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Notes to Accounts of Energy Development Company Ltd.

Mar 31, 2018

1. CORPORATE INFORMATION

Energy Development Company Limited (''the company'') is a public limited company domiciled and incorporated in India under the provisions of Companies Act. The shares of the company are listed on National Stock Exchange of India Limited [''NSE''] and The Bombay Stock Exchange Limited [''BSE'']. The registered office of the company is at Harangi Hydro Electric Project Village-Hulugunda, Taluka- Somawarpet District- Kodagu, Karnataka-571233. The company is primarily engaged in (a) generation and sale of bulk power to various electricity boards; (b) construction development, implementation, operation & maintenance of projects and consultancies and (c) trading of Power equipments, metals etc.

NOTE 2

STATEMENT OF COMPLIANCE AND RECENT PRONOUNCEMENTS

2.1 Statement of Compliance

The Company has adopted Indian Accounting Standards (referred to as "Ind AS") notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended) read with Section 133 of the Companies Act, 2013 ("the Act") with effect from April 1, 2017 and therefore Ind AS issued, notified and made effective till the financial statements are authorised have been considered for the purpose of preparation of these financial statements.

These are company''s first Ind AS Financial Statements and the date of transition to Ind AS as required has been considered to be April 1, 2016. The Financial Statement upto March 31, 2017 were prepared as per the historical cost convention on accrual basis in accordance with the Generally Accepted Accounting Principles (Previous GAAP) and Accounting Standards as prescribed under the provisions of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 then applicable to the Company. Previous GAAP figures in the financial statements have now been restated in compliance to Ind AS.

In accordance with Ind AS 101- "First Time adoption of Indian Accounting Standards" (Ind AS 101), the company has presented (Note No. 38), a reconciliation of Shareholders'' equity as given earlier under Previous GAAP and those considered in these accounts as per Ind AS as at March 31, 2017 and April 1, 2016 and also the Net Profit as per Previous GAAP and that arrived including Other Comprehensive Income under Ind AS for the year ended March 31, 2017. The mandatory exceptions and optional exemptions availed by the Company on First-time adoption have been detailed in Note No. 38 of the financial statement.

2.2 Recent Pronouncements

On March 28, 2018, Ministry of Corporate Affairs ("MCA") has issued the Companies (Indian Accounting Standards) Amendment Rules, 2018 notifying Ind AS 115, "Revenue from Contract with Customers" and Appendix B to Ind AS 21 "Foreign currency transactions and advance consideration" which are applicable with effect from financial periods beginning on or after April 1, 2018.

Ind AS 115 - Revenue from Contract with Customers

The standard requires that an entity should recognise revenue to depict the transfer of promised goods or services to customers for an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further the standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity''s contracts with customers. The effect of this amendment on the financial statements of the Company is being evaluated.

Ind AS 21 - Appendix B "Foreign currency transactions and advance consideration"

This Appendix applies to a foreign currency transaction (or part of it) when an entity recognises a non-monetary asset or nonmonetary liability arising from the payment or receipt of advance consideration before the entity recognises the related asset, expense or income (or part of it). The effect of this amendment on the financial statement of the Company is being evaluated.

Note : (a) The Company has availed the deemed cost exemption in relation to the property, plant and equipment on the date of transition and hence the net carrying amount has been considered as the gross carrying amount on that date. Further, in case of Windmill, due to application of IND AS 17 ''Leases'' land appurtenant to the windmill is reclassified as an operating lease.

(b) Transmission Lines, Transformers, Cable network etc. include Power Evacuating facilities put tip in relation to the Hydro Electric Generating Station, which has been handed over to the Electricity Board for transmission of Electricity and maintenance thereof.

(c) Fixed Asset includes Rs. 285,475,336 (as at March 31, 2017: Rs.303,216,231 , as at April 1, 2016: Rs.320,957,127) pertaining to Power Generating plant which in terms of implementation agreement with various authorities will be handed over on completion of effective useful life of the assets in terms of respective agreements.

Note :

(a) The shares held in Ayyappa Hydro Power Limited, a subsidiary are pledged (3,00,00,000 equity shares and 2,20,00,000 preference shares) with the lender of the said subsidiary.

(b) The company has pledged 2,700 (out of 5,100) equity shares held in Eastern Ramganga Valley Hydel Projects Company Private Limited and 2,700 (out of 5,100) equity shares held in Sarju Valley Hydel Projects Company Private Limited, subsidiaries of the company with other investors of these subsidiaries till implementation of the agreement mentioned in (c) below. The company has also received in advance consideration on sale of these investments as shown in Note 16C.

(c) In terms of an agreement dated 9th November, 2015, for transfer of 76% of the Company''s investment in various erstwhile wholly owned subsidiaries undertaking hydel power plants in the State of Arunachal Pradesh and Uttarakhand having aggregate capacity of 660 MW approximately (herein referred to as Arunachal Pradesh and Uttarakhand Undertaking respectively), to another strategic investor, certain investments in equity shares of these subsidiaries/associate of Rs. 11,25,78,000 [out of (iii), (iv) and (vi)/(viii) above] and preference shares of Rs. 58,38,73,000 (including ''13,82,40,000 sold during the year) [out of (x) to (xxi) above] have been sold to the said investor. In terms of the above, company''s investment of Rs. 22,00,03,137 as on 31st March, 2018 representing 24% and 51% of the equity in Arunachal Pradesh and Uttarakhand undertaking respectively and 24% in preference shares have been continued to be held by the company. These being investment in subsidiaries and associates and also long term and strategic in nature, have been carried at cost.

(d) Evaluation of impairment in the value of investment as given in (c) above and loans of Rs. 6,09,21,035 (Refer Note 6B(b) (iv), (iv) & (c)(i)) outstanding from the above subsidiaries and associate, pending completion of the project, have not been carried out. Impact in this respect as such, is presently not ascertainable which will be determined depending upon implementation status of the project.

(e) The company has purchased equity shares in EDCL Arunachal Hydro Project Private Limited and consequently, it ceased to become a subsidiary of Arunachal Hydro Power Limited and has become a wholly-owned subsidiary of the company w.e.f. 1st October, 2016.

(g) In pursuance of Section 187(2)(c ) of the Companies Act, 2013, investments purchased [ mentioned in (xiii), (xx) and (xxi)] by the Company, during the year are still lying in the name of transferor for want of performance of obligation undertaken by the Company, as per agreement entered with the seller.

(h) The Company has elected to continue with the carrying value of its investments in subsidiaries and associates, measured as per the Previous GAAP and use that carrying value on the transition date April 1, 2016 in terms of Ind AS 101 ''First -time Adoption of Indian Accounting Standards''.

(i) Includes Rs. 67,468/- (Previous Year as on 31st March, 2017: Rs. 22,980/- & as on 1st April, 2016: Rs. 6,29,000/-) recoverable from subsidiaries and associate (Refer Note 31)

(ii) Includes Rs.NIL/- (Previous Year as on 31st March, 2017 Rs. 3,194/- & as on 1st April, 2016: Rs. 75,643/-) recoverable from other related parties (Refer Note 31)

*Held by clearing member due for transfer to Mr. Amar Singh & Mrs. Panakaja Kumari Singh increasing their shareholding to 1,04,58,453 shares (22.02%) and 29,36,414 shares (6.18%) respectively.

