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Bhilwara Energy Limited Annual Report 2006-2007
Having been built on solid, reliable foundations, the
LNJ Bhilwara Group has evolved beyond its rich
heritage, steeped in integrity, reliability, quality… and
most importantly, an innate ability for innovation.
This ethos has catapulted the Group onto a global
platform, having set several benchmarks along the
years, driven by a passion for excellence.
Today, the Group is driven selflessly by its dedicated
team, which constantly innovates to generate out-of-
the-box solutions, extrapolating the current market
scenarios and trends, to focus on the needs of
tomorrow.
The LNJ Bhilwara Group offers its customers, clients
and shareholders, an avalanche of success stories,
infused with perfection and practicality alike, each one
a new gem of superlative achievement.
L. N. JhunjhunwalaChairman - Emeritus
LNJ Bhilwara Group
A Passionfor Excellence
Bhilwara Energy Limited ›› Annual Report 2006-2007
ContentsContentsGroup Salient Features 2
Corporate Information 3
Notice of Annual General Meeting 4
Directors’ Report 6
Annexure to Directors’ Report 10
Auditors’ Report 11
Balance Sheet 14
Schedules 15
Balance Sheet Abstract 19
Power
•
1. Bhilwara Energy
Ltd.
2. Malana Power
Company Ltd.
3. AD Hydro Power
Ltd.
Hydro Power
Generation
•
1. Thermal
2. Hydro
3. Waste Heat Recovery
4. Wind Energy
•
1. Indo CanadianConsultancyServices Ltd.
Captive Power
Power Consultancy
Group Salient Features : 2006-07
GROUP FINANCIAL HIGHLIGHTS
PARTICULARS 2004-05 2005-06 2006-07
Turnover 2049 2387 2859
Export Sales 893 1016 1361
PBIDT 274 374 434
PBDT 208 286 323
PBT 96 156 193
PAT 79 115 134
Gross Fixed Assets 2494 2922 3835
Net Worth 969
(Rs. in crore)
1382 1525
• RSWM Limited (yarn, fabric, garments, technical textiles, Denim)
• Maral Overseas Ltd. (cotton yarn, fabric & knitted garments)
• BSL Ltd. (fabric - worsted, polyester & silk furnishing)
• BMD Pvt. Ltd. (automotive fabric)
• Bhilwara Spinners Ltd. (yarn)
• Bhilwara Processors Ltd. (process house)
Textiles
• HEG Limited
Graphite Electrodes / Steel
2
• Bhilwara Energy Limited incorporated as the Holding Company for the Group’s power businesses.
• Bhilwara Energy Limited bags three Hydel Power projects in Arunachal Pradesh.
• Bhilwara Energy formalises agreement with Punjab State Electricity Board to develop and run a 75 MW power plant near Pathankot.
• MPCL becomes the first hydro power company in India to implement ERP.
• RSWM Limited is the new name for Rajasthan Spinning & Weaving Mills Ltd.
• RSWM has initiated a Rs. 900 crore expansion plan. Its Denim & Captive Thermal Power Plants are nearing completion.
• RSWM, Maral Overseas and BSL Limited expand their spindle capacities.
• RSWM was recently felicitated with Rajiv Gandhi National Quality Award.
• RSWM announced the acquisition of Cheslind Textiles Ltd., a Bangalore based textile unit.
• RSWM International B.V., Holland, incorporated, a 100% subsidiary of RSWM, executes a 50:50 JV with SISA S.A., Spain. The new JV entity is known as RSWM SISA.
• RSWM ropes in Salman Khan as brand ambassador for Mayur Suitings.
• HEG’s 52,000 MT per annum, Graphite Electrode plant stabilised.
• HEG institutes LNJ Award for outstanding work in the field of Carbon.
• HEG initiated Rs. 110 crore Capex during the year.
• Bhilwara Scribe ranked amongst the top 5 BPOs in Healthcare segment.
3
Bhilwara Energy Limited ›› Annual Report 2006-2007
Corporate Information
BANKERS & FINANCIAL INSTITUTIONS
CORPORATE OFFICE
REGISTERED OFFICE & WORKS
UTI Bank Limited
State Bank of India
Centurion Bank of Punjab Limited
Bhilwara TowersA-12, Sector - 1NOIDA - 201 301 (U.P.)Phone : 0120-4390300Fax : 0120-2531648, 745Website : www.bhilwaraenergy.com
Bhilwara Bhawan40-41, Community CentreNew Friends ColonyNew Delhi - 110 065Phone : 011-26822997
GROUP CHAIRMAN - EMERITUS
GROUP CHAIRMAN
BOARD OF DIRECTORS
STATUTORY AUDITORS
TECHNICAL CONSULTANTS
Mr. L. N. Jhunjhunwala
Mr. Ravi Jhunjhunwala
Mr. Vimal Banka
Mr. B. P. Singh
Mr. Salil Bhandari
Mr. M. K. Dooger
M/S S. S. Kothari Mehta & Co., New Delhi
M/s Indo-Canadian Consultancy Services Limited
4
NOTICE is hereby given that the First Annual General Meeting of the members of the Company will be convened on
Saturday, the 29th day of September, 2007 at 14.00 A.M. at the Registered Office of the Company at Bhilwara
Bhawan, 40-41 Community Centre, New Friends Colony, New Delhi - 110065 to transact the following business:
1. To receive, consider and adopt the Audited Balance Sheet as on 31st March, 2007 and Report of the Board of
Directors and the Auditors report thereon.
