ACB (India) Limitedacbindia.com/Uploads/Annual_Report_2009_10.pdf · ACB (India) Limited 3 A C B I...
Transcript of ACB (India) Limitedacbindia.com/Uploads/Annual_Report_2009_10.pdf · ACB (India) Limited 3 A C B I...
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ACB (India) Limited
ACBIL
CONTENTS
PARTICULARS PAGE NO.
Notice 05
Directors’ Report 10
Auditors’ Report 17
Balance Sheet 22
Profit and Loss Account 23
Cash Flow Statement 24
Schedules and Notes to the Accounts 26
Balance Sheet Abstract 56
Report under section 212 of the Companies Act, 1956 57
Consolidated Statement of Accounts 59
Annexure A : Aryan Clean Coal Technologies Private Limited 99
Annexure B : Aryan Energy Private Limited 135
Annexure C : Kartikay Coal Washeries Private Limited 165
Annexure D : Aryan Ispat and Power Private Limited 197
Annexure E : Connoiseur Resources Limited, BVI 229
Annexure F : Aryan Chhattisgarh Power Generation Private Limited 241
Annexure G : Aryan M.P. Power Generation Private Limited 257
Annexure H : Spectrum Coal and Power Limited 273
Annexure I : Statement Pursuant to Section 212 of the Companies Act, 1956 309
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Aryan Group
14TH ANNUAL REPORT
REGISTERED OFFICE
� C-102, L.G.F., New Multan Nagar, SuryaEnclave, Rohtak Road, New Delhi - 110 056
CORPORATE OFFICE
� 7th Floor, Office Block,Ambience Mall, NH-08, Gurgaon-122 001Haryana, India
BRANCH OFFICES
� Rajender Nagar Chowk,Link Road, Bilaspur, (CG)-495 001Chhattisgarh
� 7D, Anmol Apartments, Macosa Bagh,Nagpur, Maharashtra-440 004
� 42/15, Civil Lines,PWD Chowk, Raipur – 492 600Chhattisgarh
WASHERIES
� Dipka Washery,Post : Gevra, Dist. : Korba (CG)
� Pandarpauni Washery,Tehsil : Rajura, Dist. : Chandrapur(MS)
� Chakabura Washery,P.O. : Jawali, Tehsil: Khatgora,Dist. : Korba (CG)
� Gevra Washery,P.O. : Gevra,Dist. : Korba (CG)
POWER PLANTS
� 30MW Thermal Power Plant,P.O. : Jawali, Tehsil: Khatgora,Dist. : Korba, Chhattisgarh
� 15MW Wind Mill Plant, Village : Ghatnandre,Dist. : Sangli, Maharashtra
BOARD OF DIRECTORS
� Mr. G.C. Mrig
� Mr. R. S. Sindhu
� Mr. K. S. Solanki
� Mr. Vir Sen Sindhu
� Mr. Vrit Pal Sindhu
� Mr. Niten Malhan
STATUTORY AUDITORS
� B S R & Company(Chartered Accountants)Building No. 10, 8th Floor, Tower-B,DLF Cyber City, Phase-II,Gurgaon - 122 002
COMPANY SECRETARY
� Mr. Satish Kumar Sharma
BANKERS
� Axis Bank
� Indian Overseas Bank
� Syndicate Bank
� Well Forgo Securities, LLC
� Standard Chartered Bank
� Yes Bank
� Indusind Bank
� Punjab National Bank
� Punjab & Sindh Bank
� Corporation Bank
� Bank of India
� Central Bank of India
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ACB (India) Limited
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ACBIL
ACB (India) Limited(Formerly Aryan Coal Benefications Private Limited)
Registered Office : C-102, L.G.F., New Multan Nagar, Surya Enclave,Rohtak Road, New Delhi-110 056
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ACB (India) Limited
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NOTICE
Notice is hereby given that the 14th Annual General Meeting of M/s. ACB (INDIA) LIMITED (previously known asAryan Coal Benification Private Limited) will be held on Thursday, 30 September 2010 at 5.00 P.M. at Shorter Notice at129, Transport Centre, Rohtak Road, New Delhi – 110 035 to transact the following business:
ORDINARY BUSINESS
1. To receive, consider and adopt the Audited Balance Sheet of the Company as at 31 March 2010 and Profit & LossAccount for the period from 1 April 2009 to 31 March 2010 together with the Directors’ Report and Auditors’ Reportthereon.
2. To declare dividend @ 10% (i.e. Rs.1/- per equity share of Rs. 10 each) as final dividend for the year ended on 31March 2010.
3. To appoint a Director in place of Sh. Rudra Sen Sindhu, who retires by rotation and being eligible offers himself forre-appointment as Director of the Company.
4. To appoint a Director in place of Sh. Ganesh Chandra Mrig, who retires by rotation and being eligible offers himselffor re-appointment as Director of the Company.
5. To appoint Statutory Auditors of the Company:
To consider and if thought fit, to pass with or without modification(s), the following resolution as an OrdinaryResolution:
“RESOLVED THAT M/s B S R & Company, Chartered Accountants, retiring Auditors of the Company be and arehereby appointed as the Statutory Auditors of the Company to hold office from the date of conclusion of ensuingAnnual General Meeting till the date of conclusion of the next Annual General Meeting of the Company at aremuneration as decided by Chairman and/or Managing Director of the Company.”
SPECIAL BUSINESS
6. To consider and if thought fit, to pass with or without modification(s), the following resolution as SpecialResolution:
“RESOLVED THAT pursuant to the provisions of Section 198, 269, 309, 310 and other applicable provisions, if any,of the Companies Act, 1956 (“the Act”) read with Schedule XIII of the Act and pursuant to the Articles of Associationof the Company, the approval of the Company be and is hereby accorded for payment of managerial remunerationto Sh. Ganesh Chandra Mrig, Managing Director of the Company of Rs. 3,64,32,000 (Rupees Three Crores Sixtyfour Lakh Thirty Two Thousand Only) during the financial year 2010-11 which includes Travelling Allowance,provident fund, Bonus/other allowances/gratuity, etc. as per the policy of the Company and the Company shallprovide one Rent Free Accommodation for residential purpose of the Director, for performing duties over andabove the duties of Director.”
7. To consider and if thought fit, to pass with or without modification(s), the following resolution as an OrdinaryResolution:
“RESOLVED THAT pursuant to the provisions of Section 198, 269, 309, 310 and other applicable provisions, if any,of the Companies Act, 1956 (“the Act”) read with Schedule XIII of the Act and pursuant to the Articles of Associationof the Company, the approval of the Company be and is hereby accorded for payment of managerial remunerationto Sh. Rudra Sen Sindhu, Chairman of the Company of Rs. 3,64,32,000 (Rupees Three Crores Sixty four Lakh ThirtyTwo Thousand Only) during the financial year 2010-11 which includes Travelling Allowance, provident fund,Bonus/other allowances/gratuity/perquisites, etc. as per the policy of the Company, for performing duties overand above the duties of Director.”
8. To consider and if thought fit, to pass with or without modification(s), the following resolution as an SpecialResolution:
“RESOLVED THAT pursuant to provisions of Sections 198, 309(4) and all other applicable provisions, if any, of theCompanies Act, 1956, consent of the Company be and is hereby accorded for payment of remuneration by way ofcommission to Sh. Kuldeep Singh Solanki, Director of the Company who is neither a neither a Whole time Directorsnor a Managing Director of the Company of Rs. 1,24,32,000 (Rupees One Crore Twenty Four Lakh Thirty TwoThousand Only) during the financial year 2010-11 provided that total commission payable to all directors in thesaid category shall not exceed 1% of the Net Profits computed in accordance with the provisions of Section 198, 349& 350 of the Companies Act, 1956.
ACB (India) LimitedRegd. Office: C-102, Surya Enclave, New Multan Nagar, New Delhi-110056
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9. To consider and if thought fit, to pass with or without modification(s), the following resolution as an OrdinaryResolution:
“RESOLVED THAT pursuant to the provisions of Section 198, 269, 309, 310 and other applicable provisions, if any,of the Companies Act, 1956 (“the Act”) read with Schedule XIII of the Act and pursuant to the Articles of Associationof the Company, the approval of the Company be and is hereby accorded to re-appoint Sh. Vir Sen Sindhu asWhole time Director of the Company, whose term expires at the forthcoming Annual General Meeting for a furtherperiod starting from the conclusion of the forthcoming Annual General Meeting for the year 2009-10 i.e. 30th
September, 2010 till the Annual General Meeting for the year 2010-11 and Sh. Vir Sen Sindhu, Whole time Directorof the Company be paid managerial remuneration of Rs. 1,84,32,000 (Rupees One Crore Eighty Four Lakh ThirtyTwo Thousand Only) during the financial year 2010-11 which includes Travelling Allowance, provident fund,Bonus/other allowances/gratuity/perquisites, etc. as per the policy of the Company, for performing duties overand above the duties of Director.”
10. To consider and if thought fit, to pass with or without modification(s), the following resolution as an OrdinaryResolution:
“RESOLVED THAT pursuant to the provisions of Section 198, 269, 309, 310 and other applicable provisions, if any,of the Companies Act, 1956 (“the Act”) read with Schedule XIII of the Act and pursuant to the Articles of Associationof the Company, the approval of the Company be and is hereby accorded to re-appoint Sh. Vrit Pal Sindhu asWhole time Director of the Company, whose term expires at the forthcoming Annual General Meeting for a furtherperiod starting from the conclusion of the forthcoming Annual General Meeting for the year 2009-10 i.e. 30th
September, 2010 till the Annual General Meeting for the year 2010-11 and Sh. Vrit Pal Sindhu, Whole time Directorof the Company be paid managerial remuneration of Rs. 1,24,32,000 (Rupees One Crore Twenty Four Lakh ThirtyTwo Thousand Only) during the financial year 2010-11 which includes Travelling Allowance, provident fund,Bonus/other allowances/gratuity/perquisites, etc. as per the policy of the Company, for performing duties overand above the duties of Director.”
By order of the Board of DirectorsFor ACB (India) Limited
Sd/-Place : Gurgaon R.S. SindhuDate : 15 September 2010 Chairman
NOTES:
1 A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TOATTEND AND VOTE INSTEAD OF HIMSELF/HERSELF. SUCH PROXY NEED NOT BE A MEMBER OF THECOMPANY.
2 IN ORDER TO BE EFFECTIVE PROXY FORM DULY COMPLETED MUST BE RECEIVED BY THE COMPANY ATITS REGISTERED OFFICE NOT LESS THAN 48 HOURS BEFORE SCHEDULED TIME FOR HOLDING OF THEMEETING. A BLANK PROXY FORM IS ENCLOSED HEREWITH.
3 Details in respect of Subsidiary Companies – Aryan Clean Coal Technologies Private Limited, Aryan Energy PrivateLimited, Kartikay Coal Washeries Private Limited and Aryan Ispat and Power Private Limited, Aryan M. P. PowerGeneration Private Limited, Aryan Chhattisgarh Power Generation Private Limited, Spectrum Coal and PowerLimited and Connoiseur Resources Ltd and pursuant to section 212 of the Companies Act, 1956 are enclosed herewith.
4 The members are requested to give necessary consent in enclosed Form No. 22A in accordance with the provisionsof Section 171(2) of the Companies Act, 1956 to convene the Annual General Meeting at a shorter notice.
5 The relevant Explanatory Statement, pursuant to section 173(2) of the Companies Act, 1956, in respect of the specialbusiness set out above is annexed hereto.
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ACB (India) LimitedRegd. Office: C-102, Surya Enclave, New Multan Nagar, New Delhi-110056.
EXPLANATORY STATEMENT AS PER SECTION 173(2) OF THE COMPANIES ACT, 1956
Item No. 6:
At the 13th Annual General Meeting of the Company held on 30th September, 2009, the shareholders have, inter-alia,approved the appointment and terms of remuneration of Sh. Ganesh Chandra Mrig as Managing Director w.e.f. 14th
September, 2009 till till the date he attains the age of 75 years i.e. March 10, 2012. Further, the Board of Directors in theirmeeting held on 11th August, 2010 approved the payment of remuneration, etc. to Sh. Ganesh Chandra Mrig, ManagingDirector for the financial year 2010-11, pursuant the provisions of Section 198, 269, 309 read with Schedule XIII of theCompanies Act, 1956 and subject to approval of Shareholders of the Company. Further, he was appointed as ManagingDirector of M/s. Aryan Ispat and Power Private Limited (The Company’s Subsidiary company) w.e.f. 01.04.2010 withoutany remuneration.
A copy each of the resolutions passed at the 13th Annual General Meeting held on 30th September, 2009 and the resolutionpassed by the Board of Directors in their Board Meeting held on 11th August, 2010, are open for inspection by theMembers, during business hours between 11.00 A.M. to 1.00 P.M. on all working days of the Company, upto the date ofthe meeting, at the Registered Office of the Company.
The resolution is recommended for your approval as special resolution.
The contents of Resolution at item no. 6 of the notice may be treated as an abstract of the terms & conditions ofremuneration payable to Sh. Ganesh Chandra Mrig pursuant to section 302 (2) of the Companies Act, 1956.
The above said Managing Director is concerned or interested in the payment of remuneration in the resolution as setout at item no.6 of the notice. Save and except as above, none of the Directors, is in any way, concerned or interested inthe said resolutions.
Item No. 7
At the 13th Annual General Meeting of the Company held on 30th September, 2009, the shareholders have, inter-alia,approved the appointment and terms of remuneration of Sh. Rudra Sen Sindhu, Whole-time Director designated asChairman w.e.f. 29 September, 2009. Further, the Board of Directors in their meeting held on 11th August, 2010 approvedthe payment of remuneration, etc. to Sh. Rudra Sen Sindhu, Chairman for the financial year 2010-11, pursuant theprovisions of Section 198, 269, 309 read with Schedule XIII of the Companies Act, 1956 and subject to approval ofShareholders and subject to Article No. 47 of the Articles of Association of the Company.
A copy each of the resolutions passed at the 13th Annual General Meeting held on 30th September, 2009 and the resolutionpassed by the Board of Directors in their Board Meeting held on 11th August, 2010, are open for inspection by theMembers, during business hours between 11.00 A.M. to 1.00 P.M. on all working days of the Company, upto the date ofthe meeting, at the Registered Office of the Company.
The resolution is recommended for your approval as an Ordinary Resolution.
The contents of Resolution at item no. 7 of the notice may be treated as an abstract of the terms & conditions ofremuneration payable to Sh. Rudra Sen Sindhu pursuant to section 302 (2) of the Companies Act, 1956.
Sh. Rudra Sen Sindhu is concerned or interested in the payment of remuneration. Further, Sh. Vir Sen Sindhu and Sh.Vrit Pal Sindhu being related to him, may also be deemed to be concerned or interested in the resolution as set out atitem no. 7 of the notice. Save and except as above, none of the Directors, is in any way, concerned or interested in thesaid resolutions.
Item No. 8
At the 13th Annual General Meeting of the Company held on 30th September, 2009, the shareholders have, inter-alia,approved the payment of commission to Sh. Kuldeep Singh Solanki w.e.f. 29 September, 2009. Further, the Board ofDirectors in their meeting held on 11th August, 2010 approved the payment of commission, etc. to Sh. Kuldeep SinghSolanki, for the financial year 2010-11, pursuant the provisions of Sections 198, 309(4) and all other applicable provisions,if any, of the Companies Act, 1956 and subject to approval of Shareholders of the Company.
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Further total commission payable to all directors in said category cannot exceed 1% of the Net Profits computed inaccordance with the provisions of Section 198, 349 & 350 of the Companies Act, 1956. The commission is proposed to bepaid to him is well within the limit of 1% of Net profit as prescribed under the Companies Act, 1956.
Section 309 of the Companies Act, 1956 permits the payment of remuneration to a Director who is neither a whole timedirector nor a managing director of the company, by way of commission not exceeding 1% of the net profit of thecompany, provided the Company authorizes such payment by a special resolution passed at the General Meeting of theCompany.
The Board recommends the resolution for approval by Shareholders as a Special Resolution.
A copy of the resolution passed by the Shareholders in the 13th Annual General Meeting held on 30th September, 2009and the resolution passed by the Board of Directors of the Company in their Board Meeting held on 11th August, 2010,is open for inspection by the Members, during business hours between 11.00 A.M. to 1.00 P.M. on all working days ofthe Company, upto the date of the meeting, at the Registered Office of the Company.
Ex. Capt. Kuldeep Singh Solanki himself is concerned or interested in payment of commission for the financial year2010-11. Save and except as above, none of the Directors, is in any way, concerned or interested in the resolution set outat item no.8.
Item No. 9
At the 13th Annual General Meeting of the Company held on 30th September, 2009, the shareholders have, inter-alia,approved the appointment and terms of remuneration of Sh. Vir Sen Sindhu as Whole-time Director of the Companyw.e.f. 29 September, 2009 till next Annual General Meeting of the Company. Further, the Board of Directors in theirmeeting held on 11th August, 2010 re-appointed Sh. Vir Sen Sindhu as Whole time Director of the Company for a furtherperiod starting from the forthcoming Annual General Meeting for the year 2009-10 till the Annual General Meeting forthe year 2010-11 and also approved the payment of remuneration, etc. to Sh. Vir Sen Sindhu, Whole-time Director of theCompany for the financial year 2010-11, pursuant the provisions of Section 198, 269, 309 read with Schedule XIII of theCompanies Act, 1956 and subject to approval of Shareholders of the Company.
A copy each of the resolutions passed at the 13th Annual General Meeting held on 30th September, 2009 and the resolutionpassed by the Board of Directors in their Board Meeting held on 11th August, 2010, are open for inspection by theMembers, during business hours between 11.00 A.M. to 1.00 P.M. on all working days of the Company, upto the date ofthe meeting, at the Registered Office of the Company.
The resolution is recommended for your approval as an Ordinary Resolution.
The contents of Resolution at item no. 9 of the notice may be treated as an abstract of the terms & conditions ofappointment and remuneration payable to Sh. Vir Sen Sindhu pursuant to section 302 (2) of the Companies Act, 1956.
Sh. Vir Sen Sindhu himself is concerned or interested in his appointment and payment of remuneration. Further, Sh.Rudra Sen Sindhu and Sh. Vrit Pal Sindhu being related to him, may also be deemed to be concerned or interested in theresolution as set out at item no. 9 of the notice. Save and except as above, none of the Directors, is in any way, concernedor interested in the said resolutions.
Item No. 10
At the 13th Annual General Meeting of the Company held on 30th September, 2009, the shareholders have, inter-alia,approved the appointment and terms of remuneration of Sh. Vrit Pal Sindhu as Whole-time Director of the Companyw.e.f. 29 September, 2009 till next Annual General Meeting of the Company. Further, the Board of Directors in theirmeeting held on 11th August, 2010 re-appointed Sh. Vrit Pal Sindhu as Whole time Director of the Company for a furtherperiod starting from the forthcoming Annual General Meeting for the year 2009-10 till the Annual General Meeting forthe year 2010-11 and also approved the payment of remuneration, etc. to Sh. Vrit Pal Sindhu, Whole-time Director of theCompany for the financial year 2010-11, pursuant the provisions of Section 198, 269, 309 read with Schedule XIII of theCompanies Act, 1956 and subject to approval of Shareholders of the Company.
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A copy each of the resolutions passed at the 13th Annual General Meeting held on 30th September, 2009 and the resolutionpassed by the Board of Directors in their Board Meeting held on 11th August, 2010, are open for inspection by theMembers, during business hours between 11.00 A.M. to 1.00 P.M. on all working days of the Company, upto the date ofthe meeting, at the Registered Office of the Company.
The resolution is recommended for your approval as an Ordinary Resolution.
The contents of Resolution at item no. 10 of the notice may be treated as an abstract of the terms & conditions ofappointment and remuneration payable to Sh. Vrit Pal Sindhu pursuant to section 302 (2) of the Companies Act, 1956.
Sh. Vrit Pal Sindhu himself is concerned or interested in his appointment and payment of remuneration. Further, Ex.Capt. Rudra Sen Sindhu and Sh. Vir Sen Sindhu being related to him, may also be deemed to be concerned or interestedin the resolution as set out at item no. 10 of the notice. Save and except as above, none of the Directors, is in any way,concerned or interested in the said resolutions.
By order of the Board of DirectorsFor ACB (India) Limited
Sd/-Place : Gurgaon R.S. Sindhu
Date : 15 September 2010 Chairman
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Dear Members,
The Directors of your Company have pleasure in presenting the 14th Annual Report together with the Audited AnnualAccounts of the Company for the year ended 31 March, 2010 and Auditors’ Report thereon.
Performance Results
The Company’s performance during the year under review, is summarized below:
(Rs. in million)
Particulars For the year For the yearended ended
31 March 2010 31 March 2009
Gross Turnover 6,950.04 7,878.35Other Income 238.79 445.06
Total Income 7,188.83 8,323.41
Profit before Interest, Depreciation & Tax 2,850.11 4,051.11
Finance Cost 254.69 230.10
Profit before Depreciation & Tax 2,595.42 3,821.01
Depreciation 343.36 410.34
Profit before Tax 2,252.06 3,410.67
Provision for Taxation 671.53 1084.58
Profit after Tax 1580.52 2326.09
Appropriations:
Dividend Paid/Proposed
- On Equity Shares 112.25 91.31
Tax on Dividend 19.08 15.52
Basic EPS (Rs.) 14.08 25.49
Diluted EPS (Rs.) 14.08 25.44
Share Capital
During the year under review the Company had issued and allotted 1,55,60,744 (One Crore Fifty Five Lakh SixtyThousand Seven Hundred Forty Four Only) Equity Shares of Rs.10/- each as under:
On 17th August, 2009 – 31,36,392 Equity Shares of Rs.10/- each
On 4th September, 2009 – 1,24,24,352 Equity Shares of Rs.10/- each
Dividend
Continuing with the trend of rewarding its shareholders and simultaneously keeping in view the requirement of fundsfor the operations and growth of the Company, your Directors are pleased to recommend a dividend of 10% on EquityShare Capital of the Company for the Financial Year ended 31st March, 2010.
The dividend as above on the Equity is placed before you for your approval at the ensuing Annual General Meetingand if approved, will absorb an amount of Rs. 11,22,45,616/- (Rupees Eleven Crore Twenty Two Lakh Forty Five ThousandSix Hundred and Sixteen Only) and the corporate tax on dividend was Rs. 1,90,76,142/- (Rupees One Crore NinetyLakh Seventy Six Thousand One Hundred Forty Two Only).
Operations
The Company is mainly operating in two segments viz. Coal Washery and Power Generation.
Coal Washery
During the financial year under review, the Company has been operating 4 Coal Washeries with an installed capacity of27.60 Million Ton Per Annum (MTPA) in the States of Chhattisgarh and Maharashtra.
DIRECTORS’ REPORT
ACB (India) LimitedRegd. Office: C-102, LGF, Surya Enclave, New Multan Nagar, New Delhi-110056
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Thermal Power Generation
During the financial year under review, the Company has been operating a 30 Mega Watt (MW) Thermal Power Plantat Korba, Chhattisgarh. The Company is in the process of setting up of a new 270 MW (2x135 MW) Thermal PowerProject at Korba District in the State of Chhattisgarh. The expected date of commission of the 1st unit of the Project isDecember, 2010. Further, the Company is also expanding the capacity of its existing of 30 MW Power Project to 60 MWand the said expansion is expected to be completed by June, 2011.
Wind Power Generation
During the financial year under review, the Company has been operating a 15 MW Wind Power farm at Sangli,Maharashtra.
Audit Committee
As required pursuant to Section 292A of the Companies Act, 1956, the details of composition of Audit Committee aregiven hereunder:
1. Sh. Rudra Sen Sindhu
2. Sh. Kuldeep Singh Solanki
3. Sh. Niten Malhan
Sh. Kuldeep Singh Solanki is the Chairman of the Audit Committee.
Public Deposits
During the year under review, your Company has not invited/accepted any public deposits under section 58A & 58AAof the Companies Act, 1956 during the year ended on 31st March, 2010.
Insurance
All properties and insurable assets of the Company, including Building, Plant & Machinery and Stocks have beenadequately insured, wherever necessary.
Directors
Sh. Vir Sen Sindhu and Sh. Vrit Pal Sindhu were re-appointed as Whole-time Director for a further period commencingfrom the conclusion of 14th Annual General Meeting i.e. 30th September, 2010 till the date of 15th Annual general Meeting,subject to the approval of shareholders in the forthcoming general meeting. Further the payment of remuneration toChairman, Managing Director and Whole-time Directors for the financial year 2010-11 has been decided by the Boardof Directors of your Company on the meeting held on 11th August, 2010 subject to approval of Shareholders in theforthcoming Annual General Meeting.
Sh. Kuldeep Singh Solanki continued as Director of the Company and the payment of commission for the financial year2010-11 has been decided by the Board of Directors of your Company in the meeting held on 11th August, 2010 subjectto approval of Shareholders in the forthcoming Annual General Meeting.
In accordance with the provisions of Companies Act, 1956, Sh. Rudra Sen Sindhu and Sh. Ganesh Chandra Mrig,Directors of the Company, are liable to retire by rotation and being eligible offer themselves for re-appointment.
Auditors Report
In the Auditor’s Report for the year ending on 31 March, 2010, Auditors have made certain observations with regard toacquisition of an investment by the Company by issue of its own equity shares. Based on the accounting advice receivedfrom a firm of chartered accountants, the Company has recorded the cost of investment at the face value of the equityshares issued and has not determined the fair value as required by Accounting Standard 13, as specified in the Companies(Accounting Standard) Rules, 2006. In the absence of fair value of securities issued/acquired, the Auditors are unableto express an opinion on the value of investment recorded in Company’s books and its consequential impact, if any, onthese financial statements
To the above, the Company states that during the year, the Company has purchased 6,257,358 equity shares of GlobalCoal & Mining Private Limited (‘GCMPL’) for an aggregate consideration of Rs. 124,243,520 from certain shareholdersof GCMPL. In satisfaction of the liability to pay the said consideration, the Company has issued and allotted 12,424,352fully paid up equity shares of face value of Rs 10 each at par. The transaction was entered into in accordance with theagreements executed amongst the Company, GCMPL and the certain shareholders of GCMPL. The Company hasobtained an accounting opinion from a firm of Chartered Accountants and based on said opinion, the Company is ofthe view that the provisions of Para 10 of Accounting Standard 13 are not applicable to this transaction.
In the Auditor’s Report for the year ending on 31 March, 2010, Auditors have made certain observations with regard tothe Company’s investment in share capital of Aryan Energy Private Limited (AEPL), being a subsidiary company,
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amounting to Rs. 213,379,237 and loans and advances given to AEPL amounting to Rs. 733,559,772(including interest)and the accumulated losses of AEPL have entirely eroded its paid-up capital and reserves. In view of present negativenet worth position and uncertainty of future cash flows to revive such position, the Auditors are unable to express anopinion on the necessity of provision, if any, on the carrying value of investment /loans and advances in this subsidiarycompany and the consequential impact on the profit for the year of the Company.
To the above, the Company states that the Company has invested Rs. 213,379,237 in the equity shares of one of itssubsidiaries, namely Aryan Energy Private Limited (AEPL). The management considers this investment as strategic innature and expects that future cash flow will revive the present negative net worth position of AEPL. Though the networth of this subsidiary is fully eroded, the management in view of its long term commitments and future cash flowsprojections of AEPL considers this to be of temporary nature and has accordingly not provided for any amount towardsdiminution in its value of investments. The Company has also provided inter corporate deposits of Rs. 733,559,772(including interest) as at 31 March 2010.
In the Auditor’s Report for the year ending on 31 March, 2010, Auditors have made certain observations with regard tocertain transactions aggregating Rs. 10,305,567 entered into by the Company in the previous year, covered under section297 of the Companies Act, 1956, and in respect of which prior approval of the Central Government, as envisaged underthat section, has not been obtained.
To the above, the Company states that the Company has during the year entered into transactions of purchases andsales of goods and services with private companies and firms, in which director(s) of the Company are director(s)/shareholder(s)/ partner(s). In majority of the cases, the Company has taken the relevant approvals from the statutoryauthorities i.e. Central Government, however, in case of any lapse due to commission/ omission, the necessary correctiveaction is being initiated.
In the Auditor’s Report for the year ending on 31 March, 2010, Auditors have made certain observations that theCompany is in the process of further strengthening the records of inventory.
To the above, the Company states that the Company has engaged the services of a reputed consultant to preparestandard operating procedures (SOPs) to strengthen internal control system of the Company including records ofinventories. Further, the Company has initiated process to incorporate more details in its inventory records.
In the Auditor’s Report for the year ending on 31 March, 2010, Auditors have made certain observations that theCompany needs to strengthen the internal controls relating to acquisition of fixed assets and sale of rejects.
To the above, the Company states that the Company has engaged the services of a reputed consultant to preparestandard operating procedures (SOPs) to strengthen internal control system of the Company. This will cover all themajor areas of the Company including controls pertaining to acquisition of fixed assets and sale of rejects.
Further, the Company is discharging its tax liability in time, however, in case there is some delay in discharging thesame, the Company will take up the issue with appropriate authority for condoning the delay and take remedial actionso that such lapse does not occur in future.
The notes to the accounts and other observations in the Auditors’ Report are self-explanatory and, therefore, do not callfor any further comments.
Appointment of Statutory Auditors
As per the provisions of the Companies Act, 1956, M/s. B S R & Company, Chartered Accountants, hold office asStatutory Auditors of your Company till the conclusion of the ensuing Annual General Meeting and have shown theirwillingness to be re-appointed as the Auditors of the Company.
Your Company has received the Certificate from M/s. B S R & Company, Chartered Accountants, as required underSection 224(1B) of the Companies Act, 1956, to the effect that their re-appointment, if made, will be within the limits asprescribed under the provisions thereof. Your Directors recommend their re-appointment as the Auditors of the Company.
Disclosures under Section 217 of the Companies Act, 1956
Except as disclosed elsewhere in the report, there have been no material changes and commitments, which can affectthe financial position of the Company between the end of financial year and the date of report.
As required under Section 217(2) of the Companies Act, 1956, the Board of Directors inform the members that duringthe financial year there has been no change:
• in the nature of Company’s business,
• in the Company’s subsidiaries or in the nature of business carried out by them, except those stated in this report,
• in the classes of business in which the Company has an interest.
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Conservation of energy, technology absorption & foreign exchange earnings and outgo:
The Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 as required under section217(1) (e) are not applicable to our company, hence no statement for disclosure has been made.
During the year under report, the details of foreign exchange earnings and foreign exchange outgo on various headsare as under:
Foreign Exchange Earnings: Nil (Previous year Nil)
Foreign Exchange Outgo:
a) Value of imports calculated on CIF basis(Amount in Rupees)
Particulars For the year ended For the year ended31 March 2010 31 March 2009
Stores and spares 5,909,009 2,440,131Capital goods 9,356,035 10,453,991Total 15,265,044 12,894,122
b) Expenditure in foreign currency(Amount in Rupees)
Particulars For the year ended For the year ended31 March 2010 31 March 2009
Travelling expenses 747,275 2,481,741Sponsorship fees 27,249 -Advertisement and publicity - 312,221Legal and professional - 2,062,803Legal and professional fee (included in capital - 207,551,600work in progress)Travelling expenses (included in capital work 142,035 2,393,674in progress)Travelling expenses (included in capital work 380,968,770 122,345,518in progress)Total 381,885,329 337,147,557
Particulars of Employees:
List of employees of the Company who has drawn salary in excess of the limits prescribed in Section 217 (2A) of theCompanies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 is given below for the year ended31st March, 2010:
S. Name Designation Remuneration Qualification Date of Age Last EmploymentNo. and nature Received and Experience Commence- of the held Name of
of duties ment of Employee Employer, Designation,Employment Period of Service
A. Persons employed throughout the Financial Year ended 31st March, 2010, who were in receipt of remuneration for the year inwhich the aggregate was not less than Rs.24,00,000/-
1 Mr. S.S. Vice President – 24,03,750 B.E. (Mining) 01.06.1997 48 South Eastern CoalfieldsVerma Washeries Limited
(Dipka Area)
2 Mr. Satish Company 35,43,000 ACS, M.A. 01.04.2007 54 Sainik Finance &Kumar Secretary, & (Economics), Industries Ltd.,Sharma Head of the LL.B, CAIIB Company Secretary,
Legal & 6 years 3 monthsSecretarial Dept.
3 Mr. Sanjay Chief Financial 35,43,000 FCA 01.04.2006 43 Self employed, Partner,Hasija Officer, Incharge M/s. SMR & Associates,
of Finance and Chartered AccountantsAccounts
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Directors’ Responsibility Statement
The Directors hereby confirm:
(a) That in preparation of the Accounts for the financial year ended 31st March, 2010 the applicable AccountingStandards have been followed alongwith proper explanations relating to material departures.
(b) That the Directors have selected such Accounting Policies and applied them consistently and made judgmentsand estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of theCompany at the end of the financial year and of the profit of the Company for that period.
(c) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities and.
(d) That the Directors have prepared the accounts for the financial year ended 31st March 2010 on a going concernbasis.
Environment, Health and Safety
The Company accords the highest priority to Environment, Health and Safety. The Company’s Washeries has beencertified to be in compliance with ISO 9001 standards.
The Company generally endeavors to embrace the latest and most environmentally efficient power generation technologyin its power projects.
Besides the above, the Company has 15MW wind based power generation.
Internal Control Systems
The Company has in place Internal Control Systems commensurate with its size and scale of operations. The Companyhas appointed a reputed firm of Chartered Accountants to carry out Internal Audit. It ensures adherence to the policies
S. Name Designation Remuneration Qualification Date of Age Last EmploymentNo. and nature Received and Experience Commence- of the held Name of
of duties ment of Employee Employer, Designation,Employment Period of Service
4 Mr. J.S.Ghai Sr. Vice 28,92,450 BE - Electrical 01.04.2002 71 Coal India Limited,President, (Hons) C.E. (Engineering),Incharge of 38 yearsWashery Division
5 Mr. Rakesh President-Power, 28,08,400 BSc. 10.11.2007 57 Reliance Energy Ltd.,Kumar Incharge of Engineering Sr. ExecutiveAggarwal Power Division (Mechanical) Vice President,
and PGDBM 1 year 5 months
6 Mr. Dalip Sr. President – 16,75,367 FCA 14.09.2009 43 Self employed, Partner,Nagar Corporate Finance M/s. Nagar Goel &
and Business Chwala, CharteredStrategy Accountants
7 Mr. Navin C. President 6,50,000 Mining Engineer 07.04.1997 74 Retired as Chief GeneralNarula Manager, Bharat Cooking
Coal Limited
B. Persons employed for a part of the Financial Year ended 31st March, 2010, who were in receipt of remuneration for any part of theyear, at the rate which in the aggregate was not less than Rs.2,00,000/- per month.
Notes:1. Remuneration includes salary, house rent allowance, conveyance/transport allowance, bonus, Company’s as well as employee’s
contribution to Provident Fund, Leave Encashment, provisions for Gratuity, Medical reimbursement and all allowances paid incash and monetary value of perquisites wherever applicable.
2. None of the employees whose name is mentioned in the table above are relative of any of the director of the Company.
3. There was no employee who was employed either throughout the financial year or part thereof, who was holding either byhimself or along with the spouse and dependent children 2% or more of the Shares of the Company and drawing remunerationin excess of the remuneration drawn by Managing Director / Whole-time Director.
4. All the above said employees are paid remuneration as per the policy/rules of the Company. All the above said appointments arecontractual.
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and systems and mitigation of the operational risks perceived in respect of major and important risk areas and routineaudit of activities. The audit process also includes review and evaluation of effectiveness of the existing processes,controls and compliances.
Information Technology
The Company has implemented Navision software covering major areas like generation, distribution, materials, financeand human resources, for enhancing service levels to its consumers, suppliers, employees and other stakeholders. ERPimplementation is expected to lead to better system integrity and process reliability thereby improving business decisionmaking.
Subsidiaries
a) Aryan Clean Coal Technologies Pvt. Ltd. (ACCTPL):
ACCTPL became subsidiary of the Company on 10 September, 2003 and is engaged in the business of manufactureof washery equipments and continues as subsidiary as on date.
b) Aryan Energy Pvt. Ltd. (AEPL):
AEPL became subsidiary of the Company on 24 August 2005 and is engaged in the business of coal beneficiationand continues as subsidiary as on date.
c) Kartikay Coal Washeries Pvt. Ltd. (KCWPL):
KCWPL became subsidiary of the Company on 15 November 2005 and is engaged in the business of coalbeneficiation and continues as subsidiary as on date.
d) Aryan Ispat and Power Pvt. Ltd. (AIPPL):
AIPPL became subsidiary of the Company on 31 January 2006 and is operating an Sponge Iron Plant, CoalWashery and a 18MW Power Plant in Orissa and continues as subsidiary as on date. During the year underreview, the Company has increased its stake by way of further investment of Rs.49.48 Crore in the Share Capitalof the Company.
e) Connoiseur Resources Limited, BVI (CRL):
CRL is a wholly owned subsidiary incorporated under the law of British Virgin Islands on 10 December, 2007.The Company has been formed to facilitate Overseas Investments by the Company.
f) Aryan Chhattisgarh Power Generation Pvt. Ltd. (ACPGPL):
ACPGPL became a wholly owned subsidiary of the Company on 9 May 2008 and is engaged in the business ofpower generation. ACPGPL has been incorporated as a Special Purpose Vehicle for implementation of 1200 MWcoal based Thermal Power Plant in the state of Chhattisgarh. The said 1200 MW coal based Thermal PowerProject is in the stage of implementation.
g) Aryan M.P. Power Generation Pvt. Ltd. (AMPPGPL):
AMPPGPL became wholly owned subsidiary of the Company on 9 May 2008 and is engaged in the business ofPower Generation. AMPGPL has been incorporated as a Special Purpose Vehicle for implementation of 1200MW coal based Thermal Power Plant in the state of Madhya Pradesh. The said 1200 MW coal based ThermalPower Project is in the stage of implementation.
h) Spectrum Coal & Power Ltd. (SCPL):
SCPL became subsidiary of the Company on 30 March, 2009 and is engaged in the business of coal washing.SCPL has proposed to implement a reject coal based Thermal Power Plant in the state of Chhattisgarh.
i) TRN Energy Private Limited (TRNEPL)
TRNEPL became subsidiary of the Company on 20 May 2009 and is engaged in the business of power generation.TRNEPL has proposed to implement 600 MW coal based Thermal Power Plant in the state of Chhattisgarh. Thesaid 600 MW coal based Thermal Power Project is in the stage of implementation.
j) Aryan Eestech Private Limited
Aryan Eestech Private Limited has been incorporated as a subsidiary of ACCTPL on 29th January, 2010 with theobject to carry on the business of purification of water by using JetWater (JSW) water purification technology torecover high purity distilled water from range of waste water resources and to produce electricity by usingHybrid Coal Gas Technology (HCGT) process which involves burning gas and low heat value washery coalrejects in a rotating kiln to produce hot gases.
k) ACB (India) Power Limited
ACB (India) Power Limited has been incorporated as a Wholly Owned Subsidiary of the Company on 20th July,2010 with the object to carry on the business of production, generation, storage, transmission distribution and
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supply of electricity (bulk and retail), power and energy and to promote, own, acquire, erect, construct, establish,operate, maintain, takeover power companies, hold share in power companies.
The copy of the Balance Sheet, Profit and Loss Account, Auditors’ Report and Directors’ Report of the Nine SubsidiaryCompanies and other documents required to be attached under section 212(1) of the Companies Act, 1956 have beenattached herewith. A statement pursuant to section 212 of the Companies Act, 1956 in relation to all the nine subsidiariesof the Company is also attached herewith. As Aryan Eestech Private Limited was incorporated on 29th January, 2010,the Balance Sheet and Profit and Loss Account for the year 2009-10 has not been prepared. Further, ACB (India) PowerLimited was incorporated on 20th July, 2010 i.e. after the financial year 2009-10.
Appreciation and Acknowledgments
Your Directors express sincere thanks to Banks, Financial Institutions, Government Agencies and business associatesfor their continued assistance, support and co-operation. The Board recognizes the contribution of the esteemedconsumers in the growth of the Company and takes this opportunity to pledge the Company’s commitment to servethem better. The Board would also like to express great appreciation for the commitment and contribution of its employeesat all levels. Last but not least, the Company thanks its shareholders as well as Foreign Institutional Investors for theirunstinted support.
By order of the Board of DirectorsFor ACB (India) Limited
Sd/-Place : Gurgaon R.S. SindhuDate : 15 September 2010 Chairman
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ACB (India) Limited
We have audited the attached Balance Sheet of ACB (India) Limited (formerly known as Aryan Coal BeneficationsPrivate Limited (“the Company”) as at 31 March 2010, the Profit and Loss Account and the Cash Flow Statement(“financial statements”) of the Company for the year ended on that date, annexed thereto. These financial statementsare the responsibility of the Company’s management. Our responsibility is to express an opinion on these financialstatements based on our audit.
We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards requirethat we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principles used and significant estimatesmade by management, as well as evaluating the overall financial statement presentation. We believe that our auditprovides a reasonable basis for our opinion.
As required by the Companies (Auditor’s Report) Order, 2003 (“the Order”) issued by the Central Government of Indiain terms of sub-Section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure, a statement on thematters specified in paragraphs 4 and 5 of the said Order.
Further to our comments in the Annexure referred to above, we report that:
a) subject to our comments in paragraph g) below, we have obtained all the information and explanations, which to thebest 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 fromour examination of those books;
c) the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreementwith the books of account;
d) in our opinion, subject to our comments in paragraph g) below, the Balance Sheet, the Profit and Loss Account and theCash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-Section(3C) of Section 211 of the Companies Act, 1956;
e) on the basis of written representations received from the directors, as on 31 March 2010, and taken on record by theBoard of Directors, we report that none of the directors is disqualified as on 31 March 2010 from being appointed asa director in terms of clause (g) of sub-Section (1) of Section 274 of the Companies Act, 1956;
f) without qualifying our opinion, we draw attention to note III 21 of schedule 19 which explains the position of alegal case pending against the Company in Hon’ble Supreme Court. The Company has filed necessary responsesagainst alleged concerns and since the matter is subjudice, the financial and operational impact, if any, of this legalcase on the Company cannot be determined at this stage;
g) attention is invited to note III 18 of schedule 19 with regard to acquisition of an investment by the Company by issue of its ownequity shares. Based on the accounting advice received from a firm of chartered accountants, the Company has recorded the costof investment at the face value of the equity shares issued and has not determined the fair value as required by AccountingStandard 13, as specified in the Companies (Accounting Standard) Rules, 2006. In the absence of fair value of securities issued/acquired, we are unable to express an opinion on the value of investment recorded in Company’s books and its consequentialimpact, if any, on these financial statements;
h) attention is drawn to Company’s investment in share capital of Aryan Energy Private Limited (AEPL), being a subsidiarycompany, amounting to Rs. 213,379,237 and loans and advances given to AEPL amounting to Rs. 733,559,772. The accumulatedlosses of this company have entirely eroded its paid-up capital and reserves. The management considers this investment asstrategic in nature and expects that future cash flow will revive the present negative net worth position of AEPL. Accordingly,no provision for loss, if any, on investment and loans and advances amounting to Rs. 213,379,237 and Rs. 733,559,772respectively has been considered in these amounts. In view of present negative net worth position and uncertainty of future cashflows to revive such position, we are unable to express an opinion on the necessity of provision, if any, on the carrying value ofinvestment /loans and advances in this subsidiary company and the consequential impact on the profit for the year of theCompany;
Auditors’ Report
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i) attention is invited to note III 10 of schedule 19 with regard to certain transactions aggregating Rs. 10,305,567 entered into bythe Company in the current year, covered under section 297 of the Companies Act, 1956, and in respect of which prior approvalof the Central Government, as envisaged under that section, has not been obtained;
j) Subject to our comments in paragraph (g), (h) and (i) above, the impact of which has not been ascertained, in our opinion andto the best of our information and according to the explanations given to us, the said accounts give the informationrequired by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2010;
(ii) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.
For B S R & CompanyChartered AccountantsFirm registration number: 128032W
Sd/-Place : Gurgaon Kaushal KishoreDate : 15 September 2010 Partner
Membership No. :090075
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Annexure to the Auditors’ report(Referred to in our report of even date)
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details andsituation of fixed assets.
(b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assetsare verified in a phased manner over a period of two years. According to that programme the Company hasduring the year physically verified certain assets. In our opinion, this periodicity of physical verification isreasonable having regard to the size of the Company and the nature of its assets. The Company has startedreconciling the physical verification results with book records and expects no material adjustments in thisregard.
(c) Fixed assets disposed off during the year were not substantial, and therefore, do not affect the going concernassumption.
(ii) (a) The inventory, except goods-in-transit, has been physically verified by the management during the year. Inour opinion, the frequency of such verification is reasonable.
(b) The procedures for the physical verification of inventories followed by the management are reasonable andadequate in relation to the size of the Company and the nature of its business.
(c) The Company is in the process of further strengthening the records of inventory. The discrepancies noticed onverification between the physical stocks and the book records were not material.
(iii) (a) The Company has granted loans to three companies covered in the register maintained under Section 301of the Companies Act, 1956. The maximum amount outstanding during the year was Rs. 799,431,135 andthe year-end balance of such loans was Rs. 799,431,135.
(b) In our opinion, the rate of interest and other terms and conditions on which loans have been granted tocompanies listed in the register maintained under Section 301 of the Companies Act, 1956 are prima facie,not prejudicial to the interest of the Company.
(c) In the case of loans granted to companies listed in the register maintained under Section 301, the borrowershave been regular in payment of principal and interest on such loans as and when demanded by theCompany. As per terms stipulated in loan agreements, principal and interest on loans are payable on demand.
(d) There is no overdue amount of more than Rupees one lakh in respect of loans granted to any of the companieslisted in the register maintained under Section 301.
(e) The Company has taken loans from three companies covered in the register maintained under Section 301of the Companies Act, 1956. The maximum amount outstanding during the year was Rs. 487,000,000 andthe year-end balance of such loans was Rs. Nil.
(f) In our opinion, the rate of interest and other terms and conditions on which loans have been taken fromcompanies listed in the register maintained under Section 301 of the Companies Act, 1956 are prima facie,not prejudicial to the interest of the Company.
(g) In the case of loans taken from companies listed in the register maintained under Section 301, the Companyhas been regular in payment of principal and interest on such loans as and when demanded by the lenders.As per terms stipulated in loan agreements, principal and interest on loans are payable on demand.
(iv) In our opinion and according to the information and explanations given to us, there is an adequate internalcontrol system commensurate with the size of the Company and the nature of its business with regard to purchaseof inventories and fixed assets and with regard to the sale of goods and services, except that the Company needs tofurther strengthen the internal controls relating to acquisition of fixed assets and sale of rejects. In our opinion andaccording to the information and explanations given to us, there is no continuing failure to correct majorweaknesses in internal control system, except as mentioned above.
(v) (a) In our opinion and according to the information and explanations given to us, the particulars of contractsor arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the registerrequired to be maintained under that Section.
(b) In our opinion, and according to the information and explanations given to us, the transactions made in
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pursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rs. 5 lakhwith any party during the year have been made at prices which are reasonable having regard to the prevailingmarket prices at the relevant time except for purchases of certain services and items of fixed assets andinventories which are for the specialised requirements of the Company and for which suitable alternativesources are not available to obtain comparable quotations. However, on the basis of information andexplanations provided, the same appear reasonable.
Further, as explained in more detail in paragraph i) above of our audit report, no prior approval of the CentralGovernment was obtained by the Company in respect of the transactions entered with other private companies andpartnership firms during the period within which common directorship/common partners prevailed.
(vi) The Company has not accepted any deposits from the public.
(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribedby the Central Government for maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956in respect of power operations and are of the opinion that prima facie, the prescribed accounts and records havebeen made and maintained. However, we have not made a detailed examination of the records.
(ix) (a) According to the information and explanations given to us and on the basis of our examination of therecords of the Company, amounts deducted/ accrued in the books of account in respect of undisputedstatutory dues including Provident Fund, Income-tax, Wealth tax, Customs duty, Cess and other materialstatutory dues have generally been regularly deposited during the year by the Company with the appropriateauthorities, except for dues in respect of Sales tax and Service tax where there have been substantial delays in fewcases. As explained to us, provisions of Employees’ State Insurance and Excise duty are not applicable tothe Company. Further, as explained to us, the Company did not have any dues on account of InvestorEducation and Protection Fund.
There were no dues on account of Cess under Section 441A of the Companies Act, 1956 since the date fromwhich the aforesaid Section comes into force has not yet been notified by the Central Government.
According to the information and explanations given to us, no undisputed amounts payable in respect ofProvident Fund, Income tax, Sales tax, Wealth tax, Service tax, Customs duty, Cess and other materialstatutory dues were in arrears as at 31 March 2010 for a period of more than six months from the date theybecame payable.
(b) According to the information and explanations given to us, there are no dues of Income tax, Sales tax,Wealth tax, Service tax, Customs duty and Cess which have not been deposited with the appropriateauthorities on account of any dispute, except as mentioned below:
Name of the Nature of dues Amount Period to which Forum whereStatute involved the amount dispute is pending
(Rs. lakhs) relates
Finance Act, 1994 Service tax 1,653 plus 10 September CESTAT,penalty plus 2004 till 31 March New Delhiinterest * 2006
Finance Act, 1994 Service tax 86 plus 16 August 2002 CESTAT,penalty plus till 31 March 2006 New Delhiinterest
Finance Act, 1994 Service tax 118 plus 28 February 2005 CESTAT,penalty plus to 31 March 2007 New Delhiinterest *
Finance Act, 1994 Service tax 22 plus April 2006 to Commissionerpenalty plus March 2007 (Adjudication),interest New Delhi
Income tax, 1994 Income tax 41.46 Financial year Commissioner ofplus interest 2007-2008 Income tax appeals,
New Delhi
* Out of the above demand, we are informed by the Company that it has deposited a sum of Rs. 1,242 lacs against thesedemands in earlier years.
** Including disputed dues aggregating Rs. 1,857 lacs which have been stayed by respective authorities.
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(x) The Company does not have any accumulated losses at the end of the financial year and has not incurred cashlosses in the financial year and in the immediately preceding financial year.
(xi) In our opinion and according to the information and explanations given to us, the Company has not defaultedin repayment of dues to its bankers. The Company did not have any outstanding dues to any financial institutionor debenture holders during the year.
(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares,debentures and other securities.
(xiii) In our opinion and according to the information and explanations given to us, the Company is not a chit fundor a nidhi/ mutual benefit fund/ society.
(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares,securities, debentures and other investments.
(xv) In our opinion and according to the information and explanations given to us, the terms and conditions onwhich the Company has given guarantees for loans taken by others from banks or financial institutions are notprejudicial to the interest of the Company.
(xvi) In our opinion and according to the information and explanations given to us, the term loans taken by theCompany have been applied for the purpose for which they were raised. However, pending utilisation ofcertain term loans for the stated purpose, the funds have temporarily been deployed in the fixed deposits andhave been utilised for the stated purpose as and when required.
(xvii) According to the information and explanations given to us and on an overall examination of the balance sheetof the Company, we are of the opinion that the funds raised on short-term basis have not been used for long-term investment.
(xviii) According to the information and explanations given to us, read with our comment in paragraph g) of ouraudit report, the Company has not made any preferential allotment of shares to companies/firms/parties coveredin the register maintained under Section 301 of the Act.
(xix) The Company did not have any outstanding debentures during the year.
(xx) The Company has not raised any money by public issues.
(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed orreported during the course of our audit.
For B S R & CompanyChartered AccountantsFirm registration number: 128032W
Sd/-Place : Gurgaon Kaushal KishoreDate : 15 September 2010 Partner
Membership No. :090075
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Schedule As at As at31 March 2010 31 March 2009
I. SOURCES OF FUNDSShareholders’ fundsShare capital 1 1,187,415,640 1,056,808,200Reserves and surplus 2 10,541,847,084 8,623,974,298Loan fundsSecured loans 3 7,948,516,750 6,261,539,846Unsecured loans 4 - 100,489,466
Deferred tax liability (net) 168,252,437 176,503,097(refer note III 12 of Schedule 19)
TOTAL 19,846,031,911 16,219,314,907
II. APPLICATION OF FUNDSFixed assets 5Gross block 4,714,323,720 4,496,596,072Less : Accumulated depreciation/ amorisation 1,763,842,110 1,423,178,258Net block 2,950,481,610 3,073,417,814Capital work in progress (including capital advances) 4,590,415,922 1,525,849,342
7,540,897,532 4,599,267,156
Investments 6 3,796,038,977 2,783,422,172
Current assets, loans and advancesInventories 7 715,887,498 500,046,275Sundry debtors 8 1,206,509,272 1,259,189,102Cash and bank balances 9 4,764,767,802 6,025,488,066Other current assets 10 18,137,006 18,855,303Loans and advances 11 3,051,832,885 1,717,186,425
9,757,134,463 9,520,765,171Less: Current liabilities and provisions 12Current liabilities 1,092,235,391 545,690,502Provisions 155,803,670 138,449,090
1,248,039,061 684,139,592
Net current assets 8,509,095,402 8,836,625,579
TOTAL 19,846,031,911 16,219,314,907
Significant accounting policies and notes to the accounts 19
The accompanying notes and schedules form an integral part of the accounts.
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Balance Sheet as at 31 March 2010(All amounts are in Rupees)
As per our report of even date attached
For B S R & Company For and on behalf of the Board of DirectorsChartered AccountantsFirm Registration No : 128032W
Sd/- Sd/- Sd/- Sd/-Kaushal Kishore R.S. Sindhu G.C. Mrig Satish Kumar SharmaPartner Chairman Managing Director Company SecretaryMembership no.: 090075
Place : GurgaonDate : 15 September 2010
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ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Profit and Loss Account for the year ended 31 March 2010(All amounts are in Rupees)
Schedule For the year ended For the year ended31 March 2010 31 March 2009
IncomeCoal operations-Raw coal beneficiations and allied receipts 2,812,724,436 3,006,044,242-Sale of coal 3,528,283,950 4,236,533,029
Power operations-Sales of power 609,031,381 635,770,380
Other income 13 238,787,731 445,058,817
7,188,827,498 8,323,406,468ExpenditurePurchase of coal 1,419,731,981 1,191,676,846Decrease/ (increase) in stock of coal 14 (148,607,515) (214,810,441)Direct expenses 15 2,243,730,106 2,363,263,476Personnel cost 16 390,951,358 362,356,277Administrative and selling expenses 17 432,914,520 569,808,482Depreciation 5 343,365,064 410,337,081Finance cost 18 254,693,086 230,098,199
4,936,778,600 4,912,729,920
Profit before tax 2,252,048,899 3,410,676,548Provision for tax- Current tax 673,400,000 1,099,900,000- Deferred tax charge /(credit) for current year (8,250,660) (21,793,647)- Fringe benefit tax - 2,750,712- Wealth tax 558,573 451,779- Taxes for earlier years 5,817,499 3,275,057
Balance available for appropriations 1,580,523,487 2,326,092,647Appropriations:- Interim dividend - 91,305,274- Proposed dividend 112,245,616 -- Provision for corporate dividend tax 19,076,142 15,517,332
Profit after appropriations transferred to Balance Sheet 1,449,201,729 2,219,270,041Earnings per share (refer note III 8 of schedule 19)Equity shares of face value of Rs. 10 eachBasic 14.08 25.49Diluted 14.08 25.44Significant accounting policies and notes to the accounts 19The accompanying notes and schedules form an integral part of the accounts.
As per our report of even date attached
For B S R & Company For and on behalf of the Board of DirectorsChartered AccountantsFirm Registration No : 128032W
Sd/- Sd/- Sd/- Sd/-Kaushal Kishore R.S. Sindhu G.C. Mrig Satish Kumar SharmaPartner Chairman Managing Director Company SecretaryMembership no.: 090075
Place : GurgaonDate : 15 September 2010
2-ACBIL 3-57.p65 2011/05/06, 02:40 PM23
24
Aryan Group
Particulars For the year ended For the year ended31 March 2010 31 March 2009
A) Cash flow from operating activities:Net profit before tax 2,252,048,899 3,410,676,548Adjustments for :Depreciation/ amortisation 343,365,064 410,337,081Bad debts written off 7,275,779 24,958,519Capital work in progress written off - 6,770,143(Profit)/ loss on sale of assets (239,038) (178,248)Finance cost 254,693,086 230,098,199Interest income (227,688,339) (261,972,843)Dividend income (61,650) (3,547,750)Bonus received on keyman insurance policies - (150,048,558)Forward premium amortised 2,652,352 884,116
Operating profit before working capital changes 2,632,046,152 3,667,977,207Adjustments for :(Increase) in inventories (215,841,223) (286,036,297)Decrease/ (increase) in sundry debtors 45,404,051 (262,257,126)Decrease/ (increase) in other current assets 718,297 (12,408,534)(Increase) in loans and advances (1,351,717,251) (315,836,447)Increase/ (decrease) in current liabilities and provisions 142,428,961 (67,408,839)
Cash Generated from operations 1,253,038,987 2,724,029,964
Taxes paid (net) (707,760,004) (1,096,445,348)
Net cash from operating activities (A) 545,278,983 1,627,584,616
B) Cash flow from investing activities:Purchase of fixed assets/capital work in progress (3,105,747,531) (1,373,939,991)Sale of fixed assets 5,904,379 880,000Purchase of investments (888,373,285) (2,238,858,595)Interest income 485,755,339 362,531,003Dividend income 61,650 3,547,750Bonus received on keyman insurance policies - 150,048,558
Net cash used in investing activities (B) (3,502,399,448) (3,095,791,275)
C) Cash flow from financing activities:Proceeds from issue of equity share capital 1,418,849 91,166,960Proceeds from securities premium 473,616,128 918,568,736Proceeds from secured loans 2,818,915,503 5,235,343,355Repayments of secured loans (664,648,774) (787,153,724)Proceeds from unsecured loans 418,500,000 121,000,000Repayments of unsecured loans (518,500,000) (21,000,000)Dividends and tax on dividend (106,822,606) (34,206,362)Finance cost (726,078,899) (352,987,032)
Net cash from in financing activities (C ) 1,696,400,201 5,170,731,933
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Cash Flow Statement for the year ended 31 March 2010(All amounts are in Rupees)
2-ACBIL 3-57.p65 2011/05/11, 09:45 AM24
ACB (India) Limited
25
ACBIL
Particulars For the year ended For the year ended31 March 2010 31 March 2009
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Cash Flow Statement for the year ended 31 March 2009(All amounts are in Rupees)
As per our report of even date attached
For B S R & Company For and on behalf of the Board of DirectorsChartered AccountantsFirm Registration No : 128032W
Sd/- Sd/- Sd/- Sd/-Kaushal Kishore R.S. Sindhu G.C. Mrig Satish Kumar SharmaPartner Chairman Managing Director Company Secretary
Membership no.: 090075
Place : GurgaonDate : 15 September 2010
D) Net (decrease)/ increase in cash and cash equivalents (A+B+C) (1,260,720,264) 3,702,525,274
E) Cash and cash equivalents as at the beginning of the year 6,025,488,066 2,322,962,792
F) Cash and cash equivalents as at the end of the year 4,764,767,802 6,025,488,066
Note:
The cash flow statement has been prepared in accordance with ‘Indirect method’ as set out in the AccountingStandard (AS)-3 on Cash Flow Statements’ as notified in the the Companies (Accounting Standard) Rules, 2006.
2-ACBIL 3-57.p65 2011/05/06, 02:40 PM25
26
Aryan Group
As at As at31 March 2010 31 March 2009
Schedule 1 - Share capital
Authorised capital1,000,000,000 equity shares of Rs. 10 each 10,000,000,000 1,250,000,000(previous year 125,000,000 equity share of Rs.10 each)
Issued, subscribed & paid up capital118,741,564 equity shares of Rs.10 each fully paid up 1,187,415,640 1,031,808,200(previous year 103,180,820 equity shares of Rs.10 each fully paid up)[Of the above equity shares, 87,499,120 (previous year 84,512,080)equity shares are alloted as fully paid up by way of bonus sharesfrom securities premium account][Of the above equity shares, 17,750,792 (previous year 5,326,440)equity shares are issued for consideration received other than cash]
Share warrantsNil (previous year 149,352) share warrants of Rs. 3,348 each, - 25,000,000of which Rs. 167.39 per warrant paid up convertible into 3,136,392(inlcuding bonus shares 2,987,040) equity shares of Rs. 10 each
1,187,415,640 1,056,808,200
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the account(All amounts are in Rupees)
Schedule 2 - Reserves & surplus
Securities premium:Opening balance 3,736,900,505 2,763,516,167Add: received during the year 498,541,457 973,384,338Less: applied for issue of bonus shares against share warrants (29,870,400) -
4,205,571,562 3,736,900,505
General reserve 278,306,928 278,306,928
Profit and loss account:Opening balance 4,608,766,865 2,389,496,824Add: transferred from Profit and Loss Account 1,449,201,729 2,219,270,041
6,057,968,594 4,608,766,865
10,541,847,084 8,623,974,298
Schedule 3 - Secured loans
Loans and advances from banks:-Term loans *
Rupee loan 3,412,177,705 1,535,799,890Foreign currency loan 3,611,200,000 4,076,000,000-Cash credit/ working capital loans ** 898,864,713 600,679,573-Vehicle/ equipment loans # 14,609,606 34,905,832-Interest accrued and due on term loans 11,664,726 14,154,551
7,948,516,750 6,261,539,846
Notes:Due within one year Rs. 1,283,496,224 (previous year Rs. 512,833,915) (excluding cash credit/ working capital loans).
* Nature of security for term loans
(a) Term loan of Rs. 340,470,958 (previous year Rs. 441,057,508) from Syndicate Bank is secured by way of first charge on fixedassets of the 30 MW Thermal Power Project at Chakabura, Chattisgarh acquired out of the term loan. Further, secured byway of personal guarantees of directors and relatives.
2-ACBIL 3-57.p65 2011/05/06, 02:40 PM26
ACB (India) Limited
27
ACBIL
Schedule 4 - Unsecured loans
Inter corporate deposit received-from a subsidiary company - 100,000,000-interest accrued and due on above - 489,466
- 100,489,466
As at As at31 March 2010 31 March 2009
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the account(All amounts are in Rupees)
(b) Term loan of Rs. 196,576,958 (previous year Rs. 291,992,382) from Axis Bank is secured by way of exclusive first charge on allassets, fixed and current, both present and future of 15MW Wind Mill Project located at Sangli, Maharashtra. Further,secured against negative lien on the Power Purchase Agreement with MSEDCL, O&M Agreement with Suzlon WindfarmServices Private Limited and on performance guarantees offered by Suzlon Energy Limited and personal guarantees ofdirectors.
(c) Term loan of Rs. 41,214,286 (previous year Rs. 97,750,000) from Standard Chartered Bank is secured by way of first andexclusive charge on entire fixed assets both present and future of the 5 MTPA coal washery plant at Gevra Site. Further,secured by way of first charge over the land located at Gevra by way of equitable mortage with a margin of 25% andpersonal guarantee of promoter director.
(d) Term loan of Rs. 300,000,000 (previous year Rs. 540,000,000) from Yes Bank is secured by way of exclusive charge on land,building and plant and machinery of subsidiary company. Further, secured by way of unconditional and irrecoverablepersonal guarantee of promoter directors.
(e) Term loans of Rs. 5,145,115,503 (previous year Rs. 4,241,000,000) from ECB and INR Lenders is secured by way of firstcharge on all of the 270MW thermal power project assets, both movable and immovable and any other assests related to theproject, whether tangible and intangible and whether present and future. Further secured by way of first charge on allrights, title, interest,benefits and claims of the Company in all project documents and on all replacements and additions toany of the Project Assets. Further, secured by way of personal guarantees of directors.
(f) Term loan of Rs. 500,000,000 (previous year Rs. nil) from Yes Bank is secured by way of exclusive charge on movable andimmovable, both present and future, fixed assets of the the Himgir Washery. Further, secured by way of unconditional andirrecoverable personal guarantee of promoter directors.
(g) Short term loan of Rs. 500,000,000 (previous year Rs. nil) from Axis Bank is secured by way of first pari passu charge oncurrent assets of the Company with Indian Overseas Bank in a multiple banking arrangement. Further, secured by way offirst pari passu charge with Indian Overseas Bank on land/ building, plant and machinery of Panderpauni Plant of theCompany and residential properties Flat No. 3 and 18, Vasant Enclave, New Delhi, 1509, DLF Phase-II, Gurgaon and 953,Sector 31-32A, Gurgaon. Further, secured by way of personal guarantees of directors.
** Nature of security for cash credit/working capital loans
(a) Cash credit of Rs. 255,274,794 (previous year Rs. 303,002,113) from Indian Overseas Bank is secured by way of first paripassu charge on current assets of the Company with Standard Chartered Bank. Further, collaterally secured by way of paripassu charge with Standard Chartered Bank on land/ building, plant and machinery of Panderpauni Plant of the Company.Cash credit is secured by way of personal guarantees of directors, relatives and corporate guarantee of group company.
(b) Cash credit of Rs. 85,562,149 (previous year Rs. 153,315,068) and working capital loan of Rs. 111,354,618 (previous year Rs.144,362,392) from Standard Chartered Bank is secured by way of pari passu charge on current assets of the Company withIndian Overseas Bank in a multiple banking arrangement. Further, secured by way of pari passu charge with Indian OverseasBank on land/ building, plant and machinery of Panderpauni Plant of the Company.
(c) Working capital demand loan of Rs. 245,101,919 (previous year Rs. nil) from Indusind Bank is secured by way of pari passucharge on current assets of the Company with Indian Overseas Bank in a multiple banking arrangement. Further, securedby way of pari passu charge with Indian Overseas Bank on land/ building, plant and machinery of Panderpauni Plant ofthe Company. Further, secured by way of personal guarantees of directors.
(d) Working capital demand loan of Rs. 201,571,233 (previous year Rs. nil) from Yes Bank is secured by way of pari passu chargeon current assets of the Company with Indian Overseas Bank in a multiple banking arrangement. Further, secured by wayof pari passu charge with Indian Overseas Bank on land/ building, plant and machinery of Panderpauni Plant of theCompany. Further, secured by way of personal guarantees of directors.
# Nature of security for vehicle/equipment loans
(a) Vehicle/equipment loans of Rs. 14,609,606 (previous year Rs. 34,905,832) secured by first and exclusive charge on specificvehicles/equipments. Further, secured by way of post dated cheques for repayment of interest and principal.
2-ACBIL 3-57.p65 2011/05/06, 02:40 PM27
28
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2-ACBIL 3-57.p65 2011/05/06, 02:40 PM28
ACB (India) Limited
29
ACBIL
As at As at31 March 2010 31 March 2009
Schedule 6 - Investments (non-trade)
Long term investments (at cost)
Quoted:
Indian Overseas Bank 328,800 328,80013,700 equity shares of Rs. 10 each fully paid up(previous year 13,700 equity shares fully paid up)
Market value Rs. 91.95 each(previous year Rs. 45.60 each)
Aggregate amount of Company’s quoted investments 328,800 328,800
Unquoted:
Other than government securities
In subsidiary companies (fully paid up)
Aryan Clean Coal Technologies Private Limited 34,998,000 34,998,0003,499,800 equity shares of Rs. 10 each(previous year 3,499,800 equity shares of Rs. 10 each)
Aryan Energy Private Limited 213,379,237 213,379,2371,381,250 equity shares of Rs.100 each (previous year 1,381,250equity shares of Rs. 100 each)
Kartikay Coal Washeries Private Limited 58,327,000 58,327,0002,919,600 equity shares of Rs.10 each(previous year 2,919,600 equity shares of Rs. 10 each)
Aryan Ispat and Power Private Limited 1,002,800,000 508,000,0007,488,000 equity shares of Rs. 100 each(previous year 2,540,000 equity shares of Rs. 100 each)
Connoiseur Resources Limited, BVI 1,953,805 401,50048,135 equity shares of USD 1 each(previous 10,000 Equity Shares of USD 1 Each)
Aryan Chhattisgarh Power Generation Private Limited 100,000 100,00010,000 equity shares of Rs.10 each(previous year 10,000 equity shares of Rs.10 each)
Aryan M.P. Power Generation Private Limited 100,000 100,00010,000 equity shares of Rs.10 each(previous year 10,000 equity shares of Rs.10 each)
Spectrum Coal and Power Limited 1,967,333,835 1,967,333,835(refer note III 22 of Schedule 19)41,678,083 equity shares of Rs. 10 each(previous year 41,678,083 equity shares of Rs. 10 each)
TRN Energy Private Limited 66,300,000 -6,630,000 equity shares of Rs. 10 each (previous year nil)
Others (fully paid up)
Cellcap Securities Limited, BVI 26,018,300 453,800660,000 equity shares of USD 1 each(previous year 10,000 equity shares of USD 1 each)
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the account(All amounts are in Rupees)
2-ACBIL 3-57.p65 2011/05/06, 02:40 PM29
30
Aryan Group
As at As at31 March 2010 31 March 2009
Schedule 6 - Investments (non-trade) (Contd.)
Global Coal & Mining Private Limited 124,400,000 -6,257,358 equity shares of Rs. 10 each (previous year nil)
Spectrum Power Generation Limited 300,000,000 -30,000,000 equity shares of Rs. 10 each (previous year nil)
Aggregate amount of Company’s unquoted investments 3,795,710,177 2,783,093,372
3,796,038,977 2,783,422,172
Schedule 7 - Inventories(At lower of cost and net realisable value)Stores and spare parts * 241,763,506 174,529,798Raw coal 85,916,757 101,586,467Work in progress 38,080,581 25,866,715Beneficiated coal 192,089,638 126,736,398Coal rejects 158,037,016 71,326,897
715,887,498 500,046,275* includes goods in transit Rs. 17,373,833 (previous year Rs. 11,486,198)
Schedule 8 - Sundry debtors(refer note III 16 of schedule 19)
(Unsecured and considered good, unless otherwise stated)Debts outstanding for a period exceeding six months 277,199,150 74,127,191Other debts 929,310,122 1,185,061,911
1,206,509,272 1,259,189,102
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the account(All amounts are in Rupees)
Schedule 9 - Cash and bank balances
Cash in hand 6,794,930 6,182,802Cheques in hand 613,333 8,842,618Balance with scheduled banks:-on current accounts 140,511,043 194,617,519-on deposit accounts-provided as security to government authority 64,868 39,746-held as margin money for bank guarantees 120,068,002 191,632,839-lien marked for 270MW Power Project 1,718,224,091 1,615,046,905-held in control account for 270MW Power Project 2,778,491,535 3,872,653,760-other fixed deposits - 136,471,877
4,764,767,802 6,025,488,066
Schedule 10 - Other current assets
Income accrued but not due 18,137,006 18,855,30318,137,006 18,855,303
2-ACBIL 3-57.p65 2011/05/06, 02:40 PM30
ACB (India) Limited
31
ACBIL
As at As at31 March 2010 31 March 2009
Schedule 11 - Loans & advances (refer note III 17 of Schedule 19)
(Unsecured and considered good, unless otherwise stated)Advances recoverable in cash or in kind or for value to be received 293,460,505 179,680,677Inter corporate deposits-to subsidiaries 739,100,000 431,475,000-interest accrued and due 60,311,135 43,222,392Share application money-to subsidiaries 1,767,731,600 817,692,305-to others - 25,564,500Advance income tax 18,428,974 - [net of provision for tax of Rs. 1,777,446,882]Advance fringe benefit tax 383,736 408,766 [net of provision for tax of Rs. 2,750,712 (previous year Rs. 6,270,813)]Advance wealth tax 113,874 - [net of provision for tax of Rs. 1,010,352]Security and other deposits 155,062,797 149,225,169Forward cover receivable (net) - 50,025,000[net of forward cover payable of previous year of Rs. 4,025,975,000]Unamortised premium on forward cover 17,240,264 19,892,616
3,051,832,885 1,717,186,425
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the account(All amounts are in Rupees)
Schedule 12 - Current liabilities and provisions
Current liabilitiesSundry creditors- Dues to micro and small enterprises (refer note III 14 of Schedule 19) 405 229,316
- dues to other than micro and small enterprise * 595,068,551 448,523,513Advances from customers 10,816,753 8,633,779Forward cover payable (net) 414,775,000 -[net of foreign cover receivable of current year of Rs. 3,611,200,000]Other liabilities ** 71,574,682 88,303,894
1,092,235,391 545,690,502
*includes salary, wages and bonus payable of Rs. 688,612(previous year Rs. 3,647,170).**includes provident fund payable of Rs. 2,985,446(previous year Rs. 2,802,726).
ProvisionsProvision for income tax - 9,014,338 [net of advance tax of Rs. 1,619,699,112]Provision for wealth tax - 451,779 [net of advance tax of Rs. 1,205,689]Provision for gratuity 24,481,912 22,160,367Interim dividend - 91,305,274Proposed dividend 112,245,616 -Provision for corporate dividend tax 19,076,142 15,517,332
155,803,670 138,449,090
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For the year ended For the year ended31 March 2010 31 March 2009
Schedule 13 - Other income
Interest income-from banks 155,872,823 204,419,360
(tax deducted at source Rs. 16,800,323 previous year Rs. 45,733,797)-from others 71,815,516 57,553,483
(tax deducted at source Rs. 6,899,718 previous year Rs. 12,859,855)Dividend received-from subsidiaries - 3,499,800-from others 61,650 47,950
Bonus received on keyman insurance policies - 150,048,558Exchange gain (net) - 727,355Profit on sale of assets (net) 239,038 178,248Sundry balances written back 1,364,560 1,319Bad debts recovered 1,884,402 27,892,702Miscellaneous receipts 7,549,742 690,042
238,787,731 445,058,817
Schedule 14 - Decrease/(increase) in stock of coal
Opening stock of coal:Raw coal 101,586,467 9,942,972Work in progress 25,866,715 12,937,336Beneficiated coal 126,736,398 55,178,010Coal rejects 71,326,897 32,647,718
325,516,477 110,706,036
Closing stock of coal:Raw coal 85,916,757 101,586,467Work in progress 38,080,581 25,866,715Beneficiated coal 192,089,638 126,736,398Coal rejects 158,037,016 71,326,897
474,123,992 325,516,477
(148,607,515) (214,810,441)
Schedule 15 - Direct expenses
Power and fuel 75,166,247 84,941,437Consumption of materials 22,313,188 38,177,615Transportation and loading charges 1,620,638,953 1,735,787,060Beneficiation charges 92,912,008 22,669,580Energy duty 9,306,282 10,058,834Pollution control expenses 15,172,968 17,584,016Repair, running and maintainance:-Building 12,416,665 26,963,970-Plant and machinery 268,781,185 296,293,269-Others 127,022,610 130,787,695
2,243,730,106 2,363,263,476
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the account(All amounts are in Rupees)
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For the year ended For the year ended31 March 2010 31 March 2009
Schedule 16 - Personnel cost
Salaries, wages and bonus 360,533,862 332,816,769Contribution to provident and other funds 19,116,816 17,700,448Staff welfare expenses 11,300,680 11,839,060
390,951,358 362,356,277
Schedule 17 - Administrative and selling expenses
Rent (refer note III 9 of Schedule 19) 28,393,680 30,795,657Land lease rent 1,811,371 1,450,029Rate, taxes and fees 24,398,414 13,096,495Subscription and tender fees 1,561,159 1,449,499Legal and professional fee 47,363,685 74,015,323Security expenses 9,533,054 4,646,665Insurance 6,991,378 6,650,819Printing and stationery 4,060,024 3,492,953Communication expenses 8,687,727 7,353,216Office maintenance expenses 15,116,927 9,308,982Travelling and conveyance 32,810,905 31,041,648Electricity and water charges 1,666,100 1,122,251Charity and donation 3,503,606 3,129,568Deductions on account of quality and quantity 129,292,534 202,260,623Coal handling charges 86,979,293 127,653,012Sampling charges 2,647,032 2,505,804Advertisement and publicity 2,089,948 2,290,899Business promotion 1,794,902 2,537,843Bank charges 8,866,825 6,735,844Exchange loss (net) 42,919 -Forward premium amortised 2,652,352 884,116Bad debts written off 7,275,779 24,958,519Capital work in progress written off - 6,770,143Miscellaneous expenses 5,374,906 5,658,574
432,914,520 569,808,482
Schedule 18 - Finance cost
Interest on term loans 130,281,788 169,504,748Interest on cash credits/ working capital loans 86,358,997 47,694,575Interest on inter corporate deposits 25,552,301 632,876Loan processing charges 12,500,000 12,266,000
254,693,086 230,098,199
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the account(All amounts are in Rupees)
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I. Background
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited) (‘ACB’ or ‘the Company’) is a flagshipcompany of Aryan Group. ACB was incorporated on 14 March 1997. Besides coal beneficiation business, ACB isengaged in power generation through 30MW thermal power plant and 15MW wind mill plant. Both the powerplants are supported by Power Purchase Agreements with State Electricity Boards. Further, the Company is in theprocess of setting up 270MW thermal power plant at Chakabura, Chhattisgarh.
During the year, the Company changed its name from Aryan Coal Benefications Private Limited to ACB (India)Private Limited and subsequently changed its status from private limited company to public limited company.Consequently, the name of the Company has been changed to ACB (India) Limited.
II. Significant accounting policies
1) Accounting convention:
The financial statements are prepared and presented under the historical cost convention in accordance withthe Generally Accepted Accounting Principles (‘GAAP’) in India and mandatory accounting standards asspecified in the Companies (Accounting Standard) Rules, 2006, the provisions of the Companies Act, 1956, tothe extent applicable, and as adopted consistently by the Company.
2) Use of estimates:
The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP)in India requires management to make estimates and assumptions that affect the reported amounts of assetsand liabilities and the disclosure of contingent liabilities on the date of the financial statements. Actual resultscould differ from those estimates. Differences between the actual results and estimates are recognised in theyear in which the results are known/ materialized. Any revision to accounting estimates is recognisedprospectively in current and future periods.
3) Inventories (valued at lower of cost and net realisable value):
Inventories are valued at lower of cost and net realisable value. The basis for determination of cost of variouscategories of inventory is as follows:
(a) Stores and spare parts:
Stores and spare parts are computed on first in first out basis (FIFO).
(b) Raw coal and beneficiated coal:
These are valued at cost of raw coal (computed on FIFO) including cost attributable to the category of coal,based on appropriate basis to bring the coal to its present location and condition.
(c) Work in progress :
Work in progress represents the cost incurred on beneficiation of coal on behalf of customers towards rawcoal transportation, beneficiation of raw coal and transportation of beneficiated coal to bring the coal to itspresent location and condition.
(d) Coal rejects:
These consist of rejects generated out of coal beneficiation process or coal rejects purchased directly. Thecost is ascertained by apportioning the total cost attributable to the category of coal generated/ purchased,based on an appropriate basis.
4) Revenue recognition
Beneficiation operations:
(a) Raw coal beneficiations and allied receipts:
Revenue from raw coal beneficiation and allied receipts is recognised on attainment of the said activity.Such activity is regarded as being attained when no significant uncertainty exists regarding the amount ofconsideration that will be derived from the performance of such activity and the activity is completed orsubstantially completed. Revenue represents the invoiced value of net beneficiation receipts.
(b) Sale of coal:
Revenue from sale of coal is recognised when coal is dispatched to the customers, which coincides withthe transfer of significant risks and rewards. Sales represent the invoiced value of coal (net of sales tax).
