2 cm
Nava Bharat Ventures Limited 37th Annual Report 2008-09 Environment protection is a guiding principle in all our operations. We have adopted several measures in this direction in recognition of which our Company is honoured with the following awards:
National Award for Excellence in Energy Management – Innovative Project from Confederation of Indian Industry (2008).
National Award for Excellence in Energy Management – Excellent Energy Efficient Unit from Confederation of Indian Industry (Received twice: 2008 and 2007).
Cleaner Production Technologies Award from Andhra Pradesh Pollution Control Board (Received twice: 2007-08 and 2003-04)
Pollution Control Excellence Award from State Pollution Control Board, Orissa (2007)
5-S Excellence Award from Confederation of Indian Industry (2007)
Award for Hundred Per Cent Utilization of Fly Ash from Ministry of Environment & Forests, Govt. of India (2005) NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:09 PM Page 1
Annual Report 2008-09
Contents Page
Five Years at a Glance 2
Board of Directors 3
Directors’ Report 4
Report on Corporate Governance 26
Auditors’ Report 43
Annexure to the Auditors’ Report 44
Balance Sheet 46
Profit and Loss Account 47
Cash Flow Statement 48
Schedules 1 to 21 50
Balance Sheet Abstract 74
Statement relating to Subsidiary Companies 75
Subsidiary Companies 76
Annual Report of Nava Bharat (Singapore) Pte. Limited 77
Annual Report of Brahmani Infratech Private Limited 89
Annual Report of Kinnera Power Company Limited 102
Annual Report of Nava Bharat Realty Limited 117
Annual Report of Nava Bharat Projects Limited 127
Annual Report of Nava Bharat Energy India Limited 140
Annual Report of Nava Bharat Sugar and Bio Fuels Limited 150
Auditors’ Report on Consolidated Accounts 159
Consolidated Balance Sheet 160
Consolidated Profit and Loss Account 161
Consolidated Cash Flow Statement 163
Schedules to Consolidated Accounts 165 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:09 PM Page 2
Nava Bharat Ventures Limited
Five years at a glance
(Rs. in lakhs)
2008-09 2007-08 2006-07 2005-06 2004-05
Sources of funds Share capital 1,523.77 1,558.73 1,355.25 1337.01 1,337.01 Warrants against Share Capital – – 217.36 – – Share application Money – 6.73 – – – Reserves 115,616.13 78,768.46 40,442.34 29,375.15 24,983.49 Loans 43,037.29 39,930.36 47,166.18 21,846.92 17,991.21 Deferred Tax Liability 2,113.61 1,498.43 1,953.43 1,983.97 1,553.16 162,290.80 121,762.71 91,134.56 54,543.05 45,864.87
Application of Funds Fixed Assets less Depreciation 71,509.63 64,380.32 41,960.74 34,828.27 28,564.61 Investments 3,716.69 2,103.53 163.77 218.19 241.34 Net Current Assets 87,064.48 55,278.86 49,010.05 19,496.59 17,058.92 162,290.80 121,762.71 91,134.56 54,543.05 45,864.87
Profit after Dividend Profit after Taxation 45,510.41 31,484.51 14,045.70 5,801.33 10,636.04 Dividend and Corporate Dividend Tax 6,645.25 5,117.37 2,935.45 1409.67 1,409.67 Retained Profit 38,865.16 26,367.14 11,110.25 4,391.66 9,226.37
Other data Dividend per share: – Rs. 2/- each (Rs.) 8.00 6.00 4.00 2.00 – – Rs. 10/- each (Rs.) – – – – 10.00 Debt Equity Ratio 0.21 0.27 0.46 0.58 0.45
2 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:09 PM Page 3
Annual Report 2008-09
Board of Directors
Mr. D. Ashok Chairman Mr. P. Trivikrama Prasad Managing Director Mr. C.V. Durga Prasad Director (Business Development) Mr. G.R.K. Prasad Director (Finance & Corporate Affairs) Dr. G. Sreeramjee Dr. E.R.C. Shekar Dr. M.V.G. Rao Mr. K. Balarama Reddi Dr. D. Nageswara Rao Mr. S.V. Satyanarayana IDBI Nominee
Mr. M. Subrahmanyam Company Secretary & Vice President
Auditors Registered Office Messrs Brahmayya & Co. 6-3-1109/1, Chartered Accountants ‘Nava Bharat Chambers’ Flat No. 403, Golden Green Apartments Raj Bhavan Road Irrum Manzil Colony Hyderabad – 500 082 Somajiguda, Hyderabad - 500 082
Cost Auditors Works : Messrs Narasimha Murthy & Co. Ferro Alloy Division Power Division Cost Accountants Ferro Alloy Plant (A.P.) Power Plant (A.P.) 104, Pavani Estates Paloncha – 507 154 Paloncha – 507 154 3-6-365, Himayat Nagar Khammam District Khammam District Hyderabad - 500 029 Andhra Pradesh Andhra Pradesh
Dharmavaram Prathipadu Mandal East Godavari Dist. Andhra Pradesh
Bankers Ferro Alloy Plant (Orissa) Power Plant (Orissa) State Bank of India Kharagprasad Village-759 121 Kharagprasad Village-759 121 Andhra Bank Dhenkanal District Dhenkanal District Bank of India Orissa Orissa State Bank of Hyderabad UCO Bank
Registrars and Share Transfer Agents Sugar Division Machine Building Division Messrs Karvy Computershare Private Limited Samalkot - 533 440 Nacharam Plot No. 17 to 24, Near Image Hospital East Godavari District Hyderabad - 500 076 Vittalrao Nagar Andhra Pradesh Andhra Pradesh Madhapur, Hyderabad - 500 081
3 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:09 PM Page 4
Nava Bharat Ventures Limited
Report of the Directors and Management Discussion and Analysis for the financial year ended March 31, 2009
Dear Members,
Your Directors have pleasure in submitting the Report and the Audited Accounts of the Company for the financial year ended March 31, 2009.
Financial Results The Company’s performance for the year ended March 31, 2009 is summarised below
(Rs. in lakhs)
Year ended Year ended March 31, 2009 March 31, 2008
Turnover/Income (Gross) 1,42,571.36 1,13,224.12 Profit before Finance charges, Depreciation and Taxation 56,472.28 41,573.01 Less: Finance charges (excluding amount capitalised) 3,095.15 2,039.63 Profit before Depreciation and Taxation 53,377.13 39,533.38 Depreciation 3,776.54 2,513.87 Profit for the year after Depreciation 49,600.59 37,019.51 Provision for taxation – Current tax 5,700.00 5,850.00 – Deferred tax 615.18 (455.00) – MAT credit entitlement (2,300.00) – – Fringe benefit tax 75.00 140.00 Profit after Tax 45,510.41 31,484.51 Balance brought forward from last year 19,939.51 5,521.68 Excess provision for Income Tax written back 33.53 50.69 Profit available for appropriation 65,483.45 37,056.88 Appropriations Dividend on Equity Share Capital 5,679.94 4,374.01 Corporate Dividend Tax 965.31 743.36 Capital Redemption Reserve 35.60 – Contingency Reserve 2,000.00 2,000.00 General Reserve 10,000.00 10,000.00 Surplus carried to Balance Sheet 46,802.60 19,939.51 65,483.45 37,056.88
4 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:09 PM Page 5
Annual Report 2008-09
Review of operations helped your Company achieve higher quantum of power. The It is heartening that your Company takes pride to report an Company is endeavouring to overcome certain limitations on exuberant and record performance with gross earnings of evacuation of power in the existing transmission network in Rs. 1425.71 crore and net profit of Rs. 455.10 crore for Orissa, which affected the plant load factor to some extent. The 2008-09 reflecting an increase by 25.92% and 44.55%, Company generated 1514.65 MU of power and delivered respectively, notwithstanding the volatile economic situation. 335.87 MU of power for captive consumption, 1014.58 MU of The operations for the year 2008-09 were marked by global power for sale and 164.20 MU of power for auxiliary meltdown, severely affecting commodity markets and the consumption including unbilled power and transmission losses. financial markets all over the world. The Power plants operated at a healthy availability of about 95% and plant load factor of 89.86% on an average. Your Company thrives on a business model which revolves around value addition for power either in captive consumption Sugar Division or on merchant sale. The Sugar business of the Company was severely dented by reduction in cane availability, consequent to a change in the Ferro Alloy Division cropping pattern and lower recovery. As these factors are The Ferro Alloy operations of the Company took the brunt of common across various industry constituents, a fall in sugar worst commodity cycle, especially in the second half of the year output ensued resulting in spurt in the realisations of sugar, 2008-09, with consequent fall in realisations and virtual enabling your Company to close the year on a profitable note stoppage of off-takes from the dependent steel industry. This from this division. The Company crushed 3.18 lakhs tonne of had two pronged affect in this segment; one, affecting the top sugar cane this year compared to 5.26 lakhs tonne of cane last line growth with little movement of stocks in the second half year at a recovery of 9.53% compared to 10.25% last year. The and secondly, the write down in the value of inventory division was also benefitted by the by-products achieving following the precipitous fall in realisations. The Company marked improvement in the realisation as also by the strived hard to minimise the impact on the profit achieved from co-generation and sale of power. this division during the first half of the previous year. The Company, however, had to take proactive and pragmatic New projects/Initiatives decision to cut back on the production of Ferro Alloys during Your Company considers merchant sale of power as the growth the second half and as a result, the production and sales driver considering power is the back bone for infrastructure volumes for the year at 79,113 MT and 80,440 MT reflect growth in the country and there is a wide gap between declines compared to the previous year at 1,35,678 MT and demand and supply. The Company is implementing a new 1,14,372 MT, respectively. 64-MW power unit in Orissa. Besides this Unit, Nava Bharat Energy India Limited, a subsidiary of your Company, will take Power Division up implementation of two 150-MW units in A.P., one adjacent As stated earlier in this report, the Company concentrated on to the existing 114-MW power facility at Paloncha in sale of power to wither the pressure on account of subdued Khammam District and the other adjacent to 20-MW power Ferro Alloy business. The acute power deficit in several parts of facility at Dharmavaram in East Godavari District. The new the country helped your Company achieve a sustained spot power plants will be implemented over the next 36 months. market of power. Notwithstanding certain restrictions on open During the year, your Company achieved a moderate success in access, resorted to by the States of A.P. and Orissa, the its efforts of backward integration for coal. The Company’s Company was able to dispatch higher quantum of power for Singapore subsidiary has tied up with an Indonesian coal mine merchant sale compared to the previous year. Commercial and obtained control on the off-take of coal to the extent of operations from the new 64-MW facility in Orissa, from July, 75% from this mine. Your Company is evaluating other mining 2008 and 20 MW-facility in A.P., from March, 2009, also prospects to expand the coal mining base further. Similarly, the
5 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:09 PM Page 6
Nava Bharat Ventures Limited
Singapore subsidiary tied up with an Indonesian company FCCBs which has manganese ore mine rights. The exploration of these The Company’s FCCBs are outstanding to an extent of mineral prospects is underway and your Company hopes to JPY 3520 million at the fixed exchange rate of Rs. 0.3976 per deal in the manganese ore from these mines during the later Yen for conversion. part of the current year. Employees Stock Option Scheme Outlook and future plans The Company granted 6,00,000 options to the specified The outlook and future plans of the Company are presented in employees, of which, 3,34,110 options got vested against “Management Discussion and Analysis”, forming a part of this which employees exercised options to an extent of 1,41,450 Report. shares.
Dividend on equity share capital The Company received a certificate from the Auditors of the Considering the satisfactory performance of your Company and Company that the Scheme was implemented in accordance keeping in view the ongoing capital works and growth with the SEBI Guidelines and the resolution passed at the trajectory, your Directors are pleased to recommend dividend at Annual General Meeting held on July 27, 2006. The certificate Rs. 8/- per equity share of Rs. 2/- each, subject to necessary would be placed at the Annual General Meeting for inspection approvals absorbing a sum of Rs. 56.80 crore. by members.
The aggregate dividend payout for the year 2008-09 amounts The prescribed details relating to ESOS as per the SEBI to Rs. 66.45 crore, including corporate dividend tax. Guidelines are set out in the Annexure – II.
Buy-back of Company’s equity shares Listing of shares Following the global meltdown and steep correction in stock The Securities of the Company are listed on National Stock markets, the Company’s share price was subdued and was not Exchange of India Limited and Bombay Stock Exchange reflective of the sustained business model of the Company. Limited. The listing fee for these Stock Exchanges are paid. Your Board considered it appropriate to implement the equity share buy-back scheme under the extant guidelines to instill Fixed deposits confidence in the investor community. Keeping various Your Company has been inviting and accepting deposits from commitments for new project initiatives, the Company the public, shareholders and others. The amount of deposits considered it appropriate to keep an amount of Rs. 50 crore for outstanding as on March 31, 2009 was Rs. 88.41 lakhs. this buy-back scheme and to fix the maximum price at which There were no overdue deposits, which were unpaid as on the buy-back was to be done at Rs. 170/- per share. date. The Buyback, offer opened on January 6, 2009, is in progress. Insurance The Company bought 19,20,000 equity shares of Rs. 2/- each All the properties of the Company including buildings, plant and extinguished 17,79,904 equity shares as on March 31, and machinery and stocks have been adequately insured. 2009. With the extinguishment of the said equity shares, the paid-up capital of the Company came down to 7,61,25,324 Directors equity shares, aggregating to Rs. 15,22,50,648/-. Sri D. Ashok, Chairman and Managing Director, was re- designated as the Chairman with effect from January 29, 2009 The Company further bought 12,500 equity shares of Rs. 2/- and Sri P. Trivikrama Prasad, Executive Director, was re-designated each and extinguished all the shares so bought. The Company’s as the Managing Director with effect from the same date. paid-up capital after the above extinguishment is 7,59,72,728 equity shares of Rs. 2/- each aggregating to Rs. 15,19,45,456/-. In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company,
6 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:09 PM Page 7
Annual Report 2008-09
Dr. G. Sreeramjee and Sri. G. R. K. Prasad, Directors, will retire Nava Bharat (Singapore) Pte. Limited by rotation at this Annual General Meeting and Sri. G. R. K. Nava Bharat (Singapore) Pte. Limited is the trading outfit Prasad, Director, being eligible, offered himself for engaged in Ferro Alloys at present and other minerals at a later re-appointment. stage. All the overseas acquisitions of the Company will take place through and at the behest of its Singapore subsidiary. The Dr. G. Sreeramjee, Director of the Company, who is to retire at Singapore subsidiary identified two investment initiatives in the forthcoming Annual General Meeting has expressed his power, one in Zambia and the other one in Indonesia. The unwillingness to offer for re-appointment on health grounds Group is in talks with the respective owner entities in Zambia and will cease to be the Director effective from the date of and Indonesia for achieving binding joint venture agreements ensuing Annual General Meeting. Dr. G. Sreeramjee was in due course. Nava Bharat (Singapore) Pte. Limited acquired appointed on the Board of the Company on May 10, 1974. off-take rights for coal and manganese ore in compliance with Dr. G. Sreeramjee has been associated with the Company the local laws and regulations. since 1974. He is the member of the Audit Committee. The Board placed on record the long standing presence of Kinnera Power Company Limited Dr. G. Sreeramjee and the contribution made by him in the Kinnera Power Company Limited (KPCL) is a subsidiary of Nava Board deliberations. Bharat Ventures Limited (NBV) with 51% equity stake. The balance equity is held by Meenakshi Infrastructure Group Dr. D. Nageswara Rao was appointed as Additional Director (MIG). MIG is implementing a road project, awarded to NBV by under Section 260 of the Companies Act, 1956 and he would NHAI, on a non recourse basis. However, under the existing hold office up to the date of Annual General Meeting. The guidelines of NHAI, NBV is required to hold at least 51% equity Company received notice from a member with necessary stake in the SPV executing the road project in order to comply deposit proposing that Dr. D. Nageswara Rao, be appointed as with the NHAI guidelines and to achieve the non-recourse the Director, liable to retire by rotation, pursuant to the status. NBV arranged with MIG to fund the entire equity share provisions of Companies Act, 1956. capital in KPCL and that in the SPV. Hence, NBV does not have Dr. D. Nageswara Rao is a post graduate in electronic any economic interest in KPCL though, it continues to be a engineering from Birla Institute of Science and Technology, subsidiary of the Company till such time as NHAI permits Pilani, and a Doctorate from the University of Strathclyde, UK. divestment of equity. It is for this reason the accounts of KPCL He is an active member in many trade associations at State and are not consolidated with those of NBV. National levels and was also Director of APEDC, Govt. of A.P. Brahmani Infratech Private Limited Sri S. V. Satyanarayana was nominated by the IDBIL on the Brahmani Infratech Private Limited (BIPL) is a subsidiary of NBV. Board in the place of its earlier nominee, Sri N. Krishnan with NBV intends to have a minimum of 51% equity in BIPL, while effect from September 15, 2008. The Board placed on record the balance will be held by others. BIPL secured an area of about the contribution made by Sri N. Krishnan during his tenure. 250 acres of land from the Government of Andhra Pradesh to set up an IT / ITES SEZ on an area of 150 acres and attendant Subsidiary Companies and consolidated facilities and amenities on the balance 100 acres of area. BIPL accounts entered into a joint development agreement with Mantri IT The Company has six Indian subsidiary companies Viz., Parks Private Limited, a subsidiary of Mantri Developers Limited, M/s. Kinnera Power Company Limited, M/s. Brahmani Infratech Bangalore, for development of the SEZ, commercial and Private Limited, M/s. Nava Bharat Realty Limited, M/s. Nava residential amenities on its own without any recourse to BIPL or Bharat Projects Limited, M/s. Nava Bharat Energy India Limited its sponsors. In turn, BIPL is entitled to about 25% of the built and M/s. Nava Bharat Sugar and Bio Fuels Limited and a up space, pro-rata in all segments of construction. The IT / ITES subsidiary in Singapore, M/s. Nava Bharat (Singapore) Pte. SEZ stands notified and Mantri has obtained co-developer status Limited. from the Government of India.
7 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:09 PM Page 8
Nava Bharat Ventures Limited
Nava Bharat Projects Limited are eligible for re-appointment. The Company has received Nava Bharat Ventures Limited (NBV) plans to create a power letter from them to the effect that their appointment, if made, focused vertical, distinct from its diversified operations. Nava would be within the prescribed limits under Section 224 (1-B) Bharat Projects Limited (NBPL) is a wholly owned subsidiary of of the Companies Act, 1956. NBV and is the designated power holding company. NBPL will Cost audit drive the investments into specific SPVs (Operating Companies) M/s. Narasimha Murthy & Co, cost auditors, have been which implement power projects on a project finance and non engaged by the Company to conduct the cost audit in respect recourse basis. Accordingly, NBPL holds investments (50% stake) of industrial alcohol, sugar and electricity generated by the in Navabharat Power Private Limited, the SPV implementing 3 x Company for the financial year 2008-09. The approval of the 350 MW power plant in Orissa along with captive coal mine and Central Government was received for this appointment. 100% stake in Nava Bharat Energy India Limited which plans to implement two 150 MW coal fired power plants in Andhra “Group” for inter-se transfer of shares Pradesh. Besides the investments, NBPL will engage in power As required under Clause 3(1)(e) of the Securities and Exchange O&M activities and EPC activities in due course. Board of India (Substantial Acquisition of Shares and Takeovers) Nava Bharat Energy India Limited Regulations, 1997, persons constituting “Group” (within the Nava Bharat Energy India Limited (NBEIL) is a subsidiary of Nava meaning as defined in the Monopolies and Restrictive Trade Bharat Ventures Limited (NBV) and is designated as a power Practices Act, 1969) for the purpose of availing exemption from operating Company of the Group and will be a subsidiary of applicability of the provisions of Regulation 10 to 12 of the Nava Bharat Projects Limited (NBPL). NBEIL has drawn up plans aforesaid SEBI Regulations are given in Annexure III attached to implement two 150 MW thermal power plants based herewith and the said Annexure III forms part of this Annual predominantly on imported coal and washery rejects in Andhra Report. Pradesh. The projects are at the initial stage of implementation Management Discussion and Analysis with project land having been acquired and other approvals are Management Discussion and Analysis for the year under review being obtained. The Company has entrusted the project as stipulated under Clause 49 of the Listing Agreement with appraisal and syndication of debt finance to IDBIL. the Stock Exchanges in India is presented in a separate section Nava Bharat Realty Limited forming a part of this Annual Report. Nava Bharat Realty Limited (NBRL) is a subsidiary of Nava Bharat Directors’ Responsibility Statement Ventures Limited and is set up to focus on real estate ventures The Directors confirm that in the preparation of Annual either directly or through SPVs. NBRL has no operations at Accounts for the year ended March 31, 2009 present excepting advances for land and investments. – All applicable accounting standards were followed Nava Bharat Sugar and Bio Fuels Limited – The accounting policies framed in accordance with the Nava Bharat Ventures Limited (NBV) has floated another guidelines of the Institute of Chartered Accountants of India subsidiary, Nava Bharat Sugar and Bio Fuels Limited to facilitate have been applied restructuring of sugar operations as and when such a plan is taken up by the Group. At present, there are no operations in – Reasonable and prudent judgement and estimates were this subsidiary. made so as to give a true and fair view of the state of affairs of the Company Auditors – Proper and sufficient care has been taken for the M/s. Brahmayya & Co., Chartered Accountants, Hyderabad, the maintainance of adequate accounting records in accordance statutory auditors of the Company, will hold office until the with the provisions of the Companies Act, as applicable conclusion of the forthcoming Annual General Meeting and – The accounts were prepared on an ‘on going’ basis
8 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:09 PM Page 9
Annual Report 2008-09
Corporate Governance i) Excellent Energy Efficient Unit Award (for the second Pursuant to Clause 49 of the Listing Agreement, your Company consecutive year) has to mandatorily comply with the requirements of Corporate ii) Innovative Project Award Governance. A separate section on Corporate Governance and Further, the Company was awarded during 2008-09 by a certificate from the auditors of the Company, regarding EEPCINDIA (formerly Engineering Export Promotion Council). compliance of conditions of Corporate Governance, form a Silver shield for star performer as a large enterprise in the product part of this Annual Report. group of Ferro Alloys in recognition of outstanding contribution Conservation of energy, technology to engineering exports during 2006-2007. This was the sixth year absorption and foreign exchange of receiving such an award for export excellence. As required under the provisions of Section 217(1) (e) of the The Works at Paloncha was conferred an award for excellence Companies Act, 1956, read with Rule 2 of the Companies in “Cleaner Production Technologies and Adoption of Climate (disclosure of particulars in the Report of Board of Directors) Change Mitigation Measures” during 2007-08 by Andhra Rules, 1988, the particulars relating to conservation of energy, Pradesh Pollution Control Board, Hyderabad, in the form of a technology absorption, foreign exchange earnings and outgo shield and a certificate on June 5, 2008 on the occasion of have been given in the Annexure - I, which forms a part of this World Environment Day. The award was given based on the Report. various environmental protection measures and cleaner production technologies employed by the works at Paloncha. Industrial safety and environment Safety Industrial relations Your company continues to give utmost importance to safety Industrial relations have been cordial and your Directors of personnel and equipment in all its plants. The safety appreciate the sincere and efficient services rendered by the measures adopted are reviewed thoroughly and several employees of the Company at all levels towards successful proactive steps taken to avoid accidents. In addition, safety working of the Company. drills are conducted at regular intervals to train the workmen and staff in facing accidents. Acknowledgement Your Directors would like to express their grateful appreciation Environment for the assistance and cooperation received from the financial Your company received, from Confederation of Indian Industry, institutions, the Company’s bankers, insurance companies and an award for “Excellence in Cleaner Production Technologies” the government of Andhra Pradesh, Orissa and the state for the second consecutive year 2008. utilities and shareholders during the year under review.
