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Notes to Accounts of Karma Energy Ltd.

Mar 31, 2015

1. Terms / rights attached to equity shares

a. The Company has only one class of equity shares having a par value of Rs.10/- per share.

b. Each holder of equity shares is entitled to one vote per share.

c. The dividend on equity shares proposed by Board of Directors is subject to approval of shareholders in the ensuing Annual General Meeting.

d. In the event of liquidation of the company, the holders of equity shares will be entitled to receive the 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

e. The company has not issued any bonus shares or bought back the equity shares in the last 5 years immediately preceding the balance sheet date.

f. With respect to amalgamation of the Transferor company Avirodh Financial Services Ltd, the Company alloted 5561 equity shares of Rs.10/- each in the ratio of 1 Equity share of Rs10/- each of the Company for every 18 equity shares of Rs10/- each held by the Equity shareholders in the Transferor company.

Security against Term Loan from State Bank of India is charged on specific wind farm of 3.6 MW and guaranteed by Weizmann Ltd and Weizmann Forex Ltd

2. Security against Term Loans from Axis Bank Ltd is charged on receivables from specific wind farm of 18.0 MW

3. Security against Term Loan from Uco Bank is charged on receivables from specific wind farm of 7.0 MW

4. Security against Term Loan from Saraswat Co-op Bank Ltd is charged on specific vehicle

2) Contingent Liabilities: Rs Nil (Prev. Year - Rs. NIL)

3) Earnings in Foreign Exchange :

Sale of Entitlement from Wind Power : Rs Nil (Prev. Year - Rs. 127.84 Lakh)

Expenditure in Foreign Exchange : Rs Nil (Prev. Year - Rs. Nil)

4) Disclosures required under Accounting Standard 15 "Employee Benefits as per Companies (Accounting Standards) Rules 2006 The Employee's Gratuity Fund Scheme managed by Life Insurance Corporation of India is a defined benefit plant. The present value of obligation is determined based on acturial valuation using the projected unit credit method.

5) Based on Information of status of suppliers to the extent received by the company there are no Small Scale Industrial undertakings included in Sundry Creditors to whom the payments are outstanding for a period more than 45 days. Further the company has not received any memorandum (as required to be filed by the suppliers with the notified authority under the micro, Small and Medium Enterprises Development Act, 2006) claiming their status as micro, small or medium enterprises. Consequently the amount paid/payable to these parties during the year is Nil.

10)Joint Venture Disclosure

The company does not have any joint venture companies

11) Segment Information

The Primary Business activity of the Company is that of Generation of Power from Renewable Sources and hence there being only one reportable segment, segment reporting has not been furnished.

12) The company has, on the basis of expected life of Fixed Assets, as prescribed in Schedule II of the Companies Act, 2013, restated figures of Written Down Value of each of such fixed asset, as on 01.04.2014 and in accordance therewith the net difference arising there from aggregating to Rs.6.01 lac has been transferred to the retained earnings.

13) Exceptional item represents the difference of (i) an income of Rs.380.20 lacs being difference in tarriff for sale value of wind power sold to state power Distribution Licencee (DL) in Andhra Pradesh from January 2011 to March 2014 as per order dated 06.09.2014 issued by Hon'ble State Electricity Regulatory Commission and (ii) Net Present Value compensation of Rs.240.90 lacs paid to Sahyadri Tiger Reserve Conservation Foundation as per Order Dated 16.01.2015 of Hon'ble Supreme Court of India against which the Company has filed petition with Hon'ble Supreme Court of India.

14) The company in respect of its 18 MW wind farm in the state of Maharashtra, as in past years had applied for open access approval to the state utility for sale of power to third parties in FY 2014-15. However the state utility unilaterally denied granting of open access to many wind farm developers including the company leading to a petition to be filed before State Electricity Regulatory Commission (MERC) through an Association of Wind Power Developers of which the Company is a member.

The company had continued to feed the wind power generated into the grid of the state utility and had in the first quarter of the financial year on a conservative basis recorded the revenue from generation at the low preferential tariff of Rs.2.52 per unit. However, while the hearing on the petition was in process MERC announced a new Open Access Regulations incorporating most of the contentions of the State Utility for refusing open access for FY 2014-15. The Company considering the approach of MERC in interpreting the provisions of the Electricity Act and expecting long legal uncertainty decided to reverse the revenue recorded in the first quarter of FY 2014-15 and continued non recording of revenue from the said 18 MW wind farm.

In view of recent pronouncement of certain judgments on Open Access for Solar Energy by Appellate Tribunal for Electricity which is equally applicable to the contention of the Association in the subject petition before MERC and further since the MERC has finally heard the petition, pending judgment that may be in favour of the company, in the absence of receipt of the same at the time of finalization of the accounts for the financial year ended as at 31.03.2015, the Company without prejudice to the contentions in the said petition before MERC decided to record the revenue at the lower tariff at Rs.2.52 per unit as compared to better tariff that could be realized under open access in respect of its aforesaid wind farm.