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the account
Schedule 19: Significant accounting policies and notes to the accounts
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Power operations:
(a) Sale of power:Revenue from sale of power is recognised based on tariffs as per the terms of the Power Purchase Agreementsentered into by the Company with respective State Electricity Boards.
Other incomes:
(a) Interest income:Interest income is recognised on a time proportion basis considering the contracted rate of return.
(b) Dividend income:Dividend income is recognised when the shareholders’ right to receive payment is established.
(c) Bonus received on keyman insurance policies:Income from bonus received on keyman insurance policies is recognised on receipt basis.
5) Fixed assets and depreciation
Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. The cost of fixedassets includes inward freight, duties, taxes and incidental expenses related to acquisition and installationincurred upto the date of commissioning of the assets. Fixed assets under construction, advances paid towardsacquisition of fixed assets and cost of asset not ready to use before the year end, are disclosed as capital workin progress. Assets held for disposal are stated at their estimated residual values as at the balance sheet date.For assets used for coal beneficiation operations-
Depreciation is provided on pro-rata basis as per written down value (WDV) method at rates based uponmanagement estimates of useful lives of the assets. Such rates are equal to the rates prescribed in Schedule XIVof the Companies Act, 1956.For assets used for power operations-
Depreciation is provided on pro-rata basis as per straight line method (SLM) at rates based upon the managementestimates of useful lives of the assets. Such rates are equal to the rates prescribed in Schedule XIV of theCompanies Act, 1956.Leasehold assets-
Leasehold assets are amortised over the period of lease. Leasehold improvements are amortised over theremaining period of lease or derived useful lives of assets as prescribed in Schedule XIV to the Companies Act,1956, whichever is shorter.Assets individually costing upto Rs. 5,000 are fully depreciated in the year of purchase.
6) Foreign currency transactions
Foreign currency transactions are recorded at the rate of exchange prevailing on the date of the respectivetransactions. Monetary foreign currency assets and liabilities remaining unsettled at the balance sheet date aretranslated at the rates of exchange prevailing on that date. Gains/ losses arising on account of realisation/settlement of foreign exchange transactions and on translation of foreign currency assets and liabilities arerecognised in the Profit and Loss Account.The premium or discount that arises on entering into a forward exchange contract for hedging is measured bythe difference between the exchange rate at the date of the inception of the forward exchange contract and theforward rate specified in the contract and is amortised as expense or income over the life of the contract.Exchange difference on a forward exchange contract is the difference between:(a) the foreign currency amount of the contract translated at the exchange rate at the reporting date, or the
settlement date where the transaction is settled during the reporting period, and;(b) the same foreign currency amount translated at the latter of the date of inception of the forward exchange
contract and the last reporting date. These exchange differences are recognised in the statement of profitand loss in the reporting period in which the exchange rates change.
The premium or discount arising at the inception of a forward exchange contract entered into to hedge theforeign currency risk of a firm commitment or a highly probable forecast transaction is amortised as expenseor income over the life of the contract.
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7) Investments
Long term investments are valued at cost. Any decline other than temporary, in the value of long terminvestments, is adjusted in the carrying value of such investments.
8) Employee benefits
All employee benefits payable/available within twelve months of rendering the service are classified as short-term employee benefits. Benefits such as salaries, wages and bonus etc., are recognised in the Profit and LossAccount in the period in which the employee renders the related service.
Defined contribution plans: A defined contribution plan i.e. provident fund is a post-employment benefitplan under which an entity pays fixed contributions into a separate entity and will have no legal and constructiveobligation to pay further amounts. Obligations for contributions to defined contribution provident plans arerecognised as an employee benefit expense in the Profit and Loss Account when they are due. Prepaidcontributions are recognised as an asset to the extent that a cash refund or a reduction in future payments isavailable.
Defined benefit plans: A defined benefit plan i.e. gratuity, is a post-employment benefit plan. The Company’sgratuity plan is a defined benefit plan.
The Company’s net obligation in respect of defined benefit plans is calculated separately for each plan byestimating the amount of future benefit that employee have earned in return for their service in the currentand prior periods; that benefit is discounted to determine its present value. Any unrecognised past servicecosts and the fair value of any plan assets are deducted. The discount rates used for determining the presentvalue of obligation under defined benefit plans, is based on the market yields on Government securities as atthe balance sheet date, having maturity periods approximating to the terms of related obligations. The calculationis performed annually by an independent actuary using the projected unit credit actuarial method. When thecalculation results in a benefit to the Company, the asset is recognised only to the extent of the present value ofany economic benefits available in the form of refunds from the plan or reductions in future contributions tothe plan.
Actuarial gains and losses are recognised immediately in the Profit and Loss Account. Gains or losses on thecurtailment or settlement of any defined benefit plan are recognised when the curtailment or settlement occurs.
9) Borrowing costs
Borrowing costs (net of income on the temporary investment of those borrowings) that are attributable to theacquisition of qualifying assets are capitalised as part of the cost of such assets. All other borrowing costs arecharged to revenue.
10) Leases
Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest withthe lessor, are recognised as operating leases. Lease payments under operating lease arrangements are recognisedas an expense in the Profit and Loss Account on a straight line basis over the lease term.
11) Earnings per share
In computing earnings per share, the Company considers net profit/(loss) after tax. Basic earnings per shareare computed by the weighted average number of equity shares outstanding during the year. Diluted earningsper share are computed using the weighted average number of equity and dilutive equivalent shares outstandingduring the year, except where results would be anti-dilutive.
12) Taxes
Income-tax expenses comprise current tax (i.e. the amount of tax for the period determined in accordance withthe Income-tax Act, 1961) and deferred tax charge or credit (reflecting the tax effects of the timing differencesbetween the accounting income and taxable income for the period). The deferred tax charge or credit and thecorresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted orsubstantively enacted by the balance sheet date. Deferred tax assets are recognized only to the extent there isreasonable certainty that the assets can be realized in the future. However, where there is unabsorbeddepreciation or carry forward loss under taxation laws, deferred tax assets are recognized only if there isvirtual certainty of realization of such assets. Deferred tax assets are reviewed at each balance sheet date and
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the account
Schedule 19: Significant accounting policies and notes to the accounts
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written down or written up to reflect the amount that is reasonably/virtually certain (as the case may be) to berealized. Deferred tax implications of timing differences, that originate during the tax holiday period andreverse after the tax holiday period are recognised in the year in which timing differences originate.
Fringe Benefits Tax (‘FBT’) has been abolished w.e.f. 1 April 2009, therefore no provision is made in the currentfinancial year.
13) Impairment of assets
The carrying amounts of assets are reviewed at each balance sheet date to determine whether there is anyindication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. Animpairment loss is recognised whenever the carrying amount of an asset or its cash generating unit exceeds itsrecoverable amount. Impairment losses are recognised in the Profit and Loss Account. An impairment loss isreversed if there has been a change in the estimates used to determine the recoverable amount. An impairmentloss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount thatwould have been determined net of depreciation or amortisation, if no impairment loss had been recognised.
14) Provisions and contingencies
The Company recognises a provision when there is a present obligation as a result of a past event and it is morelikely than not that there will be an outflow of resources embodying economic benefits to settle such obligationand the amount of such obligation can be reliably estimated. Provisions are not discounted to its present value,and are determined based on the management’s best estimate of the amount of obligation required at the yearend. These are reviewed at each balance sheet date and adjusted to reflect current management estimates.
Contingent liabilities are disclosed in respect of possible obligations that have arisen from past events and theexistence of which will be confirmed only by the occurrence or non occurrence of future events not whollywithin the control of the Company. Contingent liabilities are also disclosed for present obligations in respect ofwhich it is not probable that there will be an outflow of resources or a reliable estimate of the amount ofobligation cannot be made.
When there is a possible obligation or a present obligation where the likelihood of an outflow of resources isremote, no disclosure or provision is made.
III. Notes to accounts
1) Contingent liabilities and capital commitments
a) Corporate and bank guaranteesThe Company has given corporate guarantees of Rs. 2,866,300,000 (previous year Rs. 2,089,000,000) to YesBank Limited, New Delhi, Bank of India, New Delhi, Federal Bank, Mumbai and Bank of Baroda, New Delhi,Srei Infrastructure Limited, Kolkata, and Axis Bank, New Delhi against credit facilities given by the said banksto subsidiaries of the Company.
Out of the total bank guarantee limits of the Company, bank guarantee limit of Rs. 561,000,000 (previous yearRs. nil) has been allocated in favour of Aryan M.P. Power Generation Private Limited (wholly owned subsidiaryof the Company). The said bank guarantee is issued by Axis Bank in favour of Power Grid Corporation ofIndia Limited and is in the nature of performance bank guarantee of Aryan M.P. Power Generation PrivateLimited.
The corporate guarantee issued to Lehman Brothers Commercial Corporation Asia Limited, Hongkong, againstcredit facilities extended to Cellcap Securities Limited, BVI, a joint venture company, for an amount of USD45.50 million was released upon full and final settlement of loan during the current year.
b) Contingent liability
The Company has contested the liability of Rs. 63,885,017 (previous year Rs. 63,885,017) raised by service taxauthorities.
c) Capital commitments
The estimated amount of contracts remaining to be executed on capital account (net of advances) was Rs.5,574,911,610 as at 31 March 2010 (previous year Rs. 7,291,666,874).
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the account
Schedule 19: Significant accounting policies and notes to the accounts
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2) Managerial remuneration
Managerial remuneration under Section 198 of the Companies Act, 1956 to the directors of the Company is asfollows:
(Amount in Rupees)
For the year ended For the year ended31 March 2010 31 March 2009
Remuneration to whole time directors:
Salaries and allowances 99,590,605 111,350,000Bonus 15,043,836 15,050,000Perquisite 1,579,600 1,440,000Contribution to Provident Fund 2,446,225 3,024,000
Commission to non-executive director 6,267,090 -
124,927,356 130,864,000
As the future liability for gratuity is provided on the basis of actuarial valuation for the Company as a whole, theamount pertaining to the directors is not ascertainable and therefore not included above.
Computation of net profit in accordance with section 349 of the Companies Act, 1956:
(Amount in Rupees)
For the year ended31 March 2010
Net profit before tax as per profit and loss account 2,252,048,899Add:Managerial remuneration 124,927,356Add/(Less) : Loss/(Profit) on sale of fixed assets (239,038)Net profit as per section 349 of the Companies Act, 1956 2,376,737,217Permissible percentage for total managerial remuneration 10%Maximum permissible remuneration for whole time directors 237,673,722Remuneration paid to whole time directors during the year 118,660,266Permissible percentage for commission 1%Maximum permissible commission 23,767,372Commission paid to non-executive director 6,267,090
3) Legal and professional fee include auditors’ remuneration (excluding out of pocket expenses):
(Amount in Rupees)
For the year ended For the year ended31 March 2010 31 March 2009
Statutory audit fees 3,500,000 6,750,000 *Fees for other services 5,080,000 170,000Service tax 883,740 783,212
9,463,740 7,703,212
*includes cost over-run of Rs. 3,250,000 for the year ended 31 March 2008.
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the account
Schedule 19: Significant accounting policies and notes to the accounts
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4) Installed Capacity and production (as certified by the management and relied upon by the auditors, being atechnical matter).
Particulars Units Installed capacity Actual productionYear ended Year ended Year ended Year ended
31 March 2010 31 March 2009 31 March 2010 31 March 2009Coal beneficiation MT 27,600,000 27,600,000 21,820,428 24,750,144plants
Thermal power Units 262,800,000 262,800,000 231,276,000 252,498,000plants
Wind mill Units 131,400,000 131,400,000 25,211,526 21,356,947
5) Quantitative information:
Quantitative information in respect of trading of coal:
Particulars For the year ended For the year ended31 March 2010 31 March 2009
Quantity Value Quantity Value(MT) (Rupees) (MT) (Rupees)
Opening stock 1,214,746 299,649,762 1,261,335 97,768,700Purchases/generation * 4,728,547 1,419,731,981 4,877,386 1,191,676,846Sales/captive consumption ** 3,784,503 3,528,283,950 4,883,157 4,236,533,029Disposed off 168,930 - 40,818 -Closing stock 1,989,860 436,043,411 1,214,746 299,649,762
* Represents the cost of purchase of coal through e-booking/e-auction, coal rejects and value of credit notes givento various customers for purchase of coal rejects generated through beneficiation of raw coal. All the expensesrelating to processing/ re-processing have been included under respective expense heads.
** Represents sale of coal (both processed and unprocessed) purchased through e-booking/e-auction and coalrejects.
Quantitative information in respect of generation and sale of power:
Particulars For the year ended For the year ended31 March 2010 31 March 2009
Quantity Value Quantity Value(Units) (Rupees) (Units) (Rupees)
Thermal power:Generation 231,276,000 - 252,498,000 -Sale 177,110,000 512,132,518 200,942,000 556,593,534Wind power:Generation 25,211,526 - 21,356,947 -Sale 24,462,175 96,898,863 20,691,707 79,176,846
Note : Difference between generation and sales is due to auxiliary and captive consumption.
6) a) Value of imports calculated on CIF basis(Amount in Rupees)
Particulars For the year ended For the year ended31 March 2010 31 March 2009
Stores and spares 5,909,009 2,440,131Capital goods 9,356,035 10,453,991
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the account
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b) Expenditure in foreign currency (Amount in Rupees)
Particulars For the year ended For the year ended31 March 2010 31 March 2009
Travelling expenses 747,275 2,481,741Sponsorship fees 27,249 -Advertisement and publicity - 312,221Legal and professional - 2,062,803Legal and professional fee(included in capital work in progress) - 207,551,600Travelling expenses (included in capital work in progress) 142,035 2,393,674Interest on loan (included in capital work in progress) 380,968,770 122,345,518
7) a) General description of defined benefit plan:
Gratuity plan:The Company operates a gratuity plan which provides lump sum benefits linked to the qualifying salary andcompleted years of service with the Company at the time of separation. Every employee who has completed 5years of continuous service is entitled to receive gratuity at the time of his retirement or separation from theorganization whichever is earlier. However the condition of completion of 5 years of service is not applicablewhere separation is on account of disability or death of an employee. The gratuity benefit that is payable toany employee, is computed in accordance with the provisions of “The Payment of Gratuity Act, 1972”.
The Gratuity FundThe following table sets forth the status of the Gratuity Plan of the Company and the amounts recognised in theBalance Sheet and Profit and Loss Account.
(Amount in Rupees)Particulars Year ended Year ended
31 March 2010 31 March 2009Changes in the present value of defined benefit obligationProjected benefit obligation at the beginning of year 22,160,367 15,205,617Current service cost 4,069,114 2,813,787Interest cost 1,879,364 1,334,401Actuarial loss/(gain) (2,086,048) 2,901,754Benefits paid (1,540,885) (95,192)
Projected benefit obligation at the end of the year 24,481,912 22,160,367
Changes in the fair value of plan assetsFair Value of Plan Assets at the beginning of the year - -Expected return on plan assets - -Contributions by employer 1,540,885 95,192Contributions benefits paid (1,540,885) (95,192)Actuarial (loss)/gain - -Fair Value of Plan Assets at the end of the year - -
Projected benefit obligation at the end of the year 24,481,912 22,160,367Fair value of plan assets at the end of the year - -
Funded status of the plans – asset/(liability) (24,481,912) (22,160,367)Asset recognised in the Balance Sheet - -Expense recognised in the Profit and Loss AccountCurrent service cost 4,069,114 2,813,787Interest cost on defined benefit obligation 1,879,364 1,334,401Expected return on plan assets - -Net actuarial (gain)/loss recognised in the year (2,086,048) 2,901,754
Net gratuity cost 3,862,430 7,049,942
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the account
Schedule 19: Significant accounting policies and notes to the accounts
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Principal actuarial assumptions at the balance sheet date are as follows:
Economic assumptions:
The principal assumptions are the discount rate and salary escalation rate. The discount rate is generally basedupon the market yields available on Government bonds at the accounting date with a term that matches that of theliabilities and the salary growth rate takes account of inflation, seniority, promotion and other relevant factors onlong term basis. The assumptions used are summarized in the following table:
Assumptions as at Assumptions as at31 March 2010 31 March 2009
Discount rate 8.30% 7.70%Salary growth rate 10.00% 10.00%
Demographic assumptions:
Assumptions as at Assumptions as at31 March 2010 31 March 2009
Retirement age 60 years 60 yearsMortality table LIC (1994-96) duly LIC (1994-96) duly
modified modifiedEmployee turnover 21 - 30 years- 5% 21 - 30 years- 5%
31 - 40 years-3% 31 - 40 years-3%41 - 50 years -2% 41 - 50 years -2%51 - 59 years-1% 51 - 59 years-1%
8) Earnings per share:
Reconciliation of basic and diluted shares used in computing earnings per share
Year Ended Year Ended31 March 2010 31 March 2009
Profit after tax attributable to equity shareholders (Rupees) 1,580,523,487 2,326,092,647
Number of shares considered as weighted average sharesoutstanding for computing basic earnings per share 112,245,616 91,257,291
Add: Effect of dilutive issues of shares - 159,785
Number of shares considered as weighted average sharesand potential shares outstanding for computing dilutedearnings per share 112,245,616 91,417,076
Nominal value per share (Rupees) 10 10
Basic Earnings per share (Rupees) 14.08 25.49
Diluted Earnings per share (Rupees) 14.08 25.44
9) Operating leases:The Company has taken railway siding, office space, accommodation for its employees and guest houseresidential accommodation for employees under cancellable operating lease arrangements. Lease rental expensescharged during the year to the Profit and Loss Account amount to Rs. 28,393,680 (previous year Rs. 30,795,657).
10) The Company has during the year entered into transactions of purchases and sales of goods and services with
private companies and firms, in which director(s) of the Company are director(s)/ shareholder(s)/ partner(s).In majority of the cases, the Company has taken the relevant approvals from the statutory authorities i.e.Central Government, however, in case of any lapse due to commission/ omission, the necessary correctiveaction is being initiated.
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the account
Schedule 19: Significant accounting policies and notes to the accounts
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11) Segment Reporting
In accordance with Accounting Standard-17 on segment reporting as prescribed in the Companies (AccountingStandard) Rules, 2006, under the provisions of the Companies Act, 1956, the Company has identified threebusiness segments viz. coal operations, wind power and thermal power. The above segments have beenidentified and reported taking into account the differing risks and returns, and the current internal financialreporting systems. The segment wise disclosures are as follows:
Segment Revenue, Results and Capital Employed include the respective amounts identifiable to each of thesegments. Other unallocable expenditure/assets/liabilities includes expenses/ assets/ liabilities which arenot directly identifiable to any business segment.
Segment revenue, results and capital employed:
(Amount in Rupees)
Particulars Coal Wind power Thermal power Eliminations Totaloperations
Segment revenue
External revenue 6,341,008,386 96,898,863 512,132,518 - 6,950,039,767(7,242,577,271) (79,176,846) (556,593,534) (-) (7,878,347,651)
Inter segment 68,855,015 - 127,320,852 -196,175,867 -revenue (83,459,738) (-) (112,516,002) (-195,975,740) (-)
Total revenue 6,409,863,401 96,898,863 639,453,370 -196,175,867 6,950,039,767(7,326,037,009) (79,176,846) (669,109,536) (-195,975,740) (7,878,347,651)
Segment results 2,172,605,285 48,845,330 351,136,113 - 2,572,586,728(3,058,082,587) (32,557,508) (388,568,311) - (3,479,208,406)
Less: Unallocated 304,632,474corporate expenses (283,492,476)
Operating profit 2,267,954,254(3,195,715,930)
Finance cost 254,693,086(230,098,199)
Interest and 238,787,731other income (445,058,817)
Net profit 2,252,048,899before tax (3,410,676,548)
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the account
Schedule 19: Significant accounting policies and notes to the accounts
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ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the account
Schedule 19: Significant accounting policies and notes to the accounts
(Amount in Rupees)
Other Information Coal operations Wind power Thermal power Total
Assets
Segment assets 3,660,389,080 623,679,235 9,974,669,773 14,258,738,088(3,443,248,352) (647,768,366) (8,274,604,025) (12,365,620,743)
Unallocated corporate 6,835,332,884 assets (4,537,833,756)
Total assets 21,094,070,972(16,903,454,499)
Liabilities/Shareholders’fundsSegment liabilities 457,743,987 4,170,186 596,369,000 1,058,283,173
(500,827,709) (9,286,819) (3,814,152) (513,928,680)Unallocated corporate 358,008,325liabilities (346,714,010)
Share capital 1,187,415,640(1,056,808,200)
Reserves and surplus 10,541,847,084(8,623,974,298)
Secured and 7,948,516,750unsecured loans (6,362,029,312)
Total liabilities/ 21,094,070,972shareholders’ funds (16,903,454,500)
Segment capital 256,268,960 - 3,007,154,454 3,263,423,414expenditure (336,376,109) - (1,002,330,309) (1,338,706,418)
Unallocated capital 18,870,814expenditure (24,339,625)
Total capital 3,282,294,228expenditure (1,363,046,043)
Depreciation 231,235,462 35,088,456 54,320,609(302,479,238) (35,088,456) (53,834,691)
Figure in brackets are for the previous year
The Company’s customers are located in India and constitute a single reportable segment for the purpose ofsecondary segment reporting. Accordingly, no secondary segment information has been disclosed as requiredby Accounting Standard (AS)-17 ‘Segment Reporting’ specified in the Companies (Accounting Standard) Rules,2006 under the provisions of the Companies Act, 1956.
Segment accounting policies
The accounting principles consistently used in the preparation of the financial statements and consistentlyapplied to record revenue and expenditure in individual segments are as set out in Part II to this schedule onsignificant accounting policies. The accounting policies in relation to segment accounting are as under:
a) Segment assets and liabilities
All segment assets and liabilities have been allocated to the various segments on the basis of specificidentification. Segment assets consist principally of fixed assets, capital work in progress, inventories, sundrydebtors, other current assets and loans and advances. Segment assets do not include unallocated corporate
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fixed assets, cash and bank balances, advance tax and other assets not specifically identifiable with any segment.
Segment liabilities include sundry creditors, other liabilities and staff benefits. Segment liabilities do not includeshare capital and provision for income tax and other liabilities not specifically identifiable with any segment.
b) Segment revenue and expenses
Segment revenue and expenses are directly attributable to the segment and have been allocated to varioussegments on the basis of specific identification. Segment revenue does not include interest income and otherincomes in respect of non-segmental activities. Segment expenses do not include depreciation on unallocatedcorporate fixed assets, interest expense, tax expense and other expense in respect of non-segmental activities.
12) Deferred tax assets/liabilities included in the Balance Sheet comprise the following:
In accordance with Accounting Standard -22, Accounting for Taxes on Income, the tax effect of significanttiming differences that reverse in one or more subsequent years gave rise to the following net deferred taxliability as at 31 March 2010 :
(Amount in Rupees)
As at As at31 March 2010 31 March 2009
Deferred tax assets arising on account of
Provision for gratuity 8,132,279 7,532,309Total (A) 8,132,279 7,532,309
Deferred tax liability arising on account of
Excess of depreciation allowable under Income-tax Act overdepreciation provided on accounts 176,384,716 184,035,406Total (B) 176,384,716 184,035,406
Net deferred tax asset/(liability) (net) (A-B) (168,252,437) (176,503,097)
13) Related party disclosures
a) Related party and nature of the relationship with whom transactions have taken place during the year:
Subsidiaries:• Aryan Clean Coal Technologies Private Limited• Aryan Energy Private Limited• Kartikay Coal Washeries Private Limited• Aryan Ispat and Power Private Limited• Connoiseur Resources Limited, BVI• Aryan M.P. Power Generation Private Limited• Aryan Chhattisgarh Power Generation Private Limited• Spectrum Coal and Power Limited• TRN Energy Private Limited
Enterprise of which the Company is an associate (investing party):• Pineridge Investment Limited, Mauritius
Key Management Personnel (KMP):• G.C. Mrig, Managing Director• R.S. Sindhu, Chairman• Kuldeep Singh Solanki, Director (upto 29 September 2009)• Vir Sen Sindhu, Director• Vrit Pal Sindhu, Director• Dev Suman Sindhu, Director (upto 14 September 2009)• Ajay Mrig, Director (upto 14 September 2009)
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the account
Schedule 19: Significant accounting policies and notes to the accounts
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Relatives of Key Management Personnel (relatives):• Ashok Mrig• Sumati Sindhu• Surbhi Sindhu• Abhimanyu Sindhu• Satya Pal Sindhu• Indu Solanki• Monica Mrig
Enterprises over which key management personnel exercise significant influence (others):• Bhandari Consultancy & Finance Limited• Blank Angel Security Service Private Limited• Cellcap Securities Limited, BVI• General Automobiles• Hari Bhoomi Communications Private Limited• Indus Automobiles• Indus Compuquest Private Limited• Indus Portfolio Private Limited• Mitter Sen Agrofarms Private Limited• Maneesha Finlease Limited• Mass Agencies Private Limited• Pragati Vanijaya Limited• Sainik Automobiles• Sainik Mining & Allied Services Limited• Sainik Transport• Sindhu Holdings Limited• Sindhu Realtors Private Limited• Sindhu Trade Links Limited• Spectrum Coal & Power Limited (upto 29 March 2009)• Sarvesh Coal Mintech Private Limited• Sarvesh Coal Tech Private Limited• V.V. Transport• M.S. & Sons• Global Coal & Mining Private Limited
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the account
Schedule 19: Significant accounting policies and notes to the accounts
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ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the account
Schedule 19: Significant accounting policies and notes to the accounts
b) Transactions/outstanding balances with related parties:
The company has entered into transactions with certain related parties as listed below. The Board considerssuch transactions to be in normal course of business.
(Amount in Rupees)Particulars Subsidiaries Investing KMP Relatives Others Total
party
Transactions during the year
Raw coal beneficiation 13,642,838 - - - - 13,642,838and allied receipts (144,554,621) (-) (-) (-) (-) (144,554,621)
Sale of coal 156,153,772 - - - - 156,153,772(21,166,513) (-) (-) (-) (64,141,495) (85,308,008)
Sale of spares 15,035,968 - - - - 15,035,968(2,396,881) (-) (-) (-) (-) (2,396,881)
Sale of fixed assets 1,607,581 - - - 1,800,000 3,407,581(-) (-) (-) (-) (-) (-)
Interest income 67,012,372 - - - - 67,012,372(56,661,001) (-) (-) (-) (-) (56,661,001)
Purchases of coal - - - - - -(13,230,152) (-) (-) (-) (41,764,436) (54,994,588)
Transportation and 4,342,644 - - - 66,012,529 70,355,173loading charges (-) (-) (-) (-) (114,502,969) (114,502,969)
Beneficiation charges 92,912,008 - - - - 92,912,008(22,669,580) (-) (-) (-) (-) (22,669,580)
Repair,running and - - - - - -maintenance-building (-) (-) (-) (-) (541,623) (541,623)
Repair, running and 2,047 - - - 1,500 3,547maintenance-plant (-) (-) (-) (-) (539,332) (539,332)and machinery
Repair, running and - - - - 42,482,768 42,482,768maintenance-others (-) (-) (-) (-) (34,824,232) (34,824,232)
Vehicle payments on behalf - - - - - -(-) (-) (-) (-) (119,759) (119,759)
Managerial remuneration paid - - 118,660,266 - - 118,660,266(-) (-) (130,864,000) (-) (-) (130,864,000)
Salaries paid - - - 2,872,800 - 2,872,800(-) (-) (-) (2,850,000) (-) (2,850,000)
Staff welfare expenses - - - - 20,253 20,253(-) (-) (-) (-) (-) (-)
Rent paid - - 6,255,000 120,000 6,280,810 12,655,810(-) (-) (5,932,988) (120,000) (6,502,626) (12,555,614)
Rate, taxes and fees - - - - 24,111 24,111(-) (-) (-) (-) (15,371) (15,371)
Security expenses - - - - 481,146 481,146(-) (-) (-) (-) (473,010) (473,010)
Communication expenses - - - - 180,000 180,000(-) (-) (-) (-) (180,000) (180,000)
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ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the account
Schedule 19: Significant accounting policies and notes to the accounts
Office maintenance expenses - - - - 284,725 284,725(-) (-) (-) (-) (104,141) (104,141)
Travelling and conveyance - - - - 384,170 384,170(-) (-) (-) (-) (721,389) (721,389)
Deduction and quality cut - - - - - -(29,442,237) (-) (-) (-) (-) (29,442,237)
Coal hanling charges - - - - - -(1,536,087) (1,536,087)
Advertisement and publicity - - - - 221,944 221,944(-) (-) (-) (-) (298,327) (298,327)
Finance cost 18,754,630 - - - 6,797,671 25,552,301(632,876) (-) (-) (-) (-) (632,876)
Social welfare - - - - 98,120 98,120(-) (-) (-) (-) (-) (-)
Equity shares issued - - 594,753,937 3,992,040 25,532,520 624,278,497(including share premium) (-) (532,363,304) (69,470,726) (10,838,776) (505,142,892) (1,117,815,698)
Inter corporate deposit taken 128,000,000 - - - 290,500,000 418,500,000(100,000,000) (-) (-) (-) (18,500,000) (118,500,000)
Inter corporate deposit 228,000,000 - - - 290,500,000 518,500,000taken refunded (-) (-) (-) (-) (18,500,000) (18,500,000)
Fixed assets purchased 31,954,347 - - - 17,476,164 49,430,511(-) (-) (34,739,450) (-) (2,855,332) (37,594,782)
Capital work in progress - - - - 147,826 147,826(-) (-) (-) (-) (637,493) (637,493)
Shares purchased/allotment 562,652,305 - 94,718,960 3,992,040 351,097,020 1,012,460,325(investments) (317,500,000) (534,104,735) (-) (-) (707,542,800) (1,559,147,535)
Store, Spares and fuel 59,080,705 - - - 5,562,056 64,642,761purchased (69,676,988) (-) (-) (-) (11,507,636) (81,184,624)
Inter corporate deposit given 375,495,000 - - - - 375,495,000(383,650,000) (-) (-) (-) (-) (383,650,000)
Inter corporate deposit 67,870,000 - - - - 67,870,000given received back (276,250,000) (-) (-) (-) (-) (276,250,000)
Share application money paid 2,597,191,600 - - - 300,000,000 2,897,191,600(1,033,905,880) (-) (-) (-) (1,033,905,880)
Share application money 1,084,500,000 - - - - 1,084,500,000paid received back (184,009,839) (-) (-) (-) (184,009,839)
Share application money - - 475,034,977 - - 475,034,977received (-) (-) (105,074,076) (13,838,776) (34,317,644) (153,230,496)
Share application money - - - - - -received refunded (-) (-) (35,603,350) (3,000,000) (29,791,850) (68,395,200)
(Amount in Rupees)Particulars Subsidiaries Investing KMP Relatives Others Total
party
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ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the account
Schedule 19: Significant accounting policies and notes to the accounts
(Amount in Rupees)Particulars Subsidiaries Investing KMP Relatives Others Total
party
Outstanding balancesas at year end
Share warrants - - - - - -(-) (-) (-) (-) (25,000,000) (25,000,000)
Inter corporate deposit taken - - - - - -(100,000,000) (-) (-) (-) (-) (100,000,000)
Shares purchased 3,345,291,876 - - - 450,418,300 3,795,710,176(investments) (2,782,639,572) (-) (-) (-) (453,800) (2,783,093,372)
Sundry debtors 40,860,973 - - - - 40,860,973(17,238,653) (-) (-) (-) (-) (17,238,653)
Interest accrued and 60,311,135 - - - - 60,311,135due receivable (43,222,392) (-) (-) (-) (-) (43,222,392)
Inter corporate deposit given 739,100,000 - - - - 739,100,000(431,475,000) (-) (-) (-) (-) (431,475,000)
Share application money paid 1,767,731,600 - - - - 1,767,731,600(817,692,305) (-) (-) (-) (25,564,500) (843,256,805)
Advance to vendors 9,165,172 - - - - 9,165,172(-) (-) (-) (-) (-) (-)
Interest payable - - - - - -(489,466) (-) (-) (-) (-) (489,466)
Sundry creditors 4,367,930 - - 531,600 24,900,691 29,800,221(8,042,457) (-) (-) (1,830,000) (39,049,603) (48,922,060)
Figures in brackets are for the previous year
c) Disclosure in respect of transaction which are more than 10% of the total transactions of the same type withrelated parties during the year:
(Amount in Rupees)
Transactions during the year For the year ended For the year ended31 March 2010 31 March 2009
Raw coal beneficiation and allied receiptsAryan Energy Private Limited 13,642,838 144,554,621
13,642,838 144,554,621Sale of coalAryan Ispat and Power Private Limited 156,153,772 21,166,513Spectrum Coal and Power Limited - 64,141,495
156,153,772 85,308,008Sale of sparesAryan Ispat and Power Private Limited 7,883,099 -Spectrum Coal and Power Limited 5,822,923 -Aryan Clean Coal Technologies Private Limited - 2,131,879Aryan Energy Private Limited - 265,002Others 1,329,946 -
15,035,968 2,396,881
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ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the account
Schedule 19: Significant accounting policies and notes to the accounts
Sale of fixed assetsBhandari Consultancy & Finance Limited 1,800,000 -Aryan Ispat and Power Private Limited 1,151,508 -Aryan M.P. Power Generation Private Limited 456,073 -
3,407,581 -
Interest incomeAryan Energy Private Limited 56,510,858 47,602,326Kartikay Coal Washeries Private Limited 7,720,692 8,283,880Others 2,780,822 774,795
67,012,372 56,661,001
Purchases of coalSpectrum Coal and Power Limited - 41,764,436Aryan Energy Private Limited - 13,230,152
- 54,994,588
Transportation and loading chargesSainik Mining & Allied Services Limited 55,668,465 85,253,360Sainik Transport 10,344,064 29,249,609Others 4,342,644 -
70,355,173 114,502,969
Beneficiation chargesKartikay Coal Washeries Private Limited 63,738,114 22,669,580Spectrum Coal and Power Limited 29,173,894
92,912,008 22,669,580
Repair, running and maintenance-buildingSainik Mining & Allied Services Limited - 538,363Others - 3,260
- 541,623
Repair, running and maintenance-plant and machinerySainik Mining & Allied Services Limited - 150,052V.V. Transport - 378,495Aryan Clean Coal Technologies Private Limited 2,047 -Sainik Automobiles 1,500 -Others - 10,785
3,547 539,332
Repair, running and maintenance-othersGeneral Automobiles 32,460,966 24,103,105Sainik Automobiles 5,243,686 6,743,476Others 4,778,116 3,977,651
42,482,768 34,824,232
Vehicle payments on behalfSainik Automobiles - 119,759
- 119,759
(Amount in Rupees)
Transactions during the year For the year ended For the year ended31 March 2010 31 March 2009
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Managerial remuneration paidG.C. Mrig 36,912,000 36,912,000R.S. Sindhu 36,432,000 36,432,000Vir Sen Sindhu 18,991,600 18,912,000Vrit Pal Sindhu 12,972,000 12,912,000Others 13,352,666 25,696,000
118,660,266 130,864,000
Salaries paidSurbhi Sindhu 1,436,400 1,425,000Sumati Sindhu 1,436,400 1,425,000
2,872,800 2,850,000
Staff welfare expensesGeneral Automobiles 20,253 -
20,253 -
Rent PaidSindhu Trade Links Limited 4,480,810 4,262,626Vrit Pal Sindhu 3,600,000 5,452,988Sindhu Holdings Limited 1,800,000 1,470,000G.C. Mrig 2,175,000 -Others 600,000 1,370,000
12,655,810 12,555,614
Rate, taxes and feesIndus Portfolio Private Limited 24,111 15,371
24,111 15,371
Security expensesBlack Angles Security Service Private Limited 481,146 473,010
481,146 473,010
Communication expensesIndus Compuquest Private Limited 180,000 180,000
180,000 180,000
Office maintenance expensesV.V. Transport - 104,141Black Angles Security Service Private Limited 284,725
284,725 104,141
Travelling and conveyanceV.V. Transport 346,941 689,485General Automobiles 37,229 10,157Others - 21,747
384,170 721,389
Deductions and quality cutAryan Energy Private Limited - 29,442,237
- 29,442,237
Coal handling chargesKartikay Coal Washeries Private Limited - 1,536,087
- 1,536,087
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the account
Schedule 19: Significant accounting policies and notes to the accounts
(Amount in Rupees)
Transactions during the year For the year ended For the year ended31 March 2010 31 March 2009
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ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the account
Schedule 19: Significant accounting policies and notes to the accounts
Advertisement and publicityHari Bhoomi Communications Private Limited 221,944 298,327
221,944 298,327
Finance costSpectrum Coal and Power Limited 18,754,630 632,876Pragati Vanijaya Limited 6,782,904 -Others 14,767 -
25,552,301 632,876
Social WelfareSindhu Realtors Private Limited 98,120 -
98,120 -
Equity shares issued (including share premium)R.S. Sindhu 181,571,449 15,860,000G.C. Mrig 120,697,322 13,484,146Vir Sen Sindhu 112,436,453 8,710,000Kuldeep Singh Solanki 100,006,932 24,591,840Vrit Pal Sindhu 64,896,861 5,200,000Pineridge Investment Limited - 532,363,304Pragati Vanijaya Limited - 392,537,096Others 44,669,480 125,069,312
624,278,497 1,117,815,698
Inter corporate deposit takenPragati Vanijaya Limited 285,000,000 18,500,000Spectrum Coal and Power Limited 128,000,000 100,000,000Others 5,500,000 -
418,500,000 118,500,000
Inter corporate deposit taken refundedPragati Vanijaya Limited 285,000,000 18,500,000Spectrum Coal and Power Limited 228,000,000 -Others 5,500,000 -
518,500,000 18,500,000
Fixed assets purchasedAryan Clean Coal Technologies Private Limited 18,562,732 -Aryan Ispat and Power Private Limited 13,391,615 -Sindhu Realtors Private Limited 17,476,164 -R.S. Sindhu - 10,616,000Vrit Pal Sindhu - 24,123,450Others - 2,855,332
49,430,511 37,594,782
Capital work in progressV.V. Transport 142,826 264,558Hari Bhoomi Communications Private Limited 5,000 78,552Sainik Mining & Allied Services Limited - 294,383
147,826 637,493
(Amount in Rupees)
Transactions during the year For the year ended For the year ended31 March 2010 31 March 2009
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Shares purchased/allotment (investments)Aryan Ispat and Power Private Limited 494,800,000 317,500,000Spectrum Power Generation Limited 300,000,000Pragati Vanijaya Limited - 393,821,300Sarvesh Coaltech Private Limited - 313,721,500Pineridge Investment Limited - 534,104,735Others 217,660,325 -
1,012,460,325 1,559,147,535Store, Spares and fuel purchasedAryan Clean Coal Technologies Private Limited 59,080,705 69,676,988Others 5,562,056 11,507,636
64,642,761 81,184,624Inter corporate deposit givenAryan Energy Private Limited 372,245,000 249,000,000Kartikay Coal Washeries Private Limited 3,250,000 114,650,000Others - 20,000,000
375,495,000 383,650,000Inter corporate deposit given received backAryan Energy Private Limited 29,520,000 198,600,000Kartikay Coal Washeries Private Limited 33,350,000 77,650,000Others 5,000,000 -
67,870,000 276,250,000Share application money paidAryan Ispat and Power Private Limited 1,724,300,000 867,600,000Connoiseur Resources Limited, BVI 463,550,000 156,355,880Spectrum Power Generation Limited 300,000,000 -Others 409,341,600 9,950,000
2,897,191,600 1,033,905,880Share application money paid received backAryan Ispat and Power Private Limited 1,055,000,000 11,500,000Connoiseur Resources Limited, BVI - 154,889,839Others 29,500,000 17,620,000
1,084,500,000 184,009,839Share application money receivedR.S. Sindhu 131,833,447 23,360,000G.C. Mrig 114,008,383 27,087,496Kuldeep Singh Solanki 95,006,935 24,591,840Vir Sen Sindhu 85,411,397 16,710,000Vrit Pal Sindhu 48,774,815 10,200,000Others - 51,281,160
475,034,977 153,230,496Share application money received refundedR.S. Sindhu - 7,500,000Ganesh Chandra Mrig - 13,603,350Vir Sen Sindhu - 8,000,000Maneesha Finlease Limited - 29,791,850Others - 9,500,000
- 68,395,200
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the account
Schedule 19: Significant accounting policies and notes to the accounts
(Amount in Rupees)
Transactions during the year For the year ended For the year ended31 March 2010 31 March 2009
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14) There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for morethan 45 days as at 31 March 2010. This information as required to be disclosed under the Micro, Small andMedium Enterprises Development Act, 2006 has been determined to the extent such parties have been identifiedon the basis of information available with the Company.
15) The Company uses forward exchange contracts to hedge against its foreign currency exposures relating to theunderlying transactions. The Company does not enter into any derivative instruments for trading or speculativepurposes. The forward exchange contracts outstanding (all ‘buy’ contracts) are as under:
Particulars As at As at
31 March 2010 31 March 2009
Number of arrangements 3 -Forward cover (in USD) 80,000,000 80,000,000Outstanding amount (in USD) 80,000,000 80,000,000
The purpose of entering into a forward exchange contract is to hedge the foreign currency exposure on repaymentof loans and interest thereon. During the current year, the Company has not entered into any derivativeinstrument for speculation purpose.
16) Debts due by companies in which director(s) of the Company are director(s):
(Amount in Rupees)
Particulars As at As at
31 March 2010 31 March 2009
Aryan Energy Private Limited * 24,170,888 10,891,385Aryan Ispat and Power Private Limited * 16,690,086 6,347,268
Total 40,860,974 17,238,653
* these are also companies under the same management as defined under section 370(1B) of the Companies Act, 1956.
17) Loans and advances:
Advances and loans to subsidiaries
(Amount in Rupees)
Name of the entity 31 March 2010 31 March 2009
Year end Maximum Year end Maximumbalance outstanding balance outstanding
during the during theyear year
Aryan Energy Private Limited * 733,559,772 733,559,772 376,790,639 435,777,326Aryan Clean Coal Technologies Private Limited * 17,502,740 22,502,740 20,000,000 53,274,795Kartikay Coal Washeries Private Limited * 51,573,091 85,277,039 77,906,753 128,873,880Aryan Ispat and Power Private Limited * 980,690,000 2,132,190,000 806,190,000 806,190,000Connoiseur Resources Limited, BVI * 463,550,000 463,550,000 1,552,305 156,442,144Aryan Chhattisgarh Power Generation * 3,524,160 3,524,160 2,024,160 2,024,160Private LimitedAryan M.P. Power Generation Private Limited * 274,467,440 274,467,440 7,925,840 7,925,840Spectrum Coal and Power Limited * 5,940,704 5,940,704 - -TRN Energy Private Limited * 45,500,000 64,300,000 - -
Total 2,576,307,907 3,785,311,855 1,292,389,697 1,590,508,145
* these these are also companies in which director(s) of the Company are director(s). Further, these arecompanies under the same management as defined under section 370(1B) of the Companies Act, 1956.
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the account
Schedule 19: Significant accounting policies and notes to the accounts
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Aryan Group
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the account
Schedule 19: Significant accounting policies and notes to the accounts
Debts due by companies under the same management as defined under section 370(1B) of the CompaniesAct, 1956:
Name of the entity 31 March 2010 31 March 2009
Year end Maximum Year end Maximumbalance outstanding balance outstanding
during the during theyear year
Sarvesh Coaltech Private Limited - - - 205,641,498Cellcap Securities Limited, BVI - 25,564,500 25,564,500 25,564,500
Total - 25,564,500 25,564,500 231,205,998
* these are also companies in which director(s) of the Company are director(s).
18) During the year, the Company (‘buyer’) has purchased 6,257,358 equity shares of Global Coal & Mining PrivateLimited (‘GCMPL’) for an aggregate consideration of Rs. 124,243,520 from certain shareholders of GCMPL. Insatisfaction of the liability to pay the said consideration, the buyer has issued and allotted 12,424,352 fully paidup equity shares of face value of Rs 10 each at par. The transaction was entered into in accordance with theagreements executed amongst the buyer, GCMPL and the certain shareholders of GCMPL.
The Company has obtained an accounting opinion from a firm of Chartered Accountants and based on saidopinion the Company is of the view that the provisions of Para 10 of Accounting Standard 13 are not applicableto this transaction.
19) The Company has invested Rs. 213,379,237 in the equity shares of one of its subsidiaries, namely Aryan EnergyPrivate Limited (AEPL). Though the net worth of this subsidiary is fully eroded, the management in view of itslong term commitments and future cash flows projections of AEPL considers this to be of temporary natureand has accordingly not provided for any amount towards diminution in its value of investments. The Companyhas also provided inter corporate deposits of Rs. 733,559,772 (including interest) as 31 March 2010.
20) The Company has directly and indirectly infused Rs. 789,568,300 in Spectrum Power Generation Limited (SPGL)which has incurred losses in the past and has resultant accumulated losses. SPGL had submitted a Scheme ofArrangement (the Scheme) for restructuring of its debt and equity under section 391 of the Companies Act,1956 which was approved by the Hon’ble High Court of Andhra Pradesh. SPGL has made tremendous progressin implementing the Scheme and it is expected that the entire debt of SPGL would stand restructured andsubstantially reduced before the end of financial year 2010-11. The equity capital of SPGL has already beenrestructured and therefore the Company is confident of making good returns on its investments based on theturn-around of the existing 208MW operations and implementation of 350MW Combined-Cycle gas basedpower plant which has achieved substantial milestones including financial closure. The Company hasaccordingly not provided for any amount towards diminution in its value of long term investments in SPGL.
21) The Company has an outstanding litigation pending before Hon’ble Supreme Court in relation to sale of coalrejects and other allied matters. The matter is subjudice before the Hon’ble Supreme Court. The Company hasfiled the necessary replies and awaits final disposal of the case by Hon’ble Supreme Court. A legal opinion hasbeen sought and the management believes that final outcome will not have any significant impact on theCompany’s financial position.
22) The Company has issued a letter of comfort to a bank acting as security agent in respect of ECB of USD 17.50million availed by its wholly owned subsidiary Spectrum Coal and Power Limited (SCPL) from a foreignbank. The Company has provided assurance that it would not permit SCPL to enter into liquidation or enterinto any arrangement with creditors without prior discharge of the said loan in full. The Company has alsoconfirmed that it would not dispose off any shares in SCPL that may result in its shareholding reduced tominority and non controlling shareholding without first having received written consent from security agentor discharge of loan in full. In the event of any default in payment by SCPL the Company will issue andexecute corporate guarantee of equivalent amount within 15 Days from the date of such event.
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ACBIL
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the account
Schedule 19: Significant accounting policies and notes to the accounts
23) In the current year as well as in the previous years, the Company has/ had placed share application monieswith its subsidiary companies/ associate companies which are pending allotment. The balance outstanding asat the financial year end amounts to Rs. 1,767,731,600. Subsequent to the financial year end, the subsidiarycompanies have increased the authorised share capital, wherever necessary, to facilitate the allotment.
24) Previous year’s figures have been regrouped/ re-arranged wherever considered appropriate whenevernecessary to confirm to the current years’ groupings/classification. .
For and on behalf of the Board of Directors
Sd/- Sd/- Sd/-R. S. Sindhu G.C. Mrig Satish SharmaChairman Managing Director Company Secretary
Place : GurgaonDate : 15 September 2010
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ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Information pursuant to Part IV of Schedule VI of the Companies Act, 1956
Balance Sheet Abstract and Company’s General Business Profile
For and on behalf of the Board of Directors
Sd/- Sd/- Sd/-R. S. Sindhu G.C. Mrig Satish Kumar SharmaChairman Managing Director Company Secretary
Place : GurgaonDate : 15 September 2010
I. Registration Details:
Registration Number State Code
Balance Sheet DateDate Month Year
II. Capital Raised During the Year (Amount In Rs. Thousand) :
Public Issue Rights Issue
Bonus Issue Private Placement
III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousand)
Total Liabilities Total Assets
Sources of Funds
Paid - up Capital Reserves & Surplus
Share warrants Secured Loans
Current liabilities and provisions Unsecured loans
Deferred tax liability
Application of funds
Net fixed assets Current assets
Capital work in progress
Investments
IV. Performance of Company (Amount in Rs. Thousand) :
Turnover (includes other income) Total Expenditure
Profit before Tax Profit after Tax
Basic earnings per share (in Rs.) Dividend Rate (%) 10%
Dilutive earning per share (in Rs.)
V. Generic name of three principal products / services of company :(As per monetary terms)
Item Code No. (ITC Code) Product Description
Not applicable Coal benefication and allied activities
Not applicable Energy generation
3 1 0 3 2 0 1 0
U 1 0 1 0 2 D L 1 9 9 7 P T C 0 8 5 8 3 7 5 5
N I L
N I L N I L
1 3 0 6 0 7
2 1 0 9 4 0 7 1 2 1 0 9 4 0 7 1
1 1 8 7 4 1 6 1 0 5 4 1 8 4 7
- 7 9 4 8 5 1 7
1 2 4 8 0 3 9 -
1 6 8 2 5 2
2 9 5 0 4 8 2 9 7 5 7 1 3 4
4 5 9 0 4 1 6
3 7 9 6 0 3 9
7 1 8 8 8 2 7
2 2 5 2 0 4 9
1 4 . 0 8
1 4 . 0 8
4 9 3 6 7 7 8
1 5 8 0 5 2 3
1 0 %
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ACBILParticulars in respect of Subsidiary Companies pursuant to Section 212 of Companies Act, 1956
In accordance with the provisions of Section- 212 of the Companies Act 1956, the following particulars in respect ofM/s Aryan Clean Coal Technologies Private Limited, M/s Aryan Ispat and Power Private Limited, M/s Aryan EnergyPrivate Limited, M/s Kartikay Coal Washeries Private Limited, M/s Connoisseur Resources Limited, M/s AryanChhattisgarh Power Generation Pvt. Ltd, M/s Aryan M.P. Power Generation Pvt. Ltd., Spectrum Coal & Power Ltd.and M/s. TRN Energy Private Limited are being enclosed herewith:-
1. Annual audited Balance Sheet and Profit and Loss Account for year ending 31st March 2010 together with theDirectors and Auditors report thereon as per Annexure -‘A’ to ‘I’ respectively.
2. A statement of the holding Company’s interest in the subsidiaries as specified in section 212(5) of the CompaniesAct, 1956 as per Annexure – J.
By order of the Board of DirectorsFor ACB (India) Limited
Sd/-Place: Gurgaon R.S. SindhuDate: 15 September 2010 Chairman
ACB (India) LimitedRegd. Office: C-102, Surya Enclave, New Multan Nagar, New Delhi-110056.
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ACB (India) Limited (Consolidated)
59
CONSOL.
ACB (India) Limited (Consolidated)
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(in Rupees) (in USD)
Particulars Aryan Clean Aryan Energy Kartikay Aryan Ispat Aryan Aryan M.P. Spectrum TRN Connoiseur
Coal Private Coal and Power Chhattisgarh Power Coal and Energy Resources
Technologies Limited Washeries Private Power Gener- Generation Power Private Limited,
Private Private Limited ation Private Private Limited Limited BVI
Limited Limited Limited Limited
Share capital 35,000,000 178,500,000 45,000,000 900,000,000 100,000 100,000 416,780,890 130,000,000 48,135
Share application money - - - 1,121,065,212 3,524,160 274,467,440 - 88,500,000 10,000,000
Reserves and surplus 93,382,331 (227,512,417) 107,487,764 (18,666,783) (515,440) (292,975) 1,926,322,514 (1,997,143) (8,222)
Total networth 128,382,331 (49,012,417) 152,487,764 881,333,217 (415,440) (192,975) 2,343,103,404 128,002,857 39,913
Total sssets 196,462,353 859,295,278 275,782,237 3,279,086,656 3,219,020 275,024,539 4,075,416,265 216,832,225 10,040,163
Total outside liabilities 68,080,021 908,307,697 123,294,474 1,276,688,228 110,300 750,074 1,732,312,861 329,368 250
Investments 51,000 - 7,402 239,110 - - - - -
Turnover 110,961,968 155,659,287 470,707,622 916,230,008 - - 2,325,298,484 (100,000) 18
Profit before taxation (153,318) (213,066,713) 90,384,653 (388,597,885) (126,084) (144,418) 757,540,690 (2,003,815) (3,949)
Provision for taxation (393,615) 11,300 27,851,883 51,880 - - 241,880,158 7,910 -
Profit after taxation 240,297 (213,078,013) 62,532,770 (388,649,765) (126,084) (144,418) 515,660,532 (2,011,725) (3,949)
Proposed dividend - - - - - - - - -
Notes: -
1. Total assets exclude profit and loss debit balance.
2. Total liabilities exclude capital, Private Limited.
3. Turnover is the total income reported by each of the entities in the financial statements.
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Consolidated Statement of Accounts
Financial Information of Subsidiaries for the year ended 31 March 2010
For and on behalf of Board of Directors
Sd/- Sd/- Sd/-R. S. Sindhu G.C. Mrig Satish Kumar SharmaChairman Managing Director Company Secretary
Place : GurgaonDate : 15 September 2010
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AUDITOR’S REPORT TO THE BOARD OF DIRECTORS ON THE MEMORANDUM CONSOLIDATEDFINANCIAL STATEMENTS OF ACB (INDIA) LIMITED (FORMERLY ARYAN COAL BENEFICATIONS PRIVATELIMITED) AND ITS SUBSIDIARIES
1. We have audited the attached memorandum consolidated Balance Sheet of ACB (India) Limited (formerly AryanCoal Benefications Private Limited) (‘the Company’), its subsidiaries, as described in note III (2) (e) of Schedule 18,and joint venture, as described in note III (2) (e) of Schedule 18, (collectively called the ‘Aryan Group’) as at 31March 2010, the memorandum consolidated Profit and Loss Account and the memorandum consolidated CashFlow Statement for the year ended on that date, annexed thereto (“consolidated financial statements”). Thesememorandum consolidated financial statements are the responsibility of the Company’s management. Ourresponsibility is to express an opinion on these memorandum consolidated financial statements based on our audit.This audit is not required by any statute and was conducted in accordance with the terms of engagement as specifiedby the Board of Directors of the Company.
2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards requirethat we plan and perform the audit to obtain reasonable assurance about whether the financial statements are freeof material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financial statement presentation. We believe thatour audit provides a reasonable basis for our opinion.
3. The financial statements of Connoiseur Resources Limited, BVI, whose financial statements reflect total assets ofRs. 453,212,958 [USD 10,040,163] as at 31 March 2010, total revenue of Rs. 834 [USD 18] and cash flows amounting toRs. (595,049) [USD (7,464)] for the year then ended have been audited by other auditor. The audit report for theabove mentioned entity have been furnished to us, and our opinion, in so far as it relates to the amounts included inrespect of this subsidiary, is based solely upon the report of the other auditor.
4. The consolidated financial statements of Cellcap Securities Limited, BVI, whose financial statements reflect totalassets of Rs. 2,296,996,773 [USD 50,886,061] as at 31 March 2010, total revenue of Rs. 284,272 [USD 5,995] and cashflows amounting to Rs. (675,488,503) [USD (13,247,269)] for the year then ended have been audited by other auditor.The audit report for the above mentioned entity has been furnished to us, and our opinion, in so far as it related tothe amounts included in respect of this joint venture, is based solely upon the report of the other auditor.
5. We report that the memorandum consolidated financial statements have been prepared by the Company’smanagement in accordance with the requirements of Accounting Standards (AS) 21, Consolidated FinancialStatements, (AS) 27, Financial Reporting of Interests in Joint Ventures, (AS) 23, Accounting for Investments inAssociates in Consolidated Financial Statements, as specified in Rule 3 of the Companies (Accounting Standards)Rules, 2006.
6. without qualifying our opinion, we draw attention to note III (21) of schedule 18 which explains the position of alegal case pending against the Company in Hon’ble Supreme Court. The Company has filed necessary responsesagainst alleged concerns and since the matter is subjudice, the financial and operational impact, if any, of this legalcase on the Company cannot be determined at this stage;
7. attention is invited to note III (16) of schedule 18 with regard to acquisition of an investment by the Company by issue of itsown equity shares. Based on the accounting advice received from a firm of chartered accountants, the Company has recorded thecost of investment at the face value of the equity shares issued and has not determined the fair value as required by AccountingStandard 13, as specified in the Companies (Accounting Standard) Rules, 2006. In the absence of fair value of securities issued/acquired, we are unable to express an opinion on the value of investment recorded in Company’s books and its consequentialimpact, if any, on these financial statements;
8. attention is invited to note III (10)(a) of schedule 18 to the financial statements. The management at one of the subsidiarycompany, viz. Aryan Energy Private Limited (AEPL), has not carried out the impairment analysis in accordance with therequirements of Accounting Standard AS -28 “Impairment of Assets” in respect of one of its washery having a gross block ofRs. 113,918,327 and a net block of Rs. 64,390,409 as at 31 March 2010, which has not been in operation for the last two years.In the absence of such an analysis we are unable to comment on the carrying values of the fixed assets of AEPL and theconsequential impact, if any, on the profit for the year of Aryan Group. This was also a subject matter of qualification in ourreport for the previous year;
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9. attention is invited to note III (19) of schedule 18 with regard to a subsidiary company, viz. Spectrum Coal and Power Limited(SCPL) investment amounting to Rs. 1,627,173,402 towards setting up of 11 MTPA coal washery at Talcher, Orissa on landprovided by Andhra Pradesh Power Generation Corporation Limited (APGENCO). Delay in setting up of railway siding atTalcher and consensus on certain commercial terms with the customer has resulted in delays in commencement of commercialoperations. The commencement of commercial operations is dependent on the resolution of various issues with APGENCOincluding that of liquidated damages on SCPL due to these delays. Accordingly, at this stage we are unable to express anopinion on the financial/operational impact of the same on the Aryan Group;
10. attention is invited to note III (11) of schedule 18 to the financial statements wherein it has been explained that the Company hasentered into transactions covered under section 297 of the Companies Act, 1956 with certain parties in the current year and theprevious years aggregating to Rs. 57,037,333 and Rs. 273,955,400 respectively. In respect of such transactions, the Companyhas not obtained the prior approval of the Central Government, as envisaged under that section. In respect of the previous years,the Company has filed the necessary applications for compounding of these transactions with the appropriate authorities. In theabsence of such prior approval, we are unable to comment on the impact, if any, that the above non-compliance may have on thefinancial statements of the Aryan Group;
The same was also a subject matter of qualification in our report for the previous year; and
11. Subject to paragraph 7, 8, 9 and 10 above, the impact of which is not ascertainable, in our opinion and to the best of ourinformation and according to the explanations given to us, the said accounts give a true and fair view in conformitywith the accounting principles generally accepted in India:
(a) in the case of the memorandum consolidated Balance Sheet, of the state of affairs of the Aryan Group as at 31March 2010;
(b) in the case of the memorandum consolidated Profit and Loss Account, of the profit of the Aryan Group forthe year ended on that date; and
(c) in the case of the memorandum consolidated Cash Flow Statement, of the cash flows of the Aryan Group forthe year ended on that date.
12. This report is intended solely for use in connection with the audit of the Aryan Group and is not to be used,referred to or distributed for any other purpose without our “prior written consent”.
For B S R & CompanyChartered AccountantsFirm registration number: 128032W
Sd/-Place : Gurgaon Manish GuptaDate : 15 September 2010 Partner
Membership No. 095037
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Schedule As at As at31 March 2010 31 March 2009
I. SOURCES OF FUNDSShareholders’ fundsShare capital 1 1,187,415,640 1,056,808,200Reserves and surplus 2 11,647,978,664 8,568,036,869Share application money pending allotment 183,375,212 151,100,212Minority interest 3 512,947,145 349,753,284Loan fundsSecured loans 4 (a) 10,382,566,690 8,326,113,216Unsecured loans 4 (b) 255,525,000 -Deferred tax liability (net) (refer note III 8 of Schedule 18) 237,851,408 250,579,639
TOTAL 24,407,659,759 18,702,391,420
II. APPLICATION OF FUNDSFixed assets 5Gross block 10,664,537,155 8,519,636,637Less : Accumulated depreciation 3,335,314,959 2,623,490,308Net block 7,329,222,196 5,896,146,329Capital work-in-progress (including capital advances) 5,712,244,840 3,438,177,905
13,041,467,036 9,334,324,234
Investments 6 1,965,718,909 964,740Current assets, loans and advancesInventories 7 1,456,599,934 1,277,133,590Sundry debtors 8 2,080,954,978 1,960,262,132Cash and bank balances 9 6,235,976,474 6,361,402,686Other current assets 10 43,026,422 21,912,736Loans and advances 11 1,278,008,083 911,606,694
11,094,565,891 10,532,317,838
Less: Current liabilities and provisions 12Current liabilities 1,524,698,776 993,780,124Provisions 169,393,301 171,435,268
1,694,092,077 1,165,215,392Net current assets 9,400,473,814 9,367,102,446
TOTAL 24,407,659,759 18,702,391,420
Significant accounting policies and notes to the accounts 18
The accompanying notes and schedules form an integral part of the accounts
As per our report of even date attachedFor B S R & Company For and on behalf of the Board of DirectorsChartered AccountantsFirm Registration No :128032W
Sd/- Sd/- Sd/- Sd/-Manish Gupta R.S. Sindhu G.C. Mrig Satish Kumar SharmaPartner Chairman Managing Director Company SecretaryMembership no.: 095037
Place : GurgaonDate : 15 September 2010
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Consolidated Balance Sheet as at 31 March 2010(All amounts are in Rupees)
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CONSOL.Schedule For the year ended For the year ended
31 March 2010 31 March 2009IncomeCoal beneficiation and allied receipts 3,580,039,194 3,027,430,829Sales-Sale of coal 5,701,608,464 4,780,378,654-Sale of power 707,299,196 635,770,380-Sale of sponge iron 479,764,550 439,166,658-Sale of equipments 11,935,193 54,082,156Other income 13 202,869,016 400,061,590
10,683,515,613 9,336,890,267ExpenditurePurchases of coal 2,203,542,406 1,490,488,675Decrease/ (increase) in stock (153,103,024) (233,994,126)Direct expenses 14 3,634,798,884 2,883,409,644Personnel cost 15 553,203,416 422,542,065Administrative and selling expenses 16 805,064,842 638,533,524Depreciation 5 718,035,268 486,122,494Finance cost 17 428,016,697 290,448,882
8,189,558,489 5,977,551,158
Profit before Tax 2,493,957,124 3,359,339,109Provision for tax- Current tax 972,738,249 1,117,239,374- Deferred tax charge/ (credit) for current year (12,728,231) (19,615,656)- Fringe benefit tax - 3,866,365- Wealth tax 610,453 615,542- Taxes for earlier years (19,685,543) 3,275,057Profit after tax (before consolidation adjustments) 1,553,022,196 2,253,958,427Add/ (less) consolidation adjustments:- Share of loss/ (profit) transferred to minority 81,486,013 17,913,617- Share in profit of associate 36,796,287 44,617,169- (Profit)/ loss on further acquisition of subsidiaries 76,680,203 12,157,524Profit after tax (after consolidation adjustments) 1,747,984,699 2,328,646,737Appropriations:- Interim dividend - 91,305,274- Proposed dividend 112,245,616 -- Provision for corporate dividend tax 19,076,142 15,517,332Profit after appropriations transferred to Balance Sheet 1,616,662,941 2,221,824,131Earnings per share (refer note III 7 of schedule 18)Equity shares of face value of Rs. 10 eachBasic 15.57 25.52Diluted 15.57 25.47Significant accounting policies and notes to the accounts 18
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Consolidated Profit and Loss Account for the year ended 31 March 2010(All amounts are in Rupees)
The accompanying notes and schedules form an integral part of the accounts
As per our report of even date attachedFor B S R & Company For and on behalf of the Board of DirectorsChartered AccountantsFirm Registration No :128032W
Sd/- Sd/- Sd/- Sd/-Manish Gupta R.S. Sindhu G.C. Mrig Satish Kumar SharmaPartner Chairman Managing Director Company SecretaryMembership no.: 095037
Place : GurgaonDate : 15 September 2010
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ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Consolidated Cash Flow Statement for the year ended 31 March 2010(All amounts are in Rupees)
For the year ended For the year ended31 March 2010 31 March 2009
A) Cash flow from operating activities:Net profit before tax 2,493,957,124 3,359,339,109Adjustments for :Depreciation 718,035,268 486,122,494Preliminary expenses written off 126,324 -Exchange fluctuation translation reserve (34,826,586) -Provision for doubtful advances 50,063,822 -Bad debts written off 14,567,746 55,843,255Sundry balances written off 100,000 -Capital work in progress written off - 6,770,143Liabilities no longer required written back - (31,828)(Profit)/ loss on sale of assets (1,022,440) (447,533)Loss of Stock due to Fire 17,416,620 -Finance cost 428,016,697 290,448,882Interest income (181,658,522) (210,167,380)Dividend income (61,650) (47,950)Bonus received on keyman insurance policies - (150,048,558)Forward premium amortised 2,652,352 884,116
Operating profit before working capital changes 3,507,366,755 3,840,074,612Adjustments for :(Increase)/ decrease in inventories (196,882,964) (523,635,712)(Increase)/ decrease in sundry debtors (135,260,592) (191,398,433)(Increase)/ decrease in other current assets 718,297 (12,408,534)(Increase)/ decrease in loans and advances (457,423,163) 244,837,843Increase/ (decrease) in current liabilities and provisions 88,595,693 (156,516,858)
Cash generated from operations 2,807,114,026 3,200,952,918Taxes paid (net) (1,029,019,697) (1,138,108,642)
Net cash from operating activities (A) 1,778,094,329 2,062,844,276
B) Cash flow from investing activities:Purchase of fixed assets/ capital work in progress (4,180,268,039) (2,435,287,015)Sale of fixed assets 15,544,362 1,291,215Purchase of investments (369,176,990) (66,936)Acquisiton of stake in subsidiaries/ joint venture - (1,921,158,595)Interest income 457,720,523 330,082,768Dividend income 61,650 47,950Bonus received on keyman insurance policies - 150,048,558
Net cash used in investing activities (B) (4,076,118,494) (3,875,042,055)
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For the year ended For the year ended31 March 2010 31 March 2009
Cash Flow (contd.)
C) Cash flow from financing activities:Proceeds from issue of equity share capital 1,418,849 91,166,960Proceeds from share application money 131,200,000 198,500,000Repayments of share application money (26,800,000) -Proceeds from securities premium 473,616,128 918,568,736Proceeds from secured loans 4,823,034,718 5,780,912,551Repayments of secured loans (2,515,605,327) (1,052,847,789)Proceeds from unsecured loans 320,020,000 104,635,439Repayments of unsecured loans (320,020,000) (21,000,000)Dividends and tax on dividend (106,822,606) (34,801,387)Finance cost (949,332,420) (506,098,978)
Net cash from in financing activities (C ) 1,830,709,342 5,479,035,532
D) Net (decrease)/ increase in cash and cash equivalents (A+B+C) (467,314,823) 3,666,837,753Cash and cash equivalents as at the beginning of the year 6,361,402,686 2,422,162,750Add: Upon acquisition of a new subsidiary/ joint venture 341,888,611 272,402,183
Cash and cash equivalents as at the end of the year 6,235,976,474 6,361,402,686
Notes:1. The cash flow statement has been prepared in accordance with ‘Indirect method’ as set out in the Accounting Standard
(AS)-3 on ‘Cash Flow Statements’ as specified in the the Companies (Accounting Standard) Rules, 2006 under theprovisions of the Companies Act, 1956.
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Consolidated Cash Flow Statement for the year ended 31 March 2010(All amounts are in Rupees)
As per our report of even date attachedFor B S R & Company For and on behalf of the Board of DirectorsChartered Accountants
Sd/- Sd/- Sd/- Sd/-Manish Gupta R.S. Sindhu G.C. Mrig Satish Kumar SharmaPartner Chairman Managing Director Company SecretaryMembership no.: 095037
Place : GurgaonDate : 15 September 2010
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As at As at31 March 2010 31 March 2009
Schedule 1 - Share Capital
Authorised capital1,000,000,000 equity shares of Rs. 10 each(previous year 125,000,000 equity shares of Rs. 10 each) 10,000,000,000 1,250,000,000
Issued, subscribed and paid up capital118,741,564 equity shares of Rs.10 each fully paid up 1,187,415,640 1,031,808,200(previous year 103,180,820 equity shares of Rs. 10 eachfully paid up)[Of the above equity shares, 87,499,120 (previous year 84,512,080)equity shares are alloted as fully paid up by way of bonusshares from securities premium account][Of the above equity shares, 17,750,792 (previous year 5,326,440) equityshare are issued for consideration received other than cash]
Share warrants - 25,000,000Nil (previous year 149,352) share warrants of Rs. 3,348 each,of which Rs. 167.39 per warrant paid up convertible into 3,136,392(inlcuding bonus shares 2,987,040) equity shares of Rs. 10 each
1,187,415,640 1,056,808,200
Schedule 2 - Reserves and surplus
Securities premium:Opening balance 3,736,900,505 2,763,516,167Add: received during the year 498,541,457 973,384,338Less: applied for issue of bonus shares (29,870,400) -
4,205,571,562 3,736,900,505
General reserve: 279,372,288 279,372,288Profit and loss account:Opening balance 4,517,789,789 2,295,965,658Add: opening profit of joint venture considered first time 59,265,112 -Add: transferred from Profit and Loss Account 1,616,662,941 2,221,824,131
6,193,717,842 4,517,789,789Capital reserve on consolidation of subsidiaries:Opening balance 33,974,287 53,397,082Add: additions during the year 21,056,317 -Less: deletions during the year - (19,422,795)
55,030,604 33,974,287Capital reserve 566,162,927 -
Capital reserve on accounting for investment in associate:Opening balance - -Add: additions during the year 359,120,362 -
359,120,362 -Foreign exchange transalation reserve (10,996,921) -
11,647,978,664 8,568,036,869
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the consolidated accounts(All amounts are in Rupees)
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ACB (India) Limited (Consolidated)
69
CONSOL.Particulars As at As at
31 March 2010 31 March 2009
Schedule 3 - Minority interestOpening balance 349,753,284 217,772,295Add/ (less):Profit/ (loss) for the current year (81,483,194) (17,913,617)Adjustment in respect of additional investment 312,363,702 182,500,000Adjustment in respect of divestment of stake (67,686,647) (32,605,394)
512,947,145 349,753,284
Schedule 4 (a) - Secured loansLoans and advances from banks:-Term loans *
Rupee loan 3,928,882,023 3,101,164,251Foreign currency loan 4,432,212,500 4,076,000,000
-Cash credit/ working capital loans ** 1,130,644,851 1,061,345,582-Vehicle/ equipment loans # 19,288,787 51,454,809-Interest accrued and due on term loans 11,664,726 21,802,586Loans and advances from others:-Term loans * 843,750,000 --Vehicle/ equipment loans # 16,123,803 14,345,988
10,382,566,690 8,326,113,216
Note:Due within one year Rs. 1,508,496,224 (previous year Rs. 704,243,472) (excluding cash credit/ working capital loans).
* Nature of security for term loans
(a) Term loan of Rs. 340,470,958 (previous year Rs. 441,057,508) from Syndicate Bank is secured by way of first charge on fixed assets of the 30MW Thermal Power Project at Chakabura, Chattisgarh acquired out of the term loan. Further, secured by way of personal guarantees ofdirectors and relatives.
(b) Term loan of Rs. 196,576,958 (previous year Rs. 291,992,382) from Axis Bank is secured by way of exclusive first charge on all assets, fixedand current, both present and future of 15MW Wind Mill Project located at Sangli, Maharashtra. Further, secured against negative lien onthe Power Purchase Agreement with MSEDCL, O&M Agreement with Suzlon Windfarm Services Private Limited and on performanceguarantees offered by Suzlon Energy Limited and personal guarantees of directors.
(c) Term loan of Rs. 41,214,286 (previous year Rs. 97,750,000) from Standard Chartered Bank is secured by way of first and exclusive charge onentire fixed assets both present and future of the 5 MTPA coal washery plant at Gevra Site. Further, secured by way of first charge over theland located at Gevra by way of equitable mortage with a margin of 25% and personal guarantee of promoter director.
(d) Term loan of Rs. 300,000,000 (previous year Rs. 540,000,000) from Yes Bank is secured by way of exclusive charge on land, building and plantand machinery of subsidiary company. Further, secured by way of unconditional and irrecoverable personal guarantee of promoter directors.
(e) Term loans of Rs. 5,145,115,503 (previous year Rs. 4,241,000,000) from ECB and INR Lenders is secured by way of first charge on all of the270MW thermal power project assets, both movable and immovable and any other assests related to the project, whether tangible andintangible and whether present and future. Further secured by way of first charge on all rights, title, interest,benefits and claims of theCompany in all project documents and on all replacements and additions to any of the Project Assets. Further, secured by way of personalguarantees of directors.
(f) Term loan of Rs. 500,000,000 (previous year Rs. nil) from Yes Bank is secured by way of exclusive charge on movable and immovable, bothpresent and future, fixed assets of the the Himgir Washery. Further, secured by way of unconditional and irrecoverable personal guaranteeof promoter directors.
(g) Short term loan of Rs. 500,000,000 (previous year Rs. nil) from Axis Bank is secured by way of first pari passu charge on current assets of theCompany with Indian Overseas Bank in a multiple banking arrangement. Further, secured by way of first pari passu charge with IndianOverseas Bank on land/ building, plant and machinery of Panderpauni Plant of the Company and residential properties Flat No. 3 and 18,Vasant Enclave, New Delhi, 1509, DLF Phase-II, Gurgaon and 953, Sector 31-32A, Gurgaon. Further, secured by way of personal guaranteesof directors.
(h) Term loans of Rs. nil (previous year Rs. 841,466,120) are secured by way of first pari passu charge on block of assets of the Aryan Ispat andPower Private Limited situated at Sambalpur, Orissa. Further, second pari passu charge on current assets of the Aryan Ispat and PowerPrivate Limited including book debts along with personal gaurantees of the directors.
(i) Term loan of Rs. 843,750,000 (previous year Rs. nil) is secured by way of first pari passu charge on block of assets of the Aryan Ispat & PowerPrivate Limited situated at Sambalpur, Orissa. Further, second pari passu charge on current assets of the Aryan Ispat & Power PrivateLimited including book debts along with personal gaurantees of the directors.
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the consolidated accounts(All amounts are in Rupees)
3-Consolidate 58-98.p65 2011/05/06, 02:40 PM69
70
Aryan Group
(j) Term loan of Rs. 150,210,838 (previous year Rs. 210,000,000 ) from Bank of India is secured by way of first hypothecation charge alongwithother term lenders on fixed assets of the coal washery plant of Spectrum Coal and Power Limited near Balaram OCP (Talcher), Orissa.Further, secured by way of corporate guarantee of the holding company.
(k) Term loan of Rs. 209,933,968 (previous year Rs. 279,851,559) from Bank of Baroda is secured by way of first hypothecation charge alongwithother term lenders on fixed assets of the coal washery plant of Spectrum Coal and Power Limited near Balaram OCP (Talcher), Orissa.Further, secured by way of corporate guarantee of the holding company.
(l) Term loan of Rs. 149,661,349 (previous year Rs. 199,671,682) from The Federal Bank Limited is secured by way of first hypothecation chargealongwith other term lenders on fixed assets of the coal washery plant of Spectrum Coal and Power Limited near Balaram OCP (Talcher),Orissa. Further, secured by way of corporate guarantee of the holding company.
(m) Term loan of Rs. 68,98,163 (previous year Rs. 34,375,000) from Bank of India is secured by way of hypothecation charge on fixed assets of thecoal washery plant at Dipka, Chattisgarh . Further, secured by way of corporate guarantee of ACB India Limited, the holding company andpersonal guarantee by director of holding company.
(n) ECB Term loan of Rs. 821,012,500 (previous year Rs. nil ) from Standard Charterd Bank is secured by way of first & exclusive charge onP&M and other movable & immovable fixed assets pertaining to power project, tangible or intangible, present or future amd projectcurrent assets. Further, secured by way of personal guarantee of Ex-Capt. Kuldeep Singh Solanki and Ex-Capt. R.S. Sindhu and LOC ofACB (India) Limited, the holding company.
** Nature of security for cash credit/ working capital loans(a) Cash credit of Rs. 255,274,794 (previous year Rs. 303,002,113) from Indian Overseas Bank is secured by way of first pari passu charge on
current assets of the Company with Standard Chartered Bank. Further, collaterally secured by way of pari passu charge with StandardChartered Bank on land/ building, plant and machinery of Panderpauni Plant of the Company. Cash credit is secured by way of personalguarantees of directors, relatives and corporate guarantee of group company.
(b) Cash credit of Rs. 85,562,149 (previous year Rs. 153,315,068) and working capital loan of Rs. 111,354,618 (previous year Rs. 144,362,392) fromStandard Chartered Bank is secured by way of pari passu charge on current assets of the Company with Indian Overseas Bank in a multiplebanking arrangement. Further, secured by way of pari passu charge with Indian Overseas Bank on land/ building, plant and machinery ofPanderpauni Plant of the Company.
(c) Working capital demand loan of Rs. 245,101,919 (previous year Rs. nil) from Indusind Bank is secured by way of pari passu charge oncurrent assets of the Company with Indian Overseas Bank in a multiple banking arrangement. Further, secured by way of pari passu chargewith Indian Overseas Bank on land/ building, plant and machinery of Panderpauni Plant of the Company. Further, secured by way ofpersonal guarantees of directors.
(d) Working capital demand loan of Rs. 201,571,233 (previous year Rs. nil) from Yes Bank is secured by way of pari passu charge on currentassets of the Company with Indian Overseas Bank in a multiple banking arrangement. Further, secured by way of pari passu charge withIndian Overseas Bank on land/ building, plant and machinery of Panderpauni Plant of the Company. Further, secured by way of personalguarantees of directors.
(e) Cash credit of Rs. 35,228,435 (previous year Rs. 50,159,238) is secured by way of exclusive charge on current assets of Aryan Clean CoalTechnologies Private Limited. Further, unconditional and irrevocable corporate guarantee of the holding company has been provided forsuch loan.
(f) Working capital demand loan of Rs. 124,617,924 (previous year Rs. 294,240,918) is secured against exclusive charge on all current and fixedassets of Aryan Energy Private Limited. Further, unconditional and irrevocable corporate guarantee of the holding company has beenprovided for Aryan Energy Private Limited.
(g) Cash credit of Rs.nil (previous year Rs. 74,970,680) are secured by way of first pari passu charge on current assets of Aryan Ispat and PowerPrivate Limited including book debts and stock along with Punjab and Sind Bank. Further, second pari passu charge on block of assets ofAryan Ispat and Power Private Limited situated at Sambalpur, Orissa and personal guarantees of the directors.
(h) Cash Credit of Rs.71,933,779 (previous year Rs. 41,295,173) from Bank of India is secured by hypothecation of book debts of the coalwashery plant of Spectrum Coal and Power Limited at Dipka, Chattisgarh. Further secured by corporate guarantee of the holding companyand its directors.
# Nature of security for vehicle/ equipment loans(a) Vehicle/ equipment loans of Rs. 35,412,590 (previous year Rs. 65,800,797) are secured by way of first and exclusive charge on specific
vehicles/ equipments.
