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Notes to Accounts of Suryachakra Power Corporation Ltd.

Mar 31, 2015

Note 1: Corporate Information

Suryachakra Power Corporation Limited ("the Company") was incorporated on 28 February 1995, as a Public Limited Company. The Company was converted into a Private Limited Company with effect from 9 August 2000. Pursuant to this, the name of the Company was changed to "Suryachakra Power Corporation Private Limited". The Company was re- converted into a public limited company with effect from 8 September 2005. Pursuant to this, the name of the Company was changed to Suryachakra Power Corporation Limited.

The Company is engaged in the generation and sale of electricity. The commercial operation started with effect from 1 April 2003. The Company is listed in Bombay Stock Exchange since 23 July 2007. The Company is also engaged in business of trading of coal from the year 31 March 2009.

1.2 Rights, pereferences and restrictions attached to equity shares

The Company has only one class of shares referred to as equity shares having a par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the company, the holders of equity shares will be entitled to receive surplus from sale of assets after setting off of the liabilities. The distribution will be in proportion to the number of equity shares held by the shareholders.

2.1 Nature of Security for term loans

A. Working Capital Term loans from State Bank of India (SBI) is secured by:

(i) First charge on the entire fixed assets of company, present and future on pari passu basis with other term lender, SREI Equipment Finance Private Limited

(ii) Registred mortgage of leasehold rights of land meausring 4.12 Ha. Bearing Survey Nos. 462, 467,636, 635/2, 625/1, 634/1, 635/3 and 635/4 situated at Bambooflat, Ferragunj Tehsil, Andaman, A & N Island, including assignment of Power Purchase Agreement, EPC contract and O&M contract, insurance policy and other project documents.

(iii) Collateral security by way of :

(a) Pledge of 84,37,388 shares of Suryachakra Power Corporation Limited (Face value of Rs.10)

(b) Vacant urban residential plot no.74 admeasuring 350 sq.yards, Survey Nos.300P, 302, 309P, in the name of Shri M. Seshavatharam and situated in Krishnaja Hills, Village : Bachupally, Mandal : Quthubullapur, District : Ranga Reddy, Andhra Pradesh.

(c) Open vacant plots of land in the name of Shri M. Naveen Babu admeasuring -1.47 acres RS No.368; 0.97 acre RS No.09;0.38 acre RS No.11. All three at village. Thorreddu, Rajahmundry Rural Mandal, District East Godavari, Andhra Pradesh. 3.02 acres Rs No. 246/1,village : Madhurapudi, Korukondala Mandal, District East Godavari, Andhra Pradesh.

(d) 6 Nos. vacant residential plots in the name of Shri M. Naveen Babu in Western Block No.6-95, 6-95/1, 6-97, 6-97/1 , 6-97/3 and 6-96 admeasuring 2082.88 sq. yards situated in RS 124/4, at village: Thorreddu, Rajahmundry Rural Mandal, District East Godavari, Andhra Pradesh.

(iv) Personal Guarantee of Dr. S.M. Manepalli, Managing Director, Shri M. Seshavatharam and Smt T. Sreelatha relatives of Director and Shri M. Naveen Babu,

B. Term loan from SREI Equipment Finance Private Limited is secured by :

(i) First charge on all movable and immovable assets, present and future of the company in favour of SREI on a pari-passu basis with SBI.

(ii) Assignment in favour of SREI, SBI on a pari-passu basis, of all rights titles and interests of the company in, to and under all assets of the project and all project documents, insurance policies, permits/approval etc, to which the company is a party and all other contracts relating to project.

(iii) Pari-passu first charges on company's all the accounts including but not limited to Trust and Retention Account and the Debt-Service Letter of Credit / Reserve Account.

(iv) The Equity Shares held by promoters in the project company (minimum 51%) shall be pledged to SREI and SBI on a pari-passu basis.

(v) Non-disposal undertaking by Caterpillar and BSES for not disposing off their respective equity shares of SPCL during the currency of the credit facilities sanctioned to SPCL without the written consent of SREI and SBI.

2.2 Terms of repayment of secrued term loans

(i) Working capital term loan from State Bank of India (Kolkata) carries an interest of12.75% per annum and is repayable in thirty three monthly unequal installments.

(ii) Term loan form SREI Equipment Finance Private Limited carries an interest of 19.5% per annum. The loan outstanding as on the date of the balance sheet has fallen due for repayment.

3.1 Nature of Security for Cash Credit

Cash Credits from State Bank of India is secured by:

(i) Exclusive first charge on the entire current assets of the company both present and future

(ii) Assignment of LC from Andaman and Nicobar Administration

(iii) Collateral security on second charge on all fixed assets of the company

Note: 4 Year ended Year ended Operation and maintenance expenses March 31, 2015 March31,2014 (Amount) (Amount)

Note: 5

Contingent Liabilities and commitments (to the extent provided for)

(i) Contingent liabilities

(a) Claims against the company not acknowledged as debt - Liquidated damages for delay in commencement of commercial operations 31,570,000 31,570,000

(b) Corporate guarantee given to Bunge Emissions Fund Limited against the loan provided to Suryachakra Global Enviro Power Limited, 70,908,000 70,908,000 a subsidiary of the company

(ii) Commitments

(a) Estimated amount of contracts remaining to be executed on capital account not provide for (net of advances) - -

Note: 6

Disclosures under Section 22 of Micro, Small and Medium Enterprises Development Act, 2006.

The Ministry of Micro, Small and Medium Enterprises has issued an office Memorandum dated August 26, 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Enterpreneurs Memorandum Number as allotted after filing of the Memorandum. However, the Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures,if any, relating to amounts unpaid as at year end together with interest paid / payable as required under the said Act, have not been given. Further in the view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the Micro, Small and Medium Enterprises Development Act, 2006 is not expected to be material. The Company has not received any claim for interest from any supplier under the said Act. Note :29

Disclosure as per Clause 32 of the Listing Agreements with the Stock Exchanges

Note :

(a) Loans and Advances shown above, fall under the category of "Long Term Loans & Advances' in nature of Loans. No repayment schedule has been specified in respect of these loans.

(b) All the above loans and advances are interest free

(c) * Secured by a second charge by way of hypothecation of the fixed assets of the lonee situated at Madwa Village, Tehsil: Janjgir, champa, District : Janjgir, Champa - Chattisgarh.

Note : 7

Revenue from A & N Administration

(i) The Company's revenue from sale of electricity is based on the Power Purchase agreement (PPA) entered into with the Andaman and Nicobar (A & N) Administration. The PPA is for a initial period of 15 years and can be extended on mutual terms and conditions for three further periods of five (5) years each and contains a set of pre-defined formulae for calculation of the revenue to be billed on a monthly basis. Such billings as per terms of the PPA include a fixed charge payment, a variable charge payment, incentive payment, foreign exchange adjustment and change-in- law adjustment.

(ii) The Company, for the purpose of determining the fixed charge monthly billings, invoices the A & N Administration based on the capital cost as envisaged in the PPA. Pending final confirmation of actual capital expenditure, no adjustment is made to the revenue. Such adjustments, if any, will be made in the period in which the amount becomes determinable and is confirmed by the A & N Administration.

(iii) Revenues for the year ended March 31,2015 include an amount of Rs.49,344,300 (Previous year: Rs.5,32,99,282) billed by the company as charges under the PPA, which has been rejected / withheld by the A & N Administration on the grounds of the technical interpretation of the formulae for computation of such charges. Aggregate receivables as at March 31, 2015 on account of such rejections / withheld amounts to Rs. 23,05,07,685 as at March 31, 2015 (Previous year: Rs. 18,11,63,385). Further as at 31st March 2015 the Company also has to receive an amount of Rs.12,75,74,329 from A & N Administration towards interest on the above stated rejections / withheld amounts which have been recognized in earlier years. Management is pursuing the matter with A & N Administration and is confident of recovering the amount. The amount so far recognized in the books of accounts upto 31.03.2015, is a part of claim preferred on A & N Administration.

* Investment in equity shares is net of provision for diminution in value Rs. 668,337,722/- (31.03.2014: Nil). Loans and advances are net of provision for doubtful advances Rs. 38,31,28,691/- (31.03.2014 : Rs. 139,098,212 )

Status of the subsidiaries is as follows:

(a) Suryachakra Global Enviro Power Limited (SGEPL):

SGEPL along with its subsidiaries is engaged in generation and sale of power. SGEPL and its subsidiaries have incurred substantial losses and the net worth of these companies has been fully eroded. In view of high input cost, operations of these companies were suspended from the financial year 2011-12 onwards. Secured loan lenders have issued notices under section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002(SARFAESI Act) and Winding up Petitions Under Section 433 and 434 of Companies Act 1956. Except one Power Plant owned by M/s.Sri Panchajanya Power Private Limited at Hingoli, Maharashtra all other three plants and one Plant in project stage were taken over by the respective secured loan lenders. The lenders have issued auction notice for sale of the plant and called for bids. The Company has filed a petition in the Debt Recovery Tribunal (DRT), Hyderabad seeking stay on the auction proceedings. The matter is pending before DRT. Indiabulls Housing Finance Limited - a secured Lender for SGEPL and South Asian Agro Industries Ltd has initiated alleged criminal proceedings against the Managing Director of the Company and other Directors and Guarantors. These criminal proceedings were challenged by the company and the matter is pending before Courts. The management's effort to resume operations of these plants did not materialize. Management is considering various options available to it including the disposal of these plants to a stratagic investor. The Management is of the opinion that there would be impairment in recovery of carrying value investments and recovery of advances given. Hence, as a measure of prudence, the company has made a provision of Rs.66,83,37,722 (being 75% of the carrying value of investments) towards dimunition in the value of investments and Rs.24,40,30,479 towards provision for doubtful advances.