Particulars of employees For and on behalf of the Board As required by the provisions of Section 217(2A) of the Companies Act, 1956, read with Companies (particulars of P. Trivikrama Prasad employees) Rules, 1975, as amended, the names and other Managing Director particulars of the employees are set out in the Annexure - IV to the Directors’ Report. Place: Hyderabad D. Ashok Date: May 30, 2009 Chairman Awards Your Company received the following awards during 2008-09 for Excellence in Energy Management from Confederation of Indian Industry:
9 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:09 PM Page 10
Nava Bharat Ventures Limited
Annexure-I to the Directors’ Report
Information under Section 217(1)(e) of the Companies Act, 1956 read with companies (disclosure of particulars in the report of the Board of Directors) rules, 1988 and forming part of Directors’ Report.
A. Conservation of energy ii. Installation of solar heater for residential purpose
a) Energy conservation measures taken iii. Installation of water-flow meter for furnace water circulation system to optimize loading of pump I) Sugar division motor i. Utilization of 2nd vapor instead of 1st vapor for distillery spent wash evaporation iv. Installation of Alfa mixer at briquetting plant, replacing pan mixer (3 nos.) to reduce energy ii. Modification of liquor feed line for Pan no.3 consumption iii. Installation of vibroscreen for dry seed screening b) Additional investments and proposals, if any, iv. Automation of process cooling tower fan on/off being implemented for reduction of consumption with reference to water temperature of energy II) Power division I) Sugar division PP(AP) i. Installation of plate type heat exchanger for raw i. Installation of higher efficiency cooler for turbine juice heating with hot process condensate lube oil which requires less ACW water ii. Modification of liquor feed lines for Pan nos.1, 2, 4 ii. Installation of gravity make-up line for cooling and 5 tower make up water iii. Cut over line washing with first vapor in place of MP iii. Installation of new boiler fill pump which reduced steam boiler start up time iv. Installation of plate type re-boiler for distillery iv. Installation of new side stream filter pump for analyzer column Unit-1 II) Power division v. Reduction in energy consumption by ESP-1 by PP(AP) reducing hopper heater consumption through i. Installation of new high efficiency PA fan for Boiler-1 change in operation procedure ii. Installation of additional conveyors in coal handling vi. Reduction in energy consumption by ESP-2 by Plant-2 for reduction of coal conveying time replacing controllers iii. Construction of crushed coal storage shed and III) Ferro alloy division conveying system at coal handling Plant-1 FAP(AP) PP(O) i. Installation of energy saver for factory lighting of i. Installation of vapor absorption machine, replacing Furnace-2 and Furnace-3 AC machines in Unit-1 and Unit-2 and FAP(O) ii. Replacement of 15 nos. of conventional and old control rooms type window air conditioners with the latest energy ii. Installation of one single compressor in Unit-2 for efficient split ACs (four-star rating) service air and instrument air FAP(O) iii. Installation of a blow down tank of 7000 m3 i Installation of level sensors at the bunker for dried capacity to collect all the CT blow down water and fines of chrome ore at briquetting plant and at using the same for sprinkling in coal yard area, dust furnace charging chutes to optimize the equipment control, ash conditioning, slag granulation in operation FAP(O) and gardening
10 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:09 PM Page 11
Annual Report 2008-09
Proposals for 2009-10: FAP(O) I) Power division i. Arrangement of coal fired fluidized bed combustor for PP(AP) dryers a. Turbine and auxiliaries ii. Replacement of cooling tower (3 nos.) fan blades with i. Replacement of Unit-3 CEP with one stage less FRP blades impeller to decrease the operating pressure and iii. Installation of energy savers for plant lighting system thereby reduce power consumption c) Impact of the measures at a) and b) above for ii. Installation of VFD for Unit-3 CEP reduction of energy consumption and consequent iii. Improving efficiency of Unit-1 HP heater by impact on the cost of production of goods replacing damaged 40% by-pass valve for increasing I) Sugar division feed water temperature from i. Use of second vapour for distillery spent wash 210 degrees C to 225 degrees C evaporation resulted in saving of 206 M.T. of iv. Optimizing main air compressor operating pressure bagasse during the year ii. Modification of feed line for Pan no.3 improved b. Electrical System circulation and increased pan capacity. As a result i. Identifying low efficiency motors and replacing them 0.1% steam on cane is saved ii. Installation of automatic star delta star converters iii. Vibroscreen for dry seed has improved quality of for identified motors seed and reduced water consumption at pans. This iii. Replacement of conventional FTL with energy has improved quality of sugar and reduced steam efficient T5 lamps consumption by 0.05% on cane c. Boiler and ash handling systems iv. 6780 kWh is saved during the year by providing i. Installation of new PA Fans for Boilers-1 and 2 automation for on/off operation of process cooling ii. Reducing specific energy consumption in AHP tower fan with reference to water temperature compressors by separating conveying systems with II) Power division respect to pressure PP(AP) iii. Reducing suction filter pressure drop at compressors i. Installation of higher efficiency turbine lube oil by arranging continuous monitoring cooler which requires less ACW water, reduced energy consumption by 528 kWh/day. PP(O) Replacement of one vertical turbine pump of motor ii. Installation of gravity make-up line for cooling rating 110 kW with 75 kW to 90 kW motor for same tower make-up water, reduced pump running flow. Savings will be around 150 kWh per day hours, saving 150 kWh/day iii. Installation of new boiler fill pump reduced cold II) Ferro alloy division start up time of boiler by two hours FAP (AP) iv. Installation of new high efficiency side stream filter i. Mechanization of finished product handling pump for Unit-1 reduced power consumption by ii. Arrangement of de-dusting system at Furnace-4 raw 75 kWh/day material screen house v. Changing operating procedure of hopper heater of iii. Replacement of outdated vibrofeeder control panel of ESP-1 reduced power consumption by 250 kWh/day the batch weighing system with the latest and compact vi. Replacement of controllers reduced power design to increase the equipment availability consumption at ESP-2 by 400 kWh/day
11 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:09 PM Page 12
Nava Bharat Ventures Limited
PP(O) ii. Replacement of old ACs with latest energy efficient i. By providing vapor absorption heat pump in the place four-star rating split ACs saved 540 kWh per month of conventional air-conditioning machine, the present FAP(O) level of energy consumption is reduced by around 40% i. Energy saving of 50,000 kWh per annum for installation ii. Due to use of single compressor for both the Units of level sensors at the bunker for dried fines of chrome around 400 kWh/day of auxiliary power is saved ore at briquetting plant iii. Collection and recycling of all CT blow down water for ii. Saving of 30,000 kWh per annum due to installation of ash conditioning, dust suppression in CHP, granulation solar heater for residential purpose. in ferro alloy plant and gardening purpose, resulted in zero water discharge iii. Saving of 2,00,000 kWh owing to installation of water- flow meter for furnace water circulation system III) Ferro alloy division: iv. Saving of 2,00,000 kWh per annum due to installation FAP(AP) of Alfa mixer at briquetting plant replacing pan mixer i. Installation of energy savers resulted in saving 3,000 (3 nos.) kWh per month in Furnace 2 and 3 factory lighting
d) I) Total energy consumption and energy consumption per unit of production
Current year Previous year
1. Power and fuel consumption a. Electricity purchased: Units (kWh) 82,32,000 6,56,400 Total amount (Rs. in lakhs) 50.68 53.68 Rate/Unit (Rs.) 6.15 8.18 b. Own generation: i) Through diesel generator (units) 16,622 6,896 Units per litre of diesel oil 1.74 1.47 Cost/Unit (Rs.) 21.48 22.34 ii) Through steam turbine generator: Units 2,38,72,512 3,76,84,600 Export 1,20,76,800 2,00,32,700 Consumption 1,17,95,712 1,76,51,900 2. Coal (distillery) – – 3. Furnace oil (LDO in lts) – – 4. Natural gas ––
12 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:09 PM Page 13
Annual Report 2008-09
II) Consumption per unit of production
Current year Previous year
1. Sugar (qtl.)A Power (kWh) 32.03 25.73 Steam (Tonne)B 0.42 0.36 2. Alcohol (KL)C Power (kWh) 279.96 334.47 Steam (Tonne)D 3.40 1.17
A. The rate per unit of electricity purchased decreased owing to increase in maximum demand charges. B. The power and steam consumption per quintal of sugar has increased owing to the combined effect of the fall in recovery from 10.12% (previous year) to 9.37% (current year) and the decrease in average crushing rate from 2972 TPD (previous year) to 2326 TPD (current year). C. The power consumption of the distillery has decreased owing to the increase in production rate from 12.2 kLPD (previous year) to 17.13 kLPD (current year). D. The specific steam consumption in the main plant of the distillery has decreased from 0.93 T/kL (previous year) to 0.82 T/kL (current year). Alcohol production increased from 1176.4 kL (previous year) to 1970.2 kL (current year) which increased spent wash generation. Effective spent wash disposal was achieved by continuous spent wash evaporation that led to additional steam consumption. As per prevailing rules, Ferro Alloy and Power Generation are excluded industries for the purpose of this information under d) I) & II) and hence the above particulars pertain to the Sugar Plant only.
B. Technology absorption ii. Replacement of old MCC panel and control panel of a) Efforts made in technology absorption the raw material handling system with new and latest MCC panel 1. Areas in which efficiency improvement was carried out iii. Replacement of LT distribution system for Furnace-2 by the Company and Furnace-3 with new PCC and with latest I) Sugar division switchgear components i. Installation of bagacillo flotation cell iv. Design and modification of raw material feeding ii. Installation of melt sulphitor system to feed charge to Furnace-3 from batch iii. Installation of sludge clarifier at distillery weighing system, PLC SCADA, of Furnace-4 iv. Utilization of spent lees for distillery cooling tower v. Installation of bag house for ladle pre-heating burner make up vi. Provision of tap hole drill machine and mud gun for II) Power division Furnace-1 and Furnace-2. With this, all four furnaces are now provided with such equipment PP(AP) vii. Replacement of 20/5T capacity EOT Crane with new Developed indigenous design for imported spares of 40/15T capacity EOT Crane turbine to reduce the cost of inventory FAP(O) III) Ferro alloy division: i. Installation of Alfa mixer FAP(AP) ii. Briquetting plant automation i. Replacement of existing semi auto control desk with iii. Automation of DG auto-start fully automatic PLC system for all the four gas iv. Installation of pneumatically operated dampers for cleaning plants furnace chimney
13 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:09 PM Page 14
Nava Bharat Ventures Limited
v. Installation of fugitive emission control system at v. Improved work environment briquetting plant vi. Improved reliability of equipment vi. Modification of screening equipment of dryer system vii. Improved safety of EOT cranes and reduction of vii. Installation of ladle skull breaker damage to ladles
2. Benefits derived as a result of above modifications 3. Future plan of action I) Sugar division I) Sugar division i. Production of superior quality sugar and reduction Installation of plate type evaporator as first body of the in lime and sulphur consumption due to removal of quintuple and mechanical circulator for Pan no.5 for bagacillo from mixed juice using fourth effect vapors for pan steam requirement ii. Sulphitation of melt to produce superior quality sugar II) Power division iii. Recovered 8.7 kL of alcohol otherwise lost through sludge waste PP(AP) iv. Totally avoided chemical usage and decreased make i. Overhaul of TG-1 during 2009-10 to improve up water usage at distillery cooling tower turbine heat rate ii. Replacement of existing cast iron diaphragms with II) Power division cast steel diaphragms to improve the reliability PP(AP) iii. Renovation of Boiler-1 for enhancement of life by Reduction in the cost of spares procured replacing the damaged pressure parts III) Ferro alloy division iv. Installation of SCADA for better operations in power FAP(AP) distribution i. More user friendly operation with better control of PP(O) GCPs i. Installation of hoists to lift the bed material up to light ii. More robust and compact control panel for raw up platform which will reduce the time for lifting the material handling bed material and consequently the light up time iii. Improved reliability of LT distribution system ii. Installation of new drain oil tanks for turbine oil iv. Flexibility to use the batch weighing system of either outside the T.G. hall. During exigencies such as fire Furnace-3 or Furnace-4 to feed raw materials to in the T.G. hall near oil tank, the oil can be drained Furnace-3 into the drain tank to avoid fire catching the v. More environment-friendly ladle preheating due to available oil in the tank for Unit-1 and 2. reduced emission of smoke into atmosphere III) Ferro alloy division vi. Elimination of furnace tap hole problems FAP(AP) vii. Easy handling of molten metal i. Mechanization of finished product handling FAP(O) ii. Installation of de-dusting system at raw material screen i. Energy conservation and improved reliability and house productivity of briquetting plant iii. Replacement of outdated control panel of vibrofeeder ii. Improved strength of briquettes and reduction of with latest and compact design control panel binder usage FAP(O) iii. Uninterrupted power supply to critical equipment i. Installation of automated raw material handling system iv. Improved safety to furnace equipment and human ii. Installation of cone/roll crusher for crushing of 25 mm beings size “slag mixed metal” to 6 mm for recovery of metal
14 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:09 PM Page 15
Annual Report 2008-09
4. Expenditure on efficiency improvement (Rs. in Lakhs) Sugar FAP(AP) FAP(O) PP division (3rd FC renovation and (Installation of (AP) 4th gas cleaning plant) ladle skull breaker) a. Capital 40.69 1,383.17 24.95 224.75 b. Recurring 0.65 – – – c. Total 41.34 1,383.17 24.95 224.75 d. Total expenditure on efficiency improvement as a percentage of total turnover 0.56% 2.84% 0.15% 0.53%
b) Technology absorption, adaptation and innovation No imported technology is in operation
C. Foreign exchange earnings & outgo a) Activities relating to exports, initiatives taken to increase exports, development of new export markets for products and services and export plans The company has been exporting Ferro alloys to Belgium, China, Germany, Indonesia, Iran, Italy, Japan, Korea, Peru, Portugal, Spain, Thailand, Russia, Saudi Arabia, Netherlands, Turkey, U.K. and U.S.A. and has successfully entered new markets in Mexico and Ukraine. The total quantity exported during 2008-09 stood at 50,028 MT with an FOB value of US$ 88.98 million. b) Total foreign exchange used and earned (Rs. in lakhs) Current year Previous year
1. Foreign exchange outgo: i. CIF value of imports 13,099.95 10,614.65 ii. Interest 573.75 150.92 iii. Consultation fees 15.40 12.86 iv. Others 169.02 64.74 2. Foreign exchange earnings at FOB Value i. Export of goods 39,061.30 49,546.72 ii. Interest earned 132.47 46.38
For and on behalf of the Board
P. Trivikrama Prasad Managing Director
Place: Hyderabad D. Ashok Date: May 30, 2009 Chairman
15 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:09 PM Page 16
Nava Bharat Ventures Limited
Annexure-II to the Directors’ Report
ESOP disclosures made under Clause 12.1 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999.
1 Number of options granted No options granted during the current year. 6,00,000 options granted during the year 2006-07. 2 Pricing formula 80% of the latest available closing price of the equity shares of the Company on NSE prior to the date of meeting of the Compensation Committee (Rs. 90.52). 3 Number of options vested 3,60,000 4 Number of options exercised 1,41,450 5 Total number of shares arising out of exercise of options 1,41,450 6 Number of options lapsed 62,050 7 Variation in the terms of the options No variations 8 Money realized by exercise of options Rs. 1,28,04,054.00 9 Total number of options in force 3,96,500 options 10 Employee wise details of options granted to – No options were granted during the current year a Senior management personnel Name of the employee Number of options granted in 2006-07 Sri C. V. Durga Prasad 43,700 Sri G. R. K. Prasad 39,600 Sri Y. Poornachandra Rao 32,700 Sri J. Ramesh 31,500 Sri A. S. N. Murthy 22,100 Sri N. Prabhakar 20,300 Sri G. P. Vardhana Rao 19,900 Sri A. Venkata Rao 24,700
b Any other employee who receives a grant in any one year of option amounting to 5% or more of Name of the employee Number of options options granted during the year granted in 2006-07 Sri C. V. Durga Prasad 43,700 Sri G. R. K. Prasad 39,600 Sri Y. Poornachandra Rao 32,700 Sri J. Ramesh 31,500
c Identified employees who were granted options, None of the employees were granted options equal to or during any one year, equal to or exceeding 1% of the exceeding 1% of the issued capital of the Company at the issued capital (excluding outstanding warrants and time of grant conversions) of the company at the time of grant
16 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:09 PM Page 17
Annual Report 2008-09
11 Diluted earnings per share (EPS) pursuant to issue of Rs. 57.03 shares on exercise of option calculated in accordance with Accounting Standard (AS) 20 – earnings per share
12 Where the Company calculated the employee Net income (as reported) (Rs. in lakhs) 45,543.94 compensation cost using the intrinsic value of the stock Add – Intrinsic value 38.24 options, the difference between the employee Less – Fair value 68.27 compensation cost so computed and the employee Adjusted Pro forma income (Rs. in lakhs) 45,513.91 compensation cost that shall have been recognized if it Basic EPS had used the fair value of the options, shall be disclosed. As reported Rs. 59.68 The impact of this difference on profits and on EPS of As adjusted Rs. 59.64 the Company shall also be disclosed. Diluted EPS As reported Rs. 57.03 As adjusted Rs. 56.99
13a Weighted average exercise prices for options whose No options granted during the year exercise price – i. equals market price ii. exceeds market price iii. is less than market price 13b Weighted fair values for options whose exercise price – No options granted during the year i. equals market price ii. exceeds market price iii. is less than market price
14 A description of the method and significant No options granted during the year. assumptions used during the year to estimate the fair values of Options, including the following weighted- average information: i. risk free rate ii. expected life iii. expected volatility iv. expected dividends and v. the price of the underlying share in the market at the time of option grant.
For and on behalf of the Board
P. Trivikrama Prasad Managing Director
Place: Hyderabad D. Ashok Date : May 30, 2009 Chairman
17 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:09 PM Page 18
Nava Bharat Ventures Limited
Annexure-III to the Directors’ Report
The following is the list of persons constituting “Group” (within the meaning as defined in the Monopolies and Restrictive Trade Practices Act, 1969) for the purpose of availing exemption from applicability of the provisions of Regulations 10 to 12 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (“the said Regulations”), as provided in Clause 3 (1) (e) of the said regulations:
Sl. No. Name Sl. No. Name
1 M/s. Nav Finance and Leasing Ltd. 14 Smt. A. Nilima
2 M/s. A. N. Investments Pvt. Ltd. 15 Sri P. Trivikrama Prasad
3 M/s. S. R. T. Investments Pvt. Ltd. 16 Sri P. Trivikrama Prasad (HUF)
4 M/s. Nav Energy Pvt. Ltd. 17 Smt. P. Rajashree
5 M/s. A9 Homes Pvt. Ltd. 18 Smt. P. Shruthi (Formerly M/s. Malaxmi Homes Pvt. Ltd.)
6 M/s. AV Dwellings Pvt. Ltd. 19 Smt. P. Seeta Devi (Formerly M/s. Malaxmi Dwellings Pvt. Ltd.)
7 M/s. V9 Avenues Pvt. Ltd. 20 Dr. P. Ramakrishna Prasad (Formerly M/s. Malaxmi Avenues Pvt. Ltd.)
8 Sri Devineni Ashok 21 Dr. P. Ramakrishna Prasad (HUF)
9 Smt. Devineni Ramaa 22 Dr. C. Sudha
10 Sri Devineni Ashwin 23 Dr. C. Nageswara Rao
11 Sri Devineni Nikhil 24 Smt. Madhu Prasad Kilaru
12 Dr. Devineni Rajasekhar 25 Sri K. P. Prasad
13 Smt. Devineni Bhaktapriya 26 Smt. Gullapalli Pratibha Rao
For and on behalf of the Board
P. Trivikrama Prasad Managing Director
Place: Hyderabad D. Ashok Date : May 30, 2009 Chairman
18 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:09 PM Page 19
Annual Report 2008-09
Annexure-IV to the Directors’ Report
Statement of particulars of employees pursuant to Section 217 (2A) of the Companies Act, 1956 and forming part of the Directors’ Report for the year ended March 31, 2009.
