Home  »  Company  »  CESC Ltd.  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of CESC Ltd.

Mar 31, 2015

NOTE - 1 The operations of the Company are governed by the Electricity Act, 2003 and various Regulations and/or Policies framed thereunder by the appropriate authorities. Accordingly, in preparing the financial statements, the relevant provisions of the said Act, Regulations etc. have been duly considered.

NOTE 2 In terms ofthe provisions ofthe Companies Act, 1956 Members ofthe Company at the Thirty-fifth Annual General Meeting held on 26 July, 2013 have approved payment of commission to the non-executive directors at a rate not exceeding 3% per annum of the net profits of the Company for each of the five financial years commencing from 2013-14. Accordingly the said Commission has been fully provided for the year 2014-15. A fresh Ordinary Resolution in terms of the provisions of the Companies Act, 2013 has been included in the notice convening the ensuing Thirty-seventh Annual General Meeting of the members of the Company for the said payment of commission to the non-executive directors commencing from the financial year 2014-15 at a rate not exceeding 3% per annum of the net profits of the Company, subject to the total managerial remuneration not exceeding 11% of the net profit of the Company, for the relevant financial year.

NOTE 3 Outstanding foreign currency loans as on 31st March, 2015 as disclosed in Note 5, stands fully hedged in Indian Rupee. Trade Payables include Rs. 18.25 crore (31.03.2014 : Rs. Nil) representing amount payable in United States Dollar which have not been hedged.

NOTE 4 Based on a review of the projected business prospects of the Company''s subsidiaries, inspite of present losses in many of them, the management does not foresee any diminution, other than temporary, in the value of the Company''s investments and share application money placed therein other than in its investments in Mahuagarhi Coal Company Private Limited (MCCPL), which was incorporated in India for development of Mahuagarhi coal field and exploration of coal therefrom as a joint venture company with 50% participation of the Company in MCCPL''s share capital, in terms of the requirements of allocation of the said coal block by the Ministry of Coal, Government of India. Pursuant to the judgement dated 25th August, 2014 and the subsequent Order dated 24th September, 2014 ofthe Hon''ble Supreme Court of India, the underlying coal block got deallocated during the year. Consequently, the value of the Company''s investments amounting to Rs. 2.43 crore in equity share of MCCPL has been fully provided for. The interests of the Company as at 31st March, 2015 in the assets, liabilities and expenses of the joint venture are Rs. 0.01 crore (previous year: Rs. 3.20 crore), Rs. 0.93 crore (previous year: Rs. 0.05 crore) and Rs. 3.18 crore (previous year: Rs. 0.01 crore) respectively and in respect thereof, in terms of the Order dated 6th February, 2015 of Hon''ble High Court at Delhi, the Company has also provided a Bank Guarantee of Rs. 20.50 crore to the Ministry of Coal for its share in the deallocated coal block valid till 7th June, 2015.

NOTE - 5 Future rentals payable in respect of non-cancellable leases for assets comprising various equipment and vehicles acquired under operating leases for the period ranging between 36-60 months work out to Rs. 3.50 crore (previous year: Rs. 7.42 crore) and Rs. 10.21 crore (previous year: Rs. 5.91 crore) during next one year and thereafter till five years respectively. There are no restrictions in respect of such leases.

Borrowing Financing obligation :

During the year, (i) a sum ofRs. 24.85 crore towards dividend for the year 2013-14 was paid to Rainbow Investments Ltd, an enterprise related to the Company in terms of Para 3(e) of Accounting Standard AS -18 issued by ICAI and (ii) Commission and sitting fees paid to the Chairman amounting to Rs. 8.49 crore. Also refer Note 23(b) above relating to commitments as on 31.03.2015 in respect of DIL, HEL, SRL and others amounting to Rs. 638.86 crore, Rs. 555.50 crore, Rs. 280 crore and Rs. 123.12 crore respectively and Note 34 relating to Mahuagarhi Coal Company Private Limited.

NOTE - 6 Pursuant to allocation of the Sarisatoli coal block in the State of West Bengal to the Company in 1993 by the Ministry of Coal, Government of India, a portion ofthe Company''s coal requirement has been met since October 2002 from the production ofthe said mine. By the judgement dated 25th August 2014 read with its Order dated 24th September 2014 of the Hon''ble Supreme Court ofIndia in Coal Block Allocation, the process of allocation ofcoal blocks adopted by the Government of India in vogue since 1993, was held to be wanting in material respects which resulted in the Hon''ble Apex Court cancelling most of the allocations, including the aforesaid Sarisatoli coal block and even those to Central as well as State Public Sector Undertakings, made under that process. Moreover, payment of an additional levy in respect of coal extracted from the said mine(s) was directed under the aforesaid judgement, which in the above referred case worked out to Rs. 1044.87 crore upto the effective date of cancellation i.e. 31st March, 2015.

In terms ofthe provisions ofthe Coal Mines (Special Provisions) Ordinance, 2014, read with the Coal Mines (Special Provisions) Rules, 2014 framed thereunder, Coal Mines (Special Provisions) Second Ordinance, 2014 and Coal Mines (Special Provisions) Act, 2015, inter alia, payment of the aforesaid sum by the Company was necessitated and, a demand has so far been raised on the Company by the Competent Authority for payment of a sum of Rs. 995.52 crore, which has been fully paid and the balance sum would also be duly settled in terms ofthe appropriate order / legislations. Considering that the above payment being in the form of levy, and given the facts and circumstances ofthe incidence thereof, a portion ofthe said additional levy amounting to Rs. 896.73 crore relatable to the period since inception upto 31st March, 2014 has been shown in the financial statements as an Exceptional Item and an amount ofRs. 101.03 crore for the financial year 2014-15 included in the fuel cost, the total amount ofRs. 997.76 crore being directly relatable to the underlying fuel sourced for the Company''s (a statutory distribution licensee supplying electricity to the end consumers in Kolkata and surrounding areas) embedded generation, and hence considered as recoverable by way of tariff in terms ofthe applicable laws / regulations, for which a reference has since been made to West Bengal Electricity Regulatory Commission (WBERC). The balance sum of Rs. 47.11 crore has not been considered as recoverable and charged off to Profit and Loss Account.