2. To appoint M/s S. S. Kothari Mehta & Co., Chartered Accountants as Statutory Auditors, who shall hold office
from the conclusion of this Annual General Meeting until the conclusion of next Annual General Meeting and to
fix their remuneration.
3. To consider and if thought fit, to pass with or without modification, the following resolutions as an Ordinary
Resolution in respect of which Notice, as required under Section 257 of the Companies Act, 1956, has been
received from a member:
a. “RESOLVED THAT Mr. Vimal Banka, who was appointed with effect from 21.07.2006 as an Additional
Director of the Company and holds office upto the date of this Annual General Meeting under Section 260
of the Companies Act, 1956 be and is hereby appointed as a Director of the Company, liable to retire by
rotation”.
b. “RESOLVED THAT Mr. Mahender Kumar Doogar, who was appointed with effect from 21.07.2006 as an
Additional Director of the Company and holds office upto the date of this Annual General Meeting under
Section 260 of the Companies Act, 1956 be and is hereby appointed as a Director of the Company, liable to
retire by rotation”.
c. “RESOLVED THAT Mr. Salil Bhandari, who was appointed with effect from 21.07.2006 as an Additional
Director of the Company and holds office upto the date of this Annual General Meeting under Section 260
of the Companies Act, 1956 be and is hereby appointed as a Director of the Company, liable to retire by
rotation”.
d. “RESOLVED THAT Mr. Bhaskar Pratap Singh, who was appointed with effect from 29.12.2006 as an
Additional Director of the Company and holds office upto the date of this Annual General Meeting under
Section 260 of the Companies Act, 1956 be and is hereby appointed as a Director of the Company, liable to
retire by rotation”.
e. “RESOLVED THAT Mr. Sunil Chawla, who was appointed with effect from 21.08.2007 as a Additional
Director of the Company and holds office upto the date of this Annual General Meeting under Section 260
of the Companies Act, 1956 be and is hereby appointed as a Director of the Company, liable to retire by
rotation”.
BY ORDER OF THE BOARD
FOR BHILWARA ENERGY LIMITED
Place : NOIDA, U.P. Vimal Banka
Date : 1st September, 2007 Director
ORDINARY BUSINESS:
SPECIAL BUSINESS:
Notice of Annual General Meeting
Bhilwara Energy Limited ›› Annual Report 2006-2007
5
NOTES
ANNEXURE TO THE NOTICE
EXPLANATORY STATEMENT PURSUANT TO
SECTION 173(2) OF THE COMPANIES ACT, 1956.
Item No. 3:
1. A member entitled to attend and vote is entitled to appoint a proxy to attend and vote instead of himself and such
proxy need not be a member of the Company. The proxy to be effective should be lodged at the Registered Office
of the Company at least 48-hours before the commencement of the meeting.
2. Shareholders seeking any information with regard to accounts are requested to write to the Company at least 7-
days in advance so as to enable the Company to keep the desired information ready.
3. Members/ Proxies should bring the Attendance Slip duly filled in for attending the meeting.
4. Members are requested to notify promptly, the changes, if any, in their address to the Company.
Mr. Vimal Banka, Mr. M. K. Doogar, Mr. Salil Bhandari were appointed as additional directors on 21st July 2006 and
Mr. B. P. Singh was appointed as Additional Director on 29th December, 2006.
Mr. Sunil Chawla was also appointed as Additional Director, as representative Director for the New York Life
Investment Management India Fund FVCI II LLC and Jacob Ballas Capital India Private Ltd. on 21st August, 2007 as
per the terms and conditions of Share Subscription and Shareholder's Agreement dated 20th June 2007 signed by the
Company.
According to the provisions of Section 260 of the Companies Act, 1956, the above Directors can hold office upto the
date of the Annual General Meeting. As required by Section 257 of the Companies Act, 1956, a notice has been
received from Members signifying their intention to propose the appointment of all above said Additional Directors
as Director at the forthcoming Annual General Meeting. Hence, necessary resolutions are required to be passed in
the meeting for member's approval.
All above Directors are deemed to be interested in the proposed resolution to the extent of their appointment as a
Director. Directors recommend the resolution as proposed in the Notice for Member's approval.
6
Directors’ ReportBOARD’S REPORT
To the members of Bhilwara Energy Limited
INCORPORATION
POWERING THE FUTURE
THE WAY AHEAD
OPERATIONS
On behalf of the Board of Directors, I have pleasure in presenting the First Annual
Report of the Board on the formation of the Company and Audited Statement of
Accounts for the year ended 31st March, 2007 together with the Auditors’ Report.
The Company was incorporated on 17th May, 2006 and the Certificate to
commence business was received from Registrar of Companies, New Delhi on
13th July, 2006.
The Company has been incorporated with the objective to be a Flagship Entity of
LNJ Bhilwara Group in Power Sector. The Company endeavors to develop new
green field power projects or acquisitions with plans to venture into the State of
Uttaranchal, Sikkim, Madhya Pradesh, Chattisgarh, Himachal Pradesh, Arunachal
Pradesh and Nepal. It intends to participate in the renovation and modernization
of old power stations and to undertake power distribution, power trading and
power transmission from surplus to deficit areas. The Company shall venture to
own, develop and maintain not only Hydro Projects but also Thermal power
plants in the country. The Company shall be participating in bidding process for
viable projects to secure more water concessions in Hydro Power Sector. The
Company is determined to expand its power generation capacity continuously.