As at As at31 March 2010 31 March 2009
Schedule 4(b)- Unsecured loans
Inter corporate deposit received-from others 5,525,000 -Other loans and advances- Term loans * 250,000,000 -
255,525,000 -Note:Due within one year Rs. 45,131,922 (previous year Rs. nil).
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the consolidated accounts(All amounts are in Rupees)
3-Consolidate 58-98.p65 2011/05/06, 02:40 PM70
ACB (India) Limited (Consolidated)
71
CONSOL.
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3-Consolidate 58-98.p65 2011/05/06, 02:40 PM71
72
Aryan Group
As at As at31 March 2010 31 March 2009
Schedule 6 - Investments (non-trade)Long term investments (at cost)Quoted:Indian Overseas Bank 328,800 328,80013,700 equity shares of Rs. 10 each fully paid up(previous year 13,700 equity shares fully paid up)Market value Rs. 91.95 each (previous year Rs. 45.60 each)Aggregate amount of Company’s quoted investments 328,800 328,800
Unquoted:Government securitiesNational saving certificate * 246,512 182,140
Other than government securitiesIn subsidiary companies (fully paid up)Aryan Eestech India Private Limited 51,000 -51,000 equity shares of Rs. 10 each (previous year nil)
In associates (fully paid up)
Global Coal & Mining Private Limited 520,316,649 -6,257,358 equity shares of Rs. 10 each (previous year nil)
Spectrum Power Generation Limited 317,153,640 -56,047,500 0.05% preference shares of Rs. 10 eachredeemable in financial year 2022-23 (previous year nil)
Spectrum Power Generation Limited 1,127,622,308 -180,000,000 equity shares of Rs. 10 each (previous year nil)
Cellcap Securities Limited, BVI - 453,800Nil (previous year 10,000 equity shares of USD 1 each)
Aggregate amount of Company’s unquoted investments 1,965,390,109 635,940
1,965,718,909 964,740
* includes Rs. 7,402 (previous year Rs. 6,844) provided as security to government authority.
Schedule 7 - Inventories(At lower of cost and net realisable value)Stores, components and spare parts ** 434,641,435 330,122,604Less: provision for slow moving/ non moving 1,409,862 1,409,862
433,231,573 328,712,742Raw materials ** 192,992,277 302,300,106Finished goods 87,134,009 56,165,159Raw coal 157,837,455 193,005,527Work in progress # 77,688,328 65,475,447Beneficiated coal 220,482,255 126,736,398Coal rejects 287,234,037 204,738,211
1,456,599,934 1,277,133,590
** includes goods in transit Rs. 36,726,273 (previous year Rs. 24,011,717).# includes stock lying with third parties Rs. 105,600 (previous year Rs. 143,501).
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the consolidated accounts(All amounts are in Rupees)
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73
CONSOL.As at As at
31 March 2010 31 March 2009
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the consolidated accounts(All amounts are in Rupees)
Schedule 8 - Sundry debtors(Unsecured and considered good, unless otherwise stated)Debts outstanding for a period exceeding six months 608,441,681 137,905,772Other debts 1,472,513,297 1,822,356,360
2,080,954,978 1,960,262,132
Schedule 9 - Cash and bank balancesCash in hand 15,591,622 8,936,912Cheques in hand 10,334,505 9,179,698Balance with banks:-on current accounts 315,229,865 259,339,200-on deposit accounts
-provided as security to government authority 146,568 50,596-pledged with financial institutions 85,962,000 --held as margin money for bank guarantees 440,941,665 247,418,328-lien marked for 270MW Power Project 1,718,224,091 1,615,046,905-held in control account for 270MW Power Project 2,778,491,535 3,872,653,760-other fixed deposits 871,049,623 348,772,287
Post office saving account 5,000 5,000
6,235,976,474 6,361,402,686
Schedule 10 - Other current assetsIncome accrued but not due 43,026,422 21,912,736
43,026,422 21,912,736
Schedule 11 - Loans and advances(Unsecured and considered good, unless otherwise stated)Advances recoverable in cash or in kind or for value to be received 721,221,947 534,983,542Share application money 225,700,000 25,564,500Advance income tax 44,695,017 - (net of provision for tax of Rs. 2,585,917,462)Advance fringe benefit tax 546,501 36,294 [net of provision for tax of Rs. 8,244,103 (previous year Rs. 11,764,204)]Advance wealth tax 51,601 - (net of provision for tax of Rs. 1,274,949)Security and other deposits 206,464,173 200,011,466Forward cover receivable (net) - 50,025,000Balance with central excise authorities 62,088,580 81,093,276Unamortised premium on forward cover 17,240,264 19,892,616
1,278,008,083 911,606,694
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Aryan Group
As at As at31 March 2010 31 March 2009
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the consolidated accounts(All amounts are in Rupees)
Schedule 12 - Current liabilities and provisionsCurrent liabilitiesSundry creditors 894,168,316 825,364,358Interest accrued but not due 42,390,134 -Advances from customers 30,461,658 16,338,154Book overdraft 27,127,244 284,998Forward cover payable (net) 414,775,000 -Security deposit received 23,007 110,129Other liabilities # 115,753,417 151,682,485
1,524,698,776 993,780,124
* includes salary, wages and bonus payable of Rs. 14,486,058 (previous year Rs. 11,915,415).# includes Employee State Insurance of Rs. 15,150 (previous year Rs. 11,859), Provident Fund amounting to Rs. 5,220,390 (previous yearRs. 3,991,449) and Labour Welfare Fund payable amounting to Rs. 5,500 (previous year Rs. 5,580).
ProvisionsProvision for income tax - 32,862,601 (net of advance tax of Rs. 2,098,497,522)Provision for wealth tax - 625,935 (net of advance tax of Rs. 1,289,884)Provision for gratuity ** 35,293,401 29,635,336Interim dividend - 91,305,274Proposed dividend 112,245,616 -Provision for leave encashment 2,778,142 1,488,790Provision for corporate dividend tax 19,076,142 15,517,332
169,393,301 171,435,268
** Includes prior period amount of Rs. nil (previous year Rs. 1,500,673).
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ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the consolidated accounts(All amounts are in Rupees)
For the year ended For the year ended31 March 2010 31 March 2009
Schedule 13 - Other incomeInterest income-from banks 178,555,121 206,272,306-from others 5,907,917 5,591,320Dividend received 61,650 47,950Bonus received on keyman insurance policies - 150,048,558Exchange gain (net) - 1,189,990Profit on sale of assets (net) 1,166,128 447,533Bad debts recovered 1,884,402 27,924,533Railway siding charges 3,311,489 3,789,239Handling of coal - 3,246,375Sundry balances written back 2,344,671 1,319Miscellaneous receipts 9,637,638 1,502,467
202,869,016 400,061,590
Schedule 14 - Direct expensesCoal beneficiation expenses 2,724,307 -Power and fuel 208,618,893 133,048,019Material consumed 581,972,675 404,703,793Transportation and loading charges 2,116,592,294 1,847,046,347Energy duty 9,306,282 10,058,834Job work charges 1,626,125 2,887,196Pollution control expenses 17,588,443 4,625,456Repair and maintainance:-Building 21,616,798 47,083,728-Plant and machinery 508,885,479 300,688,096-Others 165,867,588 133,268,175
3,634,798,884 2,883,409,644
Schedule 15 - Personnel costSalaries, wages and bonus 499,505,059 382,460,271Contribution to provident and other funds 28,870,017 22,777,623Staff welfare expenses 24,828,340 17,304,171
553,203,416 422,542,065
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For the year ended For the year ended31 March 2010 31 March 2009
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the consolidated accounts(All amounts are in Rupees)
Schedule 16 - Administrative and selling expensesRent (refer note III 4 of Schedule 18) 40,922,056 39,575,224Land lease rent 37,156,752 1,450,029Rate, taxes and fees 43,522,017 19,516,816Subscription and tender fees 2,467,667 1,449,499Legal and professional 65,414,200 83,566,799Security expenses 20,354,948 8,042,463Insurance 14,653,713 10,218,044Printing and stationery 7,263,516 4,351,483Communication expenses 13,427,437 9,780,709Office maintenance expenses 16,587,354 9,916,993Travelling and conveyance 49,430,360 44,126,374Electricity and water charges 2,026,473 1,312,180Charity and donation 5,090,558 4,031,096Sales commission 2,900,050 1,080,128Deductions on account of quality/quantity 254,434,177 178,596,040Handling charges 90,944,639 127,653,012Sampling charges 3,334,867 2,505,804Advertisement and publicity 2,177,978 2,290,899Business promotion 2,700,579 3,330,247Provision for doubtful advances 50,063,822 -Bank charges 20,647,886 10,183,654Exchange loss (net) 42,919 -Forward premium amortised 2,652,352 884,116Loss on sale of fixed assets 143,688 -Bad debts written off 14,567,746 59,447,508Capital work in progress written off - 6,770,143Loss of stock due to fire 26,039,446 -Freight outward 1,282,776 -Preliminary expenses written off 126,324 -Miscellaneous expenses 14,688,542 8,454,264
805,064,842 638,533,524
Schedule 17 - Finance costInterest on term loans 261,513,807 175,755,081Interest on cash credits/working capital loans 137,623,821 101,183,215Interest on inter corporate deposits 4,457,734 632,876Interest-others 3,296,335 143,413Loan processing charges 21,125,000 12,734,297
428,016,697 290,448,882
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I. BackgroundACB (India) Limited (formerly Aryan Coal Benefications Private Limited) (‘ACB’ or ‘the Company’) is a flagshipcompany of Aryan Group. The Company along with its subsidiaries herein is referred to as the ‘Aryan Group’. Theentities under the Aryan Group are engaged in the business of power generation, coal beneficiation, manufactureof sponge iron and coal beneficiation equipment.During the year, the Company changed its name from Aryan Coal Benefications Private Limited to ACB (India)Private Limited and subsequently changed its status from private limited company to public limited company.Consequently, the name of the Company has been changed to ACB (India) Limited.
II. Principles of consolidation and significant accounting policies1) Basis of preparation
The consolidated financial statements are prepared and presented under the historical cost convention inaccordance with the Generally Accepted Accounting Principles (‘GAAP’) in India and mandatory accountingstandards as specified in the Companies (Accounting Standard) Rules, 2006, the provisions of the CompaniesAct, 1956, to the extent applicable, and as adopted consistently by the Company.
2) Principles of consolidationThe consolidated financial statements have been prepared in accordance with the principles and proceduresfor the preparation and presentation as laid down under Accounting Standard 21 on “Consolidated FinancialStatements” as specified in the Companies (Accounting Standard) Rules, 2006.a) The consolidated financial statements of the Company and its subsidiaries have been combined on a line
by line basis by adding together the book values of all items of assets, liabilities, incomes and expensesafter eliminating all intra-group balances and intra-group transactions and also unrealised profits andlosses in full in accordance with the Accounting Standard 21 on “Consolidated Financial Statements”.The difference between the cost to the Company of its investment in subsidiaries and its proportionateshare in the equity of the investee company at the time of acquisition of shares in the subsidiaries isrecognised in the financial statements as Goodwill or Capital Reserve, as the case may be. Goodwill istested for impairment by the management on an annual basis.
b) The Company’s share of the assets, liabilities, income and expenses of a jointly controlled entity is accountedfor using proportionate consolidation method as specified under Accounting Standard 27 on “FinancialReporting of Interests in Joint Ventures” as specified in the Companies (Accounting Standard) Rules, 2006.The consolidated financial statements of Cellcap Securities Limited, BVI (‘CSL’) and its subsidiaries (‘CellcapGroup’) have been included in the Consolidated Financial Statements of the Company for the first time asthe severe long term restrictions impairing CSL’s ability to transfer funds to the Company have been liftedduring the current financial year. However, the financial statements of Spectrum Power Generation Limited(‘SPGL’) which is step-down subsidiary of CSL have not been considered in the consolidated financialstatements of CSL since 76% of the shares held by subsidiary of CSL in SPGL are pledged alongwithvoting rights with Asset Reconstruction Company of India Limited and other secured lenders.
c) In case of associates, where the Company directly or indirectly through subsidiaries holds more than 20%of equity, investments in associates are accounted for using equity method in accordance with AccountingStandard (AS) 23 -”Accounting for investments in associates in consolidated financial statements” asspecified in the Companies (Accounting Standard) Rules, 2006.The Company accounts for its share in the change in net assets of the associates, post acquisition, aftereliminating unrealised profits and losses resulting from transactions between the Company and its associatesto the extent of its share, through its Profit and Loss Account to the extent such change is attributable tothe associates’ profit and loss account and through its reserves for the balance, based on availableinformation.The difference between the cost of investment in the associates and the share of net assets at the time ofacquisition of shares in the associates is identified in the financial statements as Goodwill or Capital Reserveas the case may be.
d) The consolidated financial statements are prepared using uniform accounting policies for the liketransactions and other events in similar circumstances and are presented to the extent possible, in thesame manner as the Company’s separate financial statements. The financial statement of the foreignsubsidiary is adjusted for the accounting principles and policies followed by the Company.
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the consolidated accounts
Schedule 18: Significant accounting policies and notes to the accounts
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e) The companies considered in the consolidated financial statements are:
Name of the company Country of % share- % Share-incorpora- holding as at holding as at
tion 31 March 2010 31 March 2009
Subsidiaries:
Aryan Clean Coal Technologies Private Limited (‘ACCTPL’) India 99.994 99.994Aryan Energy Private Limited (‘AEPL’) India 77.381 77.381Kartikay Coal Washeries Private Limited (‘KCWPL’) India 64.88 64.88Aryan Ispat and Power Private Limited (‘AIPPL’) India 83.20 63.50Connoiseur Resources Limited, BVI (‘CRL’) British Virgin 100.00 100.00
IslandsAryan Chhattisgarh Power Generation India 100.00 100.00Private Limited (‘ACPGPL’)Aryan M.P. Power Generation Private Limited (‘AMPPGPL’) India 100.00 100.00Spectrum Coal and Power Limited (‘SCPL’) India 100.00 100.00TRN Energy Private Limited (‘TRN’) India 51.00 -Joint Venture:Cellcap Securities Limited, BVI (‘CSL’) British Virgin 50.00 50.00
IslandsAssociate:Global Coal & Mining Private Limited (‘GCMPL’) India 35.609 -
3) Use of estimates:
The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP)in India requires management to make estimates and assumptions that affect the reported amounts of assetsand liabilities and the disclosure of contingent liabilities on the date of the financial statements. Actual resultscould differ from those estimates. Differences between the actual results and estimates are recognised in theyear in which the results are known/ materialized. Any revision to accounting estimates is recognisedprospectively in current and future periods.
4) Inventories (valued at lower of cost or net realisable value)Inventories are valued at lower of cost and net realisable value. The basis for determination of cost of variouscategories of inventory is as follows:a) Raw materials, components, store and spare parts
Raw materials, components and store and spare parts are computed on first in first out basis (FIFO).b) Raw coal and beneficiated coal
These are valued at cost of raw coal (computed on FIFO) including cost attributable to the category of coal,based on appropriate basis to bring the coal to its present location and condition.
c) Work in progressCoal beneficiation businessWork in progress represents the cost incurred on beneficiation of coal on behalf of customers towards rawcoal transportation, beneficiation of raw coal and transportation of beneficiated coal to bring the coal to itspresent location and condition.Manufacture of coal beneficiation equipments and sponge iron businessWork in progress and finished goods are valued at cost computed on FIFO basis and includes proportionatecosts of conversion incurred in bringing the inventory to their present location and condition.
d) Coal rejectsThese consist of rejects generated out of coal beneficiation process or coal rejects purchased directly. The
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the consolidated accounts
Schedule 18: Significant accounting policies and notes to the accounts
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cost is ascertained by apportioning the total cost attributable to the category of coal generated/ purchased,based on an appropriate basis.
e) Finished goods (sponge iron, coal beneficiation equipments)Cost of finished goods includes cost of conversion and other costs incurred in bringing the inventories totheir present location and condition (including excise duty).
5) Revenue recognitionCoal beneficiation businessRaw coal beneficiations and allied receiptsRevenue from raw coal beneficiation and allied receipts is recognised on attainment of the said activity. Suchactivity is regarded as being attained when no significant uncertainty exists regarding the amount ofconsideration that will be derived from the performance of such activity and the activity is completed orsubstantially completed. Revenue represents the invoiced value of net beneficiation receipts.Sale of coalRevenue from sale of coal is recognised when coal is dispatched to the customers, which coincides with thetransfer of significant risks and rewards. Sales represent the invoiced value of coal (net of sales tax).Service incomeService income represents income from handling of coal and rent from use of the railway siding of AryanGroup. These are recognised on accrual basis as per the terms of agreement with the customers.Power generation businessSale of powerRevenue from sale of power is recognised based on tariffs as per the terms of the Power Purchase Agreementsentered into by the Aryan Group with respective State Electricity Boards.Manufacture of coal beneficiation equipments and sponge iron businessSale of goodsRevenue from sale of goods is recognized on transfer of significant risks and rewards of ownership to thecustomer which coincides with the dispatch of goods to the customers in accordance with the contract terms.The sales are shown net of sales tax.Other incomeInterest income:Interest income is recognised on a time proportion basis considering the contracted rate of return.Dividend income:Dividend income is recognised when the shareholders’ right to receive payment is established.Bonus received on keyman insurance policies:Income from bonus received on keyman insurance policies is recognised on receipt basis.
6) Fixed assets and depreciationFixed assets are stated at cost less accumulated depreciation and impairment losses, if any. The cost of fixedassets includes inward freight, duties, taxes and incidental expenses related to acquisition and installationincurred upto the date of commissioning of the assets. Fixed assets under construction, advances paid towardsacquisition of fixed assets and cost of asset not put to use before the year end, are disclosed as capital work inprogress.For assets used for coal beneficiation and manufacture of coal equipments business-Depreciation is provided on pro-rata basis as per written down value (WDV) method at rates based uponmanagement estimates of useful lives of the assets. Such rates are equal to the rates prescribed in Schedule XIVof the Companies Act, 1956.For assets used for power generation and manufacture of sponge business-Depreciation is provided on pro-rata basis as per straight line method (SLM) at rates based upon the managementestimates of useful lives of the assets. Such rates are equal to the rates prescribed in Schedule XIV of theCompanies Act, 1956.
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the consolidated accounts
Schedule 18: Significant accounting policies and notes to the accounts
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Leasehold assets-
Leasehold assets are amortised over the period of lease. Leasehold improvements are amortised over theremaining period of lease or derived useful lives of assets as prescribed in Schedule XIV to the Companies Act,1956, whichever is shorter.Assets individually costing upto Rs. 5,000 are fully depreciated in the year of purchase.
7) Foreign currency transactionsForeign currency transactions are recorded at the rate of exchange prevailing on the date of the respectivetransactions. Monetary foreign currency assets and liabilities remaining unsettled at the Balance Sheet date aretranslated at the rates of exchange prevailing on that date. Gains/ (losses) arising on account of realisation/settlement of foreign exchange transactions and on translation of foreign currency assets and liabilities arerecognised in the Profit and Loss Account.The premium or discount that arises on entering into a forward exchange contract for hedging is measured bythe difference between the exchange rate at the date of the inception of the forward exchange contract and theforward rate specified in the contract, and is amortised as expense or income over the life of the contract.Exchange difference on a forward exchange contract is the difference between:(a) the foreign currency amount of the contract translated at the exchange rate at the reporting date or the
settlement date where the transaction is settled during the reporting period, and;(b) the same foreign currency amount translated at the latter of the date of inception of the forward exchange
contract and the last reporting date. These exchange differences are recognised in the statement of profitand loss in the reporting period in which the exchange rates change.
The premium or discount arising at the inception of a forward exchange contract entered into to hedge theforeign currency risk of a firm commitment or a highly probable forecast transaction is amortized as expenseor income over the life of the contract.
8) InvestmentsLong term investments are valued at cost. Any decline other than temporary, in the value of long terminvestments, is adjusted in the carrying value of such investments.
9) Employee benefitsAll employee benefits payable/ available within twelve months of rendering the service are classified as short-term employee benefits. Benefits such as salaries, wages and bonus etc. are recognised in the Profit and LossAccount in the period in which the employee renders the related service.Defined contribution plans: A defined contribution plan i.e. provident fund is a post-employment benefitplan under which an entity pays fixed contributions into a separate entity and will have no legal and constructiveobligation to pay further amounts. Obligations for contributions to defined contribution provident plans arerecognised as an employee benefit expense in the Profit and Loss Account when they are due. Prepaidcontributions are recognised as an asset to the extent that a cash refund or a reduction in future payments isavailable.Defined benefit plans: A defined benefit plan i.e. gratuity, is a post-employment benefit plan. The gratuityplan is a defined benefit plan.The net obligation in respect of defined benefit plans is calculated separately for each plan by estimating theamount of future benefit that employee have earned in return for their service in the current and prior periods;that benefit is discounted to determine its present value. Any unrecognised past service costs and the fairvalue of any plan assets are deducted. The discount rates used for determining the present value of obligationunder defined benefit plans, is based on the market yields on Government securities as at the Balance Sheetdate, having maturity periods approximating to the terms of related obligations. The calculation is performedannually by an independent actuary using the projected unit credit actuarial method. When the calculationresults in a benefit to the Company, the asset is recognised only to the extent of the present value of anyeconomic benefits available in the form of refunds from the plan or reductions in future contributions to theplan.One of Company’s subsidiary has taken a group policy with Life Insurance Corporation of India (LIC) to meetits obligation towards gratuity. Liability with respect to the Gratuity plan is determined based on an actuarialvaluation done by an independent actuary at the year end and any differential between the fund amount asper LIC and the actuarial valuation is charged to Profit and Loss Account.
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the consolidated accounts
Schedule 18: Significant accounting policies and notes to the accounts
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Actuarial gains and losses are recognised immediately in the Profit and Loss Account. Gains or losses on thecurtailment or settlement of any defined benefit plan are recognised when the curtailment or settlement occurs.Other long term employee benefitsBenefits under the SCPL’s leave encashment policy constitute other long-term employee benefits. The liabilityin respect o leave encashment is provided on the basis of an actuarial valuation done by an independentactuary at the year end. Actuarial gains and losses are recognised immediately in the Profit and loss account.
10) Borrowing costsBorrowing costs (net of income on the temporary investment of those borrowings) that are attributable to theacquisition of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one thatnecessarily takes a period of one year or more to get ready for its intended use. All other borrowing costs arecharged to revenue.
11) Operating leasesLeases where the lessor effectively retains substantially all the risks and benefits of ownership of the leasedasset are classified as operating leases. Operating lease charges are recognized as an expense in the Profit andLoss Account on a straight line basis.
12) Earnings per shareBasic earnings per share is calculated by dividing the net profit for the year attributable to equity shareholdersby the weighted average number of equity shares outstanding during the year. Diluted earnings per share iscomputed using the weighted average number of equity and dilutive equivalent shares outstanding duringthe year, except where results would be anti-dilutive.
13) TaxesIncome-tax expenses comprise current tax (i.e. the amount of tax for the period determined in accordance withthe Income-tax Act, 1961) and deferred tax charge or credit (reflecting the tax effects of the timing differencesbetween the accounting income and taxable income for the period). The deferred tax charge or credit and thecorresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted orsubstantively enacted by the Balance Sheet date. Deferred tax assets are recognized only to the extent there isreasonable certainty that the assets can be realized in the future. However, where there is unabsorbeddepreciation or carry forward loss under taxation laws, deferred tax assets are recognized only if there isvirtual certainty of realization of such assets. Deferred tax assets are reviewed at each Balance Sheet date andwritten down or written up to reflect the amount that is reasonably/virtually certain (as the case may be) to berealized. Deferred tax implications of timing differences, that originate during the tax holiday period andreverse after the tax holiday period are recognised in the year in which timing differences originate.Fringe Benefits Tax (‘FBT’) has been abolished w.e.f. 1 April 2009, therefore no provision is made in the currentfinancial year.
14) Impairment of assetsThe carrying amounts of assets are reviewed at each Balance Sheet date in accordance with Accounting Standard28 ‘Impairment of Assets’, to determine whether there is any indication of impairment. If any such indicationexists, the asset’s recoverable amount is estimated. An impairment loss is recognised whenever the carryingamount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are recognisedin the Profit and Loss Account. An impairment loss is reversed if there has been a change in the estimates usedto determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carryingamount does not exceed the carrying amount that would have been determined net of depreciation oramortisation, if no impairment loss had been recognised.
15) Provisions and contingenciesThe Aryan Group recognises a provision when there is a present obligation as a result of a past event and it ismore likely than not that there will be an outflow of resources embodying economic benefits to settle suchobligation and the amount of such obligation can be reliably estimated. Provisions are not discounted to itspresent value, and are determined based on the management’s best estimate of the amount of obligation requiredat the year end. These are reviewed at each Balance Sheet date and adjusted to reflect current managementestimates.
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the consolidated accounts
Schedule 18: Significant accounting policies and notes to the accounts
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Contingent liabilities are disclosed in respect of possible obligations that have arisen from past events and theexistence of which will be confirmed only by the occurrence or non occurrence of future events not whollywithin the control of the Aryan Group. Contingent liabilities are also disclosed for present obligations in respectof which it is not probable that there will be an outflow of resources or a reliable estimate of the amount ofobligation cannot be made.When there is a possible obligation or a present obligation where the likelihood of an outflow of resources isremote, no disclosure or provision is made.
III. Consolidated notes to accounts1) Contingent liabilities and capital commitments
a) Corporate and bank guaranteesOut of the total bank guarantee limits of the Company, bank guarantee limit of Rs. 561,000,000 (previousyear Rs. nil) has been allocated in favour of Aryan M.P. Power Generation Private Limited (wholly ownedsubsidiary of the Company). The said bank guarantee is issued by Axis Bank in favour of Power GridCorporation of India Limited and is in the nature of performance bank guarantee of Aryan M.P. PowerGeneration Private Limited.The corporate guarantee issued to Lehman Brothers Commercial Corporation Asia Limited, Hongkong,against credit facilities extended to Cellcap Securities Limited, BVI, a joint venture company, for an amountof USD 45.50 million was released upon full and final settlement of loan during the current year.
b) Contingent liabilitiesThe Company has contested the liability of Rs. 80,790,797 (previous year Rs. 80,790,797) raised by servicetax authorities.
c) Capital commitmentsThe estimated amounts of contracts remaining to be executed on capital account (net of advances) as at31 March 2010 are Rs. 6,555,179,523 (previous year Rs. 8,413,992,696).
2) Managerial remunerationManagerial remuneration under Section 198 of the Companies Act, 1956 to the directors of the Aryan Group isas follows:
(Amount in Rupees)
For the year ended For the year ended31 March 2010 31 March 2009
Remuneration to whole time directors:Salaries and allowances 110,106,849 112,712,308Bonus 15,293,836 15,170,000Perquisite 1,579,600 1,609,000Contribution to Provident Fund 2,916,625 3,157,477
Commission to non-executive director 6,267,090 -136,164,000 132,648,785
As the future liability for gratuity is provided on the basis of actuarial valuation for the Company as a whole, theamount pertaining to the directors is not ascertainable and therefore not included above.3) Legal and professional fee include auditors’ remuneration (excluding out of pocket expenses):
(Amount in Rupees)
For the year ended For the year ended31 March 2010 31 March 2009
Statutory audit 6,594,666 8,311,478*Other services 5,080,000 170,000Service tax 1,197,890 944,286
12,872,556 9,425,764
*includes cost over-run of Rs. 3,250,000 for the year ended 31 March 2008.
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the consolidated accounts
Schedule 18: Significant accounting policies and notes to the accounts
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4) Operating leases:
The Aryan Group has taken railway sidings, office spaces, guest houses and residential accommodation foremployees under cancellable operating lease arrangements. The lease rental expenses for these operating leasesaggregate Rs. 40,922,056 (previous year Rs. 39,575,224).
5) General description of defined benefit plan
Gratuity plan:
The Aryan Group operates a gratuity plan which provides lump sum benefits linked to the qualifying salaryand completed years of service with the Aryan Group at the time of separation. Every employee who hascompleted 5 years of continuous service is entitled to receive gratuity at the time of his retirement or separationfrom the organization whichever is earlier. However the condition of completion of 5 years of service is notapplicable where separation is on account of disability or death of an employee. The gratuity benefit that ispayable to any employee, is computed in accordance with the provisions of “The Payment of GratuityAct, 1972”.
The Gratuity Fund
The following table sets forth the status of the Gratuity Plan of the Aryan Group and the amounts recognisedin the Balance Sheet and Profit and Loss Account.
(Amount in Rupees)
Particulars Year ended Year ended31 March 2010 31 March 2009
Changes in the present value of defined benefit obligationProjected benefit obligation at the beginning of year 32,559,707 18,932,692Current service cost 7,376,573 4,460,031Interest cost 2,924,890 1,747,984Actuarial loss/(gain) (2,066,066) 2,569,144Benefits paid (2,167,463) (95,192)
Projected benefit obligation at the end of the year * 38,627,641 27,614,659Changes in the fair value of plan assetsFair Value of Plan Assets at the beginning of the year 2,924,371 -Expected return on plan assets 271,742 -Contributions 2,061,311 95,192Benefits paid (1,925,155) (95,192)Actuarial (loss)/gain 1,971 -
Fair Value of Plan Assets at the end of the year 3,334,240 -
Projected benefit obligation at the end of the year 38,627,641 27,614,659Fair value of plan assets at the end of the year 3,334,240 -
Funded status of the plans – asset/(liability) (35,293,401) (27,614,659)
Asset recognised in the Balance Sheet - -
Expense recognised in the Profit and Loss AccountCurrent service cost 7,376,573 4,460,031Interest cost on benefit obligation 2,924,890 1,747,984Expected return on plan assets (271,742) -Net actuarial (gain)/loss recognised in the year (2,068,037) 2,569,144Benefits paid - -
Net gratuity cost 7,961,684 8,777,159
* The above figure does not include provision for gratuity of Rs. 2,020,677 Spectrum Coal andPower Limited for the year ended 31 March 2009..
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the consolidated accounts
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Principal actuarial assumptions at the balance sheet date are as follows:Economic assumptions:The principal assumptions are the discount rate and salary escalation rate. The discount rate is generally basedupon the market yields available on Government bonds at the accounting date with a term that matches that ofthe liabilities and the salary growth rate takes account of inflation, seniority, promotion and other relevantfactors on long term basis. The assumptions used are summarized in the following table:
Assumptions as at Assumptions as at31 March 2010 31 March 2009
Discount rate 8.30% 7.70%Salary growth rate 10.00% 10.00%
Demographic assumptions:
Assumptions as at Assumptions as at31 March 2010 31 March 2009
Retirement age 60 years 60 yearsMortality table LIC (1994-96) LIC (1994-96)
duly modified duly modifiedEmployee turnover 21-30 years- 5% Upto 30 years- 5%
31-40 years- 3% Upto 40 years- 3%41-50 years- 2% Upto 50 years- 2%51-60 years- 1% Above 50 years- 1%
6) Segment ReportingIn accordance with Accounting Standard-17 on segment reporting as prescribed in the Companies (AccountingStandard) Rules, 2006, under the provisions of the Companies Act, 1956, the Aryan Group has identified fivebusiness segments viz. coal beneficiation operations and allied activities, wind power generation, thermalpower generation, manufacturing of coal beneficiation equipments and manufacturing of sponge iron. Theabove segments have been identified and reported taking into account the differing risks and returns, and thecurrent internal financial reporting systems. The segment wise disclosures are as follows:Segment Revenue, Results and Capital Employed include the respective amounts identifiable to each of thesegments. Other unallocable expenditure/assets/liabilities includes expenses/assets/ liabilities which are notdirectly identifiable to any business segment.
Segment revenue and results(Amount in Rupees)
Particulars Coal Wind Thermal Manufacturing of Manufacturing Eliminations Totaloperations power power coal beneficiation of sponge
equipments iron
Segment revenue
External revenue 9,045,620,071 96,898,864 846,427,919 11,935,193 479,764,550 - 10,480,646,597(7,807,809,483) (79,176,846) (556,593,534) (54,082,156) (439,166,658) (-) (8,936,828,677)
Inter segment 239,613,510 - 127,320,852 97,996,760 - -464,931,122 -revenue (104,626,251) (-) (112,516,002) (133,480,185) (-) (-350,622,438) (-)
Total revenue 9,285,233,581 96,898,864 973,748,771 109,931,953 479,764,550 -464,931,122 10,480,646,597(7,912,435,734) (79,176,846) (669,109,536) (187,562,341) (439,166,658) (-350,622,438) (8,936,828,677)
Segment results 2,971,182,683 48,845,330 381,494,405 9,145,831 -304,164,719 - 3,106,503,529(3,062,270,278) (32,557,508) (388,038,653) (48,518,157) (1,834,281) - (3,533,218,877)
Less: Unallocated 387,398,724corporate expenses (283,492,476)
Operating profit 2,719,104,805(3,249,726,401)
Finance cost 428,016,697(290,448,882)
Interest and other income 202,869,016(400,061,590)
Net profit before tax 2,493,957,124(3,359,339,109)
Figures in brackets are for the previous year
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the consolidated accounts
Schedule 18: Significant accounting policies and notes to the accounts
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ACB (India) Limited (Consolidated)
85
CONSOL.
Segment assets, liabilities and capital employed *(Amount in Rupees)
Particulars Coal Wind Thermal Equipments Sponge Totaloperations power power Manufacturing iron
Assets Segment assets 9,797,553,014 623,679,235 10,404,273,525 190,768,365 1,663,563,551 22,679,837,690
(1,284,409,384) (647,768,366) (8,284,233,030) (220,038,694) (2,569,276,383) (13,005,725,857)Unallocated corporate assets 3,421,914,146
(6,861,880,955)Total assets 26,101,751,836
(19,867,606,812)Liabilities/ shareholders’ fundsSegment liabilities 713,446,128 4,170,186 601,866,365 12,378,229 85,746,579 1,417,607,487
(187,059,550) (4,170,186) (596,589,600) (26,644,069) (147,269,898) (961,733,303)Unallocated corporate liabilities 514,335,998
(454,061,728)Share capital 1,187,415,640
(1,056,808,200)Reserves and surplus 11,647,978,664
(8,568,036,869)Share application money 183,375,212pending allotment (151,100,212)Secured and unsecured loans 10,638,091,690
(8,326,113,216)Minority interest 512,947,145
(349,753,284)Total liabilities/ shareholders’ funds 26,101,751,836
(19,867,606,812)Segment capital expenditure 841,407,928 - 3,302,205,020 3,458,512 226,545,764 4,373,617,224
(2,808,821,117) - (1,011,959,314) (415,780) (1,595,778,093) (5,416,974,304)Unallocated capital expenditure 45,350,229
(24,339,624)Total capital expenditure 4,418,967,453
(5,441,313,928)Depreciation 530,336,901 35,088,456 66,984,373 8,306,507 12,274,497
(350,581,362) (35,088,456) (53,834,691) (8,249,920) (23,506,745)
Figures in brackets are for the previous year
The Aryan Group’s customers are located predominantly in India and constitute a single reportable segmentfor the purpose of secondary segment reporting. Accordingly, no secondary segment information has beendisclosed as required by Accounting Standard (AS)-17 ‘Segment Reporting’ specified in the Companies(Accounting Standard) Rules, 2006 under the provisions of the Companies Act, 1956.
Segment accounting policies
The accounting principles consistently used in the preparation of the consolidated financial statements andconsistently applied to record revenue and expenditure in individual segments are as set out in Part II to thisschedule on significant accounting policies. The accounting policies in relation to segment accounting are asunder:
a) Segment assets and liabilities
All segment assets and liabilities have been allocated to the various segments on the basis of specificidentification. Segment assets consist principally of fixed assets, capital work in progress, inventories,sundry debtors, other current assets and loans and advances. Segment assets do not include unallocated
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the consolidated accounts
Schedule 18: Significant accounting policies and notes to the accounts
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corporate fixed assets, cash and bank balances, advance tax and other assets not specifically identifiablewith any segment.
Segment liabilities include sundry creditors, other liabilities and staff benefits. Segment liabilities do notinclude share capital and provision for income tax and other liabilities not specifically identifiable withany segment.
b) Segment revenue and expenses
Segment revenue and expenses are directly attributable to the segment and have been allocated to varioussegments on the basis of specific identification. Segment revenue does not include interest income andother incomes in respect of non-segmental activities. Segment expenses do not include depreciation onunallocated corporate fixed assets, interest expense, tax expense and other expense in respect of non-segmental activities.
7) Earnings per share:
Year ended Year ended31 March 2010 31 March 2009
Profit after tax (after consolidation adjustments) 1,747,984,699 2,328,646,737attributable to equity shareholders (Rupees)Number of shares considered as weighted average shares 112,245,616 91,257,291outstanding for computing basic earnings per shareAdd: Effect of dilutive issues of shares (Numbers) - 159,785Number of shares considered as weighted average shares and 112,245,616 91,417,076potential shares outstanding for computing diluted earnings per shareNominal value per share (Rupees) 10 10Basic Earnings per share (Rupees) 15.57 25.52Diluted Earnings per share (Rupees) 15.57 25.47
8) Deferred tax assets/liabilities:
(Amount in Rupees)
Year ended Year ended31 March 2010 31 March 2009
Deferred tax assets arising on account of:Provision for leave encashment 922,899 506,039Provision for gratuity 10,998,097 10,073,052Brought forward business losses and unabsorbed depreciation 509,228,550 103,228,457(created to the extent of deferred tax liability)Provision for doubtful advances 16,629,950 -Provision for Slow moving/non moving items 468,356 479,212Preliminary expenses - 57,306
Total 538,247,852 114,344,066
Less: deferred tax asset of certain subsidiaries, recognized only to the 418,998,774 46,101,761extent of deferred tax liability in absence of virtual certainty ofrealisation of unabsorbed depreciation and business losses
Total (A) 119,249,078 68,242,305
Deferred tax liability arising on account of:Excess of depreciation allowable under Income-tax Act over 357,100,486 318,821,944depreciation provided on accounts
Total (B) 357,100,486 318,821,944
Net deferred tax asset/(liability) (net) (A-B) (237,851,408) (250,579,639)
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the consolidated accounts
Schedule 18: Significant accounting policies and notes to the accounts
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ACB (India) Limited (Consolidated)
87
CONSOL.
9) Related party disclosures
a) Related party and nature of the relationship with whom transactions have taken place during the year:
Enterprise of which the Company is an associate (investing party):• Pineridge Investment Limited, MauritiusKey Management Personnel (KMP):• G.C. Mrig, Managing Director• R.S. Sindhu, Chairman• Kuldeep Solanki, Director• Vir Sen Sindhu, Director• Vrit Pal Sindhu, Director• Dev Suman Sindhu, Director• Ajay Mrig, Director• Gurubaksh Singh Garcha, Executive Director• Anil Jain, Director• N.P. Bhati, Director• A.V. Mohan RaoRelatives of Key Management Personnel (relatives):• Ashok Mrig• Sumati Sindhu• Surabhi Sindhu• Abhimanyu Sindhu• Satya Pal Sindhu• Indu Solanki• Monica MrigEnterprises over which key management personnel exercise significant influence (others):• Atma Securities Private Limited• Bhandari Consultancy & Finance Limited• Blank Angel Security Service Private Limited• Cellcap Securities Limited, BVI• General Automobiles• Global Coal & Mining Private Limited• Hari Bhoomi Communications Private Limited
Hasdeo Coal CarriersHari Bhoomi Dainik
• Indus Automobiles• Indus Compuquest Private Limited• Indus Portfolio Private Limited
Jaisri Properties & Exports Private LimitedJain Re-Rollers Limited
• Mitter Sen Agrofarms Private Limited• Maneesha Finlease Limited• Mass Agencies Private Limited• M.S. & Sons• Mahavir Global Coal Limited• Milan Merchants Private Limited• Pragati Vanijaya Limited• Sainik Automobiles• Sainik Mining & Allied Services Limited• Sainik Transport• Sindhu Holdings Limited• Sindhu Realtors Private Limited• Sindhu Trade Links Limited
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the consolidated accounts
Schedule 18: Significant accounting policies and notes to the accounts
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• Spectrum Power Generation Limited * (upto 29 March 2009)• Sarvesh Coal Mintech Private Limited• Sarvesh Coal Tech Private Limited• Sainik Finance & Industries Limited• Shyam Indus Power Solutions• V.V. Transport• Weltex Mercantiles Private Limited• Spectrum Coal and Power Limited (upto 29 March 2009) *
* Upto 29 March 2009 Spectrum Coal and Power Limited was an enterprises over which key managementpersonnel of the Aryan Group exercised significant influence. With effect from 30 March 2009, SpectrumCoal and Power Limited became a subsidiary of the Company. Accordingly, all transactions between AryanGroup and Spectrum Coal and Power Limited upto 29 March 2009 have been included in related partytransactions.
b) Transactions/outstanding balances with related parties:The Aryan Group has entered into transactions with certain related parties as listed below. The Boardconsiders such transactions to be in normal course of business.
(Amount in Rupees)
Particulars Investing KMP Relatives Others Total party
Transactions during the yearRaw coal beneficiation and - - - 6,891,964 6,891,964allied receipts (-) (-) (-) (372,486) (372,486)Sale of coal - - - 34,132,002 34,132,002
(-) (-) (-) (302,167,166) (302,167,166)Sale of fixed assets - - - 1,800,000 1,800,000
(-) (-) (-) (-) (-)Interest income - - - - -
(-) (-) (-) (632,876) (632,876)Commission received - - - - -
(-) (-) (-) (1,879,262) (1,879,262)Sale of equipments - - - 11,711,070 11,711,070
(-) (-) (-) (52,364,472) (52,364,472)Purchase of coal - - - 40,441,320 40,441,320
(-) (-) (-) (291,968,861) (291,968,861)Power and fuel - - - 30,679,100 30,679,100
(-) (-) (-) (56,551,374) (56,551,374)Transportation and loading - - - 381,387,597 381,387,597charges (-) (-) (-) (459,260,279) (459,260,279)Pollution control expenses - - - 422,760 422,760
(-) (-) (-) (-) (-)Repair, running and - - - - -maintenance-building (-) (-) (-) (4,561,987) (4,561,987)Repair, running and maintenance- - - - 817,300 817,300plant and machinery (-) (-) (-) (10,682,508) (10,682,508)Repair, running and - - - 55,537,312 55,537,312maintenance-others (-) (-) (-) (34,878,760) (34,878,760)Vehicle payments on behalf - - - - -
(-) (-) (-) (119,759) (119,759)Managerial remuneration paid - 124,846,910 - 5,050,000 129,896,910
(-) (142,148,785) (-) (-) (142,148,785)
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the consolidated accounts
Schedule 18: Significant accounting policies and notes to the accounts
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ACB (India) Limited (Consolidated)
89
CONSOL.
(Amount in Rupees)
Particulars Investing KMP Relatives Others Total party
Salaries paid - - 2,872,800 850,000 3,722,800(-) (-) (3,930,000) (-) (3,930,000)
Staff welfare expenses - - - 20,253 20,253(-) (-) (-) (-) (-)
Rent paid - 6,255,000 120,000 6,280,810 12,655,810(-) (5,932,988) (120,000) (6,502,626) (12,555,614)
Rate, taxes and fees - - - 57,201 57,201(-) (-) (-) (15,371) (15,371)
Legal and professional fee - - - 14,500 14,500(-) (-) (350,000) (13,500) (363,500)
Non compete fee - - - - -(-) (20,000,000) (-) (-) (20,000,000)
Security expenses - - - 481,146 481,146(-) (-) (-) (473,010) (473,010)
Communication expenses - - - 180,000 180,000(-) (-) (-) (180,000) (180,000)
Office maintenance expenses - - - 284,725 284,725(-) (-) (-) (104,141) (104,141)
Travelling and conveyance - - - 536,068 536,068(-) (-) (-) (721,389) (721,389)
Coal handing charges - - - 180,000 180,000(-) (-) (-) (1,879,262) (1,879,262)
Advertisement and publicity - - - 283,354 283,354(-) (-) (-) (298,327) (298,327)
Finance cost - - - 7,333,156 7,333,156(-) (-) (-) (568,554) (568,554)
Social welfare - - - 98,120 98,120(-) (-) (-) (-) (-)
Equity shares issued - 595,953,937 3,992,040 92,732,520 692,678,497(including share premium) (532,363,304) (69,470,726) (10,838,776) (505,142,892) (1,117,815,698)Loan taken - - - - -
(-) (-) (-) (5,002,500) (5,002,500)Repayment of vehicle/ - - - 1,642,515 1,642,515equipment loans (-) (-) (-) (884,121) (884,121)Inter corporate deposit taken - - - 290,500,000 290,500,000
(-) (-) (-) (68,500,000) (68,500,000)Inter corporate deposit - - - 290,500,000 290,500,000taken refunded (-) (-) (-) (68,500,000) (68,500,000)Fixed assets purchased - - - 21,220,120 21,220,120
(-) (34,739,450) (-) (41,923,238) (76,662,688)Civil work - - - - -
(-) (-) (-) (21,033,046) (21,033,046)Capital work in progress - - - 20,493,664 20,493,664
(-) (-) (-) (637,493) (637,493)Shares purchased/allotment - 94,718,960 3,992,040 351,097,020 449,808,020(investments) (534,104,735) (-) (-) (707,542,800) (1,241,647,535)
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the consolidated accounts
Schedule 18: Significant accounting policies and notes to the accounts
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Store, Spares and fuel purchased - - - 7,646,073 7,646,073(-) (-) (-) (70,667,668) (70,667,668)
Purchase of material - - - - -(-) (-) (-) (284,392) (284,392)
Inter corporate deposit given - - - - -(-) (-) (-) (100,000,000) (100,000,000)
Share application money paid - - - 300,000,000 300,000,000(-) (-) (-) (-) (-)
Share application money received - 476,234,977 - 130,000,000 606,234,977(-) (105,074,076) (13,838,776) (232,817,644) (351,730,496)
Share application money - - - - -received refunded (-) (35,603,350) (3,000,000) (29,791,850) (68,395,200)Share application money refunded - - - 26,800,000 26,800,000
(-) (-) (-) (-) (-)Outstanding balances as at year endShare warrants - - - - -
(-) (-) (-) (25,000,000) (25,000,000)Vehicle/ equipment loans - - - 2,293,479 2,293,479
(-) (-) (-) (4,118,379) (4,118,379)Shares purchased (investments) - - - 450,418,300 450,418,300
(-) (-) (-) (453,800) (453,800)Sundry debtors - - - 8,705,915 8,705,915
(-) (-) (-) (18,897,072) (18,897,072)Share application money paid - - - - -
(-) (-) (-) (25,564,500) (25,564,500)Advance to vendors - - - 8,293 8,293
(-) (-) (-) (-) (-)Share application money received - - - 43,000,000 43,000,000
(-) (-) (-) (151,100,212) (151,100,212)Sundry creditors - - 531,600 90,915,779 91,447,379
(-) (-) (1,986,975) (169,788,371) (171,775,346)Advance from customers - - - 1,000,000 1,000,000
(-) (-) (-) (1,446,693) (1,446,693)
Figures in brackets are for the previous year.
(c) Disclosure in respect of transaction which are more than 10% of the total transactions of the same typewith related parties during the year:
(Amount in Rupees)
Transactions during the year For the For theyear ended year ended
31 March 2010 31 March 2009
Raw coal beneficiation and allied receipts Global Coal & Mining Private Limited 6,836,220 -Others 55,744 -
6,891,964 -
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the consolidated accounts
Schedule 18: Significant accounting policies and notes to the accounts
(Amount in Rupees)
Particulars Investing KMP Relatives Others Total party
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ACB (India) Limited (Consolidated)
91
CONSOL.
Sale of coalMahavir Global Coal Limited 27,565,902 3,833,201Global Coal & Mining Private Limited 6,566,100 11,645,460Kartikay Coal Washeries Private Limited - 177,782,014Spectrum Coal and Power Limited - 67,142,055ACB (India) Limited - 41,764,436
34,132,002 302,167,166Sale of fixed assetsBhandari Consultancy & Finance Limited 1,800,000 -
1,800,000 -Interest incomeACB (India) Limited 632,876
- 632,876Commission ReceivedSpectrum Coal and Power Limited - 1,879,262
- 1,879,262Transporation & Loading ReceiptSpectrum Coal and Power Limited - 170,286Global Coal & Mining Private Limited 202,200
- 372,486
Sale of equipmentsGlobal Coal & Mining Private Limited 11,696,070 13,359,246Spectrum Coal and Power Limited - 39,005,226Others 15,000 -
11,711,070 52,364,472Purchase of coalGlobal Coal & Mining Private Limited 23,894,884 1,499,580.00Hasdeo Coal Carriers 14,687,678 -Sainik Mining & Allied Services Limited 1,858,758 -Spectrum Coal and Power Limited - 223,207,203ACB (India) Limited - 64,141,495Others - 3,120,583
40,441,320 291,968,861Power and fuelSindhu Holdings Limited 30,679,100 56,141,633Others - 409,741
30,679,100 56,551,374Transportation and loading chargesSainik Mining & Allied Services Limited 370,612,427 428,775,945Others 10,775,170 30,484,334
381,387,597 459,260,279Pollution control expensesSainik Mining & Allied Services Limited 422,760 -
422,760 -
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the consolidated accounts
Schedule 18: Significant accounting policies and notes to the accounts
(Amount in Rupees)
Transactions during the year For the For theyear ended year ended
31 March 2010 31 March 2009
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Repair, running and maintenance-BuildingSainik Mining & Allied Services Limited - 4,558,727Others - 3,260
- 4,561,987Repair, running and maintenance-plant and machinerySindhu Realtors Private Limited 815,800 0.00General Automobiles - 8,758,598Indus Automobiles - 1,394,336Others 1,500 529,574
817,300 10,682,508Repair, running and maintenance-othersGeneral Automobiles 42,122,301 24,103,105Sainik Automobiles 5,367,177 6,798,004Others 8,047,834 3,977,651
55,537,312 34,878,760Vehicle payments on behalfSainik Automobiles - 119,759
- 119,759Managerial remuneration paidG.C.Mrig 36,912,000 36,912,000R.S.Sindhu 36,432,000 36,432,000Vir Sen Sindhu 18,991,600 18,912,000Others 37,561,310 49,892,785
129,896,910 142,148,785Salaries paidSurbhi Sindhu 1,436,400 1,625,000Sumati Sindhu 1,436,400 1,625,000Ashok Mrig 850,000 680,000
3,722,800 3,930,000Staff welfare expensesGeneral Automobiles 20,253 -
20,253 -Social welfareSindhu Realtors Private Limited 98,120 -
98,120 -Rent PaidSindhu Trade Links Limited 4,480,810 4,262,626Vrit Pal Sindhu 3,600,000 5,452,988Sindhu Holdings Limited 1,800,000 1,470,000G.C.Mrig 2,175,000 -Others 600,000 1,370,000
12,655,810 12,555,614Rate, taxes and feesIndus Portfolio Private Limited 57,201 15,371
57,201 15,371
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the consolidated accounts
Schedule 18: Significant accounting policies and notes to the accounts(Amount in Rupees)
Transactions during the year For the For theyear ended year ended
31 March 2010 31 March 2009
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CONSOL.
Legal and professional feeIndus Portfolio Private Limited 14,500 13,500Sumati Sindhu - 175,000Surbhi Sindhu - 175,000
14,500 363,500Non Compete FeeA.V.Mohan Rao - 20,000,000
- 20,000,000Security expensesBlack Angles Security Service Private Limited 481,146 473,010
481,146 473,010Communication expensesIndus Compuquest Private Limited 180,000 180,000
180,000 180,000Office maintenance expensesBlack Angles Security Service Private Limited 284,725 104,141
284,725 104,141Travelling and conveyanceV.V. Transport 487,320 689,485Others 48,748 31,904
536,068 721,389Coal handing chargesKartikay Coal Washeries Private Limited - 1,879,262Sainik Mining & Allied Services Limited 180,000 -
180,000 1,879,262Advertisement and publicityHari Bhoomi Communications Private Limited 221,944 298,327Hari Bhoomi Dainik 61,410
283,354 298,327Finance costPragati Vanijaya Limited 6,782,904 -Sainik Finance & Industries Limited 535,485 568,554Others 14,767 -
7,333,156 568,554Equity shares issued (including share premium)R.S.Sindhu 181,571,449 15,860,000G.C.Mrig 120,697,322 13,484,146Vir Sen Sindhu 112,436,453 8,710,000Ex. Capt. Kuldeep Singh Solanki 100,006,932 24,591,840Pineridge Investment Limited - 532,363,304Pragati Vanijaya Limited - 392,537,096Others 177,966,341 130,269,312
692,678,497 1,117,815,698Loan takenSainik Finance & Industries Limited - 5,002,500
- 5,002,500
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the consolidated accounts
Schedule 18: Significant accounting policies and notes to the accounts(Amount in Rupees)
Transactions during the year For the For theyear ended year ended
31 March 2010 31 March 2009
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Repayment of vehicle/ equipment loansSainik Finance & Industries Limited 1,642,515 884,121
1,642,515 884,121Inter corporate deposit takenPragati Vanijaya Limited 285,000,000 18,500,000Global Coal & Mining Private Limited 50,000,000Others 5,500,000 -
290,500,000 68,500,000Inter corporate deposit taken refundedPragati Vanijaya Limited 285,000,000 18,500,000Global Coal & Mining Private Limited 50,000,000Others 5,500,000 -
290,500,000 68,500,000Fixed assets purchasedSindhu Realtors Private Limited 21,220,120 -Aryan Clean Coal Technologies Private Limited - 39,067,906Vrit Pal Sindhu - 24,123,450Ex. Capt. R.S. Sindhu - 10,616,000Others - 2,855,332
21,220,120 76,662,688Civil WorkSindhu Realtors Private Limited - 21,033,046
- 21,033,046Capital work in progressSindhu Realtors Private Limited 20,336,298 -V.V. Transport 142,826 637,493Others 14,540 -
20,493,664 637,493Shares purchased/allotment (investments)Spectrum Power Generation Limited 300,000,000 -Pragati Vanijaya Limited - 393,821,300Pineridge Investment Limited - 534,104,735Others 149,808,020 313,721,500
449,808,020 1,241,647,535Store, Spares and fuel purchasedGeneral Automobiles 4,793,977 7,782,330V.V. Transport 1,078,614 1,759,944Orissa Spares & Services 845,476 2,256,954Others 928,006 59,152,832
7,646,073 70,952,060Inter corporate deposit givenACB (India) Limited - 100,000,000
- 100,000,000
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the consolidated accounts
Schedule 18: Significant accounting policies and notes to the accounts
(Amount in Rupees)
Transactions during the year For the For theyear ended year ended
31 March 2010 31 March 2009
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95
CONSOL.
Share application money paidSpectrum Power Generation Limited 300,000,000 -
300,000,000 -Share application money receivedR.S.Sindhu 131,833,447 23,360,000G.C.Mrig 114,008,383 27,087,496Ex. Capt. Kuldeep Singh Solanki 95,006,935 24,591,840Vir Sen Sindhu 85,411,397 16,710,000Atma Securities Private Limited 81,600,000 -Mahavir Global Coal Limited - 178,500,000Others 98,374,815 81,481,160
606,234,977 351,730,496Share application money received refundedManeesha Finlease Limited - 29,791,850Ganesh Chandra Mrig - 13,603,350Vir Sen Sindhu - 8,000,000Ex. Capt. R.S. Sindhu - 7,500,000Others - 9,500,000
- 68,395,200Share application money refundedAtma Securities Private Limited 25,000,000 -Others 1,800,000 -
26,800,000 -
10) (a) The Aryan Group’s coal washery at Gauri, Maharashtra has been identified as a separate cash generatingunit and has been operating at a minimal capacity level for past two years. Further, the Aryan Group doesnot have any long term contracts for Gauri washery. This indicates that cash generating capacity of fixedassets of Gauri washery might have been impaired. Accordingly, management is in the process of testing,wherein future cash flows are being estimated to determine the provision required, if any, in respect ofimpairment of fixed assets. Management believes that adjustment to the carrying amount of fixed assets,if any, arising out of testing would not be material.
(b) The Aryan Group during the year performed an impairment testing at its three beneficiation plants atWani, Talcher and Indram as per the requirements of Accounting Standard 28 on Impairment of Assets,since there were indications that these assets may be impaired. The Aryan Group evaluated the recoverableamount of the assets for its value in use. Based on the evaluation, the Aryan Group has not recognised anyimpairment loss since the recoverable amount exceeds carrying amount of such assets.
11) The Aryan Group has during the year entered into transactions of purchases and sales of goods and serviceswith private companies and firms in which director(s) of the Company are director(s)/ shareholder(s)/partner(s). In majority of the cases, the Company has taken the relevant approvals from the statutory authoritiesi.e. Central Government, however, in case of any lapse due to commission/ omission, the necessary correctiveaction is being initiated.
12) As per the decision of the Central Excise & Service Tax Appellate Tribunal (CESTAT), Bangalore, AEPL is notliable to pay service tax on the beneficiation services rendered up to 31 May 2007. Consequently, the recoverabilityof the service tax input pertaining to the period up to 31 May 2007 has become doubtful and accordingly, AEPLhas made provision of Rs. 50,063,822.
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the consolidated accounts
Schedule 18: Significant accounting policies and notes to the accounts
(Amount in Rupees)
Transactions during the year For the For theyear ended year ended
31 March 2010 31 March 2009
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13) During the year, AIPPL lost 15,000 MT of coal stock due to fire from spontaneous combustion, having value ofRs. 17,416,620. AIPPL has filed an insurance claim against the same; however, on conservative basis AIPPL hascharged this to profit and loss account.
14) During the year, SCPL has changed its accounting policy for calculation of depreciation on building constructedon lease hold land where lease period is 30 years or less. Hitherto, SCPL was charging depreciation on buildingconstructed on leasehold land at written down value (WDV) method at the rates prescribed under ScheduleXIV of the Companies Act. 1956. During the year, based on recent opinion issued by “Expert AdvisoryCommittee” of the “Institute of Chartered Accountants of India”, SCPL has changed its accounting policy ofcharging such depreciation and started amortizing building on such leasehold land over the lease period ofsuch leasehold land.
As a result of change in this policy, the depreciation charge for the year under report is lower by Rs. 3,139,605out of which Rs. 1,632,454 is related to prior periods. Deferred tax charge for the year is higher by Rs. 1,042,977and the profit after tax is higher by Rs. 2,096,628
15) The Aryan Group uses forward exchange contracts to hedge against its foreign currency exposures relating tothe underlying transactions. The Company does not enter into any derivative instruments for trading orspeculative purposes. The forward exchange contracts outstanding (all ‘buy’ contracts) are as under:
Particulars As at As at31 March 2010 31 March 2009
Number of arrangements 3 3Forward cover (in USD) 80,000,000 80,000,000Outstanding amount (in USD) 80,000,000 80,000,000
The purpose of entering into a forward exchange contract is to hedge the foreign currency exposure on repaymentof loans and interest thereon. During the current year, the Company has not entered into any derivativeinstrument for speculation purpose
16) During the year, the Company (‘buyer’) has purchased 6,257,358 equity shares of Global Coal & Mining PrivateLimited (‘GCMPL’) for an aggregate consideration of Rs. 124,243,520 from certain shareholders of GCMPL. Insatisfaction of the liability to pay the said consideration, the buyer has issued and allotted 12,424,352 fully paidup equity shares of face value of Rs 10 each at par. The transaction was entered into in accordance with theagreements executed amongst the buyer, GCMPL and the certain shareholders of GCMPL.
The Company has obtained an accounting opinion from a firm of Chartered Accountants and based on saidopinion the Company is of the view that the provisions of Para 10 of Accounting Standard 13 are not applicableto this transaction.
17) Aryan Group has infused Rs. 789,568,300 in Spectrum Power Generation Limited (SPGL) which has incurredlosses in the past and has resultant accumulated losses. SPGL had submitted a Scheme of Arrangement (theScheme) for restructuring of its debt and equity under section 391 of the Companies Act, 1956 which wasapproved by the Hon’ble High Court of Andhra Pradesh. SPGL has made tremendous progress in implementingthe Scheme and it is expected that the entire debt of SPGL would stand restructured and substantially reducedbefore the end of financial year 2010-11. The equity capital of SPGL has already been restructured and thereforeAryan Group is confident of making good returns on its investments based on the turn-around of the existing208MW operations and implementation of 350MW Combined-Cycle gas based power plant which has achievedsubstantial milestones including financial closure. Aryan Group has accordingly not provided for any amounttowards diminution in its value of long term investments in SPGL.
18) The Company has an outstanding litigation pending before Hon’ble Supreme Court in relation to sale of coalrejects and other allied matters. The matter is subjudice before the Hon’ble Supreme Court. The Company hasfiled the necessary replies and awaits final disposal of the case by Hon’ble Supreme Court. A legal opinion hasbeen sought and the management believes that final outcome will not have any significant impact on theCompany’s financial position.
19) Pursuant to an agreement entered into with Andhra Pradesh Power Generation Corporation Limited
ACB (India) Limited (formerly Aryan Coal Benefications Private Limited)Schedules forming part of the consolidated accounts
Schedule 18: Significant accounting policies and notes to the accounts
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(APGENCO), SCPL is in the process of setting up 11 MTPA coal washery at Talcher, Orissa on land providedby APGENCO out of which the first phase of 7 MTPA had already been commissioned.
SCPL has invested Rs 1,627,173,402 (including capital work in progress) towards the above mentioned coalwashery as at 31 March 2010. Delay in setting up of railway siding at Talcher and consensus on certaincommercial terms has resulted in delays in commencement of commercial operations. SCPL is hopeful that thecommercial issues will be completely resolved in the near future and expects to commence the commercialoperations at this washery immediately on such resolution. SCPL does not foresee any liability due to delay incommencement of commercial operations. Accordingly, SCPL has continued to state the amounts incurredtowards the project at historical cost.
20) The advance of USD 11,370,000 given to B.G. Power Limited for purchase of 56,047,500 0.05% preference sharesof INR 10 each of Spectrum Power Generation Limited (‘SPGL’) has been transferred to investments uponcredit of the said shares in the depositary account of the Cellcap Group during the year.
21) During the year the Cellcap Group has settled loan taken from M/s Lehman Brothers Commercial CorporationAsia Limited which had been novated to M/s Kingfisher Capital Clo Limited. The balance (net of securitytrustee fee paid to HSBC Hong Kong Loan Agency) upon one time settlement of the loan facility has beencredited to Capital Reserve. Further, in accordance with the one time settlement the balance appearing in thename of M/s Lehman Brothers Opportunity Limited has also been credited to Capital Reserve. Further moreas part of one time settlement, CSL has acquired 6,742,248 equity shares of Pinnacle Overseas Assets Limited(‘POAL’) form M/s Lehman Brothers Opportunity Limited which represents 20% stake held by them in POAL.
22) POAL had submitted a bid during the year 2006-2007 to Asset Reconstruction Company of India Limited(ARCIL) with a plan to restructure the equity share capital and the secured loans of Spectrum Power GenerationLimited (SPGL) and was selected as a qualified bidder in terms of sanction letter issued by ARCIL Dated 12thDecember 2006. The process of restructuring of SPGL has been approved by the Hon’ble High Court of AndhraPradesh, in terms of the petition filed under section 391-394 of the Companies Act, 1956 before the said Court.In pursuance of the bid submitted the POAL has already deposited a sum of USD 11,235,955 (Rs.50 Crores) on15th December 2006 with ARCIL. POAL has also infused as equity share capital in SPGL USD 25,433,177(Rs.100 Crores) immediately upon the Sanction of Rehabilitation Scheme by the Hon’ble High Court of AndhraPradesh.
23) POAL has provided its Corporate Guarantee to ARCIL to secure the loans taken by SPGL from ARCIL andother secured Lenders and has also pledged 76% of the equity shares held by it in SPGL in favour of ARCILand other secured Lenders.
24) Previous year’s figures have been regrouped/ re-arranged wherever considered appropriate whenevernecessary to confirm to the current years’ groupings/ classification.
For Aryan Coal Benefications Private Limited
Sd/- Sd/- Sd/-R.S. Sindhu G.C. Mrig Satish Kumar SharmaChairman Managing Director Company Secretary
Place : GurgaonDate : 15 September 2010
Aryan Coal Benefications Private LimitedSchedules forming part of the consolidated accounts
Schedule 18: Significant accounting policies and notes to the accounts
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ACCTPL
Annexure-AAryan Clean Coal Technologies Private Limited
Registered Office : 18, Vasant Enclave, Rao Tula Ram Marg,New Delhi-110057
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NOTICE
Notice is hereby given that the Seventh Annual General Meeting of the Company shall be held at shorter notice onThursday, 30 September, 2010 at 5.30 P.M at 129, Transport Centre, Rohtak Road, Punjabi Bagh, New Delhi – 110 035to transact the following business:
ORDINARY BUSINESS
1. To consider and adopt the Audited Balance Sheet of the Company as at 31st March, 2010 and Profit & Loss Accountfor the period from 1st April, 2009 to 31st March, 2010 together with the Directors’ Report and Auditors’ Reportthereon.
2. To appoint a Director in Place of Sh. Kuldeep Singh Solanki, who retires by rotation and being eligible, offers himselffor reappointment.
3. To appoint Statutory Auditors of the Company and to fix their remuneration:
To consider and if thought fit, to pass with or without modification(s), the following resolution as an ORDINARYRESOLUTION:
“RESOLVED THAT M/s B S R & Company, Chartered Accountants, retiring Auditors of the Company being eligiblewho have offered themselves for reappointment, be and are hereby appointed as the Statutory Auditors of theCompany to hold office as such from the date of conclusion of this Annual General Meeting till the date of conclusionof the next Annual General Meeting of the Company at a remuneration as mutually decided by the Company &Auditors.”
SPECIAL BUSINESS
4. To consider and if thought fit, to pass with or without modification(s), the following resolution as an ORDINARYRESOLUTION:
“RESOLVED THAT Sh. Ashok Mrig, who was appointed as Additional Director of the Company w.e.f. 01.04. 2010by the Board of Directors of the Company and who holds office upto the date of this Annual General Meeting of theCompany and in respect of whom the Company has received a notice in writing proposing his candidature for theoffice of Director under section 257 of the Companies Act, 1956, be and is hereby appointed as a Director of theCompany, liable to retire by rotation.”
“RESOLVED THAT subject to the provisions of Section 198, 269, 309, 310 read with Schedule XIII of the CompaniesAct, 1956 and other applicable provisions, if any of the Companies Act, 1956 and pursuant to Articles of Associationof the Company, Sh. Ashok Mrig, be and is hereby appointed as Whole Time Director of the Company for a periodfrom 01.04.2010 till 31.03.2011 at a monthly remuneration upto Rs. 90,000/- (Rupees Ninety Thousand Only permonth) plus gratuity, etc. as per the policy of the Company which shall be payable to him w.e.f. 01.04.2010.
FURTHER RESOLVED THAT Sh. Rudra Sen Sindhu and Sh. Kuldeep Singh Solanki, Directors of the Company beand are hereby severally authorised to sign and execute an agreement/papers/documents required, if any, in respectof appointment of Sh. Ashok Mrig as Whole Time Director of the Company and to sign and file Form 23, 32 &25-C and other documents as prescribed under the Companies Act, 1956 with the Registrar of Companies and to doall other acts and deeds in connection therewith on behalf of the Company.”
5. To consider and if thought fit, to pass with or without modification(s), the following resolution as an ORDINARYRESOLUTION:
“RESOLVED THAT Sh. Vrit Pal Sindhu, who was appointed as Additional Director of the Company w.e.f. 01.04.2010by the Board of Directors of the Company and who holds office upto the date of this Annual General Meeting of theCompany and in respect of whom the Company has received a notice in writing proposing his candidature for theoffice of Director under section 257 of the Companies Act, 1956, be and is hereby appointed as a Director of theCompany, liable to retire by rotation.”
6. To consider and if thought fit, to pass with or without modification(s), the following resolution as an ORDINARYRESOLUTION:
“RESOLVED THAT Sh. Vir Sen Sindhu, who was appointed as Additional Director of the Company w.e.f. 01.04.2010 by the Board of Directors of the Company and who holds office upto the date of this Annual General Meetingof the Company and in respect of whom the Company has received a notice in writing proposing his candidature
Aryan Clean Coal Technologies Private LimitedRegd. Office: 18, Vasant Enclave, Rao Tula Ram Marg, New Delhi-110057
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for the office of Director under section 257 of the Companies Act, 1956, be and is hereby appointed as a Director ofthe Company, liable to retire by rotation.”
7. To consider and if thought fit, to pass with or without modification(s), the following resolution as an ORDINARYRESOLUTION:
“RESOLVED THAT the consent of the Company be and is hereby accorded pursuant to the provisions of Section293(1)(a), Section 293(1)(d) and other applicable provisions, if any, of the Companies Act, 1956, to the Board ofDirectors (“Board”) of the Company to mortgage / pledge / lien / charge / in favour of the Company’s bank(s) orany other banks or financial institutions (‘hereinafter collectively referred to as the Lenders’), all immovable andmovable properties of the Company both present and future and whole of the undertaking of the Company or suchof them on such terms as may be approved by the Board and as may be agreed to between the Board and theLenders from time to time to secure the Loan / credit facility(s) not exceeding Rs. 500 Crores (Rupees Five HundredCrores only) together with the moneys already borrowed by the Company (apart from the temporary loans obtainedfrom the Company’s banks in the ordinary courses of business) which may be more than its networth i.e. networthcalculated by adding Paid up Share Capital and its Free Reserve, not set apart for any specific purpose, togetherwith interest commitment charge costs and other charge and expenses payable by the Company to the Lender onsuch terms as may be approved by the Board and agreed under the Loan Agreements to be entered into between theCompany and the Lenders.”
RESOLVED FURTHER THAT all actions taken by the Board in connection with any matter referred to orcontemplated in any of the foregoing resolutions are hereby approved, ratified and confirmed in all respects.”
By order of the Board of directorsFor Aryan Clean Coal Technologies Private Limited
Sd/-Place : Gurgaon (R.S. Sindhu)Date : 15 September, 2010 Chairman
NOTES
1 A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TOATTEND AND VOTE INSTEAD OF HIMSELF/HERSELF. SUCH PROXY NEED NOT BE A MEMBER OF THECOMPANY.
2 IN ORDER TO BE EFFECTIVE PROXY FORM DULY COMPLETED MUST BE RECEIVED BY THE COMPANY ATITS REGISTERED OFFICE NOT LESS THAN 48 HOURS BEFORE THE SCHEDULED TIME FOR HOLDING OFTHE MEETING. A BLANK PROXY FORM IS ENCLOSED HEREWITH.
3 Explanatory Statement pursuant to the provisions of Section 173 (2) of the Companies Act, 1956 is attached herewith.
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ACCTPL
Explanatory Statement pursuant to the provisions of Section 173 (2) of the CompaniesAct, 1956Item No. 4
The Board of Directors of the Company the (‘Board’), by circulation appointed Sh. Ashok Mrig as an Additional Directorof the Company effective April 1, 2010 pursuant to the provision of section 260 of the Companies Act, 1956. In terms ofthe provision of section 260 of the Companies Act, 1956, Sh. Ashok Mrig would hold office up to date of the ensuingAnnual General Meeting. Further, Sh. Ashok Mrig was also appointed by the Board as a Whole time Director w.e.f. 01April, 2010 pursuant to the provisions of Section 198, 269, 309 read with Schedule XIII of the Companies Act, 1956 andsubject to approval of Shareholders.
The Company has received a notice in writing from a member alongwith deposit of Rs. 500/- for proposing thecandidature of Sh. Ashok Mrig for the office of Director of the Company under the provision of section 257 of the Act.Sh. Ashok Mrig is not disqualified from being appointed as Director in terms of section 274 (1) (g) of the Act. TheCompany has received the requisite Form ‘DD-A’ from Sh. Ashok Mrig, confirming his eligibility for such appointment.
It is proposed to seek Member’s approval for the appointment of Sh. Ashok Mrig as Director of the Company as well asWhole time Director of the Company in terms of the applicable provisions of the Companies Act, 1956.
The contents of Resolution at item no. 4 of the notice may be treated as an abstract of the terms & conditions of appointmentand remuneration payable to Sh. Ashok Mrig pursuant to section 302 (2) of the Companies Act, 1956.
Sh. Ashok Mrig himself is concerned or interested in his appointment and payment of remuneration. Save and exceptas above, none of the Directors, is in any way, concerned or interested in the said resolutions.
The Board recommends the resolution as set out at item No. 4 of the Notice for your approval.
Item No. 5
The Board of Directors of the Company the (‘Board’), by circulation appointed Sh. Vrit Pal Sindhu as an AdditionalDirector of the Company effective April 1, 2010 pursuant to the provision of section 260 of the Companies Act, 1956. Interms of the provision of section 260 of the Companies Act, 1956, Sh. Vrit Pal Sindhu would hold office up to date of theensuing Annual General Meeting.
The Company has received a notice in writing from a member alongwith deposit of Rs. 500/- for proposing thecandidature of Sh. Vrit Pal Sindhu for the office of Director of the Company under the provision of section 257 of theAct. Sh. Vrit Pal Sindhu is not disqualified from being appointed as Director in terms of section 274 (1) (g) of the Act. TheCompany has received the requisite Form ‘DD-A’ from Sh. Vrit Pal Sindhu, confirming his eligibility for such appointment.
It is proposed to seek Member’s approval for the appointment of Sh. Vrit Pal Sindhu as Director of the Company interms of the applicable provisions of the Companies Act, 1956.
Sh. Vrit Pal Sindhu himself is concerned or interested in his appointment. Further, Sh. Rudra Sen Sindhu & Sh. Vir SenSindhu are interested in the resolution as set out at item No. 5 of the Notice which pertains to appointment of Sh. VritPal Sindhu. None of the other Directors of the Company is, in any way, concerned or interested in the resolution.
The Board recommends the resolution as set out at item No.5 of the Notice for your approval.
Item No. 6
The Board of Directors of the Company the (‘Board’), by circulation appointed Sh. Vir Sen Sindhu as an AdditionalDirector effective April 1, 2010 pursuant to the provision of section 260 of the Companies Act, 1956. In terms of theprovision of section 260 of the Companies Act, 1956, Sh. Vir Sen Sindhu would hold office up to date of the ensuingAnnual General Meeting.
The Company has received a notice in writing from a member alongwith deposit of Rs. 500/- for proposing thecandidature of Sh. Vir Sen Sindhu for the office of Director of the Company under the provision of section 257 of theAct. Sh. Vir Sen Sindhu is not disqualified from being appointed as Director in terms of section 274 (1) (g) of the Act. TheCompany has received the requisite Form ‘DD-A’ from Sh. Vir Sen Sindhu, confirming his eligibility for such appointment.
It is proposed to seek Member’s approval for the appointment of Sh. Vir Sen Sindhu as Director of the Company interms of the applicable provisions of the Companies Act, 1956.
Sh. Vir Sen Sindhu himself is concerned or interested in his appointment. Sh. Rudra Sen Sindhu & Sh. Vrit Pal Sindhuare interested in the resolution as set out at item No. 6 of the Notice which pertains to appointment of Sh. Vir Sen
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Sindhu. Save and except Sh. Rudra Sen Sindhu & Sh. Sh. Vrit Pal Sindhu none of the other Directors of the Company is,in any way, concerned or interested in the resolution.
The Board recommends the resolution as set out at item No. 6 of the Notice for your approval
Item No. 7
As per the provisions of Section 293(1)(d) of the Companies Act, 1956, the Board of Directors (“Board”) of the Companycannot, except with the consent of the Company in General Meeting, borrow monies, apart from temporary loansobtained from the Company’s bankers in the ordinary course of business, in excess of the aggregate of the paid upcapital and free reserves of the Company, that is to say, reserves not set apart for any specific purposes.
The Company from time to time required fund to meet the working capital requirement as well as long term requirement.In view of above, the borrowing limit of the Company is fixed to the sum(s) so borrowed under this resolution andremaining outstanding at any time shall not exceed in the aggregate of Rs. 500 Crores (Rupees Five Hundred Crores).Further, the Banks / financial institutions in order to secure their loans create mortgage / lien on the assets of theCompany which tantamount to indirectly transferring the said assets in their favour, so that if any default is made bythe Company in the repayment of loan together with interest commitment charge costs and other charge and expensespayable, the Banks/Financial institution has a right to sell those assets of the Company in order to recover theiroutstanding loan. This amount to selling / or otherwise disposing off the undertaking of the Company which can onlybe done with the permission of the shareholders under section 293(1)(a) of the Companies Act,1956. The banks / financialinstitutions insists on this resolution being passed by the Shareholders of the Company authorizing the Board to createmortgage / pledge / lien on all the immovable / movable assets of the Company whether present or future on suchterms and condition as agreed to between lenders and the Board of the Company.
The Board of the Company have approved the limit of borrowing powers in their meeting held on 15th September 2010to borrow and to mortgage / pledge / lien / charge / in favour of the Company’s bank(s) or any other banks orfinancial institutions, all immovable and movable properties of the Company upto Rs. 500 Crores (Rupees Five HundredCrores), apart from the temporary loans obtained from the bankers in the ordinary course of business, subject to approvalof members in General Meeting.
The consent of the members is therefore sought under provisions of Section 293(1)(a) and 293(1)(d) of the CompaniesAct, 1956, to enable the Directors to borrow the aforesaid amount limit and to mortgage / pledge / lien / charge / infavour of the Lender.
Therefore, the approval of the members shall be accorded by way of passing Ordinary Resolution at General Meeting.Hence, the matter be placed before the members for their approval.
A copy each of the resolutions passed at Board Meeting dated 15th September 2010, are open for inspection of theMembers, during business hours between 11.00 A.M. to 1.00 P.M. on all working days of the Company, upto the date ofthe meeting, at the Registered Office of the Company.
None of the Directors is in any way concerned or interested in these resolutions. The Board of Directors recommendsthis enabling resolution for the approval of members.
By order of the Board of DirectorsFor Aryan Clean Coal Technologies Private Limited
Sd/-Place : Gurgaon R.S. SindhuDated : 15 September, 2010 Chairman
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DIRECTORS’ REPORT
Aryan Clean Coal Technologies Private LimitedRegd. Office: 18, Vasant Enclave, Rao Tula Ram Marg, New Delhi-110057
To,The Members,
Your directors have pleasure in presenting their Seventh Annual Report together with the Audited Statement of Accountsfor the year ended on 31 March, 2010:
1. FINANCIAL RESULTS
(Rs. in Lakhs)
Particulars 2009-10 2008-09
Gross Income from Operations 1,109.62 1,885.10Net Profit before Interest, Tax & Depreciation (EBIDTA) 174.87 567.68
Less: Interest & Finance Charges 93.34 69.59Net Profit/(Loss) before Tax & Depreciation (PBDT) 81.53 498.09
Less: Depreciation 83.06 82.50Net Profit/(Loss) after Depreciation before Tax (PBT) (1.53) 415.59
Less: Prior Period Expenses - -Profit before tax (1.53) 415.59
Less: Provision for Income Tax-Current 2.43 139.19Provision for Income Tax- Deferred (6.36) 1.48Provision for Fringe Benefit Tax - 1.34Provision for Wealth Tax - 0.85Profit after tax 2.40 272.73
Add: Balance in P & L Appropriation b/f from last year 920.77 648.04Profit available for Appropriation 923.17 920.77
Less: (Transfer to General Reserve) - -Proposed Dividend - -Provision for Corporate Dividend Tax - -
Balance Carried Forward to next year 923.17 920.77
2. OPERATIONS
The Company has its manufacturing plant in Rewari, Haryana having an installed capacity of 1500 MTPA offabrication and machining of Barrel Washers, Conveying Equipments, Thickeners and Rotary Breakers, VibratingFeeders, Mobile Screens etc. The Company has achieved a turnover of Rs.1,109.61 lacs during the year under report.The Company has provided depreciation on fixed assets amounting to Rs. 83.06 lacs during the year under report.