(b) Suryachakra Energy (Chhattisgarh) Private Limited (SECPL) :

SECPL is a 100% subsidiary of the company engaged in setting upto a 350MW coal based power project at Sapos Village, Jangir-Champa District in the State of Chhattisgarh at an estimated project cost of Rs. 19,00,00,00,000.SECPL has obtained most of the requisite licenses for setting up the project; signed a Memorandum of Understanding (MOU) with Chhattisgarh State Electricity Board; and entered into an Implementation Agreement with Chhattisgarh State Power Distribution Company Limited, for setting up the said power project.Up to 31st March, 2015, SECPL has spent an amount of Rs. 45,59,27,070 towards advances to suppliers of capital equipments and incidental expenses. Management is confident of mobilizing the requisite funds to execute the project and recover the investment made in the project. Hence, no provision in the value of investment and advance extended is considered necessary at this stage.

(c) Suryachakra Global Ventures Limited (SGVL):

SGVL is a wholly owned subsidiary of the company incorporated in Honking under Companies Ordinance. The Company through SGVL has decided to acquire a coal mine for captive use by it's subsidiaries. Out of the proceeds of the GDRs issued during the year 2011-12, the Company has advanced an amount of Rs. 85,01,25,542/ - (USD 1,90,00,000) to SGVL.

SGVL has entered an into an MOU with Symphony Trading and Investments Limited(STIL) for acquiring interests in coal mines in Indonesia. STIL is having offices in Singapore, Honking etc., and having experience in identifying and acquiring suitable coal mines for its clients.

Pursuant to the said MOU, SGVL on 28th April'2011, has paid USD 1,90,00,000 as advance to STIL for acquiring interests in two coal mines from M/s. Surajaya Indelberg in Indonesia. As per MOU, STIL has agreed to return the advance, if transaction of coal mine acquisition is not successful within the timelines mutually agreed / extended. Due to change in policies of Indonesia, the transaction could not be completed.

In view of the prevailing uncertain conditions relating to coal mining activities in Indonesia, the company has called back the advance given to STIL and making efforts to recover the advance. During the 2012 -13, management has intensified the efforts for recovery; commenced the negotiations and was in the process of initiating legal remedies. Pursuant to the said efforts, the Company could recover an amount of Rs. 14,41,29,264/- (USD 25,90,886) during the year 2013-14 and pursuing for recovery of the balance amount.

Management is confident of recovery of the advance. Shortfall if any, in recovery will be adjusted in the year of final settlement. Hence no provision towards doubtful advances, if any, has been made.

Note: 35

Advance to related parties -Suryachakra Thermal Energy (Andhra) Private Limited Rs.3,06,61,484 and Suryachakra Thermal (Madhya Pradesh) Private Limited Rs.3,81,01,314.

The company in earlier year had given the above advances to acquire land / to incurre preliminary expenses in connection with seting up the power projects. Due to financials difficulties the company could not make further progress with regard to these projects. The land acquired is yet to be registered in the name of the Company. Company had entered into a formal agreements with the vendors and the agreements are live. Company is making efforts to bring in the investors and realise the advance given. Hence, no provision for doubutful advances is considered at this stage.

Note: 8

Capital Advances

In the earlier years, the Company has given Capital Advances for enhancing the capacities and increasing the efficiencies of the existing plant and machinery. Net advances given as at 31st March 2015 aggregate to Rs.10,36,59,272. Due to financial difficulities, the company could not go ahead with the envisaged expansion and modifications. Management is making efforts and expects to recover the balance amount at the earliest. Hence, no provision in the value of advance is considered necessary at this stage.

Note: 9

Interest on Borrowings

Certain lenders of the Company have initiated legal proceedings against the company for recovery of their dues. Company is negotiating with the lenders for settling the dues amicably. The company has stopped providing for the interest and other charges on loans from these lenders. Accordingly no interest on these loans have been provided in the financial statements for the year ended 31st March, 2015. The liability if any will be recognized in the year of settlement of dispute.

Note: 10

Notices from SBI Global Factors Ltd:

During the earlier years M/s. SBI Global Factors Limited an unsecured creditor has filed a petition before the Honourable High Court of Andhra Pradesh for winding up of the company u/s 443 (1) (c) of the Companies Act, 1956. The Honourable High Court of Andhra Pradesh, had admitted the petition. SBI the holding entity of SBI Global Factors Ltd and the Principal Lender of the company has impleaded opposing the winding up petition. The company is confident of resolving the matter amicably.

Note: 11

Confirmation of Balances

The Company has not received confirmation of balances from Lenders, Trade payables, Suppliers for capital goods, Loans & Advances including capital advances given by the company as at 31st March 2015. In the absence of confirmation of balances from these parties, provision for adverse variations, if any, in the carrying amounts of these balances are not quantifiable. However, management is confident that the settlement with the said parties will be made at the carrying amounts and no provision is required at present for adverse variations. Adjustment for shortfall / excess payment, if any, will be made in the year of settlement.

Discount rate: The discount rate is based on the prevailing market yields of Indian government securities as at the balance sheet date for the estimated term of the obligations.

Expected rate of return on plan assets: This is based on the expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

Salary escalation rate: The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors.

Note: 12

Segment Reporting

The Company's operations predominantly consists of generation and sale of electricity. Hence there are no reportable segments under the Accounting Standard - 17. The Company's business operations are primarily concentrated in India. The conditions prevailing in India being uniform, no separate geographical disclosures are considered necessary.

Note: 13

Related party transactions

(a) The related parties where control exists are subsidiaries and step down subsidiaries. There are no other parties over which the company has control.

(b) Related parties where control exists and with whom transactions have taken place during the year are as follows:

(i) Subsidiaries

- Suryachakra Global Enviro Power Limited -

- Suryachakra Energy (Chhattisgarh) Private Limited ( From March' 05,2011)

- Suryachakra Global Ventures Limited

(ii) Step down subsidiaries

- South Asian Agro Industries Limited

- MSM Energy Limited

- Sri Panchajanya Power Private Limited

(iii) Key Managerial Personnel (KMP) represented on the Board of Directors

- Dr. S. M. Manepalli, Managing Director

- Mr. K Vijay Kumar, Executive Director

- Mrs. B.N.Raja Kumari

- Mr. V. L. Narasimha Rao, Chief Financial Officer

- Mr. P. Satish Chandramouli, Company Secretary

(iv) Enterprises over which Key Managerial Personnel or their relatives have significant influence (Significant interest entities)

- Suryachakra Thermal Energy (Andhra) Private Limited

- Suryachakra Thermal (Madhya Pradesh) Private Limited

- Suryachakra Power venture Private Limited

(v) Non-Executive on the Board of Directors

- Mr. V. S. Murthy

Note: 14 Deferred taxes

The Company had started claiming deduction under Section 80-IA of the Income Tax Act, 1961 from the year ended 31,March 2011. Based on the assessment of the deferred tax as on March 31, 2015, the timing differences arising in the current year will reverse within the tax holiday period. Accordingly, no deferred tax has been recognised in the books of accounts of the Company as on March 31,2015

Note: 15

Previous year figures

Previous figures have been recasted/ restated to conform to the current classification


Mar 31, 2014

Note 1: Corporate Information

Suryachakra Power Corporation Limited ("the Company") was incorporated on 28 February 1995, as a Public Limited Company. The Company was converted into a Private Limited Company with effect from 9 August 2000. Pursuant to this, the name of the Company was changed to "Suryachakra Power Corporation Private Limited". The Company was re- converted into a public limited company with effect from 8 September 2005. Pursuant to this, the name of the Company was changed to Suryachakra Power Corporation Limited.

The Company is engaged in the generation and sale of electricity. The commercial operation started with effect from 1 April 2003. The Company is listed in Bombay Stock Exchange since 23 July 2007. The Company is also engaged in business of trading of coal from the year 31 March 2009.

1.2 Rights, pereferences and restrictions attached to equity shares

The Company has only one class of shares referred to as equity shares having a par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the company, the holders of equity shares will be entitled to receive surplus from sale of assets after setting off of the liabilities. The distribution will be in proportion to the number of equity shares held by the shareholders.

2.1 Nature of Security for term loans

A. Working Capital Term loans from State Bank of India (SBI) is secured by:

(i) First charge on the entire fixed assets of company, present and future on pari passu basis with other term lender, Srei Equipment Finance Private Limited

(ii) Registred mortgage of lease hold rights of land meausring 4.12 Ha. Bearing Survey Nos. 462, 467,636, 635/2, 625/1, 634/1, 635/3 and 635/4 situated at Bambooflat, Ferragunj Tehsil, Andaman, A & N island, including assignment of Power Purchase Agreement, EPC contract and O&M contract, insurance policy and other project documents.

(iii) Collateral security by way of :

(a) Pledge of 84,37,388 shares of Suryachakra Power Corporation Limited (Face value of Rs.10)

(b) Vacant urban residential plot no.74 admeasuring 350 sq.yards, Survey Nos.300P, 302, 309P, in the name of Shri M. Seshavatharam and situated in Krishnaja Hills, Village : Bachupally, Mandal : Quthbullapur, District : Ranga Reddy, Andhra Pradesh.

(c) Open vacant plots of land in the name of Shri M. Naveen Babu admeasuring -1.47 acres RS No.368; 0.97 acre RS No.09;0.38 acre RS No.11. All three at village. Thorredu, Rajahmundry Rural Mandal, District East Godavari, Andhra Pradesh. 3.02 acres Rs No. 246/1,village : Madhurapudi, Korukondala Mandal, District East Godavari, Andhra Pradesh.

(d) 6 Nos. vacant residential plots in the name of Shri M. Naveen Babu in Western Block No.6-95, 6-95/1, 6-97, 6-97/1,6-97/3 and 6-96 admeasuring 2082.88 sq. yards situated in RS 124/4, at village: Thorredu, Rajahmundry Rural Mandal, District East Godavari, Andhra Pradesh.

(iv) Personal Guarantee of Dr. S.M. Manepalli, Managing Director, Shri M. Seshavatharam and Smt T. Sreelatha relatives of Director and Shri M. Naveen Babu,

(v) Corporate guarantee by Mauktika Energy Private Limited and Manepalli Investments Private Limited

B. Term loans from SREI Equipment Finance Private Limited is secured by :

(i) First charge on all movable and immovable assets, present and future of the company in favour of SREI on a pari- passu basis with SBI.