The envisioned power generation capacity of the Company is 1500 MW by the
year 2015.
It is proposed that the Company shall be the holding Company of all other power
sector companies of the Group. The Company will hold 51% equity stake in its
Group affiliate Malana Power Company Limited. By acquiring 51% equity stake in
MPCL, the Company would also acquire 45.9% holding of AD Hydro Power
Limited indirectly, since MPCL holds 90% stake in ADHPL. The Company plans to
dilute a portion of the equity base to mobilize funds for the purpose of its upcoming
hydro projects from time to time. All the future projects of the LNJ Bhilwara
Group shall be held by the Company, except for the Captive Power Plants.
During its first year of operations, it has signed Implementation Agreement with
Bhilwara Energy Limited ›› Annual Report 2006-2007
7
Punjab State Electricity Board (PSEB) to develop, operate
and maintain 75 MW UBDC State III Canal Based Hydro
Electric Project in the State of Punjab. The Company also
signed Memorandum of Agreement with State
Government of Arunachal Pradesh to implement, develop
and operate three hydro projects namely Nyamjang Chhu
State I, II & III in Tawang district in the State of Arunachal
Pradesh with the total capacity of 290 MW. The
preparation of Detailed Project Report (DPR) in respect of
above three projects has already been assigned to Indo
Canadian Consultancy Services Ltd., a Company of LNJ
Bhilwara Group.
During the period under review, the company raised its
authorized capital from Rs. 50 million to Rs. 1000 million.
The Company also preferentially issued and allotted
66,775,900 equity shares of face of Rs. 10/- each to several
individuals, Hindu Undivided families, LNJ Bhilwara
Group and Investment Companies including HEG Limited
and RSWM Limited.
During the financial year, the Company issued and
allotted 19,425,715 warrants of face value of Rs. 10/- each,
INCREASE IN AUTHORISED CAPITAL
WARRANTS CONVERTIBLE INTO EQUITY SHARES
with each warrant convertible into equity share of the
Company of nominal value of Rs. 10/- each to promoters /
promoter group and Relatives of promoters. The right for
conversion of share warrants into equity shares shall be
exercisable only in the event of installed capacity of three
Hydro Power Projects exceeding 290 MW, to be
determined by the DPR and approval thereof by the
Government of Arunachal Pradesh (GoAP).
Being the first year of its operation, your directions do not
propose any dividend for the financial year under review.
The Company values human resources very vital to the
augmentation of the organization. The Company
recognizes serious dearth of trained expert personnel in
power sector. With the initiative of Government for
growth in power sector, there is growing requirement for
not just qualified engineers, but also for finance,
marketing, commercial, IT and HR personnel. There is an
urgent need for skilled people in power generation,
distribution and trading.
Your Company has also put in place recruitment and
DIVIDEND
HUMAN RESOURCE DEVELOPMENT
8
a true and fair view of the state of affairs of the
Company at the end of the financial year and of the
profit or loss of the company for the financial
year 2006-2007;
iii) that the proper and sufficient care has been taken for
the maintenance of adequate accounting records in
accordance with the provisions of this Act for
safeguarding the assets of the company and for
preventing and detecting fraud and other
irregularities; and
iv) that the annual accounts have been prepared on
going concern basis.
During the year under review, Mr. Ravi Jhunjhunwala,
Mr. Riju Jhunjhunwala and Dr. Kamal Gupta resigned
from the Board of Directors with effect from 21st July,
2006. Mr. Vimal Banka, Mr. M. K. Doogar & Mr. Salil
Bhandari were appointed with effect from 20th July, 2006
and Mr. B. P. Singh was appointed as an Additional
Director with effect from 29th December, 2006, until the
conclusion of the Annual General Meeting. The Board
recommends for the appointment of all the additional
Directors at Annual General Meeting who shall be liable
to retire by rotation.
DIRECTORS
human resource management system for its future needs
of enormous manpower requirements in development of
projects, which enables it to attract and retain high caliber
employees. Your Company is also committed to become
an attractive employer in the industry.
During the financial year 2006-2007, no employee of the
Company was covered as per the provisions of section
217(2A) of the Companies Act, 1956 (the Act), read with
the Companies (Particulars of Employees) Rules, 1975, as
amended, regarding employees.
As required under section 217 (2AA) of the Companies
(Amendment) Act, 2000, the Directors' of your Company
states hereunder:-
i) that in the preparation of the annual accounts, the
applicable accounting standards had been followed
along with proper explanation relating to material
departures, if any;
ii) that the accounting policies have been selected and
applied consistently and made judgments and
estimates that are reasonable and prudent so as to give
PARTICULARS OF EMPLOYEES
DIRECTORS' RESPONSIBILITY STATEMENT
9
Bhilwara Energy Limited ›› Annual Report 2006-2007
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN
EARNINGS AND EXPENDITURE
PUBLIC DEPOSITS
AUDITORS
AUDITORS’ REMARKS
ACKNOWLEDGEMENT
Since the Company is yet to start operational activity and has no dealings in foreign
exchange, the particulars required by the Companies (Disclosure of Particulars in
the Report of Board of Directors) Rules, 1988 are NIL.
The Company has not accepted any deposits from the public during the year under
report. Therefore, provisions of Section 58A are not applicable.