15) An Association of Wind Power Generators of which the Company is the member has filed a petition before Hon'ble Maharashtra State Electricity Regulatory Commission on the matter of refusal to grant Open Access for sale of wind power to third parties by the State Utility for Fy 2014-15. Though hearing is completed, order is yet to be issued. If the order is in favour of the Association the Company would stand benefitted in realising higher revenue from sale of wind power to third parties from its 18 MW wind farm in state. If the decision is against the Association, there would not be any adverse impact as the company has recorded revenue for FY 2014-15 at lower tariff which would be realised.

An Association of Wind Power Generators of which the Company is a member is a respondent in a Civil appeal filed before Hon'ble Supreme Court of India by State Utility in Maharashtra in the matter of payment of interest on delayed remittance of wind power generation dues. The company had in the earlier years recorded such interest of Rs.201.99 lacs as directed to be paid by Hon'ble Appelate Tribunal for Electricity. In the event the Apex Court upholds the contention of state utility the said revenue recorded may have to be provided for.

The Company has filed an Impleading Application before Hon'ble Supreme Court of India in the matter of an Order issued by the Apex Court directing payment of Net Present Value (NPV) with Wild Life Authorities in respect of selected wind mills of the Company in Maharashtra. In compliance with the order of the Apex Court the Company has paid and charged to expenses in the financial statement an amount of Rs.240.90 lacs. If the Apex Court upholds the contention of the Company the said payment has to be recovered and credited to revenue.

16) In respect of balances of Sundry Creditors / Debtors, Loans and Advances, Banks and Unsecured Loans / Inter Corporate Deposits confirmations were not received by the Company in few cases. In the opinion of management the balances as appearing in the books are fully payable / realisable, as the case may be, in the normal course of business.

17) Previous year figures have been regrouped and / or reclassified wherever necessary.


Mar 31, 2014

1) Contingent Liabilities: Rs Nil (Prev. Year - Rs. NIL)

2) Earnings in Foreign Exchange :

Sale of Entitlement from Wind Power :

Rs 127.84 Lakh (Prev. Year - Rs. 90.78 Lakh)

Expenditure in Foreign Exchange : Rs Nil (Prev. Year - Rs. Nil)

3) Disclosures required under Accounting Standard 15 "Employee Benefits as per Companies (Accounting Standards) Rules 2006

The Employee''s Gratuity Fund Scheme managed by Life Insurance Corporation of India is a defined benefit plant. The present value of obligation is determined based on acturial valuation using the projected unit credit method.

4) Based on Information of status of suppliers to the extent received by the company there are no Small Scale Industrial undertakings included in Sundry Creditors to whom the payments are outstanding for a period more than 45 days. Further the company has not received any memorandum (as required to be filed by the suppliers with the notified authority under the micro, Small and Medium Enterprises Development Act, 2006) claiming their status as micro, small or medium enterprises. Consequently the amount paid/payable to these parties during the year is Nil.

c) Loans and Advances to Companies / Firms in which Directors are interested (Excluding Subsidiary and Associate Companies) - NIL

d) Investment by the loanee in the shares of parent and subsidiary company - NIL

9) Related Party Disclosure for the year ended 31.03.2013

In accordance with the "Accounting Standard 18 - Related Party Disclosure", the details are as follows:

A Related Party and their RelationshiD Subsidiaries

Almi Hydro Electric Projects Limited Baledh Energy Projects Limited Batot Hydro Power Limited Brahmanvel Energy Limited Greenweiz Projects Limited Joiner Hydro Power Projects Limited Khandesh Energy Projects Limited Vajharpada Energy Limited

Joint venture :

Weizmann Energy Ltd Associates

Parmatma Power Projects Pvt Ltd

Weizmann Corporate Services Ltd

upto 21.03.2014 upto 07.03.2014 wef 30.11.2013

Key Management Personnel :

Mr.Ganesh N.Kamath Managing Director

5) In respect of balances of Sundry Creditors / Debtors, Loans and Advances, Banks and Unsecured Loans / Inter Corporate Deposits confirmations were not received by the Company in few cases. In the opinion of management the balances as appearing in the books are fully payable / realisable, as the case may be, in the normal course of business.

6) Segment Information

The Primary Business activity of the Company is that of Generation of Power from Renewable Sources and hence there being only one reportable segment, segment reporting has not been furnished.

7) Previous year figures have been regrouped and / or reclassified wherever necessary.


Mar 31, 2013

1) Contingent Liabilities: Rs Nil (Prev. Year - Rs. NIL )

2) Consequent to the petition filed by Central Power Distribution Company of A.P. Ltd (APCPDCL), the distribution licensee, Andhra Pradesh Electricity Regulatory Commission (APERC) dated 16.11.2012 reviewed its earlier tariff order of Rs.3.37 per unit and fixed interim ad-hoc rate of Rs.1.69 per unit for the wind power supplied by the company. In view of the said order, amount unpaid for sale of power by APCPDCL for the period January 2011 to March 2012 the company reversed the portion of sale of wind power being difference of Rs.3.37 per unit to ad-hoc tariff of Rs.1.69 per unit totalling to Rs.127.28 lac and is shown as exceptional item. Further adjustments, if any, would be given effect to on APERC issuing the final order in the matter.

