 4

Profit/Loss before Tax ( 1 5 1 3 2 ) Profit/Loss after tax ( 8 6 7 0 )

Earning Per Share in Rs. ( 2 4 . 5 4 ) Dividend Rate % –

5. GENERIC NAMES OF PRINCIPAL PRODuCTS/SERvICES OF COMPANy (as per monetery terms) - Consultancy services

item code no. (itc code) n a

Product Description n a

BalanCe sHeet aBstraCt and CoMPany's General BusIness ProFIle







142


Financial ResultsoF


143

DiRectoRs' RePoRt

dear Membersthe Directors have pleasure in presenting the 1th annual Report together with audited Balance sheet for the period ended 31st March 2010 together with the auditors’ Report thereon.Financials Highlightsthe company has not started its commercial activities and therefore no profit & loss Account has been prepared. the company has incurred Rs 27,916- as preliminary expenses.Company AffairsYou are aware that your Company has been incorporated as SPV by “Bhilwara Energy Limited” for implementing “Nyamjang Chhu Project” in the State Arunachal of Pradesh. The process for transferring the project from “Bhilwara Energy Limited” to your Company is in advance stage and will be done very soon.dividend & other Appropriationas the company has not yet started commercial activities, no dividend is proposed to be declared during the year under review.Particulars of employeesDuring the year 2009-10, none employees of the company was covered as per the provision of section 217(2a) of the companies act, 1956 (the act), read with the companies (Particulars of employees) Rules, 1975, as amended, regarding employees.directorsshri. Vimal Banka retire at the forthcoming annual General Meeting and being eligible, offered himself for reappointment.Auditorsthe term of appointment of M/s s.s. Kothari Mehta & Co., Chartered Accountants, expires at this Annual General Meeting and being eligible they have offered themselves for re-appointment. the Board recommend their appointment.Auditors’ remarksthe auditors’ Report read along with notes to the accounts is self explanatory and require no further comments from the Board.Public deposits the company has not accepted any Deposit from the Public during the year under report.therefore, provisions of section 58a are not applicable.energy Conservation, technology Absorption And Foreign exchangethe information required pursuant to the companies (Disclosure of particulars in the report of the Board of

Directors) Rules, 1988 pertaining to energy conservation, Technology Absorption and Foreign Exchange Earnings are nil. the company has not incurred any expenditure on Foreign exchange. directors’ responsibility StatementYour Directors would like to inform members that audited accounts containing the Financial statements for the year 2009-10 are in full conformity with the requirements of the Act and they believe that the financial statements reflect fairly the form and substance of transactions carried out during the year and they fully present the company’s financial condition and results of operations. these financial statements are audited by the Statutory Auditors, M/s S.S Kothari Mehta & Co., Chartered Accountants.your directors further confirm that pursuant to Section 217 2(AA):(i) in the preparation of the annual accounts, the

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

(ii) appropriate accounting policies have been selected and applied consistently and they have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company on 31st March, 2010 and of the profit/ loss of the Company for the year ended on that date;

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

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

AcknowledgementsYours Directors record their grateful appreciation of the encouragement, assistance and co-operation received from Ministry of Power - Govt. of india and arunachal Pradesh, other Government Departments, Banks & Financial institutions, shareholders, employees etc. the Board looks forward to their continued support and co-operation in the coming years as well.

For and on behalf of the Board of DirectorsNJC Hydro Power Limited

o.P. Ajmera Vimal Banka Director Director

Place: noida Date: 2nd June, 2010

144


auDitoRs' RePoRt

to tHe MeMBerS oF NJC Hydro Power LIMIted

We have audited the attached Balance sheet and cash Flow statement of nJc Hydro Power limited as at 31st March, 2010. No Profit and Loss account has been prepared as the company has not commenced any commercial operations, relevant details are furnished in Schedule-2 ‘Project and Preoperative expenses (pending allocation)’. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in india. those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. an audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. an audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditors’ Report) Order, 2003 as amended by the Companies (Auditors’ Report) (amendment) order,2004 (collectively the order) issued by the Central Government of India in terms of the section 4a of section 227 of the companies act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 & 5 of the said Order.

Further to our comments in the annexure referred to above, we report that:

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

ii) In our opinion, proper books of account as required

by law have been kept by the Company so far as appears from our examination of those books.

iii) the Balance sheet and cash Flow statement dealt with by this report are in agreement with the books of account.

iv) in our opinion, the Balance sheet and cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the companies act, 1956.

v) On the basis of written representations received from the Directors, and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March 2010 from being appointed as a Director in terms of clause (g) of Sub-Section (1) of Section 274 of the Companies act, 1956.

vi) In our Opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the companies act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in india:

a) in the case of Balance sheet, of the state of affairs of the company as at 31st March, 2010. and

b) in the case of Cash Flow Statement, of the cash flow for the year ended on that date.

For S.S. Kothari Mehta & Co.chartered accountantsFirm regn.no.000756n

(Arun K. tulsian)PartnerMembership No. 089907

Place : new DelhiDated : 2nd June, 2010

145

ANNeXUre to AUdItorS' rePort

referred to in Paragraph 3 of our report of even date to the members of NJC Hydro Power Limited for the year ended 31st March, 2010.