M/s S. S. Kothari Mehta & Co., Chartered Accountants Statutory auditors of the
Company retire at the ensuing Annual General Meeting of the Company and being
eligible offers themselves for reappointment.
The observations made by the Auditors with reference to the Notes to the Accounts
for the year under report are self-explanatory and require no further comments from
the board.
The Board of Directors sincerely acknowledge the precious assistance and
continued support provided by the Ministry of Power, Government of Himachal
Pradesh, Govt. of Arunachal Pradesh, Himachal Pradesh State Electricity Board,
Haryana State Electricity Board, Power Trading Corporation Limited, Commercial
Banks and other Governmental Departments. The Board looks forward to their
continued support and cooperation in the coming year as well.
Your Directors are pleased to place on record the appreciation for the highly
motivated employees of the company who are working zealously for the
accomplishment of the Corporate Mission by believing that great works are
performed not by strength but by perseverance and we look forward to their
continued dedication in the years to come to enable the Company to scale even
greater zenith.
For and on behalf of the Board of Directors
Place : New Delhi VIMAL BANKADate : 8th June, 2007 Director
10
ANNEXURE I TO THE DIRECTORS’ REPORT
STATEMENT OF PARTICULARS PURSUANT TO THE COMPANIES
(DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES,1988
1. CONSERVATION OF ENERGY - NIL
2. TECHNOLOGY ABSORPTION - NIL
A. RESEARCH AND DEVELOPMENT ( R& D ) - NIL
B. TECHNOLOGICAL ABSORPTION, ADAPTATION AND INNOVATION - NIL
c. EXPORTS & FOREIGN EXCHANGE EARNING AND OUTGO - NIL
Information pursuant to Section 217 (2A) of the Companies Act, 1956 read with the Companies
(Particulars of employees) Rules, 1975 and forming part of Directors Report for the year ended
31st March 2007 are given hereunder:
I. Persons employed for the full / part year - NIL
Bhilwara Energy Limited » Annual Report 2007
11
AUDITORS’ REPORT
To the members of Bhilwara Energy Limited
We have audited the attached Balance Sheet of Bhilwara Energy
Limited as at 31st March, 2007. No Profit & Loss account
has been prepared as the company has not commenced
commercial operations, the relevant details have been furnished
in Schedule-3 ‘Project and Pre-operative expenses (pending
allocation).
These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We have conducted our audit in accordance with auditing
standards generally accepted in India. These Standards require
that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by the
management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable
basis for our opinion.
As required by the Companies (Auditors’ Report) Order, 2003 as
amended by Companies (Auditors’ Report) (Amendment) Order,
2004 (Collectively the Order) issued by the Central Government
of India in terms of Section 227 (4A) of the Companies Act, 1956
and on the basis of such checks as we considered appropriate
and according to the information and explanations given to us,
we enclose in the Annexure a statement on the matters specified
in paragraphs 4 and 5 of the said Order.
Further to our comments in the Annexure referred to above, we
report that:
a) We have obtained all the information and explanations
which, to the best of our knowledge and belief, were
necessary for the purposes of our audit;
b) In our opinion, proper books of account, as required by
law, have been kept by the Company so far as appears from
our examination of those books;
c) The Balance Sheet dealt with by this report is in agreement
with the books of account;
d) In our opinion, the Balance Sheet, dealt with by this report,
complies with the Accounting Standards referred to in sub-
section (3C) of Section 211 of the Companies Act, 1956 to
the extent applicable;
e) On the basis of written representations received from the
Directors as on 31st March, 2007 and taken on record by
the Board of Directors, we report that none of the Directors
is disqualified as on 31st March, 2007 from being appointed
as a director in terms of clause (g) of sub section (1) of
section 274 of the Companies Act, 1956;
f) In our opinion and to the best of our information and
according to the explanations given to us, the said accounts,
read with the Accounting Policies and Notes thereon, give
the information required by the Companies Act, 1956 in
the manner so required and give a true and fair view in
conformity with the accounting principles generally
accepted in India;
i) In the case of Balance Sheet, of the state of affairs of
the Company as at 31st March, 2007.
For S. S. Kothari Mehta & Co.
Chartered Accountants
Arun K. Tulsian
Partner
Membership No. : 89907
Place : New Delhi
Date : 8th June, 2007
12
ANNEXURE TO AUDITORS’ REPORT
(Annexure referred to in our report of even date)
1. (a) The Company has maintained proper records
showing full particulars including quantitative
details and situation of fixed assets.
(b) The Company has done the physical verification of
its fixed assets which, in our opinion, is reasonable
having regard to the size of the Company and the
nature of assets. As informed to us, no discrepancies
were noticed on such verification.
(c) No substantial fixed assets were disposed off during
the year.
2. According to the information and explanations given to
us and the records examined by us, the Company is not
having any inventory, in view of which the related
reporting requirement of this Order is not applicable on
the company.
3. (a) The Company has not granted any loan, secured or
unsecured, to Companies, firms and other parties
covered in the register maintained under section
301 of the Companies Act, 1956.
(b) The company has not taken any loan, secured or
unsecured, from Companies, firms and other parties
covered in the register maintained under section
301 of the companies Act, 1956.
(c) Since there are no such loans, the comments
regarding terms and conditions, payment of the
principal amount & interest thereon and overdue
amount are not required.