Rights, Preferences and Restrictions attaching to each classes of shares including restrictions on the distribution of dividends and the repayment of capital

a) The Company has only one class of equity shares having a par value of Rs. 10/- per share. Each holder of equity is entitled to one vote per share. The dividend, if any proposed by the Board of Directors of the Company is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts in proportion to the number of equity shares held by them.

b) The Board of Directors has recommended payment of dividend @ 5% (Rs. 0.50) per equity share on the paid-up share capital of the company for the financial year 2017-2018 subject to approval of members at the ensuing Annual General Meeting.

Capital Reserve Capital Reserve includes:

(a) Rs. 124,000,000 ( as at 31st March, 2017 Rs. 124,000,000, as at 1st April, 2016 Rs. 124,000,000) representing the reserves arising on forfeiture of 75,00,000 share warrants issued on preferential basis.

(b) Rs. 1,165,345 (as at 31st March, 2017 Rs. 1,165,345, as at 1st April, 2016 : Rs. 1,165,345) representing reserves arising on amalgamation pursuant to the scheme of arrangement with erstwhile Dhanashree Projects Limited. The said scheme was sanctioned by the Honorable High Court of Bangalore and Kolkata vide order dated August 12, 2010 and September 15, 2010 respectively.

Securities Premium Reserve :

Securities Premium Reserve represents the amount received in excess of par value of equity shares issued by the company and is to be utilised for as specified under Section 52 of Companies Act, 2013.

General Reserve :

The general reserve is created from time to time by appropriating profits from retained earnings. The general reserve is created by transfer from one component of equity to another and accordingly it is not reclassified to the Statement of profit and loss.

Retained earnings :

Retained earnings generally represents the undistributed profit/ amount of accumulated earnings of the company. Any actuarial gains and losses arising on defined benefit obligations have been recognised in retained earnings.

a) The Company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 (the Act) and hence disclosure relating to amounts unpaid as at the year end together with interest paid/payable under the Act has not been given.

b) Payables for goods and services includes acceptances amounting to Rs. 8,41,09,175/- (Previous Year as on 31st March, 2017: Rs. 18,09,06,500 /- & as on 1st April, 2016: Rs. 10,00,75,310/-)

(c) Includes Rs. 15,280 (Previous Year as on 31st March, 2017: Rs.NIL /- & as on 1st April, 2016 Rs. 5,24,000 /-) payable to Subsidiaries and Associate (Refer Note 31)

(d) Includes Rs. 86,900 (Previous Year as on 31st March 2017: Rs. 117,643/- & as on 1st April, 2016: Rs.NIL/-) payable to other related parties (Refer Note 31)

Note :

Revenue from sale of power, is accounted for on the basis of billing to Electricity Board in Karnataka as per Tariff approved by State Electricity Regulatory Commission in accordance with the provisions of the Long Term Power Purchase Agreement executed in this respect.

B) Defined Benefit Scheme :

The employee''s Gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of obligations is determined based on actuarial valuation using projected unit credit method which recognises each period of services as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (projected unit credit method) has been applied as when calculating the defined benefit obligation recognised within the Balance Sheet.

Notes: (As certified by Independent Actuary)

1 Assumptions relating to future salary increases, attrition, interest rate for discount and overall expected rate of return on assets have been considered based on relevant economic factors such as inflation, seniority, promotion, market growth and other factors as applicable to the period over which the obligation is expected to be settled.

2 The expected return on Plan assets is based on market expectation at the beginning of the year. The rate of return on long term Government Bonds is taken as reference for this purpose.

3 In respect of Funded Gratuity, the funds are managed by the insurer and therefore the percentage or amount that each major category constitutes the fair value of total plan assets and effect thereof on overall expected rate of return on asset is not ascertainable.

4. Acquisition adjustment represents amount in respect of certain employees transferred into/ transferred from the company.

NOTE 3

EXCEPTIONAL ITEMS

Exceptional items represents profit on investments sold during the previous period/ year.

NOTE 4 OPERATING LEASE

(a) The company has entered into arrangements of lease of land which has been classified as operating leases. These lease arrangements are non-cancellable in nature. Rental expenses towards such non- cancellable operating lease charged to statement of profit and loss amounts to 3,72,100/- (Previous Year Rs. 3,72,100/-) and has been disclosed as "Rent" in Note 27 of the financial statement.

(b) The company has taken several premises under cancellable operating leases. The lease term is upto 5 years and have the option of renewal on expiry of the lease period based on mutual agreement of both the parties. Certain lease arrangements have been terminated during the year based upon mutual agreement of both the parties. Rental expenses towards cancellable operating lease charged to statement of profit and loss amounts to Rs. 65,44,200 /- (Previous year Rs. 88,66,000/-) and has been disclosed as "Rent" in Note 27 of the financial statement.

(c) The Company has taken certain machineries under cancellable operating leases. The lease term has an option of renewal on expiry of the lease period based on the mutual agreement of both the parties. The lease arrangement has been terminated during the year based upon mutual agreement of both the parties. Rental expenses towards such cancellable operating lease charged to statement of profit and loss amounts to Rs.NIL/- (Previous Year Rs. 5,40,000 /-) and has been disclosed as "Rent" in Note 27 of the financial statement

NOTE 5

SEGMENT REPORTING

Segments have been identified in line with the Indian Accounting Standards AS-108 taking into account the organization structure as well as the differencing risk and return. The Company''s business segment comprises of (a) Generating Division - generation and sale of bulk power to various electricity boards; (b) Contract Division - construction development, implementation, operation & maintenance of projects and consultancies and (c) Trading Division - trading of Power equipments, metals etc. These have been identified by the Chief Operating Decision Maker (CODM) on the basis of the type of their respective sales and services rendered.

(a) Revenue and expenses have been identified to segment on the basis of their relationship to the operating activities of the segment. Revenue and expenses which relates to enterprise as a whole and not allocable to segment on a reasonable basis have been included under the head other common expenses.

(b) As the company operates entirely in India no secondary segment has been identified for the above purpose.

NOTE 6

FINANCIAL INSTRUMENTS

Capital Management

The Company follows a capital management strategy. The primary objective is to ensure that Company maintains a healthy capital ratio in order to support its business operations, have sufficient financial flexibility for borrowing requirements, if any, in future and to maximise shareholder value. The Company''s objective when managing capital is to safeguard their ability to continue as a going concern so that they can continue to provide returns for shareholders and benefits for other stake holders.

The management considers that the above carrying amounts of financial assets and financial liabilities recognized in the financial statements approximate their fair values.

Fair Valuation Techniques

The fair values of the financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The following methods and assumptions were used to estimate the fair values :

1. The fair value of cash and cash equivalents, trade receivables, trade payables, current borrowings, current financial liabilities and assets approximate their carrying amount largely due to the short-term nature of these instruments. The Management considers that the carrying amounts of financial assets and financial liabilities recognised at nominal cost/amortised cost in the financial statements approximate their fair values.

2. Long-term debts are from Body Corporate and the rate of interest are reviewed annually.

Fair value hierarchy

The Company categorizes assets and liabilities measured at fair value into one of three levels as mentioned in Note 3.1 depending on the ability to observe inputs employed in their measurement.