(ii) Assignment in favour of SREI, SBI on a pari-passu basis, of all rights titles and interests of the company in, to and under all assets of the project and all projects documents, insurance policies, permit approval etc, to which the company is a party and all other contracts relating to project.

(iii) Pari-passu first charges on company''s all the accounts including but not limited to Trust and Reterntion Account and the Debt-Service Letter of Credit / Reserve Account.

(iv) The Equity Shares held by promoters in the project company (minimum 51%) shall be pledged to SREI and SBI on a pari-passu basis.

(v) Non-disposal undertaking by Caterpillar and BSES for not disposing off their respective equity shares of SPCL. during the currency of the credit facilities sanctioned to SPCL without the written consent of SREI and SBI.

2.2 Terms of repayment of secrued term loans

(i) Working capital term loan from State Bank of India (Kolkata) carries an interest of 12.75% per annum and is repayable in sixty nine monthly unequal installments. First sixty months @ Rs.35,40,000 each and next eight months @ Rs. 39,30,000 each and the last installment @ Rs. 39,60,000.

(ii) Term loan form SREI Equipment Finance Private Limited carries an interest of 19.5% per annum. The loan outstanding as on the date of the balance sheet has fallen due for repayment.

3.1 Nature of Security for Cash Credit

Cash Credits from State Bank of India is secured by:

(i) Exclusive first charge on the entire current assets of the company both present and future

(ii) Assignment of LC from Andaman and Nicobar Administration

(iii) Collateral security on second charge on all fixed assets of the company

Note: 2 Year ended Year ended

Operation and maintenance expenses March 31, 2014 March 31,2013 (12 Months) (9 Months)

Note: 3

Contigent Liabilities and commitments (to the extent provided for)

(i) Contigent liabilities

(a) Letter of credit outstanding - -

(b) Claims against the company not acknowledge as debt - Liquidated damages for delay in coommencement of commercial operations 31,570,000 31,570,000

(c) Corporate guarantee given to Bunge Emissions Fund Limited against the loan provided to Suryachakra Global Enviro Power Limited, 70,908,000 70,908,000 a subsidiary of the company

(ii) Commitments

(a) Estimated amount of contracts remaining to be executed on capital account not provide for (net of advances) - -

Note: 4

Disclosures under Section 22 of Micro, Small and Medium Enterprises Development Act, 2006

The Ministry of Micro, Small amd Medium Enterprises has issued an office Memorandum dated August 26, 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Enterpreneurs Memorandum Number as allotted after filing of the Memorandum. However, the Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at year end together with interest paid / Payable as required under the said Act, have not been given. Further in view of the managment, the impact of interest if any, that may be payable in accordance with the provisions of the Micro, Small and Medium Enterprises Development Act, 2006 is not expected to be material. The Company has not received any claim for interest from any supplier under the said Act.

Note : 5

Revenue from A & N Administration

(i) The Company''s revenue from sale of electricity is based on the Power Purchase Agreement (PPA) entered into with the Andaman and Nicobar (A & N) Administration. The PPA is for a period of 15 years and contains a set of pre-defined formulae for calculation of the revenue to be billed on a monthly basis. Such billings as per terms of the PPA include a fixed charge payment, a variable charge payment, incentive payment, foreign exchange adjustment and change-in-law adjustment.

(ii) The Company, for the purpose of determining the fixed charge monthly billings, invoices the A & N Administration based on the capital cost as envisaged in the PPA. Pending final confirmation of actual capital expenditure, no adjustment is made to the revenue. Such adjustments, if any will be made in the period in which the amount becomes determinable and is confirmed by the A & N Administration.

(iii) Revenues for the year ended March 31, 2014 include an amount of Rs.5,32,99,282 (Previous year : Rs. 5,25,87,325 (9 months)) billed by the company as variable charge payment under the PPA, which has been rejected / withheld by the A & N Administration on the grounds of the technical interpretation of the formulae for computation of such charges. Aggregate receivables as at March 31,2014 on such withheld amounts works out to Rs.18,11,63,385 as at March 31,2014 (Previous year: Rs. 12,64,33,026) on account of such rejections/withheld. Further, during earlier years, the Company has accrued interest on such upaid invoices. Interest accrued on such diagreements and included in the total receivables as at March31, 2014 amounts to Rs. 127,574,329 (Previous year : Rs. 127,574,329).

Note: 6

Investment in subsidiaries and Advances to Subsidiaries

The company as at March 31, 2014 is having the following investments (including advances) in its subsidiaries:

Status of the subsidiaries is as follows:

(a) Suryachakra Global Enviro Power Limited (SGEPL):

SGEPL along with its subsidiaries (wholly owned) is engaged in generation and sale of power. SGEPL and its subsidiaries have incurred substantial losses and the net worth of the respective companies has been fully eroded. In view of high input cot, operations in the power plants of these companies were suspended sice the financial year 2011-12. Secured loan lenders have issued notices under section 13(2) of the The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 (SARFAESI Act) / Windingup Petitions Under Section 443 and 434 of Companies Act 1956. Except one Power Plant owned by M/s. Sri Panchajanya Power Private Ltd at Hingoli, Maharastra all other Three plants and one Plant in project stage were taken over by the respective lenders. Indiabulls Housing Finance Ltd- Secured Lender for SGEPL and South Asian Agro Industries Ltd has initiated criminal proceedingsagainst the Managing Director of the Company and other Directors and guarantees. During March''12 the electricity distribution companies of respective power plants have increased the tariff for the power generated and exported. In view of such upward revision in the tariff, the management is of the view that these power plants are economically viable once settlements have taken place with the respective secured lenders. Management is makeing efforts to resolve the liquidity curnch; resolve issues with the lenders and commence the operations at the earliest. Management is also of the opinion that there would not be any impairment and all the plants would realize more than the carrying value of the assets as at the reporting period.

Hence, the current diminution in the value of these investment is considered to be of temporary in nature and hence no provision for diminution is considered necessary at present. However as a measure of prudence, the company, during 2011-12, has made a provision of Rs. 13,90,98,212/- towards advances given to the subsidiaries as doubtful.

(b) Suryachakra Energy (Chhattisgarh) Private Limited (SECPL) :

SECPL is a 100% subsidiary of the Company and is engaged in setting upto a 350MW coal based power project at Sapos Village, Jangir-Champa District in the State of Chhattisgarh at an estimated project cost of Rs. 1900,00,00,000..

SECPL has obtained most of the requisite licenses for setting up the project; signed Memorandum of Understanding (MOU) with Chhattisgarh State Electricity Board; and entered into an Implementation Agreement with Chhattisgarh State Power Distribution Company Limited, for setting up the said power project.

SECPL upto March 31, 2014 spent an amount of Rs. 45,59,00,000 towards advances to suppliers of captial equipments and incidental expenses. Management is confident of mobilizing the requisite funds to execute the project and recover the investment made in the project. Hence, no provision in the value of investment is considered necessary at this stage.

(c) Suryachakra Global Ventures Limited (SGVL):

SGVL is a wholly owned subsidiary of the company incorporated in Hongking under Companies ordinance. The Company through SGVL has decided to acquire coal mine for captive use by other subsidiaries. In the process, the company, out of the proceeds of the GDRs issued during the year, has advanced an amount of Rs. 85,01,25,542/- (USD 1,90,00,000) to SGVL.

SGVL has entered an into an MOU with Symphony Trading and Investments Limited (STIL) for acquiring interests in coal mines in Indonesia. STIL is having offices in Singapore, HongKong etc., and having experience in identifying and acquiring suitable coal mines for its clients.

SGVL has entered an into an MOU with Symphony Trading and Investments Limited(STIL) for acquiring interests in coal mines in Indonesia. STIL is having offices in Singapore, Honking etc., and having experience in identifying and acquiring suitable coal mines for its clients.

Pursuant to the said MOU, SGVL on 28th April'' 2011, has paid USD 1,90,00,000 as advance to STIL for acquiring interests in two coal mines from M/s. Surajaya Indelberg in Indonesia. As per MOU, STIL has agreed to return the advance, if transaction of coal mine acquisition is not successful with in the timelines mutually agreed / extended. Due to change in policies of Indonesia, the transaction could not be completed.

In view of the prevailing uncertain conditions relating to coal mining activities in Indonesia, the company has called back the advance given to STIL and making efforts to recover the advance. During the 2012 - 13, management has intensified the efforts for recovery; commenced the negotiations and in the process of initiating legal remedies also for recovering the dues and recovered an amount of Rs. 14,41,29,264/- (USD 25,90,886) during current year and pursuing the issue for recovery of the balance amount.

Management is confident of recovery of the advance. Short fall if any, in recovery will be adjusted in the year of final settlement. Hence no provision towards doubtful advances, if any, has been made.

Note: 7

Notices from SBI Global Factors Limited:

During the period ended 30th June 2012, M/s. SBI Global Factors Limited an unsecured creditor has filed a petition before the Honourable High Court of Andhra Pradesh for winding up of the company u/s 443 (1) (c) of the Companies Act, 1956. The Honourable High Court of Andhra Pradesh, had admitted the petition. Company has appealed against the said petition which is pending for hearing. Company is confident of resolving the matter amicably.

Note: 8

Interest on Borrowings

Since the certain lenders have filed various cases on the company with regard to recovery of their dues, the company stopped recognizing liability towards various finance charges on loans from such lenders Hence no finance charges have been provided in the financial statements for the year ended Mar 31, 2014. The liability if any will be recognized in the year of settlement of the dispute.

Note: 9

Confirmation of Balances

The management has not obtained confirmation of balances from Secured Loan Lenders, Trade payables, Creditors for Capital goods and Loans & Advances given by the company as at March 31, 2014. In the absence of confirmation of balances from these parties, provision if any to be made for any adverse variations in the carrying amounts are not quantified. However, management is confident that the settlement with the said parties will be made at the carrying amounts and no provision is required at present for adverse variations. Adjustments, if any will be made on settlement.