3) Earnings in Foreign Exchange :

Sale of Entitlement from Wind Power : Rs 90.78 Lac (Prev. Year - Rs. Nil)

Expenditure in Foreign Exchange : Rs Nil (Prev. Year - Rs. Nil )

4) Disclosures required under Accounting Standard 15 "Employee Benefits as per Companies (Accounting Standards) Rules 2006

The Employee''s Gratuity Fund Scheme managed by Life Insurance Corporation of India is a defined benefit plant. The present value of obligation is determined based on acturial valuation using the projected unit credit method.

5) Based on Information of status of suppliers to the extent received by the company there are no Small Scale Industrial undertakings included in Sundry Creditors to whom the payments are outstanding for a period more than 45 days. Further the company has not received any memorandum (as required to be filed by the suppliers with the notified authority under the micro, Small and Medium Enterprises Development Act, 2006) claiming their status as micro, small or medium enterprises. Consequently the amount paid/payable to these parties during the year is Nil.

6) In respect of balances of Sundry Creditors / Debtors, Loans and Advances, Banks and Unsecured Loans / Inter Corporate Deposits confirmations were not received by the Company in few cases. In the opinion of management the balances as appearing in the books are fully payable / realisable, as the case may be, in the normal course of business.

7) Segment Information

The Primary Business activity of the Company is that of Generation of Power from Renewable Sources and hence there being only one reportable segment, segment reporting has not been furnished.

8) Previous year figures have been regrouped and / or reclassified wherever necessary.


Mar 31, 2012

1) Pursuant to the scheme of Amalgamation u/s 391 to 394 of the Companies Act, 1956, sanctioned by The Honorable High Court of Bombay on 13.04.2012, the company Avirodh Financial Services Limited (Transferor Company) stands amalgamated with the company w.e.f. 01.04.2011. Accordingly, the Assets and Liabilities of the said Transferor Company stands vested in the Company and the transaction post 1st April,2011 have been incorporated in the accounts of the Company. Consequently, the figures for the year are not comparable with those of the previous year.

With respect to amalgamation of the Transferor company Avirodh Financial Services Limited, the Company proposes to issue and allot 5561 equity shares of Rs.10/- each computed in the ratio of 1 Equity shares of Rs.10/- each of the Company for every 18 equity shares of Rs.10/- each in the Transferor Company Avirodh Financial Services Limited held by the Equity shareholders of the Transferor company on the record date. The net increase in Paid up Capital after the proposed allotment as above is represented as "Share Capital Suspense" under Share Capital in the Accounts. The difference between the consideration to the shareholders of the Transferor Company and net assets of the Transferor Company acquired is represented as Capital Reserve on Amalgamation account at Rs.9.45 lakh as per the scheme approved by Honorable High Court of Bombay.

2) Contingent Liabilities: Rs Nil (Prev. Year - Rs. NIL)

3) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs 15.54 lakh (Prev. Year - Rs.131.07 lakh).

4) Earnings in Foreign Exchange :

Sale of Entitlement from Wind Power : Rs Nil (Prev. Year - Rs. 153.38 Lakh).

Expenditure in Foreign Exchange : Rs Nil (Prev. Year - Rs. NIL)

5) Disclosures required under Accounting Standard 15 "Employee Benefits as per Companies (Accounting Standards) Rules 2006.

The company has covered its gratuity liabilities with Life Insurance Corporation of India w.e.f. 01.04.2011. On follow up with LIC for statement under AS 15, the company has been informed by them that as per their system though the company would be paying the premium annually on the Annual Renewal date as per their notice, the information as per AS 15 can be obtained from their system only after the fund subsists for minimum three years.

Therefore, the disclosure required under AS 15 has not been given even though the liability has been provided for as per their Annual renewal notice.

6) Based on Information of status of suppliers to the extent received by the company there are no Small Scale Industrial undertakings included in Sundry Creditors to whom the payments are outstanding for a period more than 45 days. Further the company has not received any memorandum (as required to be filed by the suppliers with the notified authority under the micro, Small and Medium Enterprises Development Act, 2006) claiming their status as micro, small or medium enterprises. Consequently the amount paid/payable to these parties during the year is Nil.

7) In respect of balances of Sundry Creditors / Debtors, Loans and Advances, Banks and Unsecured Loans / Inter Corporate Deposits confirmations were not received by the Company in few cases. In the opinion of management the balances as appearing in the books are fully payable / realisable, as the case may be, in the normal course of business.

8) Segment Information

The Primary Business activity of the Company is that of Generation of Power from Renewable Sources and hence there being only one reportable segment, segment reporting has not been furnished.

9) Previous year figures have been regrouped and / or reclassified wherever necessary to correspond with current year's classification / disclosure in consonance with the revised schedule VI of the Companies Act, 1956.

 
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