1.. The company does not have any fixed assets.

2. the company does not have any inventory.

3. (a) the company has neither granted nor taken any loan, secured or unsecured, to/from Companies, firms and other parties covered in the register maintained under section 301 of the companies act, 1956.

(b) Since there are no such loans, reporting regarding terms & conditions and overdue amounts is not applicable.

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

5. There are no transactions that need to be entered in the register maintained under section 301 of the companies act, 1956.

6. The company has not accepted any fixed deposits from public to which the provisions of section 58-A, 58-AA or any other applicable provisions of the companies act, 1956 apply.

7. Internal audit provisions are not applicable to the company for the year under report.

8. in our opinion and according to the information and explanations given to us, undisputed statutory dues including income tax and any other material statutory dues have been generally regularly deposited during the year with the appropriate authorities and there are no undisputed statutory dues payable for a period of more than six months from the date they became payable as at 31st March, 2010. the provisions of employees Provident Fund and employees state insurance Acts are not applicable to the company for the year under report.

9. There are no disputed unpaid liabilities in respect of income tax and other applicable statutory dues.

10. As the company has been in existence for less than five years, the reporting on accumulated losses and cash losses is not applicable.

11. The Company does not have any dues payable to any financial institutions, banks and debenture holders.

12. the company has not given any loans on the basis of pledge of shares, debentures and other securities.

13. the company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Order are not applicable to the company.

14. in our opinion, the company is not dealing or trading in shares, securities, debentures and other investments. therefore, the provisions of clause 4(xiv) of the Order are not applicable to the company.

15. according to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions.

16. there were no term loans raised during the year by the company.

17. On the basis of information and explanations given to us, and on the basis of an overall examination of the balance sheet of the Company, no funds raised on short-term basis have been used for long-term investment.

18. the company has not made any preferential allotment of shares during the year to any parties or companies covered in the register maintained under section 301 of the companies act, 1956.

19. The company has not issued any debentures during the year nor has any outstanding debentures.

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

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

For S.S. Kothari Mehta & Co.chartered accountantsFirm regn.no.000756n

(Arun K. tulsian)PartnerMembership No. 089907


146


Balance sHeet as at 31st MaRcH, 2010


For S.S. Kothari Mehta & Co.chartered accountantsFirm Regn no. 000756n

Arun K. tulsianPartnerMembership No. 089907


FoR NJC Hydro Power LIMIted

o.P. AJMerA Director

VIMAL BANKA Director

` in ‘000’

Schedules As at 31.03.2010

SoUrCeS oF FUNdS

Shareholders Funds

sHaRe caPital 1 500

totAL 500

APPLICAtIoN oF FUNdS

Project and preoperative expenses (pending allocation) 2 29

29

Current Assets, Loans and Advances

Cash and bank balances 3 472

4 472

Less: Current Liabilities and Provisions

Liabilities 20

Provisions –

20

Net Current Assets 452

Miscellaneous expenditure 5 19

(to the extent not written off or adjusted)

19

totAL 500

Significant Accounting Policies and Notes to Accounts 6

147

scHeDules to accounts

` in ‘000

As at 31.03.2010

SCHedULe 1: SHAre CAPItAL

Authorised

50,000 equity shares of (Previous Year nil) Rs.10/- each 500

Issued, Subscribed and Paid up

50,000 equity shares (Previous Year nil) of Rs.10/- each fully paid-up (entire share capital is held by Bhiwara Energy Ltd.-holding company and its nominees)

500

500

SCHedULe 2: ProJeCt ANd Pre-oPerAtIVe eXPeNSeS (PeNdINg ALLoCAtIoN)

Personnel expenses –

Administrative and other expenses

Rates & taxes 1

audit Fees 20

Legal & professional charges 4

Miscellaneous expenses 4

29

29

SCHedULe 3: CASH ANd BANK BALANCeS

cash in hand –

Balances with scheduled banks: in current accounts

472

472

SCHedULe 4: LIABILItIeS

sundry creditors 20

20

SCHedULe 5: MISCeLLANeoUS eXPeNdItUre(to the extent not written off or adjusted)

Preliminary expenses 19

19

148


SCHedULe - 6: SIgNIFICANt ACCoUNtINg PoLICIeS ANd NoteS to ACCoUNtS

A. ACCoUNtINg PoLICIeS

1. the accounts are prepared on historical cost convention and in accordance with the disclosure requirements of the companies act, 1956.

2. the company follows accrual method of accounting for expenses.

B. NoteS to ACCoUNtS

1. The Company was incorporated on 16th December 2009. The accounts have been prepared from the date of incorporation upto 31st March 2010.The figures relating to pervious year are not applicable.

2. The Company has been incorporated to put up power projects in the state of Arunachal Pradesh.

3. Since the Company has not started any commercial operations, no Profit & Loss Account has been prepared. Necessary details of expenditure incurred during the period have been presented under the Project and Pre-operative expenses (pending allocation).

4. other additional information required pursuant to the provisions of schedule Vi of the companies act, 1956 is not applicable.