Note: 10

Employee benefits

The following table sets out the status of the gratuity plan as required under AS 15 (Revised):

Discount rate: The discount rate is based on the prevailing market yields of Indian government securities as at the balance sheet date for the estimated term of the obligations.

Expected rate of return on plan assets: This is based on the expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

Salary escalation rate: The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors.

Note: 11

Segment Reporting

The Company''s operations predominantly consists of generation and sale of electricity. The coal trading business of the company has been discontinued.Hence there are no reportable segments under the Accounting Standard - 17. The Company''s business operations are primarily concentrated in India. The conditions prevailing in India being uniform, no separate geographical disclosures are considered necessary.

Note: 12

Related party transactions

(a) The related parties where control exists are subsidiaries and step down subsidiaries. There are no other parties over which the company has control.

(b) Related parties where control exists.

(i) Subsidiary

- Suryachakra Global Enviro Power Limited -

- Suryachakra Energy (Chhattisgarh) Private Limited

- Suryachakra Global Ventures Limited

(ii) Step down subsidiaries

- South Asian Agro Industries Limited

- MSM Energy Limited

- Sri Panchajanya Power Private Limited

(iii) Key Managerial Personnel (KMP) represented on the Board of Directors

- Dr. S. M. Manepalli, Managing Director

- Mr. K Vijay Kumar, Executive Director

- Mrs. B.N.Raja Kumari

(iv) Enterprises over which Key Managerial Personnel or their relatives have significant influence (Significant interest entities)

- Suryachakra Thermal Energy (Andhra) Private Limited

- Suryachakra Thermal (Madhya Pradesh) Private Limited

- Suryachakra Power venture Private Limited

(v) Non-Executive on the Board of Directors

- Mr. P. K.. Bhattarcharjee

- Mr. Mahesh Chand

- Mr. V. S. Murthy

- Mr. M. Seshavatharam (son of Managing Director)

- Mr. A Ramesh Kumar

Note: 13 Deferred taxes

The Company had started claiming deduction under Section 80-IA of the Income Tax Act, 1961 from the year ended 31, March, 2011. Based on the assessment of the deferred tax as on March 31, 2014, the timing differences arising in the current year will reverse within the tax holiday period. Accordingly, no deferred tax has been recognised in the books of accounts of the Company as on March 31, 2014.

Note : 14

The current year figures are for 12 months as compared to 9 months in the previous year, hence the figure are not comparable

Note : 15

Previous year figures have been regrouped / reclassified wherever necessary to the current years'' classification / disclosures.


Mar 31, 2013

Note 1: Corporate Information

Suryachakra Power Corporation Limited ("the Company") was incorporated on 28 February 1995, as a Public Limited Company. The Company was converted into a Private Limited Company with effect from 9 August 2000. Pursuant to this, the name of the Company was changed to "Suryachakra Power Corporation Private Limited". The Company was re- converted into a public limited company with effect from 8 September 2005. Pursuant to this, the name of the Company was changed to Suryachakra Power Corporation Limited.

The Company is engaged in the generation and sale of electricity. The commercial operation started with effect from 1 April 2003. The Company is listed in Bombay Stock Exchange since 23 July 2007. The Company is also engaged in business of trading of coal from the year 31 March 2009.

Note: 2

Contingent liabilities and commitments (to the extent not provided for) As at As at March 31, 2013 June 30, 2012

(i) Contingent liabilities

(a) Claims against the company not acknowledged as debt - Liquidated 31,570,000 31,570,000 damages for delay in commencement of commercial operation

(b) Corporate guarantee given to Bunge Emissions Fund Limited against the loan provided 70,908,000 70,908,000 to Suryachakra Global Enviro Power Limited, a subsidiary of the company.

(ii) Commitments

(a) Estimated amount of contracts remaining to be executed on - - capital account not provided for (net of advances)

Note: 3

Disclosures under Section 22 of Micro, Small and Medium Enterprises Development Act, 2006

The Ministry of Micro, Small amd Medium Enterprises has issued an office Memorandum dated August 26, 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Enterpreneurs Memorandum Number as allotted after filing of the Memorandum. However, during the year, the Com- pany has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enter- prises Development Act,2006 and hence desclosures, if any, relating to amounts unpaid as at year end together with interest paid / Payable as required under the said Act, have not been given. Further in view of the managment, the impact of interest paid / payable in accordance with the provisions of the Micro, Small and Medium Enterprises Development Act, 2006 is not expected to be mateial. The Company has not received any claims for interest from any supplier under the said Act.

Note : 4

Revenue from A & N Administration

(i) The Company''s revenue from sale of electricity is based on the Power Purchase Agreement (PPA) entered into with the Andaman and Nicobar (A & N) Administration. The PPA is for a period of 15 years and contains a set of pre-defined formulae for calculation of the revenue to be billed on a monthly basis. Such billings as per terms of the PPA include a fixed charge payment, a variable charge payment, incentive payment, foreign exchange adjustment and change-in-law adjustment.

(ii) The Company, for the purpose of determining the fixed charge monthly billings, invoices the A & N Administration based on the capital cost as envisaged in the PPA. Pending final confirmation of actual capital expenditure, no adjustment is made to the revenue. Such adjustments, if any will be made in the period in which the amount becomes determinable and is confirmed by the A & N Administration.

(iii) Revenues for the year ended March 31, 2013 include an amount of Rs.5,25,87,325 ( year ended 30.06.2012: Rs.10,13,89,890) billed by the company as variable charge payment under the PPA, which has been rejected / withheld by the A & N Administration on the grounds of the technical interpretation of the formulae for computation of such charges. The total receivables on account of such rejections / withheld including interest thereon as at March 31, 2013 amounted to Rs.25,40,07,355/- (as at 30.06.2012 : Rs.30,52,52,497). Total interest accrued on such rejections / withheld and included in the total receivables as at March 31, 2013 amounts to Rs. 12,75,74,329 (30.06.2012: Rs. 12,75,74,329).

The Company believes that the amounts billed including interest thereon are recoverable based on the interpretation that can be inferred from the formulae contained in the PPA.

Note: 5

Trade Receivables

Trade receivables include an amount of Rs.8,36,43,243/- relating to discontinued coal trading activity. Management is continuously and regulatrly pursuing with the respective debtors and is confident of recovering the balance amount. However, as a measure of prudence a provision of Rs.3,78,50,636/- has been made towards doubtful receivables.

(a) Suryachakra Global Enviro Power Limited (SGEPL):

SGEPL along with its wholly owned subsidiaries is engaged in generation and sale of power. SGEPL and its subsidiaries have incurred substantial losses and the net worth of the respective companies has been fully eroded. In view of high input cost, the power plants of these companies have been closed for substantial period during the financial year 2011-12. During 12 - 13, except for one plant all other plants were inoperative. During March''12, the electricity distribution companies of respective power plants had increased the tariff for the power generated and exported. In view of such upward revision in the tariff , the management expected that the plants can be operated profitably and commenced the process of recommissioning the plants. However, due to liquidity crunch, the recommissioning process could not be completed. Management is making efforts to resolve the liqidity crunch and commence the operations at the earliest. The management is confident that all these companies will be revived and generate adequate profits and cash flows to meet the respective financials obligations. Management is also of the opinion that there would not be any impairment and all the plants would realise more than the carrying value of the assets as at the reporting period.

The diminution in the value of these investments is considered to be of temporary in nature and hence no provision for diminution is considered necessary at present. However as a measure of prudence, the company, diuring the year ended June 30, 2012 made a provision of Rs.13,90,98,212/- towards doubtful advances.

(b) Suryachakra Energy (Chhattisgarh) Private Limited (SECPL):

SECPL is a 100% subsidiary of the company and is engaged in setting upto a 350MW coal based power project at Sapos Village, Jangir-Champa District in the State of Chhattisgarh at an estimated project cost of

SECPL has obtained most of the requisite licenses for setting up the project; signed a Memorandum of Understanding (MOU) with Chattisghar State Electricity Board; and entered into an Implementation Agreement with Chattisghar State Power Distribution Company Limited, for setting up the said power project.

SECPL has spent an amount of Rs. 45,59,27,070 towards advances to suppliers of capital equipments and incidental expenses . Management is confident of mobilizing the requisite funds to execute the project and recover the investment made in the project. Hence, no provision for diminution in the value of investment is considered necessary at this stage.

(c) Suryachakra Global Ventures Limited (SGVL):

SGVL is a wholly owned subsidiary of the company incorporated in Honkong under Companies Ordinance. The Company has decided to acquire through SGVL coal mines for captive use by other subsidiaries. During the year ended June 30, 2012, the company advanced an amount of Rs.85,01,25,542/- (USD 1,90,00,000) to SGVL, out of the proceeds of the GDRs issue.

SGVL has entered into an MOU with Symphony Trading and Investments Limited (STIL) having offices in Singapore, Hongkong etc., for acquiring interests in coal mines in Indonesia. STIL is having experience in identifying and acquiring suitable coal mines for its clients. Pursuant to the said MOU, SGVL on 28th April''2011, has paid USD 1,90,00,000 as advance to STIL for acquiring interests in two coal mines from M/s. Surajaya Indelberg in Indonesia. As per MOU, STIL has agreed to return the advance, if transaction of coal mine acquisition is not successful with in the timelines mutually agreed / extended. Due to change in the Indonesian policy, the transaction could not be completed.In view of the prevailing uncertain conditions relating to coal mining activities in Indonesia, the company has called back the advance given to STIL and is making all efforts to recover the advance. During the year, management has intensified the efforts for recovery and has commenced the negotiations and is also in the process of initiating legal remedies for recovering the advance.

Management is confident of recovery of the advance. Shortfall if any, in recovery will be adjusted in the year of final settlement. Hence no provision towards doubtful advance has been made.

Note: 6

Notices from SBI Global Factors Ltd:

During the year ended June 30, 2012, M/s. SBI Global Factors Limited an unsecured creditor had filed a petition before the Honourable High Court of Andhra Pradesh for winding up of the company u/s 443 (1) (c) of the Companies Act, 1956. The Honourable High Court of Andhra Pradesh, had admitted the petition. Company has appealed against the said petition which is pending for hearing. Company is confident of resolving the matter amicably.

