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Notes to Accounts of Energy Development Company Ltd.
Mar 31, 2024
3.12 Provisions, Contingent liabilities and Contingent assets
Provisions involving substantial degree of estimation in measurement are recognized when there is a legal or constructive obligation as a result of past events and it is probable that there will be an outflow of resources and a reliable estimate can be made of the amount of obligation. Provisions are not recognised for future operating losses. The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.
Contingent liabilities are not recognized and are disclosed by way of notes to the standalone financial statements when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the control of the Company or when there is a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the same or a reliable estimate of the amount in this respect cannot be made.
Contingent assets are not recognised but disclosed in the Standalone Financial Statements by way of notes to accounts when an inflow of economic benefits is probable.
3.13 Employee benefits
Short term employee benefits: Employee benefits are accrued in the year in which services are rendered by the employees. Short term employee benefits are recognized as an expense in the statement of profit and loss for the year in which the related service is rendered.
Defined contribution plan: Contribution to defined contribution plans such as provident fund, etc, is being made in accordance with statute and are recognised as and when incurred.
Defined benefit plan: Contribution to defined benefit plans consisting of contribution to gratuity fund are determined at close of the year at present value of the amount payable using actuarial valuation techniques. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized immediately in the Balance Sheet with a corresponding debit or credit to Retained Earnings through Other Comprehensive Income in the period in which they occur.
Other Long Term Employee Benefits: Other long term employee benefits consisting of leave encashment are determined at close of the year at present value of the amount payable using actuarial valuation techniques. The changes in the amount payable including actuarial gains and losses are recognised in the Statement of Profit and Loss.
All defined benefit plans obligations are determined based on valuations, as at the Balance Sheet date, made by independent actuary using the projected unit credit method. The classification of the Company''s net obligation into current and noncurrent is as per the actuarial valuation report.
3.14 Revenue recognition Revenue from operations
The Company recognises revenue when it transfers control over the products (Power) or services to a customer at an amount that reflects the consideration to which the Company becomes entitled on such transaction in terms of agreement and/or orders as applicable to the transaction. This excludes the rebates, discounts, taxes and other collections on behalf of the third parties.
Sale of Power
Revenue in respect of sale of electricity generated is accounted for on delivery to the grid under long term/ mid-term Power Purchase Agreement (PPA) read with the regulations of State Electricity Regulatory Commission and/or short-term contracts/ merchant basis on completion of supply to the respective customers.
Revenue from third party power plant under operations and maintenance is recognised when service under the contract are rendered.
Revenue from construction contract
Revenue from construction contracts is recognized based on completion of the performance obligation in terms of the contract when the performance creates an asset with no alternative use and an enforceable right to payment as performance is completed.
Other Income
Dividend Income
Dividend income from investment in equity shares is recognised when the shareholders'' right to receive payment has been established.
Interest Income
Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts the estimated future cash receipts through the expected life of the financial asset to that asset''s net carrying amount on initial recognition.
3.15 Borrowing Cost
Borrowing cost comprises of interest and other costs incurred in connection with the borrowing of the funds. All borrowing costs are recognized in the Statement of Profit and Loss using the effective interest method except to the extent attributable to qualifying Property Plant Equipment which is capitalized to the cost of the related assets. A qualifying PPE is an asset that necessarily takes a substantial period of time to get ready for its intended use.
3.16 Taxes on income
Income tax expense representing the sum of current tax expense and the net charge of the deferred taxes is recognized in profit or loss except to the extent that it relates to items recognized directly in equity or other comprehensive income.
Current Tax
Current tax is provided on the taxable income and recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. Advance tax and provisions are presented in the balance sheet after setting off advance tax paid and income tax provision for the respective financial year.
Interest expenses and penalties, if any, related to income tax are included in finance cost and other expenses respectively. Interest income, if any, related to income tax is included in "Other income".
Deferred Tax
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences between the carrying amount of assets and liabilities in the standalone financial statements and the corresponding tax basis used in the computation of taxable profit as well as for unused tax losses or credits. In principle, deferred tax liabilities are recognized for all taxable temporary differences and deferred tax assets are recognized to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilized.
Deferred tax assets & liabilities have been offset wherever the Company has a legally enforceable right to set off current tax assets against current tax liabilities & where deferred tax assets & liabilities relate to income tax levied by the same taxation authority.
Deferred taxes are calculated at the enacted or substantially enacted tax rates that are expected to apply when the asset or liability is settled. Deferred tax is charged or credited to profit or loss, except when it relates to items credited or charged directly to other comprehensive income or equity, in which case the corresponding deferred tax is also recognized directly in other comprehensive income or equity.
Deferred tax assets include Minimum Alternate Tax (MAT) measured in accordance with the tax laws in India, which is likely to give future economic benefits in the form of availability of set off against future income tax liability and such benefit can be measured reliably and it is probable that the future economic benefit associated with the same will be realised.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be utilized.
3.17 Earnings per share
Basic earnings per share is calculated by dividing the net profit/loss for the year by the weighted average number of equity shares outstanding during the period.
Diluted earnings per share is computed using the net profit/loss for the year and weighted average number of equity and potential equity shares outstanding during the year including share options, convertible preference shares and debentures, except where the result would be anti-dilutive. Potential equity shares that are converted during the year are included in the calculation of diluted earnings per share, from the beginning of the year or date of issuance of such potential equity shares, to the date of conversion.
3.18 Statement of Cash flows
Cash flows are reported using indirect method, whereby profit/loss before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
3.19 Segment Reporting
The identification of operating segment is consistent with performance assessment and resource allocation by the Chief Operating Decision Maker. An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses including revenues and expenses that relate to transactions with any of the other components of the Company and for which discrete financial information is available. Operating segments of the Company comprises three segments namely, Generating division, Contract division and Trading division. All operating segments operating results are reviewed regularly by the Chief Operating Decision Maker to make decisions about resources to be allocated to the segments and assess their performance.
NOTE 4
CRITICAL ACCOUNTING JUDGMENTS, ASSUMPTIONS AND KEY SOURCES OF ESTIMATION AND UNCERTAINTY
The preparation of the standalone financial statements in conformity with the recognition and measurement principle of Ind AS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and
liabilities at the date of the standalone financial statements and reported amounts of revenues and expenses during the period. Accounting estimates and underlying assumptions are reviewed on an ongoing basis and could change from period to period. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Revisions to accounting estimates are recognised prospectively. Actual results may differ from these estimates. Differences between the actual results and estimates are recognized in the year in which the results are known/materialized and, if material, their effects are disclosed in the notes to the standalone financial statements.
The application of accounting policies that require significant areas of estimation, uncertainty and critical judgments and the use of assumptions in the standalone financial statements have been disclosed below. The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are discussed below:
4.1 Depreciation/amortization of and impairment loss on property, plant and equipment/intangible assets.
Depreciation on assets of generating plant and equipment, building and roads, hydraulic works, transmission lines, transformers and cable network has been provided on straight line method over useful life as per the implementation/ other agreement with the authorities. Values of spares related to the machinery are depreciated over the effective life of the plant and equipment to which they relate. ROU assets are depreciated over the lease term or expected useful life of the asset, whichever is lower. Intangible assets are amortised over a period of five years. The Company reviews the estimated useful lives of the assets regularly in order to determine the amount of depreciation/ amortization to be recorded during any reporting period. This reassessment may result in change in such expenses in future periods.
The Company reviews its carrying value of its tangible and intangible assets whenever there is objective evidence that the assets are impaired. In such situation assets recoverable amount is estimated which is higher of asset''s or cash generating units (CGU) fair value less cost of disposal and its value in use. In assessing value in use the estimated future cash flows are discounted using pre-tax discount rate which reflects the current assessment of time value of money. In determining fair value less cost of disposal, recent market realisations are considered or otherwise in absence of such transactions appropriate valuations are adopted.
4.2 Arrangements containing leases
Ind AS 116 requires lessees to determine the lease term as the non-cancellable period of a lease adjusted with any option to extend or terminate the lease if the use of such option is reasonably certain. The Company makes an assessment on the expected lease term on a lease-by-lease basis and thereby assesses whether it is reasonably certain that any option to extend or terminate the contract will be exercised. In evaluating the lease term, the Company considers factors such as any significant leasehold improvements undertaken over the lease term, costs relating to the termination of the lease and the importance of the underlying asset to the Company''s operations taking into account the location of the underlying asset and the availability of suitable alternatives. The lease term in future periods is reassessed to ensure that the lease term reflects the current economic circumstances.
4.3 Impairment allowances on financial assets
The Company evaluates whether there is any objective evidence that financial asset including loan, trade and other receivables are impaired and determines the amount of impairment allowance as a result of the inability of the concerned parties to make required payments. The Company bases the estimates on the ageing of the trade receivables balance, credit-worthiness of the trade receivables, historical write-off experience and these factors are subject to variations leading to consequential impact on the amounts considered in the standalone financial statements.
4.4 Application of "Service concession arrangements" accounting
In assessing the applicability of the service concession arrangement with respect to hydro power plants of the Company, the management has exercised significant judgement considering the ownership of the assets and consideration there against, operational capabilities and ability to sell the power generated to the consumer and determine the rate in this respect, in concluding that the arrangements with the Company as such do not meet the criteria for recognition as service concession arrangements.
4.5 Current tax and Deferred tax
Significant judgment is required in determination of taxability of certain income and deductibility of certain expenses during the estimation of the provision for income taxes.
The extent to which deferred tax assets can be recognised is based on the assessment of the probability of the Company''s future taxable income against which the deferred tax assets can be utilised. In addition, significant judgement is required in assessing the impact of any legal or economic benefits.
4.6 Defined benefit obligations (DBO)
Critical estimate of the DBO involves a number of critical underlying assumptions such as standard rates of inflation, mortality, discount rate, anticipation of future salary increases etc. as estimated by Independent Actuary appointed for this purpose by the Management. Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses.
4.7 Provisions and contingencies
Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification of the liability requires the application of judgement to existing facts and circumstances, which can be subject to change.
Management judgment is required for estimating the possible outflow of resources, if any, in respect of contingencies/claim/ litigations against the Company as it is not possible to predict the outcome of pending matters with accuracy.
The carrying amounts of provisions and liabilities and estimation for contingencies are reviewed regularly and revised to take account of changing facts and circumstances.
20.1 Refer Standalone Statement of Changes in Equity for movement in balances of items of other equity.
Nature and purpose of reserves :
20.2 Capital reserve Capital reserve includes:
(a) '' 1,240.00 lakhs (31st March, 2023''1,240.00 lakhs) representing the reserves arising on forfeiture of 75,00,000 share warrants issued on preferential basis.
(b) '' 11.65 lakhs (31st March, 2023''11.65 lakhs) representing reserves arising on amalgamation pursuant to the Scheme of Arrangement with erstwhile Dhanashree Projects Limited. The said scheme was sanctioned by the Hon''ble High Court of Bangalore and Kolkata vide order dated 12th August, 2010 and 15th September, 2010 respectively.
20.3 Securities premium
Securities premium represents the amount received in excess of face value of equity shares issued by the Company and is to be utilised for as specified under section 52 of the Companies Act, 2013.
20.4 General reserve
The general reserve is created from time to time by appropriating profits from retained earnings. The general reserve is created by transfer from one component of equity to another and accordingly it is not reclassified to profit or loss.
20.5 Retained earnings
Retained earnings generally represents the undistributed profit/amount of accumulated earnings of the company. Any actuarial gains/ (losses) arising on remeasurement of defined benefit plan have been recognised in Retained earnings.
Notes : (As certified by Independent Actuary)
1. Assumptions relating to future salary increases, attrition, interest rate for discount and overall expected rate of return on assets have been considered based on relevant economic factors such as inflation, seniority, promotion, market growth and other factors as applicable to the period over which the obligation is expected to be settled.
2. The expected return on plan assets is based on market expectation at the beginning of the year. The rate of return on long term government bonds is taken as reference for this purpose.
3. In respect of funded gratuity, the funds are managed by the insurer and therefore the percentage or amount that each major category constitutes the fair value of total plan assets and effect thereof on overall expected rate of return on asset is not ascertainable.
4. Acquisition adjustment represents amount in respect of certain employees transferred into/ transferred from the Company.
(A) Nature of goods and services
Majority of Revenue : The revenue of the Company for the year ended 31st March, 2024 and 31st March, 2023 comprises of income from sale of electricity. The following is a description of the principal activities:
(i) Revenue from sale of electricity
The major revenue of the Company comes from sale of electricity. The Company is principally engaged in production and sale of bulk power from hydro power and wind power mills to various electricity boards and/ or sale to other parties through Indian Energy Exchange (IEX) or otherwise as per the terms agreed bilaterally on short term basis. The Company owns and operates a 9 MW Hydro-Electric Power project at Harangi, Karnataka and 6 MW Harangi Hydro-Electric Power Plant in Karnataka. It has two operating windmills of 1.5 MW each located in Hassan and Chitradurga district in the state of Karnataka.