149

casH FloW stateMent as at MaRcH 31, 2010

` in '000'

As at 31.03.2010

A. Cash flows from investing activities

acquisition of Fixed assets (9)

Net cash used in investing activities (9)

B. Cash flows from financing activities

Proceeds from issuance of share capital 500

increase in Miscellaneous expenditure (19)

Net cash from financing activities 481

Net increase / (decrease) in cash and cash equivalents( A+B) 472

Cash and cash equivalents at the beginning of the year –

Cash and cash equivalents at the end of the year 472


cash on hand –

With scheduled banks - on current accounts with bank deposits 472

472








150


1. regIStrAtIoN detAILS

Registration no. u4 0101Dl2009Plc196998 state code 5 5

Balance sheet Date 3 1 0 3 2 0 1 0

Date Month Year

2. CAPItAL rAISed dUrINg tHe yeAr (Amount in rs. thousands)


Bonus Issue – Private Placement –

3. PoSItIoN oF MoBILISAtIoN ANd dePLoyMeNt oF FUNdS (Amount in rs. thousands)

Total Liabilities 5 0 0 Total Assets 5 0 0

SoUrCeS oF FUNdS

Paid-up Capital 5 0 0 Reserves and Surplus –

Share Application Money –

Secured Loans – Unsecured Loans –

APPLICAtIoN oF FUNdS

Net Fixed Assets 2 9 Investments –

(inc. P.o.P. exps)

net current assets 4 5 2 Misc. expenditure 1 9

Accumulated Losses – Deferred Tax Assets –

4. PerForMANCe oF CoMPANy (Amount in rs. thousands)

Turnover – Total Expenditure –


Earning Per Share in Rs. N A Dividend Rate % –

5. geNerIC NAMeS oF PrINCIPAL ProdUCtS/SerVICeS oF CoMPANy-eLeCtrICIty geNerAtIoN (as per monetary terms)

item code no. (itc code) 9 8 0 1 0 0

Product Description H Y D R o e l e c t R i c e n e R G Y

BALANCe SHeet ABStrACt ANd CoMPANy'S geNerAL BUSINeSS ProFILe


For S.S. Kothari Mehta & Co.chartered accountantsFirm Regn. no. 000756n






Financial ResultsoF

Green Ventures PVt. Ltd.(nePaL)

152


auditoRs' RepoRt

to

the shareholders of Green Ventures (P) Ltd.

We have audited the accompanying Balance sheet of Green Ventures (P.) Ltd. as of 31st March, 2010 and the related statements of cash Flows and changes in equity for the period from 1st april 2009 to 31st March, 2010.

These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with nepal standards of auditing or relevant practices. those standards or relevant practices require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

as per the provisions of the companies act, 2063 we state that:

1) We have received prompt replies to our queries and explanations asked for.

2) The books of accounts have been maintained as required by law.

3) the Balance sheet and cash flow statements comply with the books of accounts maintained by the company.

4) The business of the Company appears to have been conducted satisfactorily in so far as appears from our examination of the books and records of the company.

5) In our opinion and to the best of our information and according to the explanations given to us and from our examination of the books of account of the company, we have not come across the cases where the Board or any member thereof or any employee thereof or any employee of the company has acted contrary to the provisions of the law or caused loss or damage to the company or misappropriated to the funds of the company.

In our opinion, the financial statements give a true and fair view of the financial position of the company as of 31st March 2010 and its cash Flows and changes in equity for the period from 1st april 2009 to 31st March 2010.

narayan Bajaj, Fcanarayan Bajaj & associateschartered accountants

date : 15th april, 2010place : Kathmandu

153

Green Ventures Pvt. Ltd. (Nepal)

(nepali Rs.)

schedules as at 31.03.2010

as at 31.03.2009

source of funds

shareholders' fund

share capital 1 415,757,048.00 227,025,000.00

Reserve and surplus 2

total shareholders' fund 415,757,048.00 227,025,000.00

Mid-term & Long term Loans

– secured – –

– unsecured 3 – –

Gross total 415,757,048.00 227,025,000.00

aPPLication of fund

fixed assets 4 69,253,912.99 53,295,113.96

Work-in-progress 5 – –

investment in share 6 – –

current assets

inventory 7 – –

Trade & Other Receivables 8 2,930,374.36 2,714,445.69

Cash and Bank Balance 9 15,343,733.46 2,581,951.19

Prepaid expenses, Advances & Deposits 10 58,867,522.95 82,044,033.90

total current assets 77,141,630.77 87,340,430.78

Less: current Liabilities & Provisions

Trade & Other Payables 11 7,985,911.78 232,809.66

provisions 12 – –

total current Liabilities 7,985,911.78 232,809.66

net current assets 69,155,718.99 87,107,621.12

Pre-Operating Expenses Pertaining to Capitalisation 13 277,347,416.02 86,622,264.95

Gross total 415,757,048.00 227,025,000.00

contingent Liabilities 14

notes to accounts 15

Balance sHeet as at 31st MaRcH, 2010

as per our report of even date

narayan Bajaj, fca directornarayan Bajaj & associateschartered accountants


154


stateMent oF cHanges in equity

for the Period froM 1st aPriL, 2009 to 31st March, 2010

Particulars share capital General reserve

retained earnings

total

opening Balance (1st april, 2009)

share capital 30,000,000.00 30,000,000.00

advance against share capital

BHilWaRa eneRgy ltd., india 149,950,000.00 149,950,000.00

tRiveni eneRgy (p) ltd. nepal 47,075,000.00 47,075,000.00

during the period (from 1st april, 2009 to 31st March, 2010)

share capital – –



tRiveni eneRgy (p) ltd. nepal 99,900,000.00 99,900,000.00

closing Balance (31 March, 2010) 415,757,048.00 – – 415,757,048.00




155


scHedules to accounts

scheduLe 1 : share caPitaL (nepali Rs.)

s. no.