3. DIVIDEND
Your Directors do not recommend any dividend for the Financial Year under review.
4. PUBLIC DEPOSITS
The Company has not invited / accepted any public deposits under section 58A & 58AA of the Companies Act, 1956during the year under review.
5. DIRECTORS
During the year under review, Sh. Niten Malhan continued as Nominee Director on Board of Directors of the Companyon behalf of Pineridge Investment Ltd. Sh. Ganesh Chandra Mrig, Managing Director of the Company has resignedfrom the Directorship of the Company w.e.f. 31st March 2009 and Sh. Ashok Mrig, Sh. Vrit Pal Sindhu and Sh. Vir SenSindhu, were appointed as Additional Director of the Company effective 1st April, 2010. Sh. Ashok Mrig was alsoappointed as Whole Time Director of the Company w.e.f. 1st April, 2010. In terms of Section 260 of the CompaniesAct, 1956 they shall hold office only upto the date of the ensuing Annual General Meeting. The Company hasreceived requisite notice in writing from members proposing their candidature for the office of Director.
Sh. Kuldeep Singh Solanki, Directors, retire by rotation and being eligible, offer himself for reappointment at theensuing Annual General Meeting.
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6. AUDITORS REPORT
In the Auditor’s Report for the year ending on 31 March, 2010, Auditors have made certain observations withregard to certain transactions aggregating Rs 304,701 with certain parties covered under Section 297 of the CompaniesAct, 1956 and in respect of which the Company has not obtained the prior approval of the Central Government asenvisaged under that section. In the absence of such prior approval of the Central Government, the Auditors areunable to comment on the impact, if any, that the above non-compliance with the provisions of Section 297 of theCompanies Act, 1956 may have on the financial statements of the Company.
To the above, the Company states that the Company has during the year entered into transactions with privatecompanies in which director(s) of the Company are director(s) in respect of which the Company has not obtainedthe prior approval of the Central Government as required under Section 297 of the Companies Act, 1956. Themanagement has sought legal consultation for the above violation with the provisions of the Companies Act, 1956.
7. APPOINTMENT OF AUDITORS
M/s B S R & Company, Chartered Accountants, retire at the conclusion of the ensuing Annual General Meeting andbeing eligible have offered themselves for re-appointment. The Company has received a certificate from them pursuantto section 224(1B) confirming their eligibility for re-appointment. Yours Directors recommend their re- appointment.
8. DISCLOSURES UNDER SECTION 217 OF THE COMPANIES ACT, 1956
Except as disclosed elsewhere in the report, there have been no material changes and commitments, which canaffect the financial position of the Company between the end of financial year and the date of report.
As required under Section 217(2) of the Companies Act, 1956, the Board of Directors informs the member thatduring the financial year there has been no change:
• in the nature of Company’s business,
• in the classes of business in which the Company has an interest.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS ANDOUTGO
I. Energy Conservation
A. Energy Conservation measures taken
• Taking steps to increase the awareness among all the employees for optimum usage of power & water in officearea & production areas.
• Using High Luminous Tube Rods and energy efficient systems for lighting.
• Using copper capacitor for optimum use of electricity.
• Switching off of Lights and other equipments during idle hours and leisure times.
• Minimum lights are on during night time.
B. Proposal / Investments for reduction of Energy Conservation
The Company proposes to install switch gears and cables of proper description for any new requirements therebyresulting into conservation of energy.
C. Impact of measures taken and impact on cost of production of goods
The above said measures taken by the Company for conservation of energy has resulted significant saving in cost ofenergy resulting into lowering the cost of production of goods.
Details of energy conservation along with the information in accordance with section 217(1)(e )of the CompaniesAct, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 isgiven below.
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A. Power & Fuel Consumption
S. Particulars Current Year Previous YearNo. 2009-2010 2008-2009
1 Electricitya) Purchased/Consumed Units 213585 246246
Total Amount (Rs.) 961738 1098256Rate/ Unit (Rs. Per Unit) 4.50 4.46
b) Own Generationi) Through Diesel Generator Units 243519 240064
Unit per Litre of Diesel Oil 7.87 8.88Cost/Unit (Rs.) 4.21 3.98
ii) Through Steam Turbine/Generator Units N.A N.AUnits per litre of Fuel Oil/Gas
2 Coal (specify quality and where used)Quantity (tones) (MT) N.A N.ATotal Cost (Rs.) N.A N.AAverage Rate (Rs.) N.A N.A
3 Furnace OilTotal Amount (Average Rate) N.A N.A
4 Others/Internal GenerationQuantity N.A N.ATotal Cost N.A N.ARate/Unit N.A N.A
B. Consumption per unit of production (Machinery Equipments)
Standard Current Year Previous Year(if any) (MT) (MT)
Products (with details) UnitElectricity — 623.55 437.85Coal (Specify Quality) — N.A N.AFurnace Oil — N.A N.AOthers (Specify) — N.A N.A
Form for Disclosure of Particulars with respect to Conservation of Energy[Sec. 217(1)(e) of the Companies Act, 1956]
II. Technology Absorption
FORM BForm for disclosure of particulars with respect to Technology AbsorptionResearch & Development (R&D)1. Specific areas in which R & D carried : Nil
out by the Company2. Benefits derived as a result of above R & D : N.A.3. Future plan of Action : Nil4. Expenditure on R & D during 2008-09 : N.A.
Technology absorption, adaptation and Innovation1 Efforts, in brief, made towards technology : Nil
adaptation and innovation2. Benefits derived as a result of the above efforts : N.A.
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3. In case of imported technology (imported during the last five years reckoned from the beginning of the financialyear), following information may be furnished. N.A.a. Technology imported : N.A.b. Year of import : N.A.c. Has technology been fully absorbed : N.A.d. If not fully absorbed, areas where this : N.A.
has not taken place, reasons thereof andfuture plan(s) of action
III. Foreign Exchange Earnings and Outgo
During the year under report, the details of foreign exchange earnings and foreign exchange outgo on variousheads are as under:
Foreign Exchange Earnings: Nil (Previous year Nil)
Foreign Exchange Outgo:(Amount in Rs.)
Particulars Current Year Previous Year31-03-2010 31-03-2009
Foreign Exchange Outgo on account of Travelling Expenses NIL 58,414/-
9. PARTICULARS OF EMPLOYEES U/S 217(2A) OF COMPANIES ACT, 1956
None of the employees of the Company has drawn salary in excess of the limits prescribed in the said section readwith the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and hence no suchlist is being provided.
10. SECRETARIAL COMPLIANCE CERTIFICATE
As required pursuant to the proviso to Section 383A of the Companies Act, 1956, the Company had obtained SecretarialCompliance Certificate from M/s. Ashok Arora & Co., Company Secretaries and the same is annexed herewith asAnnexure to the Directors’ Report.
11. DIRECTOR RESPONSIBILITY STATEMENT
As per the provisions of Section 217(2AA) of the Companies Act, 1956 your directors make the Statement:
a) that in the preparation of Annual Accounts, the applicable Accounting Standards have been followed alongwith proper explanation relating to the material departures.
b) that the Directors have selected such Accounting Policies and applied them consistently and made judgementsand estimates that are reasonable and prudent so as to give a true and fair view of state of affairs of the Companyat the end of the financial year 2009-10 and of the profit or loss of the Company for that period.
c) that the directors have taken proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of this Act for safeguarding the Assets of the Company and for preventing anddetecting fraud or other irregularities.
d) that the Directors have prepared the Annual Accounts on a Going Concern basis.
12. ACKNOWLEDGEMENT
Your directors would like to place their grateful appreciation for the assistance and co-operation received from theCompany’s bankers during the year under review. The Directors also acknowledge with appreciation the supportand co-operation rendered by various Govt. Agencies and Departments. Your Directors would also wish to place onrecord their deep sense of appreciation for the continued support of all the investors of the Company. Your Directorsalso acknowledge the hard work, dedication and unstinting efforts of the employees. The Directors also wish tothank Pineridge Investments Ltd (an affiliate of Warburg Pincus Group) and Sh. Niten Malhan, their representativeDirector for having supported the business plans of the Company to the fullest extent.
By order of the Board of DirectorsFor Aryan Clean Coal Technologies Private Limited
Sd/-Place : Gurgaon R.S. SindhuDated : 15 September, 2010 Chairman
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ASHOK ARORA & CO. OFF : 201, T-2527COMPANY SECRETARIES Subhash Nagar, Faiz Road,
Karol Bagh, New Delhi-110 005Tel No. 011-46082886
E. Mail : [email protected] Mobile No. 9971017444
COMPLIANCE CERTIFICATE
Co. No. : U29199DL2003PTC122193 Authorised Share Capital : Rs. 5 Crore
The MembersAryan Clean Coal Technologies Private Limited
We have examined the registers, records, books and papers of M/s Aryan Clean Coal Technologies Private Limitedhaving its Regd. Office at 18, Vasant Enclave, Rao Tula Ram Marg, New Delhi – 110 057 as required to be maintainedunder the Companies Act, 1956, and the rules made thereunder and also the provisions contained in the Memorandumand Articles of Association of the Company for the financial year ended on 31st March, 2010. In our opinion and to thebest of our information and according to the examinations carried out by us and explanations furnished to us by theCompany, its officers and agents, we certify that in respect of the aforesaid financial year:
1. The Company has kept and maintained all registers as stated in Annexure “A” to this certificate, as per the provisionsand the rules made thereunder and all entries therein have been duly recorded.
2. The Company has duly filed with the forms and returns as stated in Annexure “B” to this certificate, with theRegistrar of Companies, Regional Director, Central Government, Company Law Board or other authorities withinthe time prescribed under the Act and the rules made thereunder.
3. The Company being a private limited company has the minimum prescribed paid-up capital and its maximumnumber of members during the said financial year were not more than fifty (Three Members) excluding its presentand past employees and the Company during the year under scrutiny:
(i) has not invited public to subscribe for its shares or debentures;
and
(ii) has not invited or accepted any deposits from persons other than its members, directors or their relatives.
4. The Board of directors duly met 4 times on 13/05/2009, 27/08/2009, 04/12/2009 and 03/03/2010 in respect ofwhich meetings proper notices were given and the proceedings were properly recorded and signed including thecircular resolutions passed in the Minutes Book maintained for the purpose.
5. The Company has not closed its Register of members and Debenture holders during the financial year.
6. No Extra Ordinary General Meeting was held during the financial year.
7. The Company being a Subsidiary of Public Company section 295 of the Act is applicable but no loan has been madeto any directors during the year.
8. The Company has entered into any contracts falling within the purview of section 297 of the Act and necessaryapproval required were applied during the year and obtained in current year.
9. The Company has made necessary entries in the register maintained under section 301 of the Act.
10. As there was no instances falling within the purview of Section 314 of the Act during the year, so the Company hasnot obtained any approvals from the Board of Directors, Members or Central Government.
11. The Company has not issued any duplicate share certificates during the financial year.
12. The Company has:
(i) not done any allotment/transfer/transmission of securities during the financial year;
(ii) deposited the amount in a separate Bank Account as dividend was declared during the financial year;
(iii) posted warrants to the member of the company as dividend was declared during the financial year;
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(iv) no amounts in unpaid dividend account, application money due for refund, matured deposits, matureddebentures and the interest accrued thereon which have remained unclaimed or unpaid for a period of sevenyears to be transferred to Investor Education and Protection Fund;
(v) duly complied with the requirements of section 217 of the Act.
13. The Board of Directors of the Company is duly constituted. There was no appointment of additional directors,alternate directors and directors to fill casual vacancies during the financial year.
14. The Company has not appointed any Managing Director/Whole-time Director/Manager during the financial year.
15. The Company has not appointed any sole-selling agents during the financial year.
16. The Company was required to obtain approval u/s Section 297 of the Companies Act, 1956 from the CentralGovernment, Company Law Board, Regional Director, Registrar or such other authorities as prescribed under theabove provisions of the Act during the year and same was received form Regional Director during the year.
17. The directors have disclosed their interest in other firms/companies to the Board of Directors pursuant to theprovisions of the Act and the rules made thereunder.
19. The company has not issued any shares, debentures or other securities during the financial year.
20. The Company has not bought back any shares during the financial year.
21. There was no redemption of preference shares or debentures during the year.
22. There was no transaction necessitating the Company to keep in abeyance rights to dividend, rights shares andbonus shares pending registration of transfer of shares in compliance with the provisions of the Act.
23. The Company has not invited/accepted any deposits including any unsecured loans falling within the purview ofSection 58A during the financial year.
24. The Company being a subsidiary of Public Company, the borrowing made the financial year don’t attract provisionsof section 293(1)(d) of the Act but no borrowing has been made during the year.
25. The Company has not made any loans and investments and consequently entries have been made in the registerkept for the purpose.
26. The Company has not altered the provisions of the Memorandum with respect to situation of the company’sregistered office from one State to another during the year under scrutiny.
27. The Company has not altered the provisions of the Memorandum with respect to the objects of the Companyduring the year under scrutiny.
28. The Company has not altered the provisions of the Memorandum with respect to name of the Company during theyear under scrutiny.
29. The Company has not altered the provisions of the Memorandum with respect to the share capital of the Companyduring the year under scrutiny.
30 The Company has not altered the articles of association during the financial year.
31 There was no prosecution initiated against or show cause notices received by the Company for alleged offencesunder the Act and no fines and penalties or any other punishment imposed on the Company during the financialyear, for offences under the Act.
32 The Company has not received any money as security from its employees during the financial year.
33 The Company has not deducted any contribution to Provident Fund in terms of Section 418 of the Companies Act,1956 during the financial year.
For ASHOK ARORA & CO.Company Secretaries
(ASHOK KUMAR ARORA)Place : New Delhi ProprietorDate : 15 September 2010 CP No. 2851
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Annexure “A”
Registers as maintained by the CompanyStatutory Registers
1. Register of Members u/s 1502. Minutes Book u/s 1933. Books of Accounts u/s 2094. Register of Particulars of Contracts u/s 301
in which directors are interested5. Register of Directors, Managing Director, u/s 303
Manager and Secretary6. Register of Directors’ Shareholdings u/s 3077. Register of Share Transfers u/s 1088. Register of Share Application & Allotments u/s 75
Annexure “B”
Forms and Returns as filed by the Company with the Registrar of Companies, Regional Director,Central Government or other authorities during the financial year ending on 31st March, 2010.
Sr. Form Filed Filed on For Whether If delay inNo. No./ U/s filed within filing whether
Return prescribed requisite additionalTime fee paidYes/No Yes/No
1. Annual Return 159 09.03.10 Change of Members No Yes30.09.2009 Directors etc.
2. Balance Sheet 220 09.03.10 Annual Accounts No Yes30.02.2009
3. Form 66 383A 05.03.10 Compliance No YesCertificate
4. Form 17 138 17.06.09 Satisfaction of Yes NoCharge
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Auditors’ ReportTo The Members ofAryan Clean Coal Technologies Private Limited
We have audited the attached Balance Sheet of Aryan Clean Coal Technologies Private Limited (“the Company”) as at31 March 2010, the Profit and Loss Account and the Cash Flow Statement (“the financial statements”) of the Companyfor the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company’smanagement. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards requirethat we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principles used and significant estimatesmade by management, as well as evaluating the overall financial statements presentation. We believe that our auditprovides a reasonable basis for our opinion.
As required by the Companies (Auditor’s Report) Order, 2003 (“the Order”) issued by the Central Government of Indiain terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure, a statement on thematters 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 necessaryfor 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 fromour examination of those books;
c) the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreementwith the books of account;
d) in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this reportcomply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;
e) on the basis of written representations received from the directors, as on 31 March 2010, and taken on record by theBoard of Directors, we report that none of the directors is disqualified as on 31 March 2010 from being appointed asa director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;
f) attention is invited to note III (10) of Schedule 19 to the financial statements wherein it has been explained that the Companyhas during the year entered into certain transactions aggregating Rs. 304,701 with certain parties covered under Section 297 ofthe Companies Act, 1956 and in respect of which the Company has not obtained the prior approval of the Central Governmentas envisaged under that section. In the absence of such prior approval of the Central Government, we are unable to comment onthe impact, if any, that the above non-compliance with the provisions of Section 297 of the Companies Act, 1956 may have onthe financial statements of the Company; and
g) subject to our comments in paragraph (f) above, the impact of which is not ascertainable, in our opinion and to the best ofour information and according to the explanations given to us, the said accounts give the information required bythe Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2010;
(ii) in the case of the Profit and Loss Account, of the loss of the Company for the year ended on that date; and
(iii)in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.
For B S R & CompanyChartered AccountantsFirm Registration Number: 125032W
Sd/-Manish Gupta
Place : Gurgaon PartnerDate : 15 September 2010 Membership No. 095037
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Annexure to the Auditors’ Report(Referred to in our report of even date)
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details andsituation of fixed assets.
(b) According to the information and explanations given to us the Company has a programme of physicalverification of its fixed assets by which all fixed assets are verified over a period of two years. According tothat programme the Company has during the year physically verified certain assets. In our opinion, thisperiodicity of physical verification is reasonable having regard to the size of the Company and the natureof its assets. The Company has started reconciling the physical verification results with book records andexpects no material adjustments in this regard.
(c) Fixed assets disposed off during the year were not substantial and, therefore do not affect the going concernassumption.
(ii) (a) The inventory, except goods-in-transit and stocks lying with third parties, has been physically verified bythe management during the year. In our opinion, the frequency of such verification is reasonable. Forstocks lying with third parties at the year-end, written confirmations have been obtained.
(b) The procedures for the physical verification of inventories followed by the management are reasonableand adequate in relation to the size of the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification betweenthe physical stocks and the book records were not material.
(iii) (a) The Company has not granted any loan, secured or unsecured, to companies, firms or other parties coveredin the register maintained under section 301 of the Companies Act, 1956.
(iv) (a) The Company has taken loan from its holding company covered in the register maintained under section301 of the Companies Act, 1956. The maximum amount outstanding during the year was Rs. 20,000,000and the year-end balance of such loan was Rs. 15,000,000.
(b) In our opinion, the rate of interest and other terms and conditions on which loan have been taken from itsholding company listed in the register maintained under section 301 of the Companies Act, 1956 is primafacie, not prejudicial to the interest of the Company.
(c) In the case of loan taken from the holding company covered in the register maintained under section 301 ofthe Companies Act, 1956, the principal and interest is repayable on demand. The Company has been regularin the payment of the principal and interest on such loan as and when demanded by the holding company.
(v) In our opinion and according to the information and explanations given to us, and having regard to theexplanation that goods sold are for the specialised requirements of the buyers and suitable alternative sourcesare not available to obtain comparable quotations, there is an adequate internal control system commensuratewith the size of the Company and the nature of its business with regard to sale of goods, purchase of inventoriesand fixed assets. The activities of the Company do not involve sale of services. In our opinion and according tothe information and explanations given to us, there is no continuing failure to correct major weaknesses ininternal control system.
(vi) (a) According to the information and explanations given to us, the particulars of contracts or arrangementsreferred to in section 301 of the Companies Act, 1956 have been entered in the register required to bemaintained under that section.
(b) In our opinion, and according to the information and explanations given to us, the transactions made inpursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rs 5 lakh withany party during the year have been made at prices which are reasonable having regard to the prevailingmarket prices at the relevant time except for sale of certain goods which are for the specialised requirementsof the buyers and for which suitable alternative sources are not available to obtain comparable quotations.However, on the basis of information and explanations provided, the same appear reasonable.
Further, as explained in more detail in paragraph (f) of our audit report, the Company in respect of certain transactionscovered under Section 297 of the Companies Act 1956 and entered in the register maintained under Section 301 of thesaid Act, has not obtained the prior approval of the Central Government as required under Section 297 of the CompaniesAct, 1956.
(vi) The Company has not accepted any deposits from the public.
(vii) In our opinion, the Company has an adequate internal audit system commensurate with the size and nature ofits business.
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(viii) The Central Government has not prescribed the maintenance of cost records under section 209(1) (d) of theCompanies Act, 1956 for any of the products manufactured/services rendered by the Company.
(ix) (a) According to the information and explanations given to us and on the basis of our examination of therecords of the company, amounts deducted/accrued in the books of account in respect of undisputedstatutory dues including Provident Fund, Employees’ State Insurance, Income tax, Sales tax, Wealth tax,Excise duty, Cess and other material statutory dues have generally been regularly deposited during theyear by the Company with the appropriate authorities though there has been slight delay in a few cases. Asexplained to us, the Company did not have any dues on account of Service tax, Customs duty and InvestorEducation and Protection Fund.
There were no dues on account of Cess under Section 441A of the Companies Act, 1956 since the date fromwhich the aforesaid section comes into force has not yet been notified by the Central Government.
According to the information and explanations given to us, no undisputed amounts payable in respect ofProvident Fund, Employees’ State Insurance, Income tax, Sales tax, Wealth tax, Excise duty, Cess and othermaterial statutory dues were in arrears as at 31 March 2010 for a period of more than six months from thedate they became payable.
(b) According to the information and explanations given to us, there are no dues of Income tax, Sales tax,Wealth tax, Service tax, Excise duty, Customs duty and Cess which have not been deposited with theappropriate authorities on account of any dispute.
Further, as explained to us, the provisions of Investor Education and Protection Fund are not applicable tothe Company.
(x) The Company does not have any accumulated losses at the end of the financial year and has not incurred cashlosses in the financial year and in the immediately preceding financial year.
(xi) In our opinion and according to the information and explanations given to us, the Company has not defaultedin repayment of dues to its bankers. The Company did not have any outstanding dues to any financial institutionor debenture holders during the year.
(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares,debentures and other securities.
(xiii) In our opinion and according to the information and explanations given to us, the Company is not a chit fundor a nidhi/ mutual benefit fund/ society.
(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares,securities, debentures and other investments.
(xv) According to the information and explanations given to us, the Company has not given any guarantee for loanstaken by others from banks or financial institutions.
(xvi) According to the information and explanations given to us, no term loan has been taken by the Companyduring the year.
(xvii) According to the information and explanations given to us and on an overall examination of the balance sheetof the Company, we are of the opinion that the funds raised on short-term basis have not been used for long-term investment.
(xviii) The Company has not made any preferential allotment of shares to companies/firms/parties covered in theregister maintained under section 301 of the Companies Act, 1956.
(xix) The Company did not have any outstanding debentures during the year.
(xx) The Company has not raised any money by way of public issues.
(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed orreported during the course of our audit.
For B S R & CompanyChartered AccountantsFirm Registration Number: 128901W
Sd/-Manish Gupta
Place : Gurgaon PartnerDate : 15 September 2010 Membership No. : 095037
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Schedules As at As at31 March 2010 31 March 2009
SOURCES OF FUNDS
Shareholders’ fundsShare capital 1 35,000,000 35,000,000Reserves and surplus 2 93,382,333 93,142,035
128,382,333 128,142,035Loan fundsSecured loans 3 35,228,435 50,191,901Unsecured loans 4 17,502,740 20,000,000
52,731,175 70,191,901Deferred tax liability (refer note III(12) of schedule 19) 5 1,623,249 2,259,466
182,736,757 200,593,402APPLICATION OF FUNDSFixed assets 6Gross block 95,977,774 92,519,262Less: accumulated depreciation 34,667,326 26,775,761
Net block 61,310,448 65,743,501Capital work-in-progress (including capital advances) - 415,780
61,310,448 66,159,281Investments 7 51,000 -Current assets, loans and advancesInventories 8 110,828,938 133,788,617Sundry debtors 9 18,628,980 20,090,797Cash and bank balances 10 327,584 247,736Loans and advances 11 5,315,404 7,850,077
135,100,906 161,977,226Less: Current liabilities and provisions 12Current liabilities 12,378,229 26,644,068Provisions 1,347,368 899,037
13,725,597 27,543,105
Net current assets 121,375,309 134,434,121
182,736,757 200,593,402
Significant accounting policies and notes to the accounts 19
The accompanying notes and schedules form an integral part of the financial statements
Aryan Clean Coal Technologies Private LimitedBalance Sheet as at 31 March 2010(All amounts are in Indian Rupees)
As per our report attached
For B S R & Company For and on behalf of the Board of DirectorsChartered AccountantsFirm Registration No. 128901W
Sd/- Sd/- Sd/-Manish Gupta R.S Sindhu Ashok MrigPartner Chairman DirectorMembership No.: 095037
Place : GurgaonDate : 15 September 2010
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Schedules For the year ended For the year ended31 March 2010 31 March 2009
IncomeGross sales 119,408,710 212,643,766Less: Excise duty on sales 9,476,757 25,081,425
Net sales 109,931,953 187,562,341Other income 13 1,030,015 947,239
110,961,968 188,509,580ExpenditureMaterial consumed 14 65,316,176 104,573,041Manufacturing expenses 15 8,221,193 11,634,311Employees’ remuneration and other benefits 16 12,999,897 10,678,361Administrative and selling expenses 17 6,937,926 4,855,790Interest and finance charges 18 9,333,587 6,958,826Depreciation 8,306,507 8,249,920
111,115,286 146,950,249(Loss)/profit before tax (153,318) 41,559,332Less: Provision for taxation
-Current tax 242,602 13,919,374-Deferred tax (credit)/ charge (636,218) 148,281.00-Fringe benefits tax - 133,672.00-Wealth tax - 84,968.00
(393,616) 14,286,295Profit after tax 240,298 27,273,037Balance brought forward 92,076,675 64,803,638
Balance carried to Balance Sheet 92,316,973 92,076,675
Earning per share (refer note III(11) of schedule 19)Basic and diluted earnings per share(equity share of face value of Rs. 10 each) 0.07 7.79
Significant accounting policies and notes to the accounts 19The accompanying notes and schedules form an integral part of the financial statements
Aryan Clean Coal Technologies Private LimitedProfit and Loss Account for the year ended 31 March 2010(All amounts are in Indian Rupees)
As per our report attached to the balance sheet
For B S R & Company For and on behalf of the Board of DirectorsChartered AccountantsFirm Registration No. 128901W
Sd/- Sd/- Sd/-Manish Gupta R.S Sindhu Ashok MrigPartner Chairman DirectorMembership No.: 095037
Place : GurgaonDate : 15 September 2010
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Cash flow statement For the year ended For the year ended31 March 2010 31 March 2009
A. Cash flow from operating activitiesNet Profit before tax (153,318) 41,559,332Adjustments for :
- Depreciation 8,306,507 8,249,920- Interest and finance charges 9,333,588 6,958,826- Liabilities no longer required written back (431,150) (31,827)- Profit on sale of fixed assets (28,688) (269,285)
Operating profit before working capital changes 17,026,939 56,466,966Adjustments for :
- (Increase)/ decrease in inventories 22,959,679 (41,065,482)- (Increase)/ decrease in sundry debtors 1,461,817 13,108,012- (Increase)/ decrease in loans and advances 3,831,279 3,398,711- Increase/ (decrease) in current liabilities and provisions (13,240,599) (13,755,295)
Cash generated from operations 32,039,115 18,152,912- Fringe benefit tax paid (100,000) (125,000)- Wealth tax paid (84,968) -- Income tax paid (1,500,000) (20,023,853)
Net Cash from operating activities 30,354,147 (1,995,941)B. Cash flow from investing activities
- Purchase of fixed assets (including Capital work in progress) (4,553,986) (11,655,695)- Proceeds from sale/ disposal of fixed assets 1,125,000 384,615- Investment in subsidiaries (51,000) -
Net cash used in investing activities (3,479,986) (11,271,080)C. Cash flow from financing activities
- Repayment of vehicle loans (32,663) (1,693,478)- Net amounts taken/(repayment of) cash credit (14,930,803) 5,567,209- Proceeds from/(repayment of) inter-corporate deposits (5,000,000) 20,000,000- Interest and finance charges paid (6,830,847) (6,946,877)- Dividend paid - (3,500,000)- Corporate dividend tax paid - (594,825)
Net cash from/ (used in) financing activities (26,794,313) 12,832,029Net Cash Flows [increase/(decrease)] during the year (A+B+C) 79,848 (434,992)Cash and cash equivalents as at the beginning of the yearCash in hand 139,439 80,625Balance with scheduled banks- on current account 108,297 602,103- on deposit account - -
247,736 682,728Cash and cash equivalents as at the end of the yearCash in hand 15,664 139,439Cheques in hand - -Balance with scheduled banks
- on current account 161,920 108,297- on deposit account 150,000 -
327,584 247,736Note:The cash flow statement has been prepared in accordance with ‘Indirect method’ as set out in the Accounting Standard (AS)-3 on ‘Cash Flow Statements’,as specified in the Companies (Accounting Standard) Rules, 2006.
Aryan Clean Coal Technologies Private LimitedCash Flow Statement for the year ended 31 March 2010(All amounts are in Indian Rupees)
For B S R & Company For and on behalf of the Board of DirectorsChartered AccountantsFirm Registration No. 128901W
Sd/- Sd/- Sd/-Manish Gupta R.S Sindhu Ashok MrigPartner Chairman DirectorMembership No.: 095037Place : GurgaonDate : 15 September 2010
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As at As at31 March 2010 31 March 2009
Schedule 1 - Share capital
Authorised
5,000,000 (previous year 5,000,000) equity shares of Rs.10 each 50,000,000 50,000,000
50,000,000 50,000,000Issued, subscribed and fully paid up3,500,000 (previous year 3,500,000) equity shares of 35,000,000 35,000,000Rs.10 each fully paid up
35,000,000 35,000,000Of the above 3,499,800 (previous year 3,499,800) equity sharesof Rs. 10 each are held by ACB (India) Limited(formerly known as Aryan Coal Benefications Private Limited.)
Schedule 2 - Reserves and surplus
General reserve 1,065,360 1,065,360Add: gratuity transitional liability - -
1,065,360 1,065,360
Profit and loss account:Opening balance 92,076,675Profit and loss account 240,298 92,076,675
93,382,333 93,142,035
Schedule 3 - Secured Loans
Loans and advances from banks :-Vehicle/equipment loans* - 32,663-Cash credit** 35,228,435 50,159,238
35,228,435 50,191,901
*Secured by first and exclusive charge on specific vehicles/equipment.**Secured by exclusive charge on current assets of the Company. Further, unconditional and irrevocable corporate guarantee of ACB (India) Limited(formerly known as Aryan Coal BeneficationsPrivate Limited)has been provided for such facility.
Schedule 4 - Unsecured Loans
Short term loans and advances from others-Intercorporate deposit from holding company* 17,502,740 20,000,000
17,502,740 20,000,000*(including interest accrued and due Rs. 2,502,740 (previous year nil)
Schedule 5 - Deferred tax liability (refer note III (13) of schedule 18)
Opening balance 2,259,466 2,111,184Deferred tax (release)/ charge (636,217) 148,282
Closing balance 1,623,249 2,259,466
Aryan Clean Coal Technologies Private LimitedSchedules forming part of the accounts(All amounts are in Indian Rupees)
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119
Aryan Clean Coal Technologies Private Limited
ACCTPL
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Aryan Clean Coal Technologies Private LimitedSchedules forming part of the accounts(All amounts are in Indian Rupees)
As at As at
31 March 2010 31 March 2009
Schedule 7 - Investments (At cost)
Non Trade (Long Term)In subsidiary company (fully paid up)Aryan Eestech India Private Limited5,100 equity shares of Rs. 10/- each (previous year nil) 51,000 -
51,000 -
Schedule 8 - Inventories(At lower of cost and net realisable value)
Stores and spare parts 1,508,543 1,752,736Raw material & components 76,688,489 99,584,269Work in progress* 30,142,130 28,827,897Finished goods 2,489,776 3,623,715
110,828,938 133,788,617
*includes stock lying with third parties Rs. 105,600 (previous year Rs. 143,501)
Schedule 9 - Sundry debtors
(Unsecured, considered good unless otherwise stated)Debts outstanding for a period exceeding six months 17,817 7,002Other debts* # 18,611,163 20,083,795
18,628,980 20,090,797
*includes debts due from other companies under the same managementwithin the meaning of sub-section (1-B) of section 370 and companies inwhich directors of the Comapany are directors.; these area) Aryan Ispat and Power Private Limited Rs. Nil (previous year Rs. 14,393,716)b) Aryan Energy Private Limited Rs. 1,044,471 (previous year Rs.Nil)c) Kartikay Coal Washeries Private Limited Rs. 502,602 (previous year Rs. 912,746)d) Spectrum Coal and Power Limited 6,552,581 (previous year Rs Nil)e) Global Coal and Mining Private Limited Rs. 6,126,694 (previous year Rs. 1,249,382)
# includes Rs. 4,367,930 (previous year Rs. 3,510,544) due from ACB (India) Ltd.(formerly known as Aryan Coal Benefications Private Limited) a company inwhich directors of the company are directors.
Schedule 10 - Cash and bank balances
Cash in hand 15,664 139,439Balances with scheduled banks: -
- on current accounts 161,920 108,297- on fixed deposits accounts * 150,000 -
327,584 247,736
*Pledged as margin money against bank guarantee
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ACCTPL
As at As at31 March 2010 31 March 2009
Schedule 11 - Loans and advances(Unsecured, considered good, unless otherwise stated)
Advances recoverable in cash or in kind or for value to be received 1,678,769 5,195,728Advance income tax [net of provision for tax Rs. 52,776,757 2,805,187 1,547,789(previous year Rs. 52,517,853)]Advance fringe benefit tax [net of provision for fringe benefit 39,208 -tax Rs. 431,980 (previous year Rs. 298,308)]Balance with excise and sales tax authorities 377,360 733,180Security deposits 414,880 373,380
5,315,404 7,850,077
Schedule 12 - Current liabilities and provisions
Current liabilities
Sundry creditors for goods services and expenses- Dues to micro and small enterprises (refer note III (8) of schedule 19) - -- Others* 5,906,886 18,458,451
Advances from customers 5,000,000 6,821,840Book overdraft 250,192 82,255Other liabilities** 1,221,151 1,281,522
12,378,229 26,644,068
*includes salary, wages and bonus payable amounting to Rs. nil (previous year Rs. 200,000)**includes employee state insurance payable Rs. 15,150 (previous year Rs. 11,859), provident Fund payable Rs. 143,575(previous year Rs. 120,065) and labour welfare fund payable Rs. 5,500 (previous year Rs. 5,580).
ProvisionsProvision for gratuity [refer note III (1) of schedule 19] 1,347,368 753,277Provision for fringe benefit tax [net of advance fringe benefit tax Rs. Nil(previous year Rs. 371,188)] - 60,792Provision for wealth tax - 84,968
1,347,368 899,037
Aryan Clean Coal Technologies Private LimitedSchedules forming part of the accounts(All amounts are in Indian Rupees)
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For the year ended For the year ended
31 March 2010 31 March 2009
Schedule 13 - Other income
Interest on fixed deposit (gross of tax deducted at source - 523,003previous year Rs 125,174)Liabilities no longer required written back 431,150 31,827Profit on sale of fixed assets 28,688 269,285Miscellaneous income 570,177 123,125
1,030,015 947,240
Schedule 14 - Material consumedStore & spare parts consumed
Opening stock 1,752,736 1,493,309Add: Purchases 4,849,196 6,480,301
6,601,932 7,973,610Less: Closing stock (1,508,543) 5,093,389 (1,752,736) 6,220,874
Raw materials & components consumedOpening stock 99,584,269 63,307,522Add: Purchases 37,521,815 141,651,526
137,106,084 204,959,048Less: Closing stock (76,688,489) 60,417,595 (99,584,269) 105,374,779
(Increase)/decrease in stocks
Opening stock-Work-in-progress 28,827,897 15,056,799-Finished goods 3,623,715 12,865,505
32,451,612 27,922,304Less: closing stock-Work-in-progress 30,142,130 28,827,897-Finished goods 2,489,776 3,623,715
32,631,906 (180,294) 32,451,612 (4,529,308)Increase/ (decrease) in excise duty on finished goods (14,514) (2,493,304)
(194,808) (7,022,612)
65,316,176 104,573,041
Schedule 15 - Manufacturing expenses
Job work charges 3,264,820 5,551,067Power and fuel 3,276,602 3,147,269Repair and maintainance
-Building 1,302,264 2,118,440-Plant and machinery 377,507 817,535
8,221,193 11,634,311
Aryan Clean Coal Technologies Private LimitedSchedules forming part of the accounts(All amounts are in Indian Rupees)
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ACCTPL
For the year ended For the year ended31 March 2010 31 March 2009
Schedule 16 - Employees’ remuneration and other benefits
Salaries, wages and bonus 10,891,854 8,593,520Contribution to provident fund and other funds 979,618 792,927Staff welfare expenses 1,128,425 1,291,914
12,999,897 10,678,361
Schedule 17 - Administrative and selling expenses
Insurance 242,440 136,073Rates and taxes 110,580 243,517Rent - 120,000Legal and professional 1,120,568 805,562Security and house keeping 1,810,232 473,574Freight outward 1,282,776 1,091,422Printing and stationery 397,728 295,318Communication 286,918 215,944Business promotion 127,686 38,180Travelling and conveyance 1,198,928 1,027,769Electricity and water - 47,388Donation 5,100 1,100.00Miscellaneous 354,970 359,943
6,937,926 4,855,790
Schedule 18 - Finance charges
Interest on Cash credit 6,518,000 5,655,377Interest on vehicle/equipment loans 327 60,357Interest on inter-corporate deposit 2,780,822 774,795Bank charges 34,438 468,297
9,333,587 6,958,826
Aryan Clean Coal Technologies Private LimitedSchedules forming part of the accounts(All amounts are in Indian Rupees)
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Aryan Clean Coal Technologies Private LimitedSchedules forming part of the accounts(All amounts are in Indian Rupees)
Schedule 19: Significant accounting policies and notes to the accounts
I. Background
Aryan Clean Coal Technologies Private Limited (‘the Company’) was incorporated on 11 August 2003 tomanufacture coal washing equipment. The Company is a subsidiary of ACB (India) Limited (formerly known asAryan Coal Benefications Private Limited).
II. Significant accounting policies
1 Accounting Convention
The financial statements of the Company are prepared under the historical cost convention, on the accrual basisof accounting in accordance with the Generally Accepted Accounting Principles (‘GAAP’) in India and complywith the accounting standards prescribed by Companies (Accounting Standards) Rules, 2006, to the extentapplicable and relevant provisions of the Companies Act, 1956, as adopted consistently by the Company.
2 Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles (GAAP)requires management to make estimates and assumptions that affect the reported amounts of assets and liabilitiesand the disclosure of contingent liabilities at the date of the financial statements and the reported amounts ofrevenues and expenses during the year. Actual results could differ from those estimates. Any revision to accountingestimates is recognised prospectively in current and future periods.
3 Fixed assets
Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost comprises thepurchase price and any directly attributable costs of bringing the asset to its working condition for the intendeduse.
4 Depreciation
Depreciation is provided on pro-rata basis as per written down value (WDV) method at rates based uponmanagement estimates of useful lives of the assets. Such rates are equal to the rates prescribed in Schedule XIVof the Companies Act, 1956.
Assets individually costing less than Rs. 5,000 are fully depreciated in the year of purchase. In the opinion of themanagement, these rates represent the useful lives of such assets.
5 Impairment of assets
The carrying values of assets are reviewed at each reporting date to determine if there is indication of anyimpairment. If any indication exists, the asset’s recoverable amount is estimated. For assets that are not yetavailable for use, the recoverable amount is estimated at each reporting date. An impairment loss is recognisedwhenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairmentlosses are recognised in the profit and loss account. An impairment loss is reversed if there has been a change inthe estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent thatthe asset’s carrying amount does not exceed the carrying amount that would have been determined net ofdepreciation or amortisation, if no impairment loss had been recognised.
6 Inventories (valued at lower of cost and net realisable value):
Inventories are valued at lower of cost and net realisable value. The basis for determination of cost of variouscategories of inventory is as follows:
i. Raw material, components, and stores & spare parts are valued on cost computed on first in first out basis(FIFO).
Stores, raw materials and components held for use in production of finished goods are not written downbelow cost except in cases where material prices have declined, and it is estimated that the cost of the finishedgoods will exceed their net realisable value.
ii. Work in progress and finished goods are valued at cost computed on FIFO basis and includes proportionatecosts of conversion incurred in bringing the inventory to their present location and condition.
7 Revenue recognition
Revenue from sale of goods is recognized on transfer of significant risks and rewards of ownership to the customer
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Aryan Clean Coal Technologies Private LimitedSchedules forming part of the accounts(All amounts are in Indian Rupees)
Schedule 19: Significant accounting policies and notes to the accounts
which coincides with the dispatch of goods to the customers in accordance with the contract terms. The sales areshown net of sales tax.Interest income is recognised using the time proportion method, based on underlying interest rates.
8 Foreign currency transactionsTransactions in foreign currency are recorded at the exchange rate prevailing at the date of the transaction.Exchange differences arising on foreign currency transactions settled during the year are recognised in the profitand loss account for the year.Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date are translated atthe closing exchange rates on that date; the resultant exchange differences are recognised in the profit and lossaccount.
9 Operating leasesLeases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assetare classified as operating leases. Operating lease charges are recognized as an expense in the Profit and LossAccount on a straight line basis.
10 Employee benefitsi. Short – term employee benefits
All employee benefits payable / available within twelve months of rendering the service are classified asshort-term employee benefits. Benefits such as salaries, wages and bonus etc., are recognised in the profitand loss account in the period in which the employee renders the related service.
ii. Retirement benefitsa) Defined Benefit
The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligibleemployees. The plan provides for a lump sum payment to vested employees at retirement, death while inemployment or on termination of employment of an amount based on the respective employee’s salary andthe tenure of employment. Vesting occurs upon completion of five years of service. The Company accountsfor the liability for gratuity benefits payable in future based on an independent actuarial valuation reportusing the projected unit credit method as at the year end. This method recognizes each period of service asgiving rise to additional unit of employee benefit entitlement and measures each unit separately to build upthe final obligation. The obligation is measured at the present value of the estimated future cash flows. Thediscount rate used for determining the present value of the obligation is based on the market yields ongovernment securities having a similar maturity period as at the balance sheet date.Actuarial gains and losses are recognised immediately in the profit and loss account.
b) Defined ContributionIn respect of retirement benefit in the form of provident fund, the Company’s contribution paid/payableunder the schemes is recognised as expense in the period in which the employee renders the related service.The Company’s contributions towards provident fund are deposited with the Regional Provident FundCommissioner and are charged to profit and loss account.
11 TaxesIncome-tax expenses comprise current tax (i.e. the amount of tax for the period determined in accordance withthe Income Tax Act, 1961) and deferred tax charge or credit (reflecting the tax effects of the timing differencesbetween the accounting income and taxable income for the period). The deferred tax charge or credit and thecorresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted orsubstantively enacted by the balance sheet date. Deferred tax assets are recognized only to the extent there isreasonable certainty that the assets can be realized in the future. However, where there is unabsorbed depreciationor carry forward loss under taxation laws, deferred tax assets are recognized only if there is virtual certainty ofrealization of such assets. Deferred tax assets are reviewed at each balance sheet date and written down orwritten up to reflect the amount that is reasonably/virtually certain (as the case may be) to be realized.Fringe Benefits Tax (‘FBT’) has been abolished w.e.f. 1 April 2009, therefore no provision is made in currentfinancial year
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12 Provisions contingent liabilities and contingent assets
A provision is created when there is a present obligation as a result of a past event that probably requires anoutflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for acontingent liability is made when there is a possible obligation or a present obligation that may, but probablywill not, require an outflow of resources. When there is a possible obligation or a present obligation in respect ofwhich the likelihood of outflow of resources is remote, no provision or disclosure is made. The Company doesnot recognise assets which are of contingent nature until there is virtual certainty of realisability of such assets.However, if it has become virtually certain that an inflow of economic benefits will arise, asset and relatedincome is recognised in the financial statements of the period in which the change occurs.
13 Earnings per share
Basic earnings per share are calculated by dividing the net profit for the year attributable to equity shareholdersby the weighted average number of equity shares outstanding during the year. The Company has not issuedany potentially dilutive equity shares and, accordingly, the basic earnings per share and diluted earnings pershare are the same.
III. Notes to accounts
1. Disclosure in respect of employee benefits under Accounting Standard (AS) – 15 “Employee Benefits” prescribedby the Companies (Accounting Standards) Rules, 2006:
(a) Amount of Rs. 979,618 (Previous year Rs. 792,927) pertaining to employers’ contribution to provident fund,pension fund, employees’ state insurance fund and superannuation fund is recognised as an expense andincluded in “Employees’ remuneration and other benefits” in Schedule 15.
(b) The following tables sets out the status of the gratuity plan as required under the Standard:
(i) Changes in the present value of defined benefit obligation representing reconciliation of opening and closingbalances thereof:
Particulars For the year ended For the year ended31 March 2010 31 March 2009
Present value of obligation as at the beginning of the year 753,277 581,474Interest cost 73,839 55,947Current service cost 213,282 177,720Benefits paid 38,323 -Actuarial (gain) / loss on obligation 345,293 (61,864)Present value of obligation as at the end of the year 1,347,368 753,277
(ii) Actuarial gain / loss recognised in the profit and loss account:
Particulars For the year ended For the year ended31 March 2010 31 March 2009
Actuarial gain / (loss) for the year – obligation (345,293) 61,864Actuarial gain / (loss) recognised in the year (345,293) 61,864Unrecognised actuarial gains / (losses) at the end of year - -
(iii) The amounts recognised in the balance sheet are as follows:
Particulars For the year ended For the year ended31 March 2010 31 March 2009
Present value of obligation as at the end of the year 1,347,368 753,277Fair vale of plan assets as at the end of the year - -Funded status (1,347,368) (753,277)Unrecognised actuarial gains / (losses) - -Net assets / (liability) recognised in balance sheet (1,347,368) (753,277)
Aryan Clean Coal Technologies Private LimitedSchedules forming part of the accounts(All amounts are in Indian Rupees)
Schedule 19: Significant accounting policies and notes to the accounts
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ACCTPL
Aryan Clean Coal Technologies Private LimitedSchedules forming part of the accounts(All amounts are in Indian Rupees)
Schedule 19: Significant accounting policies and notes to the accounts
(iv) The amounts recognised in the profit and loss account are as follows:
Particulars For the year ended For the year ended31 March 2010 31 March 2009
Current service cost 213,282 177,720Past service cost - -Interest cost 73,839 55,947Expected return on plan assets - -Net actuarial (gain) / loss recognised in the year 345,293 (61,864)Expenses recognised in the statement of profit and loss* 6,32,414 171,803
* Included in Schedule 15 “Employees’ remuneration and other benefits”
(v) Principal actuarial assumptions at the balance sheet date are as follows:Economic assumptions:
Particulars As at 31 March 2010 As at 31 March 2009
Discount rate 8.3% 7.7%Future salary increase 10% 10%
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority,promotion and other relevant factors such as supply and demand factors in the employment market.
The discount rate is based on the prevailing market yields of Government Bonds as at the balance sheet date forthe estimated term of the obligations.
Demographic assumptions:
As at 31 March 2010 As at 31 March 2009
Retirement age 60 years 60 yearsMortality table LIC (1994-96) LIC (1994-96)
duly modified duly modifiedEmployee turnover 21 - 30 years- 5% 21 - 30 years- 5%
31 - 40 years- 3% 31 - 40 years- 3%41 - 50 years- 2% 41 - 50 years- 2%51 - 59 years- 1% 51 - 59 years- 1%
2. The estimated amount of contracts remaining to be executed on capital account and not provided for (net ofadvances) Rs. Nil (previous year Rs. 1,403,220).
3. Expenditure in foreign currency
Year ended Year ended31 March 2010 31 March 2009
Travelling - 58,414Total - 58,414
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Aryan Clean Coal Technologies Private LimitedSchedules forming part of the accounts(All amounts are in Indian Rupees)
Schedule19: Significant accounting policies and notes to the accounts
4. Additional information pursuant to Part II of Schedule VI to the Companies Act, 1956
(i) Quantitative details of capacity and production
Class of goods Units Licensed capacity Installed capacity Production
Current Previous Current Previous Current Previousyear year year year year year
Fabrication and machining Metric * * 1,500 1,500 733.06 1,110.67of coal washing equipments Tones(Barrel washer, conveyers, (MT)parts and others)#
#The Company manufactures different kinds of coal washing equipments. The figures represent a mix of suchproduct range.
*The provisions of the Industries Development Regulation Act, 1951, relating to licensed capacity are not applicableto the Company.
(5) Raw materials and components consumed
Class of goods Units Current year Previous yearQuantity Value Quantity Value
Raw material
Iron and steel MT 529.39 24,050,051 1,013.51 45,913,289Pipes and fittings Meters 9440.55 9,520,876 12,857.76 11,799,431
33,570,927 57,712,720
Components
Bearing & Sleeves Pcs 31,513 10,895,508 57,815 16,496,928Sieve Band Screen Pcs 200 3,777,305 113 1,822,940Others* Pcs 128,607 12,173,455 267,552 29,342,190
26,846,268 47,662,059
*It is not practicable to furnish quantitative information in view of the considerable number of items diverse insize and nature. These items in value individually account for less than 10% of the total value of raw materialsconsumed.
No imported raw materials, stores, components and spares have been consumed during the year.
(6) Details of sale & stock of finished goods
Class of goods Units Opening Stock Current year Previous yearQuantity Value Quantity Value
Barrel washer and parts MT - - 45.05 5,350,472Conveyer and parts MT - - - -
Others# MT 15.13 3,623,715 46.75 7,515,033
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Aryan Clean Coal Technologies Private LimitedSchedules forming part of the accounts(All amounts are in Indian Rupees)
Schedule19: Significant accounting policies and notes to the accounts
Class of goods Units Closing Stock Current year Previous yearQuantity Value Quantity Value
Barrel washer and parts MT - - - -Conveyer and parts MT - - - -Others # MT 8.570 2,489,776 15.13 3,623,715
Class of goods Units Sales* Current year Previous yearQuantity Value Quantity Value
Barrel washer and parts MT 173.97 22,393,156 190.07 24,670,011Conveyer and parts MT 385.274 56,849,751 746.35 125,403,351Others # MT 149.343 30,689,046 250.92 37,488,979
*It is not practicable to furnish quantitative information in view of the considerable number of items diverse insize and nature. These items in value individually account for less than 10% of the total value of turnover.
*Net of excise duty.
(7) Legal and professional expenses include auditors’ remuneration (excluding service tax and out of pocketexpenses):
For the year ended For the year ended31 March 2010 31 March 2009
Statutory audit fees 300,000 300,000Service tax 30.900 30,900
330,900 330,900
(8) Based on the available information there are no dues outstanding to micro and small enterprises as at 31 March2010.
(9) The Company has in the current year entered into the following transactions with private companies in whichdirector(s) of the Company are director(s) and in respect of which the Company has not obtained the priorapproval of the Central Government as required under Section 297 of the Companies Act, 1956. The managementhas sought legal consultation for the above violation with the provisions of the Companies Act, 1956.
(10) Segment Reporting
In the opinion of the management, there is only one reportable segment i.e. manufacturing of coal washingequipments, as envisaged by Accounting Standard 17 “Segment Reporting”. Accordingly, no disclosure forsegment reporting has been made in the financial statements.
(11) Earnings per share:
The computation of basic and diluted earnings per share is set out below:
For the year ended For the year ended31 March 2010 31 March 2009
Profit after tax attributable to equity shareholders 240,298 27,273,036(in Rupees) (A)Weighted average number of equity shares outstanding 3,500,000 3,500,000during the year (in numbers) (B)Nominal value per share (Rupees) (C) 10 10Basic and diluted earnings per share (in Rupees) (A)/(B) 0.07 7.79
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Aryan Clean Coal Technologies Private LimitedSchedules forming part of the accounts(All amounts are in Indian Rupees)
Schedule19: Significant accounting policies and notes to the accounts
(12) Deferred tax assets/liabilities
As at 31 March 2010 As at 31 March 2009
Deferred tax assets arising on account ofGratuity 447,562 256,039Preliminary expenses - 2,095
447,562 258,134Deferred tax liability arising on account ofDepreciation 2,070,811 2,517,600Deferred tax liability (net) 1,623,249 2,259,466
(13) Related party disclosuresa) Names of Related PartiesI. Related party and nature of the relationship where control exists.
Holding CompanyACB (India) Limited (formerly Aryan Coal Benefications Private Limited)
II. Related party and nature of the relationship with whom transaction have taken place during the year.Subsidiaries:Aryan Eestech India Private LimitedFellow subsidiaries:Aryan Ispat & Power Private LimitedKartikay Coal Washeries Private LimitedAryan Energy Private LimitedSpectrum Coal and Power LimitedKey Management Personnel:G.C. Mrig, Managing DirectorR.S. Sindhu, ChairmanKuldeep Singh Solanki, DirectorRelatives of key management personnel:Ashok MrigSumati SindhuSurabhi SindhuEnterprises over which key management personnel exercise significant influence:Sainik Finance & Industries LimitedGlobal Coal & Mining Private LimitedShyam Indus Power Solutions Private LimitedIndus Portfolio Private Limited
b) Details of transactions during the year:
Nature of transactions For the year ended For the year ended31 March 2010 31 March 2009
Sale of Fixed AssetsTo holding company- ACB (India) Limited 1,125,000 -
Sale of finished goodsTo holding company- ACB (India) Limited 73,164,957 66,600,166To fellow subsidiaries- Aryan Ispat and Power Private Limited 9,938,136 61,078,473- Spectrum Coal and Power Limited 11,679,776 39,005,226- Others 3,000,656 5,438,798
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Aryan Clean Coal Technologies Private LimitedSchedules forming part of the accounts(All amounts are in Indian Rupees)
Schedule19: Significant accounting policies and notes to the accounts
To enterprises over which key management personnelexercise significant influence- Global Coal & Mining Private Limited 11,696,070 13,359,246- Sainik Finance and Industries Limited 15,000 -
PurchasesFrom holding company- ACB (India) Limited 331,876 2,174,516From enterprises over which key management personnelexercise significant influence-Sainik Finance and Industries Limited 91,034 284,392
SalariesTo relatives of key management personnel-Ashok Mrig 850,000 880,000
Legal and professional expensesTo enterprises over which key management personnelexercise significant influence- Indus Portfolio Private Limited 33,090 175,000
Inter corporate deposits receivedFrom holding company- ACB (India) Limited - 20,000,000
Inter corporate deposits repaidTo holding company- ACB (India) Limited 5,000,000 -
Interest paid on Inter corporate depositTo holding company- ACB (India) Limited 2,780,822 774,795
Advances received from customersFrom fellow subsidiaries:- Aryan Energy Private Limited - 1,375,147- Spectrum Coal and Power Limited - 1,446,693From enterprises over which key management personnelexercise significant influence- Global Coal and Mining Private Limited - 50,000,000-Shyam Indus Power Solutions Private Limited 1,000,000 -
Advances received from customers settledFrom fellow subsidiaries:- Aryan Energy Private Limited 1,375,147 -- Spectrum Coal and Power Limited 1,446,693 -From enterprises over which key management personnelexercise significant influence:- Global Coal and Mining Private Limited - 50,000,000
Nature of transactions For the year ended For the year ended31 March 2010 31 March 2009
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Aryan Clean Coal Technologies Private LimitedSchedules forming part of the accounts(All amounts are in Indian Rupees)
Schedule19: Significant accounting policies and notes to the accounts
c) Particulars of closing balances as at the year end
Nature of transactions As at As at31 March 2010 31 March 2009
Accounts receivableFrom holding company- ACB (India) Limited 4,367,930 3,510,445
From fellow subsidiaries:
- Aryan Ispat and Power Private Limited - 14,393,716- Aryan Energy Private Limited 1,044,471 -- Global Coal & Mining Private limited 6,126,694 1,249,382- Spectrum Coal & Power Limited 6,552,581 -- Others 537,304 912,746
Note: The holding company has also tendered a guarantee to Yes Bank Limited, New Delhi towards creditfacilities extended by the bank to the Company.
15. The Company has taken office premises under cancellable operating lease arrangements. Lease rentals chargedduring the year to the profit and loss account amount to Rs. Nil. (previous year Rs. 120,000).
16. Previous year’s figures have been regrouped / re-arranged wherever necessary to conform to the current year’sgroupings/ classification.
For and on behalf of the Board of Directors
Sd/- Sd/-R.S Sindhu Ashok MrigChairman Director
Place : GurgaonDate : 15 September 2010
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I. Registration Details
Registration Number State Code
Balance Sheet DateDate Month Year
II. Capital Raised During the year (Rupees in Thousand)
Public Issue Right Issue
Bonus Share Private Placement
III. Position of Mobilization and Deployment of Funds (Rupees in Thousand)
Total Liabilities Total Assets
Source of Funds Application of Funds
Paid-Up-Capital Reserves and surplus
Current liabilities and provision Loan fund
Deferred tax liability
Application fundsFixed assets Current assetsInvestment
IV. Performance of Company (Rupees in Thousand)
Turnover Total expenditure
Profit Before Tax Profit after tax
Basic earning per share in Rs. Dividend rate %
V. Generic names of three principle products/ services of the company :(As per monetary terms)
Item Code No. (ITC Code):Product Description : NA
Balance Sheet Abstract And Company’s General Business Profile
For and on behalf of the Board of Directors ofAryan Clean Coal Technologies Private Limited
Sd/- Sd/-R.S. Sindhu Ashok MrigChairman Managing Director
Place : GurgaonDate : 15 September 2010
3 1 0 3
5 5
2 0 1 0
Nil
Nil
Nil
Nil
1 2 2 1 9 3
1 9 6 4 6 2 1 9 6 4 6 2
3 5 0 0 0 9 3 3 8 2
1 3 7 2 6 5 2 7 3 1
1 1 0 9 6 2 1 1 1 1 1 5
( 1 5 3 ) 2 4 0
1 6 2 3
6 1 3 1 0 1 3 5 1 0 1
0 . 0 7 Nil
5 1
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Annexure-BAryan Energy Private Limited
Registered Office : 43, Vasant Enclave, Rao Tula Ram Marg,New Delhi-110057
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NOTICE
Notice is hereby given that the Ninth Annual General Meeting of the Company shall be held on Thursday, 30th day ofSeptember, 2010 at 05:20 p.m. at 129, Transport Centre, Punjabi Bagh, Rohtak Road, New Delhi-110035 to transact thefollowing business:
ORDINARY BUSINESS
1. To consider and adopt the Audited Balance Sheet of the Company as at 31st March, 2010 and Profit & Loss Accountfor the period from 1st April, 2009 to 31st March, 2010 together with the Directors’ Report and Auditors’ Reportthereon.
2. To appoint a Director in Place of Sh. Rudra Sen Sindhu, who retires by rotation and being eligible, offers himself forreappointment.
3. To appoint a Director in Place of Sh. Ganesh Chandra Mrig, who retires by rotation and being eligible, offers himselffor reappointment.
4. To appoint Statutory Auditors of the Company and to fix their remuneration:
To consider and if thought fit, to pass with or without modification(s), the following resolution as an ORDINARYRESOLUTION:
“RESOLVED THAT M/s B S R & Company, Chartered Accountants, retiring Auditors of the Company being eligiblewho have offered themselves for reappointment, be and are hereby appointed as the Statutory Auditors of theCompany to hold office as such from the date of conclusion of this Annual General Meeting till the date of conclusionof the next Annual General Meeting of the Company at a remuneration as mutually decided by the Company &Auditors.”
SPECIAL BUSINESS
5. To consider and if thought fit, to pass with or without modification(s), the following resolution as an ORDINARYRESOLUTION:
“RESOLVED THAT Sh. Vrit Pal Sindhu, who was appointed as Additional Director of the Company w.e.f. 28.06.2010by the Board of Directors of the Company and who holds office upto the date of this Annual General Meeting of theCompany and in respect of whom the Company has received a notice in writing proposing his candidature for theoffice of Director under section 257 of the Companies Act, 1956, be and is hereby appointed as a Director of theCompany, liable to retire by rotation.”
6. To consider and if thought fit, to pass with or without modification(s), the following resolution as an ORDINARYRESOLUTION:
“RESOLVED THAT Sh. Ajay Mrig, who was appointed as Additional Director of the Company w.e.f. 28.06.2010 bythe Board of Directors of the Company and who holds office upto the date of this Annual General Meeting of theCompany and in respect of whom the Company has received a notice in writing proposing his candidature for theoffice of Director under section 257 of the Companies Act, 1956, be and is hereby appointed as a Director of theCompany, liable to retire by rotation.”
7. To consider and if thought fit, to pass with or without modification(s), the following resolution as an ORDINARYRESOLUTION:
“RESOLVED THAT Sh. Virender Kumar Sehgal, who was appointed as Additional Director of the Company w.e.f.28.06.2010 by the Board of Directors of the Company and who holds office upto the date of this Annual GeneralMeeting of the Company and in respect of whom the Company has received a notice in writing proposing hiscandidature for the office of Director under section 257 of the Companies Act, 1956, be and is hereby appointed as aDirector of the Company, liable to retire by rotation.”
8. To consider and if thought fit, to pass with or without modification(s), the following resolution as an ORDINARYRESOLUTION:
“RESOLVED THAT the consent of the Company be and is hereby accorded pursuant to the provisions of Section293(1)(a), Section 293(1)(d) and other applicable provisions, if any, of the Companies Act, 1956, to the Board ofDirectors (“Board”) of the Company to mortgage / pledge / lien / charge / in favour of the Company’s bank(s) or
Aryan Energy Private LimitedRegd. Office: 43, Vasant Enclave, Rao Tula Ram Marg, New Delhi-110057
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any other banks or financial institutions (‘hereinafter collectively referred to as the Lenders’), all immovable andmovable properties of the Company both present & future and whole of the undertaking of the Company or such ofthem on such terms as may be approved by the Board and as may be agreed to between the Board and the Lendersfrom time to time to secure the Loan / credit facility(s) not exceeding Rs. 500 Crores (Rupees Five Hundred Croresonly) together with the moneys already borrowed by the Company (apart from the temporary loans obtained fromthe Company’s banks in the ordinary courses of business) which may be more than its networth i.e. networthcalculated by adding Paid up Share Capital and its Free Reserve, not set apart for any specific purpose, togetherwith interest commitment charge costs and other charge and expenses payable by the Company to the Lender onsuch terms as may be approved by the Board and agreed under the Loan Agreements to be entered into between theCompany and the Lenders.”
RESOLVED FURTHER THAT all actions taken by the Board in connection with any matter referred to orcontemplated in any of the foregoing resolutions are hereby approved, ratified and confirmed in all respects.”
By order of the Board of DirectorsFor Aryan Energy Private Limited
Place : Gurgaon Sd/-Date : 15th September, 2010 (R.S. Sindhu)
Chairman
NOTES:
1 A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TOATTEND AND VOTE INSTEAD OF HIMSELF/HERSELF. SUCH PROXY NEED NOT BE A MEMBER OF THECOMPANY.
2 IN ORDER TO BE EFFECTIVE PROXY FORM DULY COMPLETED MUST BE RECEIVED BY THE COMPANY ATITS REGISTERED OFFICE NOT LESS THAN 48 HOURS BEFORE SCHEDULED TIME FOR HOLDING OF THEMEETING. A BLANK PROXY FORM IS ENCLOSED HEREWITH.
3 The relevant explanatory statement pursuant to Section 173 (2) of the Companies Act, 1956, in respect of SpecialBusiness, as set out above is annexed hereto.
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Explanatory statement pursuant to Section 173 (2) of the Companies Act,1956
Item No. 5
The Board of Directors of the Company the (‘Board’), at its meeting held on June 28, 2010 appointed Sh. Vrit Pal Sindhuas an additional Director effective June 28, 2010 pursuant to the provision of section 260 of the Companies Act, 1956. Interms of the provision of section 260 of the Companies Act, 1956, Sh. Vrit Pal Sindhu would hold office up to date of theensuing Annual General Meeting.
The Company has received a notice in writing from a member alongwith deposit of Rs. 500/- for proposing thecandidature of Sh. Vrit Pal Sindhu for the office of Director of the Company under the provision of section 257 of theAct. Sh. Vrit Pal Sindhu is not disqualified from being appointed as Director in terms of section 274 (1) (g) of the Act. TheCompany has received the requisite Form ‘DD-A’ from Sh. Vrit Pal Sindhu, confirming his eligibility for such appointment.
It is proposed to seek Member’s approval for the appointment of Sh. Vrit Pal Sindhu as Director of the Company interms of the applicable provisions of the Companies Act, 1956.
Sh. Rudra Sen Sindhu & Sh. Vir Sen Sindhu are interested in the resolution as set out at item No. 5 of the Notice whichpertains to appointment of Sh. Vrit Pal Sindhu. Save and except Sh. Rudra Sen Sindhu & Sh. Vir Sen Sindhu none of theother Directors of the Company is, in any way, concerned or interested in the resolution.
The Board commends the resolution as set out at item No. 5 of the Notice for your approval.
Item No. 6
The Board of Directors of the Company the (‘Board’), at its meeting held on June 28, 2010 appointed Sh. Ajay Mrig as anAdditional Director effective June 28, 2010 pursuant to the provision of section 260 of the Companies Act, 1956. In termsof the provision of section 260 of the Companies Act, 1956, Ajay Mrig would hold office up to date of the ensuingAnnual General Meeting.
The Company has received a notice in writing from a member alongwith deposit of Rs. 500/- for proposing thecandidature of Sh. Ajay Mrig for the office of Director of the Company under the provision of section 257 of the Act. Sh.Ajay Mrig is not disqualified from being appointed as Director in terms of section 274 (1) (g) of the Act. The Companyhas received the requisite Form ‘DD-A’ from Sh. Ajay Mrig, confirming his eligibility for such appointment.
It is proposed to seek Member’s approval for the appointment of Ajay Mrig as Director of the Company in terms of theapplicable provisions of the Companies Act, 1956.
Sh. Ganesh Chandra Mrig is interested in the resolution as set out at item No. 6 of the Notice which pertains to appointmentof Sh. Ajay Mrig. Save and except Sh. Ganesh Chandra Mrig , none of the other Directors of the Company is, in any way,concerned or interested in the resolution.
The Board commends the resolution as set out at item No. 6 of the Notice for your approval.
Item No. 7
The Board of Directors of the Company the (‘Board’), at its meeting held on June 28, 2010 appointed Sh. VirenderKumar Sehgal as an Additional Director effective June 28, 2010 pursuant to the provision of section 260 of the CompaniesAct, 1956. In terms of the provision of section 260 of the Companies Act, 1956, Sh. Virender Kumar Sehgal would holdoffice up to date of the ensuing Annual General Meeting.
The Company has received a notice in writing from a member alongwith deposit of Rs. 500/- for proposing thecandidature of Virender Kumar Sehgal for the office of Director of the Company under the provision of section 257 ofthe Act. Virender Kumar Sehgal is not disqualified from being appointed as Director in terms of section 274 (1) (g) of theAct. The Company has received the requisite Form ‘DD-A’ from Virender Kumar Sehgal, confirming his eligibility forsuch appointment.
It is proposed to seek Member’s approval for the appointment of Virender Kumar Sehgal as Director of the Company interms of the applicable provisions of the Companies Act, 1956.
Sh. Virender Kumar Sehgal is interested in the resolution as set out at item No. 7 of the Notice which pertains to hisappointment. Save and except Sh. Virender Kumar Sehgal, none of the other Directors of the Company is, in any way,concerned or interested in the resolution.
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The Board commends the resolution as set out at item No. 7 of the Notice for your approval.
Item No. 8
As per the provisions of Section 293(1)(d) of the Companies Act, 1956, the Board of Directors (“Board”) of the Companycannot, except with the consent of the Company in General Meeting, borrow monies, apart from temporary loansobtained from the Company’s bankers in the ordinary course of business, in excess of the aggregate of the paid upcapital and free reserves of the Company, that is to say, reserves not set apart for any specific purposes.
The Company from time to time required fund to meet the working capital requirement as well as long term requirement.In view of above, the borrowing limit of the Company is fixed to the sum(s) so borrowed under this resolution andremaining outstanding at any time shall not exceed in the aggregate of Rs. 500 Crores (Rupees Five Hundred Crores).Further, the Banks / financial institutions in order to secure their loans create mortgage / lien on the assets of theCompany which tantamount to indirectly transferring the said assets in their favour, so that if any default is made bythe Company in the repayment of loan together with interest commitment charge costs and other charge and expensespayable, the Banks/Financial institution has a right to sell those assets of the Company in order to recover theiroutstanding loan. This amount to selling / or otherwise disposing off the undertaking of the Company which can onlybe done with the permission of the shareholders under section 293(1)(a) of the Companies Act,1956. The banks / financialinstitutions insists on this resolution being passed by the Shareholders of the Company authorizing the Board to createmortgage / pledge / lien on all the immovable / movable assets of the Company whether present or future on suchterms and condition as agreed to between lenders and the Board of the Company.
The Board of the Company have approved the limit of borrowing powers in their meeting held on 15th September 2010to borrow and to mortgage / pledge / lien / charge / in favour of the Company’s bank(s) or any other banks orfinancial institutions, all immovable and movable properties of the Company upto Rs. 500 Crores (Rupees Five HundredCrores), apart from the temporary loans obtained from the bankers in the ordinary course of business, subject to approvalof members in General Meeting.
The consent of the members is therefore sought under provisions of Section 293(1)(a) and 293(1)(d) of the CompaniesAct, 1956, to enable the Directors to borrow the aforesaid amount limit and to mortgage / pledge / lien / charge / infavour of the Lender.
Therefore, the approval of the members shall be accorded by way of passing Ordinary Resolution at General Meeting.Hence, the matter be placed before the members for their approval.
A copy each of the resolutions passed at Board Meeting dated 15th September 2010, are open for inspection of theMembers, during business hours between 11.00 A.M. to 1.00 P.M. on all working days of the Company, upto the date ofthe meeting, at the Registered Office of the Company.
None of the Directors is in any way concerned or interested in these resolutions. The Board of Directors recommendsthis enabling resolution for the approval of members.
By order of the Board of DirectorsFor Aryan Energy Private Limited
Place : Gurgaon Sd/-Date : 15th September, 2010 (R.S. Sindhu)
Chairman
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To,The Members,
Your Directors are pleased to present the Ninth Annual Report and audited accounts for the financial year ended 31st
March, 2010:
1. FINANCIAL RESULTSThe financial performance of the Company, for the year ended March 31, 2010 is summarised below
(Rs. in Lacs)
Particulars Year ended on Year Ended on31-03-2010 31-03-2009
Gross Income from Operations 1,556.60 3,826.11Net Profit before Interest , Tax & Depreciation(EBIDTA) (742.30) 401.46
Less: Interest & Finance Charges 972.77 922.68Net Profit/(Loss) before Tax & Depreciation (PBDT) (1,715.06) (521.22)
Less: Depreciation 415.60 467.16Net Profit/(Loss) after Depreciation before tax (PBT) (2,130.67) (988.38)
Less: Provision for Income tax – Current .11 0Provision for Income tax – Deferred 0 0Provision for Fringe Benefit tax- Current 0 3.99Provision for Wealth Tax 0 0.46Net Profit/(Loss) after Tax (PAT) (2,130.78) (992.83)
Add: Balance in Profit & Loss Appropriation Account brought (684.34) 308.49forward from last yearBalance carried forward to next year (2,815.12) (684.34)
2. OPERATIONS
During the year the total income of the Company year Rs.15,56,59,286 as compare with Rs. 38,26,11,185 duringprevious year. The Net Loss during the year was Rs.21,30,78,013 as compared with loss of Rs. 9,92,83,039 duringprevious year.
3. DIVIDEND
In view of losses during the year under review, your Directors do not recommend any dividend for the financialyear ended on 31st March, 2010.
4. PUBLIC DEPOSITS
The Company has not invited / accepted any public deposits under section 58A & 58AA of the Companies Act,1956 during the financial year ended on 31st March, 2010.
5. DIRECTORS
During the year under review, Sh. Niten Malhan continued as Nominee Director on Board of Directors of theCompany on behalf of Pineridge Investment Limited. Sh. Vrit Pal Sindhu, Sh. Ajay Mrig and Sh. Virender KumarSehgal were appointed as Additional Director effective June 28, 2010. In terms of Section 260 of the Companies Act,1956 they shall hold office only upto the date of the ensuing Annual General Meeting. The Company has receivedrequisite notice in writing from a member proposing his candidature for the office of Director liable to retire byrotation. Further, Sh. Rajan Singh Arora and Sh. Arjun Kumar, Directors of the Company have resigned from theDirectorship of the Company w.e.f. 17th day of August, 2009.
Sh. Rudra Sen Sindhu and Sh. Ganesh Chandra Mrig, Directors, retire by rotation and being eligible, offer themselvesfor reappointment at the ensuing Annual General Meeting.
6. AUDIT COMMITTEE
As required pursuant to Section 292A of the Companies Act, 1956, the details of composition of Audit Committeeare given hereunder:
DIRECTORS’ REPORT
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1. Sh. Rudra Sen Sindhu2. Sh. Ganesh Chandra Mrig and3. Sh. Vrit Pal SindhuSh. Rudra Sen Sindhu is the Chairman of the Audit Committee.
7. AUDITORS REPORT
In the Auditor’s Report for the year ending on 31 March, 2010, Auditors have made certain observations withregard to the matter that the management has not carried out the impairment analysis in accordance with therequirements of Accounting Standard AS -28 “Impairment of Assets” in respect of one of its washery having agross block of Rs. 113,918,327 and a net block of Rs 64,390,409 as at 31 March 2010, which has not been in operationfor the last two years. In the absence of such an analysis the Auditors are unable to comment on the carryingvalues of the fixed assets of the Company and the consequential impact, if any, on the loss for the year. This wasalso a subject matter of qualification in the Auditors’ report for the previous year.
To the above, the Company states that the Company’s coal washery at Gauri, Maharashtra has been identified asa separate cash generating unit and has been operating at a minimal capacity level for past two years. Further, theCompany does not have any long term contracts for Gauri washery. This indicates that cash generating capacity offixed assets of Gauri washery might have been impaired. Accordingly, management is in the process of testing,wherein future cash flows are being estimated to determine the provision required, if any, in respect of impairmentof fixed assets. Management believes that adjustment to the carrying amount of fixed assets, if any, arising out oftesting would not be material.
Further, in the Auditor’s Report for the year ending on 31 March, 2010, Auditors have made certain observationswith regard to certain transactions aggregating to Rs. 129,27,724 entered into by the Company in the current year,covered under section 297 of the Companies Act, 1956, and in respect of which the Company has not obtained theprior approval of the Central Government as envisaged under that section. In the absence of such approval of theCentral Government. The Auditors are unable to comment on the impact, if any, that the above non compliancemay have on the financial statements of the Company.
To the above, the Company states that the Company has during the year entered into transactions of purchasesand sales with private companies, in which director(s) of the Company are director(s). In majority of the cases, theCompany has taken the relevant approvals from the statutory authorities i.e. Central Government but in case ofany lapse due to commission/ omission, the necessary corrective action is being initiated.
Further, in the Auditor’s Report for the year ending on 31 March, 2010, Auditors have made certain observationswith regard to Material discrepancies were noticed on verification between the physical stocks and the book records.
To the above, the Company states that the abovementioned discrepancies were found at Inderam Plant of theCompany. The Company closed this plant and started disposing the entire washery rejects lying at Plant. Due toclosure of Plant, sales of washery rejects now being made represents actual stock which is being extracted from thepiles. As physical verification of the washery rejects had been carried out based on certain technical estimates, theaccumulated washery rejects represents the accumulated stock over the period of time.
Further, in the Auditor’s Report for the year ending on 31 March, 2010, Auditors have made certain observationswith regard to The Company’s accumulated losses at the end of the financial year are more than fifty per cent of itsnet worth. Further, it has incurred cash losses in the current financial year and in the immediately precedingfinancial year.
To the above, the Company states that the losses are mainly due to the reason that the Company does not have anylong term contracts for Gauri washary. As soon as the Company start getting works the situation will automaticallyimprove and the Company will generate profits and the Net worth of the Company will improve.
Further, in the Auditor’s Report for the year ending on 31 March, 2010, Auditors have made certain observationswith regard to the funds aggregating to Rs. 328,354,630 raised on short-term basis have been used for long-terminvestment.
To the above, the Company states that the above situation is mainly due to accumulated losses which have been takeninto consideration for the purpose of calculation of net worth of the Company. Further, the Company does not haveany long term contracts for Gauri washary. To tide over the financial problems due to non-availability of work,Company borrowed funds to meets its day-to-day requirements. As soon as the Company start getting works it willrepay short term loans and the situation will automatically improve as the Net worth of the Company will improve.
Further, the Company is discharging its tax liability in time, however, in case there is some delay in dischargingthe same, the Company will take up the issue with appropriate authority for condoning the delay and take remedialaction so that such lapse does not occur in future.
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8. APPOINTMENT OF AUDITORS
M/s B S R & Company, Chartered Accountants, retire at the conclusion of the ensuing Annual General Meetingand being eligible have offered themselves for re-appointment. The Company has received a certificate from thempursuant to section 224(1B) confirming their eligibility for re-appointment. Yours Directors recommend their re-appointment.
9. DISCLOSURES UNDER SECTION 217 OF THE COMPANIES ACT, 1956
Except as disclosed elsewhere in the report, there have been no material changes and commitments, which canaffect the financial position of the Company between the end of financial year and the date of report.
As required under Section 217(2) of the Companies Act, 1956, the Board of Directors inform the members thatduring the financial year there has been no change:
• in the nature of Company’s business,
• in the classes of business in which the Company has an interest.
CONSERVATION OF ENERGY, TECHNILOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS ANDOUTGO
The provision of section 217(1) (e) of the Companies Act, 1956 is not applicable to our Company. Hence, Statementdetailing the particulars required under the said section read with the Companies (Disclosures of particulars in thereport of Board of Directors) Rules, 1988 are not being furnished. There was no foreign exchange earning andoutgo in the Company during the financial year.
10. PARTICULARS OF EMPLOYEES U/S 217(2A) OF COMPANIES ACT, 1956
None of the employees of the Company has drawn salary in excess of the limits prescribed in the said section readwith the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and hence no suchlist is being provided.
11. DIRECTOR RESPONSIBILITY STATEMENT
As per the provisions of Section 217(2AA) of the Companies Act, 1956 your directors make the Statement:
(a) That in preparation of the Accounts for the financial year ended 31st March, 2010; the applicable AccountingStandards have been followed along with proper explanations relating to material departures.
(b) That the Directors have selected such Accounting Policies and applied them consistently and made judgmentsand estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of theCompany at the end of the financial year and of the profit of the Company for that period.
(c) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting recordsin accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Companyand for preventing and detecting fraud and other irregularities and;
(d) That the Directors have prepared the accounts for the financial year ended 31st March 2010 on a going concernbasis.