Sl. Designation/ Age Qualification Experience Remuneration Date of Details No. Name of the employee Nature of (years) (years) (Rs. in Lakhs) commencement of last duties of employment employment Salary & Perks Commission
1 Sri D. Ashok Chairman 52 M.B.A. 27 140.03 1,042.75 28.08.1981 – (U.S.A.)
2 Sri P. Trivikrama Prasad Managing 56 M.B.A. 27 141.99 1,042.75 01.08.1981 – Director (U.S.A.)
3 Sri C. V. Durga Prasad Director 58 B.Com. 36 85.07 – 01.07.1973 – (Business Development)
4 Sri G. R. K. Prasad Director 51 B.Sc., F.C.A. 28 84.25 – 12.08.1995 General (Finance & and F.C.S. Manager, Corporate DCL Polysters Affairs) Limited
5 Sri J. Ramesh Executive 51 B.Com. and 26 68.68 – 01.04.1997 Director, Vice President M.B.A. Nav Chrome (FAP-O) Ltd.
6 Sri Y. Poornachandra Rao Executive 58 M.E. 32 32.98 – 15.05.1982 Metallurgist, Vice President Metallurgy Sponge Iron India Ltd.
7 Sri A. Venkata Rao Vice President 62 B.E. 35 25.68 – 01.07.1974 – (PP) Mechanical
Notes: 1. Remuneration, as shown above, includes salary, commission, Company’s contribution to provident and superannuation funds, medical reimbursement and other perquisites.
2. Sri D. Ashok and Sri P. Trivikrama Prasad are related to each other.
3. Conditions of employment are contractual or governed by the Company’s rules.
4. The experience shown above refers to the total period in years of career.
For and on behalf of the Board
P. Trivikrama Prasad Managing Director
Place: Hyderabad D. Ashok Date : May 30, 2009 Chairman
19 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:09 PM Page 20
Nava Bharat Ventures Limited
Management Discussion and Analysis
The management discussion and analysis reviews the financial, and facilitates the development of new generation capacity. operating and strategic performance of the Company in the India has a mix of thermal and hydro-based facilities. Given an reporting period. The said discussion must be read together easy availability of coal, the thermal route is preferred. Most with the Directors’ Report and the audited financial statements units are supported by linkage or captive coal blocks. Wherever that form a part of the Annual Report. there are gaps, the developers are free to import requisite coal quantities. 1. Industry structure and developments Reforms in the power sector are proceeding, albeit slower. The Ferro alloys planned national grid, combined with the development of the Ferro alloys are a range of products used in steel making to power exchanges, will open up the power trading market. The impart desired characteristics. Some major alloys include current mechanism for merchant sales involves direct sales to manganese alloys and chromium alloys. Manganese alloys lend utilities and routing power sales through power traders. hardness and strength, while chromium alloys impart corrosion While a deficit persists, the primary response from utility and heat resistance. companies and the government seems to be in the areas of Important manganese alloys include – silico manganese (65% demand management. This means the off-peak usage of - 70% of the Company’s production) and ferro manganese (5% power will be encouraged, power cuts will become predictable of the Company’s production). and staggered across customer categories with differential rate Silico manganese is estimated to grow at a 4% CAGR through cards for industrial, agricultural and domestic customers. 2010, with the bulk of the increase coming from the Asia- Corporate India is adopting the captive route to tide over the Pacific. The usage of the product is increasing in direct power situation. Given the prevalent economic slowdown and proportion to infrastructure spending. Silico manganese is also related manufacturing cutbacks, captive producers decided to a big product for the Company. The global demand for silico export power to the state grids. This phenomenon is causing a manganese was lower in 2008-09, given the production temporary surge in power availability causing realisations to cutbacks in steel companies across the world. The Company trend downward the merchant power sales/segment. sees a gradual revival in demand owing to a revival seen across Power scenario in Orissa: Orissa’s installed power generation Asia. capacity is 3,550.5 MW, of which 37.56% is contributed by The third major ferro alloy that the Company produces is ferro thermal generation. In a year of normal rainfall, the state’s chrome. Ferro manganese accounts for a smaller market and in available power from the entire thermal and hydel sources 2008-09, there was a moderation in demand owing to the (20,173 MU with 3,040 MW peak met) was inadequate to meet economic slowdown. cumulative demand, creating opportunities for power projects.
Chrome alloys are used in stainless steel. In 2008-09, the Indian Power scenario in Andhra Pradesh: The state enjoys a total and global demand for the product was subdued owing to a installed power generation capacity of 11,816.3 MW. Of this, decline in stainless steel demand. China remains a big 62.29% is from thermal power. Following rising temperatures, consumer and market driver. the power scenario is expected to be grim during the summer Power of 2009-10, while new connections rise. To counter about 1,000-MW shortage, the state government announced a one- India remains a power deficit nation despite the fiscal and non- day weekly electricity holiday for industries and a two-to-six fiscal impetus given by the State. Ranked sixth globally in hour power cut for the state’s residential units. power generation with an established capacity of 6,89,021 MU, the peak power deficit stood at 12% in 2008-09. The need Sugar for smooth and reliable power supply, coupled with a major The country’s sugar production is estimated to be 15-16 million push, coming from the Centre, drives investments in the sector tonnes. Traditionally, Tamil Nadu, Maharashtra, Karnataka and
20 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:09 PM Page 21
Annual Report 2008-09
Andhra Pradesh account for nearly half of India’s sugar merchant basis. production. Owing to lower cane availability, most millers Given the subdued demand for products and availability of the resorted to sub-optimal capacity utilisation, average capacity ores, Nava Bharat maintained a lower utilisation level in the utilisation standing at 45-50%. The net result was a contraction second half of the year. This was necessitated by production in the country’s inventory situation. Furthermore, given the cutbacks undertaken by steel producers. expected decrease in cane plantation for the new season, sugar production in 2009-10 is expected to go lower than that in Power 2008-09. India permitted the import of raw sugar to improve India’s power sector reflects an attractive potential as per the supply situation. capita electricity consumption stands at an abysmal 619 units against the global average of 2,596 KWHr. The Eleventh Five The centre is likely to keep announcing progressively higher Year Plan envisaged an increase in per capita consumption to support prices for cane to encourage higher cane planting. 1,000 KWHr, catalyzed by the comprehensive ‘Power for all by Infrastructure 2012’ programme. India – an emerging country – possesses a huge scope for The Eleventh Plan envisaged a capacity creation of 78,577 MW, infrastructure development. The country’s highways form 2% including 52,905 MW based on coal. About 84% of this of the total road network but carry 40% of the traffic. capacity was supported by coal linkages. The total fund Moreover, only 12% of the highways are four-laned, 50% are requirement for total capacity creation by the private sector in two-laned and 38% are still single-laned. In terms of railways, the Eleventh Plan, standing at 10,760 MW, is estimated at India lags dated technology, saturated routes, slow average Rs. 85,037 crore. The Twelfth Plan sustains the growth theme speeds, and low payload-to-tare ratio. with an overall capacity target of 82,200 MW, including Infrastructure is potentially a GDP multiplier. The pace of 42,200 MW planned in the thermal space. infrastructure creation is slowing. Compounding the situation The Company has a firm power-centric strategy in place. The is the global economic slowdown resulting in a muted FDI flow Company’s power business is broken up into industrial use and into the sector. As it stands, India relies on foreign investment merchant sale. to bridge the funding gap.
Several measures were taken by the government to encourage infrastructure spending including establishment of the India Power Infrastructure Finance Company and institution of viability gap funding.
2. Opportunities and threats Andhra Pradesh Orissa Coal-based Coal-based Ferro alloys Total Total The Company enjoys a sizeable presence in ferro alloy. It is the 114 MW 94 MW second largest producer of ferro alloys in India with a 15% Three units Two units market share. Its production facilities are based at Paloncha, 1x50 MW, 2x32 MW 1x30 MW, 1x64 MW Andhra Pradesh (1,25,000 TPA) and Kharagprasad, Orissa (75,000 TPA); it produces silico manganese and ferro Bagasse-based manganese at the former and ferro chrome at the latter. Nava 9 MW Bharat can easily switch from manufacturing one kind of alloy Multi-fuel to the other. In the review period, the Company shut smelters 20 MW in the ferro alloy division and marketed the surplus power on
21 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:09 PM Page 22
Nava Bharat Ventures Limited
Merchant sales are maximized. As of now, there is a policy The non-discriminatory open access envisaged under the optimising the utilisation of power, where it earns the most Electricity Act is vitiated by certain utilities resorting to the favourable return, which in most instances represents curtailment of inter-state movement at times under enabling merchant sales. This strategy is being expanded into an all-out provisions of the Act. It is hoped that CERC and the Central merchant model. Government will introduce amendments to such provisions to Merchant sales increased 135.8% from 430.3 million units to ensure a market-driven power business. 1,014.5 million units, given the addition of new capacities and Sugar repatriation of captive capacity to sales. The Company The pattern of sugar consumption in India indicates steady maintained a reasonable power generation cost through a growth. Nava Bharat’s energy-efficient, state-of-the-art 3,500- blend of linkage coal, e-auction procurement and washery TCD sugar facility is located in a cane rich region within Andhra rejects. The boilers were designed to run on this mix, increasing Pradesh. The Company markets a part of its sugar under the the operating range of the business. Deccan Sugar brand. Its distillery (6 mn-litres annually) is Plans for the coming years include an additional coal-based capable of manufacturing industrial and extra neutral alcohol generation capacity, divided across 150 MW at Paloncha varieties. (domestic coal-based) and Dharmavaram (imported coal-based) There is a scope for expansion of crushing capacity, each in Andhra Pradesh and a 64-MW facility at Kharagprasad pragmatically, the prevailing situation calls for continuing at (domestic coal-based). The requisite land is under possession of the same crushing levels. The location of the plant makes it the Company and the regulatory and other clearances are easy to supply sugar to the eastern part of the country. awaited. The broad idea is to ramp-up power for merchant sales. The Company created the Kisan Club, a forum to share The Company is also pursuing leads to secure supplies of coal successful cultivation practices and impart training on scientific for the new power projects and have a sustained fuel supply. farming practices, increased mechanisation and scientific Additionally, the Company continues to evaluate international fertilizer application. power generation opportunities. Given the in-house expertise Infrastructure created in the field, Nava Bharat expects that it will be favourably The Company controls a 315-acre land bank. Of this, 65 acres placed to tap medium-sized ventures in the Afro-Asian region. is situated in Secunderabad under the Company and 250 acres The broad push towards a power-centric model is imparting near the new Hyderabad Airport under Brahmani Infratech Pvt. predictability and sustainability to the earnings model of the Ltd, a subsidiary. BIPL intends to create an IT/ITeS SEZ in this Company. Given the state of power deficit, there is likely to be plot in association with Mantri Developers Group. enough incentive to sustain merchant sales.
3. Segment-wise performance Nava Bharat is pursuing a power-centric policy to drive growth. The following table is a representation of the business-wise performances during 2008-09 and 2007-08. Sl. Particulars Ferro alloys Power Sugar No. March March March March March March 31, 2009 31, 2008 31, 2009 31, 2008 31, 2009 31, 2008
1. Production (MT)/(MU) 79,113 1,35,678 1,350 984 30,266 53,264 2. Sales (MT)/(MU) 80,440 1,14,372 1,350 984 31,045 51,294 3. Revenue (Rs. in lakh) 65,383 67,758 69,175 36,124 7,380 8,840 4. PBIDT (Rs. in Lakh) 13,941 18,643 41,349 22,624 1,245 (63)
22 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 23
Annual Report 2008-09
4. Outlook create power generation capacities. There will be a need to commit investment in capacity creation in industries such as Ferro alloys steel, cement, aluminium, construction companies and capital With a perceived recovery in the steel industry, the ferro alloys goods (transformers, switchgears, conductors and cables, outlook looks set to improve. Trends in Asia, particularly in among others) to support new generation capacity creation. India and China, suggest a recovery in the production of steel based on fiscal stimuli and infrastructure creation. The industry Sugar has seen fair amount of de-stocking and helped steel The mood and expectations in the sugar industry continue to production to return to normal levels. Given the time-lag be upbeat. This follows the gross mismatch between demand required for this to translate into a demand pick-up for ferro and supply in the country. Given the annual consumption, alloys, the situation is expected to improve towards the end of rising at 3-4%, total demand is likely to be around 22-23 the current year. million tonnes versus a production of 15-16 million tonnes. Since there are inadequate stocks in buffer, the gap is expected In terms of operating preparedness, the Company remains in a to be met through imports. This leaves a huge incentive for comfortable condition to ramp-up production. Its facilities farmers to increase cane plantation, considering the increasing were revamped recently. Moreover, the Company’s efforts to trend in sugar prices. It remains to be seen whether cane venture into mining of manganese ore might bear fruit in the availability also improves in line with this trend. current year. This is expected to support ferro alloy operations. The Company has a relatively small-sized crushing operation. It Power can be expected to post some gains on account of the The Company’s commitment to the power-model steadily integrated business nature. increased its scope of merchant operations to 1,014.5 million units with the commissioning of new coal-based facilities. Infrastructure Numerous opportunities are available across India for Given the higher realisations merited by merchant sales model, infrastructure creation. Given the various initiatives announced, the performance in the power industry is expected to be good. a target of US$ 500 billion has been set till 2015 by the The Company’s merchant model is intended to be a government. While a majority of this planned spend will go combination of long-term power purchase agreements and towards the power sector, sizeable opportunities lie in road, short term open access-based sales. Given the availability of railway, telecom, irrigation and water supply sectors. coal assets overseas and the support of linkages domestically, the Company also embarked on additional capacity creation. Nava Bharat continues to evaluate opportunities through the There is likelihood of about 250 MW of merchant power consortium route which enhances opportunity maximisation, becoming available for export in 2012 and 500 MW in the widens management bandwidth and spreads risk. following two years. 5. Risks and concerns As a backward integration initiative, the Company through its Singapore subsidiary, will invest US$18 mn in a coal mine in Ferro alloys Indonesia (mineable reserve–10 mn tonnes) for 75% of the off- The production cut-backs in steel encourage de-stocking which take rights in the reserves. The coal mine expects to commence is expected to result in inventories returning to normal levels. operations by CY 2009 end and coal drawn from these mines Going forward, the pick-up in ferro alloy production is likely to will be traded, apart from meeting a part of the fuel be staggered. Ore prices are also expected to trend lower in the requirements of the Company in India leading to enhanced interim. revenues-centric. Power While the Company is committed to driving a power model, The demand for power within India continued to rise. The adequate opportunities are emerging for private players to government outlined an ambitious program to increase
23 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 24
Nava Bharat Ventures Limited
generation. Although a majority of the power investment will • Safety of resources and the efficient usage come from the government, the private sector is also being • Accuracy in recording encouraged to invest. Some of the key possible impediments • Custody of the Company’s assets are regulatory complexities with regard to power evacuation, • Compliance with the latest mandated statutes, policies, coal procurement, environmental and land-related clearances. procedures, listing requirements, management guidelines Besides, the country is still in the process of developing a and circulars strong national grid to facilitate inter-regional power transfers. • Accurate recording of transactions, their cross-verification Sugar and prompt reporting The trend in sugarcane cultivation is mixed. On the one hand, • Adherence to applicable accounting standards and policies the cultivation is expected to be lower as farmers shift to remunerative crops like wheat and on the other hand, there is • Information and technology systems comprising controls to a strong incentive to plant more cane, given the steep rise in facilitate the above sugar realisations. Whatever the scenario, the availability of The internal control system covers internal processes, cane is going to be a significant issue for sugar manufacturers. authorisations and approval codes to help day-to-day Infrastructure operations. In line with the stated objectives during the fiscal Infrastructure spending is strongly needed in an emerging year 2008-09, internal audit reports were presented to the country like India. The basic challenges to infrastructure Audit Committee. Besides, there were informative discussions development remain technical skill-sets, management, on the subject at the Audit Committee’s meetings. execution capabilities and government policies. In general practice, the observations that follow the audit procedure are typically subjected to systematic reviews, 6. Internal control systems and their compliance and monitoring. A formal review is made by adequacy members of the Audit Committee based on internal audits and A broad overview of the Company’s internal control system on the status of the action taken till then. This then determines follows. There is an overall adequacy in terms of the processes the course of future action as deemed fit by the Audit in place and the measures taken to attain the desired Committee. objectives, such as:
7. Financial performance with respect to operational performance 2008-09 2007-08 % Rs. crore Rs. crore change 1. Net sales/income from operations 1,410.06 1,122.38 26 2. Other income 15.05 9.86 59 3. Total income (1 + 2) 1,425.71 1,132.24 26 4. Total expenditure 929.71 762.05 22 5. Operating profit 594.43 431.18 38 6. Operating margin % 42.25 38.63 7. Finance charges 30.95 20.40 52 8. Gross profit after finance charges but before depreciation and tax 533.81 395.35 35 9. Gross profit after finance charges but before depreciation and tax (%) 37.44 34.92
24 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 25
Annual Report 2008-09
2008-09 2007-08 % Rs. crore Rs. crore change 10. Depreciation 37.81 25.15 50 11. Profit/(loss) after exceptional items and before tax 496.00 370.20 34 12. Provision for – Current tax 57.00 58.50 -3 – Deferred tax 6.15 -4.55 -235 – MAT credit entitlement -23.00 0.00 – – Fringe benefit tax 0.75 1.40 -46 13. Profit/(loss) after tax 455.10 314.85 45 14. Return on capital employed % 36.60 37.57
The fully diluted book value of each equity share stood at total strength of employees stood at 1,034 in 2008-09. Rs. 153.88 as on March 31, 2009. The market price of the equity shares stood between Rs. 99.50 per share and 9. Cautionary forward-looking statements Rs. 300.50 per share on the National Stock Exchange of India The Company makes forward-looking statements that are and ranged from Rs. 99.4 per share to Rs. 301.2 per share on subject to risks and uncertainties. All statements, that address the Bombay Stock Exchange in 2008-09. expectations or projections about the future, including, but not limited to, statements about the Company’s strategy for 8. Human resources development growth, market position and financial results are forward- A committed and driven employee-set is important for any looking statements. organization. The Company conducted a number of training For those statements, the Company cautions that numerous and development workshops with a view to impart knowledge important factors could affect the Company’s actual results and globally benchmark the Company with the best practices. and could cause its results to differ materially from those Nava Bharat remains certified for important international expressed in any such forward-looking statements. The standards viz., ISO:9001 and 14001. It has been following the Company assumes no responsibility to publicly amend, modify 5-S concept for clean and lean processes. Relations between or revise any forward–looking statements, on the basis of any employees and the management remained largely cordial. The subsequent developments, information or events.
25 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 26
Nava Bharat Ventures Limited
Report on Corporate Governance for the year ended March 31, 2009 (as required under Clause 49 of the Listing Agreement entered into with the Stock Exchanges)
Corporate Governance In terms of Clause 49 of the Listing Agreement, compliance with the requirements of Corporate Governance is set out below:
1. The Company’s philosophy on code of governance: The Company’s philosophy on code of governance is conducting business in a fair and transparent manner, enhancing stakeholders’ value. The Company will continue to focus on its resources, strengths and strategies for creation and safeguarding of shareholders’ wealth and interests. 2. Board of Directors: The Company’s Board of Directors has a combination of Executive, Non-Executive and Independent Directors. The Board comprises total ten Directors, of which six are Non-Executive and more than half of the total strength of the Board comprises of Independent Directors (6 out of 10). On the retirement of Sri P. Punnaiah, Non-Executive Director, from the Board of Directors on the last Annual General Meeting (July 25, 2008), Sri D. Ashok, Managing Director, was elected as the Chairman by the Board of Directors. Sri D. Ashok, Chairman and Managing Director, was re-designated as Chairman with effect from January 29, 2009 and he is the Executive Chairman and Director in whole-time employment of the Company. Sri P. Trivikrama Prasad, Executive Director, was re- designated as the Managing Director with effect from the even date. All the other terms of their appointment such as the balance tenure, remuneration including salary, commission and other allowances remained the same.
None of the Directors in the Board is a member of the Committees on more than 10 Companies and Chairman of more than five Companies (as specified in Clause 49), across all the Companies in which any one is a Director. The necessary disclosures regarding the Committee positions have been made by all the Directors.
26 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 27
Annual Report 2008-09
The composition and category of the Board of Directors, their attendance at the Board Meetings during the year and at the last Annual General Meeting, the number of other Boards/Committee Memberships/Chairmanships held by them (other than in the Company – Nava Bharat Ventures Limited), number of Board Meetings held and their dates are given below:
Name of the Director Category Number of Attendance Whether Number of Number of Number of Board at Board attended other Boards other Board other Board Meetings Meetings AGM on in which he Committees in Committees in held 25.07.08 is a Director which he is a in which he is Pvt. Pub Member a Chairman
Sri D. Ashok* Executive and 5 5 Yes 6 6 – – Chairman Promoter Sri P. Punnaiah** Non-Executive 1 – – – – – – Sri P. Trivikrama Prasad* Executive and 5 5 Yes 10 7 – – Managing Director Promoter Sri N. Krishnan*** 2 2 Yes – – – – Independent IDBIL Nominee Sri S.V. Satyanarayana***} 33––11 – Dr. G. Sreeramjee***** Independent 5 – – 1 1 – – Non-Executive Dr. E. R. C. Shekar Independent 5 4 No 1 3 1 2 Non-Executive Dr. M. V. G. Rao Independent 5 4 Yes -- 5 2 – Non-Executive Sri K. Balarama Reddi Independent 5 4 Yes 1 6 1 3 Non-Executive Dr. D. Nageswara Rao**** Independent 3 3 – 2 1 – – Non-Executive Sri C. V. Durga Prasad Executive 5 3 No 1 – – – Sri G. R. K. Prasad Executive 5 5 Yes – 4 – –
*Sri D. Ashok, Chairman and Managing Director, was re-designated as Chairman with effect from January 29, 2009 and Sri P. Trivikrama Prasad, Executive Director, was re-designated as Managing Director with effect from the same date. **Retired as Director with effect from July 25, 2008. ***Industrial Development Bank of India Limited nominated Sri S. V. Satyanarayana on the Board replacing its earlier nominee, Sri N. Krishnan, with effect from September 15, 2008. ****Dr. D. Nageswara Rao was appointed as Additional Director on July 25, 2008. *****Dr. G. Sreeramjee (85 Years) will retire at the forthcoming Annual General Meeting and has not opted for re-appointment on health grounds.