Power is supplied in accordance with the sale price, payment terms and other conditions as per the Power Purchase Agreements ("PPA") entered into with various government institutions read along with the regulations of State Electricity Regulatory commission and/ or short term contracts/ merchant basis arrangements on completion of supply to the respective customers. Electricity generated each month is sold to the institutions set up under the government and/ or other parties through Indian Energy Exchange (IEX) or otherwise as per the terms agreed bilaterally on short term basis and maximum credit period of up to 15 days is allowed for payment.
(ii) Income from construction contract
The Company engages in construction, development, implementation, operation & maintenance of projects and consultancies. The Company has executed various infrastructure related projects like bridges and hydro projects on contractual basis. A Memorandum of Understanding (MOU) is entered into with Public Works Department (PWD) of Dharamnagar, Agartala, Khowai division of Tripura and revenue from such activity is recognised progressively on percentage of completion method. Stage of completion of contracts in progress is assessed or estimated in proportion to the contract cost incurred relative to the estimated total cost of the contract.
The construction project shall be executed in the manner as prescribed in the MOU. Monthly Running account bill (R.A bill) shall be submitted to the departments within 30 days from the date of issue of completion certificate. All duties and taxes (Works contract tax, labour welfare, Cess, Goods and Services Tax) shall be borne by the Company.
(iii) Trading Division
The Company is basically engaged in purchase and sale of electrical equipment and metals. The Company purchases such equipment from various parties and sells them to its customers.
Revenue is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable and the associated costs can be estimated reliably. After the vendor accepts delivery, a credit period of 30 days is allowed for payment.
During the year ended 31st March, 2024 and 31st March, 2023, there have been no trading activities in the Company.
47 Capital Management
The Company follows a capital management strategy. The primary objective is to ensure that Company maintains a healthy capital ratio in order to support its business operations, have sufficient financial flexibility for borrowing requirements, if any, in future and to maximise shareholder value. The Company''s objective when managing capital is to safeguard their ability to continue as a going concern so that they can continue to provide returns for shareholders and benefits for other stake holders.
(B) Fair Valuation Techniques
The fair values of the financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The following methods and assumptions were used to estimate the fair values:
1. The fair value of cash and cash equivalents, trade receivables, trade payables, current borrowings, current financial liabilities and assets approximate their carrying amount largely due to the short-term nature of these instruments. The management considers that the carrying amounts of financial assets and financial liabilities recognised at nominal cost/amortised cost in the standalone financial statements approximate their fair values.
2. Long-term debts are from bodies corporate and promoter and the rate of interest are reviewed annually.
49 Financial risk management objectives and policies
The Company''s activities expose it to the following risks:
(a) Credit risk
(b) Liquidity risk
(c) Market risk
(a) Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. Trade receivables of the Company mainly comprises of receivables from state electricity boards and government department and hence such risk is negligible. Trade receivables in case of trading operations are from various private parties and are therefore exposed to general credit risk. The Company has a policy to monitor such risk on an ongoing basis. However, the Company is exposed to credit risk from its lending activities to its subsidiaries.
The Company establishes an allowance for impairment that represents its estimate of incurred losses in respect of receivables.
The carrying amount of respective financial assets recognised in the standalone financial statements, (net of impairment losses) represents the Company''s maximum exposure to credit risk.
The credit risk on cash and cash equivalents and deposits with banks are insignificant as counterparties are banks with high credit ratings.
(b) Liquidity Risk
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. The Company is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. The Company monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by management to finance the Company''s operations and to mitigate the effects of fluctuations in cash flows.
The following tables detail the Company''s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The information included in the tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows. The contractual maturity is based on the earliest date on which the Company may be required to pay.
The Company has current financial assets which will be realised in ordinary course of business and unused line of credit. The Company monitors its rolling forecast of its liquidity requirements to ensure it has sufficient cash to meet expected operational requirements.
The Company relies on mix of borrowings and operating cash flows to meet its need for funds and ensures that it does not breach any financial covenants stipulated by the lender.
(c) Market risk
Market risk is the risk or uncertainty arising from possible market price movements resulting in fluctuation of the fair value or future cash flows of a financial instrument. The major components of Market risk are foreign currency risk, interest rate risk and other price risk. Financial instruments affected by market risk includes trade receivables, borrowings and trade payables.
(i) Foreign currency risk
The Company does not have significant transaction in foreign currency and accordingly it is not exposed to foreign currency risk. There are certain old outstanding balances which are unhedged. The details of the unhedged foreign currency exposures are given in note no. 43. The management continuously reviews the exchange rates and are in process of settling the balances.
(ii) Interest rate risk
The Company''s debt exposure includes borrowings from bodies corporate, infusion of funds from promoter and cash credit facility from bank. Borrowings from bodies corporate and promoter are subject to fixed interest rate which can be modified upon mutual agreement between the parties involved. Further, interest payable on cash credit facility is also contracted at fixed rate. Hence, the Company does not have any significant exposure to interest rate risk.
52(i) Various debit and credit balances including in respect of loans, advances, creditors, etc are subject to confirmation and consequential reconciliation thereof.
52(ii) Security deposits/retention money, advances and balances with government authorities include balances of 298.81 lakhs which are lying outstanding for a considerable period. Pending outwise of recovery of the said amount, no provision against this has been considered necessary.
53 Income Tax Authorities had conducted search under section 132 of the Income Tax Act, 1961 at the Company''s Corporate Office. During the previous year, the Company has received Assessment Orders for assessment of Income Tax for the years 2011-2012 to 2020-2021 and demand notices aggregating to '' 18,817.47 lakhs had been issued to the Company. Necessary appeals against these notices have been filed before the Commissioner of Income Tax (Appeals) and the matter is pending as on this date. Further, pursuant to the application made by the Company in respect of various demands aggregating to '' 18,939.44 lakhs (including demands pertaining to other matters) pending in appeals, etc before Income Tax Authorities, the demands have been stayed. Pending resolution of the matters, '' 1,235.03 lakhs (including '' 153.30 lakhs recovered from the bank accounts of the Company) have been deposited till 31st March, 2024 in instalments as agreed upon with the Income Tax Authorities and shown as "Duties and taxes paid under protest" under "Other non-current assets" (note no. 11). As per the legal and professional advice received, the allegations and contentions made by the Income Tax Authorities are legally not tenable and no liability as such is expected to arise in this respect. Matter being pending in appeal, impact in this respect as such are not determinable.
54 No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries") with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall, whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
55 Comparative figures of the previous year have been regrouped/ rearranged wherever considered necessary to make them comparable with those of the current year''s figures.
As per our Report of even date attached For and on behalf of the Board of Directors of
For A L P S & Co. Energy Development Company Limited
Chartered Accountants
Firm''s Registration No ⢠313132E Sd/- Pankaja Kumari Singh, Director (DIN: 00199454), Place : New Delhi
Sd/- A.K. Khetawat Sd/- Satyendra Pal Singh, Executive Director (DIN: 01055370)
Partner Sd/- Aman Jain, Director (DIN: 08187995)
Membership N°.: 052751 Sd/- Vishal Sharma, Director (DIN: 08773037)
Place : Kolkata Place : Kolkata Sd/- Prabir Goswami, Chief Financial Officer
Dated : 29th May, 2024 Dated : 29th May, 2024 Sd/- Vijayshree Binnani, Company Secretary
Mar 31, 2023
3.12 Provisions, Contingent liabilities and Contingent assets
Provisions involving substantial degree of estimation in measurement are recognized when there is a legal or constructive obligation as a result of past events and it is probable that there will be an outflow of resources and a reliable estimate can be made of the amount of obligation. Provisions are not recognised for future operating losses. The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.
Contingent liabilities are not recognized and are disclosed by way of notes to the financial statements when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or when there is a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the same or a reliable estimate of the amount in this respect cannot be made.
Contingent assets are not recognised but disclosed in the Financial Statements by way of notes to accounts when an inflow of economic benefits is probable.
3.13 Employee benefits
Short term employee benefits: Employee benefits are accrued in the year in which services are rendered by the employees. Short term employee benefits are recognized as an expense in the statement of profit and loss for the year in which the related service is rendered.
74 | Annual Report B Accounts 2D22-2D23
Defined contribution plan: Contribution to defined contribution plans such as provident fund, etc, is being made in accordance with statute and are recognised as and when incurred.
Defined benefit plan: Contribution to defined benefit plans consisting of contribution to gratuity fund are determined at close of the year at present value of the amount payable using actuarial valuation techniques. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized immediately in the Balance Sheet with a corresponding debit or credit to Retained Earnings through Other Comprehensive Income in the period in which they occur.
Other Long Term Employee Benefits: Other long term employee benefits: Other long term employee benefits consisting of leave encashment are determined at close of the year at present value of the amount payable using actuarial valuation techniques. The changes in the amount payable including actuarial gains and losses are recognised in Other Comprehensive Income.
All defined benefit plans obligations are determined based on valuations, as at the Balance Sheet date, made by independent actuary using the projected unit credit method. The classification of the Company''s net obligation into current and noncurrent is as per the actuarial valuation report.
3.14 Revenue Recognition Revenue from Operations
The Company recognises revenue when it transfers control over the products (Power) or services to a customer at an amount that reflects the consideration to which the Company becomes entitled on such transaction in terms of agreement and/ or orders as applicable to the transaction. This excludes the rebates, discounts, taxes and other collections on behalf of the third parties.
Sale of Power
Revenue in respect of sale of electricity generated is accounted for on delivery to the grid under long term/ mid-term Power Purchase Agreement (PPA) read with the regulations of State Electricity Regulatory Commission and/ or short-term contracts/ merchant basis on completion of supply to the respective customers.
Revenue from third party power plant under operations and maintenance is recognised when service under the contract are rendered.
Revenue from Construction Contract
Revenue from construction contracts is recognized based on completion of the performance obligation in terms of the contract when the performance creates an asset with no alternative use and an enforceable right to payment as performance is completed.
Other Income
Dividend Income
Dividend income from investment in equity shares is recognised when the shareholders'' right to receive payment has been established.
Interest Income
Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts the estimated future cash receipts through the expected life of the financial asset to that asset''s net carrying amount on initial recognition.
3.15 Borrowing Cost
Borrowing cost comprises of interest and other costs incurred in connection with the borrowing of the funds. All borrowing costs are recognized in the Statement of Profit and Loss using the effective interest method except to the extent attributable to qualifying Property Plant Equipment which is capitalized to the cost of the related assets. A qualifying PPE is an asset that necessarily takes a substantial period of time to get ready for its intended use.
3.16 Taxes on income
Income tax expense representing the sum of current tax expense and the net charge of the deferred taxes is recognized in profit and loss except to the extent that it relates to items recognized directly in equity or other comprehensive income.
Current Tax
Current tax is provided on the taxable income and recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. Advance tax and provisions are presented in the balance sheet after setting off advance tax paid and income tax provision for the current year.
Interest expenses and penalties, if any, related to income tax are included in finance cost and other expenses respectively. Interest income, if any, related to income tax is included in "Other income".
Deferred Tax
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of taxable profit as well as for unused tax losses or credits. In principle, deferred tax liabilities are recognized for all taxable temporary differences and deferred tax assets are recognized to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilized.
Deferred tax assets & liabilities have been offset wherever the Company has a legally enforceable right to set off current tax assets against current tax liabilities & where deferred tax assets & liabilities relate to income tax levied by the same taxation authority.
Deferred taxes are calculated at the enacted or substantially enacted tax rates that are expected to apply when the asset or liability is settled. Deferred tax is charged or credited to profit or loss, except when it relates to items credited or charged directly to other comprehensive income or equity, in which case the corresponding deferred tax is also recognized directly in other comprehensive income or equity.
Deferred tax assets include Minimum Alternate Tax (MAT) measured in accordance with the tax laws in India, which is likely to give future economic benefits in the form of availability of set off against future income tax liability and such benefit can be measured reliably and it is probable that the future economic benefit associated with the same will be realised.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be utilized.
3.17 Earnings per share
Basic earnings per share is calculated by dividing the net profit/loss for the year by the weighted average number of equity shares outstanding during the period.
