Jaiprakash Hydro-Power

1.  Contingent Liabilities:                         (In Rupees)
 
 (i) Outstanding amount of Letter of Credit          1,33,04,896/-
 (Previous year Rs. 4,12,52,083/-)
 
 Margin Money against above                             6,85,362/-
 (Previous year Rs. 21,18,000/-)
 
 (ii> Estimated amount of contracts
    remaining to be executed on Capital
    Account and not provided for:                         Nil
 (Previous year Rs. 3,01,04,865/-)
 
 (iii) Claims against the company not
       acknowledged as debts.                        6,29,13,672/-
      (Previous year Rs. 6,25,91,672/-)
 
 2. (a) Rupee Term Loans, Foreign Currency Loans, Working Capital
 Facilities and Deferred Payment Guarantee(s) from Financial
 Institutions and Banks, together with all interest, guarantee
 commission, liquidated damages, premia on prepayment or on redemption,
 cost, expenses and other monies stipulated in the Loan
 Agreements/Deferred Payment Guarantee Agreement are secured by
 hypothecation of the Companys movable assets (present and future),
 equitable mortgage on the immovable assets of the Company and pledge of
 29,49,99,900 equity shares held by Jaiprakash Associates Limited in the
 company, and assignment of all the rights, titles and interest of the
 Company in all project documents, licenses, permits, approvals etc
 ranking pari-passu among all the participating Institutions and Banks
 viz. IDBI, PFC, IFCI, LIC, Bank of Baroda, Punjab National Bank, Indian
 Overseas Bank, State Bank of Indore, State Bank of Hyderabad and Yes
 Bank.
 
 (b) The Foreign Currency Loans under Buyers Credit are guaranteed by
 Deferred Payment Guarantee issued by Power Finance Corporation Limited.
 
 (c) The Non Convertible Debentures, (NCDs) together with all interest,
 liquidated damages, remuneration payable to Trustees, premium on
 prepayment or on redemption, cost, expenses and other monies stipulated
 in the Subscription Agreements/Trustee Agreement are secured by a legal
 mortgage in English form by way of first mortgage and charge on
 Companys properties at Mouje Dhanot, Taluka Kalol, District Mehsana in
 the state of Gujarat in favour of IDBI Trusteeship Services Ltd.
 (Trustees) for NCDs of Rs.15,000 Lacs subscribed by ICICI Bank Ltd.
 (since converted into RTL) and Axis Bank Ltd. (Trustees) for NCDs of
 Rs. 17,400 Lacs subscribed by Axis Bank Ltd and hypothecation of the
 Companys movable assets (present and future), equitable mortgage on
 the immovable assets of the Company and pledge of shares as stated in
 3(a) above held by Jaiprakash Associates Limited in the Company,
 ranking pari-passu among all the participating Institutions and Banks.
 
 (d) The working capital facilities sanctioned by Punjab National Bank-
 Shimla are inter - alia secured by personal guarantees of Shri
 Jaiprakash Gaur - Founder Chairman, Shri Manoj Gaur - Chairman, Shri
 S.K.Sharma - Vice Chairman and Shri S. K. Jain - Director of the
 Company.
 
 3.  (a) Jaiprakash Associates Limited (JAL), the holding Company,
 
 has furnished Corporate Guarantees for the financial assistance
 outstanding as on 31.03.2009 amounting to Rs. 248,41,11,445/- (Previous
 Year Rs. 525,66,57,330/-) to the Financial Institutions and Banks and
 have also pledged 29,49,99,900 Equity Shares of Rs.10/- each of the
 Company held by it with IFCI Ltd. to collaterally secure the financial
 assistance granted to the Company by the Financial Institutions and
 Banks, namely ICICI Bank, IDBI, PFC, LIC, IFCI, Bank of Baroda, Punjab
 National Bank, Indian Overseas Bank, State Bank of Indore, State Bank
 of Hyderabad, Yes Bank and Axis Bank. ICICI Bank, State Bank of
 Hyderabad, IDBI, State Bank of Indore, Punjab National Bank, LIC and
 Indian Overseas Bank have since released the aforesaid corporate
 guarantees furnished by JAL and Bank of Baroda & IFCI (taken over loan
 from IIBI) have agreed to release the same subject to similar approval
 by other Term Lenders to the company.
 