Subsequently, following the auction conducted by the Ministry of Coal, Government of India, under the provisions of the applicable laws, the Company has been allotted the said Sarisatoli coal block effective 1st April, 2015 and mining operations thereat commenced from 10th April, 2015 which has since been duly informed to WBERC.

NOTE - 7 76,21,118 new equity shares of Rs 10 each were allotted on 5th November, 2014 for cash at a premium of Rs. 634 per share to Qualified Institutional Buyers in compliance with applicable legal requirements and pending its utilisation in terms of the Issue, the proceeds thereof have been kept invested in mutual funds and shown under Current Investments.

NOTE - 8 As per plans, the 60 year old 100 MW New Cossipore generating station of the Company has permanently ceased to generate power effective on 30th November, 2014. Net block of fixed assets of New Cossipore plant (net of adjustment from revaluation reserve) amount to Rs. 18.51 crore, in respect ofwhich no adjustment has so far been given effect to. However, the realizable value of these assets are estimated to be significantly higher than the aforesaid book value.

NOTE - 9 In terms of the provisions of Companies Act, 2013, the required Corporate Social Responsibility (CSR) spending works out to Rs. 15.17 crore, which has been met by way of contribution to a trust set up for the said purpose and direct expenditure of Rs. 12.11 crore and Rs. 3.06 crore respectively.

NOTE - 10 The derated installed capacity of the Generating Stations of the Company (as per certification of technical expert) as on 31st March, 2015 was 1125000 kW (31st March, 2014 : 1225000 kW).

NOTE-11 The Company has reclassified previous year''s figures to conform to this year''s classification alongwith other regrouping/ rearrangement wherever necessary.


Mar 31, 2014

NOTE - 1 The operations of the Company are governed by the Electricity Act, 2003 and various Regulations and / or Policies framed thereunder by the appropriate authorities. Accordingly, in preparing the financial statements the relevant provisions of the said Act, Regulations etc. have been duly considered.

NOTE- 2 SHORT-TERM BORROWINGS

B. Nature of Security

Overdraft facilities from banks in (A) above are secured, ranking pari passu inter se, by hypothecation of the Company''s current assets comprising stock of stores, coal and other consumables, book debts, monies receivable and bank balances as a first charge and as a second charge by equitable mortgage / hypothecation of fixed assets of the Company including its land, buildings and other construction thereon where exists, plant and machinery etc. However, creation of the said mortgage security in respect of overdraft facilities from banks aggregating Rs. 190 crore (31.03.2013 - Rs. 165 crore) is in process.

NOTE- 3 TRADE PAYABLES

Trade payables include Rs. 3.10 crore ( 31.3.2013 - Rs. 3.37 crore) due to Micro and Small Enterprises, as defined in the Micro, Small and Medium Enterprises Development Act, 2006, based on information available with the Company.

- Nil (31.3.2013 - Rs. 0.00 crore), Rs. 0.17 crore (31.3.2013 - Rs. 0.14 crore) and Rs. 0.57 crore (31.03.2013 - Rs. 0.40 crore) representing interest due on amount outstanding as at the year end, interest accrued and due for the period of delay in making payment during the year and interest accrued and remaining unpaid at the year end respectively.

NOTE-4 OTHER CURRENT LIABILITIES

(g) Unclaimed dividend and unclaimed Public Deposits do not include any amounts, due and outstanding, to be credited to Investor Education and Protection Fund.

(h) Other payables include accrued interest on consumer security deposit, employee related liability, creditors towards contractual obligations etc.

NOTE-5 CASH AND BANK BALANCES

(c) Amount lying in deposit accounts with banks as at 31st March, 2014 includes Rs. Nil (31.03.2013 : Rs. 26.00 crore) appropriated upto the previous year towards Fund for unforeseen exigencies and interest attributable thereto.

(d) Amount lying in deposit accounts with banks as at 31st March, 2014 includes Rs. 150.75 crore (31.03.2013 : Rs. 91.00 crore) appropriated for upto the previous year towards Fund for unforeseen exigencies and interest attributable thereto.

(e) Bank deposits with original maturity more than 3 months under Other bank balances include Rs. Nil (31.03.2013: Rs. 18.75 crore) having original maturity more than 12 months as on the reporting date.

NOTE - 6 CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

(a) Claims against the Company not acknowledged as debts :

The West Bengal Taxation Tribunal had held meter rentals received by the Company from consumers to be deemed sales under the provisions of the Bengal Finance (Sales Tax) Act, 1941 and that sales tax was payable on such rentals. Based on such findings the Commercial Taxes Directorate assessed Rs. 0.69 crore as sales tax on meter rentals received during the year ended 31st March, 1993 and raised a demand of Rs. 0.36 crore on account of interest. Against the above demand, the Company had deposited a sum ofRs. 0.75 crore with the sales tax authorities and obtained a stay against the balance demand from the Deputy Commissioner of Commercial Taxes. The sales tax authorities also indicated their intention to levy such sales tax on meter rentals for the subsequent years as well, against which, the Company filed a writ petition in the Calcutta High Court and prayed for an interim order, inter alia, restraining the sales tax authorities from proceeding with the assessment for the subsequent years till disposal of the appeal. An interim order has been issued by the High Court permitting the sales tax authorities to carry out assessments but restraining them from serving any assessment order on the Company. The disposal of the case is still pending.

(b) Other money for which the company is contingently liable :

Municipal Tax : Rs. 1.12 crore (31.03.2013 : Rs. 1.06 crore) in respect of certain properties, the rates of which are disputed by the Company.

(c) Commitment of the Company on account of estimated amount of contracts remaining to be executed on capital account and the same towards borrowing obligation of a subsidiary and a body corporate from a bank, not provided for amount to Rs. 161.89 crore (31.03.2013 : Rs. 127.06 crore), Rs. 150 crore (31.03.2013 : Rs. 154.58 crore), and Rs. 132.08 crore (31.03.2013 : Rs. 161.25 crore) respectively.

(d) The Company has ongoing commitment to extend support and provide equity to the subsidiaries, in respect of various projects and otherwise (where, in certain cases there are restriction on transfer of investments).

The future cash outflow in respect of above cannot be ascertained at this stage.