During the year ended 31st March 2018; 31st March, 2017 and 1st April 2016, there was no transfer between Level 3 fair value measurements. Further, there is no transaction / balance for Level 1 and Level 2 categories.

Unquoted investments in shares have been valued based at cost as the latest audited financial statements were not available. There were no external unobservable inputs or assumptions used in such valuation.

Financial Risk Factors

The Company''s activities expose it to a variety of financial risks - market risk, credit risk and liquidity risk. The Board of Directors reviews and approves policies for managing each of these risks, which are summarized below :

Market Risk

Market risk is the risk or uncertainty arising from possible market price movements resulting in fluctuation of the fair value of future cash flows of a financial instrument. The major components of Market risks are price risk, interest rate risk and foreign currency exchange risk.

Financial instruments affected by market risk includes borrowings.

a. Foreign Currency Risk

The company does not have significant transaction in foreign currency and accordingly it is not exposed to foreign currency risk. There are certain old outstanding balances which are unhedged. The details of the unhedged foreign currency exposures are given in Note No. 35. The management continuously reviews the exchange rates and are in process of setteling the balances.

b. Interest Rate Risk

The Company''s exposure in market risk relating to change in interest rate primarily arises from floating rate borrowing with banks and financial institutions.

With all other variables held constant, the following table demonstrates the impact of the borrowing cost on floating rate portion of loans and borrowings and excluding loans on which interest rate swaps are taken.

A decrease in 0.50 basis point in Cash Credit & 0.25 basis point in Other Loans would have an equal and opposite effect on the company''s financial statements.

c. Other price risk

The company is not exposed to any other price risk.

Credit Risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. Trade Receivables of the company mainly comprises of receivables from state electricity boards and government department and hence such risk is negligible. Trade receivales in case of trading operations are from various private parties and are therefore exposed to general credit risk. The company has a policy to monitor such risk on an ongoing basis. However the Company is exposed to credit risk from its lending activities to it''s subsidiaries.

The Company establishes an allowance for impairment that represents its estimate of incurred losses in respect of receivables.

The carrying amount of respective financial assets recognised in the financial statements, (net of impairment losses) represents the Company''s maximum exposure to credit risk.

Financial assets that are neither past due nor impaired

Cash and cash equivalents, investment and deposits with banks are neither past due nor impaired. Cash and cash equivalents with banks are held with reputed and credit worthy banking institutions.

Financial assets that are past due but not impaired

Trade receivables disclosed include amounts that are past due at the end of the reporting period but against which the Company has not recognised an allowance for doubtful receivables because there has not been a significant change in credit quality and the amounts are still considered recoverable.

Liquidity Risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. The Company is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. The Company monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by management to finance the Company''s operations and to mitigate the effects of fluctuations in cash flows.

The following tables detail the Company''s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The information included in the tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows. The contractual maturity is based on the earliest date on which the Company may be required to pay.

The company has current financial assets which will be realised in ordinary course of business and unused line of credits as given above. The Company monitors its rolling forecast of its liquidity requirements to ensure it has sufficient cash to meet expected operational requirements.

The company relies on mix of borrowings and operating cash flows to meet its need for funds and ensures that it does not breach any financial covenants stipulated by the lender.

b) Disclosure as per Ind AS 101 First-time adoption of Indian Accounting Standards :

(I) Overall principle :

The Company has prepared the opening balance sheet as per Ind AS as of 1st April, 2016 (the transition date) by recognising all assets and liabilities whose recognition is required by Ind AS, not recognising items of assets or liabilities which are not permitted by Ind AS, by reclassifying items from previous GAAP to Ind AS as required under Ind AS, and applying Ind AS in measurement of recognised assets and liabilities.

However, this principle is subject to certain mandatory exceptions and certain optional exemptions availed by the Company as detailed below :

(II) Mandatory exceptions and optional exemptions

(i) Classification and measurement of financial asset:

The Company has classified the financial assets in accordance with Ind AS 109 on the basis of facts and circumstances that exist at the date of transition to Ind AS.

(ii) Derecognition of financial assets and financial liabilities :

The Company has applied the derecognition requirements of financial assets and financial liabilities prospectively for transactions occurring on or after the transition date.

(iii) Deemed cost for property, plant and equipment and other intangible assets :

The Company has elected to continue with the carrying value of all of its property, plant and equipment and other intangible assets recognised as of 1st April, 2016 (transition date) measured as per the previous GAAP and used that carrying value as its deemed cost as of the transition date except in respect of leasehold land of windmill as given in Note 5A(a).

(iv) Deemed cost of investment in Subsidiaries and Associates :

The Company has elected to continue with the carrying value of all of its investments in Subsidiaries and Associates recognised as of 1st April, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.

(v) Determining whether an arrangement contains a lease :

The Company has applied Appendix C of Ind AS 17 Determining whether an Arrangement contains a Lease to determine whether an arrangement existing at the transition date contains a lease on the basis of facts and circumstances existing at that date.

(vi) Impairment of financial assets :

Ind AS 109 "Financial Instruments" requires the impairment to be carried out retrospectively; however, as permitted by Ind AS 101, the Company, has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial instruments were initially recognized in order to compare it with the credit risk at the transition date.

Further, the Company has not undertaken an exhaustive search for information when determining, at the date of transition to Ind ASs, whether there have been significant increases in credit risk since initial recognition, as permitted by Ind AS 101.

(vii) Business Combinations :

In terms of Ind AS 101 "First Time Adoption of Indian Accounting Standards", the Company has elected to not to apply Ind AS 103 "Business Combination" for past combinations.

c) Explanatory Notes to reconciliation between Previous GAAP and Ind AS

i) Re-classification of Leasehold Land

Under previous GAAP, leasehold land was shown as a part of fixed assets, whereas under Ind AS, the same is considered as an operating lease and hence is shown as prepayments on leasehold land. This reclassification has resulted in decrease in depreciation and increase in rental expense and hence has no impact on other equity.

ii) Remeasurements of post-employment benefit obligations

Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in Other Comprehensive Income instead of profit or loss. Under the Previous GAAP, these remeasurements were forming part of the profit or loss for the year.

iii) Financial Assets accounted at amortised cost method under effective rate of interest

(a) Financial assets such as retention money and deposits have been valued by applying amortised cost method using Effective Interest Rate as per requirements of Ind AS 109 ''Financial Instruments''. Subsequent to transition date, the fair valuation difference on financial assets has been recognized in statement of profit & loss under other expenditure. Further, the accounting of such financial assets under the effective interest rate method, has resulted in increase in interest income.