12. ACKNOWLEDGEMENT
Your directors would like to place their grateful appreciation for the assistance and co-operation received from theCompany’s bankers during the year under review. The Directors also acknowledge with appreciation the supportand co-operation rendered by various Govt. Agencies and Departments. Your Directors would also wish to placeon record their deep sense of appreciation for the continued support of all the investors of the Company. YourDirectors also acknowledge the hard work, dedication and unstinting efforts of the employees. The directors alsowish to thank Pineridge Investments Ltd (an affiliate of Warburg Pincus Group) and Sh. Niten Malhan, theirrepresentative director for having supported the business plans of the Company to the fullest extent.
By order of the Board of DirectorsFor Aryan Energy Private Limited
Place : Gurgaon Sd/-Date : 15th September, 2010 (R.S. Sindhu)
Chairman
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Auditors’ Report
The Members,Aryan Energy Private Limited
We have audited the attached Balance Sheet of Aryan Energy Private Limited (“the Company”) as at 31 March 2010, theProfit and Loss Account and the Cash Flow Statement (“the financial statements”) of the Company for the year endedon that date, annexed thereto. These financial statements are the responsibility of the Company’s management. Ourresponsibility is to express an opinion on these financial statements based on our audit.We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards requirethat we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principles used and significant estimatesmade by management, as well as evaluating the overall financial statement presentation. We believe that our auditprovides a reasonable basis for our opinion.As required by the Companies (Auditor’s Report) Order, 2003 (“the Order”) issued by the Central Government of Indiain terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure, a statement on thematters specified in paragraphs 4 and 5 of the said Order.Further to our comments in the Annexure referred to above, we report that:a) subject to our comments in paragraph (f) below, we have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our audit;b) in our opinion, proper books of account as required by law have been kept by the Company so far as appears from
our examination of those books;c) the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement
with the books of account;d) subject to our comments in paragraph (f) below, in our opinion, the Balance Sheet, the Profit and Loss Account and the
Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C)of Section 211 of the Companies Act, 1956;
e) on the basis of written representations received from the directors, as on 31 March 2010, and taken on record by theBoard of Directors, we report that none of the directors is disqualified as on 31 March 2010 from being appointed asa director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;
f) attention is invited to note III(2a) of schedule 18 to the financial statements. The management has not carried out the impairmentanalysis in accordance with the requirements of Accounting Standard AS -28 “Impairment of Assets” in respect of one of itswashery having a gross block of Rs. 113,918,327 and a net block of Rs 64,390,409 as at 31 March 2010, which has not been inoperation for the last two years. In the absence of such an analysis we are unable to comment on the carrying values of the fixedassets of the Company and the consequential impact, if any, on the loss for the year. This was also a subject matter of qualificationin our report for the previous year;
g) attention is invited to note III(12) of schedule 18 with regard to certain transactions aggregating to Rs. 12,927,724 entered intoby the Company in the current year, covered under section 297 of the Companies Act, 1956, and in respect of which theCompany has not obtained the prior approval of the Central Government as envisaged under that section. In the absence of suchapproval of the Central Government, we are unable to comment on the impact, if any, that the above non compliance may haveon the financial statements of the Company; and
h) subject to our comments in paragraphs (f) and (g) above, the impact of which is not ascertainable, in our opinion and to thebest of our information and according to the explanations given to us, the said accounts give the information requiredby the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2010;(ii) in the case of the Profit and Loss Account, of the loss for the year ended on that date; and(iii)in the case of the Cash Flow Statement, of the cash flows for the year ended on that date
For B S R & CompanyChartered AccountantsFirm Registration No. :125032W
Sd/-Manish Gupta
Place : Gurgaon PartnerDate : 15 September 2010 Membership No.: 095037
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(Referred to in our report of even date)
(i) (a) The Company has maintained records showing particulars, including details of situation of fixed assets.
(b) According to the information and explanations given to us the Company has a programme of physicalverification of its fixed assets by which all fixed assets are verified in a phased manner over a period of twoyears. In accordance with such programme, the Company has during the year physically verified its fixedassets. In our opinion, this periodicity of physical verification is reasonable having regard to the size of theCompany and the nature of its assets. The Company has started reconciling the physical verification resultswith book records and expects no material adjustment in this regard.
(c) The fixed assets disposed off during the year were not substantial and therefore do not affect the goingconcern assumption.
(ii) (a) Inventories have been physically verified by the management during the year. In our opinion, the frequencyof such verification is reasonable.
(b) The procedures for the physical verification of inventories followed by the management in respect of theinventories physically verified during the year are reasonable and adequate in relation to the size of theCompany and the nature of its business.
(c) The Company is maintaining proper records of inventory. Material discrepancies were noticed on verificationbetween the physical stocks and the book records and such discrepancies have been appropriately dealt with inthe books of accounts.
(iii) (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties coveredin the register maintained under section 301 of the Companies Act, 1956.
(b) The Company has taken a loan from its holding company covered in the register maintained under Section301 of the Companies Act, 1956. The maximum amount outstanding during the year was Rs. 733,559,772 andthe year end balance of such loan is Rs. 733,559,772.
(c) In our opinion, the rate of interest and other terms and conditions on which the loans taken from its holdingcompany covered in the register maintained under section 301 of the Companies Act, 1956 is prima facie, notprejudicial to the interests of the Company.
(d) In the case of loans taken from the holding company, covered in the register maintained under section 301,the principal and interest is repayable on demand. The Company has been regular in the payment of theprincipal and interest on such loans as and when demanded by the holding company.
(iv) In our opinion and according to the information and explanations given to us, and having regard to the explanationthat purchases of certain items of fixed assets are for the specialised requirements of the Company and suitablealternative sources are not available to obtain comparable quotations, there is an adequate internal control systemcommensurate with the size of the Company and the nature of its business with regard to sale of goods andservices, purchase of inventories and fixed assets. In our opinion and according to the information andexplanations given to us, there is no continuing failure to correct major weaknesses in internal control system.
(v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts orarrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register requiredto be maintained under that section.
(b) In our opinion and according to the information and explanations given to us, the transactions made inpursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rs. 5 lakhs withany party during the year have been made at prices which are reasonable having regard to the prevailingmarket prices at the relevant time except for purchases of certain items of fixed assets which are for thespecialised requirements of the Company and suitable alternative sources are not available to obtaincomparable quotations. However, based on the information and explanations provided to us the same appearto be reasonable.
Further as explained in more detail in paragraph (g) of our audit report, the Company has not obtained the priorapproval of the Central Government in respect of certain transactions covered under Section 297 of the Companies Act,1956 and entered in the register maintained under Section 301 of the said Act.
(vi) The Company has not accepted any deposits from the public.
(vii) In our opinion, the Company has an adequate internal audit system commensurate with the size and nature ofits business.
Annexure to the Auditors’ Report
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(viii) The Central Government has not prescribed the maintenance of cost records under section 209(1)(d) of theCompanies Act, 1956 for any of the products sold and services rendered by the Company.
(ix) (a) According to the information and explanations given to us and on the basis of our examination of the recordsof the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory duesincluding Provident Fund, Income-tax, Wealth tax, Sales-tax, Cess and other material statutory dues havegenerally been regularly deposited during the year by the Company with the appropriate authorities, thoughthere has been a slight delay in a few cases. Further, as explained to us, the Company did not have any dueson account of Employees’ State Insurance, Excise duty, Customs duty and Investor Education and ProtectionFund.
There were no dues on account of Cess under Section 441A of the Companies Act, 1956 since the date fromwhich the aforesaid section comes into force has not yet been notified by the Central Government.
According to the information and explanations given to us, no undisputed amounts payable in respect ofProvident Fund, Income tax, Wealth tax, Sales tax, Service tax, Cess and other material statutory dues werein arrears as at 31 March 2010 for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us, there are no dues of Income tax, Wealth tax, Salestax, Service tax and Cess which have not been deposited with the appropriate authorities on account of anydispute.
Further, as explained to us, the provisions of Employees’ State Insurance, Customs duty, Excise duty andInvestor Education and Protection Fund are not applicable to the Company.
(x) The Company’s accumulated losses at the end of the financial year are more than fifty per cent of its net worth. Further, ithas incurred cash losses in the current financial year and in the immediately preceding financial year.
(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted inrepayment of dues to its bankers. Further, the Company did not have any outstanding dues to any financialinstitution or to any debenture holders during the year.
(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares,debentures and other securities.
(xiii) In our opinion and according to the information and explanations given to us, the Company is not a chit fund ora nidhi/ mutual benefit fund/ society.
(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares,securities, debentures and other investments.
(xv) According to the information and explanations given to us, the Company has not given any guarantee for loanstaken by others from banks or financial institutions.
(xvi) The Company did not have any term loan outstanding during the year.
(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of theCompany, we are of the opinion that the funds aggregating to Rs. 328,354,630 raised on short-term basis have been used forlong-term investment.
(xviii) The Company has not made any preferential allotment of shares to companies/firms/parties covered in theregister maintained under section 301 of the Companies Act, 1956.
(xix) The Company did not have any outstanding debentures during the year.
(xx) The Company has not raised any money by public issues.
(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed orreported during the course of our audit
For B S R & CompanyChartered AccountantsFirm Registration No. :125032W
Sd/-Manish Gupta
Place : Gurgaon PartnerDate : 15 September 2010 Membership No.: 095037
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Schedule As at As at31 March 2010 31 March 2009
I SOURCES OF FUNDS
Shareholders’ fundsShare capital 1 178,500,000 178,500,000Reserves and surplus 2 54,000,000 54,000,000
232,500,000 232,500,000Loan fundsSecured loans 3 124,617,924 294,240,918Unsecured loans 4 733,559,772 376,790,639
Total 1,090,677,696 903,531,557
II APPLICATION OF FUNDS
Fixed AssetsGross Block 5 566,848,634 567,089,566Less : Accumulated depreciation 287,723,369 248,221,853
Net Block 279,125,265 318,867,713Capital work in progress 216,948 162,180
279,342,213 319,029,893Current assets, loans and advancesInventories 6 50,714,397 73,066,933Sundry debtors 7 378,313,657 350,639,004Cash and bank balances 8 67,096,357 33,185,218Loans and advances 9 83,437,180 127,726,603Other current assets 10 412,326 2,464,720
579,973,917 587,082,478Less: Current liabilities and provisions 11Current liabilities 47,813,297 68,670,936Provisions 2,337,554 2,344,282
50,150,851 71,015,218
Net current assets 529,823,066 516,067,260
Profit and loss account 281,512,417 68,434,404
Total 1,090,677,696 903,531,557
Significant accounting policies and notes to the accounts 18
The accompanying notes and schedules form an integral part of the financial statements.As per our report of even date attached
For B S R & Company For and on behalf of the Board of DirectorsChartered AccountantsFirm registation no.128032W
Sd/- Sd/- Sd/- Sd/-Manish Gupta R.S. Sindhu G.C. Mrig Praveen KatariaPartner Chairman Director Company SecretaryMembership no.:095037Place : GurgaonDate : 15 September 2010
Aryan Energy Private LimitedBalance Sheet as at 31 March 2010(All amounts are in Rupees)
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Schedule For the year ended For the year ended31 March 2010 31 March 2009
IncomeWashery operations
- Raw coal benefications and allied receipts 24,681,358 180,538,473- Sale of coal / coal rejects 126,289,684 194,977,106
Other income 12 4,688,244 7,095,606
155,659,286 382,611,185
ExpenditurePurchase of coal 61,309,745 3,991,065Decrease/(increase) in stock of coal 13 18,819,459 (8,113,585)Direct expenses 14 53,517,857 268,179,913Personnel cost 15 17,294,027 19,988,616Administrative and selling expenses 16 78,948,133 60,705,163Depreciation 5 41,559,760 46,716,177Finance cost 17 97,277,019 89,982,041
368,726,000 481,449,390
Profit/ (loss) before tax (213,066,713) (98,838,205)- Current tax for earlier years 11,300 -- Fringe benefit tax - 399,200- Provision for wealth tax - 45,634
Profit/ (loss) for the year after taxes (213,078,013) (99,283,039)Balance brought forward (68,434,404) 30,848,635
Balance carried forward to balance sheet (281,512,417) (68,434,404)
Basic and diluted loss per share (face value of Rs. 100 each) (119.37) (55.62)(Refer to note III 3 of schedule 18)
Significant accounting policies and notes to the accounts 18
Aryan Energy Private LimitedProfit and Loss Account for the year ended 31 March 2010(All amounts are in Rupees)
The accompanying notes and schedules form an integral part of the financial statementsAs per our report of even date attached
For B S R & Company For and on behalf of the Board of DirectorsChartered AccountantsFirm registation no.128032W
Sd/- Sd/- Sd/- Sd/-Manish Gupta R.S. Sindhu G.C. Mrig Praveen KatariaPartner Chairman Director Company SecretaryMembership no.:095037
Place : GurgaonDate : 15 September 2010
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For the year ended For the year ended31 March 2010 31 March 2009
A) Cash Flow from Operating Activities :Net profit before tax (213,066,712) (98,838,205)Adjustment for :- Depreciation 41,559,760 46,716,177- Profit on Sale of assets (893,073) -- Bad debts 3,011,516 30,884,736- Interest and finance cost 97,277,019 89,982,041- Provision for doubtful advances 50,063,822 -- Interest income (1,067,654) (3,466,664)
Operating profit before working capital changes (23,115,322) 65,278,085Adjustment for :
- (Increase)/ decrease in sundry debtors (30,686,169) 106,092,966- (Increase)/ decrease in loans and advances (7,422,480) 15,801,812- (Increase)/ decrease in inventories 22,352,536 (11,102,896)- Increase/ (decrease) in current liabilities and provisions (20,655,624) (61,181,211)
Cash generated from operations (59,527,059) 114,888,756- Fringe benefit tax paid (208,743) (463,215)- Income tax paid 1,636,781 (19,458,851)
Net cash (used in)/generated from operating activities (58,099,021) 94,966,690B) Cash flows from investing activities
- Purchase of fixed assets (4,987,146) (25,066,371)- Sale of fixed assets 4,008,138 -- Interest income 3,120,048 3,521,794
Net cash from/(used in) investing activities 2,141,040 (21,544,577)C) Cash flows from financing activities
- Repayments of term loans and vehicle loans - (40,091,238)- Inter-corporate deposit taken during the year 372,245,000 249,000,000- Repayments of inter-corporate deposit (29,520,000) (198,600,000)- Net amount taken/(repaid) from cash credit loans (169,622,994) (2,974,937)- Finance cost paid (83,232,886) (73,617,480)
Net cash from/(used in) financing activities 89,869,120 (66,283,655)Net increase/ (decrease) in cash flows during the year (A+B+C) 33,911,139 7,138,458
Cash and Cash equivalents as at the beginning of the yearCash in hand 1,391,836 936,701Balances with scheduled banks- on current account 17,505,158 11,636,820- on deposit accounts 14,288,224 13,473,239
33,185,218 26,046,760Cash and Cash equivalents as at the end of the year
Cash in hand 1,207,021 1,391,836Cheques in hand 2,000,000Balances with scheduled banks- on current account 23,491,744 17,505,158- on deposit accounts 40,397,592 14,288,224
67,096,357 33,185,218Note:The cash flow statement has been prepared in accordance with ‘Indirect method’ as set out in the Accounting Standard(AS)-3 on ‘Cash Flow Statement’, as specified in the Companies (Accounting Standard) Rules, 2006
Aryan Energy Private LimitedCash Flow Statement for the year ended 31 March 2010(All amounts are in Rupees)
For B S R & Company For and on behalf of the Board of DirectorsChartered AccountantsFirm registation no.128032W
Sd/- Sd/- Sd/- Sd/-Manish Gupta R.S. Sindhu G.C. Mrig Praveen KatariaPartner Chairman Director Company SecretaryMembership no.:095037Place : GurgaonDate : 15 September 2010
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Particulars As at As at31 March 2010 31 March 2009
Schedule 1 - Share capital
Authorised capital2,000,000 (previous year 2,000,000) equity shares of Rs. 100 each 200,000,000 200,000,000
200,000,000 200,000,000Issued, subscribed and paid up capital1,785,000 (previous year 1,785,000) equity shares ofRs.100 each fully paid up 178,500,000 178,500,000
Of the above 1,381,250 (previous year 1,381,250) equity sharesof Rs. 100 each are held by ACB (India) Limited(fomerly Aryan Coal Benefications Private Limited),the holding company.
178,500,000 178,500,000
Schedule 2 - Reserves & surplus
Securities premium account- Opening balance 54,000,000 54,000,000- Additions during the year - -- Deletions during the year - -
Closing Balance 54,000,000 54,000,000
Schedule 3 - Secured loans
Loans and advances from banks- Cash credit* 124,617,924 294,240,918
124,617,924 294,240,918
*Secured against exclusive charge on all current and fixed assets of the Company. Further, secured by unconditionaland irrevocable corporate guarantee of the holding company.
Schedule 4 - Unsecured loans
Other loans and advances- Intercorporate deposit from holding company 682,700,000 339,975,000- Interest accrued and due on above 50,859,772 36,815,639
733,559,772 376,790,639
Aryan Energy Private LimitedSchedules forming part of the accounts(All amounts are in Rupees)
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As at As at31 March 2010 31 March 2009
Schedule 6 - Inventories(At lower of cost and net realisable value)
Stores and spare parts 16,161,973 18,564,284Work in progress - 5,219,883Raw Coal 8,802,462 -Coal rejects 15,306,578 49,282,766Beneficated Coal 10,443,384 -
50,714,397 73,066,933
Schedule 7 - Sundry debtors(Unsecured, considered good unless otherwise stated)
Debts outstanding for a period exceeding six months* 305,311,299 61,671,491Other debts 73,002,358 288,967,513
378,313,657 350,639,004
*Includes Rs. 40,333,710 (previous year Rs. 4,833,122) due from Kartikay Coal Washeries Private Limited and Rs. 2,241,802(previous year Rs. Nil) due from Global Coal & Mining Private Limited, companies in which certain directors of thecompany are directors. Kartikay Coal Washeries Private Limited and Global Coal & Mining Private Limited are alsocompanies under the same management as defined in section 370 (1-B) of the Companies Act, 1956
Schedule 8 - Cash and bank balances
Cash in hand 1,207,021 1,391,836Cheques in hand 2,000,000Balances with scheduled banks:- on current accounts 23,491,744 17,505,158- on deposit accounts* 40,397,592 14,288,224
67,096,357 33,185,218
*Includes Rs. 40,397,592 (previous year Rs. 14,098,400) pledged with banks as margin money against guarantees given.
Schedule 9 - Loans and advances(Unsecured, considered good unless otherwise stated)
Advances recoverable in cash or in kind or for value to be received- considered good 25,656,705 71,385,872- considered doubtful 50,063,822 -
75,720,527 71,385,872Less: Provision for doubtful advances 50,063,822 -
25,656,705 71,385,872Security deposits paid 10,141,488 10,338,525Advance income tax [net of provision for tax Rs. 32,994,802 47,638,987 46,002,206(previous year Rs. 32,994,802)]
83,437,180 127,726,603
Schedule 10 - Other current assets
Income accrued but not due 412,326 2,464,720
412,326 2,464,720
Aryan Energy Private LimitedSchedules forming part of the accounts(All amounts are in Rupees)
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Aryan Energy Private LimitedSchedules forming part of the accounts(All amounts are in Rupees)
As at As at31 March 2010 31 March 2009
Schedule 11 - Current liabilities and provisions
Sundry creditors (refer note III 12 of schedule 18)-due to micro and small enterprises - --due to others* 31,262,947 31,575,704
Advance from customers 6,864,000 -Security deposits from vendors 23,007 110,129Other liabilities** 9,663,343 36,985,103
47,813,297 68,670,936
* Includes salaries and wages payable Rs. 455,159 (previous year Rs. Nil)** Includes contribution to provident fund Rs. 100,315 (previous year Rs. 81,708)
ProvisionsProvision for gratuity (refer note III (1) of schedule 18) 2,316,704 2,069,055Provision for fringe benefit tax [net of advance fringe benefit tax 10,457 219,200of Rs. 1,015,856 (previous year Rs. 1,128,652)]Provision for wealth tax 10,393 56,027
2,337,554 2,344,282
Schedule 12 - Other income
Interest income from banks 1,067,654 3,466,664[Gross of tax deducted at source Rs. 101,390 (previous year Rs. 241,688)]Interest income from others 2,440,310 1,173,243[Gross of tax deducted at source Rs. 254,621 (previous year Rs. 9,407)]Sale of scrap 700 1,833,910Profit on sale of Fixed Assets 893,073 -Miscellaneous Income 286,507 621,789
4,688,244 7,095,606
Schedule 13 - Increase/(decrease) in stock
Closing stockWork in progress - 4,089,117Raw Coal 8,802,462 -Coal rejects 15,306,578 49,282,766Beneficated Coal 10,443,384 -
34,552,424 53,371,883Opening stockWork in progress 4,089,117 4,188,607Coal rejects 49,282,766 41,069,691
53,371,883 45,258,298
18,819,459 (8,113,585)
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For the year ended For the year ended31 March 2010 31 March 2009
Schedule 14 - Direct expenses
Power and fuel 5,466,220 17,494,261Transportation charges 27,744,902 161,427,258Loading and handling charges 1,475,293 9,944,309Beneficiation charges 8,489,159 50,531,953Sampling charges - 356,225Repair and maintenance
-Building 1,316,800 542,446-Plant and machinery 9,025,483 27,883,461
53,517,857 268,179,913
Schedule 15 - Personnel cost
Salaries, wages and bonus 15,467,389 17,100,701Contribution to provident and other funds 1,335,129 1,364,900Staff welfare expenses 491,509 1,523,015
17,294,027 19,988,616
Schedule 16 - Administrative and selling expenses
Rent (refer note III 11 of schedule 18) 9,126,584 7,763,959Rates and taxes 2,674,927 4,471,025Legal and professional 3,319,894 5,259,468Security charges 1,995,022 1,833,549Bank charges 3,258,064 2,285,631Insurance 1,667,283 1,910,206Printing and stationary 156,919 364,477Communication 602,507 933,322Office maintenance 286,313 608,011Travelling and conveyance 2,232,782 3,771,847Donation 84,619 188,050Business promotion 467,881 430,882Bad debts 3,011,516 30,884,736Provision for doubtful advances (refer to note 11 of schedule 18) 50,063,822 -
78,948,133 60,705,163
Schedule 17 - Finance cost
Interest on- Term loans - 3,324,726- Cash credit 40,766,161 39,054,989- Inter corporate deposit 56,510,858 47,602,326
97,277,019 89,982,041
Aryan Energy Private LimitedSchedules forming part of the accounts(All amounts are in Rupees)
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I. Background
Aryan Energy Private Limited (‘the Company’) was incorporated in India on 23 February 2001 to beneficiate andtrade in coal. The Company is a subsidiary of ACB (India) Limited (formerly known as Aryan Coal BeneficationsPrivate Limited).
II. Significant accounting policies
1) Accounting convention
The financial statements are prepared under the historical cost convention in accordance with the GenerallyAccepted Accounting Principles (‘GAAP’) in India and mandatory accounting standards as specified in theCompanies (Accounting Standard) Rules, 2006, the provisions of the Companies Act, 1956, to the extentapplicable, and as adopted consistently by the Company.
2) Going concern
Though, the net worth of the Company has been fully eroded as at 31 March 2010, the directors consider itappropriate to prepare the accounts on a going concern basis in view of the committed support from theholding company as evidenced through the letter of financial support. Accordingly, these accounts have beenprepared on a going concern basis i.e. the assets and liabilities are recorded on the basis that the company willbe able to realise its assets and discharge its liabilities in the normal course of the business.
3) Use of estimates
The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP)in India requires management to make estimates and assumptions that affect the reported amounts of assetsand liabilities and the disclosure of contingent liabilities on the date of the financial statements. Actual resultscould differ from those estimates. Differences between the actual results and estimates are recognised in theyear in which the results are known or materialized. Any revision to accounting estimates is recognisedprospectively in current and future periods.
4) Fixed assets and depreciation
Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. The cost of fixedassets includes inward freight, duties, taxes and incidental expenses related to acquisition and installationincurred upto the date of commissioning of the assets. Fixed assets under construction, advances paid towardsacquisition of fixed assets and cost of asset not ready to use before the year end, are disclosed as capital workin progress. Assets held for disposal are stated at their estimated residual values as at the balance sheet date.
Depreciation is provided on pro-rata basis as per written down value (WDV) method at rates based uponmanagement estimates of useful lives of the assets. Such rates are equal to the rates prescribed in Schedule XIVof the Companies Act, 1956.
Assets individually costing upto Rs. 5,000 are fully depreciated in the year of purchase.
5) Impairment of assets
The carrying amounts of assets are reviewed at each balance sheet date in accordance with Accounting Standard28 ‘Impairment of Assets’, to determine whether there is any indication of impairment. If any such indicationexists, the asset’s recoverable amount is estimated. An impairment loss is recognised whenever the carryingamount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are recognisedin the profit and loss account. An impairment loss is reversed if there has been a change in the estimates usedto determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carryingamount does not exceed the carrying amount that would have been determined net of depreciation oramortisation, if no impairment loss had been recognised.
Aryan Energy Private LimitedSchedules forming part of the accounts(All amounts are in Rupees)
Schedule 18: Significant accounting policies and notes to the accounts
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Aryan Energy Private LimitedSchedules forming part of the accounts(All amounts are in Rupees)
Schedule 18: Significant accounting policies and notes to the accounts
6) Inventories (valued at lower of cost and net realisable value):
Inventories are valued at lower of cost and net realisable value. The basis for determination of cost of variouscategories of inventory is as follows:
(a) Stores and spare parts:Stores and spare parts are computed on first in first out basis (FIFO).
(b) Raw coal and beneficiated coal:These are valued at cost of raw coal (computed on FIFO) including cost attributable to the category of coal,based on appropriate basis to bring the coal to its present location and condition.
(c) Work in progress :Work in progress represents the cost incurred on beneficiation of coal on behalf of customers towards rawcoal transportation, beneficiation of raw coal and transportation of beneficiated coal to bring the coal to itspresent location and condition.
(d) Coal rejects:These consist of rejects generated out of coal beneficiation process or coal rejects purchased directly. Thecost is ascertained by apportioning the total cost attributable to the category of coal generated/ purchased,based on an appropriate basis.
7) Revenue recognition
Beneficiation operations:
(a) Raw coal beneficiations and allied receipts:Revenue from raw coal beneficiation and allied receipts is recognised on attainment of the said activity.Such activity is regarded as being attained when no significant uncertainty exists regarding the amount ofconsideration that will be derived from the performance of such activity and the activity is completed orsubstantially completed. Revenue represents the invoiced value of net beneficiation receipts.
(b) Sale of coal:Revenue from sale of coal is recognised when coal is dispatched to the customers, which coincides withthe transfer of significant risks and rewards. Sales represent the invoiced value of coal (net of sales tax).
Other incomes:
Interest income:Interest income is recognised on a time proportion basis considering the contracted rate of return.
8) Employee benefits
All employee benefits payable/available within twelve months of rendering the service are classified as short-term employee benefits. Benefits such as salaries, wages and bonus etc., are recognised in the Profit and LossAccount in the period in which the employee renders the related service.
Defined contribution plans: A defined contribution plan i.e. provident fund is a post-employment benefitplan under which an entity pays fixed contributions into a separate entity and will have no legal and constructiveobligation to pay further amounts. Obligations for contributions to defined contribution provident plans arerecognised as an employee benefit expense in the Profit and Loss Account when they are due. Prepaidcontributions are recognised as an asset to the extent that a cash refund or a reduction in future payments isavailable.
Defined benefit plans: A defined benefit plan i.e. gratuity, is a post-employment benefit plan. The Company’sgratuity plan is a defined benefit plan.
The Company’s net obligation in respect of defined benefit plans is calculated separately for each plan byestimating the amount of future benefit that employee have earned in return for their service in the current andprior periods; that benefit is discounted to determine its present value. Any unrecognised past service costs
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Aryan Energy Private LimitedSchedules forming part of the accounts(All amounts are in Rupees)
Schedule 18: Significant accounting policies and notes to the accounts
and the fair value of any plan assets are deducted. The discount rates used for determining the present value ofobligation under defined benefit plans, is based on the market yields on Government securities as at the balancesheet date, having maturity periods approximating to the terms of related obligations. The calculation isperformed annually by an independent actuary using the projected unit credit actuarial method. When thecalculation results in a benefit to the Company, the asset is recognised only to the extent of the present value ofany economic benefits available in the form of refunds from the plan or reductions in future contributions tothe plan.
Actuarial gains and losses are recognised immediately in the Profit and Loss Account. Gains or losses on thecurtailment or settlement of any defined benefit plan are recognised when the curtailment or settlement occurs.
9) Borrowing costs
Borrowing costs that are attributable to the acquisition of qualifying assets are capitalised as part of the cost ofsuch assets. All other borrowing costs are charged to revenue.
10) Earnings per share
In computing earnings per share, the Company considers net profit/(loss) after tax. Basic earnings per shareare computed by the weighted average number of equity shares outstanding during the year. Diluted earningsper share are computed using the weighted average number of equity and dilutive equivalent shares outstandingduring the year, except where results would be anti-dilutive.
11) Taxes
Income-tax expenses comprise current tax (i.e. the amount of tax for the period determined in accordance withthe Income Tax Act, 1961) and deferred tax charge or credit (reflecting the tax effects of the timing differencesbetween the accounting income and taxable income for the period). The deferred tax charge or credit and thecorresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted orsubstantively enacted by the balance sheet date. Deferred tax assets are recognised only to the extent there isreasonable certainty that the assets can be realised in the future. However, where there is unabsorbed depreciationor carry forward loss under taxation laws, deferred tax assets are recognised only if there is virtual certainty ofrealization of such assets. Deferred tax assets are reviewed at each balance sheet date and written down orwritten up to reflect the amount that is reasonably/virtually certain (as the case may be) to be realised.
Minimum Alternate Tax paid in accordance with the tax laws, which gives rise to future economic benefits inthe form of adjustment of future income tax liability, is considered as an asset if there is convincing evidencethat the Company will pay normal tax. Accordingly, it is recognised as an asset in the balance sheet when it isprobable that the future economic benefit associated with it will flow to the Company and the asset can bemeasured reliably.
Fringe Benefits Tax (‘FBT’) has been abolished w.e.f. 1 April 2009, therefore no provision is made in the currentfinancial year.
12) Provisions and contingencies
The Company recognises a provision when there is a present obligation as a result of a past event and it is morelikely than not that there will be an outflow of resources embodying economic benefits to settle such obligationand the amount of such obligation can be reliably estimated. Provisions are not discounted to its present value,and are determined based on the management’s best estimate of the amount of obligation required at the yearend. These are reviewed at each balance sheet date and adjusted to reflect current management estimates.
Contingent liabilities are disclosed in respect of possible obligations that have arisen from past events and theexistence of which will be confirmed only by the occurrence or non occurrence of future events not whollywithin the control of the Company. Contingent liabilities are also disclosed for present obligations in respect ofwhich it is not probable that there will be an outflow of resources or a reliable estimate of the amount ofobligation cannot be made. When there is a possible obligation or a present obligation where the likelihood ofan outflow of resources is remote, no disclosure or provision is made.
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Aryan Energy Private LimitedSchedules forming part of the accounts(All amounts are in Rupees)
Schedule 18: Significant accounting policies and notes to the accounts
III. Notes to accounts
1) Disclosure in respect of employee benefits under Accounting Standard (AS) – 15 “Employee Benefits” prescribedby the Companies (Accounting Standards) Rules, 2006:
(a) Amount of Rs. 1,335,129 (Previous year Rs. 1,364,900) pertaining to employers’ contribution to providentfund is recognised as an expense and included in “Personnel Cost” in Schedule 15.
(b) Gratuity plan
The Company operates a gratuity plan which provides lump sum benefits linked to the qualifying salaryand completed years of service with the Company at the time of separation. Every employee who hascompleted 5 years of continuous service is entitled to receive gratuity at the time of his retirement orseparation from the organization whichever is earlier. However the condition of completion of 5 years ofservice is not applicable where separation is on account of disability or death of an employee. The gratuitybenefit that is payable to any employee, is computed in accordance with the provisions of “The Paymentof Gratuity Act, 1972”.
The Gratuity Fund
The following table sets forth the status of the Gratuity Plan of the Company and the amounts recognised inthe Balance Sheet and Profit and Loss Account.
Particulars Year ended Year ended31 March 2010 31 March 2009
(Rs.) (Rs.)
Changes in the present value of defined benefit obligationProjected benefit obligation at the beginning of year 2,069,055 1,740,094Current service cost 467,910 409,611Interest cost 191,114 160,747Actuarial loss/(gain) (307,529) (241,397)Benefits paid (103,846) -Projected benefit obligation at the end of the year 2,316,704 2,069,055Changes in the fair value of plan assetsFair Value of Plan Assets at the beginning of the year - -Expected return on plan assets - -Contributions 103,846 -Benefits paid (103,846) -Actuarial (loss)/gain - -Fair Value of Plan Assets at the end of the year - -Amount recognised in the balance sheetPresent value of funded obligations - -Fair value of Plan assets - -Present value of unfunded obligations 2,316,704 2,069,055Unrecognized past service cost - -Net liability 2,316,704 2,069,055Expense recognised in the Profit and Loss AccountCurrent service cost 467,910 409,611Interest cost on benefit obligation 191,114 160,747Expected return on plan assets - -Net actuarial (gain)/loss recognised in the year (307,529) (241,397)Benefits paid - -Net gratuity cost 351,495 328,961
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Aryan Energy Private LimitedSchedules forming part of the accounts(All amounts are in Rupees)
Schedule 18: Significant accounting policies and notes to the accounts
Principal actuarial assumptions at the balance sheet date are as follows:
i) Economic assumptions: The principal assumptions are the discount rate and salary escalation rate. Thediscount rate is generally based upon the market yields available on Government bonds at the accountingdate with a term that matches that of the liabilities and the salary growth rate takes account of inflation,seniority, promotion and other relevant factors on long term basis. The assumptions used are summarizedin the following table:
Assumptions as at Assumptions as at31 March 2010 31 March 2009
Discount rate 8.3% 7.7%Salary growth rate 10% 10%
ii) Demographic assumptions:
Assumptions as at Assumptions as at31 March 2010 31 March 2009
Retirement age 60 years 60 yearsMortality table LIC (1994-96) LIC (1994-96)
duly modified duly modifiedEmployee turnover 21-30 years- 5% 21-30 years- 5%
31-40 years- 3% 31-40 years- 3%41-50 years- 2% 41-50 years- 2%51-60 years- 1% 51-60 years- 1%
2) The Company’s coal washery at Gauri, Maharashtra has been identified as a separate cash generating unit andhas been operating at a minimal capacity level for past two years. Further, the Company does not have anylong term contracts for Gauri washery. This indicates that cash generating capacity of fixed assets of Gauriwashery might have been impaired. Accordingly, management is in the process of testing, wherein future cashflows are being estimated to determine the provision required, if any, in respect of impairment of fixed assets.Management believes that adjustment to the carrying amount of fixed assets, if any, arising out of testingwould not be material.
3) Legal and professional expenses include auditors’ remuneration (excluding out of pocket expenses):
Particulars Year ended Year ended31 March 2010 31 March 2009
Statutory audit fees 400,000 500,000Service tax 41,200 51,500
441,200 551,500
4) Installed capacity and production (as certified by the management and relied upon by the auditors, being atechnical matter)
Class of service Unit Installed capacity Actual production
Current year Previous year Current year Previous year
Beneficiation of Coal MT 4,700,000 4,700,000 146,073 932,202
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Aryan Energy Private LimitedSchedules forming part of the accounts(All amounts are in Rupees)
Schedule 18: Significant accounting policies and notes to the accounts
5) Particulars in respect of sales, purchases and stocks of traded goods
Quantitative information in respect of trading of coal:
Particulars Year ended 31 March 2010 Year ended 31 March 2009
Quantity Value Quantity Value(MT) (Rupees) (MT) (Rupees)
Opening stock 164,745 49,282,766 307,196 41,069,691Purchases / generation * 103,170 61,309,745 344,694 3,991,065Gain/(loss) on physical verification 31,754 - 82,073 -Sales 240,443 126,289,684 569,218 194,977,106Closing stock 59,226 34,552,424 164,745 49,282,766
* Represents the cost of purchase of coal through e-booking/e-auction, coal rejects and value of credit notesgiven to various customers for purchase of coal rejects generated through beneficiation of raw coal. All theexpenses relating to processing/re-processing have been included under the head direct expenses.
6) Earnings per share:
Year ended Year ended31 March 2010 31 March 2009
(Rs.) (Rs.)
Profit / (loss) after tax attributable to equity shareholders (Rs.) (213,078,012) (99,283,039)Weighted average number of equity shares outstanding during 1,785,000 1,785,000the year (Nos.)Nominal value per share (Rs.) 100 100Basic earnings per share (119.37) (55.62)
7) Segment Reporting
The Company is primarily engaged in coal beneficiation and allied activities. All these activities are within thecountry. India represents one geographical segment and these activities represent one business segment in thecontext of Accounting Standard 17 on “Segment Reporting”, notified by the Companies (Accounting Standards)Rules, 2006. Accordingly, no disclosure for segment reporting has been made in the financial statements.
8) Deferred tax assets/liabilities included in the Balance Sheet comprise the following:
Particulars For the year ended For the year ended31 March 2010 31 March 2009
(Rupees) (Rupees)
Deferred tax liability arising on account of:Depreciation (19,966,260) (22,603,651)Total (19,966,260) (22,603,651)Deferred tax asset arising on account of:Gratuity 769,551 703,272Provision for doubtful advances 16,629,950 -Unabsorbed tax losses 73,176,350 33,415,105Unabsorbed tax depreciation 37,115,199 26,328,795Total 127,691,050 60,447,172Deferred tax asset recognized to the extent of (19,966,260) (22,603,651)deferred tax liabilityNet deferred tax asset/(liability) - -
No provision for deferred tax asset has been made in view of the losses computed under the normal provisions
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Aryan Energy Private LimitedSchedules forming part of the accounts(All amounts are in Rupees)
Schedule 18: Significant accounting policies and notes to the accounts
of the Income-tax Act, 1961. As at 31 March 2010, the Company has significant unabsorbed depreciation andbusiness losses. In view of absence of virtual certainty of realisation of unabsorbed depreciation and businesslosses, deferred tax asset on this unabsorbed depreciation and business losses has been recognised only to theextent of deferred tax liability.
9) Related Party Disclosures
a) Related party and nature of the relationship where control exists, irrespective of whether or not there havebeen transactions between the related parties:Enterprise having control (holding company):• ACB (India) Limited (formerly Aryan Coal Beneficiations Private Limited)
b) Related party and nature of the relationship with whom transactions have taken place during the year:Enterprise having control (holding company):• ACB (India) Limited (formerly Aryan Coal Beneficiations Private Limited)Fellow subsidiaries:• Aryan Clean Coal Technologies Private Limited• Kartikay Coal Washeries Private Limited• Spectrum Coal and Power LimitedRelatives of key management personnel (Relatives):• Sumati SindhuEnterprises over which key management personnel exercise significant influence (others):• Global Coal & Mining Private Limited• Spectrum Coal and Power Limited (Upto 29th March, 2009)• Orissa Spares & Services• Sainik Mining & Allied Services Limited
c) Related party transactions: (Amount in rupees)
Nature of Transactions For the year ended For the year ended31 March 2010 31 March 2009
Sale of CoalTo fellow subsidiaries - Kartikay Coal Washeries Private Limited 30,987,549 15,362,102To enterprises over which key management personnelexercise significant influence: - Spectrum Coal and Power Limited - 3,000,560 - Global Coal & Mining Private Limited 6,566,100 11,645,460Total 37,553,649 30,008,122Raw coal benefication and allied receiptsFrom holding company - 13,230,152To enterprises over which key management personnelexercise significant influence: - Spectrum Coal and Power Limited - 170,286 - Global Coal & Mining Private Limited 58,24,950 202,200Total 5,824,950 13,602,638Payment of beneficiation & allied chargesTo holding company 13,642,838 115,112,384To fellow subsidiariesTo enterprises over which key management personnelexercise significant influence:- Sainik Mining & Allied Services Limited 116,967 1,333,328- Global Coal & Mining Private Limited 257,760 1,234,725Total 14,017,565 117,680,437
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Aryan Energy Private LimitedSchedules forming part of the accounts(All amounts are in Rupees)
Schedule 18: Significant accounting policies and notes to the accounts
c) Related party transactions: (Amount in rupees)
Nature of Transactions For the year ended For the year ended31 March 2010 31 March 2009
Payment of repair & maintenance chargesTo enterprises over which key management personnelexercise significant influence:- Sainik Mining & Allied Services Limited 2,711 -Interest expense on inter-corporate depositsTo holding company 56,510,858 47,602,326Inter Corporate Deposit takenFrom holding company 372,245,000 249,000,000Inter Corporate Deposit RepaymentTo holding company 29,520,000 198,600,000Purchase of coal RejectFrom enterprises over which key management personnelexercise significant influence:- Global Coal & Mining Private Limited 120,057 1,499,580Purchase of sparesFrom holding Company 1,252,010 -From fellow subsidiaries- Aryan Clean Coal Technologies Private Limited 1,183,019 -From enterprises over which key management personnelexercise significant influence:- Global Coal & Mining Private Limited - 200,418- Orissa Spares and Services 845,476 2,256,954Total 3,280,505 2,457,372Purchase of fixed assetsFrom fellow subsidiaries- Aryan Clean Coal Technologies Private Limited 1,628,471 4,263,573Sale of sparesTo fellow subsidiaries- Kartikay Coal Washeries Private Limited 2,794,022 -Interest incomeFrom fellow subsidiaries- Kartikay Coal Washeries Private Limited 2,339,937 -
Related party balances As at As at31 March 2010 31 March 2009
Sundry DebtorsFellow subsidiaries- Kartikay Coal Washeries Private Limited 40,333,710 4,833,122Enterprises over which key management personnelexercise significant influence:- Global Coal & Mining Private Limited 2,241,802 -
Advance to partiesFellow subsidiaries- Aryan Clean Coal Technologies Private Limited - 1,375,147
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Aryan Energy Private LimitedSchedules forming part of the accounts(All amounts are in Rupees)
Schedule 18: Significant accounting policies and notes to the accounts
Unsecured loansInter corporate deposit from holding company 682,700,000 339,975,000Interest accrued but not due from holding company 50,859,772 36,815,639
Inter corporate deposits takenHolding Company 682,700,000 339,975,000
Interest accrued but not dueHolding Company 50,859,772 36,815,639
Sundry CreditorsHolding company 24,170,887 10,891,385Fellow subsidiaries- Aryan Clean Coal Technologies Private Limited 1,044,471 -Enterprises over which key management personnelexercise significant influence:- Sainik Mining & Allied Services Limited 740 43,481- Orissa Spares & Services 75,301 223,279- Global Coal & Mining Private Limited - 2,995,879Relative of key managerial personnel - 156,975
10) Based on the information presently available with the management, there are no dues outstanding to microand small enterprises covered under the Micro, Small and Medium Enterprises Development Act, 2006.
11) As per the decision of the Central Excise & Service Tax Appellate Tribunal (CESTAT), Bangalore, the Companyis not liable to pay service tax on the beneficiation services rendered up to 31 May 2007. Consequently, therecoverability of the service tax input pertaining to the period up to 31 May 2007 has become doubtful andaccordingly, the Company has made provision of Rs. 50,063,822 and has shown the same as provision fordoubtful advances.
12) The Company has during the year entered into transactions of purchases and sales with private companies, inwhich director(s) of the Company are director(s). In majority of the cases, the Company has taken the relevantapprovals from the statutory authorities i.e. Central Government but in case of any lapse due to commission/omission, the necessary corrective action is being initiated.
13) Operating leases
The Company has taken offices and railway sidings under cancellable operating lease arrangements, withoptions of renewal at the end of the lease term. Lease payments charged during the year to the profit and lossaccount aggregate to Rs. 9,126,584 (previous year Rs. 7,763,959).
14) Previous year’s figures have been regrouped/re-arranged wherever considered appropriate whenever necessaryto conform to the current years’ groupings/classification.
For and on behalf of the Board of Directors
Sd/- Sd/- Sd/-R.S.Sindhu G.C. Mrig Praveen KatariaChairman Director Company Secretary
Place : GurgaonDate : 15 September 2010
c) Related party transactions: (Amount in rupees)
Related party balances For the year ended For the year ended31 March 2010 31 March 2009
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I. Registration Details
Registration No. State Code
Balance Sheet DateDate Month Year
II. Capital Raised During the year (Rupees in Thousand)
Public Issue Rights Issue
Bonus Issue Private Placement
III. Position of Mobilization and Deployment of Funds (Rupees in Thousand)
Total Liabilities Total Assets
Source of Funds
Paid-Up-Capital Reserves and surplus
Current liabilities and provision Loan Fund
Application fundsFixed Assets Current Assets
Profit & Loss Account
IV. Performance of Company (Rupees in Thousand)
Turnover (including other income) Total expenditure
Profit Before Tax Profit after Tax
Basic loss per share (in Rs.) Dividend Rate %
V. Generic names of three principle products/ services of the company :(As per monetary terms)
Item Code No. (ITC Code):NA
Product Description : NA
Balance Sheet Abstract and Company’s General Business Profile
3 1 0 3
2 1
2 0 1 0
Nil
Nil
Nil
Nil
9 2 9 2 6
1 1 4 0 8 2 9 1 1 4 0 8 2 9
1 7 8 5 0 0 5 4 0 0 0
5 0 1 5 1 8 5 8 1 7 8
1 5 5 6 5 9 3 6 8 7 2 6
( 2 1 3 0 6 7 ) ( 2 1 3 0 7 8 )
2 7 9 3 4 2
2 8 1 5 1 2
5 7 9 9 7 4
( 1 1 9 . 3 7 ) Nil
For and on behalf of the Board of Directors
Sd/- Sd/- Sd/-R.S.Sindhu G.C. Mrig Praveen KatariaChairman Director Company Secretary
Place : GurgaonDate : 15 September 2010
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Annexure-CKartikay Coal Washeries Private Limited
Registered Office : 18, Vasant Enclave, Rao Tula Ram Marg,New Delhi-110057
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NOTICE
Notice is hereby given that the Eight Annual General Meeting of the Company shall be held on Thursday, the 30th dayof September, 2010 at 5:10 p.m. at 129, Transport Centre, Rohtak Road, New Delhi-110035 to transact the followingbusiness:
ORDINARY BUSINESS
1. To consider and adopt the Audited Balance Sheet of the Company as at 31st March, 2010 and Profit & Loss Accountfor the period from 1st April, 2009 to 31st March, 2010 together with the Directors’ Report and Auditors’ Reportthereon.
2. To appoint a Director in Place of Sh. Rudra Sen Sindhu, who retires by rotation and being eligible, offers himself forreappointment.
3. To appoint a Director in Place of Sh. Ganesh Chandra Mrig, who retires by rotation and being eligible, offers himselffor reappointment.
4. To appoint Statutory Auditors of the Company and to fix their remuneration:
To consider and if thought fit, to pass with or without modification(s), the following resolution as an ORDINARYRESOLUTION:
“RESOLVED THAT M/s B S R & Company, Chartered Accountants, retiring Auditors of the Company being eligiblewho have offered themselves for reappointment, be and are hereby appointed as the Statutory Auditors of theCompany to hold office as such from the date of conclusion of this Annual General Meeting till the date of conclusionof the next Annual General Meeting of the Company at a remuneration as mutually decided by the Company & theAuditors.”
SPECIAL BUSINESS
5. To consider and if thought fit, to pass with or without modification(s), the following resolution as an ORDINARYRESOLUTION:
“RESOLVED THAT the consent of the Company be and is hereby accorded pursuant to the provisions of Section293(1)(a), Section 293(1)(d) and other applicable provisions, if any, of the Companies Act, 1956, to the Board ofDirectors (“Board”) of the Company to mortgage / pledge / lien / charge / in favour of the Company’s bank(s) orany other banks or financial institutions (‘hereinafter collectively referred to as the Lenders’), all immovable andmovable properties of the Company both present & future and whole of the undertaking of the Company or such ofthem on such terms as may be approved by the Board and as may be agreed to between the Board and the Lendersfrom time to time to secure the Loan / credit facility(s) not exceeding Rs. 500 Crores (Rupees Five Hundred Croresonly) together with the moneys already borrowed by the Company (apart from the temporary loans obtained fromthe Company’s banks in the ordinary courses of business) which may be more than its networth i.e. networthcalculated by adding Paid up Share Capital and its Free Reserve, not set apart for any specific purpose, togetherwith interest commitment charge costs and other charge and expenses payable by the Company to the Lender onsuch terms as may be approved by the Board and agreed under the Loan Agreements to be entered into between theCompany and the Lenders.”
RESOLVED FURTHER THAT all actions taken by the Board in connection with any matter referred to orcontemplated in any of the foregoing resolutions are hereby approved, ratified and confirmed in all respects.”
6. To consider and if thought fit, to pass with or without modification(s), the following resolution as an SPECIALRESOLUTION:
“RESOLVED THAT pursuant to the provisions of Section 198, 269, 309, 310 read with Schedule XIII of the CompaniesAct, 1956 and other applicable provisions, if any of the Companies Act, 1956, consent of Board be and is herebyaccorded for the appointment of Sh. Ajay Mrig, as the Whole Time Director of the Company for a period of 5 yearsw.e.f. 15.09.2009 at a monthly remuneration of Rs. 4,00,000/- (Rupees Four Lacs only) plus Bonus/other allowances/gratuity/perquisites, etc. as per the policy of the Company.
FURTHER RESOLVED THAT Ex-Capt. Rudra Sen Sindhu and Sh. Ganesh Chandra Mrig, Directors of the Companybe and are hereby severally authorised to sign and execute an agreement/papers/documents required, if any, inrespect of appointment of Sh. Ajay Mrig as Whole Time Director of the Company and to sign and file e-form 32,
Kartikay Coal Washeries Private LimitedRegd. Office: 18, Vasant Enclave, Rao Tula Ram Marg, New Delhi-110057
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25-C and other documents as prescribed under the Companies Act, 1956 with the Registrar of Companies and to doall other acts and deeds in connection therewith on behalf of the Company.”
7. To consider and if thought fit, to pass with or without modification(s), the following resolution as an SPECIALRESOLUTION:
“RESOLVED THAT pursuant to the provisions of Section 198, 269, 309, 310 read with Schedule XIII of the CompaniesAct, 1956 and other applicable provisions, if any of the Companies Act, 1956, consent of Board be and is herebyaccorded for the appointment of Sh. Dev Suman Sindhu, as the Whole Time Director of the Company for a period of5 years w.e.f. 15.09.2009 at a monthly remuneration of Rs. 3,75,000/- (Rupees Three Lacs Seventy Five Thousandonly) plus Bonus/other allowances/gratuity/perquisites, etc. as per the policy of the Company.
FURTHER RESOLVED THAT Ex-Capt Rudra Sen Sindhu and Sh. Ganesh Chandra Mrig, Directors of the Companybe and are hereby severally authorised to sign and execute an agreement/papers/documents required, if any, inrespect of appointment of Sh. Dev Suman Sindhu as Whole Time Director of the Company and to sign and filee-form 32,25-C and other documents as prescribed under the Companies Act, 1956 with the Registrar of Companiesand to do all other acts and deeds in connection therewith on behalf of the Company.”
By order of the Board of DirectorsFor Kartikay Coal Washeries Private Limited
Sd/-Place : Gurgaon R.S. SindhuDate : 15th September, 2010 Chairman
NOTES
1 A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TOATTEND AND VOTE INSTEAD OF HIMSELF/HERSELF. SUCH PROXY NEED NOT BE A MEMBER OF THECOMPANY.
2 IN ORDER TO BE EFFECTIVE PROXY FORM DULY COMPLETED MUST BE RECEIVED BY THE COMPANY ATITS REGISTERED OFFICE NOT LESS THAN 48 HOURS BEFORE SCHEDULED TIME FOR HOLDING OF THEMEETING. A BLANK PROXY FORM IS ENCLOSED HEREWITH.
3 Explanatory Statement pursuant to the provisions of Section 173 (2) of the Companies Act, 1956 is attached herewith.
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Explanatory Statement pursuant to the provisions of Section 173 (2) of theCompanies Act, 1956
Item No. 5
As per the provisions of Section 293(1)(d) of the Companies Act, 1956, the Board of Directors (“Board”) of the Companycannot, except with the consent of the Company in General Meeting, borrow monies, apart from temporary loansobtained from the Company’s bankers in the ordinary course of business, in excess of the aggregate of the paid upcapital and free reserves of the Company, that is to say, reserves not set apart for any specific purposes.
The Company from time to time required fund to meet the working capital requirement as well as long term requirement.In view of above, the borrowing limit of the Company is fixed to the sum(s) so borrowed under this resolution andremaining outstanding at any time shall not exceed in the aggregate of Rs. 500 Crores (Rupees Five Hundred Crores).Further, the Banks/financial institutions in order to secure their loans create mortgage/lien on the assets of the Companywhich tantamount to indirectly transferring the said assets in their favour, so that if any default is made by the Companyin the repayment of loan together with interest commitment charge costs and other charge and expenses payable, theBanks/Financial institution has a right to sell those assets of the Company in order to recover their outstanding loan.This amount to selling/or otherwise disposing off the undertaking of the Company which can only be done with thepermission of the shareholders under section 293(1)(a) of the Companies Act,1956. The banks/financial institutionsinsists on this resolution being passed by the Shareholders of the Company authorizing the Board to create mortgage/pledge/lien on all the immovable/movable assets of the Company whether present or future on such terms and conditionas agreed to between lenders and the Board of the Company.
The Board of the Company have approved the limit of borrowing powers in their meeting held on 15 September, 2010to borrow and to mortgage/pledge/lien/charge/in favour of the Company’s bank(s) or any other banks or financialinstitutions, all immovable and movable properties of the Company upto Rs. 500 Crores (Rupees Five Hundred Crores),apart from the temporary loans obtained from the bankers in the ordinary course of business, subject to approval ofmembers in General Meeting.
The consent of the members is therefore sought under provisions of Section 293(1)(a) and 293(1)(d) of the CompaniesAct, 1956, to enable the Directors to borrow the aforesaid amount limit and to mortgage/pledge/lien/charge/in favourof the Lender.
Therefore, the approval of the members shall be accorded by way of passing Ordinary Resolution at General Meeting.Hence, the matter be placed before the members for their approval.
A copy each of the resolutions passed at Board Meeting dated 15th September, 2010, are open for inspection of theMembers, during business hours between 11.00 A.M. to 1.00 P.M. on all working days of the Company, upto the date ofthe meeting, at the Registered Office of the Company.
None of the Directors is in any way concerned or interested in these resolutions. The Board of Directors recommendsthis enabling resolution for the approval of members.
Item No. 6
Sh. Ajay Mrig was appointed as Director since the incorporation of the Company i.e. 30 April, 2002 and he is lookingafter the day to day activities of the Company. Sh. Ajay Mrig, was appointed by the Board on 03 March, 2010 as a Wholetime Director w.e.f. 15th September 2009 pursuant to the provisions of Section 198, 269, 309 read with Schedule XIII ofthe Companies Act, 1956 and subject to approval of Shareholders.
Your Directors recommend his appointment as Whole Time Directors of the Company.
The contents of Resolution at item no. 6 of the notice may be treated as an abstract of the terms & conditions ofappointment and remuneration payable to Sh. Ajay Mrig pursuant to section 302 (2) of the Companies Act, 1956.
Sh. Ajay Mrig himself is concerned or interested in his appointment and payment of remuneration. Further, Sh. GaneshChandra Mrig being related to him, may also be deemed to be concerned or interested in the resolution as set out atitem no. 6 of the notice. Save and except as above, none of the Directors, is in any way, concerned or interested in thesaid resolutions.
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Item No. 7
Sh. Dev Suman Sindhu was appointed as Director of the Company w.e.f. 13.08.2003 and he is looking after the day today activities of the Company. Sh. Dev Suman Sindhu, was appointed by the Board on 03 March, 2010 as a Whole timeDirector w.e.f. 15th September,s 2009 pursuant to the provisions of Section 198, 269, 309 read with Schedule XIII of theCompanies Act, 1956 and subject to approval of Shareholders.
Your Directors recommend his appointment as Whole Time Directors of the Company.
The contents of Resolution at item no. 7 of the notice may be treated as an abstract of the terms & conditions ofappointment and remuneration payable to Sh. Dev Suman Sindhu pursuant to section 302 (2) of the Companies Act,1956.
Sh. Dev Suman Sindhu himself is concerned or interested in his appointment and payment of remuneration. Further,Sh. Rudra Sen Sindhu being related to him, may also be deemed to be concerned or interested in the resolution as setout at item no. 7 of the notice. Save and except as above, none of the Directors, is in any way, concerned or interested inthe said resolutions.
By order of the Board of DirectorsFor Kartikay Coal Washeries Private Limited
Sd/-Place : Gurgaon R.S. SindhuDate : 15th September, 2010 Chairman
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To,The Members,
Your directors have pleasure in presenting their Eight Annual Report together with the Audited Statement of Accountsfor the year ended on 31st March, 2010:
1. FINANCIAL RESULTS
Particulars 2009-10 2008-09
Gross Income from Operations 4,707.07 3,306.33Net Profit before Interest, Tax & Depreciation (EBIDTA) 1,166.31 549.65
Less: Interest & Finance Charges 103.33 99.37Net Profit/(Loss) before Tax & Depreciation (PBDT) 1,062.98 450.28
Less: Depreciation 159.14 173.94Net Profit/(Loss) after Depreciation before Tax (PBT) 903.84 276.34
Less: Provision for Income Tax-Current 226.15 34.20Provision for Income Tax- Deferred 52.36 20.30Provision for Fringe Benefit Tax - 1.10Net Profit/(Loss) after Tax (PAT) 625.33 220.74Total Profit/(Loss) available for appropriation 625.33 220.74
2. OPERATIONS
The Company has a coal washery, situated at Wani (Maharashtra). During the year under review, the Companyprocessed 9,62,062 MT coal. During the year the total income of the Company was Rs. 47,07,07,622/- as comparewith Rs. 33,06,33,894/- during previous year. The Net Profit during the year was Rs. 6,25,32,770 as compared withNet Profit of Rs. 2,20,73,928 during previous year.
3. DIVIDEND
In order to plough back the profits into the operations of the Company, your Directors do not recommend anydividend for the financial year ended on 31st March, 2010.
4. PUBLIC DEPOSITS
The Company has not invited / accepted any public deposits under section 58A & 58AA of the Companies Act, 1956during the financial year ended on 31st March, 2010.
5. DIRECTORS
During the year under review, Sh. Niten Malhan continued as Nominee Director on Board of Directors of the Companyon behalf of Pineridge Investment Ltd. Sh. Ajay Mrig and Sh. Dev Suman Sindhu were appointed as Whole timeDirectors in the Board meeting held on 3rd March, 2010, w.e.f.15th September, 2009. Sh. Rudra Sen Sindhu andSh. Ganesh Chandra Mrig, Directors, retire by rotation and being eligible, offered themselves for reappointment atthe ensuing Annual General Meeting of the Company.
6. AUDITORS REPORT
In the Auditor’s Report for the year ending on 31 March, 2010, Auditors have made certain observations withregard to certain transactions aggregating Rs. 489,215 entered into by the Company in the previous year, coveredunder section 297 of the Companies Act, 1956, and in respect of which prior approval of the Central Government, asenvisaged under that section, has not been obtained.
To the above, the Company has to state that the Company has during the year entered into transactions of purchasesand sales of goods and services with private companies and firms, in which director(s) of the Company are director(s)/shareholder(s)/ partners(s). In majority of the cases, the Company has taken the relevant approvals from the statutoryauthorities i.e. Central Government, however, in case of any lapse due to commission/ omission, the necessarycorrective action is being initiated.
Further, the Company is discharging its tax liability in time, however, in case there is some delay in discharging thesame, the Company will take up the issue with appropriate authority for condoning the delay and take remedialaction so that such lapse does not occur in future.
DIRECTORS’ REPORT
Kartikay Coal Washeries Private LimitedRegd. Office: 18, Vasant Enclave, Rao Tula Ram Marg, New Delhi-110057
(Rs. in Lakhs)
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7. APPOINTMENT OF AUDITORS
M/s B S R & Company, Chartered Accountants, retire at the conclusion of the ensuing Annual General Meeting andbeing eligible have offered themselves for re-appointment. The Company has received a certificate from thempursuant to section 224(1B) confirming their eligibility for re-appointment. Yours Directors recommend their re-appointment.
8. DISCLOSURES UNDER SECTION 217 OF THE COMPANIES ACT, 1956
Except as disclosed elsewhere in the report, there have been no material changes and commitments, which canaffect the financial position of the Company between the end of financial year and the date of report.
As required under Section 217(2) of the Companies Act, 1956, the Board of Directors inform the members thatduring the financial year there has been no change:
• in the nature of Company’s business,
• in the classes of business in which the Company has an interest.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS ANDOUTGO
The provision of section 217(1) (e) of the Companies Act, 1956 is not applicable to our Company. Hence, Statementdetailing the particulars required under the said section read with the Companies (Disclosures of particulars in thereport of Board of Directors) Rules, 1988 are not being furnished. There was no foreign exchange earning and outgoin the Company during the financial year.
9. PARTICULARS OF EMPLOYEES U/S 217(2A) OF COMPANIES ACT, 1956
None of the employees of the Company has drawn salary in excess of the limits prescribed in the said section readwith the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and hence no suchlist is being provided.
10. SECRETARIAL COMPLIANCE CERTIFICATE
As required pursuant to the proviso to Section 383A of the Companies Act, 1956, the Company had obtained SecretarialCompliance Certificate from M/s. Ashok Arora & Co., Company Secretaries and the same is annexed herewith asAnnexure to the Directors’ Report.
11. DIRECTOR RESPONSIBILITY STATEMENT
As per the provisions of Section 217(2AA) of the Companies Act, 1956 your directors make the Statement:
(a) That in preparation of the Accounts for the financial year ended 31st March, 2010; the applicable AccountingStandards have been followed along with proper explanations relating to material departures.
(b) That the Directors have selected such Accounting Policies and applied them consistently and made judgmentsand estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of theCompany at the end of the financial year and of the profit of the Company for that period.
(c) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities and.
(d) That the Directors have prepared the accounts for the financial year ended 31st March, 2010 on a going concernbasis.
12. ACKNOWLEDGEMENTYour Directors would like to place their grateful appreciation for the assistance and co-operation received from theCompany’s bankers during the year under review. The Directors also acknowledge with appreciation the supportand co-operation rendered by various Govt. Agencies and Departments. Your Directors would also wish to place onrecord their deep sense of appreciation for the continued support of all the investors of the Company. Your Directorsalso acknowledge the hard work, dedication and unstinting efforts of the employees. The Directors also wish tothank Pineridge Investments Ltd (an affiliate of Warburg Pincus Group) and Sh. Niten Malhan, their representativeDirector for having supported the business plans of the Company to the fullest extent.
By order of the Board of DirectorsFor Kartikay Coal Washeries Private Limited
Sd/-Place : Gurgaon R.S. SindhuDate : 15th September, 2010 Chairman
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ASHOK ARORA & CO. OFF : 201, T-2527COMPANY SECRETARIES Subhash Nagar, Faiz Road,
Karol Bagh, New Delhi-110 005Tel No. 011-46082886
E. Mail : [email protected] Mobile No. 9971017444
COMPLIANCE CERTIFICATE
Co. No. : U10200DL2002PTC115155 Auth. Capital : Rs. 5 Crore
The MembersKARTIKAY COAL WASHERIES PRIVATE LIMITED
We have examined the registers, records, books and papers of M/s Kartikay Coal Washeries Private Limited. havingits Regd. Office at 18, Vasant Enclave, Rao Tula Ram Marg, New Delhi – 110 057 as required to be maintained under theCompanies Act, 1956, and the rules made thereunder and also the provisions contained in the Memorandum andArticles of Association of the Company for the financial year ended on 31st March, 2010. In our opinion and to the bestof our information and according to the examinations carried out by us and explanations furnished to us by the company,its officers and agents, we certify that in respect of the aforesaid financial year:
1. The company has kept and maintained all registers as stated in Annexure “A” to this certificate, as per the provisionsand the rules made thereunder and all entries therein have been duly recorded.
2. The company has duly filed with the forms and returns as stated in Annexure “B” to this certificate, with theRegistrar of Companies, Regional Director, Central Government, Company Law Board or other authorities withinthe time prescribed under the Act and the rules made thereunder.
3. The company being a private limited company has the minimum prescribed paid-up capital and its maximumnumber of members during the said financial year were not more than fifty (Six ) excluding its present and pastemployees and the company during the year under scrutiny:
(i) has not invited public to subscribe for its shares or debentures;
and
(ii) has not invited or accepted any deposits from persons other than its members, directors or their relatives.
4. The Board of directors duly met 4 times on 13/05/2009, 27/08/2009, 04/12/2009 and 03/03/2010 in respect ofwhich meetings proper notices were given and the proceedings were properly recorded and signed including thecircular resolutions passed in the Minutes Book maintained for the purpose.
5. The company was not required to close its Register of members and Debenture holders during the financial year.
6. The annual general meeting for the financial year ended on 31st March, 2009 held on 30/09/2009 after giving duenotice to the members of the company and the resolutions passed thereat were duly recorded in Minutes Bookmaintained for the purpose.
7. No Extra Ordinary General Meeting was held during the financial year.
8. The Company being a subsidiary of public limited company section 295 of the Act is applicable, but no loan hasbeen made loan to directors.
9. The company has entered into any contracts falling within the purview of section 297 of the Act and obtained theapproval from Regional Director for this purpose .
10. The company has made necessary entries in the register maintained under section 301 of the Act.
11. As there were no instances falling within the purview of Section 314 of the Act during the year, so the company hasnot obtain any approvals from the Board of Directors, members or Central Government.
12. The company has not issued any duplicate share certificates during the financial year.
13. The company has:
(i) Not done any allotment/transfer/transmission of securities during the financial year ;(ii) not deposited the amount in a separate Bank Account as no dividend was declared during the financial year;(iii) not posted warrants to the member of the company as no dividend was declared during the financial year;(iv) no amounts in unpaid dividend account, application money due for refund, matured deposits, matured
debentures and the interest accrued thereon which have remained unclaimed or unpaid for a period of sevenyears to be transferred to Investor Education and Protection Fund;
(v) not required to compile with the requirements of section 217 of the Act.
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14. The Board of Directors of the company is duly constituted. There was no appointment of additional directors,alternate directors and directors to fill casual vacancies during the financial year.
15. The company has not appointed any Managing Director/Whole-time Director/Manager during the financial year.Sh. Dev Suman Sindhu and Sh. Ajay Mrig were appointed as Whole Time Directors w.e.f. 15.09.2009.
16. The company has not appointed any sole-selling agents during the financial year.
17. The company was required to obtain approval of the Central Government, Company Law Board, Regional Director,Registrar or such other authorities as prescribed under the various provisions of the Act during the year andobtained approval from Regional Director under Section 297 of the Companies Act, 1956.
18. The directors have disclosed their interest in other firms/companies to the Board of Directors pursuant to theprovisions of the Act and the rules made thereunder.
19. The company has not issued any securities during the financial year.
20. The company has not bought back any shares during the financial year.
21. There was no redemption of preference shares or debentures during the year.
22. There was no transactions necessitating the company to keep in abeyance rights to dividend, rights shares andbonus shares pending registration of transfer of shares in compliance with the provisions of the Act.
23. The company has not invited/accepted any deposits including any unsecured loans falling within the purview ofSection 58A during the financial year.
24. The Company being a subsidiary of public limited company, the borrowing made the financial year attract provisionsof section 293(1) (d) of the Act but borrowings has been made during the year.
25. The company has not made any loans and investments, or given guarantees or provided securities to other bodiescorporate and consequently no entries have been made in the register kept for the purpose.
26. The company has not altered the provisions of the Memorandum with respect to situation of the company’s registeredoffice from one State to another during the year under scrutiny.
27. The company has not altered the provisions of the Memorandum with respect to the objects of the company duringthe year under scrutiny.
28. The company has not altered the provisions of the Memorandum with respect to name of the company during theyear under scrutiny.
29. The company has not altered the provisions of the Memorandum with respect to the share capital of the companyduring the year under scrutiny.
30 The company has not altered the articles of association during the financial year.
31 There was no prosecution initiated against or show cause notices received by the company for alleged offencesunder the Act and no fines and penalties or any other punishment imposed on the company during the financialyear, for offences under the Act
32 The company has not received any money as security from its employees during the financial year.
33 The company has not deducted any contribution to Provident Fund in terms of Section 418 of the Companies Act,1956 during the financial year.
For ASHOK ARORA & CO.Company Secretaries
(ASHOK KUMAR ARORA)Place : New Delhi ProprietorDate : 15.09.2010 CP No. 2851
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Annexure “A”
Registers as maintained by the Company
Statutory Registers
1. Register of Members u/s 1502. Minutes Book u/s 1933. Books of Accounts u/s 2094. Register of Particulars of Contracts u/s 301
in which directors are interested5. Register of Directors, Managing Director, u/s 303
Manager, and Secretary6. Register of Directors’ Shareholdings u/s 3077. Register of Share Application and Allotment u/s 758. Register of Share Transfer u/s 108
Note : The The company has not maintained any other register as it was informed that there were no entries/transactions to be recorded therein :
Annexure “B”
Forms and Returns as filed by the Company with the Registrar of Companies, Regional Director, Central Governmentor other authorities during the financial year ending on 31st March, 2010.
Sr. Form Filed Filed on For Whether If delay inNo. No./ U/s filed within filing whether
Return prescribed requisite additionalTime fee paidYes/No Yes/No
1. Annual Return 159 09.03.10 Change of Members No Yes30.09.2009 Directors etc.
2. Balance Sheet 220 09.03.10 Annual Accounts No Yes31.03.2009
3. Compliance 383A 08.03.10 Compliance No YesCertificate Report
4. Form 17 138 22.12.09 Satisfaction of Yes NoCharge
5. Form 17 138 22.12.09 Satisfaction of Yes NoCharge
6. Form 17 138 20.01.10 Satisfaction of Yes NoCharge
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To the members ofKartikay Coal Washeries Private Limited
We have audited the attached Balance Sheet of Kartikay Coal Washeries Private Limited (“the Company”) as at31 March, 2010, the Profit and Loss Account and the Cash Flow Statement (“the financial statements”) of the Companyfor the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company’smanagement. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards requirethat we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principles used and significant estimatesmade by management, as well as evaluating the overall financial statement presentation. We believe that our auditprovides a reasonable basis for our opinion.
As required by the Companies (Auditor’s Report) Order, 2003 (“the Order”) issued by the Central Government of Indiain terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure, a statement on thematters 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 necessaryfor 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 fromour examination of those books;
c) the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreementwith the books of account;
d) in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this reportcomply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;
e) on the basis of written representations received from the directors, as on 31 March, 2010, and taken on record by theBoard of Directors, we report that none of the directors is disqualified as on 31 March, 2010 from being appointed asa director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956; and
f) attention is invited to note III(12) of schedule 19 with regard to certain transactions aggregating Rs. 489,215 entered into bythe Company in the current year, covered under section 297 of the Companies Act, 1956, and in respect of which prior approvalof the Central Government, as envisaged under that section, has not been obtained; and
g) Subject to our comments in paragraph (f) above, the impact of which is not ascertainable, in our opinion and to the best ofour information and according to the explanations given to us, the said accounts give the information required bythe Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March, 2010;
(ii) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and
(iii)in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
For B S R & CompanyChartered AccountantsFirm registration no.:128032W
Sd/-Place : Gurgaon Manish GuptaDate : 15 September, 2010 Partner
Membership No.: 095037
Auditors’ Report
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Annexure to the Auditors’ report(Referred to in our report of even date)
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details andsituation of fixed assets.
(b) The Company has a programme of physical verification of its fixed assets by which all fixed assets are verifiedin a phased manner over a period of two years. According to that programme the company has during the yearphysically verified certain assets. In our opinion, this periodicity of physical verification is reasonable havingregard to the size of the company and the nature of its assets. The Company has started reconciling the physicalverification results with the book records and expects no material adjustment in this regard.
(c) The Company did not dispose of any fixed assets during the year.
(ii) (a) The inventory has been physically verified by the management during the year. In our opinion, the frequencyof such verification is reasonable.
(b) The procedures for the physical verification of inventories followed by the management are reasonable andadequate in relation to the size of the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification betweenthe physical stocks and the book records were not material.
(iii) (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered inthe register maintained under Section 301 of the Companies Act, 1956.
(b) The Company has taken loan from its holding company covered in the register maintained under section 301of the Companies Act, 1956. The maximum amount outstanding during the current year for such loan wasRs. 77,906,753 and the year end balance of such loan is Rs. 48,348,623.
(c) In our opinion, the rate of interest and other terms and conditions on which loan has been taken from holdingcompany listed in the register maintained under Section 301 of the Companies Act, 1956 is prima facie, notprejudicial to the interest of the Company.
(d) In the case of loan taken from holding company listed in the register maintained under Section 301, the Companyhas been regular in the payment of interest and principal on loan as and when demanded by the holdingcompany. As per terms stipulated in loan agreement, principal and interest on loan is payable on demand.
(e) There is no overdue amount of more than Rs. one lakh in respect of loan taken from parties listed in the registermaintained under Section 301.
(iv) In our opinion and according to the information and explanations given to us, there is an adequate internalcontrol system commensurate with the size of the Company and the nature of its business with regard topurchase of inventories and with regard to the sale of goods and services. In our opinion and according to theinformation and explanations given to us, there is no continuing failure to correct major weaknesses in internalcontrol system.
(v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts orarrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register requiredto be maintained under that section.
(b) In our opinion, and according to the information and explanations given to us, the transactions made inpursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rs. 5 lakh withany party during the year have been made at prices which are reasonable having regard to the prevailingmarket prices at the relevant time except for sale and purchase of certain goods or services which are for thespecialised requirements of the Company and for which suitable alternative sources are not available to obtaincomparable quotations. However, on the basis of information and explanations provided, the same appearreasonable.
(vi) The Company has not accepted any deposits from the public.
(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.
(viii) The Central Government has not prescribed the maintenance of cost records under section 209(1)(d) of theCompanies Act, 1956 for any products manufactured/ services rendered by the Company.
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(ix) (a) According to the information and explanations given to us and on the basis of our examination of the recordsof the company, amounts deducted/accrued in the books of account in respect of undisputed statutory duesincluding Provident Fund, Employees State Insurance, Income tax, Wealth tax, Customs duty, Cess and othermaterial statutory dues have generally been regularly deposited during the year by the Company with theappropriate authorities, dues in respect of, Sales Tax and Service Tax where there were delays in few cases. Asexplained to us, provisions of Excise duty are not applicable to the Company. Further, as explained to us, theCompany did not have any dues on account of Investor Education and Protection Fund.
There were no dues on account of Cess under Section 441A of the Companies Act, 1956 since the date fromwhich the aforesaid section comes into force has not yet been notified by the Central Government.
According to the information and explanations given to us, no undisputed amounts payable in respect ofProvident Fund, Employees’ State Insurance, Income tax, Sales tax, Wealth tax, Excise duty, Cess and othermaterial statutory dues were in arrears as at 31 March, 2010 for a period of more than six months from the datethey became payable.
(b) According to the information and explanations given to us, there are no dues of Income tax, Sales tax, Wealthtax, Service tax, Customs duty and Cess which have not been deposited with the appropriate authorities onaccount of any dispute.
As explained to us, the provisions of Excise duty are not applicable to the Company.
(x) The Company does not have any accumulated losses at the end of the financial year and has not incurred cashlosses in the financial year and in the immediately preceding financial year.
(xi) In our opinion and according to the information and explanations given to us, the Company has not defaultedin repayment of dues to its bankers. The Company did not have any outstanding dues to any financial institutionor debenture holder during the year.
(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares,debentures and other securities.
(xiii) In our opinion and according to the information and explanations given to us, the Company is not a chit fundor a nidhi/ mutual benefit fund/ society.
(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares,securities, debentures and other investments.
(xv) In our opinion and according to the information and explanations given to us, the Company has not givenguarantees for loans taken by others from banks or financial institutions.
(xvi) In our opinion and according to the information and explanations given to us, the term loan taken by theCompany has been applied for the purpose for which it was raised.
(xvii) According to the information and explanations given to us and on an overall examination of the balance sheetof the company, we are of the opinion that the funds raised on short-term basis have not been used for long-term investment.
(xviii) The Company has not made any preferential allotment of shares to companies/firms/parties covered in theregister maintained under Section 301 of the Companies Act, 1956.
(xix) The Company did not have any outstanding debentures during the year.
(xx) The Company has not raised any money by public issues.
(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed orreported during the course of our audit.
For B S R & CompanyChartered AccountantsFirm Registration No.:128032W
Sd/-Place : Gurgaon Manish GuptaDate : 15 September, 2010 Partner
Membership No.: 095037
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Schedule As at As atNumber 31 March 2010 31 March 2009
I. SOURCES OF FUNDS
Shareholders’ fundsShare capital 1 45,000,000 45,000,000Reserves and surplus 2 107,487,763 44,954,994Share application money pending allotment - 5,525,000Loan fundsSecured loans 3 1,034,138 2,351,981Unsecured loans 4 53,873,623 77,906,753Deferred tax liability (net) 5 7,265,945 2,029,709(refer note III 9 of schdule 19)
TOTAL 214,661,469 177,768,437
II. APPLICATION OF FUNDSFixed assets 6Gross block 202,745,859 202,671,848Less: Accumulated depreciation 95,741,225 79,827,166
Net block 107,004,634 122,844,682
Investments 7 7,402 6,844
Current assets, loans and advancesInventories 8 43,854,200 21,563,938Sundry debtors 9 55,115,967 42,621,553Cash and bank balances 10 18,800,954 12,828,930Loans and advances 11 50,999,080 8,671,102
168,770,201 85,685,523Less: Current liabilities and provisions 12Current liabilities 59,774,787 27,898,737Provisions 1,345,981 2,869,875
61,120,768 30,768,612Net current assets 107,649,433 54,916,911
TOTAL 214,661,469 177,768,437
Significant accounting policies and notes to the accounts 19
The accompanying notes and schedules form an integral part of the accounts.
As per our report of even date attached
For B S R & Company For and on behalf of the Borad of DirectorsChartered AccountantsFirm Registration No.:128032W
Sd/- Sd/- Sd/-Manish Gupta Dev Suman Sindhu Ajay MrigPartner Director DirectorMembership No.: 095037
Place : GurgaonDate : 15 September, 2010
Kartikay Coal Washeries Private LimitedBalance Sheet as at 31 March 2010(All amounts are in Rupees)
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Schedule For the year ended For the year endedNumber 31 March 2010 31 March 2009
IncomeCoal beneficiation receipts 63,738,114 22,669,580Sale of coal 403,629,915 300,888,980Other income 13 3,339,593 7,075,334
470,707,622 330,633,894
ExpenditurePurchase of coal 306,488,687 261,937,392Decrease/ (increase) in stock of coal 14 (16,688,074) (11,070,100)Direct expenses 15 37,282,421 13,166,786Personnel cost 16 15,186,099 4,454,507Administrative and selling expenses 17 11,806,511 7,180,071Depreciation 6 15,914,059 17,393,829Finance cost 18 10,333,266 9,937,357
380,322,969 302,999,842
Profit/(loss) before tax 90,384,653 27,634,052Provision for tax- Current tax 22,615,647 3,420,000- Deferred tax charge/(credit) 5,236,236 2,029,709- Fringe benefit tax - 110,415
Profit/(loss) after tax transferred to Balance Sheet 62,532,770 22,073,928
Earnings/(loss) per share [refer note III 7 of schedule 19]Equity shares of face value of Rs. 10 eachBasic 13.90 4.91Diluted 12.38 3.51
Significant accounting policies and notes to the accounts 19
The accompanying notes and schedules form an integral part of the accounts.