27 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 28
Nava Bharat Ventures Limited
Board Meetings held during the year 2008-09: b. Recommendation of appointment among others, of the During the financial year 2008-09, five board meetings were statutory auditors and their fee for audit and other held on May 17, 2008, July 25, 2008, October 30, 2008, services. December 12, 2008 and January 29, 2009. c. Review of annual financial statements with particular The Board was composed as prescribed. The Non-Executive reference to Directors’ responsibility statement, changes Directors’ compensation was fixed by the Board of Directors in accounting policies, major accounting entries and was approved by the shareholders in General Meeting. involving estimates, disclosure of related party transactions, qualifications in the draft audit report, Disclosure of relationships between Directors inter-se among others. Sri P. Trivikrama Prasad, Managing Director, is related to Chairman (as Chairman’s sister’s husband) and Sri D. Ashok, d. Discussions with internal auditors on significant Chairman as such is related to the Managing Director. In findings and with statutory auditors on the nature and respect of the other Directors, there is no inter-se relation as per scope of audit and on areas of concern. Section 6 and Schedule 1A of the Companies Act, 1956. e. Review of quarterly financial statements, uses and Review of compliance report application of funds raised, performance of statutory The Board periodically reviewed the compliance reports of all and internal auditors, adequacy of internal control laws applicable to the Company at its quarterly board meetings. system and internal audit function.
3. Audit Committee f. Mandatory review of management discussion and analysis of financial condition, results of operations, The Audit Committee of the Board of Directors was constituted significant related party transactions, internal control in conformity with the requirements of Section 292A of the weaknesses reported by the statutory auditors and Companies Act, 1956 and Clause 49 of the Listing Agreement. internal auditors and the appointment and i. Brief description of terms of reference remuneration of internal auditor. The role of the Audit Committee is as prescribed including ii. Composition, name of members and chairperson the following The Audit Committee comprises three Independent a. Overseeing the Company’s financial reporting process Directors and one Institutional Nominee, who is also an and the disclosure of its financial information to ensure Independent Director. All the members of the Committee that the financial statements are correct, sufficient and including the Chairman have adequate financial and credible. accounting knowledge.
The composition of the Audit Committee is as under: Name of the Director Category Member/Chairman Sri K. Balarama Reddi Independent Director Chairman Dr. G. Sreeramjee Independent Director Member Dr. M. V. G. Rao Independent Director Member Sri N. Krishnan (Up to September 15, 2008) IDBIL Nominee and Independent Director Member Sri S. V. Satyanarayana (From September 15, 2008) }
28 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 29
Annual Report 2008-09
iii. Meetings and attendance during the year The Audit Committee met four times during the financial year on May 16, 2008, July 24, 2008, October 30, 2008 and January 29, 2009 and the attendance details of the members are as under:
Name of the Director Designation Number of meetings attended
Sri K. Balarama Reddi Chairman 4
Dr. G. Sreeramjee Member Nil
Dr. M. V. G. Rao Member 3
IDBIL Nominee
Sri N. Krishnan Member 2 (Up to 15th September 2008)
Sri S. V. Satyanarayana Member 2 (From 15th September 2008)
Subsidiary Companies Risk Management Independent Directors viz., Sri K. Balarama Reddi, The Board laid down the risk assessment and minimisation Dr. G. Sreeramjee and Dr. M. V. G. Rao are the Directors on the procedures which are reviewed periodically at its meetings to Boards of the non-listed Indian Subsidiary Companies as ensure that executive management controls risk through a detailed below: properly defined framework.
Name of the Director on the Board of Proceeds from fresh/further issues Independent Director Subsidiary Companies The Company issued FCCBs to an extent of JPY 6,000 million
Sri K. Balarama Reddi 1. Nava Bharat Realty Limited including Green Shoe Option at a conversion price of Rs. 136.50 per equity share of Rs. 2/- each during the financial 2. Nava Bharat Projects Limited year 2006-07. FCCBs to an extent of JPY 2,480 million were Dr. G. Sreeramjee 1. Brahmani Infratech Private Limited converted into 77,76,303 equity shares of Rs. 2/- each at a 2. Kinnera Power Company Limited revised conversion price of Rs.132.96 per share during the last financial year. Further, no FCCBs were converted into equity Dr. M. V. G. Rao 1. Nava Bharat Energy India Limited shares during the current financial year. 2. Nava Bharat Sugar and The conversion price of FCCBs was revised to Rs. 129.26 at the Bio Fuels Limited time of book closure for declaration of dividend for the year The financial statements and the minutes of the Board 2007-08. meetings of the Subsidiary Companies are considered at the The sources and uses/application of funds are disclosed to and meetings of the Board of Directors of the Company. considered by the Audit Committee on a quarterly basis and as Related party transactions a part of the quarterly declaration of financial results. The Audit Committee and the Board considered periodically The Company did not utilize any part of the said funds for the the statement of related party transactions with details purposes other than those stated in the offer documents or together with basis, at their meetings. notices.
29 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 30
Nava Bharat Ventures Limited
4. Remuneration Committee i. Brief description of terms of reference The functioning and terms of reference of the Remuneration Committee are as prescribed under the Listing Agreement with the Stock Exchanges and it determines the Company’s policy on all elements of the remuneration packages of the Directors including the Executive Directors. The remuneration of the Directors is approved by the Remuneration Committee and the Board of Directors as per the remuneration policy of the Company.
ii. Composition, names of members and chairperson The Remuneration Committee comprises two Independent Directors and one Nominee Director, who is also Independent Director. The Remuneration Committee comprises Name of the Director Category Member/Chairman
Sri K. Balarama Reddi Independent Director Chairman
Dr. M. V. G. Rao Independent Director Member
Sri N. Krishnan (up to September 15, 2008) IDBIL nominee and Independent Director Member Sri S. V. Satyanarayana (from September 15, 2008) }
iii. Meetings and attendance during the year During the financial year, the Committee met once on May 16, 2008 and the attendance details of the members are as under: Name of the Director Member/Chairman No. of meetings attended
Sri K. Balarama Reddi Chairman 1 Dr. M. V. G. Rao Member NIL
IDBIL Nominee Sri N. Krishnan Member 1
The Committee also met on April 14, 2009, reviewed re-appointment of and remuneration payable to Sri D. Ashok, Director in whole-time employment as Chairman and recommended to the Board the re-appointment of and remuneration payable to him for approval. Sri K. Balarama Reddi, Dr. M.V.G.Rao and Sri S. V. Satyanarayana attended the meeting. The Committee met on May 30, 2009, reviewed the remuneration payable to Sri C. V. Durgaprasad, Director (Business Development) and Sri G. R. K. Prasad, Director (Finance & Corporate Affairs) and recommended to revise their salary to Rs. 4 lakh per month each w.e.f. April 1, 2009 and the allowances/perquisites remain the same which would be computed on enhanced salary w.e.f. April 1, 2009. All the members of the committee attended the meeting and above recommendations were approved by the Board.
30 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 31
Annual Report 2008-09
iv. Remuneration policy As a policy, the Remuneration Committee considers the financial position and profitability of the Company, nature and responsibility of the position, remuneration packages prevailing in the industry or other organization comparable in regard to the size and complexity of operations. v. Details of remuneration and other payments to or transactions of all Directors during the financial year 2008-09: Name of the Director Sitting fee - Board Salaries and Commission as approved Other Stock options and Committee perquisites by General Body transactions granted on 05.01.07 (Rupees) (Rupees) (Rupees) (Rupees) at Rs. 90.52 each Sri D. Ashok – 1,40,02,913 10,42,75,397 – – Sri P. Punnaiah* – 78,767 – – Sri P. Trivikrama Prasad – 1,41,99,481 10,42,75,397 – – Sri N. Krishnan** Sri S. V. Satyanarayana** 50,000 2,50,000 – – Dr. G. Sreeramjee – 2,50,000 – – Dr. E. R. C. Shekar 20,000 2,50,000 – – Dr. M. V. G. Rao 40,000 2,50,000 – – Sri K. Balarama Reddi 50,000 2,50,000 – – Dr. D. Nageswara Rao* 15,000 1,71,233 – – Sri C. V. Durga Prasad – 85,07,210 – – 43,700 Sri G. R. K. Prasad – 84,24,901 – – 39,600
*Sri P. Punnaiah retired as Director with effect from July 25, 2008 and Dr. D. Nageswara Rao was appointed as Additional Director with effect from the same date.
**Payable to Industrial Development Bank of India Limited (IDBIL), Sri S. V. Satyanarayana was substituted in place of Sri N. Krishnan as Nominee Director by IDBIL with effect from September 15, 2008.
vi. Service contract, notice period, severance fees The vesting and exercise schedules are as follows: There are no specific contracts or any severance fees. Terms Schedule of Date of Exercise period of appointment are as decided by the Board and General grant of options vesting up to Body. 30% 05.01.2008 04.01.2012
Stock options 30% 05.01.2009 04.01.2013 The Company granted 6,00,000 stock options to the 40% 05.01.2010 04.01.2014 employees including Working Directors, who are non- The ESOS Remuneration (Compensation and Allotment) promoters i.e., Sri C. V. Durga Prasad, Director (Business Committee at its meeting held on March 19, 2008 allotted Development) and Sri G. R. K. Prasad, Director (Finance & 1,09,890 equity shares of Rs. 2/- each and 31,560 equity Corporate Affairs) at Rs. 90.52 per option on January 5, shares of Rs. 2/- each on July 30, 2008, under the 2007. The issue price is 80% of the closing price of the scrip Employees Stock Option Scheme 2006 of the Company, on on NSE on January 4, 2007 (80% of the latest available exercise of options granted on January 5, 2007 at Rs. 90.52 closing price on NSE). per option/equity share, including premium.
31 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 32
Nava Bharat Ventures Limited
The ESOS Remuneration (Compensation) Committee met ix. Details of shares held by Chairman, Managing Director on April 14, 2009 and reviewed the status of the ESOS and and Directors in the whole-time employment of the also the status of vesting of options for the second tranche. Company as on March 31, 2009
vii. Remuneration to the Non-Executive Directors and criteria SL. Name Equity shares of The Board, at its meeting, held on May 31, 2006 and Annual No. Rs. 2/- each held in General Meeting on July 27, 2006, approved payment of their name remuneration/commission to the Non-Executive Directors for 1. Sri D. Ashok 6,38,100 each year for a period of five years commencing from April 2. Sri P. Trivikrama Prasad 14,79,992 01, 2006, as the Board may determine from time to time (to be divided equally amongst the Non-Executive Directors) not 3. Sri P. Trivikrama Prasad (HUF) 2,70,565 exceeding 1% of the net profits of the Company in any 4. Sri C. V. Durga Prasad 40,325
financial year subject to an overall ceiling of Rs.15 lakhs per 5. Sri G. R. K. Prasad 2,866 year to be paid and distributed equally among all the Non- Executive Directors of the Company for each year, in addition Management disclosure to the sitting fees for every meeting of the Board or The senior management personnel disclosed to the Board Committee not exceeding Rs. 5,000/- per meeting as may be the transactions for the year under review wherever they determined by the Board from time to time. have personal interest, such as dealings in the Company’s shares. Criteria Keeping in view the size, scale and complexity of the 5. Shareholders/Investors Grievances Committee Company’s operations and the level of involvement of the i. The Company has Shareholders/Investors Grievances Non-Executive Directors in the supervision and control of Committee at the Board level comprising two Directors, the Company and their guidance for the growth of the Sri K. Balarama Reddi and Sri P. Trivikrama Prasad. Company as Members of the Board and also as Chairman Sri K. Balarama Reddi, Non-Executive and Independent or Members of the relevant Committees of the Board, the Director, chairs the shareholders/Investors Grievances Board and Shareholders decided that such remuneration/ Committee. It deals with shareholders’ complaints on a commission would commensurate with their role which regular basis. All the complaints were solved to the has undergone significant qualitative changes. concerned members’ satisfaction. Details of shares held by Non-Executive Directors as on viii. Earlier, Sri P. Punnaiah was the Chairman of Shareholders/ March 31, 2009 Investors Grievances Committee. On his retirement, as SL. Name Equity shares of Rs. 2/- Director from the Board with effect from July 25, 2008, No. each held in their name Sri K. Balarama Reddi, Non-Executive and Independent 1. Dr. G. Sreeramjee 2,91,350 Director, was appointed as the Chairman of the said 2. Sri K. Balarama Reddi Nil Committee. 3. Dr. E. R. C. Shekar Nil ii. Name and designation of Compliance Officer : 4. Dr. M. V. G. Rao 7,780 Sri M. Subrahmanyam 5. Dr. D. Nageswara Rao Nil Company Secretary and Vice President 6. Sri S. V. Satyanarayana Nil
32 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 33
Annual Report 2008-09
iii. Number of shareholders complaints received during the year ended March 31, 2009 : 16
iv. Number not solved to the shareholders’ satisfaction : Nil
v. Number of pending complaints : Nil
6. General Body Meetings i. Location and time, where last three Annual General Meetings were held
Year Location Date Time
2008 Hotel Green Park, Begumpet, Hyderabad – 500 016 July 25, 2008 10.00 am
2007 Hotel Green Park, Begumpet, Hyderabad – 500 016 July 27, 2007 10.30 am
2006 Hotel Green Park, Begumpet, Hyderabad – 500 016 July 27, 2006 11.00 am
ii. Special resolutions passed in the previous three Annual General Meetings
Year Date Special resolutions considered
2008 July 25, 2008 6
2007 July 27, 2007 5
2006 July 27, 2006 5
iii. A special resolution was passed through postal ballot at the last Annual General Meeting held on July 25, 2008. Postal ballot was conducted and the consent of the members was accorded under Section 372A of the Companies Act, 1956 for making inter-corporate investments/loans exceeding the limits pursuant to Section 372A.
iv. The Postal ballot exercise was conducted in a fair and transparent manner by the scrutiniser, Smt. P. Renuka, Practicing Company Secretary.
Details of voting patterns are as follows:
Particulars of resolution Number of shares voted Number of shares voted in favour of resolution against resolution
Inter-corporate investments/loans 3,83,42,829 23,035 (99.94%)
7. Disclosures i. Materially significant related party transactions that may have potential conflict with the interests of the Company at large.
Related party transactions Besides the summary of transactions forming a part of annual accounts, the following are reported as part of Corporate Governance Compliance.
The Audit Committee reviewed and considered the transactions with related parties from time to time.
33 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 34
Nava Bharat Ventures Limited
1. Remuneration (including salaries, commission and iii. Whistle Blower policy and affirmation that no personnel perquisites) paid to the Whole-time Directors as have been denied access to the Audit Committee. Chairman, Managing Director, Director (Business The Company has not yet established a mechanism for Development) and Director (Finance & Corporate Whistle Blower Policy. However, no personnel have been Affairs) – Rs. 2,536.85 lakhs. denied access to the Audit Committee. 2. Rent : Rs. 57.68 lakhs iv. Details of compliance with the mandatory requirements and 3. Interest on fixed deposits : Rs. 2.07 lakhs adoption of non-mandatory requirements of this clause. 4. i) Investment into Brahmani Infratech Pvt. Ltd. up to All mandatory requirements are scrupulously complied with March 31, 2009 was Rs. 6,300.00 lakhs towards and non-mandatory requirements are partially adopted. equity shares. a. Mandatory requirements ii) Investment into Nava Bharat Realty Limited The Company scrupulously complied with all the Rs. 1,957.00 lakhs mandatory requirements enumerated in Clause 49 as iii) Investment into Nava Bharat Projects Limited prescribed relating to i. Board of Directors; ii. Audit Rs. 1,328.40 lakhs Committee; iii. Subsidiary Companies; iv. Disclosures; v. CEO/CFO Certification; vi. Report on Corporate 5. Trustee fee - Rs. 0.15 lakhs Governance; and vii. Compliance. 6. Remuneration to Non-Executive Directors put together b. Non-mandatory requirements Rs.15.00 lakhs p.a. sitting fee per meeting Rs. 5,000/- i. The Board 7. The Company contributed a sum of Rs.500.00 lakhs Sri D. Ashok, Managing Director, was elected as the during 2008-09 to Dr. Devineni Subbarao Trust, Chairman by the Board of Directors on July 25, registered charitable trust under Section 12A (a) of the 2008 and subsequently he was re-designated as the Income Tax Act to which Sri D. Ashok, Director in Chairman with effect from January 29, 2009. He is whole-time employment as Chairman of the Company, the Executive Chairman and Director in whole-time is the Managing Trustee without any remuneration. employment of the Company. Sri P. Punnaiah, Non- Sri P. Trivikrama Prasad, Managing Director of the Executive Director, retired from the Board of Company, is the Trustee (Honorary). Directors effective from the date of last Annual 8. M/s. Beardsell Limited on the Board of which General Meeting on July 25, 2008. Sri P. Punnaiah is a Director, was paid Rs. 115 lakhs The maximum tenure of Independent Directors is towards advance for compensation in part, out of the not adopted by the Company. total agreed sum of Rs. 245 lakhs for vacation and ii. Remuneration Committee return of the leasehold property of an area of 1 acre at The Board has constituted the Remuneration Nacharam Industrial Estate over which sheds and office Committee with the role and functions as premises were constructed by M/s. Beardsell Limited. prescribed, with three Directors, all of whom are The remaining compensation is payable on handing Non-Executive and Independent Directors including over of the said leasehold property to the Company. the Chairman. ii. Details of non compliance by the Company, penalties, and iii. Allotment Committee strictures imposed on the Company by Stock Exchanges or The Board constituted Allotment Committee the SEBI or any statutory authority, on any matter related to comprising the Directors, Sri K. Balarama Reddi, capital markets, during the last 3 years - Nil Dr. M. V. G. Rao, Sri C. V. Durga Prasad and
34 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 35
Annual Report 2008-09
Sri G. R. K. Prasad for allotment of equity shares on circulated in India including Business Line/Business Standard conversion of foreign currency convertible bonds and in newspapers in the language of region including (FCCBs). Eenadu/Andhra Prabha/Andhra Jyothi. The results are also During the current financial year the Company did displayed on the Company’s website www.nbventures.com not convert any FCCBs. and the SEBI’s website: www.sebiedifar.nic.in. Official news items are sent to the Stock Exchanges i.e., National Stock iv. Shareholders’ rights Exchange of India Limited and Bombay Stock Exchange The half-yearly financial performance was published Limited, where shares of the Company are listed and the in newspapers and placed on the Company’s exchanges present the same on their websites. The website, apart from the SEBI EDIFAR website. The presentations, if any, made to Institutional Investors will be same was also sent individually to each shareholder. covered in the Company’s website. All the quarterly financial results are also placed on the Company’s website: www.nbventures.com and 9. General Shareholder information the SEBI’s EDIFAR website: www.sebiedifar.nic.in, i. Annual General Meeting: Day, date, time and venue: apart from publishing the same in the newspapers. Friday, July 31, 2009 at 10.00 am Hotel Green Park, Begumpet, Hyderabad – 500 016 v. Audit qualifications There are no qualifications in the Company’s ii. Financial calendar: financial statements. FINANCIAL YEAR 2008-09 (01.04.2008 to 31.03.2009) vi. Training of Board Members 1. First quarter results July 25 2008 The Company is yet to plan for the same. 2. Second quarter and vii. Mechanism for evaluating Non-Executive Board half-year results October 30 2008 Members 3. Third quarter results January 29 2009 The aforesaid mechanism is yet to be introduced. 4. Annual results (audited) May 30 2009 viii.Whistle Blower Policy The Company is yet to introduce the same. iii. Date of book closure : July 23, 2009 to July 31, 2009 Accounting standards and treatment iv. Dividend on equity shares : Rs. 8/- per equity share of The accounting treatment, as prescribed in the and payment date Rs. 2/- each payable on and accounting standards, was followed in the preparation from August 7, 2009. of financial statements. v. Listing on Stock Exchanges C.E.O/C.F.O. certification The securities of the Company are listed on National Stock The C.E.O. and the C.F.O. (Managing Director and Exchange of India Limited and Bombay Stock Exchange Director (Finance & Corporate Affairs)) certified to the Limited. The listing fees for these Stock Exchanges were paid. Board on the prescribed matters as required under Clause 49 of the Listing Agreement and the said vi. Stock code certificate was considered by the Board at its meeting Bombay Stock Exchange Scrip Code/Trading Symbol: held on May 30, 2009. 513023/‘NBVENTURE’ 8. Means of communication National Stock Exchange Trading Symbol: ‘NBVENTURES’ The quarterly, half-yearly and annual results are normally Demat ISIN Number in NSDL and CDSL for equity shares: published by the Company in the English newspapers INE 725A01022
35 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 36
Nava Bharat Ventures Limited
vii. Market price data: High/low(daily closing prices) during each month in the financial year 2008-09: Equity shares of Rs. 2/- each National Stock Exchange Bombay Stock Exchange Limited Month of India Limited High Low High Low Closing Sensex April 2008 267.55 211.75 266.45 211.10 255.25 17287.31 May 2008 300.50 253.10 301.20 253.85 280.15 16415.57 June 2008 281.40 239.70 280.95 238.65 245.45 13461.60 July 2008 283.35 232.05 282.85 232.05 255.60 14355.75 August 2008 271.05 239.55 270.30 240.05 245.55 14564.53 September 2008 251.30 182.85 251.10 181.85 181.85 12860.43 October 2008 187.80 108.85 188.30 105.55 124.35 9788.06 November 2008 125.40 100.35 125.55 100.60 100.60 9092.72 December 2008 125.45 99.45 125.50 99.35 124.85 9647.31 January 2009 135.45 101.55 135.75 101.85 108.55 9424.24 February 2009 117.80 108.30 117.45 107.95 110.15 8891.61 March 2009 141.30 114.30 139.75 113.45 137.10 9708.50
viii. The Company is not forming a part of BSE Sensex or NIFTY. Overall performance of the scrips of the Company is by and large in tandem with BSE Sensex as follows:
Performance of M/s. Nava Bharat Ventures Ltd. Share price in comparison to BSE Sensex
36 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 37
Annual Report 2008-09
ix. Registrars and Transfer Agents: M/s. KARVY Computershare Private Limited Plot No.17 to 24, Vittal Rao Nagar, Madhapur, Hyderabad – 500 081
Telephone Numbers (040) 23420818/23420828
Direct (040) 23431598
Fax Number (040) 23420814
Contact Person Sri M. S. Madhusudhan/Sri Mohd. Mohsinuddin
E-mail [email protected] [email protected]
x. Share Transfer System M/s. Karvy Computershare Private Limited, Hyderabad, is the Company’s Registrars and Share Transfer Agents. Share transfers are registered and returned in the normal course within a period of 15 days from the date of receipt, if the documents are in order in all respects. Request for dematerialization of shares are processed and confirmation is given to the respective depositories, i.e., National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) within 15 days. The Registrars and Share Transfer Agents were delegated the power of share transfer to expedite the transfer formalities.