4. In our opinion, and according to the information and
explanations given to us during the course of audit, there
are adequate internal control systems commensurate with
size of the Company and the nature of its business with
regard to purchase of fixed assets. Further on our
examination of the books and records of the company
carried out in accordance with the generally accepted
auditing practices in India, we have neither come across
nor have we been informed of any instance of major
weaknesses in the aforesaid internal control systems.
5. (a) Based upon the audit procedures applied by us and
according to the information and explanations given
to us, we are of the opinion that there is no
transaction which is required to be entered into the
register maintained under section 301 of the Act.
(b) In our opinion, and according to the information
and explanations given to us, there are no
transactions made in pursuance of contracts or
arrangements required to be entered in the register
maintained under section 301 of the Companies
Act, 1956 and aggregating during the year to Rupees
five lacs or more in respect of each party.
6. The Company has not accepted any deposits from public
within the meaning of section 58A and 58AA of the
Companies Act, 1956 or any other relevant provisions
of the Act including the Companies (Acceptance of
Deposit) Rules, 1975.
7. According to the information and explanations given to
us, the requirements of internal audit do not apply to the
Company.
8. (a) According to the records of the Company,
undisputed statutory dues including Provident Fund,
Income-Tax, Sales-Tax, Wealth-Tax, Service Tax,
Custom Duty, Excise Duty, Cess and other material
statutory dues, as applicable, have been regularly
deposited during the year with the appropriate
authorities. According to the information and
explanations given to us and as per the books and
records examined by us, there are no arrears of such
undisputed statutory dues outstanding as on the date
of balance sheet for a period exceeding six months
from the date they became payable.
(b) According to the records of the Company examined
by us and the information and explanations given
to us, there are no dues of Custom Duty, Wealth
Tax, Service Tax, Sales Tax, Excise duty, Income
Tax and Cess which have not been deposited on
account of any dispute.
9. Since the Company is yet to commence commercial
production, there are no accumulated losses as at the
end of the financial year.
10. In our opinion, and according to the information given
to us, the company has not availed any loan or credit
from Financial Institution or Banks.
11. According to the information and explanations given to
us, the Company has not granted any loans and advances
on the basis of security by way of pledge of shares,
debentures and other securities.
12. The Company does not fall within the category of Chit
fund/Nidhi/Mutual Benefit fund/Society and hence the
related reporting requirements are not applicable.
13. According to the information and explanations given to
us and the records examined by us, the Company is not
dealing or trading in shares, securities, debentures and
other investments and hence the related reporting
requirements of the Order are not applicable.
Bhilwara Energy Limited » Annual Report 2007
13
14. The Company has not given any guarantee for loans taken
by others from financial institutions / banks.
15. The Company has not raised Term Loans during the
financial year, hence the related reporting requirements
of the Order are not applicable.
16. According to the information and explanations given to
us and as per the books and records examined by us, as
on the date of balance sheet, no short term fund have
been raised by the Company. Hence the related reporting
requirement of the Order is not applicable.
17. The Company has not made any preferential allotment
of shares to companies and other parties covered in the
register maintained under section 301 of the Companies
Act, 1956.
18. The Company has not raised any debentures during the
year.
19. The Company has not raised any money through public
issue during the year.
20. During the course of our examination of the books and
records of the Company carried out in accordance with
the generally accepted auditing practices in India, we
have neither come across any instance of fraud on or by
the Company, noticed or reported during the year, nor
have we been informed of such case by the Management.
21. The other clauses of the Order are not applicable on the
Company.
For S. S. Kothari Mehta & Co.
Chartered Accountants
Arun K. Tulsian
Partner
Membership No. : 89907
Place : New Delhi
Date : 8th June, 2007
14
BALANCE SHEET AS AT 31ST MARCH, 2007 (Rs. ‘000)
SCHEDULES As at 31.3.2007
SOURCES OF FUNDS
Shareholders' Funds.......................................................................................................................................................................................................................................................................................Share capital 1 667,759......................................................................................................................................................................................................................................................................................Share application money (pending allotment) 4,410......................................................................................................................................................................................................................................................................................Warrants 9,713......................................................................................................................................................................................................................................................................................TOTAL 681,882......................................................................................................................................................................................................................................................................................APPLICATION OF FUNDS......................................................................................................................................................................................................................................................................................Fixed Assets......................................................................................................................................................................................................................................................................................Gross block 2 131......................................................................................................................................................................................................................................................................................Less : Depreciation 18......................................................................................................................................................................................................................................................................................Net block 113......................................................................................................................................................................................................................................................................................Project and pre-operative expenses (pending allocation) 3 29,993......................................................................................................................................................................................................................................................................................
30,106......................................................................................................................................................................................................................................................................................Current Assets, Loans and Advances......................................................................................................................................................................................................................................................................................Cash and bank balances 4 413,789......................................................................................................................................................................................................................................................................................Other current assets......................................................................................................................................................................................................................................................................................Loans and advances 5 233,466......................................................................................................................................................................................................................................................................................
647,255......................................................................................................................................................................................................................................................................................Less: Current Liabilities and Provisions......................................................................................................................................................................................................................................................................................Liabilities 6 1,859......................................................................................................................................................................................................................................................................................Provisions 7 228......................................................................................................................................................................................................................................................................................
2,087......................................................................................................................................................................................................................................................................................Net Current Assets 645,168......................................................................................................................................................................................................................................................................................Miscellaneous Expenditure 8 6,608(to the extent not written off or adjusted)......................................................................................................................................................................................................................................................................................TOTAL 681,882......................................................................................................................................................................................................................................................................................Notes to Accounts 9......................................................................................................................................................................................................................................................................................