Diluted earnings per share is computed using the net profit/loss for the year and weighted average number of equity and potential equity shares outstanding during the year including share options, convertible preference shares and debentures, except where the result would be anti-dilutive. Potential equity shares that are converted during the year are included in the calculation of diluted earnings per share, from the beginning of the year or date of issuance of such potential equity shares, to the date of conversion.
3.18 Statement of Cash flows
Cash flows are reported using indirect method, whereby profit/ loss before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
3.19 Segment Reporting
The identification of operating segment is consistent with performance assessment and resource allocation by the Chief Operating Decision Maker. An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incurred expenses including revenues and expenses that relate to transactions with any of the other components of the Company and for which discrete financial information is available. Operating segments of the Company comprises three segments namely, Generating division, Contract division and Trading division. All operating segments operating results are reviewed regularly by the Chief Operating Decision Maker to make decisions about resources to be allocated to the segments and assess their performance.
NOTE 4
CRITICAL ACCOUNTING JUDGMENTS, ASSUMPTIONS AND KEY SOURCES OF ESTIMATION AND UNCERTAINTY
The preparation of the standalone financial statements in conformity with the recognition and measurement principle of Ind AS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the standalone financial statements and reported amounts of revenues and expenses during the period. Accounting estimates and underlying assumptions are reviewed on an ongoing basis and could change from period to period. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Revisions to accounting estimates are recognised prospectively. Actual results may differ from these estimates. Differences between the actual results and estimates are recognized in the year in which the results are known / materialized and, if material, their effects are disclosed in the notes to the standalone financial statements.
The application of accounting policies that require significant areas of estimation, uncertainty and critical judgments and the use of assumptions in the standalone financial statements have been disclosed below. The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are discussed below:
4.1 Depreciation/ amortization of and impairment loss on property, plant and equipment/ intangible assets.
Depreciation on assets of generating plant and machinery, building and roads, hydraulic works, transmission lines, transformers and cable network has been provided on straight line method over useful life as per the implementation/ other agreement with the authorities. Values of spares related to the machinery are depreciated over the effective life of the plant and machinery to which they relate. ROU assets are depreciated over the lease term or expected useful life of the asset, whichever is lower. Intangible assets are amortised over a period of five years. The Company reviews the estimated useful lives of the assets regularly in order to determine the amount of depreciation/ amortization to be recorded during any reporting period. This reassessment may result in change in such expenses in future periods.
The Company reviews its carrying value of its tangible and intangible Assets whenever there is objective evidence that the assets are impaired. In such situation assets recoverable amount is estimated which is higher of asset''s or cash generating units (CGU) fair value less cost of disposal and its value in use. In assessing value in use the estimated future cash flows are discounted using pre-tax discount rate which reflects the current assessment of time value of money. In determining fair value less cost of disposal, recent market realisations are considered or otherwise in absence of such transactions appropriate valuations are adopted.
4.2 Arrangements containing leases
Ind AS 116 requires lessees to determine the lease term as the non-cancellable period of a lease adjusted with any option to extend or terminate the lease if the use of such option is reasonably certain. The Company makes an assessment on the expected lease term on a lease-by-lease basis and thereby assesses whether it is reasonably certain that any options to extend or terminate the contract will be exercised. In evaluating the lease term, the Company considers factors such as any significant leasehold improvements undertaken over the lease term, costs relating to the termination of the lease and the importance of the underlying asset to the Company''s operations taking into account the location of the underlying asset and the availability of suitable alternatives. The lease term in future periods is reassessed to ensure that the lease term reflects the current economic circumstances.
4.3 Impairment allowances on financial assets
The Company evaluates whether there is any objective evidence that financial asset including loan, trade and other receivables are impaired and determines the amount of impairment allowance as a result of the inability of the concerned parties to make required payments. The Company bases the estimates on the ageing of the trade receivables balance, credit-worthiness of the trade receivables, historical write-off experience and these factors are subject to variations leading to consequential impact on the amounts considered in the standalone financial statements.
4.4 Application of "Service concession arrangements" accounting
In assessing the applicability of the service concession arrangement with respect to hydro power plants of the Company, the management has exercised significant judgement considering the ownership of the assets and consideration there against, operational capabilities and ability to sell the power generated to the consumer and determine the rate in this respect, in concluding that the arrangements with the Company as such do not meet the criteria for recognition as service concession arrangements.
4.5 Current tax and Deferred tax
Significant judgment is required in determination of taxability of certain income and deductibility of certain expenses during the estimation of the provision for income taxes.
The extent to which deferred tax assets can be recognised is based on the assessment of the probability of the Company''s future taxable income against which the deferred tax assets can be utilised. In addition, significant judgement is required in assessing the impact of any legal or economic benefits.
4.6 Defined benefit obligations (DBO)
Critical estimate of the DBO involves a number of critical underlying assumptions such as standard rates of inflation, mortality, discount rate, anticipation of future salary increases etc. as estimated by Independent Actuary appointed for this purpose by the Management. Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses.
4.7 Provisions and contingencies
Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification of the liability requires the application of judgement to existing facts and circumstances, which can be subject to change.
Management judgment is required for estimating the possible outflow of resources, if any, in respect of contingencies/ claim/ litigations against the Company as it is not possible to predict the outcome of pending matters with accuracy.
The carrying amounts of provisions and liabilities and estimation for contingencies are reviewed regularly and revised to take account of changing facts and circumstances.
7.1 (a) The shares (3,00,00,000 equity shares and 2,20,00,000 preference shares) held in Ayyappa Hydro Power Limited, a subsidiary are
pledged with the lender of the said subsidiary.
(b) In respect of one of the wholly owned subsidiary company, the net worth has been completely eroded and the current liabilities have exceeded current assets as on 31st March, 2023. Impairment in the value of investments in equity and preference shares aggregating to ''5,200.00 Lakhs of the said subsidiary, considering these to be strategic in nature, pending determination thereof has not been considered necessary.
7.2 The Company has pledged 2,700 (out of 5,100) equity shares held in Eastern Ramganga Valley Hydel Projects Company Private Limited and 2,700 (out of 5,100) equity shares held in Sarju Valley Hydel Projects Company Private Limited, subsidiaries of the company with other investors of these subsidiaries till implementation of the agreement mentioned in note no. 7.3(a) below. The Company has received in advance, consideration for sale of these investments as shown in note no. 26.
7.3 (a) In terms of an agreement dated 9th November, 2015, for transfer of 76% of the Company''s investment in various erstwhile wholly
owned subsidiaries undertaking hydel power plants in the State of Arunachal Pradesh and Uttarakhand having aggregate capacity of 660 MW approximately (herein referred to as Arunachal Pradesh and Uttarakhand Undertaking respectively), to another strategic investor, investment of ''2,200.03 Lakhs as on 31st March, 2023 representing 24% and 51% of the equity in Arunachal Pradesh and Uttarakhand Undertaking respectively and 24% in preference shares have been continued to be held by the Company.
(b) The investment in subsidiaries/ associate have been carried at cost. Memorandum of Agreement for execution of two of the hydel power plants undertaken in Arunachal Pradesh transferred as per note no. 7.3(a) above have been terminated by the State Government. Pending evaluation of the status of the project, impairment in the value of investment of ''2,200.03 Lakhs as given under note no. 7.3(a) above, loans of Rs. 681.16 Lakhs and other receivables of ''46.41 Lakhs outstanding from the aforesaid subsidiaries/ associate have not been determined and given effect to in the standalone financial statements.
(c) Sale consideration of ''4,994.52 lakhs pertaining to Arunachal Pradesh Undertaking in terms of note no. 7.3(a) above is outstanding as on 31st March, 2023. Pending fulfilment of conditions and approvals etc. in terms of the agreement and pending recovery thereof, the said amount has been considered good and recoverable and is included under "Other financial assets- current".
7.4 In pursuance of section 187(2)(c) of the Companies Act, 2013, investments purchased [mentioned in (xi), (xviii) and (xix)] by the Company, are still lying in the name of transferor for want of performance of obligation undertaken by the Company, as per agreement entered with the seller.
20.1 Refer Standalone Statement of Changes in Equity for movement in balances of items of other equity.
Nature and purpose of reserves :
20.2 Capital Reserve Capital Reserve includes:
(a) 1,240.00 Lakhs (31st March, 2022 - ''1,240.00 Lakhs) representing the reserves arising on forfeiture of 75,00,000 share warrants issued on preferential basis.
(b) ''11.65 Lakhs (31st March, 2022 - ''11.65 Lakhs) representing reserves arising on amalgamation pursuant to the Scheme of Arrangement with erstwhile Dhanashree Projects Limited. The said scheme was sanctioned by the Hon''ble High Court of Bangalore and Kolkata vide order dated 12th August, 2010 and 15th September, 2010 respectively.
20.3 Securities Premium
Securities premium represents the amount received in excess of face value of equity shares issued by the Company and is to be utilised for as specified under section 52 of Companies Act, 2013.
20.4 General Reserve
The general reserve is created from time to time by appropriating profits from retained earnings. The general reserve is created by transfer from one component of equity to another and accordingly it is not reclassified to profit or loss.
20.5 Retained Earnings
Retained earnings generally represents the undistributed profit/amount of accumulated earnings of the company. Any actuarial gains/ (losses) arising on remeasurement of defined benefit plan have been recognised in Retained earnings.
44 Disclosures in accordance with Indian Accounting Standard 115 "Revenue from contracts with Customers"
(A) Nature of goods and services
Majority of Revenue : The revenue of the Company for the year ended 31st March, 2023 and 31st March, 2022 comprises of income from sale of electricity and construction contracts. The following is a description of the principal activities:
(i) Revenue from sale of electricity
The major revenue of the Company comes from sale of electricity. The Company is principally engaged in production and sale of bulk power from hydro power and wind power mills to various electricity boards and/ or sale to other parties through Indian Energy Exchange (IEX) or otherwise as per the terms agreed bilaterally on short term basis. The Company owns and operates a 9 MW Hydro-Electric Power project at Harangi, Karnataka and 6 MW Harangi Hydro-Electric Power Plant in Karnataka. It has two operating windmills of 1.5 MW each located in Hassan and Chitradurga district in the state of Karnataka.
Power is supplied in accordance with the sale price, payment terms and other conditions as per the Power Purchase Agreements ("PPA") entered into with various government institutions read along with the regulations of State Electricity Regulatory commission and/ or short term contracts/ merchant basis arrangements on completion of supply to the respective customers. Electricity generated each month is sold to the institutions set up under the government and/ or other parties through Indian Energy Exchange (IEX) or otherwise as per the terms agreed bilaterally on short term basis and maximum credit period of up to 15 days is allowed for payment.
(ii) Income from construction contract
The Company engages in construction development, implementation, operation & maintenance of projects and consultancies. The Company has executed various infrastructure related projects like bridges and hydro projects on contractual basis. A Memorandum of Understanding (MOU) is entered into with Public Works Department (PWD) of Dharamnagar, Agartala, Khowai division of Tripura and revenue from such activity is recognised progressively on percentage of completion method. Stage of completion of contracts in progress is assessed or estimated in proportion to the contract cost incurred relative to the estimated total cost of the contract.
The construction project shall be executed in the manner as prescribed in the MOU, Monthly Running Account bill (R.A bill) shall be submitted to the departments within 30 days from the date of issue of completion certificate. All duties and taxes (Works contract tax, labour welfare, Cess, Goods and Services Tax) shall be borne by the Company.
(iii) Trading Division
The Company is basically engaged in purchase and sale of electrical equipment and metals. The Company purchases such equipment from various parties and sells them to its customers.
Revenue is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable and the associated costs can be estimated reliably. After the vendor accepts delivery, a credit period of 30 days is allowed for payment.
During the year ended 31st March, 2023 and 31st March, 2022, there have been no trading activities in the Company.
45 Segment Reporting
(a) As required under Indian Accounting Standard AS 108 "Operating Segments", the Chief Operating Decision Maker (CODM) evaluates the Company''s performance and allocates resources based on an analysis of various performance indicators by business segments. Management has determined the operating segments based on the information reviewed by the CODM for the purpose of allocating resources and assessing performance. The Company has identified three business segments:
(a) Generating division - generation and sale of bulk power to various electricity boards and/ or sale to other parties through Indian Energy Exchange (IEX) or otherwise as per the terms agreed bilaterally on short term basis
(b) Contract division - construction, development, implementation, operation & maintenance of projects and consultancies and
(c) Trading division - trading of power equipment, metals etc.
Revenue and expenses have been identified to a segment on the basis of relationship to operating activities of the segment. There are no inter segment revenues during the year. Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as "Unallocable".
Segment assets and segment liabilities represent assets and liabilities of the respective segment. The assets and liabilities which are not allocable to an operating segment have been disclosed as "Unallocable".