Kartikay Coal Washeries Private LimitedProfit and Loss Account for the year ended 31 March 2010(All amounts are in Rupees)
As per our report of even date attached
For B S R & Company For and on behalf of the Borad of DirectorsChartered AccountantsFirm Registration No.:128032W
Sd/- Sd/- Sd/-Manish Gupta Dev Suman Sindhu Ajay MrigPartner Director DirectorMembership No.: 095037
Place : GurgaonDate : 15 September, 2010
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Particulars For the year ended For the year ended31 March 2010 31 March 2009
A. Cash Flow from Operating Activities :Net profit before tax 90,384,653 27,634,052Adjustments for :Depreciation 15,914,059 17,393,829Provision for slow moving/non moving items - 1,409,862Finance cost 10,333,266 9,937,357Interest income (28,104) (39,720)Operating profit before working capital changes 116,603,874 56,335,380Adjustments for :(Increase)/ decrease in sundry debtors (12,494,414) (32,384,126)(Increase) in loans and advances (40,529,956) 10,856,847(Increase)/ decrease in inventories (22,290,262) (16,171,428)Increase/ (decrease) in current liabilities and provisions 32,774,402 14,021,886
Cash Generated from operations 74,063,644 32,658,559Taxes paid (net) (26,835,916) (826,650)
Net cash from operating activities (A) 47,227,728 31,831,909
B) Cash flow from investing activities:Purchase of fixed assets (74,011) (4,831,700)Sale of fixed assets - 26,600Interest income 27,546 39,203
Net cash used in investing activities (B) (46,465) (4,765,897)
C) Cash flow from financing activities:Repayments of share application money - (17,620,000)Proceeds from secured loan - 2,460,000Repayments of secured loan (1,317,843) (34,611,967)Proceeds from unsecured loan 6,250,000 114,650,000Repayments of unsecured loan (36,350,000) (77,650,000)Finance cost (9,791,396) (7,685,924)
Net cash from in financing activities (C ) (41,209,239) (20,457,891)
D) Net increase in cash and cash equivalents (A+B+C) 5,972,024 6,608,121
E) Cash and cash equivalents as at the beginning of the year 12,828,930 6,220,809
F) Cash and cash equivalents as at the end of the year 18,800,954 12,828,930
Notes:1. The cash flow statement has been prepared in accordance with ‘Indirect method’ as set out in the AccountingStandard (AS)-3 on ‘Cash Flow Statements’ as specified in the the Companies (Accounting Standard) Rules, 2006,under the provisions of the Companies Act, 1956.
Kartikay Coal Washeries Private LimitedCash Flow Statement for the year ended 31 March 2010(All amounts are in Rupees)
As per our report of even date attached
For B S R & Company For and on behalf of the Borad of DirectorsChartered AccountantsFirm Registration No.:128032W
Sd/- Sd/- Sd/-Manish Gupta Dev Suman Sindhu Ajay MrigPartner Director DirectorMembership No.: 095037
Place : GurgaonDate : 15 September, 2010
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Particulars As at As at31 March 2010 31 March 2009
Schedule 1 - Share capital
Authorised Capital50,000,000 equity shares of 10/- each(previous year 5,000,000 equity shares of 10 each) 50,000,000 50,000,000
Issued subscribed and paid up capital4,500,000 equity shares Rs. 10 each fully paid up 45,000,000 45,000,000(previous year 4,500,000 equity shares of Rs. 10 each fully paid up)[Of the above, 2,919,600 (previous year 2,919,600) equityshares are held by ACB (India) Limited (formerly known asAryan Coal Benefications Private Limited), the holding company]
45,000,000 45,000,000
Schedule 2 - Reserves and surplus
Securities premium 44,900,000 44,900,000Profit and loss account:Opening balance 54,994 (22,018,934)Add: transferred from Profit and Loss Account 62,532,769 22,073,928
62,587,763 54,994
107,487,763 44,954,994
Schedule 3 - Secured loans
Loans and advances from others:-Equipment finance loan * 1,034,138 2,351,981
1,034,138 2,351,981
* Secured by first and exclusive charge on specific vehicle. Further, secured by way of post dated cheques for repaymentof interest and principal.
Schedule 4 - Unsecured loans
Inter corporate deposits received-From holding company 41,400,000 71,500,000-Interest accrued and due on above 6,948,623 6,406,753-From others 5,525,000 -
53,873,623 77,906,753
Schedule 5 - Deferred tax liabilities (net)
Opening Balance 2,029,709 -Add/(less): Deferred tax charge/ (credit) 5,236,236 2,029,709
7,265,945 2,029,709
Kartikay Coal Washeries Private LimitedSchedules forming part of the accounts(All amounts are in Rupees)
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As at As at31 March 2010 31 March 2009
Schedule 7 - Investments (non-trade)Long term investment-unquoted, at cost
Investments in government securities
-National savings certificate * 7,402 6,844
7,402 6,844* provided as security to government authority
Schedule 8 - Inventories(At lower of cost and net realisable value)
Stores and spare parts 16,342,963 10,740,775Less: Provision for slow moving/non-moving 1,409,862 1,409,862
14,933,101 9,330,913Stock-in-trade:Raw coal 520,522 9,071,635Beneficiated coal 17,949,233 -Reject coal 10,451,344 3,161,390
43,854,200 21,563,938
Schedule 9 - Sundry debtors(Unsecured and considered good, unless otherwise stated)
Debts outstanding for a period exceeding six months 2,066,042 614,703Other debts 53,049,925 42,006,850
55,115,967 42,621,553
Schedule 10 - Cash and bank balances
Cash in hand 1,004,741 163,180Cheques in hand - -Balance with scheduled banks:-on current accounts 17,784,513 12,654,900-on deposit account * 11,700 10,850
18,800,954 12,828,930* provided as security to government authority
Schedule 11 - Loans and advances(Unsecured and considered good, unless otherwise stated)
Advances recoverable in cash or in kind or for value to be received 48,585,058 8,227,102Advance income tax 1,751,112 -[net of provision for tax of Rs. 26,035,647 (previous year Rs. 3,420,000)]Advance fringe benefit tax [net of provision for tax for current year Rs. 225,632] 46,910 -Security deposit 616,000 444,000
50,999,080 8,671,102
Kartikay Coal Washeries Private LimitedSchedules forming part of the accounts(All amounts are in Rupees)
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As at As at31 March 2010 31 March 2009
Schedule 12 - Current liabilities and provisions
Current liabilitiesSundry creditors- Dues to micro and small enterprises (refer note III 12 of schedule 19) - 9,458- Others 50,059,376 22,789,119Advances from customers 5,078,568 882,535Book overdraft 1,105,384 -Other liabilities * 3,531,459 4,217,625
59,774,787 27,898,737
* includes provident fund payable of Rs. 796,316 (previous year Rs. 76,197)
ProvisionsProvision for income tax [net of advance tax Rs.1,044,972] - 2,375,028Provision for fringe benefit tax [net of advance tax Rs.178,414] - 47,218Provision for gratuity (refer note III 6 of schedule 19) 1,345,981 447,629
1,345,981 2,869,875
Kartikay Coal Washeries Private LimitedSchedules forming part of the accounts(All amounts are in Rupees)
For the year ended For the year ended31 March 2010 31 March 2009
Schedule 13 - Other income
Railway siding charges 3,311,489 3,789,239Handling of coal - 3,246,375Miscellaneous income (interest) 28,104 39,720
3,339,593 7,075,334
Schedule 14 - Decrease/ (increase) in stock of coal
Opening stock of coalRaw coal 9,071,635 1,072,301Reject coal 3,161,390 90,624
12,233,025 1,162,925Closing stock of coalRaw coal 520,522 9,071,635Beneficiated coal 17,949,233 -Reject coal 10,451,344 3,161,390
28,921,099 12,233,025
(16,688,074) (11,070,100)
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For the year ended For the year ended31 March 2010 31 March 2009
Schedule 15 - Direct expenses
Power and fuel 9,642,819 4,025,492Transportation and loading charges 12,532,463 2,020,549Chemicals expenses 2,065,316 697,597Repair, running and maintainance:-Building 242,310 388,993-Plant and machinery 8,182,024 5,723,753-Others 4,614,774 308,962Pollution control expenses 2,715 1,440
37,282,421 13,166,786
Schedule 16 - Personnel costSalaries, wages and bonus 13,458,901 3,684,832Contribution to provident funds and other funds 1,157,883 367,474Staff welfare expenses 569,315 402,201
15,186,099 4,454,507
Schedule 17 - Administrative and selling expenses
Rent (refer note III 5 of Schdule 19) 44,935 69,400Rates and taxes 1,772,346 876,019Legal and professional fees 1,263,503 1,575,825Security expenses 667,534 405,072Insurance 340,435 411,678Printing and stationary 221,647 89,869Communication expenses 332,304 193,870Business promotion 117,610 52,093Travelling and conveyance 152,876 261,402Electricity charges 10,710 9,650Vehicle running and maintenance 678,065 350,324Bank charges 398,943 328,647Charity and donations 56,205 1,001Deductions on account of quantity and quality 2,625,714 2,090,157Coal handling charges 2,539,434 -Miscellaneous expenses 584,250 465,064
11,806,511 7,180,071
Schedule 18 - Finance cost
Interest Paid - others 2,339,937 1,624,709Equipment finance charges 272,637 28,768Interest on inter corporate deposit 7,720,692 8,283,880
10,333,266 9,937,357
Kartikay Coal Washeries Private LimitedSchedules forming part of the accounts(All amounts are in Rupees)
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Kartikay Coal Washeries Private LimitedSchedules forming part of the accounts
Schedule 19 - Significant accounting policies and notes to the accounts
I. Background
Kartikay Coal Washeries Private Limited (‘the Company’) was incorporated in India on 13 April 2002 to beneficiatethe coal. The main activities of the Company are beneficiation and trading of coal. ACB (India) Limited (formallyknown as Aryan Coal Benefications Private Limited) is the holding company.
II. Significant accounting policies
1) Accounting convention
The financial statements are prepared under the historical cost convention in accordance with the GenerallyAccepted Accounting Principles (‘GAAP’) in India and mandatory accounting standards as specified in theCompanies (Accounting Standard) Rules, 2006, the provisions of the Companies Act, 1956, to the extentapplicable, and as adopted consistently by the Company.
2) Use of estimates
The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP)in India requires management to make estimates and assumptions that affect the reported amounts of assetsand liabilities and the disclosure of contingent liabilities on the date of the financial statements. Actual resultscould differ from those estimates. Differences between the actual results and estimates are recognised in theyear in which the results are known/materialised. Any revision to accounting estimates is recognisedprospectively in current and future periods.
3) Inventories (valued at lower of cost and net realisable value):
Inventories are valued at lower of cost and net realisable value. The basis for determination of cost of variouscategory of inventory are as follows:
a) Store and spare parts:
Store and spare parts are computed on first in first out basis (FIFO).
(b) Raw coal and beneficiated coal:
These are valued at cost of raw coal (computed on first in first out basis-FIFO) including cost attributableto the category of coal, based on appropriate basis to bring the coal to its present location and condition.
(c) Work in progress :
Work in progress represents the cost incurred on beneficiation of coal on behalf of customers towards rawcoal transportation, beneficiation of raw coal and transportation of beneficiated coal to bring the coal to itspresent location and condition.
(d) Coal rejects:
These consist of rejects generated out of coal beneficiation process or coal rejects purchased directly. Thecost is ascertained by apportioning the total cost attributable to the category of coal generated/purchasedbased on appropriate basis.
4) Revenue recognition
(a) Raw coal beneficiation and allied receipts:
Revenue from raw coal beneficiation and allied receipts is recognised on attainment of the said activity.Such activity is regarded as being attained when no significant uncertainty exists regarding the amount ofconsideration that will be derived from the performance of such activity and the activity is completed orsubstantially completed. Revenue represents the invoiced value of net beneficiation receipts.
(b) Sale of coal:
Revenue from sale of coal is recognised when coal is dispatched to the customer which coincides with thetransfer of significant risks and rewards. Sales represent the invoiced value ofcoal (net of sales tax).
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Kartikay Coal Washeries Private LimitedSchedules forming part of the accounts
Schedule 19 - Significant accounting policies and notes to the accounts
(c) Service income:
Service income represents income from handling of coal and rent from use of the Company’s railwaysiding. These are recognised on accrual basis as per the terms of agreement with the customers.
5) Fixed assets and depreciation
Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. The cost of fixedassets includes inward freight, duties and taxes. Assets held for disposal are stated at their estimated residualvalues as at the balance sheet date.
Depreciation is provided on pro-rata basis as per written down value method at rates based upon managementestimates of useful lives of the assets. Such rates are equal to the rates prescribed in Schedule XIV of theCompanies Act, 1956.
Assets individually costing upto Rs. 5,000 are fully depreciated in the year of purchase.
6) Investments
Long term investments are valued at cost. Any decline other than temporary, in the value of long terminvestments, is adjusted in the carrying value of such investments.
7) Employee benefits
All employee benefits payable/available within twelve months of rendering the service are classified as short-term employee benefits. Benefits such as salaries, wages and bonus etc. are recognised in the Profit and LossAccount in the period in which the employee renders the related service.
Defined contribution plans: A defined contribution plan i.e. provident fund is a post-employment benefit planunder which an entity pays fixed contributions into a separate entity and will have no legal and constructiveobligation to pay further amounts. Obligations for contributions to defined contribution provident plans arerecognised as an employee benefit expense in the Profit and Loss Account when they are due. Prepaidcontributions are recognised as an asset to the extent that a cash refund or a reduction in future payments isavailable.
Defined benefit plans: A defined benefit plan i.e. gratuity, is a post-employment benefit plan. The Company’sgratuity plan is a defined benefit plan.
The Company’s net obligation in respect of defined benefit plans is calculated separately for each plan byestimating the amount of future benefit that employee have earned in return for their service in the current andprior periods; that benefit is discounted to determine its present value. Any unrecognised past service costsand the fair value of any plan assets are deducted. The discount rates used for determining the present value ofobligation under defined benefit plans, is based on the market yields on Government securities as at the balancesheet date, having maturity periods approximating to the terms of related obligations. The calculation isperformed annually by an independent actuary using the projected unit credit actuarial method. When thecalculation results in a benefit to the Company, the asset is recognised only to the extent of the present value ofany economic benefits available in the form of refunds from the plan or reductions in future contributions tothe plan.
Actuarial gains and losses are recognised immediately in the Profit and Loss Account. Gains or losses on thecurtailment or settlement of any defined benefit plan are recognised when the curtailment or settlement occurs.
8) Borrowing costs
Borrowing costs that are attributable to the acquisition of qualifying assets are capitalised as part of the cost ofsuch assets. All other borrowing costs are charged to revenue.
9) Earnings per share
In computing earnings per share, the Company considers net profit/(loss) after tax. Basic earnings per shareare computed by the weighted average number of equity shares outstanding during the year. Diluted earnings
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per share are computed using the weighted average number of equity and dilutive equivalent shares outstandingduring the year, except where results would be anti-dilutive.
10) Taxation
Income-tax expenses comprise current tax (i.e. the amount of tax for the period determined in accordance withthe Income Tax Act, 1961) and deferred tax charge or credit (reflecting the tax effects of the timing differencesbetween the accounting income and taxable income for the period). The deferred tax charge or credit and thecorresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted orsubstantively enacted by the balance sheet date. Deferred tax assets are recognized only to the extent there isreasonable certainty that the assets can be realized in the future. However, where there is unabsorbed depreciationor carry forward loss under taxation laws, deferred tax assets are recognized only if there is virtual certainty ofrealization of such assets. Deferred tax assets are reviewed at each balance sheet date and written down orwritten up to reflect the amount that is reasonably/virtually certain (as the case may be) to be realized.
Fringe Benefits Tax (‘FBT’) has been abolished w.e.f. 1 April 2009, therefore no provision is made in currentfinancial year.
11) Impairment of assets
The carrying amounts of assets are reviewed at each balance sheet date to determine whether there is anyindication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. Animpairment loss is recognised whenever the carrying amount of an asset or its cash generating unit exceeds itsrecoverable amount. Impairment losses are recognised in the Profit and Loss Account. An impairment loss isreversed if there has been a change in the estimates used to determine the recoverable amount. An impairmentloss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount thatwould have been determined net of depreciation or amortisation, if no impairment loss had been recognised.
12) Operating leases
Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leasedasset are classified as operating leases. Operating lease charges are recognized as an expense in the Profit andLoss Account on a straight line basis.
13) Provisions and contingencies
The Company recognises a provision when there is a present obligation as a result of a past event and it is morelikely than not that there will be an outflow of resources embodying economic benefits to settle such obligationand the amount of such obligation can be reliably estimated. Provisions are not discounted to its present value,and are determined based on the management’s best estimate of the amount of obligation required at the yearend. These are reviewed at each balance sheet date and adjusted to reflect current management estimates.
Contingent liabilities are disclosed in respect of possible obligations that have arisen from past events and theexistence of which will be confirmed only by the occurrence or non occurrence of future events not whollywithin the control of the Company. Contingent liabilities are also disclosed for present obligations in respect ofwhich it is not probable that there will be an outflow of resources or a reliable estimate of the amount ofobligation cannot be made.
When there is a possible obligation or a present obligation where the likelihood of an outflow of resources isremote, no disclosure or provision is made.
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Kartikay Coal Washeries Private LimitedSchedules forming part of the accounts
Schedule 19 - Significant accounting policies and notes to the accounts
III. Notes to accounts
1) Managerial remuneration
Managerial remuneration under Section 198 of the Companies Act, 1956 to the directors of the Company is asfollows:
(Amount in Rupees)
Year ended Year ended31 March 2010 31 March 2009
Salaries and allowances 5,716,244 -Contribution to Provident Fund 470,400 -
6,186,644 -
As the future liability for gratuity is provided on actuarial valuation for the Company as a whole, the amountpertaining to the directors is not ascertainable and therefore not included above.
2) Legal and professional expenses include auditors’ remuneration (excluding out of pocket expenses):
(Amount in Rupees)
Year ended Year ended31 March 2010 31 March 2009
Statutory audit fees 250,000 250,000Service tax 25,750 25,750
275,750 275,750
3) Installed capacity and production (as certified by the management and relied upon by the auditors, being atechnical matter)
Particulars Unit Installed capacity Actual production
Year ended Year ended Year ended Year ended31 March 2010 31 March 2009 31 March 2010 31 March 2009
Coal beneficiation plant MT 2,000,000 2,000,000 9,62,062 302,261
4) Quantitative information:
Quantitative information in respect of trading of coal:
Particulars Year ended 31 March 2010 Year ended 31 March 2009
Quantity Value Quantity Value(MT) (Rupees) (MT) (Rupees)
Opening stock 8,955 12,233,025 1,050 1,162,925Purchases/generation* 210,582 306,488,686 274,504 261,937,392Sales** 195,484 403,629,915 266,599 300,888,980Closing stock 24,052 28,921,099 8,955 12,233,025
*Represents the cost of purchase of coal through e-auction, coal rejects and value of credit notes given to variouscustomers for purchase of coal rejects generated through beneficiation of raw coal. All the expenses relating toprocessing/reprocessing have been included under the respective expense head.
** Represents sale of coal (both processed and unprocessed) purchased through e-auction/otherwise and coalrejects.
5) The Company has taken residential accommodation for employees under cancellable operating leasearrangements. Lease rental expenses charged during the year to the profit and loss account amount toRs. 44,935 (Previous year Rs. 69,400).
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Schedule 19 - Significant accounting policies and notes to the accounts
6) General description of defined benefit plan:
Gratuity plan:
The Company operates a gratuity plan which provides lump sum benefits linked to the qualifying salary andcompleted years of service with the Company at the time of separation. Every employee who has completed 5years of continuous service is entitled to receive gratuity at the time of his retirement or separation from theorganization whichever is earlier. However the condition of completion of 5 years of service is not applicablewhere separation is on account of disability or death of an employee. The gratuity benefit that is payable to anyemployee, is computed in accordance with the provisions of “The Payment of Gratuity Act, 1972”.
The Gratuity Fund
The following table sets forth the status of the Gratuity Plan of the Company and the amounts recognised inthe Balance Sheet and Profit and Loss Account.
Particulars Year ended Year ended31 March 2010 31 March 2009
(Rs.) (Rs.)
Changes in the present value of defined benefit obligationProjected benefit obligation at the beginning of year 447,629 266,814Current service cost 151,661 86,310Interest cost 45,865 28,229Actuarial loss/(gain) 943,134 66,276Benefits paid 242,308 -Projected benefit obligation at the end of the year 1,345,981 447,629Amount recognised in the balance sheetProjected benefit obligation at the end of the year 1,345,981 447,629Fair value of plan assets at the end of the year - -Funded status of the plans – asset/(liability) (1,345,981) (447,629)Asset recognised in the balance sheet - -
Expense recognised in the Profit and Loss AccountCurrent service cost 151,661 86,310Interest cost on benefit obligation 45,865 28,229Expected return on plan assets - -Net actuarial (gain)/loss recognised in the year 943,134 66,276Net gratuity cost 1,140,660 180,815
Principal actuarial assumptions at the balance sheet date are as follows:
Economic assumptions:
The principal assumptions are the discount rate and salary escalation rate. The discount rate is generally basedupon the market yields available on Government bonds at the accounting date with a term that matches that ofthe liabilities and the salary growth rate takes account of inflation, seniority, promotion and other relevantfactors on long term basis. The assumptions used are summarized in the following table:
Assumptions as at Assumptions as at31 March 2010 31 March 2009
Discount rate 8.30% 7.70%Salary growth rate 10.00% 10.00%
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Kartikay Coal Washeries Private LimitedSchedules forming part of the accounts
Schedule 19 - Significant accounting policies and notes to the accounts
Demographic assumptions:
Assumptions as at Assumptions as at31 March 2010 31 March 2009
Retirement age 60 years 60 yearsMortality table LIC (1994-96) LIC (1994-96)
duly modified duly modifiedEmployee turnover 21 - 30 years- 5% 21 - 30 years- 5%
31 - 40 years- 3% 31 - 40 years- 3%41 - 50 years- 2% 41 - 50 years- 2%51 - 59 years- 1% 51 - 59 years- 1%
7) Earnings per share
Reconciliation of basic and diluted shares used in computing earnings per share
Year ended Year ended31 March 2010 31 March 2009
Profit/(loss) after tax attributable to equity shareholders (Rupees) 62,532,770 22,073,928Number of shares considered as weighted average shares 4,500,000 4,500,000outstanding for computing basic earnings per share (nos.)Add: Effect of dilutive issues of shares (nos.) 552,500 1,788,314Number of shares considered as weighted average shares and 5,052,500 6,288,314potential shares outstanding for computing diluted earningsper share (nos.)Nominal value per share (Rupees) 10 10Basic Earnings/(loss) per share (Rupees) 13.90 4.91Diluted Earnings/(loss) per share (Rupees) 12.38 3.51
8) Segment Reporting
In the opinion of the management, there is only one reportable segment i.e. coal beneficiation and allied activities,as envisaged by Accounting Standard 17 “Segment Reporting” issued by the Companies (Accounting Standard)Rules, 2006. Accordingly, no disclosure for segment reporting has been made in the financial statements.
9) Deferred tax assets/liabilities included in the Balance Sheet comprise the following:(Amount in Rupees)
Particulars As at As at31 March 2010 31 March 2009
Deferred tax assets arising on account of
Carry forward business losses and unabsorbed depreciation - 7,014,148Provision for slow-moving/non-moving items 468,356 479,212Provision for gratuity 447,135 152,149Total (A) 915,491 7,645,509
Deferred tax liability arising on account of
Excess of depreciation allowable under Income-tax Act over 8,181,436 9,675,218depreciation provided in accountsTotal (B) 8,181,436 9,675,218
Net deferred tax asset/(liability) (A-B) (7,265,945) (2,029,709)
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10) Related Party Disclosures
a) Related party and nature of the relationship where control exists, and with whom transactions have takenplace during the year:• ACB (India) Limited (formerly known as Aryan Coal Benefications Private Limited) (holding company)
Fellow subsidiaries:• Aryan Clean Coal Technologies Private Limited• Aryan Energy Private Limited• Spectrum Coal and Power Limited
Key Management Person• Mr. Ganesh Chandra Mrig (Till 4 September 2009)• Mr. Ajay Mrig• Mr. Dev Suman Sindhu
Enterprises over which key management personnel exercise significant influence (others):• Sainik Automobiles
b) Related party transactions: (Amount in Rupees)
Particulars Holding Fellow KMP Others Totalcompany subsidiaries
Transactions during the period
Coal beneficiation receipts 63,738,114 - - - 63,738,114(22,669,580) (-) (-) (-) (22,669,580)
Other income - - - - -(1,367,113) (-) (-) (1,879,262) (3,246,375)
Purchases of coal - 30,987,549 - - 30,987,549(-) (15,670,060) (-) (181,442,767) (197,112,827)
Purchase of stores and spare parts - 3,296,624 - 408,582 3,705,206(-) (1,558,628) (-) (151,286) (1,709,914)
Managerial remuneration paid - - 6,186,644 - 6,186,644(-) (-) (-) (-) (-)
Interest expense on 77,20,692 - - - 77,20,692inter-corporate deposit (8,283,880) (-) (-) (-) (8,283,880)
Inter corporate deposit received 3,250,000 - - - 3,250,000(114,650,000) (-) (-) (-) (114,650,000)
Refund of inter corporate deposit 33,350,000 - - - 33,350,000(77,650,000) (-) (-) (-) (77,650,000)
Refund of share application money - - - - -(17,620,000) (-) (-) (-) (17,620,000)
Commercial vehicle running - - - 123,492 123,492and maintenance (-) (-) (-) (54,528) (54,528)
Interest accrued and due on - 2,339,937 - - 2,339,937Credit Balance (-) (-) (-) (-) (-)
Repair & Maint.(Plant - 1,588 - - 1,588& Machinery) (-) (-) (-) (-) (-)
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Outstanding balances as at 31 March, 2010
Inter corporate deposit 41,400,000 - - - 41,400,000(71,500,000) (-) (-) (-) (71,500,000)
Interest accrued and due 6,948,623 - - - 6,948,623(6,406,753) (-) (-) (-) (6,406,753)
Sundry creditors - 43,483,752 - - 43,483,752(-) (18,504,950) (-) (16,615) (18,521,565)
Sundry debtors - - - - -(1,720,860) (1,866,516) (-) (-) (3,587,376)
Share application money - - - - -(-) (-) (-) (5,525,000) (5,525,000)
Advance from Debtors 3,224,468 - - - 3,224,468(-) (-) (-) - (-)
Advance to Vendors - - - 8,293 8,293(-) (-) (-) (-) (-)
Figures in brackets are for the previous year
c) Disclosure in respect of transaction which are more than 10% of the total transactions of the same typewith related parties during the year:
(Amount in Rupees)
Transactions during the year Year ended Year ended31 March 2010 31 March 2009
Coal beneficiation receiptsACB (India) Limited 63,738,114 22,669,580
63,738,114 22,669,580Handling of coalSpectrum Coal and Power Limited - 1,879,262ACB (India) Limited - 1,367,113
- 3,246,375Purchase of coalSpectrum Coal and Power Limited - 181,442,767Aryan Energy Private Limited 30,987,549 15,670,060
30,987,549 197,112,827Purchase of stores and spare partsAryan Clean Coal Technologies Private Limited 502,602 1,558,628Aryan Energy Private Limited 2,794,022 -Others 408,582 151,286
3,705,206 1,709,914Interest expense on inter corporate depositACB (India) Limited 7,720,692 8,283,880
7,720,692 8,283,880Inter corporate deposit receivedACB (India) Limited 3,250,000 114,650,000
3,250,000 114,650,000
(Amount in Rupees)
Particulars Holding Fellow KMP Others Totalcompany subsidiaries
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Refund of inter corporate depositACB (India) Limited 33,350,000 77,650,000
33,350,000 77,650,000Refund of share application moneyACB (India) Limited - 17,620,000
- 17,620,000Repair & maintenance (Plant & Machinery)Aryan Energy Private Limited 1,588 -
1,588 -Commercial vehicle running and maintenanceSainik Automobiles 123,492 54,528
123,492 54,528Interest accrued & due on Credit BalanceAryan Energy Private Limited 2,339,937 -
2,339,937 -Director RemunerationMr.Ajay Mrig 3,185,519 -Mr.Dev Suman Sindhu 3,001,125 -
6,186,644 -
11) There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for morethan 45 days as at 31 March 2010. The information as required to be disclosed under the Micro, Small andMedium Enterprises Development Act, 2006 has been determined to the extent such parties have been identifiedon the basis of information available with the Company.
12) The Company has during the year entered into transactions of purchases and sales of goods and services withprivate companies and firms, in which director(s) of the Company are director(s)/ shareholder(s)/ partners(s).In majority of the cases, the Company has taken the relevant approvals from the statutory authorities i.e.Central Government, however, in case of any lapse due to commission/ omission, the necessary correctiveaction is being initiated.
13) Previous year’s figures have been regrouped / re-arranged where considered appropriate wherever necessaryto conform to the current year’s groupings / classifications.
For and on behalf of the Borad of Directors
Sd/- Sd/-Dev Suman Sindhu Ajay MrigDirector Director
Place : GurgaonDate : 15 September 2010
(Amount in Rupees)
Transactions during the year Year ended Year ended31 March 2010 31 March 2009
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Information pursuant to Part IV of scheule VI of the Companies Act, 1956BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL
BUSINESS PROFILEI. Registration Details
Registration No. State Code
Balance Sheet DateDate Month Year
II. Capital Raised During the year (Rupees in Thousand)
Public Issue Rights Issue
Bonus Issue Private Placement
III. Position of Mobilization and Deployment of Funds (Rupees in Thousand)
Total Liabilities Total Assets
Source of Funds
Paid-Up-Capital Reserves and Surplus
Share application money Loan Fund
Current liabilities and provision Deferred Tax Lliability
Application of FundsFixed Assets Current Assets
Investments
IV. Performance of Company (Rupees in Thousand)
Turnover Total Expenditure
Profit Before Tax Profit after Tax
Basic earning per share (in Rs.) Dividend rate %
Basic earning per share (in Rs.)
V. Generic names of three principle products/services of the company(As per monetary terms)
Item Code No. (ITC Code): Product Description :
Not applicable Coal beneficiation and allied activities
3 1 0 3
5 5
2 0 1 0
Nil
Nil
Nil
Nil
U 1 0 2 0 0 D L 2 0 0 2 P T C 1 1 5 1 5 5
2 7 5 7 8 2 2 7 5 7 8 2
4 5 0 0 0 1 0 7 4 8 8
- 5 4 9 0 8
4 7 0 7 0 8 3 8 0 3 2 3
9 0 3 8 5 6 2 5 3 3
1 0 7 0 0 5
7
1 6 8 7 7 0
1 3 . 9 0 Nil
6 1 1 2 1 7 2 6 6
1 2 . 3 8
For and on behalf of the Borad of Directors
Sd/- Sd/-Dev Suman Sindhu Ajay MrigDirector Director
Place : GurgaonDate : 15 September, 2010
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Annexure-DAryan Ispat and Power Private Limited
Registered Office : Above Hero Honda Showroom,Rajendra Nagar Chowk, Link Road, Bilaspur, Chhatisgarh-495001
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NOTICE
Notice is hereby given that the Seventh Annual General Meeting of the Company shall be held at shorter notice onThursday, the 30 September, 2010 at 10:30 a.m. at the Registered Office of the Company at Above Hero Honda Showroom,Rajendra Nagar Chowk, Link Road, Bilaspur (CG)-495001 to transact the following business:
ORDINARY BUSINESS
1. To receive, consider and adopt the Audited Balance Sheet of the Company as at 31 March, 2010 and Profit & LossAccount for the period commencing from 1 April, 2009 to 31 March, 2010 together with the Directors’ Report andAuditors’ Report thereon.
2. To appoint a Director in Place of Sh. Ganesh Chandra Mrig, who retires by rotation and being eligible, offers himselffor reappointment.
3. To appoint a Director in Place of Sh. Vir Sen Sindhu, who retires by rotation and being eligible, offers himself forreappointment.
4. To appoint a Director in Place of Sh. Pramod Kumar Jain, who retires by rotation and being eligible, offers himselffor reappointment.
5. To appoint Statutory Auditors of the Company:
To consider and if thought fit, to pass with or without modification(s), the following resolution as an OrdinaryResolution:
“RESOLVED THAT M/s B S R & Company, Chartered Accountants, retiring Auditors of the Company be and arehereby appointed as the Statutory Auditors of the Company to hold office from the date of conclusion of thisAnnual General Meeting till the date of conclusion of the next Annual General Meeting of the Company at aremuneration as mutually decided by the Company & the Auditors.”
SPECIAL BUSINESS
6. To consider and if thought fit, to pass with or without modification(s), the following resolution as a Special Resolution:
“RESOLVED THAT pursuant to the provisions of Section 198, 269, 309, 316 and other applicable provisions, if any,of the Companies Act, 1956 read with Schedule XIII to the Companies Act, 1956, and pursuant to the Articles ofAssociation of the Company, Sh. Ganesh Chandra Mrig who is presently holding office of Managing Director inACB (India) Limited, be and is hereby appointed as Managing Director of the Company for a period of one yearwith effect from 1st April, 2010, without any remuneration, provided that he would be reimbursed for all the expensesthat may be incurred by him in the course of performing his official duties at any time during his tenure of office.
RESOLVED FURTHER THAT the Directors of the Company be and are hereby severally authorised to file thenecessary returns/Forms with the Registrar of Companies and to do all such acts, deeds and things as may benecessary to give effect to this resolution.”
By order of the Board of DirectorsFor Aryan Ispat and Power Private Limited
Sd/-Place : Gurgaon R.S. SindhuDate : 15 September, 2010 Chairman
NOTES
1 A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TOATTEND AND VOTE INSTEAD OF HIMSELF/HERSELF. SUCH PROXY NEED NOT BE A MEMBER OF THECOMPANY.
2 IN ORDER TO BE EFFECTIVE PROXY FORM DULY COMPLETED MUST BE RECEIVED BY THE COMPANY ATITS REGISTERED OFFICE NOT LESS THAN 48 HOURS BEFORE SCHEDULED TIME FOR HOLDING OF THEMEETING. A BLANK PROXY FORM IS ENCLOSED HEREWITH.
3 Explanatory Statement pursuant to the provisions of Section 173 (2) of the Companies Act, 1956 is attached herewith.
Aryan Ispat And Power Private LimitedRegd. Office- Above Hero Honda Showroom, Rajendra Nagar Chowk, Link Road, Bilaspur (C.G.)-495001
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EXPLANATORY STATEMENT PURSUANT TO THE PROVISIONS OF SECTION 173(2) OF THE COMPANIESACT, 1956
Item No. 6:
As per the provisions of Section 269 of the Companies Act, 1956, a company having paid-up capital of Rs. 5 Crores andmore is required to appoint a Managing Director or Whole-time Director and the Company’s paid-up capital is morethan Rs.5 Crores, hence, the Company is required to appoint a Managing Director or Whole-time Director.
Further, in view of the Company’s increased activities due to operations of the Company’s Plant at Sambalpur, Sh.Ganesh Chandra Mrig, who is presently working as Managing Director of the Company’s holding company viz. ACB(India) Limited, was appointed by the Board of Directors of the Company as Managing Director in their meeting heldon 31.03.2010, to look after the day to day management of the Company, without any remuneration. Sh. Ganesh ChandraMrig has already attained the age of 70 years and as per the provisions of Schedule XIII of the Companies Act, 1956, hisappointment can be made by way of Special Resolution passed in their General Meeting. He was appointed for aperiod of 1 year with effect from 1st April, 2010, subject to approval of the Shareholders by way of Special Resolutionpassed in their General Meeting.
It is proposed to seek Member’s approval by way of Special Resolution passed in their General Meeting for theappointment of Sh. Ganesh Chandra Mrig as Managing Director of the Company in terms of the applicable provisionsof the Companies Act, 1956.
The contents of Resolution at item no. 6 of the notice may be treated as an abstract of the terms & conditions ofappointment payable to Sh. Ganesh Chandra Mrig pursuant to section 302 (2) of the Companies Act, 1956.
Sh. Ganesh Chandra Mrig himself is concerned or interested in his appointment. Save and except as above, none of theDirectors, is in any way, concerned or interested in the said resolutions.
The Board recommends the resolution as set out at item No. 6 of the Notice for your approval.
By order of the Board of DirectorsFor Aryan Ispat and Power Private Limited
Sd/-Place : Gurgaon R.S. SindhuDate : 15 September, 2010 Chairman
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To,The Members,
Your Directors have pleasure in presenting Seventh Annual Report together with the Audited Statement of Accountsfor the year ended on 31st March, 2010:
1. FINANCIAL RESULTS (Rs. in Lakhs)
Particulars 2009-10 2008-09Gross Income from Operations 9,162.30 5,256.35Net Profit/(Loss) before Interest, Tax & Depreciation (EBIDTA) (2,425.80) 259.80
Less: Interest & Finance Charges 574.34 101.33Net Profit/(Loss) before Tax & Depreciation (PBDT) (3,000.14) 158.47
Less: Depreciation 885.83 241.46Net Profit/(Loss) after Depreciation before Tax (PBT) (3,885.98) (82.99)
Less: Provision for Income Tax-Current - -Provision for Fringe Benefit Tax - 4.64Provision for Wealth Tax 0.52 0.33Net Profit/(Loss) after Tax (PAT) (3,886.50) (87.96)
Total Profit/(Loss) available for appropriation (3,886.50) (87.96)
2. OPERATION
During the year the total income of the Company year Rs.91,62,30,008/- as compare with Rs. 52,56,35,242/- duringprevious year. The Net Loss during the year was Rs.38,86,49,765/-as compared with loss of Rs. 87,96,451/-duringprevious year.
3. SHARE CAPITAL
During the year under review, the Authorised Share Capital has been increased from Rs. 70,00,00,000/-(RupeesSeventy Crore Only) divided into 7,00,000 (Seven Lakh) Equity Shares of Rs.100/- (Rupees One Hundred) each toRs. 100,00,00,000/-(Rupees One Hundred Crores Only) divided into 1,00,00,000 (One Crore) Equity Shares of Rs.100/- (Rupees One Hundred) each.
Further, during the year ended 31.03.2010, the Company has allotted 50,00,000 Equity Share of Rs.100/- each at Paron 31.03.2010.
4. DIVIDEND
In view of the losses during the year under review, your Directors do not recommend any dividend for the financialyear ended on 31 March, 2010.
5. PUBLIC DEPOSITS
The Company has not invited / accepted any public deposits under section 58A & 58AA of the Companies Act,1956 during the financial year ended on 31 March, 2010.
6. DIRECTORS
During the year under review, Sh. Niten Malhan continued as Nominee Director on Board of Directors of the Companyon behalf of Pineridge Investment Ltd.
Sh. Ganesh Chandra Mrig, Sh. Vir Sen Sindhu and Sh. Pramod Kumar Jain Directors, retire by rotation and beingeligible, offer themselves for reappointment at the ensuing Annual General Meeting.
Further, in view of the Company’s increased activities due to operations of the Company’s Plant at Sambalpur, Sh.Ganesh Chandra Mrig, who is presently working as Managing Director of the Company’s holding company viz.ACB (India) Limited, was appointed by the Board of Directors of the Company as Managing Director in theirmeeting held on 31st March, 2010, to look after the day to day management of the Company, without any remuneration.He was appointed for a period of 1 year with effect from 1st April, 2010, subject to approval of the Shareholders byway of Special Resolution passed in their General Meeting.
There is no other change in composition of Board of Directors.
DIRECTORS’ REPORT
Aryan Ispat And Power Private LimitedRegd. Office- Above Hero Honda Showroom, Rajendra Nagar Chowk, Link Road, Bilaspur (C.G.)-495001
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7. AUDIT COMMITTEE
As required pursuant to Section 292A of the Companies Act, 1956, the details of composition of Audit Committeeare given hereunder:
1. Sh. Rudra Sen Sindhu
2. Sh. Ganesh Chandra Mrig
3. Sh. Niten Malhan
Sh. Rudra Sen Sindhu is the Chairman of the Audit Committee.
8. AUDITORS’ REPORT
In the Auditor’s Report for the year ending on 31 March, 2010, Auditors have made certain observations withregard to the matter that the Company has entered into transactions covered under section 297 of the CompaniesAct, 1956 with certain parties in the current year and the previous years aggregating to Rs. 33,010,126 andRs. 273,955,400 respectively. In respect of such transactions, the Company has not obtained the prior approval of theCentral Government, as envisaged under that section. In respect of the previous years, the Company has filed thenecessary applications for compounding of these transactions with the appropriate authorities. In the absence ofsuch prior approval, the Auditors are unable to comment on the impact, if any, that the above non-compliance mayhave on the financial statements of the Company. The same was also a subject matter of qualification in their reportfor the previous year.
To the above, the Company states that the Company has during the year entered into transactions of purchases andsales with private companies, in which director(s) of the Company are director(s). In majority of the cases, theCompany has taken the relevant approvals from the statutory authorities i.e. Central Government but in case of anylapse due to commission/ omission, the necessary corrective action is being initiated. Further, the Company hasfiled Compounding Application for the past transactions.
Further, in the Auditor’s Report for the year ending on 31 March, 2010, Auditors have made certain observationswith regard to the matter that the Company has incurred cash losses in the current financial year.
To the above, the Company states that the Company has incurred losses in the financial year 2009-10 due to theadverse market conditions. The Company was not able to pass on the price increase in inputs to the customers.Moreover, in the current year the management has taken necessary steps to improve the efficiency of the Companywhich will have a positive impact on the financials.
Further, the Company is paying all its Statutory Taxes etc. in time except those which are contested by the Company.On the basis of the Opinion given by the Legal Counsel of the Company, the Management is of the view that disputepertaining to such tax liabilities shall be decided in favour of the Company.
9. APPOINTMENT OF AUDITORS
M/s B S R & Company, Chartered Accountants, retire at the conclusion of the ensuing Annual General Meetingand being eligible have offered themselves for re-appointment. The Company has received a certificate from thempursuant to section 224(1B) confirming their eligibility for re-appointment. Yours Directors recommend their re-appointment.
10. DISCLOSURES UNDER SECTION 217 OF THE COMPANIES ACT, 1956
Except as disclosed elsewhere in the report, there have been no material changes and commitments, which canaffect the financial position of the Company between the end of financial year and the date of report.
As required under Section 217(2) of the Companies Act, 1956, the Board of Directors inform the members thatduring the financial year there has been no change:• in the nature of Company’s business,• in the classes of business in which the Company has an interest.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS ANDOUTO
I. Energy Conservation
A. Energy Conservation measures taken• Taking steps to increase the awareness among all the employees for optimum usage of power & water in
office area & production areas.• Using High Luminous Tube Rods and energy efficient systems for lighting.
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• Using adequate capacitor for optimum use of electricity.• Switching off of Lights and other equipments during idle hours and leisure times.• Minimum lights are on during night time.
B. Proposal / Investments for reduction of Energy Conservation
The Company proposes to install timer for the street lights thereby resulting into conservation of energy.
C. Impact of measures taken and impact on cost of production of goods
The above said measures taken by the Company for conservation of energy has resulted significant saving incost of energy resulting into lowering the cost of production of goods.
Details of energy conservation along with the information in accordance with section 217(1)(e) of the CompaniesAct, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 isgiven below.
Form for Disclosure of Particulars with respect to Conservation of Energy[Sec. 217(1) (e) of the Companies Act, 1956]
A. Power & Fuel Consumption
S.No. Particulars Current Year Current Year2009-2010 2008-2009
1 Electricitya) Purchased/Consumption Units (KWH) 25,43,120 50,10,773
Total Amount (Rs.) 1,38,41,664 1,89,79,836Rate/ Unit (Rs. Per Unit) 5.44 3.79
b) Own Generationi) Through Diesel Generator units (KWH) 2,25,584 2,94,168
Unit per Liter of Diesel Oil 2.32 2.51Cost/unit (Rs.) 14.89 13.41
ii) Through steam turbine/generator units 1,01,49,117 N.AUnits per ton of coal oil/gas 823.14 N.A.Cost/unit (Rs.) 0.964 N.A.
2 Coal (specify quality and where used)Quantity (tones) (MT) Direct Reduced Iron Plant 60,958.32 N.AQuantity (tones) (MT) Captive Power Plant 50,086.29 N.ATotal Cost (Rs.) 8,81,15,008 N.AAverage rate (Rs.) 793.51 N.A
3 Furnace OilTotal amount (Average rate) N.A N.A
4 Others/Internal GenerationQuantity N.A N.ATotal cost N.A N.ARate/Unit N.A N.A
B. Consumption per unit of production(Sponge Iron)
Particulars Standard Current Year Previous Year(if any) (MT) (MT)
Unit
Products (with details) UnitElectricity KWH 356.32 210.67Coal (Specify Quality) MT 1.681 N.AFurnace Oil — N.A. N.AOthers (Specify) — N.A. N.A
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II. Technology Absorption
FORM B
Form for disclosure of particulars with respect to Technology Absorption Research & Development (R&D)1. Specific areas in which R & D carried out by the Company : Nil2. Benefits derived as a result of above R & D : N.A.3. Future plan of Action : Nil4. Expenditure on R & D during 2009-10 : Nil
Technology absorption, adaptation and Innovation1. Efforts, in brief, made towards technology adaptation and innovation : Nil2. Benefits derived as a result of the above efforts : N.A.3. In case of imported technology (imported during the last five years reckoned from the beginning of the financial
year), following information may be furnished. N.A.a. Technology imported : N.A.b. Year of import : N.A.c. Has technology been fully absorbed : N.A.d. If not fully absorbed, areas where this has not taken place, reasons thereof : N.A.
and future plan(s) of action
III. Foreign Exchange Earnings and Outgo
There was no foreign exchange earnings and outgo during the financial year ended on 31 March, 2010.
11. PARTICULARS OF EMPLOYEES U/S 217(2A) OF COMPANIES ACT, 1956
None of the employees of the Company has drawn salary in excess of the limits prescribed in the said section of theCompanies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and hence no such list isbeing provided.
12. DIRECTOR RESPONSIBILITY STATEMENT
As per the provisions of Section 217(2AA) of the Companies Act, 1956 your directors make the Statement:(a) That in preparation of the Accounts for the financial year ended 31st March, 2010; the applicable Accounting
Standards have been followed along with proper explanations relating to material departures.(b) That the Directors have selected such Accounting Policies and applied them consistently and made judgments
and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of theCompany at the end of the financial year and of the profit of the Company for that period.
(c) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities and.
(d) That the Directors have prepared the accounts for the financial year ended 31st March 2010 on a going concernbasis.
13. ACKNOWLEDGEMENT
Your directors would like to place their grateful appreciation for the assistance and co-operation received from theCompany’s bankers during the year under review. The directors also acknowledge with appreciation the supportand co-operation rendered by various Govt. Agencies and Departments. Your Directors would also wish to placeon record their deep sense of appreciation for the continued support of all the investors of the Company and alsoacknowledge the hard work, dedication and unstinting efforts of the employees. The directors also wish to thankPineridge Investments Ltd (an affiliate of Warburg Pincus Group) and Sh. Niten Malhan, their representative directorfor having supported the business plans of the Company to the fullest extent.
By order of the Board of DirectorsFor Aryan Ispat and Power Private Limited
Sd/-Place : Gurgaon R.S. SindhuDate : 15 September 2010 Chairman
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To the members ofAryan Ispat and Power Private Limited
We have audited the attached Balance Sheet of Aryan Ispat and Power Private Limited (“the Company”) as at 31 March2010, the Profit and Loss Account and the Cash Flow Statement (“the financial statements”) of the Company for theyear ended on that date, annexed thereto. These financial statements are the responsibility of the Company’s management.Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards requirethat we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principles used and significant estimatesmade by management, as well as evaluating the overall financial statement presentation. We believe that our auditprovides a reasonable basis for our opinion.
As required by the Companies (Auditor’s Report) Order, 2003 (“the Order”) issued by the Central Government of Indiain terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure, a statement on thematters 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 necessaryfor 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 fromour examination of those books;
c) the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreementwith the books of account;
d) in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by thisreport comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act,1956;
e) on the basis of written representations received from the directors, as on 31 March 2010, and taken on record by theBoard of Directors, we report that none of the directors is disqualified as on 31 March 2010 from being appointed asa director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;
f) attention is invited to note III (10) of schedule 19 to the financial statements wherein it has been explained that the Companyhas entered into transactions covered under section 297 of the Companies Act, 1956 with certain parties in the current yearand the previous years aggregating to Rs. 33,010,126 and Rs. 273,955,400 respectively. In respect of such transactions, theCompany has not obtained the prior approval of the Central Government, as envisaged under that section. In respect of theprevious years, the Company has filed the necessary applications for compounding of these transactions with the appropriateauthorities. In the absence of such prior approval, we are unable to comment on the impact, if any, that the above non-compliancemay have on the financial statements of the Company;
The same was also a subject matter of qualification in our report for the previous year; and
g) subject to our comments in paragraph (f) above, the impact of which is not ascertainable, in our opinion and to the best ofour information and according to the explanations given to us, the said accounts give the information required bythe Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2010;
(ii) in the case of the Profit and Loss Account, of the loss for the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.
For B S R & COMPANYChartered AccountantsFirm Registration No. :128032W
Sd/-Place : Gurgaon Manish GuptaDate : 15 September, 2010 Partner
Membership No.: 095037
Auditors’ Report
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(Referred to in our report of even date)(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and
situation of fixed assets.
(b) According to the information and explanations given to us the Company has a programme of physicalverification of its fixed assets by which all fixed assets are verified over a period of two years. In our opinion,this periodicity of physical verification is reasonable having regard to the size of the Company and the natureof its assets. According to this programme, the Company has verified a part of its fixed assets during the year.The Company is in the process of reconciling the physical assets with the book records and does not expectany material adjustments in this regard.
(c) Fixed assets disposed off during the year were not substantial and, therefore do not affect the going concernassumption.
(ii) (a) The inventory, except goods-in-transit, has been physically verified by the management during the year. Inour opinion, the frequency of such verification is reasonable.
(b) The procedures for the physical verification of inventories followed by the management are reasonable andadequate in relation to the size of the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification betweenthe physical stocks and the book records were not material.
(iii) (a) The Company has neither granted nor taken any loan, secured or unsecured, to companies, firms or otherparties covered in the register maintained under section 301 of the Companies Act, 1956.Accordingly,otherclauses of paragraph 4 (iii) of the order is not applicable.
(iv) In our opinion and according to the information and explanations given to us, there is an adequate internalcontrol system commensurate with the size of the Company and the nature of its business with regard to saleof goods, purchase of inventories and fixed assets. The activities of the Company do not involve sale ofservices. In our opinion and according to the information and explanations given to us, there is no continuingfailure to correct major weaknesses in internal control system.
(v) (a) According to the information and explanations given to us, the particulars of contracts or arrangementsreferred to in section 301 of the Companies Act, 1956 have been entered in the register required to be maintainedunder that section.
(b) In our opinion, and according to the information and explanations given to us, the transactions made inpursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rs. 5 lakhs withany party during the year have been made at prices which are reasonable having regard to the prevailingmarket prices at the relevant time
Further, as explained in more detail in paragraph (f) of our audit report, the Company in respect of certain transactionsentered into in the current year as well as the previous year and covered under Section 297 of the Companies Act 1956and entered in the register maintained under Section 301 of the said Act, has not obtained the prior approval of theCentral Government as required under Section 297 of the Companies Act, 1956.
(vi) The Company has not accepted any deposits from the public.
(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of itsbusiness.
(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribedby the Central Government for maintenance of cost records under Section 209(1)(d) of the Companies Act,1956 in respect of sponge iron manufactured and power operations of the Company and are of the opinionthat prima facie, the prescribed accounts and records have been made and maintained. However, we havenot made a detailed examination of the records.
(ix) (a) According to the information and explanations given to us and on the basis of our examination of the recordsof the company, amounts deducted/accrued in the books of account in respect of undisputed statutory duesincluding Provident Fund, Income tax, Sales tax, Wealth tax, Excise duty, Cess and other material statutorydues except for dues in respect of Works Contract tax, and Service Tax have generally been regularly depositedduring the year by the Company with the appropriate authorities though there has been a slight delay in afew cases. Dues of Works Contract tax and Service Tax have not been regularly deposited during the year by theCompany and there have been substantial delays. As explained to us, the Company did not have any dues onaccount of Custom duty and Investor Education and Protection Fund.
Annexure to the Auditor’s Report
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There were no dues on account of Cess under Section 441A of the Companies Act, 1956 since the date fromwhich the aforesaid section comes into force has not yet been notified by the Central Government.
According to the information and explanations given to us, no undisputed amounts payable in respect ofProvident Fund, Employees’ State Insurance, Income tax, Sales tax, Wealth tax, Excise duty, Cess and othermaterial statutory dues were in arrears as at 31 March 2010 for a period of more than six months from thedate they became payable.
(b) According to the information and explanations given to us, there are no dues of Income tax, Sales tax, Wealthtax, Service tax, Excise duty, and Cess which have not been deposited with the appropriate authorities onaccount of any dispute.
Further, as explained to us, the provisions of Customs duty and Investor Education and Protection Fund arenot applicable to the Company.
(x) The Company’s accumulated losses at the end of the financial year are not more than fifty percent of its networth. The Company has incurred cash losses in the current financial year but had not incurred cash losses in theimmediately preceding financial year.
(xi) In our opinion and according to the information and explanations given to us, the Company has not defaultedin repayment of dues to its bankers. The Company did not have any outstanding dues to any financialinstitution or debenture holders during the year.
(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares,debentures and other securities.
(xiii) In our opinion and according to the information and explanations given to us, the Company is not a chit fundor a nidhi/ mutual benefit fund/ society.
(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares,securities, debentures and other investments.
(xv) According to the information and explanations given to us, the Company has not given any guarantee forloans taken by others from banks or financial institutions.
(xvi) In our opinion and according to the information and explanations given to us, the term loans taken by thecompany have been applied for the purpose for which such loans were taken
(xvii) According to the information and explanations given to us and on an overall examination of the balancesheet of the Company, we are of the opinion that the funds raised on short-term basis have not been used forlong-term investment.
(xviii) The Company has not made any preferential allotment of shares to companies, firms or parties covered in theregister maintained under section 301 of the Companies Act, 1956.
(xix) The Company did not have any outstanding debentures during the year.
(xx) The Company has not raised any money by public issues.
(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticedor reported during the course of our audit.
For B S R & COMPANYChartered AccountantsFirm Registration No. :128032W
Sd/-Place : Gurgaon Manish GuptaDate : 15 September, 2010 Partner
Membership No.: 095037
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Particulars Schedule As at As at31 March 2010 31 March 2009
I. SOURCES OF FUNDSShareholders’ fundsShare capital 1 900,000,000 400,000,000Reserves and surplus 2 400,000,000 400,000,000
1,300,000,000 800,000,000
Share application money pending allotment 1,121,065,212 951,765,212Loan fundsSecured loans 3 843,750,000 916,828,157Unsecured loans 4 250,000,000 -
1,093,750,000 916,828,157
Total 3,514,815,212 2,668,593,369
II. APPLICATION OF FUNDS
Fixed assets 5Gross block 2 ,554,766,075 688,684,488Less: accumulated depreciation 151,002,826 62,608,355Net block 2,403,763,249 626,076,133Capital work in progress 58,436,099 1,595,778,093
2,462,199,348 2,221,854,226Investments 6 239,110 175,296Current assets, loans and advances
Current assetsInventories 7 274,883,097 318,433,587Sundry debtors 8 214,650,147 28,988,570Cash and bank balances 9 101,559,989 14,775,193Loans and advances 10 222,546,326 203,879,196Other current assets 11 3,060,520 61,784
816,700,079 566,138,330Less: Current liabilities and provisions 12Current liabilities 179,462,831 147,269,898Provisions 3,527,277 2,321,603
182,990,108 149,591,501Net current assets 633,709,971 416,546,829Profit and loss account 418,666,783 30,017,018Total 3,514,81 5,212 2,668,593,369Significant accounting policies and 19notes to the accountsThe accompanying notes and schedules form an integral part of the accounts.
Aryan Ispat and Power Private LimitedBalance Sheet as at 31 March 2010(All amounts are in Rupees)
As per our report of even date attached
For B S R & Company For and on behalf of the Board of DirectorChartered AccountantsFirm registration No.ERROR-AkTran32-DII
Sd/- Sd/- Sd/- Sd/-Manish Gupta R.S. Sindhu G.C. Mrig Ritesh MalhotraPartner Chairman Director Company SecretaryMembership No. : 095037
Place : GurgaonDate : 15 September 2010
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Schedule For the year ended For the year ended31 March 2010 31 March 2009
IncomeSale of sponge iron (Gross) 522,810,884 500,132,056Less: Excise duty on sales 43,046,334 60,965,398Net sales 479,764,550 439,166,658Sale of coal 334,295,401 84,508,154Sale of power 98,267,815 -Other income 13 3,902,242 1,960,430
916,230,008 525,635,242
Expenditure
Material consumed for sponge iron unit 14 653,787,173 334,380,684Coal consumption in power plant 39,743,887 -Consumption of coal for resale 250,585,572 61,475,626Manufacturing expenses 15 102,542,916 50,732,707Personnel cost 16 48,050,082 28,186,731Administrative and selling expenses 17 64,100,094 24,879,455Depreciation 5 88,583,343 24,145,758Finance cost 18 57,434,826 10,133,460
1,304,827,893 533,934,421
Loss before tax (388,597,885) (8,299,179)
Provision for tax - Fringe benefit tax - 464,111 - Wealth tax 51,880 33,161Profit/ (loss) for the year after taxes (388,649,765) (8,796,451)
Balance carried to Balance Sheet (388,649,765) (8,796,451)Earnings per share [refer note III 3 of schedule 8]Equity shares of face value of Rs. 100 eachBasic (96.83) (2.33)
Number of shares used in computing earnings per shareBasic 4,013,699 3,000,000
Significant accounting policies and 19notes to the accountsThe accompanying notes and schedules form an integral part of the accounts.
Aryan Ispat and Power Private LimitedProfit and Loss Account for the year ended 31 March 2010(All amounts are in Rupees)
As per our report of even date attached
For B S R & Company For and on behalf of the Board of DirectorChartered AccountantsFirm registration No.128032W
Sd/- Sd/- Sd/- Sd/-Manish Gupta R.S. Sindhu G.C. Mrig Ritesh MalhotraPartner Chairman Director Company SecretaryMembership No. : 095037
Place : GurgaonDate : 15 September 2010
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For the year ended For the year ended31 March 2010 31 March 2009
A) Cash flow from operating activities :ALoss before tax (388,597,885) (8,299,179)Adjustment for :Depreciation 88,583,343 24,145,758Finance cost 57,434,826 10,133,460Loss on sale of fixed assets 143,688 -Loss of stock due to fire 17,416,620 -Interest income (3,414,885) (1,329,943)Operating profit/(loss) before working capital changes (228,434,293) 24,650,096Adjustment for :Decrease/(increase) in inventories 26,133,870 (175,693,058)(Increase)/decrease in sundry debtors (185,661,576) 11,927,905(Increase)/decrease in loans and advances (18,289,722) (125,543,682)Increase/(decrease) in current liabilities and provisions 28,062,500 (56,313,468)Cash used in operations (378,189,221) (320,972,207)Taxes paid- Fringe benefit tax paid (104,111) (360,000)- Income tax paid (377,408) (405,723)Net cash used in operating activities (A) (378,670,741) (321,737,930)
B) Cash from investing activitiesPurchase of fixed assets (273,031,357) (1,034,199,333)Sale of fixed assets 45,000 -Purchase of investments (63,814) (66,936)Interest received 416,148 1,329,943Net cash used in investing activities (B) (272,634,023) (1,032,936,326)
C) Cash flow from financing activitiesProceeds from secured loans 1,150,000,000 543,109,196Repayment of secured loans (973,078,157) (191,889,654)Refund of share application money (1,055,000,000) (11,500,000)Finance cost paid (108,132,284) (102,220,051)Proceeds from share application money 1,724,300,000 1,066,100,000Net cash from financing activities (C ) 738,089,559 1,303,599,491
D) Net increase in cash and cash equivalents (A+B+C) 86,784,796 (51,074,766)
E) Cash and cash equivalents as at the beginningCash in hand 622,914 490,378Balance with scheduled banks- on current accounts 12,997,279 13,010,402- on deposit accounts 1,150,000 52,344,179
Balances with others:Post office saving bank a/c 5,000 5,000.00
14,775,193 65,849,959F) Cash and cash equivalents as at the end
Cash in hand 360,466 622,914Cheques in hand 41,000 -Balance with scheduled banks- on current accounts 4,013,523 12,997,279- on deposit accounts 97,140,000 1,150,000
Balances with others:Post office saving bank a/c 5,000 5,000
101,559,989 14,775,193
Aryan Ispat and Power Private LimitedCash Flow Statement for the year ended 31 March 2010(All amounts are in Rupees)
Note:The cash flow statement has been prepared in accordance with ‘Indirect method’ as set out in the Accounting Standard (AS)-3 on‘Cash Flow Statement’, as specified in the Companies (Accounting Standard) Rules, 2006
For B S R & Company For and on behalf of the Board of DirectorChartered AccountantsFirm registration No.128032W
Sd/- Sd/- Sd/- Sd/-Manish Gupta R.S. Sindhu G.C. Mrig Ritesh MalhotraPartner Chairman Director Company SecretaryMembership No. : 095037
Place : GurgaonDate : 15 September 2010
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As at As at31 March 2010 31 March 2009
Schedule 1 - Share capital
Authorised capital
10,000,000 equity shares of Rs. 100 each 1,000,000,000 700,000,000previous year 7,000,000 equity shares of Rs. 100 each
1,000,000,000 700,000,000Issued, subscribed and paid up capital
9,000,000 (previous year 4,000,000) equity shares of 900,000,000 400,000,000Rs.100 each fully paid upOf the above 7,488,000 (previous year 2,540,000)equity shares of Rs.100 each are held byACB (India) Limited (formerly known as 900,000,000 400,000,000Aryan Coal Benefications Private Limited), the holding company
Schedule 2 - Reserve and surplus
Securities premium accountOpening balance 400,000,000 -Add: additions during the year - 400,000,000
400,000,000 400,000,000
Schedule 3 - Secured loans
Loans and advances from banks :- Cash credit* - 74,970,680- Term loan** - 841,466,120
Other loans and advances- Vehicle loans# - 391,757- Term loans## 843,750,000
843,750,000 916,828,157
* Secured by way of first pari passu charge on current assets of the Company including book debts and stock alongwith Punjab and Sind Bank. Further, second pari passu charge on block of assets of the Company situated atSambalpur, Orissa and personal guarantees of the directors of the Company.
** Secured by way of first pari passu charge on block of assets of the Company situated at Sambalpur, Orissa. Further,secured by second pari passu charge on current assets of the Company including book debts along with personalgaurantees of the directors of the Company. Due within a year Rs. Nil (Previous year Rs. 191,018,200).
# Secured by way of first and exclusive charge on specific vehicles.Due within a year Rs. Nil (Previous year Rs. 391,357)
## Secured by way of first and exclusive charge on the project assets of the Company situated at Sambalpur, Orissa.Further, secured by first charge on the book debts, operating cash flows, receivables, revenues of any nature andwhenever arising, present and future, intangibles, goodwill and uncalled capital, present and future. Further securedby fixed deposits specifically pledged by the Company equivalent to one quarter of interest and principal repayment.Further secured by the corporate guarantee of the holding company. Further secured by the first charge by way ofassignment in favour of the lender of all rights, titles, interests, benefits, claims and demands whatsoever of theCompany in the project documents, clearances, and in any letter of credit, guarantee, performance bond providedby any party to the project documents. Due within a year Rs. 225,000,000 (Previous year Rs. nil)
Aryan Ispat and Power Private LimitedSchedules forming part of the accounts(All amounts are in Rupees)
Schedule 4: Unsecured loansOther loans and advances - Term loans* 250,000,000 -
250,000,000 -* Due within a year Rs. 45,131,922 (Previous year Rs. nil)
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As at As at31 March 2010 31 March 2009
Schedule 6 - Investments (Unquoted, non trade)
Long term investment (at cost)
Investments in government or trust securities
National saving certificates 239,110 175,296
239,110 175,296
Schedule 7 - Inventories (At lower of cost and net realisable value)
Stores and spares 26,299,439 26,317,963Raw materials* 163,939,425 239,574,180Finished goods 84,644,233 52,541,444
27,883,097 318,433,587* Includes material in transit of Rs. 19,352,440(Previous year Rs. 12,525,519)
Aryan Ispat and Power Private LimitedSchedules forming part of the accounts(All amounts are in Rupees)
Schedule 8 - Sundry debtors(Unsecured, considered good unless stated otherwise)
Debts outstanding for a period exceeding six months 10,155,964 3,859,265Other debts* 204,494,183 25,129,305
214,650,147 28,988,570
* Includes Rs. 5,912,086 (Previous year Rs. 6,755,124) due fromMahavir Global Coal Limited, a company under the same managementwithin the meaning under section 370(1B) of the Companies Act, 1956
Schedule 9 - Cash and bank balances
Cash in hand 360,466 622,914Cheques/DD in hand 41,000 -Balances with scheduled banks:- on current accounts 4,013,523 12,997,279- on deposit accounts* 97,140,000 1,150,000
Balances with others:Post office saving a/c 5,000 5,000
101,559,989 14,775,193
*Includes Rs. 11,088,000 (Previous year Rs. 1,110,000) pledged with
banks as margin money against gaurantee given.*Includes Rs. 85,962,000 (Previous year Rs. nil) pledged as security for loan taken.
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As at As at31 March 2010 31 March 2009
Schedule 10 - Loans and advances(Unsecured, considered good unless stated otherwise)
Advances recoverable in cash or in kind or for value to be received* 145,260,703 113,722,377Tax deducted at source 783,131 405,723Balance with excise and sales tax authorities 61,711,220 80,360,096Security deposits 14,791,272 9,391,000
222,546,326 203,879,196
* Includes Rs. 10,000,000 (previous year Rs. 10,000,000) due froma director of the company. Maximum amount due during the yearRs. 10,000,000 (previous year Rs. 10,000,000).
Schedule 11 - Other current assets
Interest accrued but not due 3,060,520 61,7843,060,520 61,784
Schedule 12 - Current liabilities and provisions
Current liabilitiesSundry creditors (Refer to note III 9 of schedule 18)-total outstanding dues of creditors other than micro and small enterprises* 155,150,699 135,567,998Advance from customers 6,919,990 945,678Other liabilities** 12,003,804 10,553,479Book overdraft - 202,743Interest accrued but not due on loans 5,388,338 -
179,462,831 147,269,898* Includes salary, wages and bonus payable of Rs. 6,240,252
(previous year Rs. 2,400,000).**Includes provident fund payable of Rs. 752,784 (previous year Rs. 500,634)
Provisions
Provision for gratuity 3,475,397 2,184,331Provision for wealth tax 51,880 33,161Provision for fringe benefit tax (net of advance fringebenefit tax previous year Rs. 360,000) - 104,111
3,527,277 2,321,603
Aryan Ispat and Power Private LimitedSchedules forming part of the accounts(All amounts are in Rupees)
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Aryan Ispat and Power Private LimitedSchedules forming part of the accounts(All amounts are in Rupees)
For the year ended For the year ended31 March 2010 31 March 2009
Schedule 13 - Other income
Interest income from bank 3,414,885 1,329,943[tax deducted at source Rs. 327,887 (previous year Rs. 235,105)]Interest income from others 364,206 -[tax deducted at source Rs. 49,521 (previous year Rs. 38,997)]Miscellaneous income 123,151 630,487
3,902,242 1,960,430
Schedule 14 - Material consumed
Raw materials consumedOpening stock 239,574,180 76,778,039Add : purchases 565,426,130 481,856,028
805,000,310 558,634,067Less: closing stock 163,939,425 641,060,885 239,574,180 319,059,887
Stores and spare partsOpening stock 26,317,963 8,567,162Add : purchases 40,925,131 36,980,677
67,243,094 45,547,839Less: closing stock 26,299,439 40,943,655 26,317,963 19,229,876
Increase/(Decrease) in stocks
Opening stockFinished goods 52,541,444 56,795,397Work in progress - 599,931Excise duty on finished goodsLess: closing stockFinished goods 84,644,233 52,541,444Work in progress - (32,102,789) - 4,853,884Increase/(decrease) in excise duty on finished goods 3,885,422 (8,762,963)
(28,217,367) (3,909,079)653,787,173 334,380,684
Schedule 15 - Manufacturing expenses
Power and fuel 20,963,729 24,949,885Loading and unloading expenses 38,501,557 3,814,715Equipment hire charges 14,183,456 2,171,518Repair and maintenance - Building 4,564,363 5,126,485 - Plant and machinery 24,329,811 14,670,104
102,542,916 50,732,707
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For the year ended For the year ended31 March 2010 31 March 2009
Schedule 16 - Personnel cost
Salaries, wages and bonus 39,650,897 22,341,238Contribution to provident fund and other funds 3,497,719 2,551,874Gratuity 1,291,066 1,045,638Staff welfare expenses 3,610,400 2,247,981
48,050,082 28,186,731
Schedule 17 - Administrative and selling expenses
Rent 2,024,310 826,208Rates, Fee and taxes 1,223,353 772,138Insurance 2,967,131 1,109,268Legal and professional 1,584,708 1,374,864Security charges 413,570 683,603Communication 1,733,359 1,078,296Printing and stationery 206,019 108,866Electricity and water 217,433 132,891Bank charges 2,152,740 808,700Business promotion 192,500 271,249Donation 612,494 711,377Sales commission 2,900,050 1,080,128Quality deductions 20,031,689 3,687,497Travelling and conveyance 4,089,450 7,673,384Bad debts - 3,604,253Rake handling charges 1,245,912 -Loss on sale of fixed assets 143,688 -Loss of stock due to fire 17,416,620 -Miscellaneous expenses 4,945,068 956,733
64,100,094 24,879,455
Schedule 18 - Finance cost
Interest on cash credits 3,136,084 8,778,274Interest on vehicle loans 15,043 83,056Interest on term loan 45,658,699 1,272,130Loan processing charges 8,625,000 -
57,434,826 10,133,460
Aryan Ispat and Power Private LimitedSchedules forming part of the accounts(All amounts are in Rupees)
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I. Background
Aryan Ispat and Power Private Limited (‘the Company’) was incorporated on 28 April 2003. The Company is engagedin manufacturing of sponge iron, generation of power and coal operations. The Company is a subsidiary of ACB(India) Limited (formerly known as Aryan Coal Benefications Private Limited) holding 83.20% of the equity sharecapital of the company.
II. Significant accounting policies
1 Accounting convention
The Company maintains its accounts on accrual basis. The financial statements are prepared and presentedunder the historical cost convention in accordance with the Generally Accepted Accounting Principles (‘GAAP’)in India and mandatory accounting standards as specified in the Companies (Accounting Standards) Rules,2006, the provisions of the Companies Act, 1956, to the extent applicable, and as adopted consistently by theCompany.
2 Use of estimates
The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP)in India requires management to make estimates and assumptions that affect the reported amounts of assetsand liabilities and the disclosure of contingent liabilities on the date of the financial statements. Actual resultscould differ from those estimates. Differences between the actual results and estimates are recognised in theyear in which the results are known or materialised. Any revision to accounting estimates is recognisedprospectively in current and future periods.
3 Fixed assets
Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. The cost of fixedassets includes inward freight, duties, taxes and incidental expenses related to acquisition and installation incurredupto the date of commissioning of the assets. Fixed assets under construction, advances paid towards acquisitionof fixed assets and cost of asset not ready to use before the year end, are disclosed as capital work in progress.Assets held for disposal are stated at their estimated residual values as at the balance sheet date.
4 Impairment of assets
The carrying amounts of assets are reviewed at each balance sheet date to determine whether there is anyindication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. An impairmentloss is recognised whenever the carrying amount of an asset or its cash generating unit exceeds its recoverableamount. Impairment losses are recognised in the Profit and Loss Account. An impairment loss is reversed ifthere has been a change in the estimates used to determine the recoverable amount. An impairment loss isreversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that wouldhave been determined net of depreciation or amortisation, if no impairment loss had been recognised.
5 Depreciation
For assets used for sponge operations
Depreciation is provided on pro-rata basis as per straight line method (SLM) at rates based upon managementestimates of useful lives of the assets. Such rates are equal to or higher than the rates prescribed in Schedule XIVof the Companies Act, 1956.
For assets used for coal operations
Depreciation is provided on pro-rata basis as per written down value (WDV) method at rates based uponmanagement estimates of useful lives of the assets. Such rates are equal to or higher than the rates prescribed inSchedule XIV of the Companies Act, 1956.
For assets used for power operations-
Depreciation is provided on pro-rata basis as per straight line method (SLM) at rates based upon the management
Aryan Ispat and Power Private LimitedSchedules forming part of the accounts
Schedule 19 : Significant accounting policies and notes to the accounts
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estimates of useful lives of the assets. Such rates are equal to the rates prescribed in Schedule XIV of the CompaniesAct, 1956.
Assets individually costing upto Rs. 5,000 are fully depreciated in the year of purchase.
6 Investments
Investments are classified into long term investments. Long term investments are stated at cost and provision ismade to recognize any decline, other than temporary, in the value of such investments.
7 Inventories
The basis for determination of cost of various categories of inventory is as follows:
a) Raw material including stores and spares are valued at cost or net realizable value whichever is lower. Costis determined on first in first out basis (FIFO).
Stores, raw materials and components held for use in production of finished goods are not written downbelow cost except in cases where material prices have declined and it is estimated that the cost of the finishedgoods will exceed their net realizable value.
b) Finished goods are valued at cost or net realizable value (NRV) whichever is lower. Cost includes cost ofconversion and other costs incurred in bringing the inventory to their present location and condition includingexcise duty.
8 Revenue recognition
Revenue from sale of goods is recognised when goods are dispatched to the customer which coincides with thetransfer of significant risks and rewards. Sales represent the invoiced value of goods (net of sales tax) but inclusiveof excise duty.
9 Borrowing costs
Borrowing costs that are attributable to the acquisition of qualifying assets are capitalized as part of the cost ofsuch assets. All other borrowing costs are charged to revenue.
10 Employee benefits
All employee benefits payable wholly within twelve months of rendering the service are classified as short-termemployee benefits. Benefits such as salaries, wages, short term compensated absences and bonus, etc., arerecognized in the profit and loss account in the period in which the employee renders the related service.
The employee’s provident fund scheme is a defined contribution plan. The Company’s contribution paid/payableunder the scheme is recognized as an expense in the profit and loss account during the period in which theemployee renders the related service.
The Company’s gratuity scheme is a defined benefit plan. The present value of the obligation under such definedbenefit plan is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizeseach period of service as giving rise to additional unit of employee benefit entitlement and measures each unitseparately to build up the final obligation. The obligation is measured at the present value of the estimatedfuture cash flows. The discount rate used for determining the present value of the obligation under definedbenefit plans, is based on the market yields on Government securities as at the balance sheet date. Actuarialgains and losses are recognized immediately in the profit and loss account.
11 Taxation (current and deferred)
Income tax expense comprises current tax (i.e. the amount of tax for the period determined in accordance withthe income-tax law) and deferred tax charge or credit (reflecting the tax effects of timing differences betweenaccounting income and taxable income for the period). The deferred tax charge or credit and the correspondingdeferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantively enactedby the Balance Sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty that
Aryan Ispat and Power Private LimitedSchedules forming part of the accounts
Schedule 19 : Significant accounting policies and notes to the accounts
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the assets can be realized in the future. However, where there is unabsorbed depreciation or carry forward lossunder taxation laws, deferred tax assets are recognized only if there is a virtual certainty of realization of suchassets. Deferred tax assets are reviewed as at each Balance Sheet date and written down or written-up to reflectthe amount that is reasonably/virtually certain (as the case may be) to be realized.
Fringe Benefits Tax (‘FBT’) has been abolished w.e.f. 1 April 2009, therefore no provision is made in the currentfinancial year
12 Operating leases
Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leasedasset are classified as operating leases. Operating lease charges are recognized as an expense in the Profit andLoss Account on a straight line basis.
13 Provisions and contingencies
The Company recognises a provision when there is a present obligation as a result of a past event and it is morelikely than not that there will be an outflow of resources embodying economic benefits to settle such obligationand the amount of such obligation can be reliably estimated. Provisions are not discounted to its present value,and are determined based on the management’s best estimate of the amount of obligation required at the yearend. These are reviewed at each balance sheet date and adjusted to reflect current management estimates.
Contingent liabilities are disclosed in respect of possible obligations that have arisen from past events and theexistence of which will be confirmed only by the occurrence or non occurrence of future events not whollywithin the control of the Company. Contingent liabilities are also disclosed for present obligations in respect ofwhich it is not probable that there will be an outflow of resources or a reliable estimate of the amount of obligationcannot be made.
When there is a possible obligation or a present obligation where the likelihood of an outflow of resources isremote, no disclosure or provision is made.
14 Earnings per share
In computing earnings per share, the Company considers net profit/(loss) after tax. Basic earnings per share arecomputed by the weighted average number of equity shares outstanding during the year. Diluted earnings pershare are computed using the weighted average number of equity and dilutive equivalent shares outstandingduring the year, except where results would be anti-dilutive.
III. Notes to Accounts
1. Capital commitment
The estimated amount of contracts remaining to be executed on capital account as at 31 March 2010 areRs.62,253,600(previous year Rs. 272,707,116).
2. Disclosure in respect of employee benefits under Accounting Standard (AS) – 15 “Employee Benefits” prescribedby the Companies (Accounting Standards) Rules, 2006:
(a) Amount of Rs. 3,497,719 (Previous year Rs.2,551,874) pertaining to employers’ contribution to providentfund, pension fund, employees’ state insurance fund and superannuation fund is recognised as an expenseand included in “Employees’ remuneration and other benefits” in Schedule 15
(b) Gratuity plan
The Company operates a gratuity plan which provides lump sum benefits linked to the qualifying salaryand completed years of service with the Company at the time of separation. Every employee who hascompleted 5 years of continuous service is entitled to receive gratuity at the time of his retirement or separationfrom the organization whichever is earlier. However the condition of completion of 5 years of service is notapplicable where separation is on account of disability or death of an employee. The gratuity benefit that ispayable to any employee, is computed in accordance with the provisions of “The Payment of Gratuity Act,1972”.
Aryan Ispat and Power Private LimitedSchedules forming part of the accounts
Schedule 19 : Significant accounting policies and notes to the accounts
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The Gratuity Fund
The following table sets forth the status of the Gratuity Plan of the Company and the amounts recognised in theBalance Sheet and Profit and Loss Account.
Particulars Year ended Year ended31 March 2010 31 March 2009
(Rs.) (Rs.)