(b) Interest free loan given to subsidiaries and associates were recorded at their transaction value under Previous GAAP. Under Ind AS, such loans are recognized at fair value on the date of transition/disbursements and the difference there against has been charged off against retained earnings/statement of profit & loss account except in case of cetain specific loans which are startegic and in the nature of contribution to subsidiaries. The differential amount in case of such strategic loans have been recognised as deemed investment on the date of transition/ disbursement. Subsequently, the interest free loans has been carried by applying amortised cost method using effective interest rate as per the requirements of IND AS 109 ''Financial Instruments'' and interest income has been recognised there against. In case of early prepayment, modification adjustment has been recorded and disclosed under Other Expense/Income.

iv) Proposed Divided

Under previous GAAP upto 1st April 2016, proposed dividends including dividend distribution tax are recognised as a liability in the period to which they relate, irrespective of when they are declared. Under IND AS, a proposed dividend is recognised as a liability in the period in which it is declared by the company, usually when approved by the shareholders in a general meeting, or paid.

v) Insurance Contract

Under previous GAAP, corporate guarantee issued by the Company on behalf of the Subsidiary companies was not recognised but disclosed as Contingent Liability.

Under IND AS, such Corporate Guarantee issued by the Company being in the nature of ''Insurance Contracts'' has been recognised and disclosed as contingent liability.

vi) Current Tax and Deferred Tax

Under Previous GAAP, deferred taxes were recognised for the tax effect of timing differences between accounting profit and taxable profit for the year using the income statement approach. Under Ind AS, deferred taxes are recognised using the balance sheet for future tax consequences of temporary differences between the carrying value of assets and liabilities and their respective tax bases. The aforesaid difference, together with the consequential tax impact of other Ind AS transitional adjustments lead to temporary differences and accordingly, deferred tax adjustments have been recognised in correlation to the underlying transaction either in retained earnings or through other comprehensive income.

Further, under Previous GAAP, Minimum Alternate Tax (MAT) Credit Entitlement were shown under Other Non Current Assets and under IND AS, the same has been considered as deferred tax assets. Consequently, utilisation of MAT Credit entitlement relating to the year ended 31st March, 2017 and those prior to the transition date has been netted with the income tax expense and provision for tax respectively and corresponding charge has been made from deferred tax asset under Ind AS.

vii) Previous year figures have been regrouped and rearranged to comply with the IND AS Schedule presentation.

NOTE 7

These financial statements have been approved by the Board of Directors of the Company on 7th June, 2018 for issue to the shareholders for their adoption.


Mar 31, 2016

Rights, Preferences and Restrictions attaching to each classes of shares including restrictions on the distribution of dividends and the repayment of capital

a) The Company has only one class of equity shares having a par value of Rs.10/- per share. Each holder of equity is entitled to one vote per share. The dividend, if any proposed by the Board of Directors of the Company is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts in proportion to the number of equity shares held by them.

b) During the year, the company has issued and allotted 2,00,00,000 fully paid equity shares of Rs.10/- each at a premium of Rs.12/each aggregating to Rs.44,00,00,000/- by way of private placement. Requirements specified under section 42 of the Companies Act 2013 with respect to such issue has been complied with and the proceeds from the issue has been utilized for the purposes for which they were raised.

c) The Board of Directors has recommended payment of dividend @ 5% ('' 0.50) per equity share on the paid-up share capital of the company for the financial year 2015-2016 subject to approval of members at the ensuing Annual General Meeting.

(Secured by hypothecation of entire stocks and other movables of the company including all movable Plant and Machinery, Furniture and Fixtures, Vehicles, Computers and other accessories etc. stored or to be stored, at the premises / godowns of the company''s contract division and also all present and future book debts, outstanding monies, receivables, claims, bills etc. and equitable mortgage of immovable properties at 9MW Harangi Hydro Electric Project)

(*) [Includes Rs.5,24,000/- (Previous Year Rs.10,78,000 /- ) payable to subsidiaries] (Refer Note 27)

a) The Company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 (the Act) and hence disclosure relating to amounts unpaid as at the year end together with interest paid/payable under the Act has not been given.

b) Payables for goods and services includes acceptances amounting to Rs.10,00,75,310 /- (Previous year Rs.NIL/-)

Note : (a) 7.21 acres of Land has been taken on lease for 40 years w.e.f.l4th July, 1999 at an annual lease rent of Rs.72,100/-.

(b) 1.2 acre of land has been taken on lease for 30 years w.e.f. 30th August, 2010 at an annual lease rent of Rs.1,20,000/-

(c) Transmission Lines, Transformers, Cable Network etc. include Power Evacuating facilities put up in relation to the

Hydro Electric Generating Station, which has been handed over to the Electricity Board for transmission of Electricity and maintenance thereof.

(d) Gross Block of Windmill includes Leasehold Land of Rs.3,600,000 /- (Previous year Rs.3,600,000/-)

(a) The shares held in Ayyappa Hydro Power Limited, a subsidiary are pledged (3,00,00,000 equity shares and 2,20,00,000 preference shares) with the lender of the said subsidiary.

(b) The various subsidiaries [mentioned in (iii to xvii) & (xix to xxx) above] of the company on completion of prefeasibility report have been granted permission for setting up of certain hydel power plants, having aggregate capacity of 660 MW by the Government of Arunachal Pradesh and Uttarakhand. Project survey, geological investigation and formulation of Detailed Project Report (DPR) and other allied works are under progress. In terms of agreement entered into on 9th November, 2015, 76% of the investments will be held by another strategic investor who will be implementing the projects leaving 24% which will be continued to be held by the company and its wholly owned subsidiary. The said agreements which are to be implemented by 30th September, 2016 (extended from 31st March, 2016) are subject to various regulatory and other approvals. Further the transaction is subject to certain conditions precedent to be fulfilled by the company. In terms of the above agreements, the company''s investments in the subsidiaries implementing the above projects is contempleted to be transferred by the company at least at the value at which they are stated in the accounts and no diminution in the value thereof is expected to arise in this respect.

(c) In pursuance of Section 187(2)(c) of the Companies Act, 2013, investments purchase [mentioned in (iii to xvii) / (xix to xxix)] by the company, during the year are still lying in the name of transferor for want of performance of obligation undertaken by the company, as per agreement entered wih the seller.

Employees Benefits :

The disclosures required under Accounting Standard 15 "Employee Benefits" notified in the Companies (Accounting Standards) Rules 2006 (AS-15), are given below :

(i) Defined Contribution Scheme

Contribution to Defined Contribution Plan, recognized for the year are as under :

Employer''s Contribution to Provident Fund Rs.161,016 /- (Previous year Rs.131,598/-)

Employer''s Contribution to Pension Fund Rs.364,978/- (Previous year Rs.298,766/-)

(ii) Defined Benefit Scheme :

The employee''s gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for Leave Encashment is recognized in the same manner as gratuity.

(a) Assumptions related to future salary increases, attrition, interest rate for discount and overall expected rate of return on Assets have been considered based on relevant economic factors such as inflation, market growth and other factors applicable to the period over which the obligation is expected to be settled.

(b) Acquisition adjustment represents amount in respect of certain employees transferred into / transferred from the company without affecting the term of employment.

(c) The expected contribution to the fund by the company during the year 2016-17 is yet to be determined.

i) In respect of above parties, there is no provision for doubtful debts as on 31st March 2016 and no amount has been written off or written back during the year in respect of debts due from / to them.

ii) The above Related Party information is as identified by the Management and relied upon by the auditors.

NOTE 1 OPERATING LEASE

The company has taken several premises under cancellable operating leases. The lease term is up to 5 years and have the option of renewal on expiry of the lease period based on mutual agreement of both the parties. Certain lease arrangements have been terminated during the year based upon mutual agreement of both the parties. Rental expenses towards cancellable operating lease charged to statement of profit and loss amounts to Rs.52,12,900/- (Previous year Rs.42,99,820/-) and has been disclosed as "Rent" in Note 25 of the financial statement.