The Schedules referred to above form an integral part of the Balance Sheet.
As per our report of even date For and on behalf of the Board of Directors
For S. S. Kothari Mehta & Co.
Chartered Accountants
Arun K. Tulsian Vimal Banka B. P. Singh
Partner Director Director
Membership No. : 89907
Place : New Delhi
Date : 8th June, 2007
Bhilwara Energy Limited » Annual Report 2007
15
SCHEDULES TO THE ACCOUNTS
(Rs. ‘000)
31.03.2007
SCHEDULE 1 : SHARE CAPITAL.......................................................................................................................................................................................................................................................................................
AUTHORISED.......................................................................................................................................................................................................................................................................................100,000,000 Equity shares of Rs.10 each 1,000,000.......................................................................................................................................................................................................................................................................................Issued, Subscribed and Paid up.......................................................................................................................................................................................................................................................................................66,775,900 Equity shares of Rs.10 each 667,759.......................................................................................................................................................................................................................................................................................
667,759.......................................................................................................................................................................................................................................................................................
SCHEDULE 2: FIXED ASSETS.......................................................................................................................................................................................................................................................................................
GROSS BLOCK DEPRECIATION NET BLOCK.......................................................................................................................................................................................................................................................................................Particulats Opening Additions/ Sale/ Cost as at Opening For the Sales Upto As at
Adjustment Adjustment 31.03.2007 Year Transfer 31.03.2007 31.03.2007.......................................................................................................................................................................................................................................................................................Furniture & Fixtures – 22 – 22 – 2 – 2 20.......................................................................................................................................................................................................................................................................................Computer – 52 – 52 – 9 – 9 43.......................................................................................................................................................................................................................................................................................Vehicles – 38 – 38 – 5 – 5 33.......................................................................................................................................................................................................................................................................................Electrical Equipments
& Fittings – 11 – 11 – 2 – 2 9.......................................................................................................................................................................................................................................................................................Project Equipments – 8 – 8 – 1 – 1 7.......................................................................................................................................................................................................................................................................................Total – 131 – 131 – 18 – 18 112.......................................................................................................................................................................................................................................................................................
SCHEDULE 3: PROJECT AND PRE-OPERATIVE EXPENSES
(pending allocation).......................................................................................................................................................................................................................................................................................Personnel Expenses......................................................................................................................................................................................................................................................................................Salaries , wages and bonus 822......................................................................................................................................................................................................................................................................................Contribution to provident and other funds 40......................................................................................................................................................................................................................................................................................Workmen and staff welfare expenses 72......................................................................................................................................................................................................................................................................................
934......................................................................................................................................................................................................................................................................................Administrative and other expenses......................................................................................................................................................................................................................................................................................Rent 53......................................................................................................................................................................................................................................................................................Rates & taxes 3......................................................................................................................................................................................................................................................................................Insurance 1......................................................................................................................................................................................................................................................................................Repairs and maintenance 4......................................................................................................................................................................................................................................................................................Travelling expense 930......................................................................................................................................................................................................................................................................................Conveyance 75......................................................................................................................................................................................................................................................................................Vehicle running & hiring expenses 85......................................................................................................................................................................................................................................................................................Communication expenses 27......................................................................................................................................................................................................................................................................................Auditor’s Remuneration :......................................................................................................................................................................................................................................................................................– Audit Fees 28......................................................................................................................................................................................................................................................................................Advertisement 4......................................................................................................................................................................................................................................................................................Legal & professional charges 3,058......................................................................................................................................................................................................................................................................................Fee & subscription 11......................................................................................................................................................................................................................................................................................
16
(Rs. ‘000)
31.03.2007
Testing & Surveys 2,565......................................................................................................................................................................................................................................................................................Consultancy Charges 10,500......................................................................................................................................................................................................................................................................................Project processing fee 11,600......................................................................................................................................................................................................................................................................................Miscellaneous expenses 326......................................................................................................................................................................................................................................................................................Financial / bank charges 87......................................................................................................................................................................................................................................................................................Depreciation 18......................................................................................................................................................................................................................................................................................
29,375......................................................................................................................................................................................................................................................................................Less : Interest earned (Tax deducted at source Rs. 107 thousand,
(net of provision for income tax Rs. 160 thousand). (316).......................................................................................................................................................................................................................................................................................
29,993.........................................................................................................................................................................................................................................................................................
SCHEDULE 4: CASH AND BANK BALANCES.......................................................................................................................................................................................................................................................................................Cash in hand 84.......................................................................................................................................................................................................................................................................................Balances with scheduled banks:.......................................................................................................................................................................................................................................................................................On current accounts 413,705.......................................................................................................................................................................................................................................................................................On deposit accounts –.......................................................................................................................................................................................................................................................................................
413,789.......................................................................................................................................................................................................................................................................................
SCHEDULE 5: LOANS AND ADVANCES(Unsecured, considered good).......................................................................................................................................................................................................................................................................................Advances recoverable in cash or in kind or for value to be received 15,459.......................................................................................................................................................................................................................................................................................Loan to Body Corporates 217,870.......................................................................................................................................................................................................................................................................................Security deposit with Govt. departments & others –.......................................................................................................................................................................................................................................................................................Advance income tax / tax deducted at source 137.......................................................................................................................................................................................................................................................................................