xi. a. Distribution of Shareholding as on March 31, 2009 Number of shares Number of shareholders Number of shares of Rs. 2/- each Percentage to total shares Up to 500 13,652 20,16,996 2.65 501 to 1000 1,231 9,98,264 1.31 1001 to 2000 758 11,77,748 1.55 2001 to 3000 356 9,05,550 1.19 3001 to 4000 185 6,68,542 0.88 4001 to 5000 139 6,55,534 0.86 5001 to 10000 254 18,65,942 2.45 10001 and above 368 6,78,36,748 89.11 TOTAL 16,943 7,61,25,324 100.00
37 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 38
Nava Bharat Ventures Limited
b. Categories of Shareholding as on March 31, 2009 Category Number of Number of Percentage to Shares pledged or shareholders shares of total shares otherwise encumbered Rs. 2/- each Number of shares As a percentage (i) (ii) (iii) (iv) Rs. 2/- each (v) Rs.2/- each (vi) (v / iii) A. Promoter group i. Individuals 20 1,36,76,694 17.97 ii Bodies Corporate 6 1,61,49,316 21.21 50,00,000 30.96 iii. Trust 1 49,73,510 6.53 Total shareholding of Promoter group 27 3,47,99,520 45.71 50,00,000 14.37 B. Public shareholding: i. Mutual Funds 15 32,60,979 4.28 ii. Financial Institutions/Banks 16 54.963 0.07 iii. Foreign Institutional Investors 21 90,81,095 11.93 iv. Bodies Corporate 570 56,43,445 7.41 v. Individuals 15880 2,07,67,401 27.28 vi. Directors and Relatives 17 15,20,981 2.00 vii. Non-resident Indians 324 7,26,397 0.96 viii. Trusts 5 1,86,180 0.25 ix. Clearing Members 68 84,363 0.11 Total shareholding of Public 16916 4,13,25,804 54.29 – – Grand Total (A+B) 16943 7,61,25,324 100.00 50,00,000 6.57
c. Unclaimed equity/preference dividend for the previous financial years and transfer to Investor Education and Protection Fund SL Financial Date of declaration % of dividend Date of transfer Date of transfer to Central No. year of equity/preference (equity/preference to unpaid Government's Investor Education dividends dividend) dividend a/c and Protection Fund 1 2007-2008 July 25, 2008 300 August 25, 2008 August 25, 2015 2 2006-2007 July 27, 2007 200 August 27, 2007 August 27, 2014 3 2005-2006 July 27, 2006 100 August 28, 2006 August 28, 2013 4 2004-2005 July 27, 2005 100 August 27, 2005 August 27, 2012 5 2003-2004 July 24, 2004 60 August 24, 2004 August 24, 2011 6 2002-2003 August 30, 2003 30 September 30, 2003 September 30, 2010 2002-2003 August 30, 2003 *12 September 30, 2003 September 30, 2010 7 2001-2002 September 26, 2002 18 October 26, 2002 October 26, 2009 2001-2002 September 26, 2002 *12 October 26, 2002 October 26, 2009 NOTE: * Denotes % of preference dividend
38 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 39
Annual Report 2008-09
xii. Buy-back of equity shares Company’s shares are listed.
The Company announced the buy-back of its fully paid-up xiv. The Company’s policy on prevention of Insider Trading equity shares of the face value of Rs. 2/- each, from the Pursuant to the requirements of the SEBI (Prohibition of existing owners of equity shares other than those who are Insider Trading) Regulations, 1992, as amended, the promoters, promoter group, directors of promoters, Company has in place a code of conduct for prevention of persons in control, persons acting in concert, from the Insider Trading. open market using the electronic trading facilities of The code is applicable to all the heads of the departments Bombay Stock Exchange Limited and National Stock of the Company who are likely or reasonably expected to Exchange of India Limited in accordance with the have access to the unpublished price sensitive information provisions of Sections 77A, 77AA and 77B of the relating to the Company and the same is being Companies Act, 1956 and the Securities and Exchange implemented as a self-regulatory mechanism. The code is Board of India (buy-back of securities) Regulations, 1998 at extended up to the levels of Chief Manager and Assistant a price not exceeding Rs.170/- per equity share payable in General Manager. cash, for an aggregate amount not exceeding Rs. 5,000 lakhs. The maximum offer size represents 6.29% of the xv. Dematerialization of shares and liquidity aggregate of the Company’s total paid-up equity capital 7,20,22,440 equity shares of Rs. 2/- each are under demat and free reserves as on March 31, 2008. form constituting 94.61% of the paid-up equity as on March 31, 2009. The shares are actively traded and liquid A public announcement was released in a prescribed at National Stock Exchange of India Limited and Bombay format on December 22, 2008 and a corrigendum to the Stock Exchange Limited. public announcement on January 3, 2009.
The buy-back offer was opened on January 6, 2009.
The Company as on March 31, 2009, bought 19,20,000 equity shares of Rs. 2/- each and extinguished 17,79,904 equity shares. With the extinguishment of the said equity shares, the paid-up capital of the Company has come down to 7,61,25,324 equity shares.
The Company further bought 12,500 equity shares of Rs. 2/- each and extinguished all the shares so bought. The paid-up capital of the Company after the above extinguishment is 7,59,72,728 equity shares of Rs. 2/- xvi. Outstanding GDRs/ADRs/Warrants or any convertible each. instrument, conversion date and its likely impact on xiii. Secretarial Audit equity The Company gets the Secretarial Audit done by a FCCB 2011 Practicing Company Secretary for the purpose of The Company raised foreign currency convertible bonds for reconciliation of the total equity capital with both the JPY 6,000 million including Green Shoe Option of JPY 750 depositories and in physical form with the total paid-up million equivalent INR 23,352 lakhs. The conversion price capital as per the books. The Secretarial Audit Reports are for the bonds was fixed at Rs.136.50 and revised to placed before the Board of Directors on a quarterly basis Rs.132.96 per equity share of Rs. 2/- each and was further and are also sent to the Stock Exchanges where the revised to Rs. 129.26 per equity share of Rs. 2/- each.
39 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 40
Nava Bharat Ventures Limited
During the financial year, no FCCBs were converted into xvii. Plant locations equity shares. FCCBs to an extent of JPY 3,520 million are The Company’s plants are located at outstanding and if these bonds are converted into equity • Paloncha, Khammam District, A.P. shares there would be an increase in the paid-up capital of • Samalkot, East Godavari District, A.P. the Company by about 122 lakh equity shares of Rs. 2/- • Kharagprasad Village, Dhenkanal District, Orissa and each. • Dharmavaram, Prathipadu Mandal, East Godavari District, A.P. Employees Stock Options The Company granted 6 lakh options to the employees on xviii. Address for Correspondence January 5, 2007 at Rs. 90.52 per option including premium Registered Office : NAVA BHARAT VENTURES LIMITED convertible into 6 lakh equity shares of Rs. 2/- each. The 6-3-1109/1, `Nava Bharat Chambers’ ESOS Remuneration (Compensation) Committee on March Raj Bhavan Road, 19, 2008 allotted 1,09,890 equity shares of Rs. 2/- each Hyderabad – 500 082 and 31,560 equity shares of Rs. 2/- each on July 30, 2008, Telephone Nos. : (040) 23402064/23403501/23403540 under the Employees Stock Option Scheme 2006 of the Fax Number : (040) 23403013 Company on exercise of even number of options granted. Website : www.nbventures.com If, as and when the balance options are exercised, there E-mail : [email protected]; [email protected] would be an increase in the share capital accordingly. Grievance redressal division E-mail id : [email protected]
On behalf of the Board For Nava Bharat Ventures Limited
P. Trivikrama Prasad Managing Director
Place: Hyderabad D. Ashok Date : May 30, 2009 Chairman
40 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 41
Annual Report 2008-09
Declaration on compliance with code of conduct Compliance of Code of Conduct for Directors and Senior Management Personnel pursuant to the provisions of Clause 49 of the Listing Agreement
The Board laid down a Code of Conduct for all Board Members and Senior Management Personnel of the Company at its meeting held on January 29, 2005. The code of conduct was also posted on the website of the Company.
All the Board Members and Senior Management Personnel affirmed that they have complied with the said Code of Conduct on an annual basis in respect of the financial year ended March 31, 2009.
I hereby affirm and declare, to the best of my knowledge and belief, and on behalf of the Board of Directors of the Company and Senior Management Personnel, that the Code of Conduct has been complied with.
On behalf of the Board For Nava Bharat Ventures Limited
Place: Hyderabad P. Trivikrama Prasad Date : May 30, 2009 Managing Director
Certificate To the Members of Nava Bharat Ventures Limited HYDERABAD (A.P).
We have examined the compliance of conditions of Corporate Governance by NAVA BHARAT VENTURES LIMITED, Hyderabad (A.P) for the year ended on March 31, 2009, as stipulated in Clause 49 of the Listing Agreement of the said Company with Stock Exchanges.
The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination has been limited to a review of the procedures and implementation thereof adopted by the Company for ensuring compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us, and based on the representations made by the Directors and the Management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement.
We state that such compliance is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the Company.
for BRAHMAYYA & CO., Chartered Accountants
P. CHANDRAMOULI Place: Hyderabad Partner Date : May 30, 2009 Membership No.25211
41 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 42
Nava Bharat Ventures Limited
FINANCIAL SECTION
42 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 43
Annual Report 2008-09
Auditors' Report
To The Members of Nava Bharat Ventures Limited Hyderabad
1. We have audited the attached Balance Sheet of NAVA BHARAT iii) The Balance Sheet, Profit and Loss Account and Cash Flow VENTURES LIMITED, HYDERABAD (A.P) as at March 31, 2009 and statement dealt with by this report are in agreement with the also the Profit and Loss Account and the Cash Flow Statement for books of account. the year ended on that date annexed thereto. These financial iv) In our opinion, the Balance Sheet, Profit and Loss account and statements are the responsibility of the Company's Management. Cash Flow Statement dealt with by this report comply with the Our responsibility is to express an opinion on these financial accounting standards referred to in sub-section (3C) of Section statements based on our audit. 211 of the Companies Act, 1956. 2. We conducted our audit in accordance with the auditing standards v) On the basis of written representations received from the generally accepted in India. Those Standards require that we plan Directors, as on March 31, 2009 and taken on record by the and perform the audit to obtain reasonable assurance about Board of Directors, we report that, none of the Directors is whether the financial statements are free of material misstatement. disqualified as on March 31, 2009 from being appointed as a An audit includes examining, on a test basis, evidence supporting Director in terms of clause (g) of sub-section (1) of Section 274 the amounts and disclosures in the financial statements. An audit of the Companies Act, 1956; also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating vi) In our opinion and to the best of our information and the overall financial statement presentation. We believe that our according to the explanations given to us, the said accounts audit provides a reasonable basis for our opinion. read in conjunction with the Schedules annexed therewith give the information required by the Companies Act, 1956, in the 3. As required by the Companies (Auditors' Report) Order, 2003 (as manner so required and give a true and fair view in conformity amended), issued by the Central Government of India in terms of with the accounting principles generally accepted in India: sub-section (4A) of Section 227 of the Companies Act, 1956, we a) in the case of the balance sheet, of the state of affairs of enclose in the Annexure a statement on the matters specified in the Company as at March 31, 2009; paragraphs 4 and 5 of the said Order. b) in the case of the profit and loss account, of the Profit of 4. Further to our comments in the Annexure referred to above, we the Company for the year ended on that date; and report that: c) In the case of cash flow statement, of the cash flows for i) We have obtained all the information and explanations which the year ended on that date. to the best of our knowledge and belief were necessary for the for Brahmayya & Co. purposes of our audit. Chartered Accountants
ii) In our opinion, proper books of account as required by law (P. Chandramouli) have been kept by the Company so far as appears from our Place: Hyderabad Partner examination of those books. Date : May 30, 2009 Membership No.25211
43 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 44
Nava Bharat Ventures Limited
Annexure to the Auditor's Report: referred to in paragraph 3 of our Report of even date
Re: Nava Bharat Ventures Limited. Hyderabad,
1. a) The Company has maintained proper records showing full purchase of inventory and fixed assets and with regard to sale of goods particulars, including quantitative details and situation of fixed and services. During the course of our audit, we have not observed any assets. continuing failure to correct major weaknesses in internal control b) As explained to us, the management has physically verified most of system. the fixed assets during the year and there is a regular programme 5. a) According to the information and explanations given to us by the of verification which, in our opinion, is reasonable having regard to Management, we are of the opinion that the particulars of the size of the Company and the nature of the assets. As informed, contracts or arrangements referred to in Section 301 of the no material discrepancies were noticed on such verification. Companies Act, 1956 have been entered in the register to be c) The plant and machinery disposed off during the year by the maintained under that section. Company is not substantial and hence, it has not affected the b) In our opinion and according to the information and explanations going concern status of the Company given to us, the transactions made in pursuance of contracts or 2. a) The inventory has been physically verified during the year by the arrangements entered in the register maintained under Section management. In our opinion, the frequency of verification is 301 of the Companies Act, 1956 have been made at prices which reasonable. are reasonable having regard to prevailing market prices at the b) In our opinion, the procedures of physical verification of inventories relevant time. followed by the management are reasonable and adequate in 6. In our opinion and according to the information and explanations given relation to the size of the Company and the nature of its business. to us, the Company has complied with the provisions of Sections 58A c) The Company is maintaining proper records of inventory. The and 58AA and other relevant provisions of the Companies Act, 1956 discrepancies noticed on physical verification between the physical and the Companies (Acceptance of Deposits) Rules, 1975 with regard stocks and book records were not material. to the deposits accepted from the public.
3. a) During the year, the Company has granted unsecured loan to a 7. In our opinion, the Company has an internal audit system Company covered in the register maintained under Section 301 of commensurate with its size and nature of its business. the Companies Act, 1956.The maximum amount involved during 8. We have broadly reviewed the books of account relating to materials, the year was Rs. 60.03 Crores and the year end balance of the said labour and other items of cost maintained by the Company pursuant to loan granted to such Company was Rs. 60.61 Crores. the Rules made by the Central Government for the maintenance of cost b) In our opinion and according to the information and explanations records under Section 209 (1) (d) of the Companies Act, 1956 in given to us, the rate of interest and other terms and conditions of respect of sugar, distillery, power and ferro chrome and are of the the above loan are not prima facie prejudicial to the interest of the opinion that prime facie the prescribed accounts and records have been Company. made and maintained. The Central Government has not prescribed the c) In our opinion and according to the information and explanations maintenance of cost records under Section 209 (1) (d) of the given to us, the principal amount and interest due thereon are Companies Act, 1956 for any other products of the Company. received as per the stipulations. 9. a) According to the records, the Company is generally regular in d) There is no over due amount of loans granted to Companies, Firms depositing with appropriate authorities undisputed statutory dues or other Parties listed in the register maintained under Section 301 including Provident Fund, Investor Education and Protection Fund, of the Companies Act, 1956. Employees' State Insurance, Income-tax, Sales Tax, Wealth Tax, e) During the year, the Company has not taken any loans, secured or Service Tax, Custom Duty, Excise Duty, Cess and other material unsecured from Companies, Firms or other parties covered in the statutory dues applicable to it. register maintained under Section 301 of the Companies Act, b) According to the information and explanations given to us, no 1956. Accordingly, the provisions of (Ill) (f) and (g) of paragraph 4 undisputed amounts payable in respect of Income Tax, Wealth Tax, of the aforesaid order are not applicable to the Company. Sales Tax, Customs Duty, Excise Duty and Cess were in arrears as at 4. In our opinion and according to the information and explanations given March 31, 2009 for a period of more than six months from the to us, there are adequate internal control systems commensurate with date they became payable except the following the size of the Company and the nature of its business with regard to
Name of the Statute Nature of the dues Amount Period to which the Due Date Date of Rs. amount relates payment The A. P. Electricity Duty Electricity Duty 72,60,282 2003-04 to 2007-08 15-04-2008 Not yet paid Act, 1939, (as amended) 4,07,520 April 2008 30-04-2008 Not yet paid
44 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 45
Annual Report 2008-09
c) According to the records of the Company and the information and explanations given to us, the dues of Sales Tax, Income Tax, Custom Duty, Wealth Tax, Service Tax, Excise Duty and Cess, which have not been deposited on account of any dispute are as follows: Name of the Statute Nature of the dues Amount Period to which the Forum where dispute is pending Rs. amount relates Various State Sales Tax Acts Orissa Sales tax 2,43,040 2001-02 Asst. Commissioner of Sales Tax, Range II, Cuttack Central Sales Tax 6,33,286 2000-01 Asst. Commissioner of Sales Tax, Range II, Cuttack 49,089 2002-03 Asst. Commissioner of Sales Tax, Range II, Cuttack 2,20,135 2004-05 Asst. Commissioner of Sales Tax, Range II, Cuttack 14,30,850 2005-06 Asst. Commissioner of Sales Tax, Range II, Cuttack Central Sales Tax 44,53,693 2000-01 Sales Tax Appellate Tribunal, Hyderabad 70,16,426 2000-01 Sales Tax Appellate Tribunal, Hyderabad 12,23,356 2000-01 Sales Tax Appellate Tribunal, Hyderabad AP GST 45,99,974 2002-03 Asst. Commissioner of Commercial Taxes, Warangal Central Sales Tax 14,40,936 1998-99 Sales Tax Appellate Tribunal, Hyderabad AP Value Added Tax Act, 2005 VAT 23,86,997 2005-06 Hon’ble High Court of Andhra Pradesh Income Tax Act, 1961 Income Tax 4,68,50,844 Asst. year 2005-06 ITAT, Hyderabad 10,24,93,112 Asst. year 2006-07 Commissioner of Income Tax (Appeals) – V, Hyderabad AP (Agriculture Produce & Live Agricultural 28,15,396 1980-81 to 1989-90 The Secretary, Agricultural Marketing Committee, Stock) Marketing Act, 1966 Market Cess Visakhapatnam Central Excise Act, 1944 Excise Duty 2,31,456 2006-07 Commissioner of Central Excise (Appeals), Visakhapatnam 55,29,064 1997-98 Customs, Excise & Service Tax Appellate Tribunal, New Delhi AP State Excise & Establishment charges 28,56,867 1968-69 to 1987-88 Commissioner of State Excise & Prohibition, Hyderabad Prohibition Act, 1972 under State Excise The AP Non-Agricultural NALA Tax 12,25,116 1993-94 to 1998-99 Hon’ble High Court of Andhra Pradesh Land Assessment Act, 1963 1,49,952 1995-96 to 2000-01 Hon’ble High Court of Andhra Pradesh AP Municipalities Act, 1965 Property Tax 2,00,798 1995-96 to 2000-01 Hon’ble High Court of Andhra Pradesh Customs Act, 1962 Customs Duty 17,61,860 1985 to 1987 Deputy Commissioner of Customs, Visakhapatnam The AP Electricity Duty Act, Electricity Duty 1,53,90,033 2003-04 to 2008-09 Hon’ble High Court of Andhra Pradesh 1939 (as amended)
10. The Company has no accumulated losses as at the end of the financial 17. According to the information and explanations given to us and on an year. The Company has not incurred any cash losses during the financial overall examination of the Balance Sheet of the Company, we report year covered by our audit and the immediately preceding financial year. that no funds raised on short-term basis have been used for long-term investment. 11. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to any 18. During the year, the Company has not made any preferential allotment financial institutions and Banks. of shares to parties and Companies covered in the Register maintained under Section 301 of the Companies Act, 1956. 12, The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. 19. During the year, the Company has not issued any debentures, therefore the question of creating security or charge in respect thereof does not 13. The Company is not a chit fund or a nidhi/Mutual benefit fund/society. arise Therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company. 20. During the year, the Company has not made any public issue and therefore the question of disclosing the end use of money raised by 14. The Company is not dealing or trading in shares, securities, debentures public issue does not arise. and other investments. Therefore, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the 21. Based upon the audit procedures performed and according to the Company. information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, 15. According to the information and explanations given to us, the for Brahmayya & Co. Company has not given any guarantee for loans taken by others from Chartered Accountants bank or financial institutions.