The Company has taken certain machineries under cancellable operating leases. The lease term has an option of renewal on expiry of the list period based on the mutual agreement of both the parties. Rental expenses towards such cancellable operating lease charged to statement of profit and loss amounts to Rs.7,20,000 /- (Previous Year Rs.3,96,000/-) and has been disclosed as "Rent" in Note 25 of the financial statement

NOTE 2 SEGMENT REPORTING

Segments have been identified in line with the Accounting Standards AS-17 taking into account the organization structure as well as the differencing risk and return. The Company''s business segment comprises of (1)generation and sale of electricity division and (2) construction development, implementation, operation & maintenance of projects and consultancies (Contract Division) (3) trading . These have been identified by the type of their respective sales and services rendered.

During the year, the company has carried out trading activities related to power equipments and the same having different risks and returns other than the existing activities, has been considered as a separate business segment. Further, the transaction under the said trading activities has been undertaken in the current year only and therefore, figures for the previous year are not applicable.

(a) Revenue and expenses have been identified to segment on the basis of their relationship to the operating activities of the segment. Revenue and expenses which relates to enterprise as a whole and not allocable to segment on a reasonable basis have been included under the head other common expenses.

(b) As the company operates entirely in India no secondary segment has been identified for the above purpose.

NOTE 3 COMPARATIVES

The previous year''s figures have been regrouped and rearranged wherever considered necessary.


Mar 31, 2015

Rights, Preferences and Restrictions attaching to each classes of shares including restrictions on the distribution of dividends and the repayment of capital

a) The Company has only one class of equity shares having a par value of Rs. 10/- per share. Each holder of equity is entitled to one vote per share. The dividend, if any proposed by the Board of Directors of the Company is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts in proportion to the number of equity shares held by them.

b) The Board of Directors has recommended payment of dividend @ 5% (Rs. 0.50) per equity share on the paid-up share capital of the company for the financial year 2014-2015 subject to approval of members at the ensuing Annual General Meeting.

(Secured by hypothecation of entire stocks and other movables of the company including all movable Plant and Machinery, Furniture and Fixtures, Vehicles, Computers and other accessories etc. stored or to be stored, at the premises/godowns of the company's contract division and also all present and future book debts, outstanding monies, receivables, claims, bills etc. and equitable mortgage of immovable properties at 9MW Harangi Hydro Electric Project)

(*) [Includes Rs. 10,78,000/- (Previous Year Rs. Nil /- ) payable to subsidiaries] (Refer Note 27)

a) The Company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 (the Act) and hence disclosure relating to amounts unpaid as at the year end together with interest paid/payable under the Act has not been given.

b) Payables for goods and services includes acceptances amounting to Rs. Nil /- (Previous year Rs. 85,51,329/-)

(i) The shares held in Ayyappa Hydro Power Ltd., a subsidiary are pledged (3,00,00,000 equity shares and 2,20,00,000 preference shares) with the lender of the said subsidiary.

(ii) The various subsidiaries [mentioned in (d to q) & (s to v) above] of the company on completion of prefeasibility report have been granted permission for setting up of certain hydel power plants, having aggregate capacity of 572 MW hydel power plant by the Government of Arunachal Pradesh and Uttarakhand. Project survey, geological investigation and formulation of Detailed Project Report (DPR) and other allied works are under progress. These investments being strategic and long term in nature, there is no permanent diminution and therefore no provision has been considered necessary.

(*) (a) [Includes Rs. 14,71,175/- (Previous Year Rs. Nil ) receivable from subsidiaries] (Refer Note 27)

(**) (b) Other Advances includes Rs. 4,11,586/- (Previous Year Rs. 801,721/-) under Short Term Loans and Advances and Rs. 2,21,000 (Previous Year Rs. NIL/-) under Long Term Loans and Advances in respect of loan to employees. Maximum outstanding Rs. 11,68,370/- (Previous Year Rs. 2,191,952/-)]

Employees Benefits :

The disclosures required under Accounting Standard 15 "Employee Benefits" notified in the Companies (Accounting Standards) Rules 2006 (AS-15), are given below :

(i) Defined Contribution Scheme

Contribution to Defined Contribution Plan, recognized for the year are as under :

Employer's Contribution to Provident Fund Rs. 131,598/- (Previous year Rs. 108,074/-)

Employer's Contribution to Pension Fund Rs. 298,766/- (Previous year Rs. 244,919/-)

(ii) Defined Benefit Scheme

The employee's gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for Leave Encashment is recognized in the same manner as gratuity.

Notes :

(a) Assumptions related to future salary increases, attrition, interest rate for discount and overall expected rate of return on Assets have been considered based on relevant economic factors such as inflation, market growth and other factors applicable to the period over which the obligation is expected to be settled.

b) During the year, certain employees of the company have been transferred to subsidiary companies without affecting their terms of employment and accordingly figures for the current year are not comparable with corresponding figures of the previous year.

(*) Value of consumption of stores and spare parts:

(i) The entire consumption is out of indigenous supplies.

(ii) Consumption as above includes Rs. 149,974/- (Previous year Rs. 309,064/-) on account of amortisation of spares.

(iii) Stores and Spare parts included in inventory are largely consumed as replacements and hence their consumption may not be comparable on a year on year basis.

(**) Includes Net Loss on foreign currency transactions of Rs. (-)13,17,008/- (Previous Year : Rs. 5.30.604/-)

As at 31st As at 31st March,2015 March,2014

NOTE 2

CONTINGENT LIABILITIES AND COMMITMENTS

(To the extent not provided for)

Contingent Liabilities

a) Claims against the company not acknowledged as debts

i) Income Tax matters under disputes and pending in appeal 119,430,590 125,300,100

ii) Sales Tax matters under disputes and pending in appeal 23,919,314 7,902,703

The Company's pending litigation comprise of proceedings with income tax and sales tax authorities. The company has reviewed all its pending litigations and proceedings and has made adequate provisions, wherever required and disclosed the contingent liabilities, wherever applicable, in its financial statements. The company does not expect the outcome of these proceedings to have material impact on its financial position. Future cash outflows if any in respect of (i) and (ii) above are dependent upon the outcome of the decision/judgements.

Subsidiaries of Arunachal Hydro Power Ltd.

(i) EDCL Arunachal Hydro Projects Pvt. Ltd.

(ii) EDCL Seppa Beyong Hydro Electric Pvt. Ltd.

(iii) EDCL Seppa Dunkho Hydro Electric Pvt. Ltd.

(iv) EDCL Seppa Jung Power Pvt. Ltd.

(v) EDCL Seppa Kawa Power Pvt. Ltd.

(vi) EDCL Seppa Lada Hydro Electric Pvt. Ltd.

(vii) EDCL Seppa Marjingla Hydro Electric Pvt. Ltd.

(viii) EDCL Seppa Nire Hydro Electric Pvt. Ltd.

(ix) EDCL Seppa Pachuk Power Pvt. Ltd.

(x) EDCL Seppa Riang Power Pvt. Ltd.