(e) For commitment relating to leasing arrangement, refer note no. 35

NOTE-7 REVENUE FROM OPERATIONS

(c) Earnings from sale of electricity are determined in accordance with the relevant orders of the Commission, where appropriate, giving due effect to the required adjustments which include a sum of Rs. (0.95) crore (previous year: Rs. 42.53 crore) in respect of the cost of electrical energy purchased, fuel and related costs and also those relating to revenue account, based on the Company''s understanding of the applicable regulatory provisions on this count, after giving effect of the impact arising from applicable orders in this regard for earlier years and the net impact of the said adjustments has been included in Other long term liabilities, to the extent applicable. The accurate quantification and disposal of the matters are being given effect to, from time to time, on receipt of necessary direction from the appropriate authorities. The said earnings are also net of discount for prompt payment of bills allowed to consumers on a net basis from month to month and advance against depreciation amounting to Rs. 62.41 crore (previous year: Rs. 81.91 crore) and Rs. 62.67 crore (previous year: Rs. 148.20 crore) respectively.

NOTE-8 EMPLOYEE BENEFIT EXPENSES

(B) Employee Benefits

The Company makes contributions for provident fund and pension (including for superannuation) towards retirement benefit plans for eligible employees. Under the said plans, the Company is required to contribute a specified percentage of the employees'' salaries to fund the benefits. During the year, based on applicable rates, the Company has recognised Rs. 38.78 Crores (previous year: Rs. 30.58 crore) on this count in the Statement of Profit and Loss. The Company also makes annual contribution to independent trust, who in turn, invests in the Employees Group Gratuity Scheme of eligible agencies for qualifying employees. Liabilities at the year-end for gratuity, leave encashment and other retiral benefits including medical have been determined on the basis of actuarial valuation carried out by an independent actuary, based on the method prescribed in Accounting Standard 15 - "Employee Benefits" of the Companies (Accounting Standard) Rules, 2006.

NOTE - 9 The Members of the Company at the Thirty-fifth Annual General Meeting held on 26 July, 2013 have approved payment of commission to the non executive directors at a rate not exceeding 3% per annum of the net profits of the Company for each of five financial years commencing from 2013-14. Approval of the Central Government for payment of such commission in excess of 1% of the net profit of the Company for the financial year 2013-14 is being sought and accordingly the Commission proposed for non executive directors in excess of said 1% i.e Rs. 16.67 crore, is subject to approval of the Central Government.

NOTE - 10 Outstanding foreign currency loans as on 31st March, 2014 as disclosed in Note 5, stands fully hedged in Indian Rupee. Trade Payables include Rs. Nil crore (31.03.2013 : Rs. 41.74 crore) representing amount payable in United States Dollar which have not been hedged.

NOTE - 11 Based on a review of the projected business prospects of the Company''s subsidiaries, inspite of present losses therein, the management does not foresee any diminution, other than temporary, in the value of the Company''s investments and share application money placed therein.

NOTE - 12 Future rentals payable in respect of non-cancellable leases for assets comprising various equipment and vehicles acquired under operating leases for the period ranging between 36-60 months work out to Rs. 7.42 crore (previous year: Rs. 2.76 crore) and Rs. 5.91 crore (previous year: Rs. 0.77 crore) during next one year and thereafter till five years respectively. There are no restrictions in respect of such leases.

NOTE - 13 The Company is engaged in generation and distribution of electricity and does not operate in any other reportable segment.

NOTE - 14 The derated installed capacity of the Generating Stations of the Company (as per certification of technical expert) as on 31st March, 2014 was 1225000 kW (31st March, 2013 : 1225000 kW).

NOTE-15 The Company has reclassified previous year''s figures to conform to this year''s classification alongwith other regrouping/ rearrangement wherever necessary.


Mar 31, 2013

NOTE 1 The operations of the Company are governed by the Electricity Act, 2003 and various Regulations and / or Policies framed thereunder by the appropriate authorities. Accordingly, in preparing the financial statements the relevant provisions of the said Act, Regulations etc. have been duly considered.

NOTE 2 TRADE PAYABLES

Trade payables include Rs. 3.37 crore ( 31.3.2012 - Rs. 2.76 crore) due to Micro and Small Enterprises, as defined in the Micro, Small and Medium Enterprises Development Act, 2006, based on information available with the Company.

Rs. 0.00 crore (31.3.2012 - Rs. 0.01 crore), Rs. 0.14 crore (31.3.2012 - Rs. 0.26 crore) and Rs. 0.40 crore ( 31.03.2012- Rs. 0.26 crore) representing interest due on amount outstanding as at the year end, interest accrued and due for the period of delay in making payment during the year and interest accrued and remaining unpaid at the year end respectively.

NOTE 3 CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

(a) Claims against the Company not acknowledged as debts:

The West Bengal Taxation Tribunal had held meter rentals received by the Company from consumers to be deemed sales under the provisions of the Bengal Finance (Sales Tax) Act, 1941 and that sales tax was payable on such rentals. Based on such findings the Commercial Taxes Directorate assessed Rs. 0.69 crore as sales tax on meter rentals received during the year ended 31st March, 1993 and raised a demand of Rs. 0.36 crore on account of interest. Against the above demand, the Company had deposited a sum of Rs. 0.75 crore with the sales tax authorities and obtained a stay against the balance demand from the Deputy Commissioner of Commercial Taxes. The sales tax authorities also indicated their intention to levy such sales tax on meter rentals for the subsequent years as well, against which, the Company filed a writ petition in the Calcutta High Court and prayed for an interim order, inter alia, restraining the sales tax authorities from proceeding with the assessment for the subsequent years till disposal of the appeal. An interim order has been issued by the High Court permitting the sales tax authorities to carry out assessments but restraining them from serving any assessment order on the Company. The disposal of the case is still pending.

(b) Other money for which the company is contingently liable :

Municipal Tax : Rs. 1.06 crore (31.03.2012: Rs. 1.01 crore) in respect of certain properties, the rates of which are disputed by the Company.

(c) Commitment of the Company on account of estimated amount of contracts remaining to be executed on capital account and others, not provided for amount to Rs. 442.89 crore (31.03.2012: Rs. 136.38 crore).

(d) The Company has ongoing commitment to extend support and provide equity to the subsidiaries, in respect of various projects and otherwise (where, in certain cases there are restriction on transfer of investments). The future cash outflow in respect of above cannot be ascertained at this stage.