233,466.......................................................................................................................................................................................................................................................................................
SCHEDULE 6: LIABILITIES.......................................................................................................................................................................................................................................................................................Sundry creditors 1,111.......................................................................................................................................................................................................................................................................................Deposits from contractors and others –.......................................................................................................................................................................................................................................................................................Other liabilities 748.......................................................................................................................................................................................................................................................................................
1,859.......................................................................................................................................................................................................................................................................................
SCHEDULE 7: PROVISIONS.......................................................................................................................................................................................................................................................................................Taxation including Fringe benefit tax 228.......................................................................................................................................................................................................................................................................................Leave encashment.......................................................................................................................................................................................................................................................................................
228.......................................................................................................................................................................................................................................................................................
SCHEDULE 8: MISCELLANEOUS EXPENDITURE(to the extent not written off or adjusted).......................................................................................................................................................................................................................................................................................Share issue expense.......................................................................................................................................................................................................................................................................................Balance as per last account 6,608.......................................................................................................................................................................................................................................................................................
6,608.......................................................................................................................................................................................................................................................................................
Bhilwara Energy Limited » Annual Report 2007
17
A. SIGNIFICANT ACCOUNTING POLICIES
1. GENERAL
Financial statements are prepared on historical cost
convention and on the accounting principles of a going
concern, in accordance with Generally Accepted Accounting
Principles (“GAAP), comprising of the Mandatory Accounting
Standards, Guidance Notes and other pronouncements issued
by the Institute of Chartered Accountants of India and the
Provisions of the Companies Act, 1956. The accounts are
prepared on accrual basis.
2. FIXED ASSETS
Fixed assets are stated at cost less accumulated depreciation
and impairment losses, if any. Cost comprises the purchase
price and any attributable cost of bringing the asset to its
working condition for its intended use. Borrowing costs
relating to acquisition of fixed assets, which take substantial
period of time to get ready for its intended use, are also
included to the extent they relate to the period till such assets
are ready to be put to use.
The carrying amounts of assets are reviewed at each balance
sheet date to ascertain if there is any indication of impairment
based on internal/external factors. An impairment loss is
recognized wherever the carrying amount of an asset exceeds
its recoverable amount. The recoverable amount is the greater
of the assets net selling price and value in use. In assessing
value in use, the estimated future cash flows are discounted
to their present value at the weighted average cost of capital.
(3) EXPENDITURE INCURRED DURING CONSTRUCTION
PERIOD
Expenditure directly relating to construction activity is
capitalised. Indirect expenditure incurred during construction
period is capitalised as part of the indirect construction cost
to the extent to which the expenditure is indirectly related
to construction or is incidental thereto. Income earned during
construction period is deducted from the total of the indirect
expenditure.
(4) DEPRECIATION
Depreciation is provided on the following basis:
i. On the assets of generating unit, depreciation is
provided as per straight-line method (pro-rata basis) at
the rates prescribed under the Electricity Act, 2003.
ii. On Plant & Machinery other than those covered under
(i) above, depreciation is provided on straight-line
method at the rates prescribed in Schedule XIV to the
Companies Act, 1956.
iii. On fixed assets other than those covered under (i) and
(ii) above, depreciation is provided on written down
value method at the rates prescribed in Schedule – XIV
to the Companies Act, 1956.
iv. Depreciation on Project Equipments is provided as per
straight line method over the period upto the expected
date of completion of the project.
(5) REVENUE RECOGNITION
Revenue is recognized to the extent, it is probable that the
economic benefits will flow to the Company and the revenue
can be reliably measured.
(6) Miscellaneous Expenditure to the extent not written off or
adjusted
Preliminary Expenses will be amortized / adjusted starting
from the year in which the Company commences its
commercial operations.
(7) Provision for Current Tax is made in accordance with the
provisions of Income Tax Act, 1961.
SCHEDULE – 9: SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS
18
B. NOTES TO ACCOUNTS
1. The Company was incorporated on 17th May, 2006.
The accounts have been prepared from the date of
incorporation upto 31st March, 2007. The figures
relating to previous year are not applicable.
2. The Company has issued and allotted 1,94,25,715
warrants of Rs. 10/- each convertible into one equity
share of face value i.e Rs. 10 per share, at par in the
event of the approved capacity of Company’s projects
in Arunachal Pradesh exceeding 290 MW to be
determined by the Detailed Project Report (DPR) and
approval thereof by the Government of Arunachal
Pradesh.
The Company has during the year received 5% of the
total value of the warrants and the balance 95% shall
be received on conversion of the warrants into equity
shares.
3. As the Company has not commenced commercial
operations as on March 31, 2007, no Profit and Loss
Account has been prepared, but in lieu thereof, a
Statement of Project and Pre-operative expenses
(pending allocation) has been prepared as per Schedule
3 and expenses incurred during the period ended March
31, 2007 in relation to the construction of the project,
have been included under the said Schedule, to be
allocated appropriately to the relevant fixed assets at
the time of commencement of commercial operations.
4. The Company has issued and allotted 1,94,25,715
warrants of Rs. 10/- each convertible into one equity
share of Rs. 10/- each at the option of the holder.
The Company has during the year received 5% of the
total value of the warrants and the balance 95% shall
be received on conversion of the warrants into equity
shares.
5. Provision of Payment of Gratuity Act are not applicable
during the year ended 31st March, 2007.