(B) Fair Valuation Techniques
The fair values of the financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The following methods and assumptions were used to estimate the fair values:
1. The fair value of cash and cash equivalents, trade receivables, trade payables, current borrowings, current financial liabilities and assets approximate their carrying amount largely due to the short-term nature of these instruments. The management considers that the carrying amounts of financial assets and financial liabilities recognised at nominal cost/amortised cost in the financial statements approximate their fair values.
2. Long-term debts are from bodies corporate and promoter and the rate of interest are reviewed annually.
49 Financial risk management objectives and policies
The Company''s activities expose it to the following risks:
(a) Credit risk
(b) Liquidity risk
(c) Market risk
(a) Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. Trade receivables of the Company mainly comprises of receivables from state electricity boards and government department and hence such risk is negligible. Trade receivables in case of trading operations are from various private parties and are therefore exposed to general credit risk. The Company has a policy to monitor such risk on an ongoing basis. However, the Company is exposed to credit risk from its lending activities to its subsidiaries.
The Company establishes an allowance for impairment that represents its estimate of incurred losses in respect of receivables.
The carrying amount of respective financial assets recognised in the standalone financial statements, (net of impairment losses) represents the Company''s maximum exposure to credit risk.
The credit risk on cash and cash equivalents and deposits with banks are insignificant as counterparties are banks with high credit ratings.
(b) Liquidity Risk
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. The Company is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. The Company monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by management to finance the Company''s operations and to mitigate the effects of fluctuations in cash flows.
The following tables detail the Company''s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The information included in the tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows. The contractual maturity is based on the earliest date on which the Company may be required to pay.
The Company has current financial assets wrncn will be realised in ordinary course of Dusiness and unused line of credit. me Company monitors its rolling forecast of its liquidity requirements to ensure it has sufficient cash to meet expected operational requirements.
The Company relies on mix of borrowings and operating cash flows to meet its need for funds and ensures that it does not breach any financial covenants stipulated Dy the lender.
(c) Market risk
Market risk is the risk or uncertainty arising from possible market price movements resulting in fluctuation of the fair value of future cash flows of a financial instrument. The major components of Market risk are foreign currency risk, interest rate risk and other price risk. Financial instruments affected by market risk includes trade receivables, borrowings and trade payables.
(i) Foreign currency risk
The Company does not have significant transaction in foreign currency and accordingly it is not exposed to foreign currency risk. There are certain old outstanding balances which are unhedged. The details of the unhedged foreign currency exposures are given in note no. 43. The management continuously reviews the exchange rates and are in process of settling the balances.
(ii) Interest rate risk
The Company''s debt exposure includes borrowings from bodies corporate, infusion of funds from promoter and cash credit facility from bank. Borrowings from bodies corporate and promoter are subject to fixed interest rate which can be modified upon mutual agreement between the parties involved. Further, interest payable on cash credit facility is also contracted at fixed rate. Hence, the Company does not have any significant exposure to interest rate risk.
52 Various debit and credit balances including in respect of loans, advances, creditors, etc are subject to confirmation and consequential reconciliation thereof.
53 Income Tax Authorities had conducted search under section 132 of the Income Tax Act, 1961 at the Company''s Corporate Office. During the year ended 31st March, 2023, the Company has received Assessment Orders for assessment of Income Tax for the years 2011-2012 to 2020-2021 and demand notices aggregating to ''18,817.47 lakhs have been issued to the Company. Necessary appeals against these notices have been filed before the Commissioner of Income Tax (Appeals) and the matter is pending as on this date. Further, pursuant to the application made by the Company in respect of various demands aggregating to ''18,939.44 lakhs (including demands pertaining to other matters) pending in appeals, etc before Income Tax Authorities, the demands have been stayed. Pending resolution of the matters, ''603.30 lakhs (including ''153.30 lakhs recovered from the bank accounts of the Company) have been deposited till 31st March, 2023 in instalments as agreed upon with the Income Tax Authorities and shown as "Duties and taxes paid under protest" under "Other non-current assets" (note no. 11). As per the legal and professional advice received, the allegations and contentions made by the Income Tax Authorities are legally not tenable and no liability as such is expected to arise in this respect. Matter being pending in appeal, impact in this respect as such are not determinable.
54 No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries") with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
55 Comparative figures of the previous year have been regrouped/ rearranged wherever considered necessary to make them comparable with those of the current year''s figures.
As per our Report of even date attached For and on behalf of the Board of Directors of
For A L P S & Co. Energy Development Company Limited
Chartered Accountants
Firm''s Registration No ⢠313132E Sd/- Pankaja Kumari Singh, Director (DIN: 00199454), Place : New Delhi
Sd/- A.K. Khetawat Sd/- Satyendra Pal Singh, Executive Director (DIN: 01055370)
Partner Sd/- Aman Jain, Director (DIN: 08187995)
Membership N°.: 052751 Sd/- Vishal Sharma, Director (DIN: 08773037)
Place : Kolkata Place : Kolkata Sd/- Prabir Goswami, Chief Financial Officer
Dated : 30th May, 2023 Dated : 30th May, 2023 Sd/- Vijayshree Binnani,
Mar 31, 2018
1. CORPORATE INFORMATION
Energy Development Company Limited (''the company'') is a public limited company domiciled and incorporated in India under the provisions of Companies Act. The shares of the company are listed on National Stock Exchange of India Limited [''NSE''] and The Bombay Stock Exchange Limited [''BSE'']. The registered office of the company is at Harangi Hydro Electric Project Village-Hulugunda, Taluka- Somawarpet District- Kodagu, Karnataka-571233. The company is primarily engaged in (a) generation and sale of bulk power to various electricity boards; (b) construction development, implementation, operation & maintenance of projects and consultancies and (c) trading of Power equipments, metals etc.
NOTE 2
STATEMENT OF COMPLIANCE AND RECENT PRONOUNCEMENTS
2.1 Statement of Compliance
The Company has adopted Indian Accounting Standards (referred to as "Ind AS") notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended) read with Section 133 of the Companies Act, 2013 ("the Act") with effect from April 1, 2017 and therefore Ind AS issued, notified and made effective till the financial statements are authorised have been considered for the purpose of preparation of these financial statements.
These are company''s first Ind AS Financial Statements and the date of transition to Ind AS as required has been considered to be April 1, 2016. The Financial Statement upto March 31, 2017 were prepared as per the historical cost convention on accrual basis in accordance with the Generally Accepted Accounting Principles (Previous GAAP) and Accounting Standards as prescribed under the provisions of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 then applicable to the Company. Previous GAAP figures in the financial statements have now been restated in compliance to Ind AS.
In accordance with Ind AS 101- "First Time adoption of Indian Accounting Standards" (Ind AS 101), the company has presented (Note No. 38), a reconciliation of Shareholders'' equity as given earlier under Previous GAAP and those considered in these accounts as per Ind AS as at March 31, 2017 and April 1, 2016 and also the Net Profit as per Previous GAAP and that arrived including Other Comprehensive Income under Ind AS for the year ended March 31, 2017. The mandatory exceptions and optional exemptions availed by the Company on First-time adoption have been detailed in Note No. 38 of the financial statement.
2.2 Recent Pronouncements
On March 28, 2018, Ministry of Corporate Affairs ("MCA") has issued the Companies (Indian Accounting Standards) Amendment Rules, 2018 notifying Ind AS 115, "Revenue from Contract with Customers" and Appendix B to Ind AS 21 "Foreign currency transactions and advance consideration" which are applicable with effect from financial periods beginning on or after April 1, 2018.
Ind AS 115 - Revenue from Contract with Customers
The standard requires that an entity should recognise revenue to depict the transfer of promised goods or services to customers for an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further the standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity''s contracts with customers. The effect of this amendment on the financial statements of the Company is being evaluated.
Ind AS 21 - Appendix B "Foreign currency transactions and advance consideration"
This Appendix applies to a foreign currency transaction (or part of it) when an entity recognises a non-monetary asset or nonmonetary liability arising from the payment or receipt of advance consideration before the entity recognises the related asset, expense or income (or part of it). The effect of this amendment on the financial statement of the Company is being evaluated.
Note : (a) The Company has availed the deemed cost exemption in relation to the property, plant and equipment on the date of transition and hence the net carrying amount has been considered as the gross carrying amount on that date. Further, in case of Windmill, due to application of IND AS 17 ''Leases'' land appurtenant to the windmill is reclassified as an operating lease.
(b) Transmission Lines, Transformers, Cable network etc. include Power Evacuating facilities put tip in relation to the Hydro Electric Generating Station, which has been handed over to the Electricity Board for transmission of Electricity and maintenance thereof.
(c) Fixed Asset includes Rs. 285,475,336 (as at March 31, 2017: Rs.303,216,231 , as at April 1, 2016: Rs.320,957,127) pertaining to Power Generating plant which in terms of implementation agreement with various authorities will be handed over on completion of effective useful life of the assets in terms of respective agreements.
Note :
(a) The shares held in Ayyappa Hydro Power Limited, a subsidiary are pledged (3,00,00,000 equity shares and 2,20,00,000 preference shares) with the lender of the said subsidiary.
(b) The company has pledged 2,700 (out of 5,100) equity shares held in Eastern Ramganga Valley Hydel Projects Company Private Limited and 2,700 (out of 5,100) equity shares held in Sarju Valley Hydel Projects Company Private Limited, subsidiaries of the company with other investors of these subsidiaries till implementation of the agreement mentioned in (c) below. The company has also received in advance consideration on sale of these investments as shown in Note 16C.
(c) In terms of an agreement dated 9th November, 2015, for transfer of 76% of the Company''s investment in various erstwhile wholly owned subsidiaries undertaking hydel power plants in the State of Arunachal Pradesh and Uttarakhand having aggregate capacity of 660 MW approximately (herein referred to as Arunachal Pradesh and Uttarakhand Undertaking respectively), to another strategic investor, certain investments in equity shares of these subsidiaries/associate of Rs. 11,25,78,000 [out of (iii), (iv) and (vi)/(viii) above] and preference shares of Rs. 58,38,73,000 (including ''13,82,40,000 sold during the year) [out of (x) to (xxi) above] have been sold to the said investor. In terms of the above, company''s investment of Rs. 22,00,03,137 as on 31st March, 2018 representing 24% and 51% of the equity in Arunachal Pradesh and Uttarakhand undertaking respectively and 24% in preference shares have been continued to be held by the company. These being investment in subsidiaries and associates and also long term and strategic in nature, have been carried at cost.
(d) Evaluation of impairment in the value of investment as given in (c) above and loans of Rs. 6,09,21,035 (Refer Note 6B(b) (iv), (iv) & (c)(i)) outstanding from the above subsidiaries and associate, pending completion of the project, have not been carried out. Impact in this respect as such, is presently not ascertainable which will be determined depending upon implementation status of the project.
(e) The company has purchased equity shares in EDCL Arunachal Hydro Project Private Limited and consequently, it ceased to become a subsidiary of Arunachal Hydro Power Limited and has become a wholly-owned subsidiary of the company w.e.f. 1st October, 2016.
(g) In pursuance of Section 187(2)(c ) of the Companies Act, 2013, investments purchased [ mentioned in (xiii), (xx) and (xxi)] by the Company, during the year are still lying in the name of transferor for want of performance of obligation undertaken by the Company, as per agreement entered with the seller.
(h) The Company has elected to continue with the carrying value of its investments in subsidiaries and associates, measured as per the Previous GAAP and use that carrying value on the transition date April 1, 2016 in terms of Ind AS 101 ''First -time Adoption of Indian Accounting Standards''.
(i) Includes Rs. 67,468/- (Previous Year as on 31st March, 2017: Rs. 22,980/- & as on 1st April, 2016: Rs. 6,29,000/-) recoverable from subsidiaries and associate (Refer Note 31)
(ii) Includes Rs.NIL/- (Previous Year as on 31st March, 2017 Rs. 3,194/- & as on 1st April, 2016: Rs. 75,643/-) recoverable from other related parties (Refer Note 31)
*Held by clearing member due for transfer to Mr. Amar Singh & Mrs. Panakaja Kumari Singh increasing their shareholding to 1,04,58,453 shares (22.02%) and 29,36,414 shares (6.18%) respectively.
Rights, Preferences and Restrictions attaching to each classes of shares including restrictions on the distribution of dividends and the repayment of capital
a) The Company has only one class of equity shares having a par value of Rs. 10/- per share. Each holder of equity is entitled to one vote per share. The dividend, if any proposed by the Board of Directors of the Company is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts in proportion to the number of equity shares held by them.
b) The Board of Directors has recommended payment of dividend @ 5% (Rs. 0.50) per equity share on the paid-up share capital of the company for the financial year 2017-2018 subject to approval of members at the ensuing Annual General Meeting.