Changes in the present value of defined benefit obligationProjected benefit obligation at the beginning of year 2,184,331 1,138,693Current service cost 1,337,846 972,603Interest cost 270,347 168,660Actuarial loss/(gain) (317,127) (95,625)Benefits paid -
Projected benefit obligation at the end of the year 3,475,397 2,184,331
Amount recognised in the balance sheetProjected benefit obligation at the end of the year 3,475,397 2,184,331Fair value of plan assets at the end of the year - -Funded status of the plans – asset/(liability) - -Asset recognised in the balance sheet - -
Expense recognised in the Profit and Loss AccountCurrent service cost 1,337,846 972,603Interest cost on benefit obligation 270,347 168,660Expected return on plan assets - -Net actuarial (gain)/loss recognised in the year (317,127) (95,625)
Net gratuity cost 1,291,066 1,045,638
Principal actuarial assumptions at the balance sheet date are as follows:
a. Economic assumptions: The principal assumptions are the discount rate and salary escalation rate. The discountrate is generally based upon the market yields available on Government bonds at the accounting date with aterm that matches that of the liabilities and the salary growth rate takes account of inflation, seniority, promotionand other relevant factors on long term basis. The assumptions used are summarized in the following table:
As at As at31 March 2010 31 March 2009
Discount rate 8.3% 7.7%Salary growth rate 10% 10%
b. Demographic assumptions:
As at As at31 March 2010 31 March 2009
Retirement age 60 years 60 yearsMortality table LIC (1994-96) duly modified LIC (1994-96) duly modifiedEmployee turnover 21 - 30 years- 5% 21 - 30 years- 5%
31 - 40 years- 3% 31 - 40 years- 3%4 - 50 years - 2% 41 - 50 years - 2%
51 - 59 years- 1% 51 - 59 years- 1%
Aryan Ispat and Power Private LimitedSchedules forming part of the accounts
Schedule 19 : Significant accounting policies and notes to the accounts
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4. Installed Capacity and production (as certified by the management and relied upon by the Auditors, being atechnical matter)
Class of goods Units Installed capacity Production
Current year Previous year Current year Previous year
Manufacturing of MT 165,000 60,000 36,253 25,223sponge iron
Generation of power Units 129,600,000 - 41,221,020 -
Coal beneficiation plant MT 720,000 720,000 296,639 -
The provisions of the Industries Development Regulation Act, 1951, relating to licensed capacity are not applicableto the Company.
5. Raw materials and components consumed
Class of goods Units Current year Previous year
Quantity Amount Quantity Amount
Raw materialIron ore MT 61,074 383,993,811 49,794 233,860,543Coal# MT 392,500 544,260,822 103,151 84,204,184Dolomite MT 2,809 31,35,711 908 995,160
931,390,344 319,059,887Stores and sparesOthers * * 40,943,655 * 19,229,876
40,943,655 19,229,876
*It is not practicable to furnish quantitative information in view of the considerable number of items diversein size and nature. These items in value individually account for less than 10% of the total value of rawmaterials consumed.
# Including consumption of coal for resale and excluding coal captively used for construction of fixed assets
Note: No imported raw materials, stores, components and spares have been consumed during the year.
6. Details of stock and sale of goods
Class of goods Units Current year Previous year
Quantity Amount Quantity Amount
Sponge ironOpening stock MT 3810 52,541,444 4,123 56,795,397Closing stock MT 4,488 84,644,233 3,810 52,541,444Sales* MT 34,612 479,764,550 25,536 439,166,658
PowerSales# Units 31,138,125 98,267,815 - -
Coal operationsSales MT 281,455 334,295,401 54,098 84,508,154
* Net of excise duty.
Aryan Ispat and Power Private LimitedSchedules forming part of the accounts
Schedule 19 : Significant accounting policies and notes to the accounts
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7. Legal and professional fee include auditors’ remuneration (excluding out of pocket expenses):
Year ended Year ended31 March 2010 31 March 2009
Statutory audit fees 300,000 300,000Service tax 30,900 30,900
330,900 330,900
8. Managerial remunerationManagerial remuneration under Section 198 of the Companies Act, 1956 to the Directors of the Company is asfollows:
Year ended Year ended31 March 2010 31 March 2009
Salaries and allowances - 1,362,308Bonus - 120,000Perquisite - 169,000Contribution to Provident Fund - 133,477
- 1,784,785
As the future liability for gratuity is provided on actuarial valuation for the Company as a whole, the amountpertaining to the directors is not ascertainable and therefore not included above.
9. Based on the information presently available with the management, there are no dues outstanding to micro andsmall enterprises covered under the Micro, Small and Medium Enterprises Development Act, 2006.
10. The Company has during the year entered into transactions of purchases and sales with private companies, inwhich director(s) of the Company are director(s). In majority of the cases, the Company has taken the relevantapprovals from the statutory authorities i.e. Central Government but in case of any lapse due to commission/omission, the necessary corrective action is being initiated.
11. Basic loss per share:Reconciliation of basic and diluted shares used in computing earnings per share
Particulars For the year For the yearended ended
31 March 2010 31 March 2009
(Loss) after tax attributable to equity shareholders (in Rupees) (A) (388,649,765) (8,796,451)Weighted average number of equity shares outstandingduring the year (in numbers) (B) 4,013,699 3,772,603Nominal value per share (in Rupees) (C) 100 100Basic (loss) per share (in Rupees) (A)/(B) (96.83) (2.33)
The Company has not disclosed the dilutive loss per share as the results would be anti-dilutive
12. Segment Reporting
In accordance with Accounting Standard-17 on segment reporting as prescribed in the Companies (AccountingStandard) Rules, 2006, under the provisions of the Companies Act, 1956, the Company has identified threebusiness segments viz. coal operations, sponge iron and thermal power. The above segments have been identifiedand reported taking into account the differing risks and returns, and the current internal financial reportingsystems. The segment wise disclosures are as follows:
Aryan Ispat and Power Private LimitedSchedules forming part of the accounts
Schedule 19 : Significant accounting policies and notes to the accounts
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Segment Revenue, Results and Capital Employed include the respective amounts identifiable to each of thesegments. Other unallocable expenditure/assets/liabilities includes expenses/assets/liabilities which are notdirectly identifiable to any business segment.
Particulars Sponge Iron Coal Power Total
Segment revenue 479,764,550 334,295,401 98,267,815 912,327,766 (net of excise duty)Segment results (304,164,720) 32,632,609 19,233,060 (252,299,051)Less: unallocated expense(including exceptional items) 82,766,250Operating profit (335,065,301)Add: interest income 3,779,091Add: other non-operating income 123,151Less: interest expense 57,434,826Less: taxes(current, deferred and fringe benefit tax) -Net profit after taxes (388,597,885)Other informationSegment assets 1,663,563,551 138,684,772 1,011,196,710 2,813,445,033Unallocated corporate assets 465,693,503Total assets 3,279,138,536Segment liabilities 85,746,579 4,307,623 16,321,438 106,375,640Unallocated corporate liabilities 1,170,364,468Total Liabilities 1,276,740,108Capital expenditure 226,545,764 15,040,591 60,673,824 302,260,179Unallocated capital expenditure 26,479,415Total capital expenditure 328,739,594Depreciation 25,861,025 12,663,764 25,247,975 63,772,764Unallocated depreciation 24,810,579
Total depreciation 88,583,343
Reconciliation of segment revenue reported in financials:.Particulars For the year ended
31 March 2010
Total revenue of the segments 912,327,766Add: Non operating income as reported in Profit and LossAccount, not forming part of segment revenue:
- Interest income 3,779,091- Other non-operating income 123,151
Total revenue as reported in the Profit and Loss Account 916,230,008
Secondary segment:
As the Company’s business activity falls within a single geographical segment i.e. India, the secondary businesssegment disclosure requirements of AS 17 are not applicable to the Company.
Segment accounting policies
The accounting principles consistently used in the preparation of the financial statements and consistently appliedto record revenue and expenditure in individual segments are as set out in Part II to this schedule on significantaccounting policies. The accounting policies in relation to segment accounting are as under:
Aryan Ispat and Power Private LimitedSchedules forming part of the accounts
Schedule 19 : Significant accounting policies and notes to the accounts
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Aryan Ispat and Power Private LimitedSchedules forming part of the accounts
Schedule 19 : Significant accounting policies and notes to the accounts
a Segment assets and liabilities
All segment assets and liabilities have been allocated to the various segments on the basis of specificidentification. Segment assets consist principally of fixed assets, capital work in progress, inventories, sundrydebtors, other current assets and loans and advances. Segment assets do not include unallocated corporatefixed assets, cash and bank balances, advance tax and other assets not specifically identifiable with anysegment.
Segment liabilities include sundry creditors, other liabilities and staff benefits. Segment liabilities do notinclude share capital and provision for income tax and other liabilities not specifically identifiable with anysegment.
b) Segment revenue and expenses
Segment revenue and expenses are directly attributable to the segment and have been allocated to varioussegments on the basis of specific identification. Segment revenue does not include interest income and otherincomes in respect of non-segmental activities. Segment expenses do not include depreciation on unallocatedcorporate fixed assets, interest expense, tax expense and other expense in respect of non-segmental activities.
13. Deferred tax assets/liabilities included in the Balance Sheet comprise the following:
For the year ended For the year ended31 March 2010 31 March 2009
Rs. Rs.
Deferred tax liabilityDepreciation 88,091,877 29,009,834
Total 88,091,877 29,009,834
Deferred tax assetProvision for gratuity 428,860 742,454Preliminary expenses - 55,211Unabsorbed tax losses 103,065,814 4,521,125Unabsorbed tax depreciation 295,871,187 31,949,284
Total 399,365,861 37,268,074
Deferred tax asset recognized to the extent of 88,091,877 29,009,834deferred tax liability
As at 31st March 2010, the Company has significant brought forward business losses and unabsorbed depreciation.In view of absence of virtual certainty of realisation of brought forward losses and unabsorbed depreciation,deferred tax asset on these has been recognised only to the extent of deferred tax liability.
14. Operating leasesThe Company has taken residential accommodation for employees and guest houses under cancellable operatinglease arrangements, with options of renewal at the end of the lease term. Lease payments charged during theyear to the profit and loss account aggregate to Rs. 2,024,310 (previous year Rs. 826,208).
15. Related party disclosures
a) Related party and nature of the relationship with whom transactions have taken place during the year:
Holding company:
• ACB (India) Limited (formerly known as Aryan Coal Benefications Private Limited)Fellow subsidiaries:• Aryan Clean Coal Technologies Private Limited
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Aryan Ispat and Power Private LimitedSchedules forming part of the accounts
Schedule 19 : Significant accounting policies and notes to the accounts
Key Management Personnel (KMP):• Gurubaksh Singh Garcha (upto 07th March, 2009)Relatives of key management personnel (Relatives):• Surabhi Sindhu• Vir Sen SindhuEnterprises over which key management personnel exercise significant influence (others):• Mahavir Global Coal Limited• Jain Re Rollers Limited• Indus Portfolio Private Limited
b) Related party transactions:(Amount in rupees)
Particulars Holding Fellow KMP Relatives Others Totalcompany subsidiaries
Transactions during the year
Sale of goods 11,831,856 - - - 27,565,902 39,397,758
(-) (-) (-) (-) (3,833,201) (3,833,201)
Salaries paid - - - - - -
(-) (-) (-) (200,000) (-) -(200,000)
Managerial remuneration paid - - - - - -
(-) (-) (1,784,785) (-) (-) (1,784,785)
Proceeds from share 1,724,300,000 - - - - 1,724,300,000application money (867,600,000) (-) (-) (-) (198,500,000) (1,066,100,000)
Repayment of share 1,055,000,000 - - - - 1,055,000,000application money (11,500,000) (-) (-) (-) (-) (11,500,000)
Purchases of goods 159,276,847 10,153,276 - - 23,774,827 193,204,950(21,589,843) (-) (-) (-) (-) (21,589,843)
Purchases of fixed assets 9,215,299 - - - - 9,215,299(-) (62,615,588) (-) (-) (-) (62,615,588)
Reimbursement of expenses- paid (net) - - - - - -
(2,056,625) (-) (-) (-) (-) (2,056,625)
Legal and professional charges paid - - - - 14,500 14,500
(-) (-) (-) (-) (13,500) (13,500)
Outstanding balances as at year end
Debtors - - - - 5,912,086 5,912,086
(-) (-) (-) (-) (6,755,124) (6,755,124)
Sundry creditors 16,690,086 - - - 13,274,827 29,964,913(6,347,268) (14,393,716 ) (-) (-) (-) (20,740,984)
Figures in brackets are for the previous year
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Related party transactions having value of more than 10% of total transaction in that category(Amount in rupees)
Nature of transactions For the year ended For the year ended31 March 2010 31 March 2009
Sale of goodsMahavir Global Coal Limited 27,565,902 3,833,201ACB (India) Limited 11,831,856 -
Total 39,397,758 3,833,201
Salaries paidMs. Surabhi Sindhu - 200,000
Total - 200,000
Managerial remuneration paidMr. Gurubaksh Singh Garcha - 1,362,308
Total - 1,362,308
Proceeds from share application moneyACB (India) Limited 1,724,300,000 867,600,000Mahavir Global Coal Limited - 178,500,000Others - 20,000,000
Total 1,724,300,000 1,066,100,000
Repayment of share application moneyACB (India) Limited 1,055,000,000 11,500,000
Total 1,055,000,000 11,500,000
Purchases of fixed assetsACB (India) Limited 9,215,299 -Aryan Clean Coal Technologies Private Limited - 62,615,588
Total 9,215,299 62,615,588
Purchases of coalACB (India) Limited 159,276,847 -Global Coal & Mining Private Limited 23,774,827 -
Total 183,051,674 -
Purchases of stores and sparesAryan Clean Coal Technologies Private Limited 10,153,276 -
Total 10,153,276 -
Legal and professional charges paidIndus Portfolio Private Limited 14,500 13,500
Total 14,500 13,500
Aryan Ispat and Power Private LimitedSchedules forming part of the accounts
Schedule 19 : Significant accounting policies and notes to the accounts
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16. During the year, the Company lost 15,000 MT of coal stock due to fire from spontaneous combustion, havingvalue of Rs. 17,416,620. The Company has filed an insurance claim against the same; however, on conservativebasis the Company has charged this to profit and loss account.
17. As at 31 March 2010, the Company has share application money amounting to Rs. 1,121,065,212 (previous yearRs. 951,765,212) from its shareholders which is pending allotment since the Company’s authorised capital islower than share application money received. Subsequent to the financial year end, the Company has increasedthe authorised share capital to facilitate the allotment of shares.
18. Previous year’s figures have been regrouped / re-arranged (including additional disclosures) where consideredappropriate wherever necessary to conform to the current year’s groupings / classifications.
Aryan Ispat and Power Private LimitedSchedules forming part of the accounts
Schedule 19 : Significant accounting policies and notes to the accounts
For and on behalf of the Board of Directors
Sd/- Sd/- Sd/-R.S. Sindhu G.C. Mrig Ritesh MalhotraChairman Director Company Secretary
Place : GurgaonDate : 15 September, 2010
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Balance Sheet Abstract And Company’s General Business Profile
For and on behalf of the Board of Directors ofAryan Ispat and Power Private Limited
Sd/- Sd/- Sd/-R.S. Sindhu G.C. Mrig Ritesh MalhotraChairman Director Company Secretary
Place : GurgaonDate : 15 September, 2010
Information pursuant to Part IV of Schedule VI of the Companies Act, 1956
I. Registration Details
Registration No. State Code
Balance Sheet Date
Date Month Year
II. Capital Raised During the year (Rupees in Thousands)
Public Issue Rights Issue
Bonus Share Private Placement
III. Position of Mobilization and Deployment of Funds (Rupees in Thousands)
Total Liabilities Total Assets
Source of Funds
Paid-Up-Capital Reserves and surplus
Share Aapplication Money Loan fund
Current Liabilities and Provision
Deferred Tax Liability
Application of FundsFixed Assets Deffered Tax Assets
Capital Work in Progress Net Current Assets
Investment Accumulated Losses
IV. Performance of Company (Rupees in Thousands)
Turnover Total expenditure
Profit Before Tax Profit after Tax
Basic loss per share (in Rs.) Dividend Rate %
Diluted loss per share (in Rs.)
V. Generic names of three principle products/ services of the company(As per monetary terms)
Item Code No. (ITC Code): Product Description :
Not applicable Sponge Iron
Nil
Nil
Nil
3 6 9 7 8 0 5 3 6 9 7 8 0 5
9 0 0 0 0 0 4 0 0 0 0 0
1 1 2 1 0 6 5 1 0 9 3 7 5 0
1 8 2 9 9 0
3 1 0 3
1 0
2 0 1 0
0 1 5 7 6 1
9 1 6 2 3 0 1 3 0 4 8 2 8
( 3 8 8 5 9 8 ) ( 3 8 8 6 5 0 )
( 9 6 . 8 3 ) Nil
( 9 6 . 8 3 )
2 4 0 3 7 6 3
5 8 4 3 6
N i l
N i l
2 3 9
6 3 3 7 1 0
4 1 8 6 6 7
5 0 0 0 0
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Annexure-EConnoiseur Resources Limited, BVI
Registered Office : Nerine Chambers, P.O. Box 905, Road Town,Tortola, British Virgin Islands
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NOTICE
Notice is hereby given that the Third Annual General Meeting of the Company shall be held on 21 May 2010 at 43,Vasant Enclave, Rao Tula Ram Marg, New Delhi-110057 at 3.30 P.M. to transact the following business:
ORDINARY BUSINESS
1. To receive, consider and adopt the Audited Balance Sheet of the Company as at 31 March 2010 and Profit and LossAccount for the year ended on 31 March 2010 together with the Directors’ Report and Auditors’ Report thereon.
2. To appoint Statutory Auditors of the company :-
“RESOLVED THAT M/s S M R & Associates, Chartered Accountants, retiring Auditors of the Company be andare hereby re-appointed as the Statutory Auditors of the Company to hold office from the date of conclusion ofensuing Annual General Meeting till the date of conclusion of the next Annual General Meeting of the Company ata remuneration as decided by Directors of the Company.”
By order of the Board of DirectorsFor Connoiseur Resources Limited, BVI
Sd/-Place : New Delhi R.S. SindhuDate : 30 April, 2010 Director
Connoiseur Resources Limited, BVIRegd. Off.: Nerine Chambers, P.O. Box 905, Road Town, Tortola, British Virgin Islands
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To,The Members,Ladies and Gentlemen,
Your directors have pleasure in presenting Third Annual Report together with the Audited Statement of Accounts forthe year ended on 31 March 2010:
1. FINANCIAL RESULTS (Figures in USD)
Particulars 2009-10 2008-09
Interest Income 18 418Net loss for the year 3,949 1,707Add: Loss/ (profit) brought forward from last year 4,273 2,566Balance loss carried forward to next year 8,222 4,273
2. OPERATIONS
The company is yet to commence business operations.
3. DIVIDEND
Your Directors do not recommend any dividend during the financial year ended on 31 March 2010.
4. DIRECTORS
There is no change in the directors of the company during the financial year 2009-10.
5. AUDITORS
M/s S M R & Company, Chartered Accountants, retire at the conclusion of the ensuing Annual General Meetingand being eligible have offered themselves for re-appointment. The Company has received a certificate from themthat their re-appointment, if made, shall be within the limits of Section 224(1B) of the Companies Act, 1956. YourDirectors recommend their re- appointment.
By order of the Board of DirectorsFor Connoiseur Resources Limited, BVI
Sd/-Place : New Delhi R.S. SindhuDate : 30 April 2010 Director
DIRECTORS’ REPORT
Connoiseur Resources Limited, BVIRegd. Off.: Nerine Chambers, P.O. Box 905, Road Town, Tortola, British Virgin Islands
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The Members,Connoiseur Resources Limited, BVI
1. We have audited the attached Balance Sheet of Connoiseur Resources Limited, BVI, as at 31 March 2010, and alsothe profit and loss account for the year ended 31 March 2010. These financial statements are the responsibility ofthe company’s management. Our responsibility is to express an opinion on these financial statements based on ouraudit.
2. We have conducted our audit in accordance with the generally accepted auditing standards. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis forour opinion.
3. We further report that:
i) We have obtained all the information and explanations, which to the best of our knowledge and belief werenecessary for the purposes of our audit.
ii) In our opinion, the company has kept proper books of account as required by law so far as appears from ourexamination of those books.
iii) The Balance Sheet & Profit and Loss account dealt with by this report are in agreement with the books ofaccounts.
iv) In our opinion and to the best of our information and according to the explanations given to us, the saidaccounts give the information in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted:
a) in the case of the Balance Sheet, of the state of affairs of the company as at 31 March 2010,
b) in the case of the Profit and Loss account, of the loss for the year ended 31 March 2010,
c) in the case of Cash Flow statement, of the cash flows for the year ended on that date.
For S M R & Associates Chartered Accountants
Registration no. : 013356N
Sd/-Place : New Delhi Rajesh GulatiDate : 30 April 2010 Membership no.: 089046
Proprietor
AUDITORS’ REPORT
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Schedule As at As at31 March 2010 31 March 2009
I. SOURCES OF FUNDS
Shareholders’ fundsShare capital 1 48,135 10,000Share application money received 10,000,000 38,135
10,048,135 48,135
II. APPLICATION OF FUNDS
Current assets, loans and advancesCash and bank balances 2 36,960 44,424Advances recoverable in cash or kind 10,003,203 -
10,003,203 44,424
Less : Current liabilities and provisions 3Current liabilities 250 562
250 562
Net current assets 10,039,913 43,862
Profit and Loss 4 8,222 4,273
10,048,135 48,135
Significant accounting policies and notes to the accounts 5
The accompanying notes and schedules form an integral part of the accounts.
As per our report of even date attached
For S M R & Associates For Connoiseur Resources Limited, BVI
Chartered Accountants
Registration no. : 013356N
Sd/- Sd/- Sd/-Rajesh Gulati R.S. Sindhu G.C. MrigProprietor Director DirectorMembership no.: 089046
Place : New DelhiDate : 30 April 2010
Connoiseur Resources Limited, BVIBalance Sheet as at 31 March 2010(All amounts are in USD)
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Particulars Schedule For the year ended For the year ended31 March 2010 31 March 2009
IncomeInterest income 18 418
18 418
Expenditure
Auditors’ remuneration 250 281
Bank Charges 457 457
Postage and Telegram - 132
Rate, taxes and fees 3,260 1,255
2,125 2,566
Net Profit/(Loss) carried forward to Balance Sheet 3,967 2,125
Earnings per share (refer note II 2 of schedule 5)
Equity shares of face value of USD 1 each
Basic (0.10) (0.17)
Significant accounting policies and notes to the accounts 5
The accompanying notes and schedules form an integral part of the accounts.
Connoiseur Resources Limited, BVIProfit and Loss Account for the year ended 31 March 2010(All amounts are in USD)
As per our report of even date attached
For S M R & Associates For Connoiseur Resources Limited, BVI
Chartered Accountants
Registration no. : 013356N
Sd/- Sd/- Sd/-Rajesh Gulati R.S. Sindhu G.C. MrigProprietor Director DirectorMembership no.: 089046
Place : New DelhiDate : 30 April 2010
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For the year ended For the year ended31 March 2010 31 March 2009
A) Cash flow from operating activities:Net profit/(loss) before tax (3,949) (1,707)Adjustments for :Preliminary expenses written off - -Operating profit before working capital changes (3,949) (1,707)Adjustments for :(Increase)/decrease in loans and advances (10,003,203) -(Decrease)/increase in current liabilities and provisions (312) 181Net cash from operating activities (A) (10,007,464) (1,526)
B) Cash flow from financing activities:Proceeds from issue of equity share capital - -Proceeds from share application money 10,000,000 35,950Net cash from in financing activities (C ) 10,000,000 35,950
C) Net increase in cash and cash equivalents (A+B+C) (7,464) 34,424
D) Cash and cash equivalents as at the beginning of the yearBalance with scheduled bank-on current accounts 44,424 10,000
44,424 10,000E) Cash and cash equivalents as at the end of the year
Balance with scheduled bank-on current accounts 36,960 44,424
36,960 44,424
Connoiseur Resources Limited, BVICash Flow Statement for the year ended 31 March 2010(All amounts are in USD)
As per our report of even date attached
For S M R & Associates For Connoiseur Resources Limited, BVI
Chartered Accountants
Registration no. : 013356N
Sd/- Sd/- Sd/-Rajesh Gulati R.S. Sindhu G.C. MrigProprietor Director DirectorMembership no.: 089046
Place : New DelhiDate : 30 April 2010
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For the year ended For the year ended31 March 2010 31 March 2009
Schedule 1 - Share capital
Authorised capital25,000,000 equity shares of USD 1 each 25,000,000 50,000(previous year 50,000 equity shares of USD 1 each)
Issued, subscribed and paid up capital48,135 equity shares of USD 1 each 48,135 10,000(previous year 10,000 equity shares of USD 1 each fully paid up)
48,135 10,000
Schedule 2 - Cash and bank balances
On current accounts:Soceite General Bank & Trust, Singapore Branch 36,960 44,424
38,960 44,424
Schedule 3 - Current liabilities and provisions
Current liabilities
Sundry creditorsAjay Pujani & Associates - 562S M R & Associates 250 -
250 562
Schedule 4 - Profit and lossOpening balance 4,273 2,566Add: transferred from profit and loss account 3,949 1,707
8,222 4,273
Connoiseur Resources Limited, BVISchedules forming part of the accounts(All amounts are in USD)
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I. Significant accounting policies
1. Accounting convention:
The financial statements are prepared and presented under the historical cost convention in accordance with theGenerally Accepted Accounting Principles (‘GAAP’) and as adopted consistently by the Company.
2. Use of estimates:
The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP)requires management to make estimates and assumptions that affect the reported amounts of assets and liabilitiesand the disclosure of contingent liabilities on the date of the financial statements. Actual results could differ fromthose estimates. Differences between the actual results and estimates are recognised in the year in which the resultsare known/materialized. Any revision to accounting estimates is recognised prospectively in current and futureperiods.
3. Investments:
Long term investments are valued at cost. Any decline other than temporary, in the value of long term investments,is adjusted in the carrying value of such investments.
4. Revenue recognition:
Interest income:
Interest income is recognised on a time proportion basis considering the contracted rate of return.
5. Earnings per share:
In computing earnings per share, the Company considers net profit/(loss) after tax. Basic earnings per share arecomputed by the weighted average number of equity shares outstanding during the year. Diluted earnings pershare are computed using the weighted average number of equity and dilutive equivalent shares outstandingduring the year, except where results would be anti-dilutive.
6. Provisions and contingencies:
The Company recognises a provision when there is a present obligation as a result of a past event and it is morelikely than not that there will be an outflow of resources embodying economic benefits to settle such obligation andthe amount of such obligation can be reliably estimated. Provisions are not discounted to its present value, and aredetermined based on the management’s best estimate of the amount of obligation required at the year end. Theseare reviewed at each balance sheet date and adjusted to reflect current management estimates.
Contingent liabilities are disclosed in respect of possible obligations that have arisen from past events and theexistence of which will be confirmed only by the occurrence or non occurrence of future events not wholly withinthe control of the Company. Contingent liabilities are also disclosed for present obligations in respect of which it isnot probable that there will be an outflow of resources or a reliable estimate of the amount of obligation cannot bemade.
When there is a possible obligation or a present obligation where the likelihood of an outflow of resources isremote, no disclosure or provision is made.
7. Accounting policies not specifically referred to otherwise are consistent and in consonance with generally acceptedaccounting principles.
II. Notes to accounts
1. Auditors’ remuneration include (excluding out of pocket expenses):(Amount in USD)
Year ended Year ended31 March 2010 31 March 2009
Statutory audit fees 250 250Service tax - 31
250 281
Connoiseur Resources Limited, BVISchedules forming part of the accounts
Schedule 5 : Significant accounting policies and notes to the accounts
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2. Earnings per share:
Reconciliation of basic and diluted shares used in computing earnings per share
Year Ended Year Ended31 March 2010 31 March 2009
Profit/(Loss) after tax attributable to equity shareholders (USD) (3,949) (1,707)Number of shares considered as weighted averageshares outstanding for computing basic earnings per share 39,045 10,000Nominal value per share (USD) 1 1Basic Earnings per share (USD) (0.10) (0.17)
3. Related party disclosures:
a) Related party and nature of the relationship where control exists, irrespective of whether or not there havebeen transactions between the related parties:Holding company:• ACB (India) Limited
b) Related party transactions for the year ended 31 March 2010:(Amount in USD)
Serial Particulars Holding TotalNo Company
Transactions during the year:i Proceeds from share application money 10,000,000 10,000,000
(3,414,000) (3,414,000)ii Refund of share application money - -
(3,178,050) (3,178,050)iii Allotment of share capital 38,135 38,135
(-) (-)
(Amount in USD)
Serial Particulars Holding Total No Company
Outstanding balances as at year end:i Share application money received 10,000,000 10,000,000
(38,135) (38,135)
(Figures in brackets are for previous year)
4. In the opinion of Board, Current Assets, Loans and Advances are approximately of the value stated, if realized inthe ordinary course of business.
5. ACB (India) Limited (formerly Aryan Coal Benefications Private Limited), a company incorporated under the IndianCompanies Act, 1956, is the holding company of the Company and it holds 48,135Equity Shares of USD 1 each fullypaid up in the Company, which represents 100% of the Issued, Subscribed and Paid up Capital of the Company.
6. Previous year’s figures have been regrouped/re-arranged wherever considered appropriate whenever necessaryto confirm to the current years’ groupings/classification.
Connoiseur Resources Limited, BVISchedules forming part of the account
Schedule 5: Significant accounting policies and notes to the accounts
For Connoiseur Resources Limited, BVI
Sd/- Sd/-R.S. Sindhu G.C. MrigDirector Director
Place : New DelhiDate : 30 April 2010
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Aryan Chhattisgarh Power Generation Private Limited
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Annexure-FAryan Chhattisgarh Power Generation Private LimitedRegistered Office : 129, Transport Centre, Punjabi Bagh,
New Rohtak Road, New Delhi-110035.
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NOTICE
Notice is hereby given that the Second Annual General Meeting of the Company shall be held at shorter notice onThursday, the 30 September, 2010 at 5.45 p.m. at the registered office of the Company at 129, Transport Centre, PunjabiBagh, Rohtak Road, New Delhi-110035 to transact the following business:
ORDINARY BUSINESS1. To consider and adopt the Audited Balance Sheet of the Company as at 31st March, 2010 and Profit & Loss Account
for the period from 1st April, 2009 to 31st March, 2010 together with the Directors’ Report and Auditors’ Reportthereon.
2. To appoint a Director in Place of Sh. Ganesh Chandra Mrig, who retires by rotation and being eligible, offershimself for reappointment.
3. To appoint a Director in Place of Sh. Kuldeep Singh Solanki, who retires by rotation and being eligible, offershimself for reappointment.
4. To appoint Statutory Auditors of the Company and to fix their remuneration:To consider and if thought fit, to pass with or without modification(s), the following resolution as an ORDINARYRESOLUTION:“RESOLVED THAT M/s B S R and Associates, Chartered Accountants, retiring Auditors of the Company beingeligible who have offered themselves for reappointment, be and are hereby appointed as the Statutory Auditors ofthe Company to hold office as such from the date of conclusion of this Annual General Meeting till the date ofconclusion of the next Annual General Meeting of the Company at a remuneration as mutually decided by theCompany & Auditors.”
SPECIAL BUSINESS5. To consider and if thought fit, to pass with or without modification(s), the following resolution as an ORDINARY
RESOLUTION:“RESOLVED THAT the consent of the Company be and is hereby accorded pursuant to the provisions of Section293(1)(a), Section 293(1)(d) and other applicable provisions, if any, of the Companies Act, 1956, to the Board ofDirectors (“Board”) of the Company to mortgage / pledge / lien / charge / in favour of the Company’s bank(s) orany other banks or financial institutions (‘hereinafter collectively referred to as the Lenders’), all immovable andmovable properties of the Company both present & future and whole of the undertaking of the Company or suchof them on such terms as may be approved by the Board and as may be agreed to between the Board and theLenders from time to time to secure the Loan / credit facility(s) not exceeding Rs. 5,000 Crores (Rupees Five ThousandCrores only) together with the moneys already borrowed by the Company (apart from the temporary loans obtainedfrom the Company’s banks in the ordinary courses of business) which may be more than its networth i.e. networthcalculated by adding Paid up Share Capital and its Free Reserve, not set apart for any specific purpose, togetherwith interest commitment charge costs and other charge and expenses payable by the Company to the Lender onsuch terms as may be approved by the Board and agreed under the Loan Agreements to be entered into betweenthe Company and the Lenders.”RESOLVED FURTHER THAT all actions taken by the Board in connection with any matter referred to orcontemplated in any of the foregoing resolutions are hereby approved, ratified and confirmed in all respects.”
By order of the Board of DirectorsFor Aryan Chhattisgarh Power Generation Private Limited
Sd/-Place: Gurgaon R.S. SindhuDate : 15 September 2010 Chairman
NOTES:
1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TOATTEND AND VOTE INSTEAD OF HIMSELF/HERSELF. SUCH PROXY NEED NOT BE A MEMBER OF THECOMPANY.
2. IN ORDER TO BE EFFECTIVE PROXY FORM DULY COMPLETED MUST BE RECEIVED BY THE COMPANY ATITS REGISTERED OFFICE NOT LESS THAN 48 HOURS BEFORE SCHEDULED TIME FOR HOLDING OF THEMEETING. A BLANK PROXY FORM IS ENCLOSED HEREWITH.
3. Explanatory Statement pursuant to the provisions of Section 173 (2) of the Companies Act, 1956 is attached herewith.
Aryan Chhattisgarh Power Generation Private LimitedRegd. Office: 129, Transport Centre, Punjabi Bagh, Rohtak Road, New Delhi-110035
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Explanatory Statement pursuant to the provisions of Section 173 (2) of the Companies Act, 1956
Item No. 5
As per the provisions of Section 293(1)(d) of the Companies Act, 1956, the Board of Directors (“Board”) of the Companycannot, except with the consent of the Company in General Meeting, borrow monies, apart from temporary loansobtained from the Company’s bankers in the ordinary course of business, in excess of the aggregate of the paid upcapital and free reserves of the Company, that is to say, reserves not set apart for any specific purposes.
In view of the fact that the Company is putting up a Power Plant of 1200 Mega Watt (MW) capacity which require hugecapital investment. The said Capital investment is proposed to be financed partly by equity and partly by Debt fromBanks and financial Institutions. In view of above, the borrowing limit of the Company is fixed to the sum(s) so borrowedunder this resolution and remaining outstanding at any time shall not exceed in the aggregate of Rs. 5,000 Crores(Rupees Five Thousand Crores). Further, Banks / financial institutions in order to secure their loans create mortgage /lien on the assets of the Company which tantamount to indirectly transferring the said assets in their favour, so that ifany default is made by the Company in the repayment of loan together with interest commitment charge costs andother charge and expenses payable, the Banks/Financial institution has a right to sell those assets of the Company inorder to recover their outstanding loan. This amount to selling / or otherwise disposing off the undertaking of theCompany which can only be done with the permission of the shareholders under section 293(1)(a) of the CompaniesAct,1956. The banks / financial institutions insists on this resolution being passed by the Shareholders of the Companyauthorizing the Board to create mortgage / pledge / lien on all the immovable / movable assets of the Companywhether present or future on such terms and condition as agreed to between lenders and the Board of the Company.
The Board of the Company have approved the limit of borrowing powers in their meeting held on 15th September 2010to borrow and to mortgage / pledge / lien / charge / in favour of the Company’s bank(s) or any other banks orfinancial institutions, all immovable and movable properties of the Company upto Rs. 5,000 Crores (Rupees FiveThousand Crores), apart from the temporary loans obtained from the bankers in the ordinary course of business, subjectto approval of members in General Meeting.
The consent of the members is therefore sought under provisions of Section 293(1)(a) and 293(1)(d) of the CompaniesAct, 1956, to enable the Directors to borrow the aforesaid amount limit and to mortgage / pledge / lien / charge / infavour of the Lender.
Therefore, the approval of the members shall be accorded by way of passing Ordinary Resolution at General Meeting.Hence, the matter be placed before the members for their approval.
A copy each of the resolutions passed at Board Meeting dated 15th September 2010, are open for inspection of theMembers, during business hours between 11.00 A.M. to 1.00 P.M. on all working days of the Company, upto the date ofthe meeting, at the Registered Office of the Company.
None of the Directors is in any way concerned or interested in these resolutions. The Board of Directors recommendsthis enabling resolution for the approval of members.
By order of the Board of DirectorsFor Aryan Chhattisgarh Power Generation Private Limited
Sd/-Place : Gurgaon R.S. SindhuDate : 15 September 2010 Chairman
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To,The Members,
Your directors have pleasure in presenting their Second Annual Report together with the Audited Statement of Accountsfor the year ended on 31 March, 2010:
1. FINANCIAL RESULTS
The Company has not started any commercial operations during the year under review and has incurred a Loss ofRs. 1.26 Lacs as compared Loss of Rs.3.89 Lacs for the period from the date of incorporation till 31 March, 2009.
2. DIVIDEND
As the Company has not started any commercial operations during the year under review and therefore, yourDirectors do not recommend any dividend for the financial year ended on 31 March, 2010.
3. PUBLIC DEPOSITS
The Company has not invited / accepted any public deposits under section 58A & 58AA of the Companies Act,1956 during the financial year ended on 31 March, 2010.
4. DIRECTORS
Sh. Rudra Sen Sindhu, Sh. Ganesh Chandra Mrig, Sh. Kuldeep Singh Solanki, Sh. Vir Sen Sindhu and Sh. NitenMalhan were appointed as First Directors of the Company and there is no change in the Board of Directors duringthe year under review.
Further, as per the provisions of Section 256 of the Companies Act, 1956, Sh. Kuldeep Singh Solanki and Sh.Ganesh Chandra Mrig, Directors of the Company are liable to retire by rotation at the ensuing Annual GeneralMeeting, and being eligible, the Directors have offered themselves for re-appointment
5. AUDITORS REPORT
The Report of Auditors’ on Annual Accounts of the Company for the year ended on 31 March, 2010 is selfexplanatory. Hence, no explanation is required to be given.
6. APPOINTMENT OF AUDITORS
M/s B S R and Associates, Chartered Accountants, retire at the conclusion of the ensuing Annual General Meetingand being eligible have offered themselves for re-appointment. The Company has received a certificate from thempursuant to section 224(1B) confirming their eligibility for re-appointment. Yours Directors recommend their re-appointment.
7. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS ANDOUTGO
As the Company has not started any commercial operations during the year under review and therefore, theprovision of section 217(1) (e) of the Companies Act, 1956 is not applicable to our Company. Hence, Statementdetailing the particulars required under the said section read with the Companies (Disclosures of particulars inthe report of Board of Directors) Rules, 1988 are not being furnished. There was no foreign exchange earning andoutgo in the Company during the financial year.
8. DISCLOSURES UNDER SECTION 217 OF THE COMPANIES ACT, 1956
Except as disclosed elsewhere in the report, there have been no material changes and commitments, which canaffect the financial position of the Company between the end of financial year and the date of report.
As required under Section 217(2) of the Companies Act, 1956, the Board of Directors inform the members thatduring the financial year there has been no change:
• in the nature of Company’s business,• in the classes of business in which the Company has an interest.
DIRECTORS’ REPORT
Aryan Chhattisgarh Power Generation Private LimitedRegd. Office: 129, Transport Centre, Punjabi Bagh, Rohtak Road, New Delhi-110035
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PARTICULARS OF EMPLOYEES U/S 217(2A) OF COMPANIES ACT, 1956
None of the employees of the Company has drawn salary in excess of the limits prescribed in the said section readwith the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and hence no suchlist is being provided.
9. DIRECTOR RESPONSIBILITY STATEMENT
As per the provisions of Section 217(2AA) of the Companies Act, 1956 your directors make the Statement:
(a) That in preparation of the Accounts for the financial year ended 31st March, 2010; the applicable AccountingStandards have been followed along with proper explanations relating to material departures.
(b) That the Directors have selected such Accounting Policies and applied them consistently and made judgmentsand estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of theCompany at the end of the financial year and of the profit of the Company for that period.
(c) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting recordsin accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Companyand for preventing and detecting fraud and other irregularities and.
(d) That the Directors have prepared the accounts for the financial year ended 31st March 2010 on a going concernbasis.
10. ACKNOWLEDGEMENT
Your directors wish to place on record their deep appreciation for all concerned person(s), authorities, Govt. Agenciesand departments. Your Directors also express their gratitude to the shareholders of the Company for the confidencereposed in the management.
By order of the Board of DirectorsFor Aryan Chhattisgarh Power Generation Private Limited
Sd/-Place : Gurgaon R.S. SindhuDate : 15 September 2010 Chairman
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To the members of
Aryan Chhattisgarh Power Generation Private Limited
We have audited the attached Balance Sheet of Aryan Chhattisgarh Power Generation Private Limited (“the Company”)as at 31 March 2010, the Profit and Loss Account and the Cash Flow Statement (“the financial statements”) of theCompany for the year ended on that date, annexed thereto. These financial statements are the responsibility of theCompany’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards requirethat we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principles used and significant estimatesmade by management, as well as evaluating the overall financial statement presentation. We believe that our auditprovides a reasonable basis for our opinion.
This report does not include a statement on the matters specified in paragraph 4 of the Companies (Auditor’s Report)Order, 2003, issued by the Department of Company Affairs, in terms of section 227(4A) of the Companies Act, 1956,since in our opinion and according to the information and explanations given to us, the said Order is not applicable tothe Company.
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 necessaryfor 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 fromour examination of those books;
c) the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are inagreement with the books of account;
d) in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by thisreport comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the CompaniesAct, 1956;
e) on the basis of written representations received from the directors, as on 31 March 2010, and taken on record bythe Board of Directors, we report that none of the directors is disqualified as on 31 March 2010 from being appointedas a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956; and
f) in our opinion and to the best of our information and according to the explanations given to us, the said accountsgive the information required by the Companies Act, 1956, in the manner so required and give a true and fair viewin conformity with the accounting principles generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2010;
(ii) in the case of the Profit and Loss Account, of the loss for the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
For B S R and AssociatesChartered AccountantsFirm Registration No.: 128901W
Sd/-Kaushal Kishore
Place : Gurgaon PartnerDate : 15 September 2010 Membership No.: 090075
Auditors’ Report
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Schedule As at As at31 March 2010 31 March 2009
SOURCES OF FUNDS
Shareholders’ fundsShare capital 1 100,000 100,000Share application money pending allotment 3,524,160 2,024,160
TOTAL 3,624,160 2,124,160
APPLICATION OF FUNDS
Capital work in progress 3,062,959 1,732,816(including capital advance amounting to Rs. 226,115)Current assets, loans and advancesCash and bank balances 3 156,061 112,288
156,061 112,288Less: Current liabilities and provisionsCurrent liabilities 4 110,300 110,300
110,300 110,300Net current assets
45,761 1,988Debit balance in profit and loss account 2 515,440 389,356
TOTAL 3,624,160 2,124,160
Significant accounting policies and notes to the accounts 5
The accompanying notes and schedules form an integral partof the financial statements.
As per our report of even date attached
For B S R & Company For and on behalf of the Board of DirectorChartered AccountantsFirm Registration No. 128901W
Sd/- Sd/- Sd/-Kaushal Kishore R.S. Sindhu G.C. MrigPartner Director DirectorMembership no.: 090075
Place : GurgaonDate : 15 September, 2010
Aryan Chhattisgarh Power Generation Private LimitedBalance Sheet as at 31 March 2010(All amounts are in Rupees)
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Aryan Chhattisgarh Power Generation Private LimitedProfit and Loss Account for the year ended 31 March 2010(All amounts are in Rupees)
As per our report of even date attached
For B S R & Company For and on behalf of the Board of DirectorChartered AccountantsFirm Registration No. 128901W
Sd/- Sd/- Sd/-Kaushal Kishore R.S. Sindhu G.C. MrigPartner Director DirectorMembership no.: 090075
Place : GurgaonDate : 15 September, 2010
Schedule For the year ended For the period from31 March 2010 09 May 2008 to
31 March 2009
Expenditure
Legal and professional charges 125,076 386,402Miscellaneous expenses 1,008 2,954
Loss for the year transferred to balance sheet 126,084 389,356
Loss per share
Equity shares of face value of Rs. 10 each
Basic and diluted loss per share (face value of Rs. 10 each) 12.61 38.94
Significant accounting policies and notes to the accounts 5
The accompanying notes and schedules form an integral
part of the financial statements.
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For the year ended For the period ended31 March 2010 31 March 2009
A) Cash flow from operating activities:Net loss before tax (126,084) (389,356)
Adjustments for :Increase/ (decrease) in current liabilities and provisions - 110,300
Net cash used in operating activities (A) (126,084) (279,056)
B) Cash flow from investing activities:
Increase in capital work in progress (1,330,143) (1,732,816)
Net cash used in investing activities (B) (1,330,143) (1,732,816)
C) Cash flow from financing activities:
Proceeds from issue of equity share capital 100,000Receipt of share application money 1,500,000 2,024,160
Net cash generated from financing activities (C ) 1,500,000 2,124,160
D) Net increase in cash and cash equivalents (A+B+C) 43,773 112,288Cash and cash equivalents at the beginning of the yearCash in hand 38,758 -Balance with scheduled bank-on current accounts 73,530 -
112,288 -Cash and cash equivalents at the beginning of the yearCash in hand 35,268 38,758Balance with scheduled bank-on current accounts 120,793 73,530
156,061 112,288
Note:1. The cash flow statement has been prepared in accordance with ‘Indirect method’ as set out in the Accounting
Standard (AS)-3 on ‘Cash Flow Statements’ as notified by the Companies (Accounting Standards) Rules, 2006.
Aryan Chhattisgarh Power Generation Private LimitedCash Flow Statement for the year ended 31 March 2010(All amounts are in Rupees)
As per our report of even date attached
For B S R & Associates For and on behalf of the Board of DirectorChartered AccountantsFirm Registration No. 128901W
Sd/- Sd/- Sd/-Kaushal Kishore R.S. Sindhu G.C. MrigPartner Director DirectorMembership no.: 090075
Place : GurgaonDate : 15 September, 2010
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Aryan Chhattisgarh Power Generation Private LimitedSchedules forming part of the accounts(All amounts are in Rupees)
As at As at31 March 2010 31 March 2009
Schedule 1 - Share capital
AAuthorised capital100,000 equity shares of Rs. 10 each 100,000 100,000(previous year 100,000 equity shares of Rs. 10 each)Issued, subscribed and paid up capital10,000 (previous year 10,000) equity shares of Rs.10 each fully paid up 100,000 100,000Of the above 10,000 (previous year 10,000) equity shares of Rs. 10 each are held byACB (India) Limited, the holding and ultimate holding company
100,000 100,000
Schedule 2 -Debit balance in profit and loss account
Opening balance 389,356 -Add: Loss for the year 126,084 389,356
515,440 389,356
Schedule 3 - Cash and bank balances
Cash in hand 35,268 38,758Balance with scheduled banks-on current accounts 120,793 73,530
156,061 112,288
Schedule 4 - Current liabilities and provisions
Current liabilitiesSundry creditors*- other than micro and small enterprises 99,270 98,939Other liablities 11,030 11,361
110,300 110,300
* refer to note III (4) of schedule 5
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I. BackgroundAryan Chhattisgarh Power Generation Private Limited (ACPGPL) was incorporated on 9 May 2008 for the purposeexecuting 1100 MW thermal power project in the state of Chattisgarh as a special purpose vehicle of ACB (India)Limited. The Company is a subsidiary of ACB (India) limited (formerly known as Aryan Coal Benefications PrivateLimited). ACB (India) limited had entered into a Memorandum of Understanding dated 8 January 2008 withGovernment of Chhattisgarh, Chhattisgarh State Electricity Board for setting up of the Thermal Power Project,and subsequently entered into an Implementation Agreement with the State Government on 18 February 2010.
II. Significant accounting policies
1) Accounting convention
The financial statements are prepared under the historical cost convention, on the accrual basis of accountingin accordance with the Generally Accepted Accounting Principles (‘GAAP’) in India and comply with theaccounting standards prescribed by Companies (Accounting Standards) Rules, 2006, to the extent applicableand in accordance with the provisions of the Companies Act, 1956, as adopted consistently by the Company.
2) Use of estimates
The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP)in India requires management to make estimates and assumptions that affect the reported amounts of assetsand liabilities and the disclosure of contingent liabilities on the date of the financial statements. Actual resultscould differ from those estimates. Differences between the actual results and estimates are recognised in theyear in which the results are known/ materialized. Any revision to accounting estimates is recognisedprospectively in current and future periods.
3) Fixed assets
Fixed assets are stated at cost less accumulated depreciation. Cost includes freight, duties, taxes and otherincidental expenses relating to acquisition and installation.
Expenditure incurred during the period of construction, including all direct and indirect expenses, incidentaland related to construction, is carried forward and on completion, such costs are allocated to respective fixedassets.
4) Impairment of assets
The carrying amounts of assets including those assets which are not yet available for use, are reviewed ateach Balance Sheet date to determine whether there is any indication of impairment. If any such indicationexists, the asset’s recoverable amount is estimated. An impairment loss is recognised whenever the carryingamount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are recognisedin the Profit and Loss Account. An impairment loss is reversed if there has been a change in the estimatesused to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’scarrying amount does not exceed the carrying amount that would have been determined net of depreciationor amortisation, if no impairment loss had been recognised.
5) Earnings per share
In computing earnings per share, the Company considers net profit/(loss) after tax. Basic earnings per shareare computed by the weighted average number of equity shares outstanding during the year. Diluted earningsper share are computed using the weighted average number of equity and dilutive equivalent sharesoutstanding during the year, except where results would be anti-dilutive.
6) Taxation (current and deferred)
Income-tax expenses comprise current tax (i.e. the amount of tax for the period determined in accordancewith the Income Tax Act, 1961) and deferred tax charge or credit (reflecting the tax effects of the timingdifferences between the accounting income and taxable income for the period). The deferred tax charge orcredit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that havebeen enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognized only tothe extent there is reasonable certainty that the assets can be realized in the future. However, where there isunabsorbed depreciation or carry forward loss under taxation laws, deferred tax assets are recognized only ifthere is virtual certainty of realization of such assets. Deferred tax assets are reviewed at each Balance Sheet
Aryan Chhattisgarh Power Generation Private LimitedSchedules forming part of the accounts
Schedule 5: Significant accounting policies and notes to the accounts
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date and written down or written up to reflect the amount that is reasonably/virtually certain (as the casemay be) to be realized. Deferred tax implications of timing differences, that originate during the tax holidayperiod and reverse after the tax holiday period are recognised in the year in which timing differences originate.
Fringe Benefits Tax (‘FBT’) has been abolished w.e.f. 1 April 2009, therefore no provision is made in currentfinancial year.
7) Provisions and contingencies
The Company recognises a provision when there is a present obligation as a result of a past event and it ismore likely than not that there will be an outflow of resources embodying economic benefits to settle suchobligation and the amount of such obligation can be reliably estimated. Provisions are not discounted to itspresent value, and are determined based on the management’s best estimate of the amount of obligationrequired at the year end. These are reviewed at each Balance Sheet date and adjusted to reflect currentmanagement estimates.
Contingent liabilities are disclosed in respect of possible obligations that have arisen from past events andthe existence of which will be confirmed only by the occurrence or non occurrence of future events notwholly within the control of the Company. Contingent liabilities are also disclosed for present obligations inrespect of which it is not probable that there will be an outflow of resources or a reliable estimate of theamount of obligation cannot be made.
When there is a possible obligation or a present obligation where the likelihood of an outflow of resources isremote, no disclosure or provision is made.
III. Notes to accounts
1) Auditors’ remuneration (excluding out of pocket expenses)
For the year ended For the periodon 31 March 2010 9 May 2008 to
31 March 2009Rs. Rs.
Statutory audit fees 100,000 100,000Service tax 10,300 10,300
110,300 110,300
Earning per share
For the year ended For the periodon 31 March 2010 9 May 2008 to
31 March 2009Rs. Rs.
(Loss) after tax attributable to equity shareholders (Rupees) (126,084) (389,356)Number of shares considered as weighted average sharesoutstanding for computing basic earnings per share 10,000 10,000Nominal value per share (Rupees) 10 10Basic (loss) per share (Rupees) (12.61) (38.94)
Since share application money pending allotment is anti-dilutive in nature, no disclosures for dilutive lossper share have been given.
Aryan Chhattisgarh Power Generation Private LimitedSchedules forming part of the accounts
Schedule 4: Significant accounting policies and notes to the accounts
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2) Related party disclosures
a) Related party and nature of related party relationship where control exists:ACB (India) Limited (formerly known as Aryan Coal Beneficiations Private Limited) - Holding companyand the ultimate holding company.
b) Transactions/outstanding balances with related parties:
Name of the Transactions/Outstanding For the year ended For the periodrelated party balances on 31 March 2010 9 May 2008 to
31 March 2009(Rs.) (Rs.)
ACB (India) Issue of shares - 100,000Limited
Share application money received 1,500,000 2,024,160
Outstanding balances as at year end
Share application money 3,524,160 2,024,160pending allotment
3) Based on the information presently available with the management, there are no dues outstanding to microand small enterprises covered under the Micro, Small and Medium Enterprises Development Act, 2006.
4. As at 31 March 2010, the Company has share application money amounting to Rs. 3,524,160 (previous yearRs. 2,024,160) from its shareholders which is pending allotment since the company’s authorised capital islower than share application money received. Subsequent to the financial year end, the Company has increasedthe authorised share capital to facilitate the allotment of shares.
5. The Company does not have any employee during the current year.
6. The previous period’s figures have been regrouped/re-classified, wherever considered appropriate, to confirmto the current years’ groupings/classification
For and on behalf of the Board of Directors
Sd/- Sd/-R.S. Sindhu G.C. MrigDirector Director
Place : GurgaonDate : 15 September, 2010
Aryan Chhattisgarh Power Generation Private LimitedSchedules forming part of the accounts
Schedule 4: Significant accounting policies and notes to the accounts
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Balance Sheet Abstract and Company’s General Business Profile
For and on behalf of the Board of Directors ofAryan Chhattisgarh Power Generation Private Limited
Sd/- Sd/-R. S. Sindhu G.C. MrigDirector Director
Place : GurgaonDate : 15 September, 2010
I. Registration Details:
Registration Number State Code
Balance Sheet DateDate Month Year
II. Capital Raised During the Year (Amount In Rs. Thousand) :
Public Issue Rights Issue
Bonus Issue Private Placement
III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands)
Total Liabilities Total Assets
Sources of Funds
Paid-up Capital Share Application MoneyPending Allotment
Current Liabilities
Application of funds
Capital work in progress Current assets
Profit and Loss Account
IV. Performance of Company (Amount in Rs. Thousands) :
Turnover Total Expenditure
Loss before Tax Loss after Tax
Basic loss per share (in Rs.) Dividend Rate (%) 10%
V. Generic name of three principal products/services of Company :(As per monetary terms)
Item Code No. (ITC Code) Product Description
Generation of electricity Not applicable
3 1 0 3 2 0 1 0
U 4 0 1 0 2 D L 2 0 0 8 P T C 1 7 7 9 3 9 5 5
N I L
N I L N I L
3 7 3 4 3 7 3 4
1 0 0 3 5 2 4
1 1 0
3 0 6 3 1 5 6
5 1 5
N I L
1 0 0
3 8 91 2 . 6 1
1 2 6
1 2 6N I L
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Annexure-GAryan M.P. Power Generation Private Limited
Registered Office : 129, Transport Centre, Punjabi Bagh,New Rohtak Road, New Delhi-110035.
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NOTICE
Notice is hereby given that the Second Annual General Meeting of the Company shall be held at shorter notice onThursday, 30 September, 2010 at 5:40 p.m. at 129, Transport Centre, Punjabi Bagh, Rohtak Road, New Delhi – 110 035 totransact the following business:
ORDINARY BUSINESS1. To receive, consider and adopt the Audited Balance Sheet of the Company as at 31 March, 2010 and Profit & Loss
Account for the period from 1 April, 2009 to 31 March, 2010 together with the Directors’ Report and Auditors’Report thereon.
2. To appoint a Director in Place of Sh. Kuldeep Singh Solanki, who retires by rotation and being eligible, offershimself for reappointment.
3. To appoint a Director in Place of Sh. Ganesh Chandra Mrig, who retires by rotation and being eligible, offershimself for reappointment.
4. To appoint Statutory Auditors of the Company:To consider and if thought fit, to pass with or without modification(s), the following resolution as an OrdinaryResolution:“RESOLVED THAT M/s B S R & Associates, Chartered Accountants, retiring Auditors of the Company beingeligible who have offered themselves for reappointment, be and are hereby appointed as the Statutory Auditors ofthe Company to hold office as such from the date of conclusion of this Annual General Meeting till the date ofconclusion of the next Annual General Meeting of the Company at a remuneration as mutually decided by theCompany & the Auditors.”
SPECIAL BUSINESS5. To consider and if thought fit, to pass with or without modification(s), the following resolution as an ORDINARY
RESOLUTION:“RESOLVED THAT the consent of the Company be and is hereby accorded pursuant to the provisions of Section293(1)(a), Section 293(1)(d) and other applicable provisions, if any, of the Companies Act, 1956, to the Board ofDirectors (“Board”) of the Company to mortgage / pledge / lien / charge / in favour of the Company’s bank(s) orany other banks or financial institutions (‘hereinafter collectively referred to as the Lenders’), all immovable andmovable properties of the Company both present and future and whole of the undertaking of the Company orsuch of them on such terms as may be approved by the Board and as may be agreed to between the Board and theLenders from time to time to secure the Loan / credit facility(s) not exceeding Rs. 5,000 Crores (Rupees Five ThousandCrores only) together with the moneys already borrowed by the Company (apart from the temporary loans obtainedfrom the Company’s banks in the ordinary courses of business) which may be more than its networth i.e. networthcalculated by adding Paid up Share Capital and its Free Reserve, not set apart for any specific purpose, togetherwith interest commitment charge costs and other charge and expenses payable by the Company to the Lender onsuch terms as may be approved by the Board and agreed under the Loan Agreements to be entered into betweenthe Company and the Lenders.”RESOLVED FURTHER THAT all actions taken by the Board in connection with any matter referred to orcontemplated in any of the foregoing resolutions are hereby approved, ratified and confirmed in all respects.”
By order of the Board of DirectorsFor Aryan M.P. Power Generation Private Limited
Sd/-Place : Gurgaon R.S. SindhuDate : 15 September, 2010 Chairman
NOTES:
1 A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND ANDVOTE INSTEAD OF HIMSELF/HERSELF. SUCH PROXY NEED NOT BE A MEMBER OF THE COMPANY.
2 IN ORDER TO BE EFFECTIVE PROXY FORM DULY COMPLETED MUST BE RECEIVED BY THE COMPANY AT ITSREGISTERED OFFICE NOT LESS THAN 48 HOURS BEFORE SCHEDULED TIME FOR HOLDING OF THE MEETING. ABLANK PROXY FORM IS ENCLOSED HEREWITH.
3 Explanatory Statement pursuant to the provisions of Section 173 (2) of the Companies Act, 1956 is attached herewith.
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Explanatory Statement pursuant to the provisions of Section 173 (2) of the Companies Act, 1956
Item No. 5
As per the provisions of Section 293(1)(d) of the Companies Act, 1956, the Board of Directors (“Board”) of the Companycannot, except with the consent of the Company in General Meeting, borrow monies, apart from temporary loansobtained from the Company’s bankers in the ordinary course of business, in excess of the aggregate of the paid upcapital and free reserves of the Company, that is to say, reserves not set apart for any specific purposes.
In view of the fact that the Company is putting up a Power Plant of 1200 Mega Watt (MW) capacity which require hugecapital investment. The said Capital investment is proposed to be financed partly by equity and partly by Debt fromBanks and financial Institutions. In view of above, the borrowing limit of the Company is fixed to the sum(s) so borrowedunder this resolution and remaining outstanding at any time shall not exceed in the aggregate of Rs. 5,000 Crores(Rupees Five Thousand Crores). Further, Banks / financial institutions in order to secure their loans create mortgage /lien on the assets of the Company which tantamount to indirectly transferring the said assets in their favour, so that ifany default is made by the Company in the repayment of loan together with interest commitment charge costs andother charge and expenses payable, the Banks/Financial institution has a right to sell those assets of the Company inorder to recover their outstanding loan. This amount to selling / or otherwise disposing off the undertaking of theCompany which can only be done with the permission of the shareholders under section 293(1)(a) of the CompaniesAct,1956. The banks / financial institutions insists on this resolution being passed by the Shareholders of the Companyauthorizing the Board to create mortgage / pledge / lien on all the immovable / movable assets of the Companywhether present or future on such terms and condition as agreed to between lenders and the Board of the Company.
The Board of the Company have approved the limit of borrowing powers in their meeting held on 15th September 2010to borrow and to mortgage / pledge / lien / charge / in favour of the Company’s bank(s) or any other banks orfinancial institutions, all immovable and movable properties of the Company upto Rs. 5,000 Crores (Rupees FiveThousand Crores), apart from the temporary loans obtained from the bankers in the ordinary course of business, subjectto approval of members in General Meeting.
The consent of the members is therefore sought under provisions of Section 293(1)(a) and 293(1)(d) of the CompaniesAct, 1956, to enable the Directors to borrow the aforesaid amount limit and to mortgage / pledge / lien / charge / infavour of the Lender.
Therefore, the approval of the members shall be accorded by way of passing Ordinary Resolution at General Meeting.Hence, the matter be placed before the members for their approval.
A copy each of the resolutions passed at Board Meeting dated 15th September 2010, are open for inspection of theMembers, during business hours between 11.00 A.M. to 1.00 P.M. on all working days of the Company, upto the date ofthe meeting, at the Registered Office of the Company.
None of the Directors is in any way concerned or interested in these resolutions. The Board of Directors recommendsthis enabling resolution for the approval of members.
By order of the Board of DirectorsFor Aryan M.P. Power Generation Private Limited
Sd/-Place : Gurgaon R.S. SindhuDate : 15 September, 2010 Chairman
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To,The Members,
Your directors have pleasure in presenting their Second Annual Report together with the Audited Statement of Accountsfor the year ended on 31 March, 2010:
1. FINANCIAL RESULTS
The Company has not started any commercial operations during the year under review and has incurred a Lossof Rs. 1.44 Lacs as compared to a Loss of Rs. 1.49 Lacs for the period from the date of incorporation till 31 March,2009.
2. DIVIDEND
As the Company has not started any commercial operations during the year under review, therefore, your Directorsdo not recommend any dividend for the financial year ended on 31 March, 2010.
3. PUBLIC DEPOSITS
The Company has not invited / accepted any public deposits under section 58A & 58AA of the Companies Act,1956 during the financial year ended on 31 March, 2010.
4. DIRECTORS
During the year under review, Sh. Niten Malhan continued as Nominee Director on Board of Directors of theCompany on behalf of Pineridge Investment Ltd. and there is no change in Board of Directors during the yearunder review.
Sh. Kuldeep Singh Solanki and Sh. Ganesh Chandra Mrig Directors, retire by rotation and being eligible, offerthemselves for reappointment at the ensuing Annual General Meeting.
5. AUDITORS REPORT
The Report of Auditors’ on Annual Accounts of the Company for the year ended on 31 March, 2010 is selfexplanatory. Hence, no explanation is required to be given.
6. APPOINTMENT OF AUDITORS
M/s B S R and Associates, Chartered Accountants, retire at the conclusion of the ensuing Annual General Meetingand being eligible have offered themselves for re-appointment. The Company has received a certificate from thempursuant to section 224(1B) confirming their eligibility for re-appointment. Yours Directors recommend their re-appointment.
7. DISCLOSURES UNDER SECTION 217 OF THE COMPANIES ACT, 1956
Except as disclosed elsewhere in the report, there have been no material changes and commitments, which canaffect the financial position of the Company between the end of financial year and the date of report.
As required under Section 217(2) of the Companies Act, 1956, the Board of Directors inform the members thatduring the financial year there has been no change:• in the nature of Company’s business,
• in the classes of business in which the Company has an interest.
8. CONSERVATION OF ENERGY, TECHNILOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS ANDOUTGO
As the Company has not started any commercial operations during the year under review, the provision of section217(1) (e) of the Companies Act, 1956 is not applicable to our Company. Hence, Statement detailing the particularsrequired under the said section read with the Companies (Disclosures of particulars in the report of Board ofDirectors) Rules, 1988 are not being furnished. There was no foreign exchange earnings and outgo in the companyduring the financial year under review.
9. PARTICULARS OF EMPLOYEES U/S 217(2A) OF COMPANIES ACT, 1956
None of the employees of the Company has drawn salary in excess of the limits prescribed in the said section readwith the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and hence no suchlist is being provided.
DIRECTORS’ REPORT
Aryan M.P. Power Generation Private LimitedRegd. Office: 129, Transport Centre, Punjabi Bagh, Rohtak Road, New Delhi-110035
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10. DIRECTOR RESPONSIBILITY STATEMENT
As per the provisions of Section 217(2AA) of the Companies Act, 1956 your directors make the Statement:
a) That in preparation of the Accounts for the financial year ended 31st March, 2010; the applicable AccountingStandards have been followed along with proper explanations relating to material departures.
(b) That the Directors have selected such Accounting Policies and applied them consistently and made judgmentsand estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of theCompany at the end of the financial year and of the profit of the Company for that period.
(c) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting recordsin accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Companyand for preventing and detecting fraud and other irregularities and.
(d) That the Directors have prepared the accounts for the financial year ended 31st March 2010 on a going concernbasis.
11. ACKNOWLEDGEMENT
Your Directors would like to place their grateful appreciation for the assistance and co-operation received fromthe Company’s bankers during the year under review. The Directors also acknowledge with appreciation thesupport and co-operation rendered by various Govt. Agencies and Departments. Your Directors also acknowledgethe hard work, dedication and unstinting efforts of the employees. The Directors also wish to thank PineridgeInvestments Ltd (an affiliate of Warburg Pincus Group) and Sh. Niten Malhan, their representative Director forhaving supported the business plans of the Company to the fullest extent.
By order of the Board of DirectorsFor Aryan M.P. Power Generation Private Limited
Sd/-Place : Gurgaon R.S. SindhuDate : 15 September, 2010 Chairman
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To the members ofAryan M.P. Power generation Private Limited
We have audited the attached Balance Sheet of Aryan M.P. Power Generation Private Limited (“the Company”) as at 31March 2010, the Profit and Loss Account and the Cash Flow Statement (“the financial statements”) of the Company forthe year ended on that date, annexed thereto. These financial statements are the responsibility of the Company’smanagement. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards requirethat we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principles used and significant estimatesmade by management, as well as evaluating the overall financial statement presentation. We believe that our auditprovides a reasonable basis for our opinion.
This report does not include a statement on the matters specified in paragraph 4 of the Companies (Auditor’s Report)Order, 2003, issued by the Department of Company Affairs, in terms of section 227(4A) of the Companies Act, 1956,since in our opinion and according to the information and explanations given to us, the said Order is not applicable tothe Company.
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 necessaryfor 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 fromour examination of those books;
c) the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are inagreement with the books of account;
d) in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by thisreport comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act,1956;
e) on the basis of written representations received from the directors, as on 31 March 2010, and taken on record bythe Board of Directors, we report that none of the directors is disqualified as on 31 March 2010 from being appointedas a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956; and
f) in our opinion and to the best of our information and according to the explanations given to us, the said accountsgive the information required by the Companies Act, 1956, in the manner so required and give a true and fair viewin conformity with the accounting principles generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2010;
(ii) in the case of the Profit and Loss Account, of the loss for the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
For B S R and AssociatesChartered AccountantsFirm Registration No. 128901W
Sd/-Kaushal Kishore
Place : Gurgaon PartnerDate : 15 September, 2010 Membership No.: 090075
Auditors’ Report
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Schedule As at As at31 March 2010 31 March 2009
SOURCES OF FUNDS
Shareholders’ fundsShare capital 1 100,000 100,000Share application money pending allotment 274,467,440 7,925,840
TOTAL 274,567,440 8,025,840
APPLICATION OF FUNDS
Fixed assets 3Gross block 480,173 -Less : Accumulated depreciation 22,534 -Net block 457,639 -Capital work in progress (including capital advances) 240,785,856 7,896,189
241,243,495 7,896,189
Current assets, loans and advancesCash and bank balances 4 28,852,294 99,649Loans and advances 5 4,928,750 -
33,781,044 99649Less: Current liabilities and provisions 6Current liabilities 750,074 110,300Provisions - 8,255
750,074 118,555
Net current assets 33,030,970 (18,906)
Debit balance in profit and loss account 2 292,975 148,557
TOTAL 274,567,440 8,025,840
Significant accounting policies and notes to the accounts 7
The accompanying notes and schedules form an integral part of accounts.
Aryan M.P. Power Generation Private LimitedBalance Sheet as at 31 March 2010(All amounts are in Rupees)
As per our report of even date attached
For B S R & Company For and on behalf of the Board of DirectorsChartered AccountantsFirm Registration No. 128901W
Sd/- Sd/- Sd/-Kaushal Kishore R.S. Sindhu G.C. MrigPartner Director DirectorMembership no.: 090075
Place : GurgaonDate : 15 September, 2010
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Schedule For the year For the periodended 9 May 2008 to
31 March 2010 31 March 2009
ExpenditureLegal and professional charges 127,300 136,453Miscellaneous expenses 17,118 3,849
144,418 140,302
Profit/ (loss) before tax (144,418) (140,302)Provision for tax- Fringe benefit tax - (8,255)
Profit/ (loss) after tax (144,418) (148,557)Balance brought forward (148,557) -
Balance carried to balance sheet (292,975) (148,557)
Earnings/(loss) per shareEquity shares of face value of Rs. 10 eachBasic and diluted loss per share (face value of Rs. 10 each) (14.44) (14.86)
Significant accounting policies and notes to the accounts 7
The accompanying notes and schedules form an integralpart of the financial statements.
Aryan M.P. Power Generation Private LimitedProfit and Loss Account for the year ended 31 March 2010(All amounts are in Rupees)
As per our report of even date attached
For B S R & Company For and on behalf of the Board of DirectorsChartered AccountantsFirm Registration No. 128901W
Sd/- Sd/- Sd/-Kaushal Kishore R.S. Sindhu G.C. MrigPartner Director DirectorMembership no.: 090075
Place : GurgaonDate : 15 September, 2010
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For the year For the periodended ended
31 March 2010 31 March 2009
A) Cash flow from operating activities:Profit/(loss) before tax (144,418) (140,302)
Adjustments for :Increase/ (decrease) in current liabilities and provisions 631,519 110,300(Increase)/ decrease in loans and advances (4,928,750) -(Increase)/ decrease in other current assets - -
Net cash generated from operating activities (A) (4,441,649) (30,002)
B) Cash flow from investing activities:Purchase of fixed assets (including capital work in progress) (233,347,306) (7,896,189)
Net cash used in investing activities (B) (233,347,306) (7,896,189)
C) Cash flow from financing activities:Proceeds from issue of equity share capital - 100,000Receipt of share application money 266,541,600 7,925,840
Net cash from in financing activities (C ) 266,541,600 8,025,840
D) Net increase in cash and cash equivalents (A+B+C) 28,752,645 99,649
Cash and cash equivalents as at the beginning of the yearCash in hand 39,616 -Balance with scheduled banks:-on current accounts 60,033 -
99,649 -Cash and cash equivalents as at the end of the yearCash in hand 34,284 39,616Balance with scheduled banks:-on current accounts 615,828 60,033-on deposit accounts (refer note 2) 28,202,182 -
28,852,294 99,649
Notes:1. The cash flow statement has been prepared in accordance with ‘Indirect method’ as set out in the Accounting
Standard (AS)-3 on ‘Cash Flow Statements’ as specified in the the Companies (Accounting Standard) Rules, 2006under the provisions of the Companies Act, 1956.
2. Fixed deposits amounting to Rs. 28,050,000 (previous year Rs. Nil) pledged as margin money are not availablefor use by the company.
Aryan M.P. Power Generation Private LimitedCash Flow Statement for the period ended 31 March 2010(All amounts are in Rupees)
As per our report of even date attached
For B S R & Company For and on behalf of the Board of DirectorsChartered AccountantsFirm Registration No. 128901W
Sd/- Sd/- Sd/-Kaushal Kishore R.S. Sindhu G.C. MrigPartner Director DirectorMembership no.: 090075
Place : GurgaonDate : 15 September, 2010
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As at As at31 March 2010 31 March 2009
Schedule 1 - Share capitalAuthorised capital100,000 equity shares of Rs. 10 each 100,000 100,000(previous year 100,000 equity shares of Rs. 10 each)
Issued, subscribed and paid up capital10,000 (previous year 10,000) equity shares of Rs.10 each fully paid up 100,000 100,000Of the above, 10,000 (previous year 10,000) equity shares of Rs. 10 each are heldby ACB (India) Limited, the holding and ultimate holding company.
100,000 100,000
Schedule 2 - Debit balance in profit and loss accountOpening balance 148,557 -Add: transferred loss from Profit and Loss Account 144,418 148,557
292,975 148,557
Aryan M.P. Power Generation Private LimitedSchedules forming part of the accounts(All amounts are in Rupees)
Schedule 4 - Cash and bank balancesCash in hand 34,284 39,616Balance with scheduled banks:-on current accounts 615,828 60,033-on deposit accounts (as margin money for bank guarantees) 28,202,182 -
28,852,294 99,649Schedule 5 - Loans and advancesSecurity deposits 4,911,840 -Advance tax 16,910 -
4,928,750 -Schedule 6 - Current liabilities and provisionsCurrent liabilitiesSundry creditors- other than micro and small enterprises 679,482 98,939Other liablities 70,592 11,361
* refer to note III (4) of schedule 8 750,074 110,300
ProvisionsProvision for fringe benefit tax - 8,255(net of advance tax of previous year Rs. Nil)
- 8,255
Schedule 3 - Fixed Assets
Particulars Gross block Accumulated depreciation Net block
As at Additions As at As at For the As at As at As at31 March 2009 31 March 2010 1 April 2009 year 31 March 2010 31 March 2010 31 March 2009
Tangible assets
Office equipments - 24,100 24,100 - 871 871 23,229 -Vehicles - 456,073 456,073 - 21,663 21,663 434,410 -
Total - 480,173 480,173 - 22,534 22,534 457,639 -
Previous Year - - - - - - -
Capital work in progress [including capital advances amounting to Rs. 153,192,904 (previous year Rs. Nil)] 240,954,948 7,896,189
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I. BackgroundAryan M.P. Power Generation Private Limited (AMPGPL), the Company was incorporated on 9 May 2008 for thepurpose executing 1200 MW thermal power project in the state of Madhya Pradesh as a special purpose vehicle ofACB (India) Limited. The Company is a subsidiary of ACB (India) Limited (formerly known as Aryan CoalBenefications Private Limited). ACB (India) Limited had entered into Memorandum of Understanding dated 27May 2008 with Madhya Pradesh State Government and its electricity board for setting up of the thermal powerplant, and subsequently entered into an Implementation Agreement with the State Government on 26 October2009.
II. Significant accounting policies
1) Accounting convention
The financial statements are prepared under the historical cost convention, on the accrual basis of accountingin accordance with the Generally Accepted Accounting Principles (‘GAAP’) in India and comply with theaccounting standards prescribed by Companies (Accounting Standards) Rules, 2006, to the extent applicableand in accordance with the provisions of the Companies Act, 1956, as adopted consistently by the Company.
2) Use of estimates
The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP)in India requires management to make estimates and assumptions that affect the reported amounts of assetsand liabilities and the disclosure of contingent liabilities on the date of the financial statements. Actual resultscould differ from those estimates. Differences between the actual results and estimates are recognised in theyear in which the results are known/ materialized. Any revision to accounting estimates is recognisedprospectively in current and future periods.
3) Fixed assets and depreciation
Fixed assets are stated at cost less accumulated depreciation. Cost includes freight, duties, taxes and otherincidental expenses relating to acquisition and installation.
Expenditure incurred during the period of construction, including all direct and indirect expenses, incidentaland related to construction, is carried forward and, on completion, such costs are allocated to respective fixedassets.
Depreciation is provided on pro-rata basis as per straight line method (SLM) at rates based upon themanagement estimates of useful lives of the assets. Such rates are equal to the rates prescribed in ScheduleXIV of the Companies Act, 1956.
Assets individually costing upto Rs. 5,000 are fully depreciated in the year of purchase.
4) Impairment
The carrying amounts of assets, including those assets that are not yet available for use, are reviewed at eachBalance Sheet date to determine whether there is any indication of impairment. If any such indication exists,the recoverable amount of the asset is estimated. An impairment loss is recognised in the Profit and LossAccount whenever the carrying amount of an asset exceeds its recoverable amount. Impairment losses arerecognised in the Profit and Loss Account. An impairment loss is reversed only to the extent that the carryingamount of the assets do not exceed the net book value that would have been determined, if no impairmentloss had been recognised.
5) Earnings per share
In computing earnings per share, the Company considers net profit/(loss) after tax. Basic earnings per shareare computed by the weighted average number of equity shares outstanding during the year. Diluted earningsper share are computed using the weighted average number of equity and dilutive equivalent sharesoutstanding during the year, except where results would be anti-dilutive.
6) Taxation (current and deferred)
Income-tax expenses comprise current tax (i.e. the amount of tax for the period determined in accordancewith the Income Tax Act, 1961) and deferred tax charge or credit (reflecting the tax effects of the timingdifferences between the accounting income and taxable income for the period). The deferred tax charge orcredit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have
Aryan M.P. Power Generation Private LimitedSchedules forming part of the accounts
Schedule 4: Significant accounting policies and notes to the accounts
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been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognized only tothe extent there is reasonable certainty that the assets can be realized in the future. However, where there isunabsorbed depreciation or carry forward loss under taxation laws, deferred tax assets are recognized only ifthere is virtual certainty of realization of such assets. Deferred tax assets are reviewed at each Balance Sheetdate and written down or written up to reflect the amount that is reasonably/virtually certain (as the casemay be) to be realized. Deferred tax implications of timing differences, that originate during the tax holidayperiod and reverse after the tax holiday period are recognised in the year in which timing differences originate.
Fringe Benefits Tax (‘FBT’) has been abolished w.e.f. 1 April 2009, therefore no provision is made in currentfinancial year
7) Provisions and contingencies
The Company recognises a provision when there is a present obligation as a result of a past event and it ismore likely than not that there will be an outflow of resources embodying economic benefits to settle suchobligation and the amount of such obligation can be reliably estimated. Provisions are not discounted to itspresent value, and are determined based on the management’s best estimate of the amount of obligationrequired at the year end. These are reviewed at each Balance Sheet date and adjusted to reflect currentmanagement estimates.
Contingent liabilities are disclosed in respect of possible obligations that have arisen from past events andthe existence of which will be confirmed only by the occurrence or non occurrence of future events notwholly within the control of the Company. Contingent liabilities are also disclosed for present obligations inrespect of which it is not probable that there will be an outflow of resources or a reliable estimate of theamount of obligation cannot be made.
When there is a possible obligation or a present obligation where the likelihood of an outflow of resources isremote, no disclosure or provision is made.