Particulars as on 31st March, 2010

as on 31st March, 2009

a. authorised

equity share

5,00,00,000 shares @ 100 per share 5,000,000,000.00 5,000,000,000.00

B. issued

equity share

50,00,000 shares @ 100 per share 5,000,000,000.00 5,000,000,000.00

c. subscribed

equity share

3,00,000 shares @ 100 per share 30,000,000.00 30,000,000.00

d. Paid up

equity share

3,00,000 shares @ 100 per share 30,000,000.00 30,000,000.00

total (a) 30,000,000.00 30,000,000.00



tRiveni eneRgy (p) ltd., nepal 146,975,000.00 47,075,000.00

total (b) 385,757,048.00 197,025,000.00

total (a+b) 415,757,048.00 227,025,000.00

scheduLe 2 : reserVe & surPLus

a. general Reserves – –

B. Retained earnings – –

total – –

scheduLe 3 : MediuM terM & LonG terM Loan

a. secured Loan – –

1. long term loan – –

2. Debenture – –

B. unsecured Loan – –

1. long term loan – –

2. Debenture – –

3. other unsecured loan: – –

total – –

156


scheduLe 5: Work in ProGress (nepali Rs.)

s no.



1 Work in Progress: – –

total – –

scheduLe 6: inVestMent

s no.

Particulars

a. investment on listed companies – –

B. investment on non-listed companies – –

total – –

scheduLe 7: inVentories

s no.

Particulars

a. store, spare parts, loose tools – –

B. Stock – –

total – –

scheduLe 4: fixed assets (Nepali Rs.)

Particulars Dep. Rate

Cost Price (GROSS BLOCK) DEPRECIATION Balance (NET BLOCK)

Balance as on

1 April 2009

Addition During the

Period

Sales/Adjus. During the

Period

Balance as on

31 March 2010

Accumulated Balance up to 31 March

2009

For the period

Sales/Adjus. During the

period

Accumulated Balance up to 31 March

2010

Balance as on

31 March 2010

Balance as on

31 March 2009

A. LAND

LaNd 0% 21,932,606.75 26,303,007.50 – 48,235,614.25 – – – – 48,235,614.25 21,932,606.75

TOTAL 21,932,606.75 26,303,007.50 – 48,235,614.25 – – – – 48,235,614.25 21,932,606.75

B. BuILDING –

PRe FabRicated OFFice buiLdiNg 5% 1,349,995.00 – – 1,349,995.00 – 67,499.75 – 67,499.75 1,282,495.25 1,349,995.00

tOtaL 1,349,995.00 – – 1,349,995.00 – 67,499.75 – 67,499.75 1,282,945.25 1,349,995.00

C. VEhICLES

Kia SOReNtO ba 6 ch 6385 20% 3,741,395.80 56,213.00 – 3,797,608.80 – 748,279.16 – 748,279.16 3,049,329.64 3,741,395.80

tOyOta hiLux (ba 6 ch 7514) 20% 2,757,462.50 – – 2,757,462.50 – 551,492.50 – 551,492.50 2,205,970.00 2,757,462.50

tOyOta hiLux (ba 6 ch 6653) 20% 2,770,810.00 – – 2,770,810.00 – 554,162.00 – 554,162.00 2,216,648.00 2,770,810.00

tOyOta caRROLa caR (ba 6 ch 8529) 20% 3,784,917.20 113,000.00 – 3,897,917.20 – 756,983.44 – 756,983.44 3,140,933.76 3,784,917.20

tOyOta hiLux (ba 6 ch 9366) 20% 2,806,947.81 – 2,806,947.81 – – – – – – 2,806,947.81

tOyOta hiLux (ba 6 ch 9367) 20% 2,806,952.80 169,500.00 – 2,976,452.80 – 561,390.56 – 561,390.56 2,415,062.24 2,806,952.80



yamaha biKe ba 29 Pa 3824 20% 129,970.00 – – 129,970.00 – 25,994.00 – 25,994.00 103,976.00 129,970.00

yamaha biKe ba 29 Pa 3836 20% 129,970.00 – – 129,970.00 – 25,994.00 – 25,994.00 103,976.00 129,970.00

TOTAL 24,521,145.71 338,713.00 8,399,667.41 16,460,191.30 – 3,224,295.66 – 3,224,295.66 13,235,895.64 24,521,145.71

D. Furniture & Off. Equit.

Site Furn. & equip. 25% 2,096,158.71 168,422.00 – 2,264,580.71 – 524,039.68 524,039.68 1,740,541.03 2,096,158.71

Office equipment 25% 1,278,338.51 703,024.00 – 1,981,362.51 53,742.50 306,149.00 – 359,891.50 1,621,471.01 1,224,596.01

Furniture and Fixture 25% 2,197,686.75 1,509,937.00 – 3,707,623.75 27,075.00 542,652.94 – 569,727.94 3,137,895.81 2,170,611.75

Total 5,572,183.97 2,381,383.00 – 7,953,566.97 80,817.50 1372,841.62 – 1,453,659.12 6,499,907.85 5,491,366.47

this period end balance: 53,375,931.43 29,023,103.50 8,399,667.41 73,892,377.52 80,817.50 4,664,637.03 – 4,745,454.53 69,253,912.99 53,295,113.93

Note: deprecation has not been charged on the additions made during the financial year.