Capital Reserve Capital Reserve includes:
(a) Rs. 124,000,000 ( as at 31st March, 2017 Rs. 124,000,000, as at 1st April, 2016 Rs. 124,000,000) representing the reserves arising on forfeiture of 75,00,000 share warrants issued on preferential basis.
(b) Rs. 1,165,345 (as at 31st March, 2017 Rs. 1,165,345, as at 1st April, 2016 : Rs. 1,165,345) representing reserves arising on amalgamation pursuant to the scheme of arrangement with erstwhile Dhanashree Projects Limited. The said scheme was sanctioned by the Honorable High Court of Bangalore and Kolkata vide order dated August 12, 2010 and September 15, 2010 respectively.
Securities Premium Reserve :
Securities Premium Reserve represents the amount received in excess of par value of equity shares issued by the company and is to be utilised for as specified under Section 52 of Companies Act, 2013.
General Reserve :
The general reserve is created from time to time by appropriating profits from retained earnings. The general reserve is created by transfer from one component of equity to another and accordingly it is not reclassified to the Statement of profit and loss.
Retained earnings :
Retained earnings generally represents the undistributed profit/ amount of accumulated earnings of the company. Any actuarial gains and losses arising on defined benefit obligations have been recognised in retained earnings.
a) The Company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 (the Act) and hence disclosure relating to amounts unpaid as at the year end together with interest paid/payable under the Act has not been given.
b) Payables for goods and services includes acceptances amounting to Rs. 8,41,09,175/- (Previous Year as on 31st March, 2017: Rs. 18,09,06,500 /- & as on 1st April, 2016: Rs. 10,00,75,310/-)
(c) Includes Rs. 15,280 (Previous Year as on 31st March, 2017: Rs.NIL /- & as on 1st April, 2016 Rs. 5,24,000 /-) payable to Subsidiaries and Associate (Refer Note 31)
(d) Includes Rs. 86,900 (Previous Year as on 31st March 2017: Rs. 117,643/- & as on 1st April, 2016: Rs.NIL/-) payable to other related parties (Refer Note 31)
Note :
Revenue from sale of power, is accounted for on the basis of billing to Electricity Board in Karnataka as per Tariff approved by State Electricity Regulatory Commission in accordance with the provisions of the Long Term Power Purchase Agreement executed in this respect.
B) Defined Benefit Scheme :
The employee''s Gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of obligations is determined based on actuarial valuation using projected unit credit method which recognises each period of services as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.
The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (projected unit credit method) has been applied as when calculating the defined benefit obligation recognised within the Balance Sheet.
Notes: (As certified by Independent Actuary)
1 Assumptions relating to future salary increases, attrition, interest rate for discount and overall expected rate of return on assets have been considered based on relevant economic factors such as inflation, seniority, promotion, market growth and other factors as applicable to the period over which the obligation is expected to be settled.
2 The expected return on Plan assets is based on market expectation at the beginning of the year. The rate of return on long term Government Bonds is taken as reference for this purpose.
3 In respect of Funded Gratuity, the funds are managed by the insurer and therefore the percentage or amount that each major category constitutes the fair value of total plan assets and effect thereof on overall expected rate of return on asset is not ascertainable.
4. Acquisition adjustment represents amount in respect of certain employees transferred into/ transferred from the company.
NOTE 3
EXCEPTIONAL ITEMS
Exceptional items represents profit on investments sold during the previous period/ year.
NOTE 4 OPERATING LEASE
(a) The company has entered into arrangements of lease of land which has been classified as operating leases. These lease arrangements are non-cancellable in nature. Rental expenses towards such non- cancellable operating lease charged to statement of profit and loss amounts to 3,72,100/- (Previous Year Rs. 3,72,100/-) and has been disclosed as "Rent" in Note 27 of the financial statement.
(b) The company has taken several premises under cancellable operating leases. The lease term is upto 5 years and have the option of renewal on expiry of the lease period based on mutual agreement of both the parties. Certain lease arrangements have been terminated during the year based upon mutual agreement of both the parties. Rental expenses towards cancellable operating lease charged to statement of profit and loss amounts to Rs. 65,44,200 /- (Previous year Rs. 88,66,000/-) and has been disclosed as "Rent" in Note 27 of the financial statement.
(c) The Company has taken certain machineries under cancellable operating leases. The lease term has an option of renewal on expiry of the lease period based on the mutual agreement of both the parties. The lease arrangement has been terminated during the year based upon mutual agreement of both the parties. Rental expenses towards such cancellable operating lease charged to statement of profit and loss amounts to Rs.NIL/- (Previous Year Rs. 5,40,000 /-) and has been disclosed as "Rent" in Note 27 of the financial statement
NOTE 5
SEGMENT REPORTING
Segments have been identified in line with the Indian Accounting Standards AS-108 taking into account the organization structure as well as the differencing risk and return. The Company''s business segment comprises of (a) Generating Division - generation and sale of bulk power to various electricity boards; (b) Contract Division - construction development, implementation, operation & maintenance of projects and consultancies and (c) Trading Division - trading of Power equipments, metals etc. These have been identified by the Chief Operating Decision Maker (CODM) on the basis of the type of their respective sales and services rendered.
(a) Revenue and expenses have been identified to segment on the basis of their relationship to the operating activities of the segment. Revenue and expenses which relates to enterprise as a whole and not allocable to segment on a reasonable basis have been included under the head other common expenses.
(b) As the company operates entirely in India no secondary segment has been identified for the above purpose.
NOTE 6
FINANCIAL INSTRUMENTS
Capital Management
The Company follows a capital management strategy. The primary objective is to ensure that Company maintains a healthy capital ratio in order to support its business operations, have sufficient financial flexibility for borrowing requirements, if any, in future and to maximise shareholder value. The Company''s objective when managing capital is to safeguard their ability to continue as a going concern so that they can continue to provide returns for shareholders and benefits for other stake holders.
The management considers that the above carrying amounts of financial assets and financial liabilities recognized in the financial statements approximate their fair values.
Fair Valuation Techniques
The fair values of the financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The following methods and assumptions were used to estimate the fair values :
1. The fair value of cash and cash equivalents, trade receivables, trade payables, current borrowings, current financial liabilities and assets approximate their carrying amount largely due to the short-term nature of these instruments. The Management considers that the carrying amounts of financial assets and financial liabilities recognised at nominal cost/amortised cost in the financial statements approximate their fair values.
2. Long-term debts are from Body Corporate and the rate of interest are reviewed annually.
Fair value hierarchy
The Company categorizes assets and liabilities measured at fair value into one of three levels as mentioned in Note 3.1 depending on the ability to observe inputs employed in their measurement.
During the year ended 31st March 2018; 31st March, 2017 and 1st April 2016, there was no transfer between Level 3 fair value measurements. Further, there is no transaction / balance for Level 1 and Level 2 categories.
Unquoted investments in shares have been valued based at cost as the latest audited financial statements were not available. There were no external unobservable inputs or assumptions used in such valuation.
Financial Risk Factors
The Company''s activities expose it to a variety of financial risks - market risk, credit risk and liquidity risk. The Board of Directors reviews and approves policies for managing each of these risks, which are summarized below :
Market Risk
Market risk is the risk or uncertainty arising from possible market price movements resulting in fluctuation of the fair value of future cash flows of a financial instrument. The major components of Market risks are price risk, interest rate risk and foreign currency exchange risk.
Financial instruments affected by market risk includes borrowings.
a. Foreign Currency Risk
The company does not have significant transaction in foreign currency and accordingly it is not exposed to foreign currency risk. There are certain old outstanding balances which are unhedged. The details of the unhedged foreign currency exposures are given in Note No. 35. The management continuously reviews the exchange rates and are in process of setteling the balances.
b. Interest Rate Risk
The Company''s exposure in market risk relating to change in interest rate primarily arises from floating rate borrowing with banks and financial institutions.
With all other variables held constant, the following table demonstrates the impact of the borrowing cost on floating rate portion of loans and borrowings and excluding loans on which interest rate swaps are taken.
A decrease in 0.50 basis point in Cash Credit & 0.25 basis point in Other Loans would have an equal and opposite effect on the company''s financial statements.
c. Other price risk
The company is not exposed to any other price risk.
Credit Risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. Trade Receivables of the company mainly comprises of receivables from state electricity boards and government department and hence such risk is negligible. Trade receivales in case of trading operations are from various private parties and are therefore exposed to general credit risk. The company has a policy to monitor such risk on an ongoing basis. However the Company is exposed to credit risk from its lending activities to it''s subsidiaries.
The Company establishes an allowance for impairment that represents its estimate of incurred losses in respect of receivables.
The carrying amount of respective financial assets recognised in the financial statements, (net of impairment losses) represents the Company''s maximum exposure to credit risk.
Financial assets that are neither past due nor impaired
Cash and cash equivalents, investment and deposits with banks are neither past due nor impaired. Cash and cash equivalents with banks are held with reputed and credit worthy banking institutions.
Financial assets that are past due but not impaired
Trade receivables disclosed include amounts that are past due at the end of the reporting period but against which the Company has not recognised an allowance for doubtful receivables because there has not been a significant change in credit quality and the amounts are still considered recoverable.
Liquidity Risk
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. The Company is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. The Company monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by management to finance the Company''s operations and to mitigate the effects of fluctuations in cash flows.
The following tables detail the Company''s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The information included in the tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows. The contractual maturity is based on the earliest date on which the Company may be required to pay.
The company has current financial assets which will be realised in ordinary course of business and unused line of credits as given above. The Company monitors its rolling forecast of its liquidity requirements to ensure it has sufficient cash to meet expected operational requirements.
The company relies on mix of borrowings and operating cash flows to meet its need for funds and ensures that it does not breach any financial covenants stipulated by the lender.
b) Disclosure as per Ind AS 101 First-time adoption of Indian Accounting Standards :
(I) Overall principle :
The Company has prepared the opening balance sheet as per Ind AS as of 1st April, 2016 (the transition date) by recognising all assets and liabilities whose recognition is required by Ind AS, not recognising items of assets or liabilities which are not permitted by Ind AS, by reclassifying items from previous GAAP to Ind AS as required under Ind AS, and applying Ind AS in measurement of recognised assets and liabilities.
However, this principle is subject to certain mandatory exceptions and certain optional exemptions availed by the Company as detailed below :
(II) Mandatory exceptions and optional exemptions
(i) Classification and measurement of financial asset:
The Company has classified the financial assets in accordance with Ind AS 109 on the basis of facts and circumstances that exist at the date of transition to Ind AS.
(ii) Derecognition of financial assets and financial liabilities :
The Company has applied the derecognition requirements of financial assets and financial liabilities prospectively for transactions occurring on or after the transition date.
(iii) Deemed cost for property, plant and equipment and other intangible assets :
The Company has elected to continue with the carrying value of all of its property, plant and equipment and other intangible assets recognised as of 1st April, 2016 (transition date) measured as per the previous GAAP and used that carrying value as its deemed cost as of the transition date except in respect of leasehold land of windmill as given in Note 5A(a).
(iv) Deemed cost of investment in Subsidiaries and Associates :
The Company has elected to continue with the carrying value of all of its investments in Subsidiaries and Associates recognised as of 1st April, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.
(v) Determining whether an arrangement contains a lease :
The Company has applied Appendix C of Ind AS 17 Determining whether an Arrangement contains a Lease to determine whether an arrangement existing at the transition date contains a lease on the basis of facts and circumstances existing at that date.
(vi) Impairment of financial assets :
Ind AS 109 "Financial Instruments" requires the impairment to be carried out retrospectively; however, as permitted by Ind AS 101, the Company, has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial instruments were initially recognized in order to compare it with the credit risk at the transition date.
Further, the Company has not undertaken an exhaustive search for information when determining, at the date of transition to Ind ASs, whether there have been significant increases in credit risk since initial recognition, as permitted by Ind AS 101.
(vii) Business Combinations :
In terms of Ind AS 101 "First Time Adoption of Indian Accounting Standards", the Company has elected to not to apply Ind AS 103 "Business Combination" for past combinations.
c) Explanatory Notes to reconciliation between Previous GAAP and Ind AS
i) Re-classification of Leasehold Land
Under previous GAAP, leasehold land was shown as a part of fixed assets, whereas under Ind AS, the same is considered as an operating lease and hence is shown as prepayments on leasehold land. This reclassification has resulted in decrease in depreciation and increase in rental expense and hence has no impact on other equity.
ii) Remeasurements of post-employment benefit obligations
Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in Other Comprehensive Income instead of profit or loss. Under the Previous GAAP, these remeasurements were forming part of the profit or loss for the year.
iii) Financial Assets accounted at amortised cost method under effective rate of interest
(a) Financial assets such as retention money and deposits have been valued by applying amortised cost method using Effective Interest Rate as per requirements of Ind AS 109 ''Financial Instruments''. Subsequent to transition date, the fair valuation difference on financial assets has been recognized in statement of profit & loss under other expenditure. Further, the accounting of such financial assets under the effective interest rate method, has resulted in increase in interest income.