16. In our opinion and according to the information and explanations given (P. Chandramouli) to us the term loans were applied for the purpose for which the loans Place: Hyderabad Partner were raised. Date : May 30, 2009 Membership No. 25211
45 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 46
Nava Bharat Ventures Limited
Balance Sheet as at March 31, 2009
(Rs. in lakhs) Particulars Schedule As at As at reference 31.3.2009 31.3.2008
I. SOURCES OF FUNDS: 1. Shareholders' Funds a) Share Capital 1 1,523.77 1,558.73 b) Share Application Money –6.73 c) Reserves and Surplus 2 115,616.13 78,768.46 117,139.90 80,333.92 2. Loan Funds: a) Secured Loans 3 28,866.28 25,493.51 b) Unsecured Loans 4 14,171.01 14,436.85 43,037.29 39,930.36 3. Deferred tax liability 2,113.61 1,498.43 Total 162,290.80 121,762.71 II. APPLICATION OF FUNDS: 1. Fixed Assets: 5 a) Gross Block 90,168.13 58,461.04 b) Depreciation 20,215.90 16,568.74 c) Net Block 69,952.23 41,892.30 d) Capital Work-in-progress 1,557.40 22,488.02 71,509.63 64,380.32 2. Investments 6 3,716.69 2,103.53 3. Current Assets, Loans and Advances: a) Inventories 7 39,328.99 29,097.43 b) Sundry Debtors 8 9,435.04 8,468.49 c) Cash and Bank balances 9 33,308.46 21,624.09 d) Other Current Assets 10 2,794.76 3,198.46 e) Loans and Advances 11 25,339.45 15,660.64 110,206.70 78,049.11 Less: Current Liabilities and Provisions a) Current Liabilities 12 15,698.05 15,470.60 b) Provisions 13 7,444.17 7,299.65 23,142.22 22,770.25 Net Current Assets 87,064.48 55,278.86 Total 162,290.80 121,762.71 Notes on Accounts 21
Per our report of even date. For and on behalf of the Board For Brahmayya & Co. Chartered Accountants G. R. K. Prasad Director (Finance & Corporate Affairs) P. Chandramouli Partner P. Trivikrama Prasad Managing Director M. Subrahmanyam Hyderabad Company Secretary & D. Ashok May 30, 2009 Vice President Chairman
46 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 47
Annual Report 2008-09
Profit and Loss Account for the year ended March 31, 2009
(Rs. in lakhs) Particulars Schedule Current year Previous year reference I. EARNINGS: Sales (Gross) 139,777.77 110,269.14 Less: Inter-divisional transfers 9,808.47 16,427.45 129,969.30 93,841.69 Less: Excise Duty 3,117.60 2,649.60 Sales (Net) 126,851.70 91,192.09 Export Incentives 928.45 1,341.37 Other Revenue 14 1,865.14 1,613.61 Total 129,645.29 94,147.07 II. OUTGOINGS: Raw Materials 15 32,133.12 33,865.27 Purchased Power and Fuel for Power generation 19,251.80 9,494.18 Stores Consumed 889.66 1,209.11 Other Manufacturing Expenses 1,391.41 1,336.08 Payments and benefits to Employees 16 5,490.00 4,333.61 Finance Charges 17 3,302.85 2,507.17 Other Expenses 18 19,533.63 12,412.05 Depreciation 5 3,780.79 2,514.80 Diminution in value of investments 6.45 8.76 85,779.71 67,681.03 (Increase)/Decrease in Stocks 19 (3,727.09) (8,234.96) 82,052.62 59,446.07 Less: Amount transferred to Projects-in-Progress 20 2,007.92 2,318.51 Total 80,044.70 57,127.56 III. PROFIT FOR THE YEAR BEFORE TAXATION 49,600.59 37,019.51 IV. PROVISION FOR TAXATION : Current Tax 5,700.00 5,850.00 : Deferred Tax 615.18 (455.00) : MAT Credit entitlement (2,300.00) – : Fringe Benefit Tax 75.00 140.00 4,090.18 5,535.00 V. PROFIT FOR THE YEAR AFTER TAXATION 45,510.41 31,484.51 Balance brought forward from last year 19,939.51 5,521.68 Excess Provision for Income Tax written back 33.53 50.69 VI. AMOUNT AVAILABLE FOR APPROPRIATIONS 65,483.45 37,056.88 VII. APPROPRIATIONS: Proposed Dividend on Equity 5,679.94 4,374.01 Corporate Dividend Tax 965.31 743.36 Capital Redemption Reserve 35.60 – Contingency Reserve 2,000.00 2,000.00 General Reserve 10,000.00 10,000.00 Surplus carried to Balance Sheet 46,802.60 19,939.51 Total 65,483.45 37,056.88 Earnings per share (Rs.) – Basic 59.68 43.67 – Diluted 57.03 41.44 Notes on Accounts 21 Per our report of even date. For and on behalf of the Board For Brahmayya & Co. Chartered Accountants G. R. K. Prasad Director (Finance & Corporate Affairs) P. Chandramouli Partner P. Trivikrama Prasad Managing Director M. Subrahmanyam Hyderabad Company Secretary & D. Ashok May 30, 2009 Vice President Chairman
47 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 48
Nava Bharat Ventures Limited
Cash Flow Statement for the year ended March 31, 2009
(Rs. in lakhs) Particulars Year ended Year ended 31.3.2009 31.3.2008
A. CASH FLOW FROM OPERATING ACTIVITIES:
Net Profit before Tax 49,600.59 37,019.51 Adjustments for:
Interest earned (546.38) (393.05) Excess Provisions written back (2.17) (30.53) Input tax credit written off 80.70 88.66 Bad debts and Advances written off 1.70 123.36 Project expenditure written off – 314.92 Investments written off 4.60 – Diminution in the value of Inventories/Stocks written off 6,306.27 1.99 Depreciation 3,780.79 2,514.80 Assets discarded 2.29 7.52 Profit on sale of Assets (35.11) (3.57) Profit on sale of Investments (11.00) (98.66) Diminution in value of Investments 6.45 8.76 Dividend/Interest received from Investments (764.47) (403.27) Interest (excluding the amount capitalised) 1,507.28 1,375.31 Operating Profit before Working Capital Changes 59,931.54 40,525.75 Adjustments for:
Trade and Other receivables (2,177.42) (5,455.34) Inventories (16,537.83) (15,050.48) Trade and Other payables 300.33 7,420.06 Cash generated from Operations 41,516.62 27,439.99 Direct Taxes paid (6,381.31) (4,918.86) Net Cash from Operating Activities (A) 35,135.31 22,521.13 B. CASH FLOW FROM INVESTING ACTIVITIES:
Loans/Advances to Bodies Corporate (6,061.08) (1.16) Purchase of Fixed Assets (excluding Interest capitalised) (10,836.33) (24,879.23) Sale of Fixed Assets 46.36 14.69 Fixed Deposits (9,938.22) 6,576.83 Purchase of Investments (including advances) (130,118.96) (114,517.46) Sale of Investments 128,088.75 108,354.88 Interest received 385.29 423.95 Dividend/Interest received on Investments 764.47 403.27 Net Cash used in Investing Activities (B) (27,669.72) (23,624.23)
48 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 49
Annual Report 2008-09
(Rs. in lakhs) Particulars Year ended Year ended 31.3.2009 31.3.2008
C. CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from issue of Shares/Warrants/Buy back of Shares (Net) (2,092.72) 12,419.95 Proceeds from Share Applications – 6.73 Proceeds from borrowings (net) 3,106.93 (7,761.36) Interest paid (including interest capitalised) (1,646.50) (1,694.74) Dividend paid (5,087.15) (2,489.72) Net Cash generated in Financing Activities (C) (5,719.44) 480.86 Net increase in Cash and Cash Equivalents (A+B+C) 1,746.15 (622.24) Cash and Cash equivalents at the beginning of the year 1,838.97 2,461.21 Cash and Cash equivalents at the end of the year 3,585.12 1,838.97
Notes:
Cash and Cash equivalents include: Cash and Cheques on hand 27.78 38.81 Balance with banks in Current Accounts 3,069.44 1,440.02 Balance with banks in Cash Credit Accounts 58.56 21.41 Balance with banks in Deposit Accounts 30,152.68 20,123.85 33,308.46 21,624.09
Less: Fixed Deposits considered as Investments 29,723.34 19,785.12 Cash and Cash equivalents considered for cash flow 3,585.12 1,838.97
Per our report of even date. For and on behalf of the Board For Brahmayya & Co. Chartered Accountants G. R. K. Prasad Director (Finance & Corporate Affairs) P. Chandramouli Partner P. Trivikrama Prasad Managing Director M. Subrahmanyam Hyderabad Company Secretary & D. Ashok May 30, 2009 Vice President Chairman
49 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 50
Nava Bharat Ventures Limited
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009
(Rs. in lakhs) Particulars As at As at 31.3.2009 31.3.2008 1. SHARE CAPITAL
Authorised: 25,00,00,000 – Equity Shares of Rs. 2/- each 5,000.00 5,000.00 5,000.00 5,000.00 Issued and subscribed: 7,81,56,703 (Previous year 7,81,25,143) – Equity Shares of Rs. 2/- each 1,563.13 1,562.50 1,563.13 1,562.50 Paid-up: 7,61,25,324 (Previous year 7,78,73,668) – Equity Shares of Rs. 2/- each fully paid up 1,522.51 1,557.47 Add: Forfeited Shares (amount originally paid up) 1.26 1.26 Total 1,523.77 1,558.73
2. RESERVES AND SURPLUS
a) Subsidies: Cash Subsidy from Central/State Governments Balance as per last Balance Sheet 33.60 33.60 b) Capital Reserve Balance as per last Balance Sheet 60.20 60.20 c) Capital Redemption Reserve Balance as per last Balance Sheet 787.74 787.74 Add: Transferred during the year on buyback of Equity Shares 35.60 – 823.34 787.74 d) Securities Premium Account Balance as per last Balance Sheet 13,697.41 1,789.12 Add: Received during the year 35.08 12,433.83 13,732.49 14,222.95 Less: Premium on conversion of Foreign Currency Convertible Bonds and Issue expenses – 525.54 13,732.49 13,697.41 e) Contingency Reserve Balance as per last Balance Sheet 4,100.00 2,100.00 Add: Transferred during the year 2,000.00 2,000.00 6,100.00 4,100.00 f) General Reserve Balance as per last Balance Sheet 40,150.00 30,150.00 Less: Premium on buyback of Equity Shares 2,086.10 – 38,063.90 30,150.00 Add: Transferred during the year 10,000.00 10,000.00 48,063.90 40,150.00 g) Surplus: balance in profit and loss account 46,802.60 19,939.51 Total 115,616.13 78,768.46
50 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 51
Annual Report 2008-09
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009
(Rs. in lakhs) Particulars As at As at 31.3.2009 31.3.2008 3. SECURED LOANS
i) Rupee Term Loans from: Industrial Development Bank of India Limited 3,000.00 3,750.00 Infrastructure Development Finance Company Limited 966.67 1,450.00 Andhra Bank 7,458.55 2,200.00 State Bank of India 2,054.05 2,515.90 BNP Paribas – 571.43 HDFC Bank Limited 187.50 437.50 The South Indian Bank Ltd – 500.00 ii) Foreign Currency Term Loans from: Bank of India 10,449.40 10,001.07 iii) Medium Term Loans from Banks 714.18 714.18 iv) Working Capital Loans from Banks 4,035.93 3,353.43 Total 28,866.28 25,493.51
4. UNSECURED LOANS
Fixed Deposits 88.41 218.21 From : Other Bodies Corporate 30.00 55.50 : A P State Government (deferred sales tax liability) 35.37 35.37 : Orissa State Government (deferred sales tax liability) 21.71 132.25 Foreign currency convertible bonds 13,995.52 13,995.52 Total 14,171.01 14,436.85
51 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 52
Nava Bharat Ventures Limited
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009 (Rs. in lakhs) ear Rs. 205.46 lakhs) 80,949.06 40,986.53 31,145.95 90,789.64 16,568.74 3,722.53 64,380.32 70,632.00 20,157.64 133.63 31.3.2008 31.3.2009 31.3.2008 year deductions 31.3.2009 31.3.2009 31.3.2008 58,461.04 30,918.37 147.17 89,232.24 16,568.74 3,722.53 41,892.30 69,074.60 20,157.64 133.63 – Township– Others 744.56 67.42 975.64 302.84 –12.31 142.94 811.98 – –601.62 1,278.48 121.92 17.03 656.73 155.25 –853.72 1,139.53 138.95 – Leasehold 106.20 24.44 – 130.64 1.93 1.21 –104.27 127.50 3.14 *** Cost incurred by the Company, ownership of which vests with a State Owned Power Distribution Company. ownership of which vests with a State Owned Power *** Cost incurred by the Company, b) Pre-operative expensesLess: Internal transfers (A)Total 2,384.89 2,007.92 4,388.52 (Other than internally generated) (B)Total – 4.29 (A + B) 30,998.78 Total –Previous year 80,949.06 30,998.78 9,987.75 37.19 – 147.17 – 90,789.64 80,949.06 – 16,568.74 – 10,923.64 3,722.53 56,143.11 24,953.02 – 133.63 37.19 147.17 – 20,157.64 70,632.00 – 91,725.53 64,380.32 147.07 16,568.74 935.89 80,949.06 3,780.79 – 14,182.37 – – 133.63 2,514.80 20,215.90 71,509.63 64,380.32 4.30 – 128.43 4.29 – 16,568.74 64,380.32 2,384.89 41,960.74 935.89 – – – 4.30 – 58.26 32.89 – – – 58.26 877.63 – Add: Capital Work-in-Progress a) Cost of equipment 20,103.13 8,060.24 26,610.26 1,553.11 – – – – 1,553.11 20,103.13 5. FIXED ASSETS A. ASSETS TANGIBLE 1. Land – Freehold2. Buildings Factory - 2,061.35 273.47 2,333.63 4,825.95 1.19 2,932.83 – 1.00 – 7,757.78 1,168.57 198.09 – 0.82 1,365.84 –2,061.35 6,391.94 2,333.63 3,657.38 Sl. DescriptionNo.3. Plant and Machinery4. Railway Siding5. Works Water As at6. GROSS BLOCK and Fixtures Furniture Additions7. Motor Vehicles 47,817.92 Deductions8.Machinery 26,518.99 Office Equipment9. Air Conditioners10. As at Workshop 39.99 11. 355.71 231.23 Other Assets 74,296.92 12. Lines*** Power 124.11 Upto 14,242.90 115.73 58.03 3,274.18 the For 316.55 – – 571.17 0.93 39.64 178.46 98.21 17,477.44 93.06 56,819.48 On – 33,575.02 DEPRECIATION 33.49 39.08 – – 116.71 – 65.37 Upto 289.26 455.93 107.63 2.42 115.73 – 11.22 355.71 125.04 598.86 169.74 0.31 As at – 159.41 423.19 17.80 306.53 15.04 131.39 34.04 As at 8.10 110.05 5.68 0.23 2. 61.22 Drawing Rights NET BLOCK Water 93.27 18.78 6.31 53.17 127.70 31.83 – – 60.85 188.80 8.19 44.92 187.54 – 338.95 423.19 – 267.13 101.72 10.50 259.91 0.26 33.82 157.14 – 40.35 264.64 61.49 321.89 61.10 0.23 – 84.69 898.70 340.67 70.29 55.19 90.07 1.22 45.04 72.51 – 71.79 – 898.70 1.22 421.97 – 53.96 – – 53.96 844.74 – B. ASSETS INTANGIBLE 1. Computer Software Note: Additions to fixed assets during the year include borrowing costs capitalised aggregating Rs. 433.58 lakhs (previous y
52 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 53
Annual Report 2008-09
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009
(Rs. in lakhs) Particulars Face Number of Shares value As at Additions/ As at As at As at Rs. 31.3.2008 (Deletions) 31.3.2009 31.3.2009 31.3.2008 6. INVESTMENTS: (At Cost, Long-term)
a) Government Securities – Un-quoted: 6 year National Savings Certificates 3.01 1.41 Total (a) 3.01 1.41 b) Other Investments: i) In Subsidiaries – Equity Shares fully paid up, Un-Quoted (Trade): Kinnera Power Company Limited 10 50,000 50,000 5.00 5.00 Brahmani Infratech Private Limited 10 10,000 10,000 1.00 1.00 Nava Bharat Realty Limited 2 250,000 250,000 5.00 5.00 Nava Bharat Projects Limited 2 250,000 250,000 5.00 5.00 Nava Bharat Energy India Limited 2 250,000 250,000 5.00 – Nava Bharat Sugar and Bio Fuels Limited 2 250,000 250,000 5.00 – Nava Bharat (Singapore) Pte Limited S$ 1 16,870 16,870 3,503.79 4.36 USD 1 7,290,000 7,290,000 Total (b) (i) 3,529.79 20.36 ii) In Other Companies – Equity Shares fully paid up, Un-Quoted (Trade): A P Gas Power Corporation Limited 10 17 17 0.00 0.00 Malaxmi Highway Private Limited 10 406,600 200,000 606,600 60.66 40.66 Total (b) (ii) 60.66 40.66 iii) In Other Companies – Equity Shares fully paid up, Un-Quoted (Non-Trade): Nava Bharat Envirotech Private Limited 10 1,000 1,000 0.05 0.05 Srinivasa Cystine Limited 10 75,000 75,000 5.00 5.00 Gunnam Subba Rao Investments Private Limited 10 8,000 8,000 0.56 0.56 Total (b) (iii) 5.61 5.61 iv) In Mutual Funds – Units, Un-Quoted (Non-Trade): DWS Money Plus Advantage Fund 10 9,012,486 (9,012,486) – – 903.66 Tata Dynamic Bond Fund 10 9,550,985 (9,550,985) – – 1,003.16 Total (b) (iv) – 1,906.82 v) In Other Companies – Equity Shares fully paid up, Quoted (Trade): Kothari Sugars and Chemicals Limited 10 200 200 10.00 10.00 The Jeypore Sugar Company Limited 10 2,857 2,857 1.16 1.16 Total (b) (v) 11.16 11.16
53 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 54
Nava Bharat Ventures Limited
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009
(Rs. in lakhs) Particulars Face Number of Shares value As at Additions/ As at As at As at Rs. 31.3.2008 (Deletions) 31.3.2009 31.3.2009 31.3.2008