157


scheduLe 8: trade & other receiVaBLes (nepali Rs.)

s no.



a. Advance Income Tax 223,505.11 7,576,44B. advance to director

nirajala Raut 2,706,869.25 2,706,869.25

total 2,930,374.36 2,714,445.69

scheduLe 9: cash & other BaLance

s. no.

Particulars

a. cash Balance 95,692.44 –B. Bank Balance1. Bank of Asia (A/c no. 06CL005121NPR001) 94,326.81 970,726.202. Mahalaxmi Finance Co. Ltd. A/c No. 10-00009 109,895.49 1,037,082.213. Nepal Bank Ltd. 2-11-65431 20,000.00 20,000.004. Nepal Bank Ltd. CA 4021 10,000.00 10,000.005. NIB Bank no. 012-4528100 471,034.04 405,318.776. NMB Bank Ltd. - 004 00000 283 C 4,560,109.56 –7. RBB 109006583601current account 84,849.00 84,849.008. RBB 2967 Okhal Dhunga Current Account 5,466.00 5,466.009. RBB 407 Charikot 10,000.00 10,000.00

10. scB 01-1985426-01 25,000.00 –11. scB 02-1985426-01 short call deposit 9,847,360.12 28,509.0112. Sanima Bank Ltd. A/c no. 10,000.00 10,000.00

total 15,343,733.46 2,581,951.19

scheduLe 10: PrePaid exPenses, adVances, Loans & dePosits

s. no.

Particulars

a. Advances to Party Annex A 57,124,679.95 60,211,763.25B. Advances to Staff Annex B 457,374.00 2,310,705.52c. Bank Gurantee & Letter of Credit Annex B1 – 409,948.63d. Land Acquisition Advance Annex C 1,285,469.00 19,111,616.50

total 58,867,522.95 82,044,033.90

scheduLe 11: trade & other PayaBLes

s. no.

Particulars

1. Other Payables Annex D 7,764,407.78 117,899.402. Audit Fee Payables 144,950.00 66,900.003. TDS Payables Annex E 76,554.00 48,010.26

total 7,985,911.78 232,809.66

scheduLe 12: ProVisions for incoMe tax

s. no.

Particulars

total – –

158


scheduLe 13: Pre-oPeratinG exPenses PertaininG to caPitaLisation

s. no. Particulars for the year ending

31st March, 2010

For the year ending

31st March, 2009

a. Licence & registration expenses: 1,694,000.00 4,630,438.06

Company Registrar Office Expenses – 1,450,025.00

Licence Renew Expenses – 1,000,000.00

generation licence application Fee 1,000,000.00 1,000,000.00

Licence Up-grade Expenses – 680,413.06

PPA Licence Expenses 444,000.00 –

licence transmission line survey 250,000.00 500,000.00

B. survey expenses: 25,735,437.00 29,329,978.29

consultancy Fee 25,492,700.00 –

detail project Report – 27,508,704.17

EIA Expenses 242,737.00 996,017.00

Water Flow survey – 825,257.12

c. Bridge construction: – 20,000.00

Bridge Civil Works – 20,000.00

d. transmission Line : 2,425,777.00 376,901.00

Transmission Line Expenses 2,425,777.00 376,901.00

e. road construction 150,635,318.88 28,536,070.36

Road Construction Expenses 150,635,318.88 28,536,070.36

f. Land acquisition 427,442.00 6,657,426.00

Land Acquisition Expenses 427,442.00 6,657,426.00

G. administrative expenses: 9,807,176.19 14,184,951.04

1. Office expenses (Annex F) 321,745.25 215,837.48

2. Bonus (dashain) to staff 200,603.00 741,033.00

3. Insurance Expenses 82,460.81 502,469.00

4. audit Fee 146,900.00 77,800.00

5. Advertisement Expenses 43,976.00 46,273.00

6. Telephone and Communication Expenses 322,486.33 590,028.00

7. Exchange Rate Loss 497,093.00 –

8. Guest Entertainment Expenses 308,763.00 194,917.00

9. Miscellaneous Expenses (Annex G) 1,287,796.09 1,342,654.28

10. Office Rent 2,135,567.20 997,073.00

11 Repair and Maintenance 137,435.00 120,239.66

12. printing stationary 89,273.00 276,146.00

13. Tangal House Expenses 500,702.48 960,687.33

14. Salary Office Staff 4,694,082.52 5,586,508.00

15. salary site staff 567,152.00 289,884.00

16. Legal Expenses – 14,300.00

17. Site Visit Expenses 1,298,768.77 257,962.00

18. Project Site Office Expenses 195,061.00 127,850.00

19. Travelling Expenses 629,563.00 2,444,840.33

20. Vehicle Expenses 499,360.43 620,364.84

159


SCHEDULE - 15: Significant Accounting Policies & Notes To Account

a. siGnificant accountinG PoLicies

(1) accounting conventions:

the Financial statements are prepared under historical cost conventions on accrual concept and are in accordance with nepal accounting standards and other prevalent statutory requirement of nepal. the Accounting policies are applied consistentely by the company.