(e) For commitment relating to leasing arrangement, refer note no.35

NOTE 4 COST OF FUEL

(a) Cost of fuel includes freight Rs. 286.69 crore ( previous year: Rs. 230.98 crore)

(b) Cost of fuel includes loss of Rs. 3.06 crore (previous year: loss of Rs. 4.55 crore) due to exchange fluctuations.

(c) Consumption of fuel:

NOTE 5 The Members of the Company at the Thirtieth Annual General Meeting held on 30th July, 2008 and the Central Government vide its letter dated 20th August, 2009 approved payment of commission to the non executive directors from 2008-09 to 2012-13 at a rate not exceeding 1 % per annum of the net profits of the Company computed in the manner laid down in Section 198(1) of the Companies Act, 1956.

In respect of the years 2011-12 and 2012-13, payment of the said commission at a rate not exceeding 3% of the said net profits of the Company has been approved at the Thirty-fourth Annual General Meeting of the members of the Company held on 27th July, 2012 for which approval of Central Government is awaited. Accordingly, the commission proposed for non-executive directors in excess of 1 % of the net profits, i.e., Rs. 15.96 crore for the year 2012-13, is subject to the said approval.

NOTE 6 Other long term liabilities represent those arising from adjustments detailed in Note 23 and the unadjusted balance of sums received from consumers for Capital jobs, pending completion thereof.

NOTE 7 Outstanding foreign currency loans as on 31st March, 2013 as disclosed in Note 5, stands fully hedged in Indian Rupee. Trade Payables include Rs. 41.74 crore (31.03.2012 : Rs. 76.60 crore) representing amount payable in United States Dollar which have not been hedged.

NOTE 8 Based on a review of the projected business prospects of the Company''s subsidiaries, inspite of present losses therein, the management does not foresee any diminution, other than temporary, in the value of the Company''s investments and share application money placed therein.

NOTE 9 Future rentals payable in respect of non-cancellable leases for assets comprising various equipment and vehicles acquired under operating leases for the period ranging between 36-60 months work out to Rs. 2.76 crore (previous year: Rs. 8.93 crore) and Rs. 0.77 crore (previous year : Rs. 2.27 crore) during next one year and thereafter till five years respectively. There are no restrictions in respect of such leases.

NOTE 10 The Company is engaged in generation and distribution of electricity and does not operate in any other reportable segment.

NOTE 11 The derated installed capacity of the Generating Stations of the Company (as per certification of technical expert) as on 31st March, 2013 was 1225000 kW (31st March, 2012 : 1225000 kW).

NOTE 12 The Company has reclassified previous year''s figures to conform to this year''s classification alongwith other regrouping/ rearrangement wherever necessary.


Mar 31, 2012

(a) Terms / rights attached to equity shares :

The Company has only one class of equity shares having a par value of Rs. 10 per share fully paid up. Each holder of equity share is entitled to one vote per share. During the year ended 31 st March, 2012 the amount of dividend per share recommended by the Board of Directors as distributions to equity shareholders is Rs. 5 (31.03.2011 - Rs. 4) subject to declaration at the ensuing Annual General Meeting by the members. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive sale proceeds from remaining assets of the Company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(b) 3,10,58,414 Equity Shares of Rs. 10 each were allotted as fully paid-up on 12 October, 2007 pursuant to a Scheme of Amalgamation sanctioned by the Hon'ble High Court at Calcutta, without consideration being received in cash.

(c) Amount transferred during the year to Fund for unforeseen exigencies to be invested as per the statute.

(A) Nature of Security:

1. Term loans in (A) above are secured by equitable mortgage / hypothecation of the fixed assets of the Company including its land, buildings and other constructions thereon where exits, plant and machinery etc. as a first charge and as a second charge, by hypothecation of the Company's current assets comprising stock of stores, coal and other consumables, book debts, monies receivable and bank balances. However, creation of the said mortgage security in respect of two Rupee Loans and one Foreign Currency Loan aggregating Rs. 397.50 Crore (31.03.2011 - Rs. Nil) is in process. User rights in respect of a freehold land having a book value of Rs. 68.95 crore have been offered for financial assistance availed of by a subsidiary company to their lenders.

2. The security for the term loans in (A) above ranks pari passu inter se.

A. Nature of Security

1. Overdraft facilities from banks in (A) above are secured by hypothecation of the Company's current assets comprising stock of stores, coal and other consumables, book debts, monies receivable and bank balances as a first charge and as a second charge by equitable mortgage / hypothecation of fixed assets of the Company including its land, buildings and other constructions thereon where exists, plant and machinery etc. However, creation of the said mortgage security in respect of overdraft facilities from banks aggregating Rs. 97.60 crore (31.03.2011 - Rs. 97.60 crore) is in process.

2. The security for the overdraft facilities in (A) above ranks pari passu inter se.

NOTES TRADE PAYABLES

Trade payable include Rs. 2.76 crore (31.3.2011 - Rs. Nil) due to Micro and Small Enterprises, as defined in the Micro, Small and Medium Enterprises Development Act, 2006, based on information available with the Company.

Rs. 0.01 crore (31.3.2011 - Rs. Nil) and Rs. 0.26 crore (31.3.2011 - Rs. Nil) representing interest due on amount outstanding as at the year end and interest accrued and due for the period of delay in making payment as at the year end respectively.

(g) Unclaimed dividend and unclaimed Public Deposits do not include any amounts, due and outstanding, to be credited to Investor Education and Protection Fund.

(c) Amount lying in deposit accounts with banks as at 31 March, 2012 includes Rs. 62.70 crore (31.03.2011 : Rs. 61.40 crore) appropriated upto the previous year towards Fund for unforeseen exigencies and interest attributable thereto.

(d) Amount lying in deposit accounts with banks as at 31 March, 2012 includes Rs. 23.00 crore (31.03.2011 : Rs. Nil) appropriated upto the previous year towards Fund for unforeseen exigencies and interest attributable thereto.

(e) Bank deposits with original maturity more than 3 months under Other bank balances include Rs. 50.45 crore (31.03.2011 : 72.60 crore) having original maturity more than 12 months as on the reporting date.