Note: 7

Borrowings (other than from banks), receivables, loans and advances, advances on capital account and payables are subject to review / reconciliation / confirmations. Adjustments, if any will be made on completion of such review / reconciliation / confirmations / identification of doubtful / bad advances.

Note: 8

Segment Reporting

The Company''s operations predominantly consists of generation and sale of electricity. Hence there are no reportable segments under the Accounting Standard - 17. The Company''s business operations are primarily concentrated in India. The conditions prevailing in India being uniform, no separate geographical disclosures are considered necessary.

Note: 9

Related party transactions

(a) The related parties where control exists are subsidiaries and step down subsidiaries. There are no other parties over which the company has control.

(b) Related parties where control exists and with whom transactions have taken place during the year are as follows:

(i) Subsidiary

- Suryachakra Global Enviro Power Limited

- Suryachakra Energy (Chhattisgarh) Private Limited

- Suryachakra Global Ventures Limited

(ii) Step down subsidiaries

- South Asian Agro Industries Limited

- MSM Energy Limited

- Sri Panchajanya Power Private Limited

(iii) Key Managerial Personnel (KMP) represented on the Board of Directors

- Dr. S. M. Manepalli, Managing Director

- Mr. K Vijay Kumar, Executive Director (w.e.f 15.05.2012)

- Mrs. B.N.Raja Kumari, Executive Director (w.e.f 16.07.2012)

(iv) Enterprises over which Key Managerial Personnel or their relatives have significant influence (Significant interest entities)

- Suryachakra Thermal Energy (Andhra) Private Limited

- Suryachakra Thermal (Madhya Pradesh) Private Limited

(v) Non-Executive Directors on the Board

- Mr. P. K.. Bhattarcharjee

- Mr. Mahesh Chand

- Mr. V. S. Murthy

- Mr. M. Seshavatharam (son of Managing Director, resigned w.e.f. 15.05.2012)

- Mr. A Ramesh Kumar

Note: 10

Deferred taxes

The Company had started claiming deduction under Section 80-IA of the Income Tax Act, 1961 from the year ended 31, March, 2011. Based on the assessment of the deferred tax as on March 31, 2013, the timing differences arising in the current year will reverse within the tax holiday period. Accordingly, no deferred tax has been recognised in the books of accounts of the Company as on March 31, 2013.

Note : 11

The current year figures of statement of profit and loss are for nine months as against fifteen months for the previous year, hence the figures are not comparable.


Jun 30, 2012

Note 1: Corporate Information

Suryachakra Power Corporation Limited ("the Company") was incorporated on 28 February 1995, as a Public Limited Company. The Company was converted into a Private Limited Company with effect from 9 August 2000. Pursuant to this, the name of the Company was changed to "Suryachakra Power Corporation Private Limited". The Company was re- converted into a public limited company with effect from 8 September 2005. Pursuant to this, the name of the Company was changed to Suryachakra Power Corporation Limited.

The Company is engaged in the generation and sale of electricity. The commercial operation started with effect from 1 April 2003. The Company is listed in Bombay Stock Exchange since 23 July 2007. The Company is also engaged in business of trading of coal from the year 31 March 2009.

Note:

During the year, the Company has issued 36,50,000 Global Depositary Receipts (GDR) each representing twenty equity share of nominal value Rs.10/- at an offer price of US$6.30 per GDR. Subsequently, 7,30,00,000 shares have been allotted as underlying shares to the GDRs. Consequently, the share capital stands increased by Rs.73,00,00,000 and securities premium by Rs.29,53,47,050. All the underlying shares have been withdrawan and there are no GDRs outstanding as at June 30, 2012. The proceeds from the issue have been utilised as follows:

2.1 Rights, preferences and restrictions attached to equity shares

The company has only one class of shares referred to as equity shares having a par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share.

In the event of liquidation of the company, the holders of equity shares will be entitled to receive surplus from sale of assets after setting off of the liabilities. The distribution will be in proportion to the number of equity shares held by the shareholders.

3.1 Nature of Security for term loans

A. Term loans from State Bank of India (SBI) including foreign currency term loan are secured by:

(i) First charge on the entire fixed assets of company, present and future on pari passu basis with other term lender, SREI Equipment Finance Pvt Ltd

(ii) Registered mortagage of leasehold rights of land measuring 4.12 Ha. Bearing Survey Nos. 462, 467,636, 635/2, 625/1, 634/1, 635/3 and 635/4 situated at Bambooflat, Ferrargunj Tehsil, Andaman, A& N Islands, including assignment of Power Purchase Agreement, EPc contract and o&M contract, insurance policy and other project documents.

(iii) collateral security by:

(a) Pledge of 84,37,388 shares of Suryachakra Power Corporation Limited (face value of F10).

(b) Vacant urban residential plot no. 74 admeasuring 350 sq. yards, Survey Nos.300P, 302, 309P, in the name of Shri M. Seshavatharam and situated in Krishnaja Hills, Village: Bachupally, Mandal: Quthubullapur, District Ranga Reddy, Andhra Pradesh.

(c) Open vacant plots of land in the name of Shri M. Naveen Babu Admeasuring’ 1.47 acres RS No.368; 0.97 acre RS No.09; 0.38 acre RS No.11. All three at village: Thorreddu, Rajahmundry Rural Mandal, District East Godavari, Andhra Pradesh. 3.02 acres RS No.246/1, village: Madhurapudi, Korukondala Mandal, District East Godavari, Andhra Pradesh.

(d) 6 Nos. vacant residential plots in the name of Shri M. Naveen Babu in Western Block No.6-95, 6- 95/1, 6-97, 6-97/1, 6-97/3 and 6-96 admeasuring 2082.88 sq. yards situated in RS 124/4, at village: Thorreddu, Rajahmundry Rural Mandal, District East Godavari, Andhra Pradesh.

(iv) Personal Guarantee by Dr. S.M Manepalli, Shri M. Naveen Babu, Shri M. Seshavatharam and Smt T. Sreelatha.

Notes to the financial statements for the year ended June 30, 2012 (All amounts in Indian rupees, except share data and where otherwise stated)

B. Term loan from SREI Equipment Finance Private Limited is secured by:

(i) First charge on all movable and immovable assets, present and future of the company in favour of SREI on a pari-passu basis with SBI.

(ii) Assignment in favour of SREI, SBI on a pari-passu basis, of all rights titles and interests of the company in, to and under all assets of the project and all projects documents, insurance policies, permits/approval etc, to which the company is a party and all other contracts relating to project.

(iii) Pari-passu first charges on company's all the accounts including but not limited to Trust and Retention Account and the Debt-Service Letter of Credit / Reserve Account.

(iv) The Equity Shares held by promoters in the project company (minimium 51%) shall be pledged to SREI and SBI on a pari-passu basis.

(v) Non-disposal undertaking by Caterpillar and BSES for not disposing off their respective equity shares of SPCL during the currency of the credit facilities sanctioned to SPCL without the written consent of SREI and SBI.

3.2 Terms of repayment of secured term loans

(i) Rupee term loan from State Bank of India carries an interest of 18% per annum. The loan outstanding as on the date of the balance sheet has fallen due for repayment.

(ii) Foreign currency term loan from State Bank of India carries an interest of 3.5561% and is repayable in two equal quarterly instalments of USD 87,500 each on August 23, 2012 and November 23, 2012.

(iii) Working capital term loan from State Bank of India (Kolkata) carries an interest of 12.75% per annum and is repayable in sixty nine monthly unequal instalments. First sixty months @ Rs.35,40,000 each and next eight months @ Rs.39,30,000 each and the last instalments @ Rs.39,60,000.

(iv) Term loan form SREI Equipment Finance Private Limited carries an interest of 19.5% per annum. The loan outstanding as on the date of the balance sheet has fallen due for repayment.

4.1 Nature of Security for Cash Credits

Cash Credits from State Bank of India is secured by:

(i) Exclusive first charge on the entire current assets of the company both present and future.

(ii) Assignment of LC from Andaman and Nicobar Administration

(iii) Colateral security on second charge on all fixed assets of the company

Note: 5 As at As at Contingent liabilities and commitments June 30, March 31, (to the extent not provided for) 2012 2011

(i) Contingent liabilities

(a) Letter of credit outstanding - 29,700,000

(b) Claims against the company not acknowledged as debt - Liquidated damages for delay in commencement of commercial operations 31,570,000 31,570,000

(c ) Corporate guarantee given to Bunge Emissions Fund Limited against the loan provided to Suryachakra Global Enviro Power Limited, a subsidiary of the company. 70,908,000 -

(ii) Commitments

(a) Estimated amount of contracts remaining to be executed on capital account not provided for (net of advances) - -

Note: 6

Disclosures under Section 22 of Micro, Small and Medium Enterprises Development Act, 2006

The Ministry of Micro, Small and Medium Enterprises has issued an office Memorandum dated August 26, 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Enterpreneurs Memorandum Number as allotted after filing of the Memorandum. However, during the year, the Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at year end together with interest paid / payable as required under the said Act, have not been given. Further in the view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the Micro, Small and Medium Enterprises Development Act, 2006 is not expected to be material. The Company has not received any claim for interest from any supplier under the said Act.

Note:

(a) Loans and Advances shown above, fall under the category of 'Long Term Loans & Advances' in nature of Loans. No repayment schedule has been specified in respect of these loans.

(b) All the above loans and advances are interest free.

(c) * Secured by a second charge by way of hypothecation of the fixed assets of the lonee situated at Madwa Village, Tehsil: Janjgir, Champa, District: Janjgir, Champa - Chhattisgarh.

B. Investment by the loanee in the shares of the Company and subsidiaries

None of the loanees and loanees of subsidiary companies have made investments in shares of the Company.

Note: 7

Revenue from A & N Administration

(i) The Company's revenue from sale of electricity is based on the Power Purchase agreement (PPA) entered into with the Andaman and Nicobar (A & N) Administration. The PPA is for a period of 15 years and contains a set of pre-defined formulae for calculation of the revenue to be billed on a monthly basis. Such billings as per terms of the PPA include a fixed charge payment, a variable charge payment, incentive payment, foreign exchange adjustment and change-in-law adjustment.