(2) use of estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Differences between actual and estimates are recognized in the period in which the results are known/materialized.

(3) fixed assets:

Fixed Assets are stated at cost and the cost includes all the expenses incurred up to putting the assets into use.

(4) depreciation:

Depreciation has not been charged on the additions and sales made during the financial year.

(5) Going concern:

Financial Statements of concern is presented on going concern basis.

a. notes to accounts

1. income statements:

Profit & Loss Statement has not been prepared in view of construction period of the company.

2. Regrouping of figures:

Previous Quarter figures have been regrouped/rearranged wherever necessary and the figures have been restated.

s. no. Particulars for the year ending

31st March, 2010

For the year ending

31st March, 2009

21. Depreciation Expenses 4,664,637.03 23,827.50

22. Less: Profit On Sale of Vehicle (1,230,373.21) –

23. less: Miscellaneous income (61,764.00) –

24. less: land acquisition capitalised (7,017,980.00) –

25. less: interest income (506,132.51) (1,245,743.38)

total for the Period (1st april, 2009 to 31st March, 2010) 190,725,151.07 83,735,764.75

add: accumulated expenses up to 31st March, 2009) 86,622,264.95 2,886,500.20

total accumulated expenses up to 31st March, 2010 277,347,416.02 86,622,264.95

scheduLe 14: continGent LiaBiLities

s no.



total – –

160


annexure a : adVance to the Party

s. no. name of the Party as on 31st March, 2010

(rs.)


(Rs.)

1. Belephi Jal Bidhyut co. ltd. 208,377.00 220,147.00

2. anK construction (p) ltd. – 18,950,000.00

3. iteco nepal 12,470,915.25 2,771,800.25

4. Mainawati steel industries (p) ltd. 20,366,650.00 12,366,650.00

5. MeH consultants (p) ltd. 475,000.00 475,000.00

6. narayan Bajaj & associates 10,000.00 –

7. Nepal Environment & Scientific Ltd. (NESS) 780,600.00 780,600.00

8. R K construction – 2,000,000.00

9. p s Ramechhap Jv – 2,100,000.00

10. Rasuwa-sva Joint ventures – 19,000,000.00

11. Ravindra nath – 1,547,566.00

12. iteco ceMat icgs 300,000.00 –

13. Ramechap sherpa construction pvt. ltd. 22,513,137.70 –

total 57,124,679.95 60,211,763.25

annexure B : adVance to staffadVance aGainst office Work

s. no. name of staff as on 31st March, 2010

(rs.)


(Rs.)

Advance for Office Works

1. Badri Rijal 58,923.00 100,000.00

2. anil Kumar dhungana – (2,276.00)

3. Balaji agency (custom clearing) – 62,874.00

4. Bandana Marandhar – 550.00

5. Baijay Karki – 117,433.00

6. Chabi Niraula – 16,140.00

7. chandra Bahadur (sirse House) 12,715.00 12,715.00

8. Chuda Sapkota – 17,495.00

9. Deepak Shrestha – (4,768.00)

10. ganesh thapa – 33,779.00

11. Jyoti Karki 14,600.00 15,000.00

12. Kanchan panta – 28,097.00

13. Krishna neupane – 50,000.00

14. Majuwa Bhunthan (Ramechhap) – 2,000.00

15. Markandeya Neupane – (22,076.16)

16. Mithila pandey 110,000.00 81,481.00

17. o.p. soni 16,000.00 16,000.00

18. Pashupati Kafle – 10,000.00

19. petty cash account – 516,904.00

20. Prakash Dhungana – (400.00)

21. Prakash Pokharel – 332,520.68

161


s. no. name of staff as on 31st March, 2010

(rs.)


(Rs.)

22. punya prasad Bhattarai – 5,000.00

23. Ram sharma – 8,790.00

24. Rameshwer dahal – 20,150.00

25. saran Kc – 27,715.00

26. sonam lama – 33,892.00

27. sunil Regmi – 37,265.00

28. Tika Lama – (4,000.00)

29. Uma Shankar Kamti – 3,290.00

30. uttam Magar – 3,000.00

31. vipin arora – 30,000.00

advances against staff salary

1. Chuda Sapkota – 6,036.00

2. Deepak Shrestha – 5,200.00

3. ganesh thapa – 36,000.00

4. saran Kc – 36,000.00

5. shyam Khatri – 4,600.00

6. sonam lama – 36,000.00

7. Tika Lama – 5,000.00

8. Uma Shankar Kamti 706.00 185,000.00

9. uttam Magar – 36,000.00

10. vipin arora 244,430.00 412,299.00

total 457,374.00 2,310,705.52

annexure B1 : Bank Guarantee & Letter of credit


(rs.)