(b) Interest free loan given to subsidiaries and associates were recorded at their transaction value under Previous GAAP. Under Ind AS, such loans are recognized at fair value on the date of transition/disbursements and the difference there against has been charged off against retained earnings/statement of profit & loss account except in case of cetain specific loans which are startegic and in the nature of contribution to subsidiaries. The differential amount in case of such strategic loans have been recognised as deemed investment on the date of transition/ disbursement. Subsequently, the interest free loans has been carried by applying amortised cost method using effective interest rate as per the requirements of IND AS 109 ''Financial Instruments'' and interest income has been recognised there against. In case of early prepayment, modification adjustment has been recorded and disclosed under Other Expense/Income.
iv) Proposed Divided
Under previous GAAP upto 1st April 2016, proposed dividends including dividend distribution tax are recognised as a liability in the period to which they relate, irrespective of when they are declared. Under IND AS, a proposed dividend is recognised as a liability in the period in which it is declared by the company, usually when approved by the shareholders in a general meeting, or paid.
v) Insurance Contract
Under previous GAAP, corporate guarantee issued by the Company on behalf of the Subsidiary companies was not recognised but disclosed as Contingent Liability.
Under IND AS, such Corporate Guarantee issued by the Company being in the nature of ''Insurance Contracts'' has been recognised and disclosed as contingent liability.
vi) Current Tax and Deferred Tax
Under Previous GAAP, deferred taxes were recognised for the tax effect of timing differences between accounting profit and taxable profit for the year using the income statement approach. Under Ind AS, deferred taxes are recognised using the balance sheet for future tax consequences of temporary differences between the carrying value of assets and liabilities and their respective tax bases. The aforesaid difference, together with the consequential tax impact of other Ind AS transitional adjustments lead to temporary differences and accordingly, deferred tax adjustments have been recognised in correlation to the underlying transaction either in retained earnings or through other comprehensive income.
Further, under Previous GAAP, Minimum Alternate Tax (MAT) Credit Entitlement were shown under Other Non Current Assets and under IND AS, the same has been considered as deferred tax assets. Consequently, utilisation of MAT Credit entitlement relating to the year ended 31st March, 2017 and those prior to the transition date has been netted with the income tax expense and provision for tax respectively and corresponding charge has been made from deferred tax asset under Ind AS.
vii) Previous year figures have been regrouped and rearranged to comply with the IND AS Schedule presentation.
NOTE 7
These financial statements have been approved by the Board of Directors of the Company on 7th June, 2018 for issue to the shareholders for their adoption.
Mar 31, 2016
Rights, Preferences and Restrictions attaching to each classes of shares including restrictions on the distribution of dividends and the repayment of capital
a) The Company has only one class of equity shares having a par value of Rs.10/- per share. Each holder of equity is entitled to one vote per share. The dividend, if any proposed by the Board of Directors of the Company is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts in proportion to the number of equity shares held by them.
b) During the year, the company has issued and allotted 2,00,00,000 fully paid equity shares of Rs.10/- each at a premium of Rs.12/each aggregating to Rs.44,00,00,000/- by way of private placement. Requirements specified under section 42 of the Companies Act 2013 with respect to such issue has been complied with and the proceeds from the issue has been utilized for the purposes for which they were raised.
c) The Board of Directors has recommended payment of dividend @ 5% ('' 0.50) per equity share on the paid-up share capital of the company for the financial year 2015-2016 subject to approval of members at the ensuing Annual General Meeting.
(Secured by hypothecation of entire stocks and other movables of the company including all movable Plant and Machinery, Furniture and Fixtures, Vehicles, Computers and other accessories etc. stored or to be stored, at the premises / godowns of the company''s contract division and also all present and future book debts, outstanding monies, receivables, claims, bills etc. and equitable mortgage of immovable properties at 9MW Harangi Hydro Electric Project)
(*) [Includes Rs.5,24,000/- (Previous Year Rs.10,78,000 /- ) payable to subsidiaries] (Refer Note 27)
a) The Company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 (the Act) and hence disclosure relating to amounts unpaid as at the year end together with interest paid/payable under the Act has not been given.
b) Payables for goods and services includes acceptances amounting to Rs.10,00,75,310 /- (Previous year Rs.NIL/-)
Note : (a) 7.21 acres of Land has been taken on lease for 40 years w.e.f.l4th July, 1999 at an annual lease rent of Rs.72,100/-.
(b) 1.2 acre of land has been taken on lease for 30 years w.e.f. 30th August, 2010 at an annual lease rent of Rs.1,20,000/-
(c) Transmission Lines, Transformers, Cable Network etc. include Power Evacuating facilities put up in relation to the
Hydro Electric Generating Station, which has been handed over to the Electricity Board for transmission of Electricity and maintenance thereof.
(d) Gross Block of Windmill includes Leasehold Land of Rs.3,600,000 /- (Previous year Rs.3,600,000/-)
(a) The shares held in Ayyappa Hydro Power Limited, a subsidiary are pledged (3,00,00,000 equity shares and 2,20,00,000 preference shares) with the lender of the said subsidiary.
(b) The various subsidiaries [mentioned in (iii to xvii) & (xix to xxx) above] of the company on completion of prefeasibility report have been granted permission for setting up of certain hydel power plants, having aggregate capacity of 660 MW by the Government of Arunachal Pradesh and Uttarakhand. Project survey, geological investigation and formulation of Detailed Project Report (DPR) and other allied works are under progress. In terms of agreement entered into on 9th November, 2015, 76% of the investments will be held by another strategic investor who will be implementing the projects leaving 24% which will be continued to be held by the company and its wholly owned subsidiary. The said agreements which are to be implemented by 30th September, 2016 (extended from 31st March, 2016) are subject to various regulatory and other approvals. Further the transaction is subject to certain conditions precedent to be fulfilled by the company. In terms of the above agreements, the company''s investments in the subsidiaries implementing the above projects is contempleted to be transferred by the company at least at the value at which they are stated in the accounts and no diminution in the value thereof is expected to arise in this respect.
(c) In pursuance of Section 187(2)(c) of the Companies Act, 2013, investments purchase [mentioned in (iii to xvii) / (xix to xxix)] by the company, during the year are still lying in the name of transferor for want of performance of obligation undertaken by the company, as per agreement entered wih the seller.
Employees Benefits :
The disclosures required under Accounting Standard 15 "Employee Benefits" notified in the Companies (Accounting Standards) Rules 2006 (AS-15), are given below :
(i) Defined Contribution Scheme
Contribution to Defined Contribution Plan, recognized for the year are as under :
Employer''s Contribution to Provident Fund Rs.161,016 /- (Previous year Rs.131,598/-)
Employer''s Contribution to Pension Fund Rs.364,978/- (Previous year Rs.298,766/-)
(ii) Defined Benefit Scheme :
The employee''s gratuity fund scheme managed by Life Insurance Corporation of India 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.
(a) Assumptions related to future salary increases, attrition, interest rate for discount and overall expected rate of return on Assets have been considered based on relevant economic factors such as inflation, market growth and other factors applicable to the period over which the obligation is expected to be settled.
(b) Acquisition adjustment represents amount in respect of certain employees transferred into / transferred from the company without affecting the term of employment.
(c) The expected contribution to the fund by the company during the year 2016-17 is yet to be determined.
i) In respect of above parties, there is no provision for doubtful debts as on 31st March 2016 and no amount has been written off or written back during the year in respect of debts due from / to them.
ii) The above Related Party information is as identified by the Management and relied upon by the auditors.
NOTE 1 OPERATING LEASE
The company has taken several premises under cancellable operating leases. The lease term is up to 5 years and have the option of renewal on expiry of the lease period based on mutual agreement of both the parties. Certain lease arrangements have been terminated during the year based upon mutual agreement of both the parties. Rental expenses towards cancellable operating lease charged to statement of profit and loss amounts to Rs.52,12,900/- (Previous year Rs.42,99,820/-) and has been disclosed as "Rent" in Note 25 of the financial statement.
The Company has taken certain machineries under cancellable operating leases. The lease term has an option of renewal on expiry of the list period based on the mutual agreement of both the parties. Rental expenses towards such cancellable operating lease charged to statement of profit and loss amounts to Rs.7,20,000 /- (Previous Year Rs.3,96,000/-) and has been disclosed as "Rent" in Note 25 of the financial statement
NOTE 2 SEGMENT REPORTING
Segments have been identified in line with the Accounting Standards AS-17 taking into account the organization structure as well as the differencing risk and return. The Company''s business segment comprises of (1)generation and sale of electricity division and (2) construction development, implementation, operation & maintenance of projects and consultancies (Contract Division) (3) trading . These have been identified by the type of their respective sales and services rendered.
During the year, the company has carried out trading activities related to power equipments and the same having different risks and returns other than the existing activities, has been considered as a separate business segment. Further, the transaction under the said trading activities has been undertaken in the current year only and therefore, figures for the previous year are not applicable.
(a) Revenue and expenses have been identified to segment on the basis of their relationship to the operating activities of the segment. Revenue and expenses which relates to enterprise as a whole and not allocable to segment on a reasonable basis have been included under the head other common expenses.
(b) As the company operates entirely in India no secondary segment has been identified for the above purpose.
NOTE 3 COMPARATIVES
The previous year''s figures have been regrouped and rearranged wherever considered necessary.
Mar 31, 2015
Rights, Preferences and Restrictions attaching to each classes of
shares including restrictions on the distribution of dividends and the
repayment of capital
a) The Company has only one class of equity shares having a par value
of Rs. 10/- per share. Each holder of equity is entitled to one vote per
share. The dividend, if any proposed by the Board of Directors of the
Company is subject to the approval of the shareholders in the ensuing
Annual General Meeting. In the event of liquidation of the Company, the
holders of equity shares will be entitled to receive remaining assets
of the Company, after distribution of all preferential amounts in
proportion to the number of equity shares held by them.
b) The Board of Directors has recommended payment of dividend @ 5% (Rs.
0.50) per equity share on the paid-up share capital of the company for
the financial year 2014-2015 subject to approval of members at the
ensuing Annual General Meeting.
(Secured by hypothecation of entire stocks and other movables of the
company including all movable Plant and Machinery, Furniture and
Fixtures, Vehicles, Computers and other accessories etc. stored or to
be stored, at the premises/godowns of the company's contract division
and also all present and future book debts, outstanding monies,
receivables, claims, bills etc. and equitable mortgage of immovable
properties at 9MW Harangi Hydro Electric Project)
(*) [Includes Rs. 10,78,000/- (Previous Year Rs. Nil /- ) payable to
subsidiaries] (Refer Note 27)
a) The Company has not received information from vendors regarding
their status under the Micro, Small and Medium Enterprises Development
Act, 2006 (the Act) and hence disclosure relating to amounts unpaid as
at the year end together with interest paid/payable under the Act has
not been given.
b) Payables for goods and services includes acceptances amounting to Rs.
Nil /- (Previous year Rs. 85,51,329/-)
(i) The shares held in Ayyappa Hydro Power Ltd., a subsidiary are
pledged (3,00,00,000 equity shares and 2,20,00,000 preference shares)
with the lender of the said subsidiary.
(ii) The various subsidiaries [mentioned in (d to q) & (s to v) above]
of the company on completion of prefeasibility report have been granted
permission for setting up of certain hydel power plants, having
aggregate capacity of 572 MW hydel power plant by the Government of
Arunachal Pradesh and Uttarakhand. Project survey, geological
investigation and formulation of Detailed Project Report (DPR) and
other allied works are under progress. These investments being
strategic and long term in nature, there is no permanent diminution and
therefore no provision has been considered necessary.
(*) (a) [Includes Rs. 14,71,175/- (Previous Year Rs. Nil ) receivable from
subsidiaries] (Refer Note 27)
(**) (b) Other Advances includes Rs. 4,11,586/- (Previous Year Rs.
801,721/-) under Short Term Loans and Advances and Rs. 2,21,000 (Previous
Year Rs. NIL/-) under Long Term Loans and Advances in respect of loan to
employees. Maximum outstanding Rs. 11,68,370/- (Previous Year Rs.