 (b) Plant & Machinery includes a sum of Rs. 62,86,78,388/- being the
 cost paid for Inter Connection Facility (ICF) established by Satluj Jal
 Vidyut Nigam Limited (SJVNL) at their Switch Yard at Jhakri for
 evacuation of power generated by Baspa II Hydro-Electric Project. The
 maintenance cost of ICF is paid by the company to SJVNL. Jaiprakash
 Associates Limited, the holding Company, has furnished Bank Guarantee
 in favour of SJVNL for Rs. 700 Lacs (Previous Year Rs. 700 Lacs) for
 any additional payment/bills, if any, as and when raised by SJVNL in
 respect of the aforesaid ICF.
 
 4.  In the opinion of the Board of Directors, the Current Assets,
 Loans and Advances, have a value on realisation, in the ordinary
 course of business, at least equal to the amount at which they are
 stated in the Balance Sheet.
 
 5.  The Trust and Retention Account (refer Schedule G) is maintained
 pursuant to the stipulations of the Financing Agreements executed
 with the Lenders.
 
 6.  The Rupee value of Foreign Currency Loans has been considered at
 the bank TT selling rate as at 31st March 2009 i.e. one US Dollar = Rs.
 51.18. Pursuant to the Notification dated March 31, 2009 issued by
 Ministry of Corporate Affairs, Govt, of India, the Company has
 exercised the option available under the newly inserted Paragraph 46 to
 the Accounting Standard AS-11 The effect of changes in Foreign
 Exchange Rates to add or deduct the Foreign Exchange Fluctuations to
 capital cost of the Assets. Accordingly Exchange Fluctuation for FY 08
 amounting to Rs.12,00,99,509/- credited to Profit & Loss Account of FY
 08 has been debited to the carried forward balance of Profit & Loss
 Account from previous year and the net exchange fluctuations (FY 08 and
 FY 09) amounting to Rs. 16,06,97,845/- has been added to the cost of
 Plant and Machinery.
 
 7.  The Himachal Pradesh Electricity Regulatory Commission (HPERC) has
 passed the Multi Year Tariff (MYT) Order on 30th March, 2009 for FY 09,
 10 and 11 and has also revised Tariff for FY 04 to 08 based on actuals
 for the period. The Company has filed Review Application with HPERC for
 rectification of certain items of Tariffs for FY 04 to 08 and for FY 09
 aggregating to Rs. 146.70 crores. Accordingly, the receivables from
 HPSEB in respect of review items are subject to disposal of Review
 Application/other legal remedies available to the Company.
 
 8.  As per accounting policy the Advance Against Depreciation
 amounting to Rs. 2,352 lacs (previous year Rs. 1,692 lacs, net of
 adjustment of Rs. 660 lacs as per MYT order dated 30.3.2009) has been
 treated as Deferred Revenue.
 
 9.  Related Party Disclosures, as required in terms of Accounting
 Standard [AS] 18 are given below:
 
 (1) Relationships (Related party relationships are as identified by the
 Company and relied upon by the Auditors)
 
 (a) Holding Company
 
 Jaiprakash Associates Limited
 
 (b) Subsidiary company
 
 Jaypee Powergrid Limited
 
 (c) Fellow subsidiaries
 
 (i) Jaypee Hotels Limited
 
 (ii) Jaiprakash Power Ventures Limited
 
 (iii) Jaypee Karcham Hydro Corporation Limited
 
 (iv) Jaypee Cement Limited
 
 (v) Gujarat Anjan Cement Limited, Subsidiary of Jaypee Cement Limited 
 
 (vi) Jaypee Infratech Limited
 
 (vii) Himalayan Expressway Ltd.  
 
 (viii) Bhilai Jaypee Cement Limited.
 
 (ix) Bokaro Jaypee Cement Limited 
 
 (x) Gujarat Jaypee Cement & Infrastructure Limited
 
 (xi) Madhya Pradesh Jaypee Minerals Limited 
 
 (xii) Jaypee Ganga Infrastructure Corporation Limited 
 
 (xiii) JPSK Sports Pvt. Ltd.
 