NOTE 1 CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

(a) Claims against the Company not acknowledged as debts :

The West Bengal Taxation Tribunal had held meter rentals received by the Company from consumers to be deemed sales under the provisions of the Bengal Finance (Sales Tax) Act, 1941 and that sales tax was payable on such rentals. Based on such findings the Commercial Taxes Directorate assessed Rs. 0.69 crore as sales tax on meter rentals received during the year ended 31 March, 1993 and raised a demand of Rs. 0.36 crore on account of interest. Against the above demand, the Company had deposited a sum of Rs. 0.75 crore with the sales tax authorities and obtained a stay against the balance demand from the Deputy Commissioner of Commercial Taxes. The sales tax authorities also indicated their intention to levy such sales tax on meter rentals for the subsequent years as well, against which, the Company filed a writ petition in the Calcutta High Court and prayed for an interim order, inter alia, restraining the sales tax authorities from proceeding with the assessment for the subsequent years till disposal of the appeal. An interim order has been issued by the High Court permitting the sales tax authorities to carry out assessments but restraining them from serving any assessment order on the Company. The disposal of the case is still pending.

(b) Other money for which the company is contingently liable :

i. Municipal Tax : Rs. 1.01 crore (31.03.2011 : Rs. 0.95 crore) in respect of certain properties, the rates of which are disputed by the Company.

ii. Water Cess : Rs. Nil (31.03.2011 : Rs. 6.74 crore) - disputed by the Company.

(c) Estimated amount of contracts remaining to be executed on capital account etc. and not provided for amount to Rs. 136.38 crore (31.03.2011 :Rs. 114.76 crore).

(d) The Company has ongoing commitment to extend support and provide equity to the subsidiaries, in respect of various projects and otherwise (where, in certain cases there are restrictions on transfer of Investments).

The future cash outflow in respect of above cannot be ascertained at this stage.

(e) For commitment relating to leasing arrangment, refer note no. 35

(c) Earnings from sale of electricity are determined in accordance with the relevant orders of the Commission, where appropriate, giving due effect to the required adjustments. Such adjustments include the effect of increase in tariff for the account months of April, 2011 to January, 2012 in terms of the order of the Commission, recovery of which has since commenced and will be made, as directed. and that by netting of a sum of Rs. 358.93 crore (previous year: Rs. (154.36) crore) in respect of the cost of electrical energy purchased, fuel and related costs and those relating to revenue account, based on the Company's understanding of the applicable regulatory provisions on this count, after giving effect of the impact arising from applicable orders in this regard for earlier years and the net impact of the said adjustments has been included in Other long term liabilities, to the extent appropriate. The accurate quantification and disposal of the matters are being given effect to, from time to time, on receipt of necessary direction from the appropriate authorities. The said earnings are also net of discount for prompt payment of bills and advance against depreciation amounting to Rs. 79.35 crore (previous year: Rs. 71.20 crore) and Rs. 51.77 crore (previous year: Rs. 67.55 crore) respectively.

NOTE 2 COST OF FUEL

(a) Cost of Fuel includes freight Rs. 230.98 crore (previous year: Rs. 190.88 crore)

(b) Cost of Fuel includes loss of Rs. 4.55 crore (previous year: gain of Rs. 1.25 crore) due to exchange fluctuations.

(B) Employee Benefits

The Company makes contributions for provident fund and pension (including for superannuation) towards retirement benefit plans for eligible employees. Under the said plans, the Company is required to contribute a specified percentage of the employees' salaries to fund the benefits. During the year, based on applicable rates, the Company has recognised Rs. 29.12 crore (previous year: Rs. 29.77 crore) on this count in the Profit and Loss Statement. The Company also makes annual contribution to independent trust. who in turn, invests in the Employees Group Gratuity Scheme of eligible agencies for qualifying employees. Liabilities at the year- end for gratuity, leave encashment and other retiral benefits including medical have been determined on the basis of actuarial valuation carried out by an independent actuary, based on the method prescribed in Accounting Standard 15 - "Employee Benefits" of the Companies (Accounting Standard) Rules, 2006.

Plan Assets consist of funds maintained with LICI, ICICI Prudential, Birla Sun Life and HDFC Standard Life.

Above disclosures as required by AS-15-Employee Benefits are given to the extent available from the actuarial report.

The estimates of future salary increase considered in the actuarial valuation takes into account factors like inflation, seniority, promotion and other relevant factors. The expected return on plan assets is based on actuarial expectation of the average long term rate of return expected on investments of the funds during the estimated terms of the obligations. The contribution expected to be made by the Company for the year ending 31 March, 2013 is not readily ascertainable and therefore not disclosed.

(I) Miscellaneous Expenses in (k) above include research and development expense of Rs. 1.17 crore (previous year: Rs. 0.70 crore).

NOTE 3 The Members of the Company at the Thirtieth Annual General Meeting held on 30 July 2008 and the Central Government vide its letter dated 20 August 2009 approved payment of commission to the non-executive directors from 2008-09 to 2012-13 at a rate not exceeding 1% per annum of the net profits of the Company computed in the manner laid down in Section 198(1) of the Companies Act, 1956.

The Board of Directors in its meeting held on 13 June, 2012 has considered to seek the approval of the Members at the forthcoming Annual General Meeting and of the Central Government thereafter, for payment of commission to the non-executive directors for each of the years 2011-12 and 2012-13 at an increased rate not exceeding 3% per annum of the net profit of the Company as required under Secton 310 of the said Act. Accordingly, the commission proposed for non-executive directors in excess of 1% of the net profits i.e. Rs. 13.95 crore, for the year 2011-12, is subject to the approval of the Members and of the Central Government.

NOTE 4 Other long term liabilities represent those arising from adjustments detailed in Note 23 and the unadjusted balance of sums received from consumers for Capital jobs, pending completion thereof.

NOTE 5 Out of the outstanding foreign currency loans of Rs. 677.64 crore (31.03.2011 : Rs. 531.16 crore) disclosed in Note 5, loan balance amounting to Rs. 606.79 crore (31.03.2011 : Rs. 469.09 crore) have been fully hedged in Indian Rupee and Rs. 70.85 crore (31.03.2011 : Rs. 62.07 crore) represents sum restated at year end exchange rate in respect of underlying contractual obligations in United States Dollar. Trade Payables include Rs. 76.60 crore (31.03.2011 : Rs. 19.63 crore) representing amount payable in United States Dollar restated at year end exchange rate which have not been hedged.