2,191,952/-)]
Employees Benefits :
The disclosures required under Accounting Standard 15 "Employee
Benefits" notified in the Companies (Accounting Standards) Rules 2006
(AS-15), are given below :
(i) Defined Contribution Scheme
Contribution to Defined Contribution Plan, recognized for the year are
as under :
Employer's Contribution to Provident Fund Rs. 131,598/- (Previous year Rs.
108,074/-)
Employer's Contribution to Pension Fund Rs. 298,766/- (Previous year Rs.
244,919/-)
(ii) Defined Benefit Scheme
The employee's gratuity fund scheme managed by Life Insurance
Corporation of India 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.
Notes :
(a) Assumptions related to future salary increases, attrition, interest
rate for discount and overall expected rate of return on Assets have
been considered based on relevant economic factors such as inflation,
market growth and other factors applicable to the period over which the
obligation is expected to be settled.
b) During the year, certain employees of the company have been
transferred to subsidiary companies without affecting their terms of
employment and accordingly figures for the current year are not
comparable with corresponding figures of the previous year.
(*) Value of consumption of stores and spare parts:
(i) The entire consumption is out of indigenous supplies.
(ii) Consumption as above includes Rs. 149,974/- (Previous year Rs.
309,064/-) on account of amortisation of spares.
(iii) Stores and Spare parts included in inventory are largely consumed
as replacements and hence their consumption may not be comparable on a
year on year basis.
(**) Includes Net Loss on foreign currency transactions of Rs.
(-)13,17,008/- (Previous Year : Rs. 5.30.604/-)
As at 31st As at 31st
March,2015 March,2014
NOTE 2
CONTINGENT LIABILITIES AND COMMITMENTS
(To the extent not provided for)
Contingent Liabilities
a) Claims against the company not acknowledged
as debts
i) Income Tax matters under disputes and
pending in appeal 119,430,590 125,300,100
ii) Sales Tax matters under disputes and
pending in appeal 23,919,314 7,902,703
The Company's pending litigation comprise of proceedings with income
tax and sales tax authorities. The company has reviewed all its pending
litigations and proceedings and has made adequate provisions, wherever
required and disclosed the contingent liabilities, wherever applicable,
in its financial statements. The company does not expect the outcome of
these proceedings to have material impact on its financial position.
Future cash outflows if any in respect of (i) and (ii) above are
dependent upon the outcome of the decision/judgements.
Subsidiaries of Arunachal Hydro Power Ltd.
(i) EDCL Arunachal Hydro Projects Pvt. Ltd.
(ii) EDCL Seppa Beyong Hydro Electric Pvt. Ltd.
(iii) EDCL Seppa Dunkho Hydro Electric Pvt. Ltd.
(iv) EDCL Seppa Jung Power Pvt. Ltd.
(v) EDCL Seppa Kawa Power Pvt. Ltd.
(vi) EDCL Seppa Lada Hydro Electric Pvt. Ltd.
(vii) EDCL Seppa Marjingla Hydro Electric Pvt. Ltd.
(viii) EDCL Seppa Nire Hydro Electric Pvt. Ltd.
(ix) EDCL Seppa Pachuk Power Pvt. Ltd.
(x) EDCL Seppa Riang Power Pvt. Ltd.
(xi) EDCL Tawang Lower Tsachu Hydro Electric Pvt. Ltd.
(xii) EDCL Tawang Power Pvt. Ltd.
(xiii) EDCL Tawang Upper Tsachu Hydro Electric Pvt. Ltd.
(c) Individuals having significant influence directly or indirectly
(Promoter and their relatives)
1 Mr. Amar Singh (Non Executive Chairman )
2 Mrs.Pankaja Kumari Singh (Wife of the Non Executive Chairman)
(d) Enterprises over which individuals mentioned in (c ) above
exercises significant influence
1 Startrack Vinimay Private Limited
2 Sarvottam Caps Private Limited
Mar 31, 2014
CONTINGENT LIABILITIES AND COMMITMENTS
(To the extent not provided for)
a) Contingent Liabilities
i) The company has given guarantee in respect of loan taken by one of
its subsidiary (Outstanding balance as on 31.03.2014 Rs. 583,622,488/-)
(Previous year Rs. 605,196,921/-)
ii) Income tax matters under disputes and pending in appeal Rs.
125,300,100/- (Previous year Rs. 30,224,140/-)
iii) Sales tax matters under disputes and pending in appeal Rs.
7,902,703/- (Previous year Rs. Nil)
iv) Bank guarantees given Rs. 81,464,933/- (Previous year Rs. 81,464,933/-)
Future cash outflows in respect of (ii) and (iii) above are dependent
upon the outcome of the decision/judgements.
b) Commitments
i) Estimated amount of contracts remaining to be executed on capital
account (net of advances) Rs. 235,077,791/- (Previous year Rs.
212,885,648/-)
NOTE 2
RELATED PARTY DISCLOSURES PURSUANT TO ACCOUNTING STANDARD -18 :
(a) Key Management Personnel and their relative
Mr. Amar Singh (Non Executive Chairman )
Mrs. Pankaja Kumari Singh (Wife of the Non Executive Chairman)
Mr. Sanjiv Saraf (Executive Director)
Mrs. Indira Saraf (Wife of the Executive Director)
(b) Subsidiary Companies
1 AYYAPPA HYDROPOWER LIMITED
2 EASTERN RAMGANGA VALLEY HYDEL PROJECTS CO. PVT. LTD.
3 EDCL ARUNACHAL HYDRO PROJECT PVT. LTD.
4 EDCL POWER PROJECTSLIMITED
5 EDCL SEPPA BEYONG HYDRO ELECTRIC PVT. LTD.
6 EDCL SEPPA DUNKHO HYDRO ELECTRIC PVT. LTD.
7 EDCL SEPPA JUNGPOWER PVT.LTD.
8 EDCL SEPPA KAWA POWER PVT. LTD.
9 EDCL SEPPA LADA HYDRO ELECTRIC PVT. LTD.
10 EDCL SEPPA MARJINGLA HYDRO ELECTRIC PVT. LTD.
11 EDCL SEPPA NIRE HYDRO ELECTRIC PVT. LTD.
12 EDCL SEPPA PACHUK POWER PVT. LTD.
13 EDCL SEPPA RIANGPOWER PVT.LTD.
14 EDCL TAWANG LOWER TSACHU HYDRO ELECTRIC PVT. LTD.
15 EDCL TAWANGPOWER PVT.LTD.
16 EDCL TAWANG UPPER TSACHU HYDRO ELECTRIC PVT. LTD.
17 SARJU VALLEY HYDEL PROJECTS COMPANY PVT. LTD.
(c) Associates
Sterlite Merchants LLP
Sarvottam Caps Pvt. Ltd. (Upto 09.01.2013 )
i) In respect of above parties, there is no provision for doubtful
debts as on 31st March 2014 and no amount has been written or written
back during the year in respect of debts due from / to them.
ii) The above Related Party information is as identified by the
Management and relied upon by the auditors.
SEGMENT REPORTING
Segments have been identified in line with the Accounting Standards
AS-17 taking into account the organization structure as well as the
differencing risk and return. The Company''s business segment comprises
of (1) generation and sale of electricity and (2) Construction,
development, implementation, operation & maintenance of projects and
consultancies (Contract Division). These have been identified by the
type of their respective sales and services rendered. Amount in (Rs.)
* Sales/Income from operations (net of service tax) includes Rs.
72,600,000/-(Previous Year Rs. 72,600,000/-) on account of income from
consultancy and other services.
Revenue and expenses have been identified to segment on the basis of
their relationship to the operating activities of the segment. Revenue
and expenses which relates to enterprise as a whole and not allocable
to segment on a reasonable basis have been included under the head
other common expenses.
As the company operates entirely in India no secondary segment has been
identified for the above purpose.
NOTE 3
COMPARATIVES
The previous year''s figures have been regrouped and rearranged wherever
considered necessary .
Mar 31, 2013
NOTE 1
COMMITMENT & CONTINGENCIES
a) Estimated amount of contracts remaining to be executed on capital
account (net of advances) Rs. 212,885,648/-(Previous year Rs.
202,245,697/-)
b) The company has given guarantee in respect of loan taken by one of
its subsidiary (Outstanding balance as on 31.03.2013 Rs. 605,196,921/-)
c) Claims against the Company not acknowledged as debts :
Nature of the
statute Nature of Dues Amount Period to which Forum where
the
amount relates dispute is
pending
Income Tax Scruitiny
demand raised
U/s 143(3) 30,224,140/-Assessment year
2010-11 CIT
(Appeals)
NOTE 2
SEGMENT REPORTING
Segments have been identified in line with the Accounting Standards
AS-17 taking into account the organization structure as well as the
differencing risk and return. The Company''s business segment comprises
of (l)generation and sale of electricity (SOE) and (2)sale of project
materials, consultancy and service charges (Contract Division). These
have been identified by the type of their respective sales and services
rendered.
* Sales/Income from operations (net of service tax) includes Rs.
72,600,000/-(Previous Year Rs. 92,178,351/-) on account of income from
consultancy and other services.
Revenue and expenses have been identified to segment on the basis of
their relationship to the operating activities of the segment. Revenue
and expenses which relates to enterprise as a whole and not allocable
to segment on a reasonable basis have been included under the head
other common expenses.
As the company operates entirely in India no secondary segment has been
identified for the above purpose.
NOTE 3 COMPARATIVES
The previous year''s figures have been regrouped and rearranged wherever
considered necessary .
Mar 31, 2012
(Secured by hypothecation of entire stocks and other movables of the
company including all movable Plants & Machineries, Furniture &
Fixtures, Vehicles, Computers and other accessories, etc. stored or to
be stored, at the premises/god owns of the company's' contract division
and also all present and future book debts, outstanding monies,
receivables, claims, bills, etc. and equitable mortgage of immovable
properties at 9MW Harangi Hydro Electric Project) (Renewable every
year).
The Company has not yet received information from vendors regarding
their status under the Micro, Small and Medium Enterprises Development
Act, 2006 (the Act) and hence disclosure relating to amounts unpaid as
at the yearend together with interest paid/payable under the Act has
not been given.
* Includes Rs. 24,637,316/- (Previous year Rs. 3,751,890/-) payable to
Associate company.
Note : 1) 7.21 acres of Land has been taken on lease for 40 years
w.e.f. 14th July, 1999 at an annual lease rent of Rs. 72,100/-.
2) Transmission Lines, Transformers, Cable network etc. include Power
Evacuating facilities put up in relation to the Hydro Electric
Generating Station, which has been handed over to the Electricity Board
for transmission of Electricity and maintenance thereof.
3) Windmill includes Leasehold Land of Rs. 3,600,000/- (Previous year Rs.
3,600,000/-).
'''The shares held in Ayyappa Hydro Power Ltd., a subsidiary was
pledged (3,750,000 shares) with the lender of the said subsidiary.
Further the Company has given a non-disposable undertaking (8,750,000
shares) to the lender of the said subsidiary.
* Includes Rs. 38,957/- (Previous Year Rs. 67,925/-) receivable from
Subsidiary Company.
* Includes Rs. 84,029,653/- (Previous Year Rs. Nil) receivable from
Subsidiary Company.
* Includes Rs. 93,366,280/- (Previous Year Rs. Nil) amount received from
subsidiary company **Includes Rs. 3,298,350/- from subsidiary company.
Employees Benefits
The disclosures required under Accounting Standard 15 "Employee
Benefits" notified in the Companies (Accounting Standards) Rules 2006
(AS-15), are given below :
(i) Defined Contribution Scheme
Contribution to Defined Contribution Plan, recognized for the year are
as under :
Employer's Contribution to Provident Fund Rs. 108,047/- (Previous year Rs.
106,684/-)
Employer's Contribution to Pension Fund Rs. 245,026/- (Previous year Rs.
251,260/-)
Notes:
(a) Assumptions related to future salary increases, attrition, interest
rate for discount and overall expected rate of return on Assets have
been considered based on relevant economic factors such as inflation,
market growth and other factors applicable to the period over which the
obligation is expected to be settled.
* Value of consumption of stores and spare parts :
(i) The entire consumption is out of indigenous supplies.
(ii) Consumption as above includes Rs. 309,911/- (Previous year Rs.
309,064/-) on account of amortization of spares.
(iii) Stores and Spare parts included in inventory are largely consumed
as replacements and hence their consumption may not be comparable on a
year on year basis.
NOTE 1
Commitment
a) Estimated amount of contracts remaining to be executed on capital
account (net of advances) Rs. 202,245,697/- (Previous year Rs.