(ii) The Company, for the purpose of determining the fixed charge monthly billings, invoices the A & N Administration based on the capital cost as envisaged in the PPA. Pending final confirmation of actual capital expenditure, no adjustment is made to the revenue. Such adjustments, if any will be made in the period in which the amount becomes determinable and is confirmed by the A & N Administration.

(iii) Revenues for the year ended June 30, 2012 include an amount of Rs.10,13,89,890 (Previous year: Rs.5,94,94,972) billed by the company as variable charge payment under the PPA, which has been rejected / withheld by the A & N Administration on the grounds of the technical interpretation of the formulae for computation of such charges. The Company also has receivables amounting to Rs. 17,76,78,168 as at June 30, 2012 (Previous year: Rs. 85,904,780) on account of such rejections/ withheld. Further, the Company has accrued interest on such unpaid invoices amounting to Rs. Nil for the year ended June 30, 2012 (Previous year: Rs. 4,37,21,965). Total Interest accrued on such disagreements and included in the total receivables as at June 30, 2012 amounts to Rs. 127,574,329 (Previous year: Rs. 127,574,329). The Company has during the year ended June 30, 2012 received an amount of Rs. 96,16,501and Rs. 9,55,43,200/- on 9th July 2012 towards such receivables.

The Company believes that the amounts billed including interest thereon are recoverable based on the interpretation that can be inferred from the formulae contained in the PPA.

Further, the company, upto the year ended March 31, 2011 has accrued, interest on such unpaid invoices aggregating to Rs.12,75,74,329/-. During the current year ended June 30, 2012 the company has reviewed the recognition of interest and based on such review and as a measure of prudence, has decided to discontinue further recognition of interest. The same will be recognized in the year of receipt. Management is confident of recovery of interest recognised upto March 31, 2011. Had the company continued to recognise the interest, the loss for the year would be lower and retained earning would have been higher by Rs. 7,95,18,166/-.

Note: 8

Trade Receivables

Trade receivables include an amount of Rs. 18,32,54,512/- relating to coal trading activity which has been discontinued. Subsequent to the Balance Sheet date, the company has realised an amount of Rs.8,91,00,000/- against said dues. Management is continuously and regularly pursuing with the respective debtors and confident of recovering the balance amount. However, as ameasure of prudence a provision of Rs. 3,78,50,636/- has been made towards doubtful receivables.

Status of the subsidiaries is as follows:

(a) Suryachakra Global Enviro Power Ltd (SGEPL):

SGEPL along with its subsidiaries is engaged in generation and sale of power. SGEPL and its subsidiaries have incurred substantial losses and the net worth of the respective companies has been fully eroded. In view of high input cost, the power plants of these companies have been closed for substantial period during the financial year 2011-12. During March'12, the electricity distribution companies of respective power plants have increased the tariff for the power generated and exported. In view of such upward revision in the tariff , the respective companies have commenced the process of recommissioning the plants. The management is confident that all these companies will be revived and generate adequate profits and cash flows to meet the respective financials obligations. Hence, the current diminution in the value of these investments is considered to be of temporary in nature and hence no provision for diminution is considered necessary at present. However as a measure of prudence, the company has made a provision of Rs. 13,90,98,212/- towards advances given to the subsidiaries as doubtful.

(b) Suryachakra Energy(chhattisgarh) Private Ltd (SECPL):

SECPL is a 100% subsidiary of the company and is engaged in setting upto a 350MW coal based power project at Sapos Village, Jangir-Champa District in the State of Chhattisgarh at an estimated project cost of Rs. 1900 Crores.SECPL has obtained requisite licenses for setting up the project; signed a Memorandum of Understanding (MOU) with Chattisghar

State Electricity Board; and entered into an Implementation Agreement with Chattisghar State Power Distribution Company Limited, for setting up the said power project SECPL upto March 31, 2012, spent an amount of Rs. 45.65 Crores towards advances to suppliers of capital equipments and incidental expenses . Management is confident of mobilizing the requisite funds to execute the project and recover the investment made in the project. Hence, no provision in the value of investment is considered necessary at this stage.

(c) Suryachakra Global Ventures Ltd (SGVL):

SGVL is a wholly owned subsidiary of the company incorporated in Honkong under Companies Ordinance. The Company through SGVL has decided to acquire coal mine for captive use by other subsidiaries. In the process, the company, out of the proceeds of the GDRs issued during the year, has advanced an amount of Rs. 85,01,25,542/- (USD 1,90,00,000) to SGVL. SGVL has entered an into an MOU with Symphony Trading and Investments Limited(STIL) for acquiring interests in coal mines in Indonesia. STIL is having offices in Singapore, Hongkong etc., and having experience in identifying and acquiring suitable coal mines for its clients. Pursuant to the said MOU, SGVL on 28th April'2011, has paid USD 1,90,00,000 as advance to STIL for acquiring interests in two coal mines from M/s. Surajaya Indelberg in Indonesia. As per MOU, STIL has agreed to return the advance, if transaction of coal mine acquisition is not successful with in a period of 6 months from the date of the advance. In view of the prevailing uncertain conditions relating to coal mining activities in Indonesia, the company has called back the advance given to STIL and making efforts to recover the advance. Management is confident of recovery of the advance. Shortfall if any, in recovery will be adjusted in the year of final settlement. Hence no provision towards doubtful advances, if any, has been made.

Note: 9

Notices from SBI Global Factors Ltd:

During the year M/s. SBI Global Factors Limited an unsecured creditor has filed a petition before the Honourable High Court of Andhra Pradesh for winding up of the company u/s 443 (1) (c) of the Companies Act, 1956. The Honourable High Court of Andhra Pradesh, had admitted the petition. Company has appealed against the said petition which is pending for hearing. Company is confident of resolving the matter amicably.

Note: 10

Advance to Suppliers and Others

Balances recoverable in cash or in kind or for values to be received are subject to confirmation and reconciliation. Necessary adjustments if any, will be made in the year of reconciliation / settlement.

Discount rate:

The discount rate is based on the prevailing market yields of Indian government securities as at the balance sheet date for the estimated term of the obligations.

Expected rate of return on plan assets:

This is based on the expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

Salary escalation rate:

The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors.

Note: 11

Segment Reporting

The Company's operations predominantly consists of generation and sale of electricity. The coal trading business of the company has been discontinued. Hence there are no reportable segments under the Accounting Standard - 17. The Company's business operations are primarily concentrated in India. The conditions prevailing in India being uniform, no separate geographical disclosures are considered necessary.

Note: 12

Related party transactions

(a) The related parties where control exists are subsidiaries and step down subsidiaries. There are no other parties over which the company has control.

(b) Related parties where control exists and with whom transactions have taken place during the year are as follows:

(i) Subsidiary

- Suryachakra Global Enviro Power Limited

- Suryachakra Energy (Chhattisgarh) Private Limited (from March 05, 2011)

- Suryachakra Global Ventures Limited

- Suryachakra Power Venture Private Limited (till March 21, 2011)

(ii) Step down subsidiaries

- South Asian Agro Industries Limited

- MSM Energy Limited

- Sri Panchajanya Power Private Limited

(iii) Key Management Personnel (KMP) represented on the Board of Directors

- Dr. S. M. Manepalli, Managing Director

- Mr. K Vijay Kumar, Executive Director

(iv) Enterprises over which Key Managerial Personnel or their relatives have significant influence (Significant interest entities)

- Suryachakra Thermal Energy (Andhra) Private Limited

- Suryachakra Thermal (Madhya Pradesh) Private Limited

- Suryachakra Power Venture Private Limited (from March 22, 2011)

(v) Non-Executive on the Board of Directors

- Mr. K Satyanarayana

- Mr. P. K. Bhattarcharjee

- Mr. Mahesh Chand

- Mr. V. S. Murthy

- Mr. M. Seshavatharam (son of Managing Director)

- Mr. A Ramesh Kumar

- Mr. Commodore K.V. Subramaniyam (Resigned w.e.f. 30.10.2011)

- Mr. Shri K.B.Trehan (Resigned w.e.f. 23.07.2011)

- Mr. P.Visweswara Rao, IAS (Retd) included in P.Y. Non Executive Directors

Note: 13 Deferred taxes

The Company had started claiming deduction under Section 80-IA of the Income Tax Act, 1961 from the year ended 31March 2011. Based on the assessment of the deferred tax as on 30 June 2012, the timing differences arising in the current year will reverse within the tax holiday period. Accordingly, no deferred tax has been recognised in the books of accounts of the Company as on 30 June 2012.

Note: 14

Discontinuing operations

The Company's Board of Directors at their meeting held on 29 October 2009 had approved to discontinue the coal trading business. Accordingly the coal trading business was discontinued w.e.f. June 30, 2011. The results of discontinued business during the year until the date of discontinuation were as under:

Note: 15

The management committee of Board of Directors of the Company at it's Meeting held on 29th March 2012, has approved an extention of the financial year 2011-12 of the company by a period of three months i.e upto June 30, 2012. The figures of the current year are for 15 months and for the previous year are for 12 months. Hence current year figures are not comparable with previous year figures.

Note: 16

Previous year figures

The Company has prepared these financial statements as per the format prescribed by Revised Schedule VI to the Companies Act, 1956 issued by the Ministry of Corporate Affairs, Government of India. Previous figures have been recasted/restated to conform to the classification required by the Revised Schedule VI to financial statements for the year ended June 30, 2012.


Mar 31, 2011

Background

Suryachakra Power Corporation Limited ("the Company") was incorporated on 28 February 1995, as a Public Limited Company. The Company was converted into a Private Limited Company with effect from 9 August 2000. Pursuant to this, the name of the Company was changed to "Suryachakra Power Corporation Private Limited". The Company was re- converted into a public limited company with effect from 8 September 2005. Pursuant to this, the name of the Company was changed to Suryachakra Power Corporation Limited.