(Rs.)

1. GUA PS 08/152 (Bank Guarantee) – 18,924.02

2. GUA PS 08/231 (Bank Guarantee) – 320,300.00

3. guarantee 012guacu09-0003 – 35,362.30

4. guarantee 012guacu09-0006 – 35,362.31

total – 409,948.63

162


annexure c : adVance for Land acquisition


(rs.)


(Rs.)1. Bhaviraj sunuwar – 200,000.002. Bhoj Raj ghimire – 583,907.003. Champak Sunuwar – 1,100,000.004. dev Raj ghimire – 1,990,062.505. dhir narayan (Kitta no. 1066) – 500.006. ganesh Bahadur shrestha – 5,000.007. gyan narayan shrestha – 124,219.008. Hari Kaji gautam – 2,000.009. Jivan Kumar nepal – 2,460,938.0010. Kar narayan shrestha – 251,562.0011. Khadag Kumari nepal – 1,689,062.0012. Khil nath timilsina 250,000.00 250,000.0013. Khayam Raj sunuwar – 300,000.0014. Khil prasad – 7,000.0015. Krishan Raj ghimire (Kitta no. 1183) 210,000.00 210,000.0016. lal prasad nepal – 365,616.0017. Lal Prasad Nepal (Brokrage) – 400,000.0018. Lok Kumar Nepal – 1,850,000.0019. Lok Prasad Nepal – 227,781.0020. Mal pot (nar Bahadur sunuwar) – 2,500.0021. Man Kumari sunuwar 220,000.00 220,000.0022. Man narayan shrestha – 50,000.0023. Mithu Borali – 20,000.0024. Mohan Kumar nepal – 100,000.0025. Mohan Raj ghimire – 1,222,656.0026. Murari sharma – 1,467,969.0027. nanda Raj ghimire – 320,313.0028. purna Bahadur shrestha – 25,000.0029. Rabanya Kumar Nepal – 100,000.0030. Ram chandra nepal – 100,000.0031. seshraj ghimire 355,469.00 1,000.0032. saroj sunuwar 250,000.00 250,000.0033. surya Kumari nepal – 1,277,344.0034. surya prasad nepal – 1,917,187.0035. Yadukul Gautam – 20,000.00

total 1,285,469.00 19,111,616.50

annexure d : other PayaBLes


(rs.)


(Rs.)1. anK construction co. pvt. ltd. 2,300,000.00 –2. p.s. Ramechhap Jv 1,473,484.15 –3. Rasuwa-sBa Joint ventures 1,500,000.00 –4. R. K. construction 2,235,901.61 –5. triveni properties pvt. ltd. 255,022.02 –6. pipco agency – 111,864.407. Staff Insurance Payable – 6,035.00

total 7,764,407.78 117,899.40

163


annexure e : Green Venture (P) Ltd.

details of tds Payabless. no. Particulars amount

1. Nepal Environmental and Scientific Services P. Ltd. 2,655.002. Divakar Vaidhya 8,500.003. Jyoti Karki 125.004. pashupati dhurge 3,292.005. Prakash Dhungana 4,646.006. Uma Shankar Kamti 2,654.007. vipin arora 22,075.008. triveni properties pvt. ltd. 225.509. Mithila pandey 12,223.00

10. triveni properties private limited 20,158.00total 76,554.00

annexure f : detaiL of office exPenses

details for the year ending on

31st March, 2010

For the year ending on

31st March, 2009Bank Charges 76,145.25 105,009.48postages and courier 5,913.00 11,142.00Electricity expenses 177,167.00 62,938.00Meeting Expenses 53,630.00 2,377.00local conveyance 8,890.00 34,371.00total 321,745.25 215,837.48

annexure G : detaiL of MisceLLaneous

details for the year ending on

31st March, 2010 (rs.)

For the year ending on

31st March, 2009 (Rs.)

Medicine Expenses 33,615.00 17,242.00Accidental Expenses 253,405.00Miscellaneous Expenses 248,405.47 1,013,596.28Electric Lock 4,375.00 –nail cutter 80.00 –Fooding Expenses 184,361.00 –Parking Expenses 1,710.00 –Clearing Expenses – 19,944.00photo copy 17,306.00 –Handling Expenses – –Election Expenses – –Water Expenses 14,340.00 –Canteen Expenses 4,500.00 42,378.00Gift Expenses 81,643.62 24,400.00Security Expenses 36,910.00 67,642.00news paper – 9,772.00Books & Periodicals 325.00 7,680.00Compensation Expenses 220,000.00 –employment Fund 27,680.00 –Donation Expenses 145,650.00 140,000.00Topo Sheet Expenses 13,490.00 –total 1,287,796.09 1,342,654.28

details of share capitalParticulars amountBhilwara energy 19,000,000.00nirjala Raut 1,500,000.00triveni energy 9,500,000.00total 30,000,000.00

164


casH FloW stateMent as at MaRcH 31, 2010

(Rs. '000)

as at 31.03.2010 as at 31.03.2009 cash fLoW froM oPeratinG actiVitiesa. 1. Net Profit / Loss before tax and extraordinary items

add:1. depreciation 4,664,637.03 23,827.502. Expenses written off – –3. Interest expense – –4. Accumulated Pre-Operating Expenses – –5. decrease (increase) in pre-operating