III. Notes to accounts
1) Auditors’ remuneration (excluding out of pocket expenses)
(Amount in Rupees)
For the year For the period ended 9 May 2008 to
31 March 2010 31 March 2009
Statutory audit fees 100,000 100,000Service tax 10,300 10,300
110,300 110,300
2) Earning per share
Reconciliation of basic and diluted shares used in computing earnings per share
For the year For the period ended 9 May 2008 to
31 March 2010 31 March 2009
(Loss) after tax attributable to equity shareholders (Rupees) (144,418) 148,557Number of shares considered as weighted average sharesoutstanding for computing basic/diluted earnings per share 10,000 10,000Nominal value per share (Rupees) 10 10Basic (loss) per share (Rupees) (14.44) (14.86)
Since share application money pending allotment is anti dilutive in nature, no disclosures for dilutive lossper share have been given.
Aryan M.P. Power Generation Private LimitedSchedules forming part of the accounts
Schedule 4: Significant accounting policies and notes to the accounts
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3) Related party disclosures
a) Related party and nature of related party relationship where control exists:ACB (India) Limited (formerly known as Aryan Coal Benefications Private Limited) - Holding company
b) Transactions/outstanding balances with related parties:
(Amount in Rupees)
Name of the Transactions/Outstanding For the year For the periodrelated party balances ended on 9 May 2008 to
31 March 2010 31 March 2009
ACB (India) Issue of shares - 100,000Limited Share application money received 266,541,600 7,925,840
Reimbursement of expenses - 36,153Issuance of bank guarantee on behalfof the Company 561,000,000 -Purchase of fixed assets 456,073 -Outstanding balances as at year endShare application money pending allotment 274,467,440 7,925,840
4) Based on the information presently available with the management, there are no dues outstanding to microand small Enterprises covered under the Micro, Small and Medium Enterprises Development Act, 2006.
5) As at 31 March 2010, the Company has share application money amounting to Rs. 274,467,440 (previous yearRs 7,925,840) from its shareholders which is pending allotment since the Company’s authorised capital islower than share application money received. Subsequent to the financial year end, the Company has increasedthe authorised share capital to facilitate the allotment of shares.
6) Previous period’s figures have been regrouped/re-classified, wherever considered appropriate, to confirmto the current years groupings/classification
For and on behalf of the Board of Directors
Sd/- Sd/-
R.S. Sindhu G.C. MrigChairman Managing Director
Place : GurgaonDate : 15 September, 2010
Aryan M.P. Power Generation Private LimitedSchedules forming part of the accounts
Schedule 4: Significant accounting policies and notes to the accounts
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Aryan M.P. Power Generation Private LimitedInformation pursuant to Part IV of Schedule VI of the Companies Act, 1956
Balance Sheet Abstract and Company’s General Business Profile
For and on behalf of the Board of Directors ofAryan M.P. Power Generation Private Limited
Sd/- Sd/-R. S. Sindhu G.C. MrigDirector Director
Place : GurgaonDate : 15 September, 2010
I. Registration Details:
Registration Number State Code
Balance Sheet DateDate Month Year
II. Capital Raised During the year (Amount In Rs. Thousands) :
Public Issue Rights Issue
Bonus Issue Private Placement
III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands)
Total Liabilities Total Assets
Sources of Funds
Paid-up Capital Share Application MoneyPending Allotment
Current liabilities and provisions
Application of funds
Fixed assets Current Assets
Capital work in progress
Profit and Loss Account
IV. Performance of Company (Amount in Rs. Thousands) :
Turnover Total Expenditure
Loss before Tax Loss after Tax
Basic loss per share (in Rs.) Dividend Rate (%)
V. Generic name of three principal products / services of the company :(As per monetary terms)
Item Code No. (ITC Code) Product Description
Power Generation Not applicable
3 1 0 3 2 0 1 0
U 1 0 1 0 2 D L 1 9 9 7 P T C 0 8 5 8 3 7 5 5
N I L
N I L N I L
2 7 5 3 1 8 2 7 5 3 1 8
1 0 0 2 7 4 4 6 7
7 5 0
2 4 0 7 8 63 3 7 8 1
2 9 3
N I L
1 0 0
( 1 4 0 )1 4 . 4 4
1 4 4
- 1 4 4
N I L
4 5 8
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Annexure-HSpectrum Coal and Power Limited
Registered Office : MCH No. 6-3-1089/1/1, Flat No. 203, Pavani Avenue,Somajiguda, Raj Bhavan Road, Hyderabad-500082
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NOTICE
Notice is hereby given that the Fifteenth Annual General Meeting of the Company shall be held at shorter notice onThursday, the 30 September, 2010 at 10.30 a.m. at Flat No. 203, MCH No. 6-3-1089/1/1, Pavani Avenue, Somajiguda,Raj Bhavan Road, Hyderabad-500082 to transact the following business:
ORDINARY BUSINESS
1. To receive, consider and adopt the Audited Balance Sheet of the Company as at 31 March, 2010 and Profit & LossAccount for the period commencing from 1 April, 2009 to 31 March, 2010 together with the Directors’ Report andAuditors’ Report thereon.
2. To appoint a Director in place of Sh. Narendra Prakash Bhati, who retires by rotation and being eligible offershimself for re-appointment as Director of the Company.
3. To appoint a Director in place of Sh. Dalip Nagar, who retires by rotation and being eligible offers himself for re-appointment as Director of the Company.
4. To appoint Statutory Auditors of the Company:
To consider and if thought fit, to pass with or without modification(s), the following resolution as an OrdinaryResolution:
“RESOLVED THAT M/s B S R & Company, Chartered Accountants, retiring Auditors of the Company be and arehereby appointed as the Statutory Auditors of the Company to hold office from the date of conclusion of this AnnualGeneral Meeting till the date of conclusion of the next Annual General Meeting of the Company at a remunerationas decided by the Company & Auditors.”
SPECIAL BUSINESS
5. To consider and if thought fit, to pass with or without modification(s), the following resolution as an ORDINARYRESOLUTION:
“RESOLVED THAT Sh. D.R. Gupta, who was appointed as Additional Director of the Company w.e.f. 11.08.2010by the Board of Directors of the Company and who holds office upto the date of this Annual General Meeting of theCompany and in respect of whom the Company has received a notice in writing proposing his candidature for theoffice of Director under section 257 of the Companies Act, 1956, be and is hereby appointed as a Director of theCompany, liable to retire by rotation.”
6. To consider and if thought fit, to pass with or without modification(s), the following resolution as an ORDINARYRESOLUTION:
“RESOLVED THAT Sh. N. N. Gautam, who was appointed as Additional Director of the Company w.e.f. 11.08.2010by the Board of Directors of the Company and who holds office upto the date of this Annual General Meeting of theCompany and in respect of whom the Company has received a notice in writing proposing his candidature for theoffice of Director under section 257 of the Companies Act, 1956, be and is hereby appointed as a Director of theCompany, liable to retire by rotation.”
7. To consider and if thought fit, to pass with or without modification(s), the following resolution as an ORDINARYRESOLUTION:
“RESOLVED THAT pursuant to Article 72 of the Articles of Association of the Company and subject to the provisionsof Section 198, 269, 309, 310 read with Schedule XIII of the Companies Act, 1956 and other applicable provisions, ifany of the Companies Act, 1956, Mr. Narendra Prakesh Bhati, be and is hereby continue to act as Managing Directorof the Company for another term of one year starting w.e.f. 01.12.2009 to 30.11.2010 at a monthly remuneration ofRs.4,00,000/- (Rupees Four Lacs per month) plus Bonus/other allowances/gratuity, etc. as per the policy of theCompany which shall be payable to him w.e.f. 01.04.2009.
FURTHER RESOLVED THAT Sh. Sanjay Hasija and Sh. Dalip Nagar, Directors of the Company be and arehereby severally authorised to sign and execute an agreement/papers/documents required, if any, in respect of re-appointment of Mr. Narendra Prakash Bhati as Managing Director of the Company and to sign and file necessary
Spectrum Coal and Power LimitedRegd. Office: MCH No. 6-3-1089/1/1, Flat No. 203, Pavani Avenue, Somajiguda, Raj Bhavan Road,
Hyderabad-500082
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Forms and other documents as prescribed under the Companies Act, 1956 with the Registrar of Companies and todo all other acts and deeds in connection therewith on behalf of the Company.”
By order of the Board of DirectorsFor Spectrum Coal and Power Limited
Sd/-Place : Gurgaon Narendra Prakash BhatiDate : 15 September, 2010 Managing Director
NOTES
1 A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TOATTEND AND VOTE INSTEAD OF HIMSELF/HERSELF. SUCH PROXY NEED NOT BE A MEMBER OF THECOMPANY.
2 IN ORDER TO BE EFFECTIVE PROXY FORM DULY COMPLETED MUST BE RECEIVED BY THE COMPANY ATITS REGISTERED OFFICE NOT LESS THAN 48 HOURS BEFORE SCHEDULED TIME FOR HOLDING OF THEMEETING. A BLANK PROXY FORM IS ENCLOSED HEREWITH.
3 Explanatory Statement pursuant to the provisions of Section 173 (2) of the Companies Act, 1956 is attached herewith.
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Explanatory Statement pursuant to the provisions of Section 173 (2) of theCompanies Act, 1956
Item No. 5
The Board of Directors of the Company the (‘Board’), appointed Sh. D.R. Gupta as an Additional Director of the Companyeffective August 11, 2010 pursuant to the provision of section 260 of the Companies Act, 1956. In terms of the provisionof section 260 of the Companies Act, 1956, Sh. D.R. Gupta would hold office up to date of the ensuing Annual GeneralMeeting.
The Company has received a notice in writing from a member alongwith deposit of Rs. 500/- for proposing thecandidature of Sh. D.R. Gupta for the office of Director of the Company under the provision of section 257 of the Act. Sh.D.R. Gupta is not disqualified from being appointed as Director in terms of section 274 (1) (g) of the Act. The Companyhas received the requisite Form ‘DD-A’ from Sh. D.R. Gupta, confirming his eligibility for such appointment.
It is proposed to seek Member’s approval for the appointment of Sh. D.R. Gupta as Director of the Company in terms ofthe applicable provisions of the Companies Act, 1956. The Board recommends the resolution as set out at item No.5 ofthe Notice for your approval.
Sh. D.R. Gupta himself is concerned or interested in his appointment. None of the other Directors of the Company is, inany way, concerned or interested in the resolution.
Item No. 6
The Board of Directors of the Company the (‘Board’), appointed Sh. N. N. Gautam as an Additional Director of theCompany effective August 11, 2010 pursuant to the provision of section 260 of the Companies Act, 1956. In terms of theprovision of section 260 of the Companies Act, 1956, Sh. N. N. Gautam would hold office up to date of the ensuingAnnual General Meeting.
The Company has received a notice in writing from a member alongwith deposit of Rs. 500/- for proposing thecandidature of Sh. N. N. Gautam for the office of Director of the Company under the provision of section 257 of the Act.Sh. N. N. Gautam is not disqualified from being appointed as Director in terms of section 274 (1) (g) of the Act. TheCompany has received the requisite Form ‘DD-A’ from Sh. N. N. Gautam, confirming his eligibility for such appointment.
It is proposed to seek Member’s approval for the appointment of Sh. N. N. Gautam as Director of the Company in termsof the applicable provisions of the Companies Act, 1956. The Board recommends the resolution as set out at item No.6of the Notice for your approval.
Sh. N. N. Gautam himself is concerned or interested in his appointment. None of the other Directors of the Company is,in any way, concerned or interested in the resolution.
Item No. 7
In order to comply with provision of Section 269 of the Companies Act 1956, the Board of Directors of the Company hadin its meeting held on 24th July, 2007 appointed Mr. Narendra Prakash Bhati as Managing Director of the Company fora period from 01.06.2007 till 30.11.2009. Further, the Board of Directors of the Company vide resolution passed bycirculation on 30.11.2009 extended his term as Managing Director for another term of one year starting w.e.f 01.12.2009at a monthly remuneration of Rs.4 Lacs which shall be payable to him w.e.f. 01.04.2009, subject to approval of shareholders.
It is proposed to seek Member’s approval for the appointment of Mr. Narendra Prakash Bhati as Managing Director ofthe Company and payment of remuneration to him. The Board recommends the resolution as set out at item No.7 of theNotice for your approval.
Mr. Narendra Prakash Bhati himself is concerned or interested in his appointment. None of the other Directors of theCompany is, in any way, concerned or interested in the resolution.
By order of the Board of DirectorsFor Spectrum Coal and Power Limited
Sd/-Place : Gurgaon Narendra Prakash BhatiDate : 15 September, 2010 Managing Director
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To,The Members,
Your Directors have pleasure in presenting the 15th Annual Report together with the Audited Accounts for the yearended 31 March 2010.
1. FINANCIAL RESULTS
The financial results for the year ending 31 March 2010 are as under:
Particulars 2009-10 2008-09
Gross Income from Operations 23,252.98 23,789.14Net Profit before Interest, Tax & Depreciation (EBIDTA) 10,855.27 11,966.93
Less: Interest & Finance Charges 870.86 1,140.65Net Profit/(Loss) before Tax & Depreciation (PBDT) 9,984.41 10,826.28
Less: Depreciation 2,409.00 2,496.13Net Profit/(Loss) after Depreciation before Tax (PBT) 7,575.41 8,330.15
Less: Provision for Income Tax-Current 2,764.80 2,387.00Provision for Income Tax- Deferred (90.77) 539.81Provision for Deffered Tax Charges for Earlier Years - 356.63Provision for Fringe Benefit Tax - 17.63Provision for Taxes of Earlier Years (255.22) 167.11Net Profit/(Loss) after Tax (PAT) 5,156.61 4,861.97Total Profit/(Loss) available for appropriation 5,156.61 4,861.97
2. REVIEW OF OPERATIONS:
During the year under review, your Company’s Gross Income from Operations stood at Rs. 2,32,52,98,483/- (Previousyear Rs. 2,37,89,13,512/-). The profit before tax reported by the Company for the financial year 2009-10 stood at Rs.75,75,40,690/- (Previous year Rs. 83,30,15,160/-).
3. DIVIDEND:
In view of preservation of funds to meet operational business expenditure and also to meet the proposed expansionof the capacity, your directors do not recommend any dividend.
4. PUBLIC DEPOSITS:
The Company has not invited / accepted any Public Deposits under Section 58A & 58AA of the Companies Act,1956, during the year under review.
5. DIRECTORS:
As per Article No. 88 & 89 of the Articles of Association of the Company and pursuant to the provisions of Section255 and 256 of the Companies Act 1956, Mr. Narendra Prakash Bhati and Mr. Dalip Nagar, Directors of the Companyare liable to retire by rotation and being eligible for re-appointment offer themselves for reappointment as Directorsof the Company.
During the year under review, Sh. Niten Malhan continued as Nominee Director on Board of Directors of the Companyon behalf of Pineridge Investment Ltd. and Sh. A. V. Mohan Rao has resigned from the position of Executive Chairmanas well as from Directorship of the Company w.e.f. 1 April, 2009. Further, Sh. Srikant Akula, Director of the Companyhas resigned w. e. f 1 April, 2009.
Further, on 11th August, 2010, the Company has appointed Mr. Dhani Ram Gupta and Mr. Nityanand Gautam asAdditional Directors and they would hold office up to date of the ensuing Annual General Meeting. Furthermore,the Company has received notice in writing proposing their candidature for the office of Director under section 257of the Companies Act, 1956 and your approval is required for the appointment of Mr. Dhani Ram Gupta and Mr.Nityanand Gautam as Directors of the Company at the ensuing Annual General Meeting.
DIRECTORS’ REPORT
(Rs. In Lakhs)
Spectrum Coal And Power LimitedRegd. Office: MCH No. 6-3-1089/1/1, Flat No. 203, Pavani Avenue, Somajiguda, Raj Bhavan Road,
Hyderabad-500082
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Further, the Board of Directors of the Company vide resolution passed by circulation on 30.11.2009 extended theterm of Mr. Narendra Prakash Bhati as Managing Director for another term of one year starting w.e.f 01.12.2009 at amonthly remuneration of Rs.4 Lacs which shall be payable to him w.e.f. 01.04.2009, subject to approval of shareholders.
There is no other change in the Board of Directors.
6. AUDIT COMMITTEE
As required pursuant to Section 292A of the Companies Act, 1956, the details of composition of Audit Committeeare given hereunder:
1. Sh. Dalip Nagar
2. Sh. Sanjay Hasija
3. Sh. Niten Malhan
Sh. Dalip Nagar is the Chairman of the Audit Committee.
7. AUDITOR’S REPORT:
In the Auditor’s Report for the year ending on 31 March, 2010, Auditors have made certain observations withregard to the Company’s investment amounting to Rs. 1,627,173,402 toward setting up of 11 MTPA coal washery atTalcher, Orissa on land provided by Andhra Pradesh Power Generation Corporation Limited (APGENCO). Delayin setting up of railway siding at Talcher and lack of consensus on certain commercial terms with the customer hasresulted in delays in commencement of commercial operations. The commencement of commercial operations isdependent on the resolution of various issues with APGENCO including that of liquidated damages on the companydue to these delays. Accordingly, at this stage we are unable to express an opinion on the financial/operationalimpact of the same on the company.
To the above, the Company states that pursuant to an agreement entered into with Andhra Pradesh Power GenerationCorporation Limited (APGENCO), the Company set up 11 MTPA coal washery at Talcher, Orissa on land providedby APGENCO out of which the first phase of 7 MTPA had already been commissioned. The Company has investedRs 1,627,173,402 (including capital work in progress) towards the above mentioned coal washery as at 31 March2010. Delay in setting up of railway siding at Talcher and lack of consensus on certain commercial terms has resultedin delays in commencement of commercial operations. The Company is hopeful that the commercial issues will becompletely resolved in the near future and expects to commence the commercial operations at this washeryimmediately on such resolution. The Company does not foresee any liability due to delay in commencement ofcommercial operations. Accordingly, the Company has continued to state the amounts incurred towards the projectat historical cost.
Further, the Company is discharging its tax liability in time, however, in case there is some delay in discharging thesame, the Company will take up the issue with appropriate authority for condoning the delay and take remedialaction so that such lapse does not occur in future.
8. APPOINTMENT OF AUDITORS:
M/s B S R & Company, Chartered Accountants, retire at the conclusion of the ensuing Annual General Meeting andbeing eligible have offered themselves for re-appointment. The Company has received a certificate from them pursuantto section 224(1B) confirming their eligibility for re-appointment. Yours Directors recommend their re- appointment.
9. DISCLOSURES UNDER SECTION 217 OF THE COMPANIES ACT, 1956
Except as disclosed elsewhere in the report, there have been no material changes and commitments, which canaffect the financial position of the Company between the end of financial year and the date of report.
As required under Section 217(2) of the Companies Act, 1956, the Board of Directors inform the members thatduring the financial year there has been no change:
• in the nature of Company’s business,
• in the classes of business in which the Company has an interest.
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CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS ANDOUTGO
I. ENERGY CONSERVATION
Research are integrated and are inbuilt into the business development processes. The operations of the Companyare not highly power intensive. However, sufficient steps are taken for conservating power. The Company alsoensures adequate norms, wherever needed.
II. TECHNOLOGY ABSORPTION
The Washery is designed on State of the Art Technology and is at its 8th year of full-scale operation. The adoptedtechnology proved to be excellent and as such, no new technology absorption is necessary.
III. FOREIGN EXCHANGE EARNINGS AND OUTGO:
During the year under report, the details of foreign exchange earnings and foreign exchange outgo on variousheads are as under:
Foreign Exchange Earnings: Nil (Previous year Nil)
Foreign Exchange Outgo:Amount in (Rs.)
Particulars Current Year Previous Year31-03-2010 31-03-2009
Foreign Exchange Outgo on account of Travelling Expenses - 19,53,155Foreign Exchange Outgo on account of Professional Fee - 50,95,255Import of Stores and Spares on CIF basis - 5,74,352Import of Capital Goods on CIF basis - 18,75,725Foreign Exchange Outgo on account of Advance for Capital Goods 2,19,96,200 -Total 2,19,96,200 94,98,487
10. PARTICULARS OF EMPLOYEES U/S 217 (2A) OF COMPANIES ACT, 1956:
List of employees of the Company who has drawn salary in excess of the limits prescribed in Section 217 (2A) of theCompanies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 is given below:
S. Name Designation and Remuneration Qualification Date of Age of the Last EmploymentN. nature of duties Received & Experience Commencement Employee held Name of
(Amount in Rs.) of Employment Employer,Designation,Period of Service
1. Mr. Narendra Managing Director, 50,50,000 BE (Mining), 24.07.2007 66 South EasternPrakash Bhati Overall supervision of 37 years Coalfields Limited,
day-to-day operations Director (Tech),with emphasis on 2 yearsstrategic planning andbusiness development.
Notes:
1. Remuneration includes salary, house rent allowance, bonus, Company’s contribution to Provident Fund, LeaveEncashment, Medical Assistance and all allowances paid in cash and monetary value of perquisites whereverapplicable. As the Provisions for Gratuity has been provided on actuarial valuation as a whole and individualfigures pertaining to directors is not ascertainable hence not included above.
2. All the above said appointments are contractual. The terms and conditions of above Director is as approved bythe Board of Directors and subject to approval of Shareholders.
3. There was no employee who was employed either throughout the financial year or part thereof, who was holdingeither by himself or along with the spouse and dependent children 2% or more of the Shares of the Companyand drawing remuneration in excess of the remuneration drawn by Managing Director / Whole-time Director.
11. DIRECTOR’S RESPONSIBILITY STATEMENT:
As required under Section 217(2AA) of the Companies Act, 1956 it is hereby stated that:
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(a) That in preparation of the Accounts for the financial year ended 31st March, 2010; the applicable AccountingStandards have been followed along with proper explanations relating to material departures.
(b) That the Directors have selected such Accounting Policies and applied them consistently and made judgmentsand estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of theCompany at the end of the financial year and of the profit of the Company for that period.
(c) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities and.
(d) That the Directors have prepared the accounts for the financial year ended 31st March 2010 on a going concernbasis.
12. ACKNOWLEDGEMENT:
Yours Directors wish to acknowledge the contributions of the employees and the cooperation it has received fromthe Central and State Governments, Banks, esteemed customers, suppliers and other related Agencies, during theyear.
Your Directors also express their gratitude to the shareholders of the Company for the confidence reposed in themanagement. The directors also wish to thank Pineridge Investments Ltd (an affiliate of Warburg Pincus Group)and Sh. Niten Malhan, their representative director for having supported the business plans of the Company to thefullest extent.
By order of the Board of DirectorsFor Spectrum Coal and Power Limited
Place : Gurgaon Sd/- Sd/-Date : 15 September, 2010 Narendra Prakash Bhati Nityanand Gautam
Managing Director Director
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To the members of
Spectrum Coal and Power Limited
We have audited the attached Balance Sheet of Spectrum Coal and Power Limited (“the Company”) as at 31 March 2010,the Profit and Loss Account and the Cash Flow Statement (or “financial statements”) of the Company for the yearended on that date, annexed thereto. These financial statements are the responsibility of the Company’s management.Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards requirethat we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principles used and significant estimatesmade by management, as well as evaluating the overall financial statement presentation. We believe that our auditprovides a reasonable basis for our opinion.
As required by the Companies (Auditor’s Report) Order, 2003 (“the Order”) issued by the Central Government of Indiain terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure, a statement on thematters 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 necessaryfor 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 fromour examination of those books;
c) the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreementwith the books of account;
d) in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by thisreport comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act,1956;
e) on the basis of written representations received from the directors, as on 31 March 2010, and taken on record by theBoard of Directors, we report that none of the directors is disqualified as on 31 March 2010 from being appointed asa director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;
f) attention is invited to note III (13) of schedule 17 with regard to the Company’s investment amounting to Rs. 1,627,173,402toward setting up of 11 MTPA coal washery at Talcher, Orissa on land provided by Andhra Pradesh Power Generation CorporationLimited (APGENCO). Delay in setting up of railway siding at Talcher and consensus on certain commercial terms with thecustomer has resulted in delays in commencement of commercial operations. The commencement of commercial operations isdependent on the resolution of various issues with APGENCO including that of liquidated damages on the company due tothese delays. Accordingly, at this stage we are unable to express an opinion on the financial/operational impact of the same onthe company.
g) subject to our comments in paragraph (f) above, the impact of which is not ascertainable, in our opinion and to the best ofour information and according to the explanations given to us, the said accounts give the information required bythe Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2010;(ii) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date; and(iii)in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.
For B S R & CompanyChartered AccountantsFirm Registration No: 128032W
Sd/-Manish Gupta
Place : Gurgaon PartnerDate : 15 September 2010 Membership No. 095037
Auditors’ Report
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Annexure to the Auditors’ report(Referred to in our report of even date)
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details andsituation of fixed assets.
(b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets areverified in a phased manner over a period of two years. According to that programme the Company hasduring the year physically verified certain assets. In our opinion, this periodicity of physical verification isreasonable having regard to the size of the Company and the nature of its assets. The company has startedreconciling the physical verification results with the book records and expects no material adjustments in thisregard.
(c) Fixed assets disposed off during the year were not substantial, and therefore, do not affect the going concernassumption.
(ii) (a) The inventory has been physically verified by the management during the year. In our opinion, the frequencyof such verification is reasonable.
(b) The procedures for the physical verification of inventories followed by the management are reasonable andadequate in relation to the size of the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification betweenthe physical stocks and the book records were not material.
(iii) (a) The Company has granted loans to one company covered in the register maintained under section 301 of theCompanies Act, 1956. The maximum amount outstanding during the year was Rs. 228,000,000 and the year-end balance of such loans was Rs. Nil.
(b) In our opinion, the rate of interest and other terms and conditions on which loans have been granted to companieslisted in the register maintained under section 301 of the Companies Act, 1956 are prima facie, not prejudicialto the interest of the Company.
(c) In the case of loans granted to companies listed in the register maintained under section 301, the borrower haspaid the amount of principal and interest on such loans during the year based on the demand made by thecompany, since, as stipulated in loan agreements, principal and interest on loans were payable on demand.
(d) There is no overdue amount of more than Rupees one lakh in respect of loans granted to any of the companieslisted in the register maintained under section 301 of the Companies Act, 1956.
(e) The Company has not taken any loans, secured or unsecured, to or from companies, firms or other partiescovered in the register maintained under section 301 of the Companies Act, 1956.
(iv) In our opinion and according to the information and explanations given to us, there is an adequate internalcontrol system commensurate with the size of the Company and the nature of its business with regard topurchase of inventories and fixed assets and with regard to the sale of goods and services. In our opinion andaccording to the information and explanations given to us, there is no continuing failure to correct majorweaknesses in internal control system.
(v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts orarrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register requiredto be maintained under that section.
(b) In our opinion, and according to the information and explanations given to us, the transactions made inpursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rs. 5 lakh withany party during the year have been made at prices which are reasonable having regard to the prevailingmarket prices at the relevant time except for purchases of certain services and inventories which are for thespecialised requirements of the Company and similarly for sale of certain goods for the specialised requirementsof the buyers and for which suitable alternative sources are not available to obtain comparable quotations.However, on the basis of information and explanations provided, the same appear reasonable.
(vi) The Company has not accepted any deposits from the public.
(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.
(viii) The Central Government has not prescribed the maintenance of cost records under section 209(1)(d) of theCompanies Act, 1956 for any of the services rendered by the Company.
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(ix) (a) According to the information and explanations given to us and on the basis of our examination of the recordsof the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory duesincluding, Provident Fund, Income-tax Sales-tax, Wealth tax, Service tax ,Customs duty, Cess and other materialstatutory dues have generally been regularly deposited during the year by the Company with the appropriateauthorities though there have been slight delays in few cases in Income-tax, Sales- tax and Service tax. As explained tous, provisions of Employees’ State Insurance and Excise duty are not applicable to the Company. Further, asexplained to us, the Company did not have any dues on account of Investor Education and Protection Fund.
There were no dues on account of Cess under Section 441A of the Companies Act, 1956 since the date fromwhich the aforesaid section comes into force has not yet been notified by the Central Government.
According to the information and explanations given to us, no undisputed amounts payable in respect ofProvident Fund, Income- tax, Sales- tax, Wealth tax, service tax Customs duty, Cess and other material statutorydues were in arrears as at 31 March 2010 for a period of more than six months from the date they becamepayable.
(b) According to the information and explanations given to us, there are no dues of Income Tax, Sales tax, Wealthtax, service tax, Customs duty and Cess which have not been deposited with the appropriate authorities onaccount of any dispute, except as mentioned below:
Name of the Statute Nature of Amount involved Period to which Forum where disputedues (in Rs. lacs) the amount relates is pending
Finance Act, 1994 Service tax 558 plus penalty 10 September 2004 CESTAT, New Delhiplus interest * till 31 March 2006
Finance Act, 1994 Service tax 17 plus penalty 1 April 2004 to CESTAT, New Delhiplus interest* 30 June 2006
Income Tax Act, 1961 Income Tax 56** 1999-2000 ITAT, MumbaiIncome Tax Act, 1961 Income Tax 85** 2000-2001 ITAT, MumbaiIncome Tax Act, 1961 Income Tax 177** 2001-2002 CIT(A), MumbaiIncome Tax Act, 1961 Income Tax 58** 2001-2002 ITAT, MumbaiIncome Tax Act, 1961 Income Tax 3** 2003-04 ITAT, MumbaiIncome Tax Act, 1961 Income Tax 89** 2004-05 CIT(A), MumbaiIncome Tax Act, 1961 Income Tax 149** 2005-06 CIT(A), MumbaiIncome Tax Act, 1961 Income Tax 9** 2006-07 CIT(A), Mumbai
* Out of the above demand, we are informed by the Company that it has deposited a sum of Rs. 388 lacs againstthese demands in earlier years.
** Out of the above demand, we are informed by the Company that is has deposited a sum of Rs. 275 lacsagainst demands in earlier years.
(x) The Company does not have any accumulated losses at the end of the financial year and has not incurred cashlosses in the financial year and in the immediately preceding financial year.
(xi) In our opinion and according to the information and explanations given to us, the Company has not defaultedin repayment of dues to its bankers. The Company did not have any outstanding dues to any financial institutionor debenture holders during the year.
(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares,debentures and other securities.
(xiii) In our opinion and according to the information and explanations given to us, the Company is not a chit fundor a nidhi/ mutual benefit fund/ society.
(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares,securities, debentures and other investments.
(xv) According to the information and explanations given to us, the Company has not given any guarantee forloans taken by others from banks or financial institutions.
(xvi) In our opinion and according to the information and explanations given to us, the term loans taken by thecompany have been applied for the purpose for which they were raised.
(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet
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of the company, we are of the opinion that the funds raised on short-term basis have not been used for long-term investment.
(xviii) The Company has not made any preferential allotment of shares to companies/firms/parties covered in theregister maintained under Section 301 of the Companies Act, 1956.
(xix) The Company did not have any outstanding debentures during the year.
(xx) The Company has not raised any money by public issues.
(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed orreported during the course of our audit.
For B S R & CompanyChartered AccountantsFirm Registration No: 128032W
Sd/-Manish Gupta
Place : Gurgaon PartnerDate : 15 September 2010 Membership No. 095037
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Schedule As at As at31 March 2010 31 March 2009
I. SOURCES OF FUNDS
Shareholders’ fundsShare capital 1 416,780,890 416,780,890Reserves and surplus 2 1,926,322,514 1,410,661,982Loan fundsSecured loans 3 1,429,419,443 800,960,413
Deferred tax liability (net) 60,709,777 69,787,367(refer note III 11 of Schedule 17)
TOTAL 3,833,232,624 2,698,190,652
II. APPLICATION OF FUNDSFixed assets 4Gross block 2,420,862,865 2,363,572,451Less : Accumulated Depreciation/Amortization 1,056,530,123 819,580,051Net block 1,364,332,742 1,543,992,400Capital work in progress (including capital advances) 816,388,049 348,020,995
2,180,720,791 1,892,013,395
Current assets, loans and advancesInventories 5 280,942,808 237,238,459Sundry debtors 6 304,046,663 321,600,938Cash and bank balances 7 1,078,999,666 272,402,183Other current assets 8 21,416,570 592,713Loans and advances 9 236,074,396 287,505,964
1,921,480,103 1,119,340,257Less: Current liabilities and provisions 10Current liabilities 237,079,460 240,224,580Provisions 31,888,810 72,938,420
268,968,270 313,163,000
Net current assets 1,652,511,833 806,177,257
TOTAL 3,833,232,624 2,698,190,652
Significant accounting policies and notes to the accounts 17
The accompanying notes and schedules form an integral part of the accounts.
As per our report of even date attached
For B S R & Company For and on behalf of the Board of DirectorChartered AccountantsFirm Registration No : 128032W
Sd/- Sd/- Sd/-Manish Gupta Narendra Prakash Bhati N.N. GautamPartner Managing Director DirectorMembership No. : 095037
Place : GurgaonDate : 15 September, 2010
Spectrum Coal and Power LimitedBalance Sheet as at 31 March 2010(All amounts are in Rupees)
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Schedule For the year ended For the year ended31 March 2010 31 March 2009
IncomeRaw coal beneficiations and allied receipts 787,068,466 795,397,038Sale of coal 1,499,044,857 1,550,654,842Other income 11 39,185,160 32,861,632
2,325,298,483 2,378,913,512ExpenditurePurchase of coal 159,464,105 262,171,535Decrease/ (increase) in stock of coal 12 (6,626,895) (126,387,787)Direct expenses 13 805,082,834 800,521,183Personnel cost 14 74,132,998 71,593,084Administrative and selling expenses 15 207,718,696 174,322,338Depreciation/Amortization 4 240,899,765 249,613,355Finance cost 16 87,086,290 114,064,644
1,567,757,793 1,545,898,352
Profit/(loss) before tax 757,540,690 833,015,160Provision for tax
- Current tax 276,480,000 238,700,000- Deferred tax charge for earlier years - 35,663,530- Deferred tax charge /(credit) (9,077,590) 53,981,196- Fringe benefit tax - 1,762,560- Taxes provison for earlier years (25,522,252) 16,710,850
Profit after tax 515,660,532 486,197,024
Balance carried forward to reserves and surplus 515,660,532 486,197,024
Basic / Diluted earnings per share (refer note III 10 of schedule 17) 12.37 11.67
Significant accounting policies and notes to the accounts 17
The accompanying notes and schedules form an integral part of the accounts.
Spectrum Coal and Power LimitedProfit and Loss Account for the year ended 31 March 2010(All amounts are in Rupees)
As per our report of even date attached
For B S R & Company For and on behalf of the Board of DirectorChartered AccountantsFirm Registration No : 128032W
Sd/- Sd/- Sd/-Manish Gupta Narendra Prakash Bhati N.N. GautamPartner Managing Director DirectorMembership No. : 095037
Place : GurgaonDate : 15 September, 2010
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Particulars For the year ended For the year ended31 March 2010 31 March 2009
A. Cash Flow from Operating Activities :Net profit before tax 757,540,690 833,015,160Adjustments for :Depreciation/Amortization 240,899,765 249,613,355Bad debts written off 4,280,450 6,843,244Loss by fire (Coal) 8,622,826 -(Profit)/ loss on sale of assets (5,329) 20,748Finance cost 87,086,290 114,064,644Insurance claim received 2,858,934 -Interest income (37,423,509) (24,158,970)
Operating profit before working capital changes 1,063,860,116 1,179,398,181Adjustments for :Decrease/(Increase) in sundry debtors 13,273,825 (137,503,571)Decrease/(Increase) in loans and advances 51,691,332 (90,649,016)Decrease/(Increase) in inventories (55,186,109) (128,068,719)Increase/ (Decrease) in current liabilities and provisions (38,552,202) (55,369,126)
Cash Generated from operations 1,035,086,963 767,807,749Taxes paid (293,602,072) (245,953,573)
Net cash generated from /(used in)operating activities (A) 741,484,891 521,854,176
B) Cash flow from investing activities:Purchase of fixed assets/capital work in progress (520,488,126) (309,929,252)Sale of fixed assets 4,461,846 64,756Interest income 39,766,132 23,244,197
Net cash generated from /(used in) investing activities (B) (476,260,148) (286,620,299)
C) Cash flow from financing activities:Proceeds from secured loans 854,119,215 11,880,500Repayments of secured loans (225,660,185) (244,245,831)Finance cost (87,086,290) (112,405,230)
Net cash generated from /(used in) financing activities (C ) 541,372,740 (344,770,561)
D) Net increase/(decrease) in cash and cash equivalents (A+B+C) 806,597,483 (109,536,684)
E) Cash and cash equivalents as at the beginning of the year 272,402,183 381,938,867
F) Cash and cash equivalents as at the end of the year 1,078,999,666 272,402,183
Spectrum Coal and Power LimitedCash Flow Statement for the year ended 31 March 2010(All amounts are in Rupees)
As per our report of even date attached
For B S R & Company For and on behalf of the Board of DirectorChartered AccountantsFirm Registration No : 128032W
Sd/- Sd/- Sd/-Manish Gupta Narendra Prakash Bhati N.N. GautamPartner Managing Director DirectorMembership No. : 095037
Place : GurgaonDate : 15 September, 2010
Notes:1. The cash flow statement has been prepared in accordance with ‘Indirect method’ as set out in the Accounting Standard
(AS)-3 on ‘Cash Flow Statements’ as specified in the the Companies (Accounting Standard) Rules, 2006 under the provisionsof the Companies Act, 1956.
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Particulars As at As at31 March 2010 31 March 2009
Schedule 1 - Share capitalAuthorised Capital50,000,000 equity shares of Rs. 10 each(Previous year 55,000,000 equity shares of Rs. 10 each) 550,000,000 550,000,000Issued subscribed and paid up capital41,678,089 equity shares Rs. 10 each fully paid up 416,780,890 416,780,890(Previous year 41,678,089 equity shares of Rs. 10 each fully paid up)[Of the above equity shares, 41,678,083 (previous year 41,678,083)equity shares are held by ACB (India) Limited (formerly AryanCoal Benefications Private Limited), the holding company]
416,780,890 416,780,890
Schedule 2 - Reserves & surplus
Securities premium 647,514,005 647,514,005
General reserve 30,000,000 30,000,000
Profit and loss account:Opening balance 733,147,977 246,950,953Add: transferred from Profit and Loss Account 515,660,532 486,197,024
1,248,808,509 733,147,977 1,926,322,514 1,410,661,982
Schedule 3 - Secured loans
Loans and advances from banks:- Term loans *
Rupee loan 516,704,318 723,898,241Foreign currency loan 821,012,500 -
- Cash Credit ** 71,933,779 41,295,173- Vehicle/equipment loans# 3,645,043 14,463,270- Interest accrued and due on term loans - 7,648,035
Loans and advances from others: -- Vehicle/equipment loans # 16,123,803 13,655,694
1,429,419,443 800,960,413
Spectrum Coal and Power LimitedSchedules forming part of the accounts(All amounts are in Rupees)
Notes:Due with in one year Rs. 198,434,125 (previous year Rs. 225,144,116) (excluding cash credit/ working capital loans).
* Nature of security for term loans(a) Term loan of Rs. 6,898,163 (previous year Rs. 34,375,000) from Bank of (India) is secured by way of hypothecation charge on fixed assets of the coal washery plant at Dipka,
Chattisgarh . Further, secured by way of corporate guarantee of ACB (India) Limited (formerly known as Aryan Coal Benefications Private Limited), the holding companyand personal guarantee by director of holding company.
(b) Term loan of Rs. 150,210,838 (previous year Rs. 210,000,000 ) from Bank of (India) is secured by way of first hypothecation charge alongwith other term lenders on fixedassets of the coal washery plant near Balaram OCP (Talcher), Orissa. Further, secured by way of corporate guarantee of ACB (India) Limited (formerly known as AryanCoal Benefications Private Limited), the holding company.
(c) Term loan of Rs. 209,933,968 (previous year Rs. 279,851,559) from Bank of Baroda is secured by way of first hypothecation charge alongwith other term lenders on fixedassets of the coal washery plant near Balaram OCP (Talcher), Orissa. Further, secured by way of corporate guarantee of ACB (India) Limited (formerly known as AryanCoal Benefications Private Limited), the holding company.
(d) Term loan of Rs. 149,661,349 (previous year Rs. 199,671,682) from The Federal Bank Limited is secured by way of first hypothecation charge alongwith other term lenderson fixed assets of the coal washery plant near Balaram OCP (Talcher), Orissa. Further, secured by way of corporate guarantee of ACB (India) Limited (formerly known asAryan Coal Benefications Private Limited), the holding company.
(e) Foreign currency loan of Rs. 821,012,500 (previous year Rs. Nil ) from Standard Charterd Bank is secured by way of first and exclusive charge on P&M and other movableand immovable fixed assets pertaining to power project, tangible or intangible, present or future and project current assets. Further, secured by way of personal guaranteeof Ex-Capt. Kuldeep Singh Solanki and Ex-Capt. R.S. Sindhu and LOC of ACB (India) Limited (formerly known as Aryan Coal Benefications Private Limited), the holdingcompany.
** Nature of security for Cash Credit(a) Cash Credit of Rs. 71,933,779 (previous year Rs. 41,295,173) from Bank of (India) is secured by hypothecation of book debts of the coal washery plant at Dipka, Chattisgarh.
Further secured by corporate guarantee of ACB (India) Limited (formerly known as Aryan Coal Benefications Private Limited), the holding company and personalguarantee of directors of holding company.
# Nature of security for vehicle/equipment loans(a) Secured by first and exclusive charge on specific vehicles/equipments. Further, secured by way of post dated cheques for repayment of interest and principal.
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As at As at31 March 2010 31 March 2009
Spectrum Coal and Power LimitedSchedules forming part of the accounts(All amounts are in Rupees)
Schedule 6 - Sundry debtors*(Unsecured and considered good, unless otherwise stated)
Debts outstanding for a period exceeding six months 12,209,817 3,466,694Other debts 291,836,846 318,134,244
304,046,663 321,600,938
* includes debts due from other companies under the same management withinthe meaning of sub-section (1-B) of section 370; these are -a) Kartikay Coal Washeries Private Limited Rs. 2,647,440 (previous year Rs. 12,759,082)b) ACB (India) Limited (formerly known as Aryan Coal Benefications Private Limited) Rs. Nil
(previous year Rs. 2,810,854)
Schedule 5 - Inventories(At lower of cost and net realisable value)
Stores and spare parts 105,440,378 68,362,924Raw coal 62,597,714 82,347,425Work in progress 9,465,617 5,560,952Coal rejects 103,439,099 80,967,158
280,942,808 237,238,459
Schedule 7 - Cash and bank balances
Cash in hand 468,786 358,367Cheques in hand - 337,080Balance with scheduled banks:
- on current accounts 47,109,998 19,059,061- on deposit accounts
- held as margin money for bank guarantees 160,391,259 40,577,089- other fixed deposits 871,029,623 212,070,586
1,078,999,666 272,402,183
Schedule 8 - Other current assets
Income accrued but not due 21,416,570 592,713
21,416,570 592,713
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As at As at31 March 2010 31 March 2009
Schedule 9 - Loans and advances(Unsecured and considered good, unless otherwise stated)
Advances recoverable in cash or in kind or for value to be received*` 215,481,395 170,443,002Inter corporate deposits- to holding company - 100,000,000- interest accrued and due - 489,466
Advance fringe benefit tax 67,104 67,104[net of provision for tax of Rs. 3,015,561 (previous year Rs. 3,015,561)]Security and other deposits 20,525,896 16,506,392
236,074,396 287,505,964
* includes advance paid to company under the same management withinthe meaning of sub-section (1-B) of section 370;Aryan Clean Coal Technologies Private Limited Rs. Nil(previous year Rs. 1,446,693). Maximum outstanding during the yearwas Rs. 1,754,716 (previous year Rs. 1,446,693)
Spectrum Coal and Power LimitedSchedules forming part of the accounts(All amounts are in Rupees)
Schedule 10 - Current liabilities and provisions
Current liabilities
Sundry creditors [refer note III(14) of schedule 17]-Dues to micro and small enterprises - -- total outstanding dues of creditors other than microenterprises and small enterprises * 151,692,775 229,906,440
Advances from customers 4,947,519 -Interest accured but not due 37,001,796 -Bank overdraft 25,771,668 -Other liabilities# 17,665,702 10,318,140
237,079,460 240,224,580
*includes salary, wages and bonus payable of Rs. 7,102,035 (previous year Rs. 5,668,245).#includes provident fund payable of Rs. 441,954 (previous year Rs. 410,119).
ProvisionsProvision for income tax [net of advance tax of Rs. 669,920,836 (previous year Rs. 356,318,763)] 26,784,629 69,428,953
Provision for gratuity 2,326,039 2,020,677Provision for leave Encashment 2,778,142 1,488,790
31,888,810 72,938,420
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For the year ended For the year ended31 March 2010 31 March 2009
Schedule 11 - Other income
Interest income- from banks 18,055,883 23,095,594
[Gross of tax deducted at source Rs. 4,741,738(previous year Rs. 5,076,465)]- from others 19,367,626 1,063,376
[Gross of tax deducted at source Rs. 16,446481 (previous year Rs. 240,961)]Technical consultancy receipts - 5,385,000Exchange gain (net) - 1,344,962Profit on sale of assets 5,329 -Sundry balances written back 1,080,111 -Miscellaneous receipts 676,211 1,972,700
39,185,160 32,861,632
Schedule 12 - Decrease/(increase) in stock of coal
Opening stock of coalRaw Coal 82,347,425 42,487,748Work in progress 5,560,952 -Coal rejects 80,967,158 -
168,875,535 42,487,748
Closing stock of coalRaw coal 62,597,714 82,347,425Work in progress 9,465,617 5,560,952Coal rejects 103,439,099 80,967,158
175,502,430 168,875,535
(6,626,895) (126,387,787)
Spectrum Coal and Power LimitedSchedules forming part of the accounts(All amounts are in Rupees)
Schedule 13 - Direct expenses
Power and fuel 95,747,884 105,961,843Consumption of materials 11,049,620 13,728,988Transportation and loading charges 425,195,449 485,863,786Pollution control expenses 2,412,760 100,000Repair and maintainance:- Building 2,428,035 6,758,534- Plant and machinery 248,202,338 158,924,395- Others 20,046,748 29,183,637
805,082,834 800,521,183
Schedule 14 - Personnel cost
Salaries, wages and bonus 63,622,134 63,534,214Contribution to provident and other funds 2,782,853 2,413,321Staff welfare expenses 7,728,011 5,645,549
74,132,998 71,593,084
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For the year ended For the year ended31 March 2010 31 March 2009
Schedule 15 - Administrative and selling expenses
Rent (refer note III 8 of schedule 17) 1,296,547 2,013,510Land lease rent 35,345,382 7,007,701Rate, taxes and fees 11,617,088 4,650,019Subscription and tender fees 906,508 261,066Legal and professional fee 10,340,275 42,660,660Non compete fees - 20,000,000Security expenses 5,935,536 5,822,600Insurance 2,445,046 2,354,495Printing and stationery 2,210,454 1,255,120Communication expenses 1,630,045 2,101,601Office maintenance expenses 1,184,114 1,030,309Travelling and conveyance 8,267,354 13,448,513Electricity and water charges 132,230 362,715Charity and donation 828,534 3,262,953Deductions on account of quality and quantity 102,484,240 27,950,806Coal handling charges 180,000 21,226,569Loss by fire (Coal) 8,622,826 -Sampling charges 687,835 614,664Advertisement and publicity 88,030 1,410,876Bank charges 5,840,570 8,510,879Loss on sale of fixed assets - 20,748Bad debts written off 4,280,450 6,843,244Miscellaneous expenses 3,395,632 1,513,290
207,718,696 174,322,338
Schedule 16 - Finance costInterest on term loans 85,300,356 104,062,089Interest on cash credits 844,579 6,102,309Interest-others 941,355 3,900,246
87,086,290 114,064,644
Spectrum Coal and Power LimitedSchedules forming part of the accounts(All amounts are in Rupees)
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Spectrum Coal and Power LimitedSchedules forming part of the accounts
Schedule 17: Significant accounting policies and notes to the accounts
I. Background
Spectrum Coal and Power Limited (SCPL) was incorporated on 1 January 1996. The Company is primarily engagedin coal beneficiation business. The Company is currently operating a coal washery plant at Ratija, Chattisgarh.Pursuant to an agreement entered into with Andhra Pradesh Power Generation Corporation Limited (APGENCO),the Company is in the process of setting up a 11 MTPA coal washery at Talcher, Orissa on land provided by APGENCOout of which the first phase of 7 MTPA has been completed. Further, the Company is also in the process of settingup a 50 MW thermal power plant at Ratija, Chhattisgarh.
II. Significant accounting policies
1) Accounting convention:
The financial statements are prepared and presented under the historical cost convention in accordance withthe Generally Accepted Accounting Principles (‘GAAP’) in India and mandatory accounting standards asspecified in the Companies (Accounting Standard) Rules, 2006, the provisions of the Companies Act, 1956, tothe extent applicable, and as adopted consistently by the Company.
2) Use of estimates
The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP)in India requires management to make estimates and assumptions that affect the reported amounts of assetsand liabilities and the disclosure of contingent liabilities on the date of the financial statements. Actual resultscould differ from those estimates. Differences between the actual results and estimates are recognised in theyear in which the results are known/materialized. Any revision to accounting estimates is recognisedprospectively in current and future periods.
3) Inventories (valued at lower of cost and net realisable value):
Inventories are valued at lower of cost and net realisable value. The basis for determination of cost of variouscategory of inventory are as follows:
(a) Store and spare parts:
Store and spare parts are computed on first in first out basis (FIFO).
(b) Raw coal and beneficiated coal:
These are valued at cost of raw coal (computed on first in first out basis-FIFO) including cost attributableto the category of coal, based on appropriate basis to bring the coal to its present location and condition.
(c) Work in progress :
Work in progress represents the cost incurred on beneficiation of coal on behalf of customers towards rawcoal transportation, beneficiation of raw coal and transportation of beneficiated coal to bring the coal to itspresent location and condition.
(d) Coal rejects:
These consist of rejects generated out of coal beneficiation process or coal rejects purchased directly. Thecost is ascertained by apportioning the total cost attributable to the category of coal generated/purchasedbased on appropriate basis.
4) Revenue recognition
Beneficiation operations:
(a) Raw coal beneficiation and allied receipts:
Revenue from raw coal beneficiation and allied receipts is recognised on attainment of the said activity.Such activity is regarded as being attained when no significant uncertainty exists regarding the amount ofconsideration that will be derived from the performance of such activity and the activity is completed orsubstantially completed. Revenue represents the invoiced value of net beneficiation receipts.
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Spectrum Coal and Power LimitedSchedules forming part of the accounts
Schedule 17: Significant accounting policies and notes to the accounts
(b) Sale of coal:
Revenue from sale of coal is recognised when coal is dispatched to the customer which coincides with thetransfer of significant risks and rewards. Sales represent the invoiced value of coal (net of sales tax).
Other incomes:
Interest income is recognised on a time proportion basis considering the contracted rate of return.
5) Fixed assets and depreciation
Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. The cost of fixedassets includes inward freight, duties, taxes and incidental expenses related to acquisition and installationincurred upto the date of commissioning of the assets. Fixed assets under construction, advances paid towardsacquisition of fixed assets and cost of asset not ready to use before the year end, are disclosed as capital workin progress. Assets held for disposal are stated at their estimated residual values as at the balance sheet date.
Depreciation is provided on pro-rata basis as per written down value (WDV) method at rates based uponmanagement estimates of useful lives of the assets. Such rates are equal to the rates prescribed in Schedule XIVof the Companies Act, 1956. In case of building constructed on lease hold land where lease period is 30 years orless, is amortized over the lease period of such leasehold land.
Assets individually costing upto Rs. 5,000 are fully depreciated in the year of purchase.
6) Foreign currency transactions
Foreign currency transactions are recorded at the rate of exchange prevailing on the date of the respectivetransactions. Monetary foreign currency assets and liabilities remaining unsettled at the balance sheet date aretranslated at the rates of exchange prevailing on that date. Gains/(losses) arising on account of realisation/settlement of foreign exchange transactions and on translation of foreign currency assets and liabilities arerecognised in the Profit and Loss Account.
7) Investments
Long term investments are valued at cost. Any decline other than temporary, in the value of long terminvestments, is adjusted in the carrying value of such investments.
8) Employee benefits
All employee benefits payable/available within twelve months of rendering the service are classified as short-term employee benefits. Benefits such as salaries, wages and bonus etc., are recognised in the Profit and LossAccount in the period in which the employee renders the related service.
Defined contribution plans: A defined contribution plan i.e. provident fund is a post-employment benefitplan under which an entity pays deposits fixed contribution with the appropriate government authorities.Obligations for contributions to defined contribution provident plans are recognised as an employee benefitexpense in the Profit and Loss Account when they are due.
Defined benefit plans: A defined benefit plan i.e. gratuity, is a post-employment benefit plan. The Company’sgratuity plan is a defined benefit plan.
The present value of the obligation under such defined benefit plan is determined based on actuarial valuationusing the Projected Unit Credit Method, which recognises each period of service as giving rise to additionalunit of employee benefit entitlement and measures each unit separately to build up the final obligation. Theobligation is measured at the present value of the estimated future cash flows. The discount rate used fordetermining the present value of the obligation under defined benefit plans, is based on the market yields onGovernment securities as at the balance sheet date. Actuarial gains and losses are recognised immediately inthe profit and loss account.
The Company has taken a group policy with Life Insurance Corporation of India (LIC) to meet its obligationtowards gratuity. Liability with respect to the Gratuity plan is determined based on an actuarial valuationdone by an independent actuary at the year end and any differential between the fund amount as per LIC andthe actuarial valuation is charged to revenue.
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Spectrum Coal and Power LimitedSchedules forming part of the accounts
Schedule 17: Significant accounting policies and notes to the accounts
Benefits under the Company’s leave encashment policy constitutes other long-term employee benefits. Theliability in respect of leave encashment is provided on the basis of an actuarial valuation done by an independentactuary at the year end. Actuarial gains and losses are recognised immediately in the Profit and loss account
9) Borrowing costs
Borrowing costs that are attributable to the acquisition of qualifying assets are capitalised as part of the cost ofsuch assets. All other borrowing costs are charged to revenue.
10) Leases
Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest withthe lesser, are recognised as operating leases. Lease payments under operating lease arrangements are recognisedas an expense in the Profit and Loss Account on a straight line basis over the lease term.
11) Earnings per share
In computing earnings per share, the Company considers net profit/(loss) after tax. Basic earnings per shareare computed by the weighted average number of equity shares outstanding during the year. Diluted earningsper share are computed using the weighted average number of equity and dilutive equivalent shares outstandingduring the year, except where results would be anti-dilutive.
12) Taxes
Income-tax expenses comprise current tax (i.e. the amount of tax for the period determined in accordance withthe Income Tax Act, 1961) and deferred tax charge or credit (reflecting the tax effects of the timing differencesbetween the accounting income and taxable income for the period). The deferred tax charge or credit and thecorresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted orsubstantively enacted by the balance sheet date. Deferred tax assets are recognised only to the extent there isreasonable certainty that the assets can be realised in the future. However, where there is unabsorbed depreciationor carry forward loss under taxation laws, deferred tax assets are recognised only if there is virtual certainty ofrealization of such assets. Deferred tax assets are reviewed at each balance sheet date and written down orwritten up to reflect the amount that is reasonably/virtually certain (as the case may be) to be realised.
Fringe Benefits Tax (‘FBT’) has been abolished w.e.f. 1 April 2009, therefore no provision is made in currentfinancial year.
13) Impairment of assets
The carrying amounts of assets are reviewed at each balance sheet date in accordance with Accounting Standard28 ‘Impairment of Assets’, to determine whether there is any indication of impairment. If any such indicationexists, the asset’s recoverable amount is estimated. An impairment loss is recognised whenever the carryingamount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are recognisedin the Profit and Loss Account. An impairment loss is reversed if there has been a change in the estimates usedto determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carryingamount does not exceed the carrying amount that would have been determined net of depreciation oramortisation, if no impairment loss had been recognised.
14) Provisions and contingencies
The Company recognises a provision when there is a present obligation as a result of a past event and it is morelikely than not that there will be an outflow of resources embodying economic benefits to settle such obligationand the amount of such obligation can be reliably estimated. Provisions are not discounted to its present value,and are determined based on the management’s best estimate of the amount of obligation required at the yearend. These are reviewed at each balance sheet date and adjusted to reflect current management estimates.
Contingent liabilities are disclosed in respect of possible obligations that have arisen from past events and theexistence of which will be confirmed only by the occurrence or non occurrence of future events not whollywithin the control of the Company. Contingent liabilities are also disclosed for present obligations in respect ofwhich it is not probable that there will be an outflow of resources or a reliable estimate of the amount ofobligation cannot be made.
When there is a possible obligation or a present obligation where the likelihood of an outflow of resources isremote, no disclosure or provision is made.
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Spectrum Coal and Power LimitedSchedules forming part of the accounts
Schedule 17: Significant accounting policies and notes to the accounts
III. Notes to accounts
1) Contingent liabilities and capital commitments
a) Contingent Liabilities:
Claims (net) against the company not acknowledge as debt.
Service Tax
Claim amounting to Rs. 16,905,780 is pending with appellate authority (previous year Rs.16,905,780).
b) Capital commitment
The estimated amount of contracts remaining to be executed on capital account (net of advances) was Rs.913,964,313 as at 31 March 2010 (previous year Rs. 848,215,486).
2) Managerial remuneration
Managerial remuneration under Section 198 of the Companies Act, 1956 to the directors of the Company is asfollows:
(Amount in Rupees)
Particulars Year ended Year ended31 March 2010 31 March 2009
Salaries and allowances 4,800,000 9,250,000Bonus 250,000 250,000
5,050,000 9,500,000
As the future liability for gratuity is provided on actuarial valuation for the Company as a whole, the amountpertaining to the directors is not ascertainable and therefore not included above.
3) Legal and professional fee include auditors’ remuneration (excluding out of pocket expenses):
(Amount in Rupees)
Particulars Year ended Year ended31 March 2010 31 March 2009
Statutory audit fees 1,500,000 1,500,000Service tax 154,500 154,500
1,654,500 1,654,500
4) Installed Capacity and production (as certified by the management and relied upon by the auditors,being atechnical matter).
Particulars Unit Installed capacity Actual production
Year ended Year ended Year ended Year ended31 March 2010 31 March 2009 31 March 2010 31 March 2009
Coal Benefications plant MT 18,000,000 18,000,000 7,310,259 8,111,115
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Spectrum Coal and Power LimitedSchedules forming part of the accounts
Schedule 17: Significant accounting policies and notes to the accounts
5) Quantitative information:
Quantitative information in respect of trading of coal:
Particulars For the year ended For the year ended31 March 2010 31 March 2009
Quantity Value Quantity Value(MT) (Rupees) (MT) (Rupees)
Opening stock 1,399,375 163,314,583 1,599,599 42,487,748Purchases/generation* 10,80,426 159,464,105 1,706,947 262,171,535Sales/captive consumption** 1,408,155 1,499,044,857 1,811,455 1,550,654,842Disposed off - - 95,716 -Closing stock 1,071,646 166,036,813 1,399,375 163,314,583
*Represents the cost of purchase of coal through e-auction, coal rejects and value of credit notes givento various customers for purchase of coal rejects generated through beneficiation of raw coal. All the expensesrelating to processing/reprocessing have been included under the respective expense head.** Represents sale of coal (both processed and unprocessed) purchased through e-auction and coal rejects.
6) a) Value of imports calculated on CIF basis(Amount in Rupees)
Particulars Year ended Year ended31 March 2010 31 March 2009
Stores and spares - 574,352Capital goods - 1,875,725
Total - 2,450,077
b) Expenditure in foreign currency(Amount in Rupees)
Particulars Year ended Year ended31 March 2010 31 March 2009
Travelling - 1,953,155Professional fees - 5,095,255Advance for Capital Goods 219,962,100 -
Total 219,962,100 7,048,410
7) a) General description of defined benefit plan:
Gratuity plan:
The Company operates a gratuity plan which provides lump sum benefits linked to the qualifying salary andcompleted years of service with the Company at the time of separation. Every employee who has completed 5years of continuous service is entitled to receive gratuity at the time of his retirement or separation from theorganization, whichever is earlier. However, the condition of completion of 5 years of service is not applicablewhere separation is on account of disability or death of an employee. The gratuity benefit that is payable to anyemployee, is computed in accordance with the provisions of “The Payment of Gratuity Act, 1972”.
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The Gratuity Fund
The following table sets forth the status of the Gratuity Plan of the Company and the amounts recognised inthe Balance Sheet and Profit and Loss Account.
(Amount in Rupees)
Particulars Year ended Year ended31 March 2010 31 March 2009
Changes in the present value of defined benefit obligationProjected benefit obligation at the beginning of year 4,945,048 3,175,251Current service cost 1,136,760 799,771Interest cost 464,361 315,639Actuarial loss/(gain) (643,789) 776,703Benefits paid (242,101) (122,316)
Projected benefit obligation at the end of the year 5,660,279 4,945,048
Changes in the fair value of plan assetsFair Value of Plan Assets at the beginning of the year 2,924,371 1,611,702Expected return on plan assets 271742 285,076Contributions Benefits paid 378,257 1,145,789Benefits paid (242,101) (122,316)Actuarial (loss)/gain 1,971 4,120
Fair Value of Plan Assets at the end of the year 3,334,240 2,924,371
Projected benefit obligation at the end of the year 5,660,279 4,945,048Fair value of plan assets at the end of the year 3,334,240 2,924,371Funded status of the plans – asset/(liability) (2,326,039) (2,020,677)Asset recognised in the balance sheet - -Expense recognised in the Profit and Loss AccountCurrent service cost 1,136,760 799,771Interest cost on benefit obligation 464,361 315,639Expected return on plan assets (271,742) (285,076)Net actuarial (gain)/loss recognised in the year (645,760) 772,583
Net gratuity cost 683,619 1,602,917
Obligation recognised in the balance sheetPresent value of funded obligations 5,660,279 4,945,048Fair value of plan assets 3,334,240 2,924,371Funded status of the plans – assets/(liability)Asset / (liability) recognized in the balance sheet (2,326,039) (2,020,677)
(2,326,039) (2,020,677)
Principal actuarial assumptions at the balance sheet date are as follows:
Economic assumptions:
The principal assumptions are the discount rate and salary escalation rate. The discount rate is generally basedupon the market yields available on Government bonds at the accounting date with a term that matches that ofthe liabilities and the salary growth rate takes account of inflation, seniority, promotion and other relevant
Spectrum Coal and Power LimitedSchedules forming part of the accounts
Schedule 17: Significant accounting policies and notes to the accounts
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factors on long term basis. The assumptions used are summarized in the following table:
Assumptions as at Assumptions as at31 March 2010 31 March 2009
Discount rate 8.30% 7.70%Expected rate of return on assets (p.a.) 7.50% 7.50%Salary growth rate 10.00% 10.00%
Demographic assumptions:
Assumptions as at Assumptions as at31 March 2010 31 March 2009
Retirement age 60 years 60 yearsMortality table LIC (1994-96) duly modified LIC (1994-96) duly modifiedEmployee turnover 21 - 30 years- 5% 21 - 30 years- 5%
31 - 40 years- 3% 31 - 40 years- 3%41 - 50 years- 2% 41 - 50 years- 2%51 - 59 years- 1% 51 - 59 years- 1%
8) Operating leases:
The Company is a lessee under operating lease for office space and guest house. The lease rental incurred forthese operating leases aggregate Rs. 1,296,547 (previous year Rs. 2,013,510).
9) During the year, the Company has changed its accounting policy for calculation of depreciation on buildingconstructed on lease hold land where lease period is 30 years or less. Hitherto, the Company was chargingdepreciation on building constructed on leasehold land at written down value (WDV) method at the ratesprescribed under Schedule XIV of the Companies Act. 1956. During the year, based on recent opinion issued by“Expert Advisory Committee” of the “Institute of Chartered Accountants of India”, the Company has changedits accounting policy of charging such depreciation and started amortizing building on such leasehold landover the lease period of such leasehold land.
As a result of change in this policy, the depreciation charge for the year under report is lower by Rs. 3,139,605out of which Rs. 1,632,454 is related to prior periods. Deferred tax charge for the year is higher by Rs. 1,042,977and the profit after tax is higher by Rs. 2,096,628.
10) Earnings per share
Reconciliation of basic and diluted shares used in computing earnings per share
Year Ended Year Ended31 March 2010 31 March 2009
Profit after tax attributable to equity shareholders (Rupees) 515,660,532 486,197,024
Number of shares considered as weighted average sharesoutstanding for computing basic earnings per share 41,678,089 41,678,089
Nominal value per share (Rupees) 10.00 10.00
Basic/Diluted Earnings per share (Rupees) 12.37 11.67
Spectrum Coal and Power LimitedSchedules forming part of the accounts
Schedule 17: Significant accounting policies and notes to the accounts
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11) Deferred tax assets/liabilities included in the Balance Sheet comprise the following:
In accordance with Accounting Standard -22, Accounting for Taxes on Income, the tax effect of significanttiming differences that reverse in one or more subsequent years gave rise to the following net deferred taxliability as at 31 March 2009 :
(Amount in Rupees)
As at As at31 March 2010 31 March 2009
Deferred tax assets arising on account ofProvision for leave encashment 922,899 506,039Provision for leave gratuity 772,710 686,829
Total (A) 1,695,609 1,192,868Deferred tax liability arising on account of
Excess of depreciation allowable under Income-tax Actover depreciation provided on accounts 62,405,386 70,980,235
Total (B) 62,405,386 70,980,235
Net deferred tax asset/(liability) (net) (A-B) (60,709,777) (69,787,367)
12) Related Party Disclosures
a) Related party and nature of the relationship where control exists, and with whom transactions have takenplace during the year:
Holding company:
• ACB (India) Limited (formally known as Aryan Coal Benefications Private Limited) (holding company)Fellow subsidiaries:• Aryan Clean Coal Technologies Private Limited• Aryan Energy Private Limited• Kartikay Coal Washeries Private Limited
Enterprises over which holding company exercises significant influence (others):
• General Automobiles• Indus Automobiles• Sainik Mining & Allied Services Limited• Sainik Finance and Industries Limited• Sindhu Holdings Limited• Sindhu Realtors Private Limited• V.V. Transport• Hasdeo Coal Carriers• Hari Bhoomi Communications Private Limited• Global Coal and Mining Private Limited
Key Management Personnel (KMP):
• Narendra Prakash Bhati, Managing Director
Spectrum Coal and Power LimitedSchedules forming part of the accounts
Schedule 17: Significant accounting policies and notes to the accounts
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Spectrum Coal and Power LimitedSchedules forming part of the accounts
Schedule 17: Significant accounting policies and notes to the accounts
b) Transactions/outstanding balances with related parties:
.(Amount in Rupees)
S. Particulars Holding Fellow KMP Relatives Others Total
No. Company Subsidaries
Transactions during the year
I Raw coal beneficiationsand allied receipts 30,705,347 - - - 1,067,014 31,772,361
(-) (-) (-) (-) (-) (-)II Sale of coal - - - - - -
(41,764,436) (177,782,014) (-) (-) (-) (219,546,450)III Interest received 18,754,630 - - - - 18,754,630
(632,876) (-) (-) (-) (-) (632,876)IV Purchases of coal - - - - 16,546,436 16,546,436
(Transportation Cost) (64,141,495) (3,120,583) (-) (-) (-) (67,262,078)V Fixed assets purchased - - - - 3,743,956 3,743,956
(-) (39,067,906) (-) (-) (-) (39,067,906)VI Store, Spares & Fuel Purchased 5,822,923 11,932,423 - - 738,925 18,494,271
(-) (-) (-) (-) (-) (-)VII Transportation and loading - - - - 315,000,341 315,000,341
charges (-) (-) (-) (-) (342,189,257) (342,189,257)VIII Repair and maintenance– - - - - 1,026,820 1,026,820
building (-) (-) (-) (-) (4,020,364) (4,020,364)IX Repair and maintenance– - - - - 815,800 815,800
plant and machinery (-) (-) (-) (-) (-) (-)X Repair and maintenance–others - - - - 11,901,522 11,901,522
(-) (-) (-) (-) (10,140,176) (10,140,176)XI Managerial remuneration paid - - 5,050,000 - - 5,050,000
(-) (-) (9,500,000) (-) (-) (9,500,000)XII Finance Cost - - - - 535,485 535,485
(-) (-) (-) (-) (568,554) (568,554)XIII Coal handling charges - - - - 180,000 180,000
(-) (1,879,262) (-) (-) (-) (1,879,262)XIV Inter corporate deposit paid 128,000,000 - - - - 128,000,000
(100,000,000) (-) (-) (-) (-) (100,000,000)XV Inter corporate deposit given 228,000,000 - - - - 228,000,000
received back (-) (-) (-) (-) (-) (-)XVI Vehicle/Equipment - - - - - -
loan received (-) (-) (-) (-) (5,002,500) (5,002,500)XVII Repayment of Vehicle/ - - - - 1,642,515 1,642,515
Equipment loan (-) (-) (-) (-) (884,121) (884,121)XVIII Non compete fees paid - - - - - -
(-) (-) (20,000,000) (-) (-) (20,000,000)XIX Power and fuel - - - - 30,679,100 30,679,100
(-) (-) (-) (-) (56,551,374) (56,551,374)XX Travelling and conveyance - - - - 151,898 151,898
(-) (-) (-) (-) (-) (-)XXI Pollution Control Expense - - - - 422,760 422,760
(-) (-) (-) (-) (-) (-)XXII Capital work in progress - - - - 20,345,838 20,345,838
(-) (-) (-) (-) (21,033,046) (21,033,046)XXIII Advertisement - - - - 61,410 61,410
(-) (-) (-) (-) (-) (-)
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Related party transactions having value of more than 10% of total transaction in that category:(Amount in Rupees)
Transactions during the year For the year ended For the year ended31 March 2010 31 March 2009
Raw coal beneficiation and allied receiptsACB (India) Limited 30,705,347 -Others 1,067,014 -
31,772,361 -Sale of coalKartikay Coal Washeries Private Limited - 177,782,014ACB (India) Limited - 41,764,436
- 219,546,450Interest receivedACB (India) Limited 18,754,630 632,876
18,754,630 632,876Inter corporate deposit givenACB (India) Limited 128,000,000 100,000,000
128,000,000 100,000,000Inter corporate deposit received backACB (India) Limited 228,000,000 -
228,000,000 -Purchase of coalSainik Mining & Allied Services Limited 1,858,758 -Hasdeo Coal Carriers (Transportation) 14,687,678 -ACB (India) Limited - 64,141,495Others - 3,120,583
16,546,436 67,262,078Purchase of fixed assetsSindhu Holdings Limited 3,743,956 -Aryan Clean Coal Technologies Private Limited - 39,067,906
3,743,956 39,067,906
(Amount in Rupees)
S. Particulars Holding Fellow KMP Relatives Others TotalNo. Company Subsidaries
Outstanding balances as at year endI Interest receivable - - - - - -
(489,466) (-) (-) (-) (-) (489,466)II Inter corporate deposit given - - - - - -
(100,000,000) (-) (-) (-) (-) (100,000,000)III Vehicle/equipment loan payable - - - - 2,293,479 2,293,479
(-) (-) (-) (-) (4,118,379) (4,118,379)IV Loans and advances - - - - - -
(-) (1,446,693) (-) (-) (-) (1,446,693)V Sundry creditors - 6,552,581 - - 52,664,220 59,216,801
(-) (1,866,516) (16,282,000) (-) (111,177,514) (129,326,030)VI Sundry debtors - 2,647,440 - - 552,026 3,199,466
(2,810,854) (12,759,082) (-) (-) (-) (15,569,936)VII Advance from customer 4,947,519 - - - - 4,947,519
(-) (-) (-) (-) (-) (-)
Figures in brackets represent previous year figure
Spectrum Coal and Power LimitedSchedules forming part of the accounts
Schedule 17: Significant accounting policies and notes to the accounts
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Schedule 17: Significant accounting policies and notes to the accounts
Stores, spares and fuel purchasedACB (India) Limited 5,822,923 -Aryan Clean Coal Technologies Private Limited 11,932,423 -Others 738,925 -
18,494,271 -Repair and maintenance-buildingSainik Mining & Allied Services Limited 1,026,820 4,020,364
1,026,820 4,020,364Repair and maintenance-plant & machinerySindhu Realtors Private Limited 815,800 -
815,800 -Repair and maintenance-othersGeneral Automobiles 9,661,335 8,758,598Indus Automobiles 1,649,134 1,381,578Others 591,053 -
11,901,522 10,140,176Capital work in progressSindhu Realtors Private Limited 20,336,298 21,033,046Others 9,540 -
20,345,838 21,033,046Pollution Control ExpenseSainik Mining & Allied Services Limited 422,760 -
422,760 -Advertisement and PublicityHari Bhoomi Communications Private Limited 61,410 -
61,410 -Transportation and loading chargesSainik Mining & Allied Services Limited 314,826,995 342,189,257Others 173,346 -
315,000,341 342,189,257Coal handling chargesSainik Mining & Allied Services Limited 180,000 -Kartikay Coal Washeries Private Limited - 1,879,262
180,000 1,879,262Travelling and conveyanceGeneral Automobiles 140,379 -Others 11,519 -
151,898 -Finance costSainik Finance and Industries Limited 535,485 568,554
535,485 568,554Non compete fees paidDr. A V Mohan Rao - 20,000,000
- 20,000,000
(Amount in Rupees)
Transactions during the year For the year ended For the year ended31 March 2010 31 March 2009
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13) Pursuant to an agreement entered into with Andhra Pradesh Power Generation Corporation Limited(APGENCO), the Company is in the process of setting up 11 MTPA coal washery at Talcher, Orissa on landprovided by APGENCO out of which the first phase of 7 MTPA had already been commissioned.
The Company has invested Rs 1,627,173,402 (including capital work in progress) towards the above mentionedcoal washery as at 31 March 2010. Delay in setting up of railway siding at Talcher and consensus on certaincommercial terms has resulted in delays in commencement of commercial operations. The Company is hopefulthat the commercial issues will be completely resolved in the near future and expects to commence thecommercial operations at this washery immediately on such resolution. The Company does not foresee anyliability due to delay in commencement of commercial operations. Accordingly, the Company has continuedto state the amounts incurred towards the project at historical cost.
14) Based on the information available with the management there are no dues outstanding to parties coveredunder the Micro, Small and Medium Enterprises Development Act, 2006.
15) Previous year’s figures have been regrouped/re-arranged wherever considered appropriate whenever necessaryto confirm to the current years’ groupings/classification.
For and on behalf of the Board of Director
Sd/- Sd/-Narendra Prakash Bhati N N GautamManaging Director Director
Place : GurgaonDate : 15 September, 2010
Spectrum Coal and Power LimitedSchedules forming part of the accounts
Schedule 17: Significant accounting policies and notes to the accounts
(Amount in Rupees)
Transactions during the year For the year ended For the year ended31 March 2010 31 March 2009
Managerial remunerationDr. A V Mohan Rao - 6,000,000Mr. Narender Parkash Bhati 5,050,000 3,500,000
5,050,000 9,500,000Vehicle / Equipment loan receivedSainik Finance and Industries Limited - 5,002,500
- 5,002,500Principal paid on vehicle / equipment loanSainik Finance and Industries Limited 1,642,515 884,121
1,642,515 884,121Power and fuelSindhu Holdings Limited 30,679,100 56,141,633Others - 409,741
30,679,100 56,551,374
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Balance Sheet Abstract and Company’s General Business Profile
I. Registration Details
Registration No. State Code
Balance Sheet Date
Date Month Year
II. Capital Raised During the year (Rupees in Thousand)
Public Issue Rights Issue
Bonus Issue Private Placement
III. Position of Mobilization and Deployment of Funds (Rupees in Thousand)
Total Liabilities Total Assets
Source of Funds
Paid-Up-Capital Reserves and Surplus
Current liabilities and provision Secured Loans
Deferred Tax Lliability
Application of FundsNet Fixed Assets Current Assets
Capital work in progress
IV. Performance of Company (Rupees in Thousand)
Turnover (includes other income) Total Expenditure
Profit Before Tax Profit after Tax
Basic/diluted earning per share (in Rs.) Dividend rate %
V. Generic names of three principle products/services of the company(As per monetary terms)
Item Code No. (ITC Code): Product Description :
Not applicable Coal beneficiation and allied activities
3 1 0 3
0 1
2 0 1 0
Nil
Nil
Nil
Nil
U 1 0 1 0 0 A P 1 9 9 6 P L C 0 5 4 2 3 8
4 1 0 2 2 0 1 4 1 0 2 2 0 1
4 1 6 7 8 1 1 9 2 6 3 2 3
2 6 8 9 6 8 1 4 2 9 4 1 9
2 3 2 5 2 9 8 1 5 6 7 7 5 8
7 5 7 5 4 1 5 1 5 6 6 1
1 3 6 4 3 3 3
8 1 6 3 8 8
1 9 2 1 4 8 0
1 2 . 3 7 0%
6 0 7 1 0
For and on behalf of the Board of Director
Sd/- Sd/-Narendra Prakash Bhati N N GautamManaging Director Director
Place : GurgaonDate : 15 September, 2010
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31 M
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2D
ate
from
whi
ch t
hey
beca
me
subs
idia
ry10
Sep
200
324
Aug
200
515
Nov
200
531
Jan
200
609
May
200
809
May
200
830
Mar
200
920
May
200
910
Dec
200
7
3T
he e
xten
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ding
com
pany
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tere
st in
the
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idia
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No.
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No.
of
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- 3
3 -
- -
Tota
l no.
of
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3,4
99,8
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19,6
00 2
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10,
000
10,
000
41,
678,
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48,
135
Face
val
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er s
hare
Rs.
10
Rs.
100
Rs.
10
Rs.
100
Rs.
10
Rs.
10
Rs.
10
Rs.
10
USD
1
Perc
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64.8
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100.
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51.0
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5N
et a
ggre
gate
am
ount
of
the
Subs
idia
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and
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lt w
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ccou
nt, t
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e ex
tent
the
mem
bers
of
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hold
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com
pany
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conc
erne
d:
a. C
urre
nt y
ear
240
,284
(16
4,88
1,89
7) 4
0,57
1,26
1 (
246,
792,
601)
(12
6,08
4) (
144,
418)
515
,660
,532
(1,
736,
146)
(3,
949)
b. P
revi
ous
year
s si
nce
it be
cam
e su
bsid
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64,
759,
938
(63
,642
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) 7
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) (
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7) -
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ount
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tent
the
mem
bers
of
the
hold
ing
com
pany
are
conc
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d:
a. C
urre
nt y
ear
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
b. P
revi
ous
year
s si
nce
it be
cam
e su
bsid
iary
4,15
3,14
2N
ilN
ilN
ilN
ilN
ilN
ilN
ilN
il
For
and
on
beh
alf
of B
oard
of
Dir
ecto
rs
Sd/
-Sd
/-
Sd/
-R
.S.
Sin
dh
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rig
Sat
ish
Ku
mar
Sh
arm
aC
hair
man
Man
agin
g D
irec
tor
Com
pany
Sec
reta
ry
Plac
e: G
urga
onD
ate:
15
Sept
embe
r, 20
10
12-Annexure I Statement Pursuant----309-312.p65 2011/05/06, 02:41 PM311
3