17,000,000/-).
b) The company has given guarantee in respect of loan taken by one of
its subsidiary (Outstanding balance as on 31.03.2012 Rs. 445,882,806/-).
NOTE 2
Certain debtors aggregating to Rs. 43,282,853/- are recoverable for a
considerable period. In view of the persuasive and other steps being
taken, these balances have been considered to be fully recoverable,
however in accordance with the prudent accounting policy, a provision
for bad and doubtful debts have been made in the accounts to the extent
of 50% of the outstanding, as on 31st March, 2012 as disclosed in note
no. 15.
Notes:
i) In respect of above parties, there is no provision for doubtful
debts as on 31st March 2012 and no amount has been written off or
written back during the year in respect of debts due from/to them.
ii) The above Related Party information is as identified by the
Management and relied upon by the auditors.
* This being a technical matter has been taken as certified by the
management and has not been verified by the auditors.
(B) Units purchased for operations of plant 173,370 units.
(C) The company purchases various items which can be broadly classified
as project materials hence further classification of the same has not
been carried out.
* Sales/Income from operations (net of service tax) includes Rs.
92,178,351/-(Previous Year Rs. 32,400,000/-) on account of income from
consultancy and other services.
Revenue and expenses have been identified to segment on the basis of
their relationship to the operating activities of the segment. Revenue
and expenses which relates to enterprise as a whole and not allocable
to segment on a reasonable basis have been included under the head
other common expenses.
As the company operates entirely in India no secondary segment has been
identified for the above purpose.
The previous year's figures have been regrouped and rearranged wherever
considered necessary .
Notes: 1) Cash and Bank Balance as on 31.03.2012 includes Rs.
46,186,000/- (Previous Year Rs. 35,674,000/-) as Margin Money Accounts.
2) Cash Flow Statement is prepared by the indirect method as set out in
Accounting Standard - 3 on Cash Flow Statement
3) Cash & Cash Equivalents presented in the statement consists of cash
on hand and demand deposits with bank as on the balance sheet date.
Mar 31, 2011
(1) Estimated amount of contracts remaining to be executed on capital
account (net of advances) Rs. 489,694,450/- (Previous year Rs.
17,000,000/-).
(2) Capital Work in Progress includes:
a. Machinery in stock, construction /erection materials, advances for
construction/erection works and machinery etc.
b. Capital advances of Rs Nil. (Previous year Rs. 1,600,000/-)
d. The second Power plant at Harangi was commissioned during the year
and accordingly pre-operative expenses and balances in Capital
Work-in-Progress have been transferred to Fixed Assets.
e. Fixed Assets (including Capital Work-in Progress) as at 31st March,
2011 included pre-operative/ initial expenses incurred towards various
Hydro- Electrical Projects at Arunachal Pradesh which have been
transferred to various subsidiary companies as on that date.
Accordingly, expenses incurred till date and lying as Capital Work-in
Progress have been transferred to the said companies and included in
Loans and Advances as these amounts are recoverable from the
subsidiaries.
(3) A scheme of arrangement for amalgamation of Dhanashree Projects
Limited (Dhanashree) with the Company and transfer of 7MW Ullankal
Hydel Power Project Undertaking (the Undertaking) to EDCL Power
Projects Limited (PPL), a wholly owned subsidiary with effect from 1st
April 2009 (the appointed date) has been sanctioned by the Honourable
High Courts at Bangalore and Calcutta under Section 391 and Section 394
of the Companies Act, 1956 vide their Order dated August 12, 2010 and
September 15, 2010 respectively. As per the said scheme, all assets and
liabilities pertaining to Dhanashree has been transferred to the
Company and those pertaining to the Undertaking has been transferred
from the Company at their respective book values with effect from the
appointed date. Necessary adjustments in this respect were given effect
to in the books of accounts of the Company in previous year. However,
the necessary formalities in respect of change in name for immovable
properties, investment, bank accounts etc. are in the process of being
complied with.
(4) Income from sale of electricity for the year includes amount
received from Chamundeshwari Electricity Supply Company Limited
(CHESCOM) on account of excess generation and revision of rates
totaling to Rs. 86.07 Lacs as arrear for the period upto 31st
March,2010. Cost of power purchased for the year includes a sum of Rs.
32.56 lacs paid to CHESCOM on account of minimum demand charges for
electricity purchased for the period upto 31st March, 2010.
(5) The shares held in Ayyappa Hydro Power Ltd., a subsidiary was
pledged (3,750,000 shares) with the lender of the said subsidiary.
Further the Company has given a non - disposable undertaking (8,750,000
shares) to the lender of the said subsidiary.
(6) The Company has not yet received information from vendors regarding
their status under the Micro, Small and Medium Enterprises Development
Act, 2006 (the Act) and hence disclosure relating to amounts unpaid as
at the year end together with interest paid/payable under the Act has
not been given.
(7) Related Party disclosures pursuant to Accounting Standard -18 :
(a) Key Management Personnel and their relative
Mr. Amar Singh (Chairman and Whole Time Director)
Mrs. Pankaja Kumari Singh (Wife of the Chairman and Whole Time
Director)
Mr. Sanjiv Saraf (Executive Director)
Mrs. Indira Saraf (Wife of the Executive Director)
(b) Subsidiary Company Ayyappa Hydro Power Limited
Eastern Ram Ganga Valley Hydel Projects Company Pvt. Ltd.
EDCL Power Projects Ltd..
EDCL Arunachal Hydro Project Pvt. Ltd.
EDCL Seppa Beyong Hydro Electric Pvt. Ltd.
EDCL Seppa Nire Hydro Electric Pvt. Ltd.
EDCL Seppa Dhunko Hydro Electric Pvt. Ltd.
EDCL Seppa Lada Hydro Electric Pvt. Ltd.
EDCL Seppa Marjingla Hydro Electric Pvt. Ltd.
EDCL Seppa Jung Power Pvt. Ltd.
EDCL Seppa Kawa Power Pvt. Ltd.
EDCL Seppa Pachuk Power Pvt. Ltd.
EDCL Seppa Riang Power Pvt. Ltd.
EDCL Tawang Power Pvt. Ltd.
EDCL Tawang Lower Tsachu Hydro Electric Pvt. Ltd.
EDCL Tawang Upper Tsachu Hydro Electric Pvt. Ltd
Sarju Valley Hydel Projects Company Pvt. Ltd.
(c) Associates Sarvottam Caps Limited
(b) Units generated and sold includes 1.09 million units from 6 MW
Harangi stage II project which was commissioned on 30th August, 2010.
(c) Units purchased for operations of plant 1,02,548 units.
(d) Details in respect of goods purchased and sold :
The company purchases and sales various items primarily required in
electrical projects and as these materials are denominated in different
units quantitative details as required by certain clauses of Paragraph
3, 4C and 4D of the Part II of Schedule VI of the Companies Act 1956
has not been provided.
(e) Value of consumption of stores and spare parts :
(i) The entire consumption is out of indigenous supplies.
(ii) Consumption as above includes Rs 309,064/- (Previous year Rs
309,064/-) on account of amortisation of spares.
(iii) Stores and Spare parts included in inventory are largely consumed
as replacements and hence their consumption may not be comparable on a
year on year basis.
8. Employees Benefits :
The disclosures required under Accounting Standard 15 "Employee
Benefits" notified in the Companies (Accounting Standards) Rules 2006
(AS-15), are given below :
(i) Defined Contribution Scheme
Contribution to Defined Contribution Plan, recognized for the year are
as under :
Employer's Contribution to Provident Fund Rs 106,684/- (Previous year
Rs. 80,552/-)
Employer's Contribution to Pension Fund Rs 251,260/- (Previous year Rs.
182,465/-)
(ii) Defined Benefit Scheme
The employee's gratuity fund scheme managed by Life Insurance
Corporation of India 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.
9. Segment Reporting
Segments have been identified in line with the Accounting Standards
AS-17 taking into account the organization structure as well as the
differencing risk and return. The Company's business segment comprises
of generation and sale of electricity (SOE) and sale of electrical
project materials, consultancy and service charges (Contract Division).
These have been identified by the type of their respective sales and
services rendered.
Revenue and expenses have been identified to segment on the basis of
their relationship to the operating activities of the segment. Revenue
and expenses which relates to enterprise as a whole and not allocable
to segment on a reasonable basis have been included under the head
other common expenses.
As the company operates entirely in India no secondary segment has been
identified for the above purpose.
10. The employees of EDCL Power Projects Ltd. (EDCL PPL) and their
related liabilities have been taken over by the Company with effect
from 1st April, 2010.
11. In view of Note 3(d) and Note 15 above, the previous year's
figures are strictly not comparable. However, previous year's figures
have been regrouped and rearranged wherever considered necessary.
Mar 31, 2010
1. Estimated amount of contracts remaining to be executed on capital
account (net of advances) Rs.17,000,000 (Previous year Rs.57,500,000).
2. Capital work in Progress includes :
a. Machinery in stock, construction /erection materials, advances for
construction/erection works and machinery etc.
b. Capital advances of Rs.1,600,000 (Previous year Rs.17,800,000)
3. A scheme of arrangement (the Scheme) for amalgamation of Dhanashree
Projects Limited (Dhanashree) with the Company and transfer of 7MW
Ullankal Hydel Power Project Undertaking (the undertaking) to EDCL
Power Projects Limited (PPL), a wholly owned subsidiary with effect
from 1st April 2009 (the appointed date) has been sanctioned by the
Honorable High Court at Bangalore and Calcutta under Section 391 and
Section 394 of the Companies Act, 1956 vide their Order dated August
12, 2010 and September 15, 2010 respectively. The following
transactions have been given effect to in the books of accounts of the
Company pursuant to the approval of the scheme as above and on filing
the same with the Registrar of Companies at Bangalore on 9th September,
2010 and Kolkata on 18th September, 2010 :
b) As Dhanashree is a wholly owned subsidiary, no shares are required
to be issue as consideration. The difference between the existing
investments and assets & liabilities transferred as above amounting to
Rs.1,165,346 has been taken to capital reserve.
e) The transfer obligation is required to be discharged by issue of
35,00,000 equity shares of Rs. 10/- each aggregating to Rs.35,000,000
by PPL. Pending increase in the authorized Share Capital and allotment
of the equity shares as mentioned above, the same have been included
under advance against equity to subsidiaries.
f) In view of the management, there is no stamp duty leviable on
transfer of property in the State of Kerala and no provision is
required in this respect.
g) During the year the operations of the undertaking was managed by the
company on behalf of PPL and the net amount payable to them has been
considered as liability included under other liability.
h) As the scheme became effective on 18.09.2010 necessary formalities
in respect of change in name for immovable properties, investment, bank
accounts etc are in the process of being complied with.
4. Profit on sale of investments represents profit on disposal of
investments received on amalgamation as given in Note 4 above.
5. In the opinion of the management, the current assets, loans and
advances have a value on realization in the ordinary course of
business, at least equal to the amount at which these are stated in the
Balance Sheet.
6. The company has entered into joint venture for execution of a
contract for earthwork filling and compaction. The work carried out in
respect of the said contract has been included in work in process and
increase/decrease in stock.
7. The Company has not yet received information from vendors regarding
their status under the Micro, Small and Medium Enterprises Development
Act, 2006 (the Act) and hence disclosure relating to amounts unpaid as
at the year end together with interest paid/payable under the Act has
not been given.
8. Related Party disclosures pursuant to Accounting Standard -18
issued by the Institute of Chartered Accountants of India :
(a) Key Management Personnel and their relative
Mr. Amar Singh (Chairman and Whole Time Director)
Mrs. Pankaja Kumari Singh (Wife of Chairman and Whole Time Director)
Mr. Sanjiv Saraf (Executive Director)
Mrs. Indira Saraf (Wife of Mr. Sanjiv Saraf)
(b) Subsidiary Company
Ayyappa Hydro Power Limited
EDCL Power Projects Ltd. (with effect from 28th May 2009)
(c) Associates
Sarvottam Caps Limited
9. During the year the warrant holders in respect of 7,500,000
warrants allotted to promoters and independent investors on
preferential basis have not exercised their option to convert the
warrant into shares within eighteen months. Accordingly, the entire
amount of Rs.12,40,00,000 received at the time of allotment of
aforesaid warrants was forfeited and the same was transferred to
Capital Reserve.
10. The 7MW Ullankal Hydro Electric project has been transferred to
wholly owned subsidiary EDCL Power Projects Ltd. with effect from
01.04.2009. Further associate Company Dhanashree Projects Ltd. has been
merged with the company with effect from 01.04.2009 and hence previous
years figures are not strictly comparable. Previous years figures
have been regrouped and rearranged wherever considered necessary.
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