NOTE 6 Based on a review of the projected business prospects of the Company's subsidiaries, inspite of present losses therein, the management does not foresee any dimunition, other than temporary, in the value of the Company's investments and share application money placed therein.

NOTE 7 Future rentals payable in respect of non-cancellable leases for assets comprising various equipment and vehicles acquired under operating leases for the period ranging between 36-60 months work out to Rs. 8.93 crore (previous year: Rs. 9.77 crore) and Rs. 2.27 crore (previous year: Rs. 10.47 crore) during next one year and thereafter till five years respectively. There are no restrictions in respect of such leases.

NOTE 8 The Company is engaged in generation and distribution of electricity and does not operate in any other reportable segment.

(*) Mahuagarhi Coal Company Private Limited (MCCPL) was incorporated in India for development of Mahuagarhi coal field and exploration of coal there from as a joint venture company with 50% participation of the Company in MCCPL's share capital, in terms of the requirements of allocation of the coal block by the Ministry of Coal, Government of India, which is yet to commence its commercial operation. The interests of the Company as at 31 March, 2012 in the assets, liabilities and expenses of the joint venture are Rs. 2.27 crore (31 March, 2011 : Rs. 1.65 crore), Rs. 0.00 crore (31 March, 2011 : Rs. 0.01 crore) and Rs. 0.03 crore (previous year :Rs. 0.09 crore) respectively.

NOTE 9 The derated installed capacity of the Generating Stations of the Company (as per certification of technical expert) as on 31 March. 2012 was 1225000 kW (31 March, 2011 : 1225000 kW).

NOTE 10 The Company was using pre-revised Schedule VI to the Companies Act, 1956, for preparation and presentation of its financial statement for previous year's figures till the year ended 31st March 2011. During the year ended 31st March 2012, the revised Schedule VI notified under Companies Act, 1956 has become applicable to the Company. The Company has reclassified previous year's figures to conform to this year's classification alongwith other regrouping / rearrangement wherever necessary.


Mar 31, 2011

1. The operations of the Company are governed by the Electricity Act, 2003 and various Regulations and/or Policies framed thereunder by the appropriate authorities/Accordingly, in preparing the financial statements the relevant provisions of the said Act, Regulations etc. have been duly considered.

2. Earnings from sale of electricity are determined in accordance with the relevant orders of the Commission, where appropriate, giving due effect of the required adjustments. Such earnings are net of discount for prompt payment of bills and advance against depreciation amounting to Rs.71.20 crore (previous year: Rs.62.05 crore) and Rs.67.55 crore (previous year: Rs.109.08 crore) respectively.

3. (a) Fixed assets other than furniture and vehicles as on 31 March 2005 have been revalued which resulted in an increase in the value of such assets by an amount of Rs.1,900.77 crore with corresponding credit to Revaluation Reserve.

(b) Capital work in progress includes capital advance of Rs 15.31 crore (31 March, 2010 : Rs 16.05 crore).

4. Estimated amount of commitment on capital account etc. and not provided for is Rs. 114.76 crore (31 March, 2010 : Rs. 136.98 crore).

5. Claims against the Company not acknowledged as debts :

(a) The West Bengal Taxation Tribunal had held meter rentals received by the Company from consumers to be deemed sales under the provisions of the Bengal Finance (Sales Tax) Act, 1941 and that sales tax was payable on such rentals. Based on such findings the Commercial Taxes Directorate assessed Rs.0.69 crore as sales tax on meter rentals received during the year ended 31 March, 1993 and raised a demand of Rs.0.36 crore on account of interest. Against the above demand, the Company had deposited a sum of Rs.0.75 crore with the sales tax authorities and obtained a stay against the balance demand from the Deputy Commissioner of Commercial Taxes. The sales tax authorities also indicated their intention to levy such sales tax on meter rentals for the subsequent years as well, against which, the Company filed a writ petition in the Calcutta High Court and prayed for an interim order, inter alia, restraining the sales tax authorities from proceeding with the assessment for the subsequent years till disposal of the appeal. An interim order has been issued by the High Court permitting the sales tax authorities to carry out assessments but restraining them from serving any assessment order on the Company. The disposal of the case is still pending.

(b) Other matters:

i. Municipal Tax : Rs. 0.95 crore (31 March, 2010: Rs. 0.89 crore) in respect of certain properties, the rates of which are disputed by the Company.

ii. Water Cess : Rs. 6.74 crore (31 March 2010 : Rs. 2.74 crore) - disputed by the Company.

6. Amount lying in deposit accounts with scheduled banks as at 31 March 2011 includes Rs. 61.40 crore (31 March 2010 : Rs. 42 crore) appropriated upto the previous year towards Reserve for unforeseen exigencies and interest attributable thereto.

7. The Company has accounted for in the current year a net sum of Rs. (154.36) crore (previous year: Rs. (29.56) crore) shown as cost adjustments in schedule 11 to the Profit and Loss Account, based on the Companys understanding of the applicable regulatory provisions in respect thereof, towards an estimated adjustable sum on account of cost of electrical energy purchased and fuel and related cost and adjustment relating to revenue account after giving the effect arising from the applicable orders for earlier years (which include a sum of Rs 125.80 crore attributable to expenditure of 2009-10 for which formal adjustment is under consideration of the Commission) in this regard. The accurate quantification and disposal of the matter are being given effect to from time to time on receipt of necessary directions from the appropriate authorities.

8. Interest expenses in Schedule 12 and cost of fuel in Schedule 11 include gain of Rs.0.00 crore and Rs.1.25 crore respectively (previous year: gain of Rs. 0.03 crore and Rs. 3.04 crore respectively) due to exchange fluctuations. Miscellaneous Expenses in Schedule 11 include Borrowing Cost other than interest, amounting to Rs.5.81 crore (previous year: Rs. 5.81 crore), which has been allocated to capital account and research and development expense of Rs. 0.70 crore (previous year: Rs. 0.25 crore). Income from Long Term Trade Investment and Income from Current Investment - other than trade shown in Schedule 10 include dividend income of Rs.0.30 crore (previous year: Rs. 0.30 crore) and Rs.nil (previous year: Rs. 2.78 crore) respectively.