6. INVESTMENTS: (At Cost, Long-term) (Contd.)
vi) In Other Companies – Equity Shares fully paid up, Quoted (Non-Trade): Avanthi Leathers Limited 10 63,300 63,300 6.33 6.33 Beardsell Limited 10 548,250 548,250 73.39 73.39 NB Footwear Limited 10 76,830 76,830 7.68 7.68 Supreme Petrochem Ltd 10 51,877 51,877 31.13 31.13 Avanti Feeds Limited 10 1,500 1,500 0.15 0.15 Nagarjuna Finance Limited 10 9,850 (9,850) – – 4.08 Siris Limited 10 200 (200) – – 0.52 Industrial Development Bank of India Limited 10 8,000 8,000 6.50 6.50 Andhra Bank 10 22,800 22,800 2.28 2.28 Tata Consultancy Services Limited 1 6,142 6,142 26.10 26.10 Total (b) (vi) 153.56 158.16 Total (b) (I to vi) 3,760.78 2,142.77 Total (a+b) 3,763.79 2,144.18 Less: Diminution in value of Investments 47.10 40.65 Total 3,716.69 2,103.53
Particulars As at As at 31.3.2009 31.3.2008 7. INVENTORIES
At Cost: Stores and Spares 2,622.19 1,804.79 Fuel for power generation 3,688.98 1,928.90 Raw Materials 1,593.44 9,655.80 Finished Goods 3.633.33 13,333.63 Work-in-progress 234.82 567.28 Others 60.56 37.96 Goods-in-transit 323.03 1,520.97 At realisable value: Raw Materials 13,164.69 – Work-in-progress 1,023.30 – Finished Goods 12,982.82 242.78 Scrap 1.83 5.32 Total 39,328.99 29,097.43
8. SUNDRY DEBTORS: (Unsecured, considered good)
Debts due over six months 42.70 56.05 Other debts 9,392.34 8,412.44 Total 9,435.04 8,468.49
54 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 55
Annual Report 2008-09
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009
(Rs. in lakhs) Particulars As at As at 31.3.2009 31.3.2008 9. CASH AND BANK BALANCES Cash in hand 2.81 10.08 Cash with Scheduled Banks : In Current Accounts 3,069.44 1,440.02 : In Cash Credit Accounts 58.56 21.41 : In Deposit Accounts 30,152.68 20,123.85 Cheques/Demand Drafts on hand 24.97 28.73 Total 33,308.46 21,624.09
10. OTHER CURRENT ASSETS Prepaid Expenses 291.64 117.80 Deposits recoverable 117.41 218.23 Other receivables 1,675.34 2,262.05 Interest accrued 212.30 51.21 Balance with Central Excise Dept. 498.07 549.17 Total 2,794.76 3,198.46
11. LOANS AND ADVANCES (Unsecured, considered good, recoverable in cash or in kind or for value to be received) Dues from Subsidiary Companies: Loan 6,061.08 – Advance for Investments 9,585.40 9,168.40 Other Advances 65.49 1.34 Advances to Other Bodies Corporate 0.01 0.01 Security Deposits with Power Supply Companies 364.45 390.51 Advances for : Capital goods 608.55 500.62 : Purchases and expenses 5,659.09 4,120.96 Staff Advances 57.91 48.80 Advance Tax and Tax Deducted at Source (Net of provision) 632.26 – MAT Credit entitlement 2,305.21 1,430.00 Total 25,339.45 15,660.64
12. CURRENT LIABILITIES Sundry Creditors: Total outstanding dues of Micro and Small Enterprises 425.69 937.78 Total outstanding dues of creditors other than Micro and Small Enterprises 11,673.78 11,656.42 Investor Education and Protection Fund : (Appropriate amount shall be transferred to the Fund as and when due) i) Unpaid Dividend 95.30 65.08 ii) Unclaimed matured deposits – 0.10 Security Deposits 56.77 44.73 Advances received against supplies 217.92 236.79 Retention Deposits 412.70 290.50 Pre-received Income – 0.88 Interest accrued but not due 622.24 674.15 Due to directors 2,100.51 1,564.17 Bills discounted with Bankers 93.14 – Total 15,698.05 15,470.60
55 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 56
Nava Bharat Ventures Limited
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009
(Rs. in lakhs) Particulars As at As at 31.3.2009 31.3.2008 13. PROVISIONS
For: Dividend 5,679.94 4,374.01 : Corporate Dividend Tax 965.31 743.36 : Taxation – 1,432.87 : Fringe Benefit Tax 4.38 3.88 : Gratuity 465.57 471.32 : Leave Encashment 328.97 274.21 Total 7,444.17 7,299.65
Particulars Current year Previous year 14. OTHER REVENUE
Interest earned (others, gross) 546.38 393.05 (T.D.S. Current year Rs. 81.22 lakhs, Previous year Rs. 4.47 lakhs) Miscellaneous receipts 432.99 432.69 Power off take compensation – 194.40 Excess provisions/Credit Balances written back 2.17 30.53 Income from Investments 764.47 403.27 Rents earned 41.40 37.90 Claims received/receivable 31.62 19.54 Profit on sale of Assets 35.11 3.57 Profit on sale of Short Term Investments 11.00 98.66 Total 1,865.14 1,613.61
15. RAW MATERIALS
Opening Stock 9,655.80 4,817.86 Add : Purchases 43,541.72 38,703.21 53,197.52 43,521.07 Less : Closing Stock 14,758.13 9,655.80 : Diminution in value of materials 6,306.27 – Total 32,133.12 33,865.27
16. PAYMENTS AND BENEFITS TO EMPLOYEES
Salaries, Wages and Bonus 4,821.31 3,764.89 Contribution to Provident and Other Funds 205.15 150.75 Gratuity and Superannuation 205.62 202.66 Workmen and Staff Welfare Expenses 257.92 215.31 Total 5,490.00 4,333.61
56 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 57
Annual Report 2008-09
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009
(Rs. in lakhs)
Particulars Current year Previous year 17. FINANCE CHARGES
Interest on : Term Loans 1,284.88 1,487.27 : Other Loans 309.71 276.75 Bank Charges and Commission 479.74 352.70 Prompt Payment Rebate allowed 1,228.52 390.45 Total 3,302.85 2,507.17
18. OTHER EXPENSES Rent 138.70 93.36 Rates and Taxes 267.21 2,850.10 Freight and Transportation 1,642.38 1,720.97 Cane Development Expenses 138.93 58.72 Equipment Lease Rentals – 570.42 Insurance 360.59 391.80 Advertisement 51.06 38.34 Printing and Stationery 42.13 41.34 Communications 59.14 59.19 Travelling and Conveyance 339.28 308.14 Vehicle Maintenance 48.28 41.71 Legal and Professional charges 1,292.36 714.91 Directors Sitting fee 1.75 2.15 Payments to Auditors : As Auditors 11.03 8.99 : For Tax Audit 3.31 2.25 : For Tax Representation 8.34 2.00 : For Certification 5.19 2.78 : For Expenses 0.25 0.25 Fees to Cost Auditor 3.75 2.81 Repairs and Maintenance : Machinery 3,402.75 2,302.76 : Buildings 494.92 428.02 : Others 27.99 29.92 Commission on Sales 27.17 35.71 General Charges 1,091.20 458.70 Input tax credit written off 80.70 88.66 Bad Debts and Advances written off 1.70 123.36 Project Expenditure written off – 314.92 Investments written off 4.60 – Foreign exchange fluctuations 2,921.75 1,425.16 Diminution in value of Inventories/Stocks written off 6,306.27 1.99 Assets discarded 2.29 7.52 Donations and Charities 532.13 241.51 Expenditure relating to earlier years 226.48 43.59 Total 19,533.63 12,412.05
57 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 58
Nava Bharat Ventures Limited
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009
(Rs. in lakhs)
Particulars Current year Previous year 19. (INCREASE)/DECREASE IN STOCKS
a) Opening Stocks: Work-in-progress 567.28 413.34 Finished goods 13,576.41 5,494.03 Scrap 5.32 6.68 14,149.01 5,914.05 b) Closing Stocks: Work-in-progress 1,258.12 567.28 Finished goods 16,616.15 13,576.41 Scrap 1.83 5.32 17,876.10 14,149.01 (Increase)/decrease in Stocks (a-b) (3,727.09) (8,234.96)
20. AMOUNT TRANSFERRED TO PROJECTS-IN-PROGRESS
Purchased Power and Fuel for Power generation 1,430.67 177.11 Stores Consumed – 6.00 Manufacturing Expenses 48.28 – Salaries, Wages and Bonus 58.22 82.31 Contribution to Provident and Other Funds 2.74 4.69 Workmen and Staff Welfare Expenses 22.48 17.23 Interest on Term Loans 87.31 388.71 Bank Charges and Commission 76.36 78.83 Prompt Payment Rebate allowed 44.03 – Rent 3.89 5.31 Rates and Taxes 41.27 391.48 Insurance 26.51 40.40 Advertisement 1.19 4.13 Printing and Stationery 0.83 1.43 Communications 1.22 0.92 Travelling and Conveyance 30.95 60.44 Vehicle Maintenance 0.37 0.24 Legal and Professional charges 44.90 40.34 Repairs and Maintenance – Machinery 28.36 – General Charges 4.25 11.63 Foreign exchange fluctuations 49.64 1,006.37 Donations 0.20 0.01 Depreciation 4.25 0.93 Total 2,007.92 2,318.51 Less : Income during trial run 2,201.41 78.81 Interest earned (Others) (Gross) (TDS: Nil) 0.50 27.79 Miscellaneous Receipts 117.28 28.92 Net Total (311.27) 2,182.99
58 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 59
Annual Report 2008-09
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009
21. NOTES ON ACCOUNTS
1. The following are the significant Accounting policies adopted by the Company in the preparation and presentation of financial statements.
a) Financial statements are based on historical costs and on accrual basis.
b) The preparation of financial statements requires the management of the Company to make certain estimates and assumptions that effect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expenditure for the year. Example of such estimates includes provision for doubtful debts, employee retirement benefits, provision for taxes etc. Any revision to such estimates is recognised prospectively in the year in which it is revised.
c) Tangible Fixed Assets are stated at cost, net of accumulated depreciation, amortisation and impairment losses, if any.
d) i) Depreciation on the assets is provided on straight line/written down value method as per Schedule XIV to the Companies Act, 1956. ii) The cost of leasehold land is amortised over the lease period. iii) Improvements to premises taken on lease are amortised over the primary lease period of three years. iv) Expenditure on Power Lines, ownership of which belongs to a State Owned Distribution Company is amortised over the period as permitted in the erstwhile "The Electricity Supply Act, 1948". v) Expenditure to acquire Water Drawing Rights from Government/Local Authorities or other parties, is amortised over the primary period of rights to use the facilities which is ten years for the time being. vi) Costs incurred towards purchase of Computer Software being in the nature of intangible assets are amortised over its estimated useful life of three to five years.
e) i) Raw materials, work-in-progress and consumables are valued at lower of cost based on weighted average method and realisable value. ii) Goods-in-transit and standing crops are valued at cost. iii) The other stock-in-trade, loose tools, scrap and by-products are valued at lower of cost and realisable value.
f) Long term Investments are carried at cost. Provision for diminution in the value of each long term investment is made to recognise a decline, other than that of temporary nature.
g) The contingent liabilities are indicated by way of a note and will be provided/paid on crystalisation.
h) Employee benefits: i) Short term benefits are recognised as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered. ii) Post employment and other long term employee benefits are recognised as an expense in the Profit and Loss Account for the year in which the employee has rendered service. The expense is recognised at the present value of the amount payable determined on the basis of actuarial valuation. Actuarial gains and losses in respect of post employment and other long term benefits are charged to Profit and Loss Account. iii) In respect of Employees Stock Options, the excess of fair price on the date of grant, over the exercise price, is recognised as Deferred Compensation cost and amortised over vesting period. iv) Compensation paid under the Company's Voluntary Retirement Scheme is charged to the Profit and Loss Account in the year of payment.
i) Excise Duty payable on finished/saleable goods is accounted for on production of such goods.
j) Sales are accounted for inclusive of sales tax collected.
k) Borrowing costs that are directly attributable to the acquisition, construction or production of fixed assets are capitalised as part of the cost of that asset and it is the policy of the Company to capitalise the expenditure incurred in connection with the new projects as and when commercial operations begin, which for the time being is treated as Capital Works-in-progress.
l) Export incentives, insurance claims and conversion escalations are accounted for on realisation.
m) Dividend income is recognised when the right to receive the payment is established by the Balance Sheet date.
n) Export sales in foreign currency are accounted for at the exchange rate prevailing at the time of sale. Gain/Loss arising out of fluctuations in the exchange rates is taken to revenue on realisation.
59 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 60
Nava Bharat Ventures Limited
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009
21. NOTES ON ACCOUNTS (Contd.)
o) Foreign currency liabilities/assets covered by forward contracts are stated at forward cover rates and the premium on forward contracts is recognised as income or expense over the life of the contract.
p) Foreign currency liabilities/assets not covered by forward contracts are restated at the exchange rates prevailing at the year end and the gain/loss arising out of such restatement is taken to revenue.
q) Dividend as recommended by the Board of Directors is provided for in the accounts pending shareholders/lending institutions approval.
r) Deferred tax assets and liabilities are recognised for future tax consequences attributable to the timing difference that results between the profit considered for income tax and the profit as per financial statements. Deferred tax assets and liabilities are measured as per the tax rates and laws that have been enacted or substantially enacted by the Balance Sheet date. However, deferred tax assets are recognised and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred asset can be realised.
s) Foreign Currency Convertible Bonds issue expenses incurred and premium payable on redemption of such bonds are adjusted against Securities Premium Account as permitted by Section 78(2) of the Companies Act, 1956.
t) Lease Transactions: i) Where the Company is the lessee: Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased term, are classified as operating leases. Operating lease payments are recognised as an expense in the Profit and Loss Account. ii) Where the Company is the lessor: Assets subject to operating leases are included in fixed assets. Lease Income is recognised in the Profit and Loss Account. Costs including depreciation are recognised as an expense in the Profit and Loss Account.
2. Disclosure of Sundry Creditors under Current Liabilities is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development Act, 2006" and relied upon by the Auditors. During the year the Company has paid no interest in terms of Section 16 of the said Act.
3. i) Deferred sales tax liability to Andhra Pradesh State Government is repayable as under: Due date of Amount repayment (Rs. in lakhs) 01.04.2013 26.48 01.04.2014 8.89 Total 35.37 ii) Deferred sales tax liability of Rs.21.71 lakhs to Orissa State Government is repayable on or before 19.01.2010.
4. In terms of Accounting Standard 22 "Accounting for Taxes on Income" (AS 22) issued by The Institute of Chartered Accountants of India, the Company has accounted for the deferred taxes during the year. The following are the major components of deferred tax (asset)/liability. (Rs. in lakhs) Particulars As at As at 31.3.2009 31.3.2008 Difference between book and tax depreciation 2,735.65 2,570.65 Provision for gratuity and other expenses (622.04) (1,072.22) Total 2,113.61 1,498.43
5. a) During the year the Company has bought back 17,79,904 Equity Shares of Rs. 2/- each at an average price of Rs. 119.20 per share and accordingly i) The face value of shares has been reduced from the paid up Equity Share Capital. ii) The balance of Rs. 117.20 paid on these shares aggregating to Rs. 2,086.10 lakhs has been adjusted against General Reserve. iii) As required under the provisions of the Companies Act 1956, Rs. 35.60 lakhs has been transferred to Capital Redemption Reserve from current year Surplus.
60 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 61
Annual Report 2008-09
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009
21. NOTES ON ACCOUNTS (Contd.)
b) Out of 7,61,25,324 (previous year 7,78,73,668) Equity Shares of Rs. 2/- each fully paid-up of the Company: i) 1,41,67,095 shares were allotted as fully paid-up pursuant to schemes of amalgamation without receiving the payment in cash. ii) 1,21,37,095 shares are allotted as fully paid-up by way of bonus shares by capitalising Reserves. iii) Pursuant to the order of Hon'ble High Court of Andhra Pradesh dated 30.12.1996 in the Scheme of amalgamation of Nav Chrome Limited with the Company, 49,74,510 equity shares of Rs. 2/- each fully paid up owned by the company are vested in a Trustee for the benefit of the Company which are to be sold and net sale proceeds are to be paid to the Company and such shares are not considered for dividend. iv) During the year, the Company has allotted 31,560 (Previous Year 1,09,890) Equity Shares of Rs. 2/- each at a premium of Rs. 111.15 (including the difference between the fair value and the exercise price) per share on exercise of 31,560 (Previous Year 1,09,890) Employees Stock options. Consequent to the above allotment and buy back of Shares during the year, the paid up Equity Share Capital of the Company stands decreased from Rs. 1,557.47 lakhs to Rs. 1,522.51 lakhs and the Securities Premium stands increased from Rs. 13,697.41 lakhs to Rs. 13,732.49 lakhs.
c) i) The Company has granted 6,00,000 stock options under the Company's Employees Stock Option Scheme 2006 (ESOS) during the year ended March 31, 2007 to be converted into 6,00,000 Equity Shares at a premium of Rs. 88.52 per share and stock options outstanding as at March 31, 2009 are 3,96,500. During the year 31,560 (Previous Year 1,09,890) options were exercised and 53,750 (Previous Year 8,300) options were cancelled. ii) The Company has issued and allotted 32,00,000 convertible warrants on 8th June, 2006 on preferential basis at a price of Rs. 95/- per warrant which enable the warrant holders to convert each warrant into one Equity Share of the face value of Rs. 2/- at a price of Rs. 95/- (including premium of Rs. 93/-) on or before the expiry of 18 months from the date of allotment of warrants. Out of which 9,12,000 warrants were converted during the year 2006-07 and the balance 22,88,000 were converted into Equity Shares during the pervious year.
6. a) During the year 2006-07, the Company has issued Zero Coupon Foreign Currency Convertible Bonds for an amount of JPY 6.00 billion at par. These bonds are convertible into Equity Shares with a fixed rate of exchange of Rs. 0.3976 per 1 JPY at an initial conversion price of Rs. 136.50 per Share at the option of bondholders at any time on or after October 14, 2006 and on or before the close of business hours (i.e. 5.00 P.M.) on August 31, 2011. The Company also has an option to convert all these bonds on or after September 29, 2009 and prior to September 30, 2011 at the then prevailing conversion price as per the terms of issue. Out of the above 2.48 billion Bonds were converted during the year 2007-08 and if all the remaining bonds are converted into Equity Shares, the paid up Equity Share Capital of the Company will increase by 97,00,620 Equity Shares of Rs. 2/- each. If no such conversion takes place, the Bonds are redeemable on September 30, 2011 at a redemption premium of 25.96% so as to give the bondholders gross yield to maturity of 4.67% per annum compounded semi-annually.
b) The proceeds of the above issue have been utilised as follows: Particulars Rs. In lakhs 1. Issue expenditure 954.87 2. 32 MW Power Plant in A.P. 4,474.54 3. 64 MW Power Plant in Orissa 7,040.92 4. 20 MW Power Plant in A.P. 9,526.15 5. Amount held in Deposits 1,355.52 Total 23,352.00
c) As the variables are indeterminate at present, the premium on actual redemption is not computable and hence will be recognised, as and when the redemption option is exercised, as a charge to the Securities Premium Account in terms of Section 78(2)(d) of the Companies Act,1956.
7. Fixed Deposit Receipts for Rs. 429.34 lakhs (Previous year Rs. 338.74 lakhs) are in lien with Bankers towards Margin Money for Bank Guarantees and Letters of Credit issued by them.
8. a) The Company’s land of about 5.08 acres was given possession to Hyderabad Vanaspathi Limited. The sale price of the same is yet to be adjusted pending permission from the Government of Andhra Pradesh.
61 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 62
Nava Bharat Ventures Limited
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009
21. NOTES ON ACCOUNTS (Contd.)
b) Land costing Rs. 1.23 lakhs (previous year Rs. 1.23 lakhs) admeasuring 6 acres and 23 guntas (previous year 6 acres 23 guntas) is not in the name of the Company.
c) Cost of leasehold land amounting to Rs. 113.07 lakhs shown under the head Fixed Assets represents the premium paid to the State Government of Orissa for alienation of 42.22 acres in favour of the Company by virtue of lease deeds for 99 years and the said land can be resumed by the said Government by giving 6 months notice in writing during the tenure of lease.
9. As required by Accounting Standard (AS 28) "Impairment of Assets", the management has carried out the assessment of impairment of assets and no impairment loss has been recognised during the year other than the assets discarded/dismantled and written off to Profit and Loss Account.
10. a) The aggregate market value of the quoted Investments is Rs. 176.76 lakhs (Previous Year Rs. 210.57 lakhs).
b) Investments bought and sold during the year (units in Mutual Funds): Name of the Fund Face Value No. of Purchase cost Rs. units Rs. in lakhs ABN AMRO Money Plus 10 19,993,802 2,000.00 AIG India Treasury Plus Fund 10 20,977,005 2,100.00 Birla Sun Life Savings Fund 10 9,993,205 1,000.00 Birla Sun Life Liquid Plus Fund 10 45,968,741 4,600.00 Birla Sun Life Short Term Fund 10 12,992,854 1,300.00 DWS Money Plus Fund 10 9,146,305 916.10 DWS Insta Cash Plus Fund 10 9,980,040 1,000.00 DSP Black Rock Liquidity Fund 1,000 100,941 1,009.61 DSP Merrill Lynch Liquid Plus 1,000 149,858 1,500.00 DSP Black Rock Money Manager Fund 1,000 99,920 1,000.00 Fidelity Liquid Plus Fund 10 9,998,000 1,000.00 Fidelity Ultra Short Term Debt Fund 10 9,997,501 1,000.00 Fidelity Cash Fund 10 10,039,318 1,004.45 Fortis Money Plus Fund 10 19,993,802 2,000.00 Fortis Overnight Fund 10 20,424,872 2,043.10 HSBC Liquid Plus Fund 10 58,928,648 5,900.26 HSBC Floating Rate Fund 10 6,772,416 700.10 HSBC Cash Fund 10 19,988,806 2,000.00 HDFC Liquid Fund 10 8,209,982 1,006.53 HDFC Cash Management Fund 10 78,901,080 8,000.27 HDFC Floating Rate Income Fund 10 75,390,094 7,600.00 IDFC Liquid Plus Fund 10 14,895,878 1,500.00 IDFC Money Manager Fund 10 22,100,771 2,211.78 IDFC Cash Fund 10 20,153,026 2,015.81 ICICI Prudential Institutional Liquid Fund 10 2,557,107 303.02 ICICI Prudential Flexible Income Plan 10 78,498,132 8,300.00 ING Liquid Fund 10 11,985,498 1,200.00 ING Liquid Plus Fund 10 9,998,257 1,000.16 ING Treasury Advantage Fund 10 2,001,068 200.17 JM Money Manager 10 24,989,754 2,500.00 Kotak Flexi Debt Scheme 10 99,660,335 10,001.93 Kotak Floater Long Term Fund 10 19,857,900 2,001.64 LICMF Income Plus Fund 10 7,000,000 700.00 LICMF Liquid Fund 10 6,387,602 701.37 Lotus India Liquid Fund 10 9,997,501 1,000.00
62 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 63
Annual Report 2008-09
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009
21. NOTES ON ACCOUNTS (Contd.)
Name of the Fund Face Value No. of Purchase cost Rs. units Rs. in lakhs Lotus India Liquid Plus Fund 10 50,216,824 5,029.57 Lotus India Quarterly Interval Fund 10 10,090,890 1,009.61 Mirae Asset Liquid Fund 1,000 199,857 2,000.00 Mirae Asset Liquid Plus Fund 1,000 349,540 3,500.29 Principal Cash Management Fund 10 9,999,300 1,000.00 Principal Floater Rate Fund 10 19,977,134 2,000.17 Reliance Liquid Fund 10 9,812,130 1,500.00 Reliance Liquid Plus Fund 1,000 779,167 7,800.28 Reliance Monthly Interval Fund 10 9,995,502 1,000.00 Reliance Medium Term Fund 10 11,714,091 2,002.58 Religare Liquid Fund 10 10,093,571 1,009.69 SBI Magnum Insta Cash Fund 10 5,970,042 1,000.00 SBI SHF Liquid Plus 10 19,993,323 2,000.33 Sundaram BNP Paribas Money Fund 10 9,905,600 1,000.00 Sundaram BNP Paribas Money Fund Super 10 19,870,106 2,005.95 Sundaram BNP Paribas Liquid Plus Fund 10 9,976,890 1,000.18 Sundaram BNP Paribas Ultra Short Term Fund 10 19,950,125 2,000.00 Templeton India Ultra Short Bond Fund 10 9,988,413 1,000.00 Tata Treasury Manager 1,000 100,439 1,007.40 Tata Floater Fund 10 38,861,653 3,900.00 UTI Liquid Plus Fund 1,000 299,936 3,000.00
c) 6 year National Savings Certificates of the face value of Rs. 3.01 lakhs (Previous year Rs. 1.41 lakhs) shown under the investments are in the names of employees of the Company and the certificates in respect of face value of Rs. 2.79 lakhs (Previous year Rs. 1.19 lakhs) were pledged with various Government Departments as security.
11. a) In the opinion of the management, the Current Assets, Loans and Advances are expected to realise at least the amount at which they are stated, if realised in the ordinary course of business and provision for all known liabilities have been adequately made in the accounts. b) Sundry Debtors due for less than six months amounting to Rs. 9392.34 lakhs (Previous year Rs. 8412.44 lakhs) include Rs. 2292.76 lakhs (Previous year Rs. 6145.47 lakhs) due from a foreign subsidiary Company viz., M/s.Nava Bharat (Singapore) Pte. Ltd, Singapore. c) Loans to Other Bodies Corporate amounting to Rs. 6061.08 lakhs represents the loan given to Nava Bharat (Singapore) Pte. Limited, a foreign subsidiary Company.