6. Amount payable to Small Scale Industrial undertakings
as at 31st March, 2007 is Rs. Nil to the extent such
parties have been identified from available information.
As per our report of even date.
For and on behalf of the Board of Directors
For S. S. Kothari Mehta & Co.
Chartered Accountants
Arun K. Tulsian Vimal Banka B. P. Singh
Partner Director Director
Membership No. : 89907
Place : New Delhi
Date : 8th June, 2007
Bhilwara Energy Limited » Annual Report 2007
19
BALANCE SHEET ABSTRACT & COMPANY’S GENERAL BUSINESS PROFILE
I. REGISTRATION DETAILS :
Registration No. 1 4 8 8 6 2 State Code 5 5
Balance Sheet Date 3 1 0 3 2 0 0 7
Date Month Year
II. CAPITAL RAISED DURING THE YEAR (AMOUNT IN RS. THOUSANDS)
Public Issue – Rights Issue –
Bonus Issue – Private Placement 6 6 7 7 5 9
III. POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (AMOUNT IN RS. THOUSANDS)
Total Liabilities 6 8 3 9 6 9 Total Assets 6 8 3 9 6 9
Sources of Funds
Paid-up-Capital 6 6 7 7 5 9 Reserves and Surplus –
Share Application Money 4 4 1 0 Deferred Tax Liability –
Warrants 9 7 1 3
Secured Loans – Unsecured Loans –
Application of Funds
Net Fixed Assets 3 0 1 0 6 Investments –(Incl.P.O.P. exps)
Net Current Assets 6 4 5 1 6 8 Miscellaneous Expenditure 6 6 0 8
Accumulated Losses –
IV. PERFORMANCE OF COMPANY (AMOUNT IN RS. THOUSANDS)
Turnover – Total Expenditure –
Profit/(Loss) before Tax – Profit/(Loss) after tax –
Earning Per Share (in Rs.) – Dividend Rate (%) –
V. GENERIC NAMES OF THE THREE PRINCIPAL PRODUCTS / SERVICES OF THE COMPANY (AS PER MONITORYTERMS)
Item Code No. 9 8 0 1 0 0(ITC Code)
Product Description H y d r o E l e c t r i c E n e r g y
For and on behalf of the Board of Directors
Vimal Banka B. P. Singh
Director Director
Place : New Delhi
Date : 8th June, 2007
20
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A. TEXTILES
RSWM Limited
1. Kharigram Synthetic, Regenerated Cellulosic Blended Grey, Dyed Yarn
2. Mayur Nagar, Banswara Synthetic, Regenerated Cellulosic & Cotton-blended Grey Yarn
3. Mandpam Cotton Melange Yarn, Cotton-blended Melange & Dyed Yarn
4. Rishabhdev Synthetic, Blended & Grey Yarn
5. Ringas Synthetic & Blended Dyed Yarn
6. Bangalore Apparel
7. LNJ Nagar, Mordi Fabric
8. LNJ Nagar, Mordi Denim
9. LNJ Nagar, Mordi Captive Thermal Power
10. Bagalur Cotton Yarn
Maral Overseas Ltd.
11. Maral Sarovar Cotton Yarn, Cotton-Knitted Fabric & Cotton Knitwears(100% EOU)
12. Maral Sarovar Captive Thermal Power
13. Noida Knitwears
14. Noida Knitwears
BSL Ltd.
15. Bhilwara Yarn, Worsted, Synthetic & Silk Fabric, Garments & Accessories
16. Jaisalmer Captive Wind Power Generation
Bhilwara Spinners Ltd.
17. Bhilwara Synthetic, Blended Grey & Dyed Yarn
BMD Pvt. Ltd.
18. LNJ Nagar, Mordi Specialised Automotive Fabric & Furnishing Fabric
Bhilwara Processors Ltd.
19. Bhilwara Processing of Synthetic & Worsted Fabric, Tops Fibre Dyeing
B. GRAPHITE
HEG Ltd.
20. Mandideep Graphite Electrodes
21. Mandideep Captive Thermal Power
22. Durg Steel Billets
23. Durg Captive Waste Heat Recovery Power
24. Tawa Captive Hydro Electric Power
C. POWER
Bhilwara Energy Ltd.
25. Pathankot UBDC Stage III Hydro Electric Power Generation
26. Tawang Nyamjung Chhu Hydro Electric Power Generation
Malana Power Company Ltd.
27. Malana (Kullu) Hydro Electric Power Generation
AD Hydro Power Ltd.
28. Allain-Duhangan Hydro Electric Power Generation(Manali)
Indo Canadian Consultancy Services Ltd.
29. Noida Power Engineering Services
D. INFORMATION TECHNOLOGY
Bhilwara Scribe Pvt. Ltd.
30. Bhopal Medical Transcription Services
Bhilwara Infotech Ltd.
31. Bangalore IT Services
E. OFFICES
Corporate Office
32. Noida (NCR - Delhi)
Regional / Marketing
33. Mumbai 34. Kolkata 35. Bangalore 36. New Delhi
37. Ludhiana 38. Amritsar 39. Bhilwara
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2728
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3135
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LNJ BHILWARA GROUP
A NATIONWIDE PRESENCE
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Corporate Office :
Bhilwara Towers, A-12, Sector I, Noida - 201301 (NCR - Delhi), India
Visit us at www.bhilwaraenergy.com