The Company is engaged in the generation and sale of electricity. The commercial operation started with effect from 1 April 2003. The Company is listed in Bombay Stock Exchange since 23 July 2007. The Company is also engaged in business of trading of coal from the year 31 March 2009.

1. Revenue from A&N Administration

a) The Company's revenue from sale of electricity is based on the Power Purchase agreement (PPA) entered into the Andaman and Nicobar (A & N) Administration. The PPA is for a period of 15 years and contains a set of pre-defined formulae for calculation of the revenue to be billed on a monthly basis. Such billings as per terms of the PPA include a fixed charge payment, a variable charge payment, incentive payment, foreign exchange adjustment and change-in-law adjustment.

b) The Company, for the purpose of determining the fixed charge monthly billings, invoices the A & N Administration based on the capital cost as envisaged in the PPA. Pending final confirmation of actual capital expenditure, no adjustment is made to the revenue. Such adjustments, if any will be made in the period in which the amount becomes determinable and is confirmed by the A & N Administration.

c) Revenues for the year ended 31 March 2011 include an amount of Rs. 59,494,972 (Previous year: Rs. 47,835,455) billed by the company as variable charge payment under the PPA, which has been rejected/ withheld by the A & N Administration on the grounds of the technical interpretation of the formulae for computation of such charges. The Company also has receivables amounting to Rs. 85,904,780 as at 31 March 2011 (Previous year: Rs. 118,640,315) on account of such rejections/ withheld. Further, the Company has accrued interest on such unpaid invoices amounting to Rs. 43,721,965 for the year ended 31 March 2011 (Previous year: Rs. 28,503,384). Total Interest accrued on such disagreements and included in the total receivables as at 31 March 2011 amounts to Rs. 127,574,329 (Previous year: Rs. 83,852,364). The Company has during the year ended 31 March 2011 received an amount of Rs. 92,230,508 towards such receivables as mentioned above.

d) The Company believes that the amounts billed including interest thereon are recoverable based on the interpretation that can be inferred from the formulae contained in the PPA.

2. Deferred taxes

The Company had started claiming deduction under Section 80-IA of the Income Tax Act, 1961 from the year ended 31March 2011. Based on the assessment of the deferred tax as on 31 March 2011, the timing differences arising in the current year will reverse within the tax holiday period. Accordingly, no deferred tax has been recognised in the books of accounts of the Company as on 31 March 2011.

3. Related parties

(a) The related parties where control exists are subsidiaries and step down subsidiaries. There are no other parties over which the company has control.

(b) Related parties where control exists with whom transactions have taken place during the year are follows:

(i) Subsidiary

· Suryachakra Global Enviro Power Limited

· Suryachakra Energy (Chattisgarh) Private Limited (from 05 March 2011)

· Suryachakra Global Ventures Limited (from 26 January 2011)

· Suryachakra Power Venture Private Limited (for the period 16 September 2010 to 21 March 2011)

(ii) Step down subsidiaries

· South Asian Agro Industries Limited (Subsidiary till 20 January 2010)

· MSM Energy Limited (Subsidiary till 20 January 2010)

· Sri Panchajanya Power Private Limited (Subsidiary till 20 January 2010)

(iii) Key Management Personnel (KMP) represented on the Board of Directors

· Dr. S. M. Manepalli, Managing Director

(iv) Enterprises over which Key Managerial Personnel has significant influence (Significant interest entities)

· Suryachakra Thermal Energy (Andhra) Private Limited

· Suryachakra Thermal (Madhya Pradesh) Private Limited

· Suryachakra Power Venture Private Limited

· Suryachakra Energy (Chattisgarh) Private Limited (till 04 March 2011)

(v) Non-executive on the Board of Directors

· Mr. P. K.. Bhattarcharjee

· Mr. Mahesh Chand

· Mr. K. Satyanarayana

· Mr. V. S. Murthy

· Commodore K. V. Subramaniyam, YSM (Retd.)

· Mr. M. Seshavatharam (Son of Managing Director)

· Mr. A Ramesh Kumar (from 10 August 2010)

· Mr. K. B. Trehan (from 11 November 2010)

· Mr. P. Visweswara Rao, IAS (Retd.) (from 22 November 2010)

Schedule 20. Notes to the accounts (Continued)

The managerial personnel are covered by the Company's gratuity policy and are eligible for leave encashment along with other employees of the Company. The proportionate amount of gratuity and leave encashment cost pertaining to the managerial personnel has not been included in the aforementioned disclosures as these are not determined on an individual basis.

Discount rate: The discount rate is based on the prevailing market yields of Indian government securities as at the balance sheet date for the estimated term of the obligations.

Expected rate of return on plan assets: This is based on the expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

Salary escalation rate: The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors.

4. Segment reporting

The Company's business is organised and management views the performance based on the business segments as mentioned below:

· Electricity sale: This division of the Company is engaged in the generation and sale of electricity.

· Coal trading: This division of the Company is engaged in the trading of coal.

Since the business operations of the Company are primarily concentrated in India, the Company is considered to operate only in one geographical segment.

Segment policies

The accounting policies consistently used in the preparation of the financial statements are also applied to record revenue and expenditure in individual segments.

Revenue and direct expenses in relation to segments are categorised based on items that are individually identifiable to that segment. Certain expenses are not specifically allocable to individual segments and pertain to the entity as a whole and are disclosed as unallocated expenses.

Assets and liabilities are either specifically identifiable with individual segments or have been allocated to segment on a systematic basis. Assets that pertain to the entity as a whole such as income tax balances have been disclosed as unallocated assets. Liabilities other than loan balances and income tax balances have been identified against each segment or have been allocated on a reasonable basis.

5. Discontinuing operations

The Company's Board of Directors at their meeting held on 29 October 2009 approved a definitive plan wherein, its coal trading business will be transferred to a separate legal entity to enable to focus on the core business of power generation, subject to the receipt of all regulatory and other approvals. The execution of the above plan is in process and expected to be completed by October 2011. In accordance with AS 24 (Discontinuing operations), as the initial event has occurred during the year ended 31 March 2010, the coal trading business (representing coal trading segment) would therefore qualify as a discontinuing operation under the above accounting standard.

6. The Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allotted after filing of the Memorandum. Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2011 has been made in the financial statements based on information received and available with the Company. Further in the view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the Micro, Small and Medium Enterprises Development Act, 2006 is not expected to be material. The Company has not received any claim for interest from any supplier under the said Act.

7. Exceptional items, net

(a) The Company has restructured its investments in subsidiaries and accordingly transferred its investment in subsidiaries MSM Energy Limited, South Asian Agro Industries Limited and Sri Panchajanya Power Private Limited having a total carrying value of Rs. 500,683,000 to its wholly owned subsidiary Suryachakra Global Enviro Power Limited (Formerly Lahari Power and Steels Limited) for total consideration of Rs. 569,374,243 to be settled in the form of additional share to be issued in Suryachakra Global Enviro Power Limited resulting in a profit of Rs. 68,691,243 which has been disclosed as an exceptional item in the year ended 31 March 2010. Further, the Company has been issued shares in Suryachakra Global Enviro Power Limited of Rs. 143,402,645, representing the share application money and un-secured loan in all the above mentioned subsidiaries. Climate Change Investment I I S.A. SICAR (CCI) has invested Rs. 400,000,000 and was allotted a 22.01% stake in Suryachakra Global Enviro Power Limited.

(b) In March 2006, one of the DG Set with a capacity of 5 MW output had suffered major damages. The Company made a claim of Rs. 99,141,696 with the insurance authorities (net of allowances of Rs.5,000,000). Pending final assessment of the claim, the Company had received interim amounts totaling to Rs.54,957,102 from the insurance Company including Rs.11,829,899 during the year ended 31 March 2010. The insurance company vide its letter dated 11 May 2010 has confirmed that all the amounts paid till date are final and no claim would be payable. Accordingly, the balance amount of claims receivable amounting to Rs. 44,184,594 has been written off during the year which has been disclosed as an exceptional item in the year ended 31 March 2010.

8. During the year ended 31 March 2011, the Company has transferred the coal based thermal power project under development in Chhattisgarh to Suryachakra Energy (Chhattisgarh) Private Limited (SECPL) for a consideration of Rs.356,400,000 (including Rs. 39,785,160 incurred during the year), being the carrying value of the assets in the said power project against equity shares in SECPL.

9. During the year ended 31 March 2010, the unamortised expenses related to the Initial Public Offer of the Company amounting is Rs.39,474,865 was adjusted to the Securities Premium account. These were carried forward in earlier years as Miscellaneous Expenditure and amortised over a period of 5 years. Had the Company followed amortising these over a period of 5 years, the profit for the year ended 31 March 2010 and the accumulated profits as at 31 March 2010 would have been lower by Rs.10,765,872.

10. The Board of directors in the meeting dated 22 November 2010, approved the Scheme of Amalgamation (‘the scheme') of Suryachakra Energy & Infrastructure Limited (SEIPL), a Company belonging to the promoter group of the Company. The Company has not filed the Scheme with the honorable High Court for necessary approvals as the Company is contemplating certain changes in the Scheme.

11. Subsequent to the year end, the Company has issued 3,650,000 Global Depository Receipts (GDRs) at USD 6.3 per GDR. These GDRs have been listed in the Euro MTF Market on 28 April 2011. The Company has listed the underlying 73,000,000 equity shares in Bombay Stock Exchange on 19 May 2011.

12. Previous year figures

Previous years' figures have been regrouped / reclassified wherever necessary, to conform to current years' classification.


Mar 31, 2010

Background

Suryachakra Power Corporation Limited ("the Company") was incorporated on February 28, 1995 as a Public Limited Company. The Company was converted into a Private Limited Company with effect from August 9, 2000. Pursuant to this, the name of the Company was changed to "Suryachakra Power Corporation Private Limited". The Company was re-converted into a public limited company with effect from 8 September 2005. Pursuant to this, the name of the Company was changed to Suryachakra Power Corporation Limited. The Company is engaged in the generation and sale of electricity. The commercial operation was started with effect from 1 April 2003. The Company is listed in Bombay Stock Exchange since 23 July 2007.