9. Based on a review of the projected business prospects of the Companys subsidiaries, inspite of present losses therein, the management does not foresee any permanent diminution in the value of the Companys long term investments (including advance against equity) therein.

10. Future rentals payable in respect of non-cancellable leases for assets comprising various equipment and vehicles acquired under operating leases for the period ranging between 36-60 months work out to Rs. 9 77 crore (previous year: Rs. 10.21 crore) and Rs. 10.47 crore (previous year: Rs. 19.14 crore) during next one year and thereafter till five years respectively. There are no restrictions in respect of such leases.

11. There are no amount due to Micro and Small Enterprises, as defined in the Micro, Small and Medium Enterprises Development Act, 2006, based on information available with the Company.

12. Out of the outstanding foreign currency loans of Rs 531.16 crore (previous year: Rs. 602.79 crore) disclosed in Schedule 3 and Schedule 4, loan balance amounting to Rs. 469.09 crore (previous year: Rs. 532.97 crore) have been fully hedged in Indian Rupee and Rs 62.07 crore (previous year: Rs. 69.82 crore) represents sum restated at year end exchange rate in respect of underlying contractual obligations in United States Dollar. Current Liabilities include Rs.19.63 crore (previous year: Rs. 17.87 crore) representing amount payable in United States Dollar restated at year end exchange rate which have not been hedged.

13. Employee Benefits Defined Contribution Plan

The Company makes contributions for provident fund and pension (including for superannuation) towards defined contribution retirement benefit plans for eligible employees. Under the said plans, the Company is required to contribute a specified percentage of the employees salaries to fund the benefits. During the year, based on applicable rates, the Company has recognised Rs. 29 77 crore (previous year: Rs. 24.47 crore) on this count in the Profit and Loss Account.

Defined Benefit Plans

The Company makes annual contribution to independent trust, who in turn, invests in the Employees Group Gratuity Scheme of eligible agencies for qualifying employees. Liabilities at the year-end for gratuity, leave encashment and medical benefits have been determined on the basis of actuarial valuation carried out by an independent actuary, based on the method prescribed in Accounting Standard 15 - "Employee Benefits" of the Companies (Accounting Standard) Rules, 2006.

14. The Company is engaged in generation and distribution of electricity and does not operate in any other reportable segment.

15. Related Parties disclosures

(a) Related Parties and their relationship_

Names of Related Parties Nature of Relationship

Spencers Retail Limited Subsidiary Company

Au Bon Pain Cafe India Limited Subsidiary of Spencers Retail Limited

Music World Retail Limited Subsidiary of Spencers Retail Limited

CESC Properties Limited Subsidiary Company

Metromark Green Commodities Pvt. Ltd. Subsidiary of CESC Properties Limited

CESC Infrastructure Limited Subsidiary Company (w.e.f 22 February 2011)

Haldia Energy Limited Subsidiary of CESC Limited (till 27 March, 2011) and Subsidiary of CESC Infrastructure Limited (w.e.f. 28 March, 2011)

Dhariwal Infrastructure Limited Subsidiary of Haldia Energy Limited

Surya Vidyut Limited Subsidiary of Haldia Energy Limited (w.e.f 28 June, 2010)

Nalanda Power Company Limited Subsidiary Company

Mahuagarhi Coal Company Private Limited (*) Joint Venture

Mr. Sumantra Banerjee Key Management Personnel

(*) Mahuagarhi Coal Company Private Limited (MCCPL) was incorporated in India for development of Mahuagarhi coal field and exploration of coal there from as a joint venture company with 50% participation of the Company in MCCPLs share capital, in terms of the requirements of allocation of the coal block by the Ministry of Coal, Government of India, which is yet to commence its commercial operation. The interests of the Company as at 31 March, 2011 in the assets, liabilities and expenses of the joint venture are Rs. 1.65 crore (31 March 2010 : Rs. 1.00 crore), Rs.0.01 crore (31 March 2010 : Rs. 0.00 crore) and Rs. 0.09 crore (previous year: Rs. 0.04 crore) respectively.

16. The derated installed capacity of the Generating Stations of the Company (as per certification of technical expert) as on 31 March, 2011 was 1225000 kW (31 March, 2010 :1225000 kW)

17. Previous years figures have been regrouped / rearranged, wherever necessary.


Mar 31, 2010

1. The operations of the Company are governed by the Electricity Act, 2003 and various Regulations and/or Policies framed thereunder by the appropriate authorities. Accordingly, in preparing the financial statements the relevant provisions of the said Act, Regulations etc. have been duly considered.

2. Earnings from sale of electricity are determined in accordance with the relevant orders of the Commission, where appropriate, giving due effect of the required adjustments including those relating to recovery of arrears in respect of earlier years which has resulted in a net credit adjustment of Rs. 24.28 crore in the current year. Such earnings are net of discount for prompt payment of bills and advance against depreciation amounting to Rs.62.05 crore (previous year: Rs.56.91 crore) and Rs.109.08 crore (previous year: Rs.139.68 crore) respectively.

3. Fixed assets other than furniture, vehicles and intangible assets as on 31 March 2005 have been revalued which resulted in an increase in the value of such assets by an amount of Rs.1,900.77 crore with corresponding credit to Revaluation Reserve.

4. Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. 80.73 crore (31 March, 2009: Rs. 279.74 crore).

5. Claims against the Company not acknowledged as debts :

(a) The West Bengal Taxation Tribunal had held meter rentals received by the Company from consumers to be deemed sales under the provisions of the Bengal Finance (Sales Tax) Act, 1941 and that sales tax was payable on such rentals. Based on such findings the Commercial Taxes Directorate assessed Rs.0.69 crore as sales tax on meter rentals received during the year ended 31 March, 1993 and raised a demand of Rs.0.36 crore on account of interest. Against the above demand, the Company had deposited a sum of Rs.0.75 crore with the sales tax authorities and obtained a stay against the balance demand from the Deputy Commissioner of Commercial Taxes. The sales tax authorities also indicated their intention to levy such sales tax on meter rentals for the subsequent years as well, against which, the Company filed a writ petition in the Calcutta High Court and prayed for an interim order, inter alia, restraining the sales tax authorities from proceeding with the assessment for the subsequent years till disposal of the appeal. An interim order has been issued by the High Court permitting the sales tax authorities to carry out assessments but restraining them from serving any assessment order on the Company. The disposal of the case is still pending.