 (xiv) Jaypee Aumachal Power Ltd..Subsidiary of Jaiprakash Power
 Ventures Ltd. (w.e.f. 23.4.2008)
 
 (xv) Bina Power Supply Company Ltd., Subsidiary of Jaiprakash Power
 Ventures Ltd. (w.e.f.15.5.2008)
 
 (d) Associates
 
 (i) Jaypee Ventures Pvt. Limited.  
 
 (ii) Indesign Enterprises Pvt Ltd.
 
 (iii) JIL Information Technology Limited, Subsidiary of Jaypee Ventures
 Pvt. Limited.
 
 (iv) Gaur & Nagi Limited, Subsidiary of JIL information Technology
 Limited.
 
 (v) Jaiprakash Kashmir Energy Ltd.
 
 (vi) Sonebhadra Minerals Pvt. Ltd.
 
 (vii) RPJ Minerals Pvt. Ltd.
 
 (viii) Jaypee Development Corporation Ltd., Subsidiary of Jaypee
 Ventures Pvt. Limited.
 
 (ix) Jaypee Petroleum Pvt. Ltd., Subsidiary of Jaypee Ventures Pvt.
 Ltd. (w.e.f. 17.4.2008)
 
 (x) Jaypee Hydro-Carbons Pvt.  Ltd., Subsidiary of Jaypee Ventures Pvt.
 Ltd. (w.e.f. 17.4.2008)
 
 (xi) Jaypee Spa Infocom Ltd., Subsidiary of Jaypee Ventures Pvt. Ltd.
 (w.e.f. 16.5.2008)
 
 (e) Key management Personnel
 
 (i)  Shri Manoj Gaur, Chairman
 (ii) Shri Sunil Kumar Sharma, Vice Chairman
 (iii)Shri J. N. Gaur, Whole Time Director
 (iv) Shri R. K. Narang, Whole Time Director
 (v)  Shri Suresh Chandra, Whole Time Director
 
 10. Provident Fund - Defined Contribution Plan
 
 (a) All employees are entitled to Provident Fund benefits. Amount
 debited to Profit and Loss account including Administrative and DLI
 charges Rs. 40,38,212/- during the year.
 
 11. (a) Provision of Rs. 18,26,25,002/-(Previous Year Rs.
 27,26,16,097.94) towards Minimum Alternate Tax (MAT) as Tax payable
 under section 115JB of Income Tax Act, 1961 has been made. The MAT paid
 by the company for the year is allowed to be carried forward for a
 period upto next 7 years to be adjusted against the normal tax payable,
 if any, in those years.
 
 (b) Provision for deferred tax has not been made as deferred tax
 liability arising due to the timing differences during the tax holiday
 period is less than the deferred tax asset. However, the provision for
 deferred tax asset has not been created as a matter of prudence.
 
 (c) Provision of Rs. 7,01,077/- (Previous year Rs. 6,27,758/-) towards
 Fringe Benefit Tax (FBT) as Tax payable under section 115W of Income
 Tax Act, 1961 has been made for the current year.
 
 12. (a) Pursuant to the Memorandum Of Understanding signed with Power
 Grid Corporation of India Ltd.(PGCIL), a Joint Venture Company in the
 name of Jaypee Powergrid Limited (JPPGL) had been incorporated on
 05.10.2006 by the Company for developing a Transmission System for the
 evacuation of power to be generated by the 1000 MW Karcham Wangtoo
 Hydro Electric Project in the State of Himachal Pradesh, to a suitable
 interconnection point. The Shareholders Agreement had been signed with
 PGCIL on 22.02.2007 with 74% Equity Participation with a provision of
 minimum 51% Equity Participation by the Company and balance, if any, by
 affiliates.
 
 13.  During the year Baspa II 300 MW Hydroelectric Plant has been
 recognized for generation of Verified Emission Reductions (VERs) under
 the Voluntary Carbon Standard 2007 (VCS, 2007) and has entered into an
 agreement with ECO Act, France for sale of VERs to AREVA France for the
 period upto 31.12.2010. Revenue from sale of 3,15,000 VERs has been
 accounted for during the year.
 
 14.  The Company has presently one segment i.e. Generation of Hydro-
 Power, hence, separate segment reporting is not applicable.
 
 15.  All the figures have been rounded off to the nearest rupees in
 lacs except in the Notes to the Accounts.
 
 16.  Previous years figures have been regrouped/re-arranged wherever
 considered necessary to make them conform to the figures for the year.