GVK Power & Infrastructure

1.  Nature of Operations
 
 GVK Power & Infrastructure Limited (the Company or GVKPIL) provides
 operating and maintenance services, manpower and consultancy services
 and incidental services to owners of power plants and infrastructure
 companies. It has also acquired substantial ownership interest into
 power generating assets and companies engaged in providing
 infrastructure facilities.
 
 2.  Employee benefits
 
 The Company has a defined benefit gratuity plan. Every employee who has
 completed five years or more of service gets a gratuity on retirement
 or termination at 15 days salary (last drawn salary) for each completed
 year of service. The scheme is unfunded.
 
 The following tables summarize the components of net benefit recognized
 in the profit and loss account and amounts recognized in the balance
 sheet for the respective plans.
 
 3.  Related party transaction
 
 Disclosure as required by Notified Accounting Standard 18 (AS -18)
 Related Party Disclosures are as follows:
 
 Names of the related parties and description of relationship:
 
 (a) Related parties where control exists Subsidiaries GVK Industries
 Limited
 
 GVK Jaipur Expressway Private Limited Alakananda Hydro Power Company
 Limited Gautami Power Limited (with effect from July 1, 2008) Goriganga
 Hydro Power Private Limited GVK Power (Goindwal Sahib) Limited GVK
 Airport Developers Private Limited GVK Airport Holdings Private
 Limited* GVK Coal (Tokisud) Company Private Limited GVK Aviation
 Private Limited ( till September 30, 2008) GVK Perambalur SEZ Private
 Limited (Formerly GVK Infratech Private Limited) GVK Oil & Gas Limited
 (Formerly GVK Energy Limited) GVK Energy Limited (with effect from May
 9, 2008)
 
 GVK Developmental Projects Private Limited (with effect from May 9,
 2008) * Through subsidiary Company
 
 (b) Associates
 
 Gautami Power Limited (till June 30, 2008) Mumbai International Airport
 Private Limited Seregraha Mines Limited Through subsidiary Company
 
 (c) Key management personnel
 
 Dr. G V Krishna Reddy Chairman and Managing director
 
 Mr. G V Sanjay Reddy Director
 
 Mr. Somanadri Bhupal Director
 
 Mr A Issac George Director & CFO
 
 (d ) Relative of Key management personnel having controlling interest
 
 Ms. G V Indira Krishna Reddy (e) Companies over which the key
 management personnel exercise significant influence
 
 TAJ GVK Hotels & Resorts Limited
 
 Orbit Travels & Tours Private Limited
 
 GVK Hydel Private Limited
 
 Paigah House Hotel Private Limited
 
 Vertex Infratech Private Limited
 
 GVK Novopan Industries Limited
 
 GVK Technical & Consultancy Services Private Limited
 
 Gautami Power (Samalkot) Private Limited
 
 Pinakini Share and Stock Broker Limited
 
 GVK Foundation
 
 4.  Details of Loan given to subsidiaries and associates and parties in
 which directors are interested Subsidiaries
 
 (i) Gautami Power Limited
 
 Balance as at March 31, 2009 Rs Nil (Previous Year Rs. Nil)
 
 Maximum amount outstanding during the year was Rs. 348,500 (Previous
 Year Rs. Nil)
 
 The aforesaid loan was repayable on demand (ii) GVK Industries Limited
 
 Balance as at March 31, 2009 Rs Nil (Previous Year Rs. Nil)
 
 Maximum amount outstanding during the year was Rs. 200,000 (Previous
 Year Rs. Nil)
 
 The aforesaid loan was repayable on demand (iii) GVK Power (Goindwal
 Sahib) Limited
 
 Balance as at March 31, 2009 Rs Nil (Previous Year Rs. Nil)
 
 Maximum amount outstanding during the year was Rs. 125 (Previous Year
 Rs. Nil)
 
 The aforesaid loan was repayable on demand (iv) GVK Oil & Gas Limited
 (Formerly GVK Energy Limited)
 
 Balance as at March 31, 2009 Rs Nil (Previous Year Rs. Nil)
 
 Maximum amount outstanding during the year was Rs. 760 (Previous Year
 Rs. Nil)
 
 The aforesaid loan was repayable on demand (v) GVK Perambalur SEZ
 Private Limited
 
 (Formerly GVK Infratech Private Limited)
 