(b) Other matters:

i. Municipal Tax : Rs. 0.89 crore (31 March, 2009: Rs. 1.11 crore) in respect of certain properties, the rates of which are disputed by the Company. ii. Water Cess : Rs. 2.74 crore (31 March, 2009 : Rs. 8.13 crore) in respect of interest on water cess disputed by the Company.

6. During the year the 250 MW thermal power project at Budge Budge was completed at a project cost of Rs.1,336.93 crore and the commercial operation was declared on 28 February, 2010.

7. The net proceeds of 95,60,000 equity shares allotted in 2007-08 to Qualified Institutional Buyers in accordance with Chapter XIII A of SEBI (DIP) Guidelines 2000, as amended have since been fully utilised for strengthening the Companys distribution network and making equity contribution to Haldia Energy Limited, a wholly owned subsidiary of the Company pursuing setting up of a 600 MW generating facility in Haldia.

8. Amount lying in deposit accounts with scheduled banks as at 31 March, 2010 includes Rs.42 crore (31 March 2009 : Rs. 27.19 crore) appropriated upto the previous year towards Reserve for unforeseen exigencies and interest attributable thereto.

9. The Company has accounted for in the current year a net sum of Rs.(29.56) crore (previous year: Rs.269.83 crore) shown as cost adjustments in schedule 11 to the Profit and Loss Account, based on the Companys understanding of the applicable regulatory provisions in respect thereof, towards an estimated adjustable sum on account of cost of electrical energy purchased and fuel and related cost and adjustment relating to revenue account after giving the effect arising from the applicable orders for earlier years (including a carry forward sum of Rs.125.80 crore, pending disposal by the Commission) in this regard. The accurate quantification and disposal of the matter are being given effect to from time to time on receipt of necessary directions from the appropriate authorities.

10. Interest expenses in Schedule 12 and cost of fuel in Schedule 11 include gain of Rs.0.03 crore and Rs.3.04 crore respectively (previous year: loss of Rs.0.02 crore and Rs.9.76 crore respectively) due to exchange fluctuations. Miscellaneous Expenses in Schedule 11 include Borrowing Cost other than interest, amounting to Rs.5.81 crore (31 March 2009 : Rs.3.62 crore), which has been allocated to capital account. Income from Long Term Trade Investment and Income from Current Investment - other than trade shown in Schedule 10 include dividend income of Rs.0.30 crore (previous year: Rs.0.30 crore) and Rs.2.78 crore (previous year: Rs.28.88 crore) respectively.

11. Based on a review of the projected business prospects of the Companys subsidiaries, inspite of present losses therein, the management does not foresee any permanent diminution in the value of the Companys long term investments (including advance against equity) therein.

12. Future rentals payable in respect of non-cancellable leases for assets comprising various equipment and vehicles acquired after 1 April, 2001 under operating leases for the period ranging between 36-60 months work out to Rs.10.21 crore and Rs.19.14 crore during next one year and thereafter till five years respectively. There are no restrictions in respect of such leases.

13. There are no amount due to Micro and Small Enterprises, as defined in the Micro, Small, Medium Enterprises Development Act, 2006, based on information available with the Company.

14. Out of the outstanding foreign currency loans of Rs.602.79 crore disclosed in Schedule 3 and Schedule 4, loan balance amounting to Rs.532.97 crore have been fully hedged in Indian Rupee and Rs.69.82 crore represents sum restated at year end exchange rate in respect of underlying contractual obligations in United States Dollar. Current Liabilities include Rs.17.87 crore representing amount payable in United States Dollar restated at year end exchange rate which have not been hedged.

15. Employee Benefits

Defined Contribution Plan

The Company makes contributions for provident fund and pension (including for superannuation) towards defined contribution retirement benefit plans for eligible employees. Under the said plans, the Company is required to contribute a specified percentage of the employees salaries to fund the benefits. During the year, based on applicable rates, the Company has recognised Rs. 26.90 crore (previous year: Rs.24.76 crore) on this count in the Profit and Loss Account.

Defined Benefit Plans

The Company makes annual contribution to independent trust, who in turn, invests in the Employees Group Gratuity Scheme of eligible agencies for qualifying employees. Liabilities at the year-end for gratuity, leave encashment and medical benefits have been determined on the basis of actuarial valuation carried out by an independent actuary, based on the method prescribed in Accounting Standard 15 - "Employee Benefits" of the Companies (Accounting Standard) Rules, 2006.

16. The Company is engaged in generation and distribution of electricity and does not operate in any other reportable segment.

17. Related Parties disclosures

(a) Related Parties and their relationship

Names of Related Parties Nature of Relationship

Spencers Retail Limited Subsidiary Company

Au Bon Pain Cafe India Limited Subsidiary of Spencers Retail Limited

Music World Retail Limited Subsidiary of Spencers Retail Limited

CESC Properties Limited Subsidiary Company

Metromark Green Commodities Pvt. Ltd. Subsidiary of CESC Properties Limited

Haldia Energy Limited Subsidiary Company

Dhariwal Infrastructure Limited Subsidiary of Haldia Energy Limited (w.e.f 27 August, 2009)

Nalanda Power Company Limited Subsidiary Company (w.e.f 24 June, 2009)

Mahuagarhi Coal Company Private Limited (*) Joint Venture

Mr.SumantraBanerjee Key Management Personnel

(*) Mahuagarhi Coal Company Private Limited (MCCPL) was incorporated in India for development of Mahuagarhi coal field and exploration of coal there from as a joint venture company with 50% participation of the Company in MCCPLs share capital, in terms of the requirements of allocation of the coal block by the Ministry of Coal, Government of India, which is yet to commence its commercial operation. The interests of the Company as at 31 March, 2010 in the assets, liabilities and expenses of the joint venture are Rs. 1.00 crore, Rs.0.00 crore and Rs. 0.04 crore respectively.

18. Previous years figures have been regrouped / rearranged, wherever necessary.