(xi) EDCL Tawang Lower Tsachu Hydro Electric Pvt. Ltd.

(xii) EDCL Tawang Power Pvt. Ltd.

(xiii) EDCL Tawang Upper Tsachu Hydro Electric Pvt. Ltd.

(c) Individuals having significant influence directly or indirectly (Promoter and their relatives)

1 Mr. Amar Singh (Non Executive Chairman )

2 Mrs.Pankaja Kumari Singh (Wife of the Non Executive Chairman)

(d) Enterprises over which individuals mentioned in (c ) above exercises significant influence

1 Startrack Vinimay Private Limited

2 Sarvottam Caps Private Limited


Mar 31, 2014

CONTINGENT LIABILITIES AND COMMITMENTS

(To the extent not provided for)

a) Contingent Liabilities

i) The company has given guarantee in respect of loan taken by one of its subsidiary (Outstanding balance as on 31.03.2014 Rs. 583,622,488/-) (Previous year Rs. 605,196,921/-)

ii) Income tax matters under disputes and pending in appeal Rs. 125,300,100/- (Previous year Rs. 30,224,140/-)

iii) Sales tax matters under disputes and pending in appeal Rs. 7,902,703/- (Previous year Rs. Nil)

iv) Bank guarantees given Rs. 81,464,933/- (Previous year Rs. 81,464,933/-)

Future cash outflows in respect of (ii) and (iii) above are dependent upon the outcome of the decision/judgements.

b) Commitments

i) Estimated amount of contracts remaining to be executed on capital account (net of advances) Rs. 235,077,791/- (Previous year Rs. 212,885,648/-)

NOTE 2

RELATED PARTY DISCLOSURES PURSUANT TO ACCOUNTING STANDARD -18 :

(a) Key Management Personnel and their relative

Mr. Amar Singh (Non Executive Chairman )

Mrs. Pankaja Kumari Singh (Wife of the Non Executive Chairman)

Mr. Sanjiv Saraf (Executive Director)

Mrs. Indira Saraf (Wife of the Executive Director)

(b) Subsidiary Companies

1 AYYAPPA HYDROPOWER LIMITED

2 EASTERN RAMGANGA VALLEY HYDEL PROJECTS CO. PVT. LTD.

3 EDCL ARUNACHAL HYDRO PROJECT PVT. LTD.

4 EDCL POWER PROJECTSLIMITED

5 EDCL SEPPA BEYONG HYDRO ELECTRIC PVT. LTD.

6 EDCL SEPPA DUNKHO HYDRO ELECTRIC PVT. LTD.

7 EDCL SEPPA JUNGPOWER PVT.LTD.

8 EDCL SEPPA KAWA POWER PVT. LTD.

9 EDCL SEPPA LADA HYDRO ELECTRIC PVT. LTD.

10 EDCL SEPPA MARJINGLA HYDRO ELECTRIC PVT. LTD.

11 EDCL SEPPA NIRE HYDRO ELECTRIC PVT. LTD.

12 EDCL SEPPA PACHUK POWER PVT. LTD.

13 EDCL SEPPA RIANGPOWER PVT.LTD.

14 EDCL TAWANG LOWER TSACHU HYDRO ELECTRIC PVT. LTD.

15 EDCL TAWANGPOWER PVT.LTD.

16 EDCL TAWANG UPPER TSACHU HYDRO ELECTRIC PVT. LTD.

17 SARJU VALLEY HYDEL PROJECTS COMPANY PVT. LTD.

(c) Associates

Sterlite Merchants LLP

Sarvottam Caps Pvt. Ltd. (Upto 09.01.2013 )

i) In respect of above parties, there is no provision for doubtful debts as on 31st March 2014 and no amount has been written or written back during the year in respect of debts due from / to them.

ii) The above Related Party information is as identified by the Management and relied upon by the auditors.

SEGMENT REPORTING

Segments have been identified in line with the Accounting Standards AS-17 taking into account the organization structure as well as the differencing risk and return. The Company''s business segment comprises of (1) generation and sale of electricity and (2) Construction, development, implementation, operation & maintenance of projects and consultancies (Contract Division). These have been identified by the type of their respective sales and services rendered. Amount in (Rs.)

* Sales/Income from operations (net of service tax) includes Rs. 72,600,000/-(Previous Year Rs. 72,600,000/-) on account of income from consultancy and other services.

Revenue and expenses have been identified to segment on the basis of their relationship to the operating activities of the segment. Revenue and expenses which relates to enterprise as a whole and not allocable to segment on a reasonable basis have been included under the head other common expenses.

As the company operates entirely in India no secondary segment has been identified for the above purpose.

NOTE 3

COMPARATIVES

The previous year''s figures have been regrouped and rearranged wherever considered necessary .


Mar 31, 2013

NOTE 1

COMMITMENT & CONTINGENCIES

a) Estimated amount of contracts remaining to be executed on capital account (net of advances) Rs. 212,885,648/-(Previous year Rs. 202,245,697/-)

b) The company has given guarantee in respect of loan taken by one of its subsidiary (Outstanding balance as on 31.03.2013 Rs. 605,196,921/-)

c) Claims against the Company not acknowledged as debts :

Nature of the statute Nature of Dues Amount Period to which Forum where the amount relates dispute is pending

Income Tax Scruitiny demand raised U/s 143(3) 30,224,140/-Assessment year 2010-11 CIT (Appeals)

NOTE 2

SEGMENT REPORTING

Segments have been identified in line with the Accounting Standards AS-17 taking into account the organization structure as well as the differencing risk and return. The Company''s business segment comprises of (l)generation and sale of electricity (SOE) and (2)sale of project materials, consultancy and service charges (Contract Division). These have been identified by the type of their respective sales and services rendered.

* Sales/Income from operations (net of service tax) includes Rs. 72,600,000/-(Previous Year Rs. 92,178,351/-) on account of income from consultancy and other services.

Revenue and expenses have been identified to segment on the basis of their relationship to the operating activities of the segment. Revenue and expenses which relates to enterprise as a whole and not allocable to segment on a reasonable basis have been included under the head other common expenses.

As the company operates entirely in India no secondary segment has been identified for the above purpose.

NOTE 3 COMPARATIVES

The previous year''s figures have been regrouped and rearranged wherever considered necessary .


Mar 31, 2012

(Secured by hypothecation of entire stocks and other movables of the company including all movable Plants & Machineries, Furniture & Fixtures, Vehicles, Computers and other accessories, etc. stored or to be stored, at the premises/god owns of the company's' contract division and also all present and future book debts, outstanding monies, receivables, claims, bills, etc. and equitable mortgage of immovable properties at 9MW Harangi Hydro Electric Project) (Renewable every year).

The Company has not yet received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 (the Act) and hence disclosure relating to amounts unpaid as at the yearend together with interest paid/payable under the Act has not been given.

* Includes Rs. 24,637,316/- (Previous year Rs. 3,751,890/-) payable to Associate company.

Note : 1) 7.21 acres of Land has been taken on lease for 40 years w.e.f. 14th July, 1999 at an annual lease rent of Rs. 72,100/-.