 Balance as at March 31, 2009 Rs Nil (Previous Year Rs. Nil)
 
 Maximum amount outstanding during the year was Rs. 20,000 (Previous
 Year Rs. Nil)
 
 The aforesaid loan was repayable on demand
 
 5.  Contingent liability
 
 a.  Security against loans taken by others
 
 (i) During the year ended March 31, 2009 the Company has provided
 security amounting to Rs. 5,779,112 (Previous Year Rs. 3,064,082) by
 way of pledge of its investments in subsidiaries in respect of amounts
 borrowed by GVK Industries Limited, Gautami Power Limited, GVK Jaipur
 Expressway Private Limited, Alaknanda Hydro Power Company Limited as
 well as Corporate guarantee given on behalf of GVK Industries Limited,
 Gautami Power Limited and GVK Airport holdings Private Limited.
 Management is of the opinion that the subsidiary Companies will be able
 to meet their obligations as they arise and consequently no adjustment
 is required to be made to the carrying value of the security provided.
 
 (ii) During the year ended March 31, 2009 the Company has provided
 security amounting to Rs. 1,211,210 (Previous Year Rs. Nil) by way of
 corporate guarantee to its erstwhile subsidiary GVK Aviation Private
 Limited.
 
 b.  Claims against the Company not acknowledged as debt
 
 (i) The Company has received a notice dated February 4, 2008 from the
 Office of the District Registrar of Assurances, Hyderabad demanding
 payment of stamp duties of Rs. 282,960 on transfer of shares to the
 shareholders of GVK Industries Limited vide the scheme of arrangement
 approved by the Andhra Pradesh High Court. The Company has obtained an
 order from the Andhra Pradesh High Court staying the above notice on
 March 13, 2008 until such further orders from the said court.
 
 (ii) The Company has received a show cause notice from service tax
 authorities demanding the Company to pay service tax of Rs.  27,943
 under the category Management, Maintenance or Repair services for
 operating and maintenance of immovable property, management of power
 plant and maintenance of equipment for the period from July 1, 2003 to
 September 30, 2008.  The Company has preferred an appeal against the
 said order before Customs, Excise and Service Tax Appellate Tribunal,
 Bangalore. The consequential liability in respect of service tax and
 penalty for the period from July 1, 2003 to March 31, 2009 including
 interest and penalty up to March 31, 2009 is estimated at Rs. 38,635.
 
 6.  Segment Information
 
 In accordance with Accounting Standard 17 - Segment Reporting, segment
 information has been given in the consolidated financial statements of
 the Company and therefore no separate disclosure on segment information
 is given in these financial statements.
 
 7.  Additional information pursuant to the provisions of Paragraph 3,
 4C and 4D of Part II of Schedule VI to the Companies Act, 1956 are not
 applicable as the Company is in the business of providing services
 only.
 
 8.  Acquisitions and disposal
 7he Company acquired GVK Developmental Projects Private Limited, a
 wholly owned subsidiary on May 9, 2008
 
 Gautami Power Limited became a subsidiary of the Company with effect
 from July 1, 2008. It was an associate till June 30, 2008;
 
 The Company acquired GVK Energy Limited, a wholly owned subsidiary on
 November 27, 2008;
 
 GVK Aviation Private Limited, a wholly owned subsidiary ceased to be a
 subsidiary with effect form September 30, 2008.
 
 9.  Micro, small and medium enterprises
 
 The identification of micro, small and medium enterprise suppliers as
 defined under the provisions of Micro, small and medium enterprises
 development Act, 2006 is based on Managements knowledge of their
 status. There are no dues to micro, small and medium enterprises as on
 March 31, 2009.
 
 10. The Profit and Loss Account for the year ended March 31, 2009
 include certain transactions for the period from April 1, 2008 to
 December 31, 2008 with Mumbai International Airport Private Limited
 aggregating to Rs. 103,570 GVK Technical & Consultancy Services Pvt.
 Ltd. aggregating to Rs. 3,250 and Orbit Travels & Tours Pvt. Ltd.
 aggregating to Rs. 2,368 for which prior approval of Central Government
 is required under the provisions of Section 297 of the Companies Act
 1956. In respect of this, the Company has filed an application with the
 Company Law Board () on February 9, 2009 for compounding of the said
 matter decision on which is awaited.
 
 11. Previous year comparatives
 
 Previous year figures have been regrouped where necessary to conform to
 current year classification.