1. (a) Capital commitments and contingent liabilities:

Particulars As at As at

31 March 2010 31 March 2009

i. Letter of credit outstanding 100,000,000 50,000,000

ii. Estimated amount of contracts necessary to be 4,812,916,003 4,760,000,000 executed on capital amount not provided for (net of advances)

iii. Liquidated damages for delay in commencement of 31,570,000 31,570,000 commercial operations

iv. Claims made against the Company by suppliers and not 860,162 - accepted by the Company



*Subsidiaries till 20 January 2010 (Refer note 15 of Schedule 21)

2. (a) The Companys revenue from sale of electricity is based on the Power Purchase agreement (PPA) entered into the Andaman and Nicobar (A & N) Administration. The PPA is for a period of 15 years and contains a set of pre-defined formulae for calculation of the revenue to be billed on a monthly basis. Such billings as per terms of the PPA include a fixed charge payment, a variable charge payment, incentive payment, foreign exchange adjustment and change-in-law adjustment.

(b) The Company, for the purpose of determining the fixed charge monthly billings, invoices the A & N Administration based on the capital cost as envisaged in the PPA. Pending final confirmation of actual capital expenditure, no adjustment is made to the revenue. Such adjustments, if any will be made in the period in which the amount becomes determinable and is confirmed by the A & N Administration.

(c) Revenues for the year ended 31 March 2010 include an amount of Rs. 47,835,455 (Previous year: Rs. 5,688,795) billed by the company as variable charge payment under the PPA, which has been rejected/ withheld by the A & N Administration on the grounds of the technical interpretation of the formulae for computation of such charges. The Company also has receivables amounting to Rs. 118,640,315 as at 31 March 2010 (Previous year: Rs. 70,804,860) on account of such rejections/ withheld. Further, the Company has accrued interest on such unpaid invoices amounting to Rs. 28,503,384 for the year ended 31 March 2010 (Previous year: Rs. 21,032,797). Total Interest accrued on such disagreements and included in the total receivables as at 31 March 2010 amounts to Rs. 83,852,364 (Previous year: Rs. 55,348,980).

(d) The Company believes that the amounts billed including interest thereon are recoverable based on the interpretation that can be inferred from the formulae contained in the PPA and has filed a petition with the Joint Electricity Regulatory Commission (JERC) in October 2009 claiming their long pending dues for the unresolved issues. On March 3, 2010, the A&N Administration has on a detailed analysis of the case and the unresolved issues determined that the matter is highly technical and requested the Central Electricity Authority (CEA) to re-examine the complete cost document of the Company to proceed further in the matter.

3. Deferred taxes

From the current financial year, the Company has started claiming deduction under Section 80-IA of the Income Tax Act, 1961. Based on the assessment of the deferred tax as on 31 March 2010, the timing differences arising in the current year will reverse within the tax holiday period. Accordingly, no deferred tax has been recognised in the books of accounts of the Company as on 31 March 2010.

4. Earnings per share (EPS)

The Company has no potentially dilutive equity shares outstanding during the year.

5. Related parties

(a) The related parties where control exists are subsidiaries and step down subsidiaries. There are no other parties over which the company has control.

(b) Related parties where control exists with whom transactions have taken place during the year are follows:

(i) Subsidiary

- Suryachakra Global Enviro Power Limited (Formerly Lahari Power and Steels Limited)

(ii) Step down subsidiaries

- South Asian Agro Industries Limited (subsidiary till 20 January 2010)

- MSM Energy Limited (subsidiary till 20 January 2010)

- Sri Panchajanya Power Private Limited (subsidiary till 20 January 2010)

(iii) Key Management Personnel (KMP) represented on the Board of Directors.

- Dr. S. M. Manepalli, Managing Director

(iv) Enterprises over which Key Managerial Personnel has significant influence (Significant interest entities)

- Suryachakra Thermal Energy (Andhra) Private Limited

- Suryachakra Energy (Chattisgarh) Private Limited

- Suryachakra Thermal (Madhya Pradesh) Private Limited

- Suryachakra Power Venture Private Limited

(v) Non-executive on the Board of Directors.

- Mr. P. V. Rao, IAS (Retd.)

- Mr. P. K.. Bhattarcharjee

- Mr. Mahesh Chand

- Mr. K. Satyanarayana

- Mr. V. S. Murthy

- Commodore K. V. Subramaniyam, YSM (Retd.)

- Mr. M. Seshavatharam

(c) Particulars of related party transactions and balances

Notes

1) Includes shares allotted out of share application money paid in earlier years Rs. Nil (Previous year: Rs. 79,113,324).

2) Equity investments in subsidiary and step down subsidiaries have been disclosed under "Investments" (Schedule 7). Loans and advances including share application money given/paid to subsidiary and step down subsidiaries and enterprises over which the KMP has significant influence have been disclosed under "Loans and advances" (Schedule 11).

The managerial personnel are covered by the Companys gratuity policy and are eligible for leave encashment along with other employees of the Company. The proportionate amount of gratuity and leave encashment cost pertaining to the managerial personnel has not been included in the aforementioned disclosures as these are not determined on an individual basis.

6. Employee benefits

The following table sets out the status of the gratuity plan as required under AS 15 (Revised):

Discount rate: The discount rate is based on the prevailing market yields of Indian government securities as at the balance sheet date for the estimated term of the obligations.

Expected rate of return on plan assets: This is based on the expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

Salary escalation rate: The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors.

7. Segment Reporting

The Companys business is organised and management views the performance based on the business segments as mentioned below:

- Electricity sale: This division of the Company is engaged in the generation and sale of electricity.

- Coal trading: This division of the Company is engaged in the trading of coal.

Since the business operations of the Company are primarily concentrated in India, the Company is considered to operate only in one geographical segment.

Segment policies

The accounting policies consistently used in the preparation of the financial statements are also applied to record revenue and expenditure in individual segments.

Revenue and direct expenses in relation to segments are categorised based on items that are individually identifiable to that segment. Certain expenses are not specifically allocable to individual segments and pertain to the entity as a whole and are disclosed as unallocated expenses.

Assets and liabilities are either specifically identifiable with individual segments or have been allocated to segment on a systematic basis. Assets that pertain to the entity as a whole such as income tax balances have been disclosed as unallocated assets. Liabilities other than loan balances and income tax balances have been identified against each segment or has been allocated on a reasonable basis.

8. Discontinued operations

The Companys Board of Directors at their meeting held on 29 October 2009 approved a definitive plan wherein, its coal trading business will be transferred to a separate legal entity to enable to focus on the core business of power generation, subject to the receipt of all regulatory and other approvals. The execution of the above plan is in process and expected to be completed by June 2010. In accordance with AS 24 (Discontinuing operations), as the initial event has occurred during the year, the coal trading business (representing coal trading segment) would therefore qualify as a discontinuing operation under the above accounting standard.

Discontinued operations (continued)

Note 1

Interest expense and related interest bearing liabilities have been considered as unallocable items for segment reporting in note 10 of schedule 21.

Note 2

Tax on profit on discontinuing operations have been computed under the provisions applicable for computing Minimum Alternate Tax (MAT), as the tax on the total income of the Company has been computed on this basis.

9. Quantitative details

Licensed and installed capacities are as certified by management and have not been verified by the auditors as this is a technical matter.

10. Prior period items of Rs.1,539,698 in the year ended 31 March 2009 represents operational and maintenance expenses omitted to be recorded in previous years, recorded in the year ended 31 March 2009.

11. The Company has sent out letters seeking confirmations from its suppliers whether they fall under the category of micro, small and medium enterprises as mentioned under the Micro, Small and Medium Enterprises Development Act, 2006. Based on the information available with the Company, the Company believes that it does not have any outstanding dues to micro, small and medium enterprises. Further, the Company has not paid any interest to the micro, small and medium enterprises.

12. Exceptional items, net

(a) The Company has restructured its investments in subsidiaries and accordingly transferred its investment in subsidiaries MSM Energy Limited, South Asian Agro Industries Limited and Sri Panchajanya Power Private Limited having a total carrying value of Rs. 500,683,000 to its wholly owned subsidiary Suryachakra Global Enviro Power Limited (Formerly Lahari Power and Steels Limited) for total consideration of Rs. 569,374,243 to be settled in the form of additional share to be issued in Suryachakra Global Enviro Power Limited resulting in a profit of Rs. 68,691,243 which has been disclosed as an exceptional item. Further, the Company has been issued shares in Suryachakra Global Enviro Power Limited of Rs. 143,402,645, representing the share application money and un-secured loan in all the above mentioned subsidiaries. Climate Change Investment I I S.A. SICAR (CCI) has invested Rs. 400,000,000 and was allotted a 22.01% stake in Suryachakra Global Enviro Power Limited.

(b) In March 2006, one of the DG Set with a capacity of 5 MW output had suffered major damages. The Company made a claim of Rs. 99,141,696 with the insurance authorities (net of allowances of Rs.5,000,000). Pending final assessment of the claim, the Company had received interim amounts totaling to Rs. 54,957,102 from the insurance Company including Rs.11,829,899 during the year ended 31 March 2010. The insurance company vide its letter dated 11 May 2010 has confirmed that all the amounts paid till date are final and no claim would be payable. Accordingly, the balance amount of claims receivable amounting to Rs. 44,184,594 has been written off during the year which has been disclosed as an exceptional item.

13. During the current year, the unamortised expenses related to the Initial Public Offer of the Company amounting to Rs. 39,474,865 was adjusted to the Securities Premium account. These were carried forward in earlier years as Miscellaneous Expenditure and amortised over a period of 5 years. Had the Company followed amortising these over a perod of 5 years, the profit for the year and the accumulated profits as at 31 March 2010 would have been lower by Rs. 10,765,872.

14. In July 2007, the Company made a public offer of its shares to Indian investors. There are no unutilised amounts out of such funds raised. Share application money pending refund as on 31 March 2010 is Rs. 159,500 (Previous year: Rs. 159,500).

15. Previous year figures

Previous years figures have been regrouped reclassified wherever necessary, to conform to current years classification.

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