2) Transmission Lines, Transformers, Cable network etc. include Power Evacuating facilities put up in relation to the Hydro Electric Generating Station, which has been handed over to the Electricity Board for transmission of Electricity and maintenance thereof.

3) Windmill includes Leasehold Land of Rs. 3,600,000/- (Previous year Rs. 3,600,000/-).

'''The shares held in Ayyappa Hydro Power Ltd., a subsidiary was pledged (3,750,000 shares) with the lender of the said subsidiary. Further the Company has given a non-disposable undertaking (8,750,000 shares) to the lender of the said subsidiary.

* Includes Rs. 38,957/- (Previous Year Rs. 67,925/-) receivable from Subsidiary Company.

* Includes Rs. 84,029,653/- (Previous Year Rs. Nil) receivable from Subsidiary Company.

* Includes Rs. 93,366,280/- (Previous Year Rs. Nil) amount received from subsidiary company **Includes Rs. 3,298,350/- from subsidiary company.

Employees Benefits

The disclosures required under Accounting Standard 15 "Employee Benefits" notified in the Companies (Accounting Standards) Rules 2006 (AS-15), are given below :

(i) Defined Contribution Scheme

Contribution to Defined Contribution Plan, recognized for the year are as under :

Employer's Contribution to Provident Fund Rs. 108,047/- (Previous year Rs. 106,684/-)

Employer's Contribution to Pension Fund Rs. 245,026/- (Previous year Rs. 251,260/-)

Notes:

(a) Assumptions related to future salary increases, attrition, interest rate for discount and overall expected rate of return on Assets have been considered based on relevant economic factors such as inflation, market growth and other factors applicable to the period over which the obligation is expected to be settled.

* Value of consumption of stores and spare parts :

(i) The entire consumption is out of indigenous supplies.

(ii) Consumption as above includes Rs. 309,911/- (Previous year Rs. 309,064/-) on account of amortization of spares.

(iii) Stores and Spare parts included in inventory are largely consumed as replacements and hence their consumption may not be comparable on a year on year basis.

NOTE 1

Commitment

a) Estimated amount of contracts remaining to be executed on capital account (net of advances) Rs. 202,245,697/- (Previous year Rs. 17,000,000/-).

b) The company has given guarantee in respect of loan taken by one of its subsidiary (Outstanding balance as on 31.03.2012 Rs. 445,882,806/-).

NOTE 2

Certain debtors aggregating to Rs. 43,282,853/- are recoverable for a considerable period. In view of the persuasive and other steps being taken, these balances have been considered to be fully recoverable, however in accordance with the prudent accounting policy, a provision for bad and doubtful debts have been made in the accounts to the extent of 50% of the outstanding, as on 31st March, 2012 as disclosed in note no. 15.

Notes:

i) In respect of above parties, there is no provision for doubtful debts as on 31st March 2012 and no amount has been written off or written back during the year in respect of debts due from/to them.

ii) The above Related Party information is as identified by the Management and relied upon by the auditors.

* This being a technical matter has been taken as certified by the management and has not been verified by the auditors.

(B) Units purchased for operations of plant 173,370 units.

(C) The company purchases various items which can be broadly classified as project materials hence further classification of the same has not been carried out.

* Sales/Income from operations (net of service tax) includes Rs. 92,178,351/-(Previous Year Rs. 32,400,000/-) on account of income from consultancy and other services.

Revenue and expenses have been identified to segment on the basis of their relationship to the operating activities of the segment. Revenue and expenses which relates to enterprise as a whole and not allocable to segment on a reasonable basis have been included under the head other common expenses.

As the company operates entirely in India no secondary segment has been identified for the above purpose.

The previous year's figures have been regrouped and rearranged wherever considered necessary .

Notes: 1) Cash and Bank Balance as on 31.03.2012 includes Rs. 46,186,000/- (Previous Year Rs. 35,674,000/-) as Margin Money Accounts.

2) Cash Flow Statement is prepared by the indirect method as set out in Accounting Standard - 3 on Cash Flow Statement

3) Cash & Cash Equivalents presented in the statement consists of cash on hand and demand deposits with bank as on the balance sheet date.


Mar 31, 2011

(1) Estimated amount of contracts remaining to be executed on capital account (net of advances) Rs. 489,694,450/- (Previous year Rs. 17,000,000/-).

(2) Capital Work in Progress includes:

a. Machinery in stock, construction /erection materials, advances for construction/erection works and machinery etc.

b. Capital advances of Rs Nil. (Previous year Rs. 1,600,000/-)

d. The second Power plant at Harangi was commissioned during the year and accordingly pre-operative expenses and balances in Capital Work-in-Progress have been transferred to Fixed Assets.

e. Fixed Assets (including Capital Work-in Progress) as at 31st March, 2011 included pre-operative/ initial expenses incurred towards various Hydro- Electrical Projects at Arunachal Pradesh which have been transferred to various subsidiary companies as on that date. Accordingly, expenses incurred till date and lying as Capital Work-in Progress have been transferred to the said companies and included in Loans and Advances as these amounts are recoverable from the subsidiaries.

(3) A scheme of arrangement for amalgamation of Dhanashree Projects Limited (Dhanashree) with the Company and transfer of 7MW Ullankal Hydel Power Project Undertaking (the Undertaking) to EDCL Power Projects Limited (PPL), a wholly owned subsidiary with effect from 1st April 2009 (the appointed date) has been sanctioned by the Honourable High Courts at Bangalore and Calcutta under Section 391 and Section 394 of the Companies Act, 1956 vide their Order dated August 12, 2010 and September 15, 2010 respectively. As per the said scheme, all assets and liabilities pertaining to Dhanashree has been transferred to the Company and those pertaining to the Undertaking has been transferred from the Company at their respective book values with effect from the appointed date. Necessary adjustments in this respect were given effect to in the books of accounts of the Company in previous year. However, the necessary formalities in respect of change in name for immovable properties, investment, bank accounts etc. are in the process of being complied with.

(4) Income from sale of electricity for the year includes amount received from Chamundeshwari Electricity Supply Company Limited (CHESCOM) on account of excess generation and revision of rates totaling to Rs. 86.07 Lacs as arrear for the period upto 31st March,2010. Cost of power purchased for the year includes a sum of Rs. 32.56 lacs paid to CHESCOM on account of minimum demand charges for electricity purchased for the period upto 31st March, 2010.

(5) The shares held in Ayyappa Hydro Power Ltd., a subsidiary was pledged (3,750,000 shares) with the lender of the said subsidiary. Further the Company has given a non - disposable undertaking (8,750,000 shares) to the lender of the said subsidiary.

(6) The Company has not yet received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 (the Act) and hence disclosure relating to amounts unpaid as at the year end together with interest paid/payable under the Act has not been given.

(7) Related Party disclosures pursuant to Accounting Standard -18 :

(a) Key Management Personnel and their relative

Mr. Amar Singh (Chairman and Whole Time Director)

Mrs. Pankaja Kumari Singh (Wife of the Chairman and Whole Time Director)

Mr. Sanjiv Saraf (Executive Director)

Mrs. Indira Saraf (Wife of the Executive Director)

(b) Subsidiary Company Ayyappa Hydro Power Limited

Eastern Ram Ganga Valley Hydel Projects Company Pvt. Ltd.