Expenses Pending for Capitalisation(190,725,151.07) (83,735,764.75)

2. Operating Cash flow before Change of Working Capital1. decrease (increase) in current assets

(Other than Cash & Bank Balance)22,960,582.28 (78,653,272.16)

2. Increase (Decrease) in Current liabilities 7,753,102.12 (342,519.34)3. interest paid – –4. Tax paid / refund – –5. Cash flow before extraordinary items – –6. Income/(Expense) from extraordinary items – –Net Cash flow from Operating Activities (A) (155,346,829.64) (162,707,728.75)

B. Cash flow from Investing Activities – –1. Interest / Dividend received – –2. Sale (Purchase) of Fixed assets or Investment (20,623,436.09) (53,192,225.15)3. decrease (increase) in loans, advances and deposits – –4. Decrease (Increase) in Construction Work in progress – –Net cash flow from Investing Activities (B) (20,623,436.09) (53,192,225.15)

c. Cash flow from Financing Activities – –1. Issue of Shares (except bonus shares) – 28,500,000.002. advance against shares 188,732,048.00 189,045,840.923. dividends paid – –4. investment in shares – –

5. others – –

Net cash flow from Financing Activities (C) 188,732,048.00 217,545,840.92net increase (decrease) in cash and cash equivalents = (a+B+c) 12,761,782.27 1,645,887.02Cash and cash equivalents at the beginning of the year 2,581,951.19 936,064.17cash and cash equivalents at the end of the year 15,343,733.46 2,581,951.19




Group Salient Features

• The Group has a turnover of Rs. 4,000 crore - Export constitutes 46% (Rs. 1,840

crore).

• One of the largest textile houses in the country with a turnover of over Rs. 2,450 crore

- Export constitutes 42% (Rs. 1,025 crore).

• One of leading manufacturer and exporter of Graphite Electrodes in the country with

turnover of Rs. 1,084 crore - Export constitutes 74% (Rs. 807 crore).

• Largest producer and exporter of Synthetic Blended Yarn and largest range in Greige,

Dyed and Mélange Yarn with total spindleage capacity of nearly 5 Lacs.

• Manufacturer of Wool Blended and Premium Light Weight Fabrics, Worsted Fabric,

Silk Synthetic fashion Fabric and Denim Fabric.

• India's one of the largest vertically integrated Knitwear Company.

• Manufacturer of Flame Retardants, Air – texturized Yarn and Automotive Furnishing

Fabric.

• World's largest single site plant of Graphite Electrodes with a production capacity of

66,000 TPA.

• The Group has 120 MW Thermal Power Plants, approx. 300 MW Hydro Power Plants &

60 MW HFO based Captive Power Plants.

• The Group generated 1,300 Million power units in the year 2009-10.

• A consulting Company providing engineering consultancy services for Hydro Power

Projects.

Group Companies

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3622 24

23

35

3034 26

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1

3 153716

4

8

5

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172

12

20 19

21

27

11

31

29 33

9

28

10

18

32

LNJ Bhilwara Group

TEXTILES

GRAPHITE

POWER

INFORMATION TECHNOLOGY

OFFICES

RSWM Limited

1. Kharigram Fibre Dyeing, Spinning Dyed & Grey Yarn

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

3. Mandpam Melange, Cotton Dyed Yarn & Yarn Dyeing

4. Rishabhdev Spinning PV Blended Grey Yarn

5. Ringas Fibre Dyeing & Spinning Dyed Yarn

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

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

8. LNJ Nagar, Mordi Thermal Power

Cheslind Textiles Ltd.

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

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

Maral Overseas Ltd.

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

12. Maral Sarovar Captive Thermal Power



BSL Ltd.

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

16. Jaisalmer Wind Power Generation

BMD Pvt. Ltd.

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

Bhilwara Technical Textiles Ltd.

18. LNJ Nagar, Mordi Technical Textiles

HEG Ltd.

19. Mandideep Graphite Electrodes

20. Mandideep Captive Thermal Power

21. Tawa Captive Hydro Electric Power

Bhilwara Energy Ltd.

22. Pathankot UBDC Stage III Hydro Electric Power Generation

Malana Power Company Ltd.

23. Malana (Kullu) Hydro Electric Power Generation

AD Hydro Power Ltd.

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


25. Tawang Nyam Jang Chhu Hydro Electric Power Generation

Indo Canadian Consultancy Services Ltd.

26. Noida Power Engineering Services

Bhilwara Scribe Pvt. Ltd.

27. Bhopal Medical Transcription Services

28. Bengaluru Medical Transcription Services

Bhilwara Infotech Ltd.

29. Bengaluru IT Services

Corporate Office

30. Noida (NCR-Delhi)

Regional / Marketing

31. Mumbai 35. Ludhiana

32. Kolkata 36. Amritsar

33. Bengaluru 37. Bhilwara

34. New Delhi

25

LEADING BY EXAMPLE

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

Website : www.bhilwaraenvergy.com / www.lnjbhilwara.com

Bhilwara Energy Limited

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