EDCL Power Projects Ltd..

EDCL Arunachal Hydro Project Pvt. Ltd.

EDCL Seppa Beyong Hydro Electric Pvt. Ltd.

EDCL Seppa Nire Hydro Electric Pvt. Ltd.

EDCL Seppa Dhunko Hydro Electric Pvt. Ltd.

EDCL Seppa Lada Hydro Electric Pvt. Ltd.

EDCL Seppa Marjingla Hydro Electric Pvt. Ltd.

EDCL Seppa Jung Power Pvt. Ltd.

EDCL Seppa Kawa Power Pvt. Ltd.

EDCL Seppa Pachuk Power Pvt. Ltd.

EDCL Seppa Riang Power Pvt. Ltd.

EDCL Tawang Power Pvt. Ltd.

EDCL Tawang Lower Tsachu Hydro Electric Pvt. Ltd.

EDCL Tawang Upper Tsachu Hydro Electric Pvt. Ltd

Sarju Valley Hydel Projects Company Pvt. Ltd.

(c) Associates Sarvottam Caps Limited

(b) Units generated and sold includes 1.09 million units from 6 MW Harangi stage II project which was commissioned on 30th August, 2010.

(c) Units purchased for operations of plant 1,02,548 units.

(d) Details in respect of goods purchased and sold :

The company purchases and sales various items primarily required in electrical projects and as these materials are denominated in different units quantitative details as required by certain clauses of Paragraph 3, 4C and 4D of the Part II of Schedule VI of the Companies Act 1956 has not been provided.

(e) Value of consumption of stores and spare parts :

(i) The entire consumption is out of indigenous supplies.

(ii) Consumption as above includes Rs 309,064/- (Previous year Rs 309,064/-) on account of amortisation of spares.

(iii) Stores and Spare parts included in inventory are largely consumed as replacements and hence their consumption may not be comparable on a year on year basis.

8. Employees Benefits :

The disclosures required under Accounting Standard 15 "Employee Benefits" notified in the Companies (Accounting Standards) Rules 2006 (AS-15), are given below :

(i) Defined Contribution Scheme

Contribution to Defined Contribution Plan, recognized for the year are as under :

Employer's Contribution to Provident Fund Rs 106,684/- (Previous year Rs. 80,552/-)

Employer's Contribution to Pension Fund Rs 251,260/- (Previous year Rs. 182,465/-)

(ii) Defined Benefit Scheme

The employee's gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for Leave Encashment is recognized in the same manner as gratuity.

9. Segment Reporting

Segments have been identified in line with the Accounting Standards AS-17 taking into account the organization structure as well as the differencing risk and return. The Company's business segment comprises of generation and sale of electricity (SOE) and sale of electrical project materials, consultancy and service charges (Contract Division). These have been identified by the type of their respective sales and services rendered.

Revenue and expenses have been identified to segment on the basis of their relationship to the operating activities of the segment. Revenue and expenses which relates to enterprise as a whole and not allocable to segment on a reasonable basis have been included under the head other common expenses.

As the company operates entirely in India no secondary segment has been identified for the above purpose.

10. The employees of EDCL Power Projects Ltd. (EDCL PPL) and their related liabilities have been taken over by the Company with effect from 1st April, 2010.

11. In view of Note 3(d) and Note 15 above, the previous year's figures are strictly not comparable. However, previous year's figures have been regrouped and rearranged wherever considered necessary.


Mar 31, 2010

1. Estimated amount of contracts remaining to be executed on capital account (net of advances) Rs.17,000,000 (Previous year Rs.57,500,000).

2. Capital work in Progress includes :

a. Machinery in stock, construction /erection materials, advances for construction/erection works and machinery etc.

b. Capital advances of Rs.1,600,000 (Previous year Rs.17,800,000)

3. A scheme of arrangement (the Scheme) for amalgamation of Dhanashree Projects Limited (Dhanashree) with the Company and transfer of 7MW Ullankal Hydel Power Project Undertaking (the undertaking) to EDCL Power Projects Limited (PPL), a wholly owned subsidiary with effect from 1st April 2009 (the appointed date) has been sanctioned by the Honorable High Court at Bangalore and Calcutta under Section 391 and Section 394 of the Companies Act, 1956 vide their Order dated August 12, 2010 and September 15, 2010 respectively. The following transactions have been given effect to in the books of accounts of the Company pursuant to the approval of the scheme as above and on filing the same with the Registrar of Companies at Bangalore on 9th September, 2010 and Kolkata on 18th September, 2010 :

b) As Dhanashree is a wholly owned subsidiary, no shares are required to be issue as consideration. The difference between the existing investments and assets & liabilities transferred as above amounting to Rs.1,165,346 has been taken to capital reserve.

e) The transfer obligation is required to be discharged by issue of 35,00,000 equity shares of Rs. 10/- each aggregating to Rs.35,000,000 by PPL. Pending increase in the authorized Share Capital and allotment of the equity shares as mentioned above, the same have been included under advance against equity to subsidiaries.

f) In view of the management, there is no stamp duty leviable on transfer of property in the State of Kerala and no provision is required in this respect.

g) During the year the operations of the undertaking was managed by the company on behalf of PPL and the net amount payable to them has been considered as liability included under other liability.

h) As the scheme became effective on 18.09.2010 necessary formalities in respect of change in name for immovable properties, investment, bank accounts etc are in the process of being complied with.

4. Profit on sale of investments represents profit on disposal of investments received on amalgamation as given in Note 4 above.

5. In the opinion of the management, the current assets, loans and advances have a value on realization in the ordinary course of business, at least equal to the amount at which these are stated in the Balance Sheet.

6. The company has entered into joint venture for execution of a contract for earthwork filling and compaction. The work carried out in respect of the said contract has been included in work in process and increase/decrease in stock.

7. The Company has not yet received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 (the Act) and hence disclosure relating to amounts unpaid as at the year end together with interest paid/payable under the Act has not been given.

8. Related Party disclosures pursuant to Accounting Standard -18 issued by the Institute of Chartered Accountants of India :

(a) Key Management Personnel and their relative

Mr. Amar Singh (Chairman and Whole Time Director)

Mrs. Pankaja Kumari Singh (Wife of Chairman and Whole Time Director)

Mr. Sanjiv Saraf (Executive Director)

Mrs. Indira Saraf (Wife of Mr. Sanjiv Saraf)

(b) Subsidiary Company

Ayyappa Hydro Power Limited

EDCL Power Projects Ltd. (with effect from 28th May 2009)

(c) Associates

Sarvottam Caps Limited

9. During the year the warrant holders in respect of 7,500,000 warrants allotted to promoters and independent investors on preferential basis have not exercised their option to convert the warrant into shares within eighteen months. Accordingly, the entire amount of Rs.12,40,00,000 received at the time of allotment of aforesaid warrants was forfeited and the same was transferred to Capital Reserve.

10. The 7MW Ullankal Hydro Electric project has been transferred to wholly owned subsidiary EDCL Power Projects Ltd. with effect from 01.04.2009. Further associate Company Dhanashree Projects Ltd. has been merged with the company with effect from 01.04.2009 and hence previous years figures are not strictly comparable. Previous years figures have been regrouped and rearranged wherever considered necessary.

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