12. Employee defined benefits as per AS-15 (Revised): Gratuity a) The amounts recognised in the Balance Sheet are as under: (Rs. in lakhs) Particulars Current year Previous year Present value of obligation 786.07 772.07 Fair value of Plan Assets 320.50 300.75 Net Assets/(liability) recognised in Balance Sheet as provision (465.57) (471.32)
63 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 64
Nava Bharat Ventures Limited
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009
21. NOTES ON ACCOUNTS (Contd.)
b) Changes in the present value of obligation representing reconciliation of opening and closing balances thereof are as under: (Rs. in lakhs) Particulars Current year Previous year Present value of obligation as at the beginning of the year 772.07 207.61 Interest cost 61.77 15.70 Past Service Cost – 224.06 Current Service Cost 27.52 23.36 Benefits paid (78.36) (73.38) Actuarial (gain)/loss on obligation 3.07 374.72 Present value of obligation as at the end of the year 786.07 772.07 Fair value of plan assets as at the beginning of the year 300.75 293.39 Return on plan assets 26.93 25.78 Contributions 32.84 22.82 Benefits paid 40.02 41.24 Fair value of plan assets as at the end of the year 320.50 300.75
c) The amounts recognised in the Profit and Loss Account are as under: Current Service Cost 27.52 23.36 Past Service Cost 74.69 74.69 Interest cost 61.77 15.70 Actuarial (gain)/loss on benefits paid (24.62) – Expenses recognised in the Profit and Loss Account 139.36 113.75
d) Principal actuarial assumptions at the Balance Sheet date are as follows:
Mortality Table (LIC) 1994-96 1994-96 Discount rate per annum 8.00% 8.00% Rate of escalation in Salary (per annum) 4.00% 4.00% Attrition Rate 1.00% 1.00% Retirement age 58 years 58 years
The rate of escalation in salary considered in actuarial valuation is estimated taking into account inflation, seniority, promotion and other relevant factors. The Company has determined the liability for employee benefits as at March 31, 2008 in accordance with the revised Accounting Standard 15 - Employee benefits issued by ICAI and the transitional liability in respect of gratuity is recognised as an expense on straight line basis over a period of 3 years commencing from the year 2007-08 in terms of the said Standard. The above information is certified by the actuary. 13. The Company uses derivative financial instruments such as forward contracts and currency swap to hedge currency exposures, present and anticipated, denominated mostly in US Dollars and Japanese Yen and all financial and derivative contracts entered into by the Company are for hedging purpose only. The information on derivative instruments are as follows: a) Derivative instruments outstanding: (Millions)
Particulars Bought/Sold Amount in foreign currency As at 31.3.2009 As at 31.3.2008 Foreign currency contracts – USD/INR Sold 0.55 10.00 – JPY/INR Sold – 250.00
64 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 65
Annual Report 2008-09
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009
21. NOTES ON ACCOUNTS (Contd.)
b) Foreign currency exposure not hedged by derivative instruments: (Millions) Particulars Currency Amount in foreign currency As at 31.3.2009 As at 31.3.2008 Receivable on account of sale of goods USD 3.96 18.46 Term Loans payments JPY 2029.12 2843.32 Payables on account of import of goods EURO 0.01 1.70 Payables on account of import of goods JPY – 76.86
14. a) Working Capital Loans from Banks are secured by hypothecation of raw materials, Work-in- Progress, finished goods, stores and spares and book debts to the extent of Rs. 17,000 lakhs and a second charge on fixed assets of the Company. b) The Term Loans from Industrial Development Bank of India Limited, Infrastructure Development Finance Company Limited, Andhra Bank, State Bank of India, BNP Paribas, HDFC Bank Limited, The South Indian Bank Limited, Bank of India, State Bank of Hyderabad and UCO Bank are secured by First Charge by way of equitable mortgage by deposit of title deeds to cover all immovable properties of the Company and hypothecation of all movable properties including movable Plant and Machinery, spares, tools and accessories, both present and future and a second charge by way of hypothecation of all movable properties both present and future (except book debts) subject to prior charges created/to be created in favour of Company's bankers on its stocks of raw materials, semi-finished and finished goods, consumable stores for securing borrowings for working capital requirements. The mortgage/charges created above shall rank pari-passu with the charges created/to be created in favour of other Financial Institutions/Banks. c) The Term Loan availed during the year from Andhra Bank amounting to Rs. 6,000.00 lakhs out of the sanction of Rs. 20,000 lakhs for funding to a foreign subsidiary Company, i.e. Nava Bharat (Singapore) Pte Ltd is also further secured by pledge of 30% of shares held by Company in the said subsidiary and hypothecation of mineral and mining rights of subsidiary. d) The above said loans are also guaranteed by some of the directors of the Company in their personal capacity.
15. Computation of Net Profit in accordance with Section 349 of the Companies Act, 1956. (Rs. in lakhs) Particulars Current year Previous year Profit as per Profit and Loss Account 49,600.59 37,019.51 Add: Assets discarded 2.29 7.52 Managerial Remuneration 2,551.84 1,799.41 Directors' Sitting fee 1.75 2.15 52,156.47 38,828.59 Less: Capital profit on sale of Fixed Assets 7.79 – Profit on sale of Investments 11.00 98.66 18.79 98.66 Net Profit in accordance with Section 349 52,137.68 38,729.93
16. Commission to Managerial personnel Chairman (Previous year – Managing Director) @ 2% of Net Profit 1,042.75 774.58 Managing Director (Previous year – Executive Director) @ 2% of Net Profit 1,042.75 774.58 Non-Executive Directors (maximum) 15.00 15.00
17. Remuneration to Directors included in other heads of account i) Chairman (Previous year – Managing Director) Salary 60.00 30.00 Perquisites and Contributions 80.03 33.45 Commission 1,042.75 774.58
65 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 66
Nava Bharat Ventures Limited
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009
21. NOTES ON ACCOUNTS (Contd.)
(Rs. in lakhs) Particulars Current year Previous year ii) Managing Director (Previous year – Executive Director) Salary 60.00 30.00 Perquisites and Contributions 81.99 33.20 Commission 1,042.75 774.58 iii) Director (Business Development) Salary 36.00 24.00 Perquisites and Contributions 49.07 29.71 iv) Director (Finance & Corporate Affairs) Salary 36.00 24.00 Perquisites and Contributions 48.25 30.89 v) Non-executive Directors Commission 15.00 15.00 Total 2,551.84 1,799.41
18. Contingent liabilities not provided for on account of:. (Rs. in lakhs) As at 31.3.2009 As at 31.3.2008 a) Guarantees given by the Bankers 1,007.09 305.00 b) Guarantees given by the Company 732.70 732.70 c) Guarantees given by the Company on behalf of others 10.40 10.40 d) Claims against the Company not acknowledged as debts 727.59 736.14 e) Demand raised by A. P. State Electricity Board (reconstituted as Transmission Corporation of Andhra Pradesh Ltd) towards additional charges on power tariff difference between HT I and HT III categories and surcharge on belated payments disputed by the Company, pending in appeal with High Court of A.P. 136.45 136.45 f) Interest on dues to A. P. State Electricity Board (reconstituted as Transmission Corporation of Andhra Pradesh Ltd). 62.35 62.35 g) Demand from Income-tax department disputed and pending in appeals 1,377.71 936.90
19. Showcause notices received from Central Excise Department to issue demand notices for an amount of Rs. 5,374.89 lakhs are pending for final consideration and the Company has already submitted its objections in writing against the said demands.
20. The amount of contracts remaining to be executed on capital account and not provided for are estimated at Rs. 385.75 lakhs (previous year Rs. 4668.76 lakhs).
21. Excise Duty included in Rates and Taxes and debited to Profit and Loss Account represents the aggregate of Excise Duty borne by the Company and the difference between Excise Duty on opening and closing stock of finished/saleable goods.
66 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 67
Annual Report 2008-09
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009
21. NOTES ON ACCOUNTS (Contd.)
22. Additional information as required under part II of Schedule VI to the Companies Act, 1956. (Rs. in lakhs) As at 31.3.2009 As at 31.3.2008 i. Licensed Capacity: Power : Captive generation (MW) 208 208 : Co-generation (MW) 29 29 Ferro Alloys (MT) N.A. N.A. Sugar: Cane/day (MT) 6,500 6,500 Spirit/Extra Neutral Alcohol (Bulk Ltrs) 6,000,000 6,000,000 CO 2 - MT/day 7.2 7.2 ii. Installed Capacity:* Power : Captive generation (MW) 208 144 : Co-generation (MW) 29 9 Ferro Alloys (MT)# 82500 to 190000 82500 to 190000 Sugar: Cane/day (MT) 3,500 3,500 Spirit/Extra Neutral Alcohol (Bulk Ltrs) 6,000,000 6,000,000 # Subject to product mix. * The figures are as certified by the management and not verified by the Auditors, being a technical matter. Current year Previous year iii. Actual Production: Power (KWH) # 1,394,275,529 983,972,342 Power (KWH) out of Co-generation # 36,329,600 19,351,600 Silico Manganese (MT) 58,063 79,772 Ferro Manganese (MT) 2,161 12,197 Ferro Chrome (MT) 18,889 43,709 Bagged Sugar (MT) 30,266 53,264 Spirit (Bulk Ltrs) 1,970,200 1,176,400 # Includes production during trial run: Power 55,979,174 8,682,072 Power out of Co-Generation 12,091,450 – As at 31.3.2009 As at 31.3.2008 iv. Opening Stock of Finished Goods: Ferro Silicon (MT) 21 21 Silico Manganese (MT) 14,536 2,543 Ferro Manganese (MT) 611 655 Ferro Chrome (MT) 15,565 6,227 Bagged Sugar (MT) 21,817 19,854 Spirit (Bulk Ltrs) 527,830 372,150 v. Closing Stock of Finished Goods:* Ferro Silicon (MT) –21 Silico Manganese (MT) 13,065 14,536 Ferro Manganese (MT) 1,760 611 Ferro Chrome (MT) 14,538 15,565 Bagged Sugar (MT) 21,033 21,817 Spirit (Bulk Ltrs) 818,008 527,830 * After adjustment of wastages, shortages/reprocess loss of Ferro Chrome (MT) 21 – Silico Manganese (MT) 6 – Ferro Chrome (MT) 16 19 Sugar (MT) 5 7 Spirit (Bulk Ltrs) 5 1
67 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 68
Nava Bharat Ventures Limited
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009
21. NOTES ON ACCOUNTS (Contd.)
Current year Previous year Qty Rupees in lakhs Qty Rupees in lakhs vi. Turnover (Net of Excise Duty): Power (KWH) 1,394,275,529 69,419.27 983,972,342 35,334.72 Steam (MT) 18,974 49.79 181,321 525.83 Power (KWH) out of Co-generation 36,329,600 1,865.26 19,351,600 491.91 Silico Manganese (MT) 59,528 44,300.70 67,779 36,044.02 Ferro Manganese (MT) 1,012 996.54 12,241 6,687.27 Ferro Chrome (MT) 19,900 15,781.61 34,352 21,067.21 Sugar (MT) 31,045 5,301.40 51,294 6,723.00 Spirit (Bulk Ltrs) 1,680,017 384.42 1,020,719 224.07 Molasses (MT) 11,329 524.64 15,390 262.78 Trading Goods 202.61 283.96 138,826.24 107,644.77 Less: Internal consumption (Capitalised) – 78.81 Sale to others (Capitalised) 2,201.41 - 136,624.83 107,565.96 Less: Inter Division sales: Power (kWh) 335,870,788 9,569.95 545,005,658 15,733.38 Molasses (MT) 4,574 153.39 6,935 114.66 Steam (MT) 18,974 49.79 181,321 525.83 9,773.13 16,373.87 Total 126,851.70 91,192.09 vii. Consumption of Raw Materials: Coal (MT) 82,900 2,630.63 125,104 3,128.62 Quartz (MT) 13,390 73.29 33,203 177.42 Dolomite (MT) 13,964 74.30 27,776 142.86 Charcoal (MT) 219 2.10 156 1.24 Chrome Ore (MT) 51,033 7,754.41 100,274 9,834.59 Manganese Ore (MT) 119,241 14,452.39 172,913 10,682.79 Ferro Manganese Slag (MT) 493 43.07 12,091 280.41 Coke (MT) 8,497 1,349.00 20,439 2,165.70 Anthracite Coal (MT) 5,041 597.19 6,368 510.01 Cane (MT) 317,575 4,688.54 526,458 6,228.51 Others – 274.49 – 439.51 Trading Goods 193.71 273.61 Total 32,133.12 33,865.27 viii. Trading Goods: Opening Stocks Fertilizers (MT) 18 18.14 15 17.22 PVC Pipes (Nos.) 920 4.41 2,304 22.28 Others 2.11 6.86 Total 24.66 46.36 Purchases Fertilizers (MT) 3,927 189.62 3,864 222.59 PVC Pipes (Nos.) 6,420 24.74 – – Others 1.30 29.32 Total 215.66 251.91
68 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 69
Annual Report 2008-09
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009
21. NOTES ON ACCOUNTS (Contd.)
Current year Previous year Qty Rupees in lakhs Qty Rupees in lakhs Sales Fertilizers (MT) 3,355 184.83 3,861 231.18 PVC Pipes (Nos.) 3,350 17.78 1,384 18.71 Others – 34.07 Total 202.61 283.96 Closing Stocks Fertilizers (MT) 590 30.40 18 18.14 PVC Pipes (Nos.) 3,990 12.80 920 4.41 Others 3.41 2.11 Total 46.61 24.66
Current year Previous year Percentage Value Percentage Value Rupees in lakhs Rupees in lakhs ix. Value of material consumed: Indigenous 89.78 48,668.27 87.62 40,135.51 Imported 10.22 5,539.04 12.38 5,672.30 100.00 54,207.31 100.00 45,807.81
(Rs. in lakhs) Current year Previous year x. Value of imports calculated on C.I.F. basis by the Company during the financial year in respect of i) Raw Materials 12,402.32 5,165.62 ii) Components and spare parts 507.49 238.67 iii) Capital goods 190.14 5,210.36 xi. Expenditure in foreign currency during the year on account of i) Consultation fees 15.40 12.86 ii) Interest 573.75 150.92 iii) Others 169.02 64.74 xii. Earnings in foreign exchange on account of i) Export of goods calculated on F.O.B. basis (including foreign currency fluctuations) 39,061.30 49,546.72 ii) Interest earned 132.47 46.38
69 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 70
Nava Bharat Ventures Limited
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009
21. NOTES ON ACCOUNTS (Contd.) 23. Segment reporting as per A S 17 issued by the Institute of Chartered Accountants of India. A. Primary disclosures: The Company has identified the reportable primary business segments considering: i) the nature of products and services; ii) the differing risks and returns; iii) the organisation structure; and iv) the internal financial reporting system. (Rs. in lakhs) Current year Previous year Particulars Ferro Alloys Power Sugar Others Total Ferro Alloys Power Sugar Others Total 1. Segment Revenue (gross) 65,382.87 69,175.02 7,379.74 8.15 141,945.78 67,757.97 36,124.49 8,839.74 – 112,722.20 Less: Inter segment revenue – 9,619.74 338.62 – 9,958.36 – 16,259.22 168.23 – 16,427.45 Segment Revenue (net) 65,382.87 59,555.28 7,041.12 8.15 131,987.42 67,757.97 19,865.27 8,671.51 – 96,294.75 2. Segment Result 12,679.62 38,488.89 795.96 (33.14) 51,931.33 17,850.62 21,125.18 (383.74) (26.08) 38,565.98 3. Segment Result excluding inter segment margin 18,993.44 32,228.89 742.14 (33.14) 51,931.33 27,258.82 11,716.37 (383.13) (26.08) 38,565.98 Add: Other unallocable Income 775.47 501.92 Less: a) Finance Charges 3,095.15 2,039.63 b) Other unallocable expenditure 11.06 8.76 Profit before tax 49,600.59 37,019.51 Taxation for the year 4,090.18 5,535.00 Net Profit 45,510.41 31,484.51 4. Segment Assets 56,262.77 89,898.00 10,431.56 37.74 156,630.07 51,590.43 59,061.88 9,968.92 40.18 120,661.41 Unallocated 28,802.94 23,871.56 Total Assets 185,433.01 144,532.97 5. Segment Liabilities 4,664.95 4,609.38 1,127.66 16.93 10,418.92 7,035.48 2,680.82 949.38 24.61 10,690.29 Unallocated 175,014.09 133,842.68 Total liabilities 185,433.01 144,532.97 6. Capital expenditure 630.94 9,750.64 133.62 408.43 10,923.63 926.14 23,528.89 705.79 (207.79) 24,953.03 Depreciation 688.76 2,633.71 384.94 73.38 3,780.79 647.06 1,486.31 336.67 44.76 2,514.80 Non-cash expenses other than depreciation 6,322.82 66.11 2.58 6.40 6,397.91 75.65 66.22 9.51 73.41 224.79
B. Secondary disclosures: Total Carrying amount of Segment Assets by geographical location of Assets, for each geographical Segment whose Segment Assets are 10 per cent or more of the total Assets of all geographical Segments. (Rs. in lakhs) Current year Previous year Cost incurred to acquire Assets Carrying Cost incurred to acquire Assets Carrying Geographical Segment (Tangible and Intangible) amount of (Tangible and Intangible) amount of Put to use Capital Segment Put to use Capital Segment Work-in-progress Assets Work-in-progress Assets Ferro Alloy Plant 1,015.16 388.99 38,573.80 643.57 674.16 26,798.94 Paloncha, Khammam Dist., A.P. Ferro Alloy Plant 15.26 94.96 17,688.97 87.80 71.73 24,791.49 Kharagprasad, Dhenkanal Dist. Orissa Power Plant 542.78 825.34 48,475.74 8,343.26 2,866.33 28,434.97 Paloncha, Khammam Dist., A.P. Power Plant 20,290.00 2,660.04 28,655.42 160.88 15,087.25 24,998.57 Kharagprasad, Dhenkanal Dist. Orissa Power Plant 9,583.81 5,767.82 12,766.84 1,425.43 3,848.68 5,628.34 Dharmavaram, East Godavari Dist. A.P. Note: As it is not practicable to identify the expenditure relatable to export turnover, the revenue from sales to customers located outside India is not considered as a reportable geographical segment.
70 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 71
Annual Report 2008-09
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009
21. NOTES ON ACCOUNTS (Contd.) 24. The details of related party transactions in terms of Accounting Standard (AS 18) are as follows: a) Names of related parties and description of relationship: Name of the related party Nature of relationship i) Key Management Personnel: Sri D. Ashok Chairman Sri P. Trivikrama Prasad Managing Director Sri C. V. Durga Prasad Director (Business Development) Sri G. R. K. Prasad Director (Finance & Corporate Affairs)
ii) Relatives of key management personnel: Smt. D. Bhakta Priya Mother of Sri D Ashok Dr. D. Rajasekhar Brother of Sri D Ashok Smt. A. Neelima Sister of Sri D Ashok Dr. C. Sudha Sister of Sri P Trivikrama Prasad Smt. C. Umamaheswari Wife of Sri C V Durga Prasad Smt. G. S. P. Kumari Wife of Sri G R K Prasad Mr. G. Raghu Chaitanya Son of Sri G R K Prasad Kum G. Ramya Sudha Daughter of Sri G R K Prasad
iii) Associates/Subsidiaries: M/s. Beardsell Limited Associate Company Dr. Devineni Subbarao Trust Promoter Group Entity M/s. Nav Energy Private Limited Promoter Group Entity M/s. Nava Bharat (Singapore) Pte Limited Subsidiary Company M/s. Brahmani Infratech Private Limited Subsidiary Company M/s. Nava Bharat Projects Limited Subsidiary Company M/s. Nava Bharat Realty Limited Subsidiary Company M/s. Kinnera Power Company Limited Subsidiary Company M/s. Nava Bharat Energy India Limited Subsidiary Company M/s. Nava Bharat Sugar and Bio Fuels Limited Subsidiary Company
b) Particulars of transactions during the year: (Rs. in lakhs) Nature of transactions Current year Previous year i) Transactions with Key Management personnel: Sri D. Ashok Remuneration 1,182.78 838.03 Sri P. Trivikrama Prasad Remuneration 1,184.74 837.78 Sri C. V. Durga Prasad Remuneration 85.07 53.71 Sri G. R. K. Prasad Remuneration 84.25 54.89 ii) Transactions with relatives of Key Management personnel: Dr. D. Rajasekhar Rent 14.48 14.50 Interest – 1.89 Deposits received/(repaid) – (70.00) Smt. C. Umamaheswari Rent 21.60 14.40
71 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 72
Nava Bharat Ventures Limited
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009
21. NOTES ON ACCOUNTS (Contd.) b) Particulars of transactions during the year: (Contd.) (Rs. in lakhs) Nature of transactions Current year Previous year Smt. G. S. P. Kumari Rent 21.60 14.40 Interest 0.13 0.27 Deposits received/(repaid) (2.89) – Smt. D. Bhakta Priya Interest 1.60 3.77 Deposits received/(repaid) – (175.00) Smt. A. Nilima Interest – 0.06 Deposits received/(repaid) – (10.00) Dr. C. Sudha Interest – 1.79 Deposits received/(repaid) – (19.00) Mr. G. Raghu Chaitanya Interest 0.17 0.20 Deposits received/(repaid) (2.17) – Kum. G. Ramya Sudha Interest 0.17 0.20 Deposits received/(repaid) (2.17) – iii) Transactions with Associates/Subsidiaries: M/s. Nava Bharat (Singapore) Pte Limited Sale of finished goods 39,615.48 49,810.42 Advances/Loans given/(received back) 6,126.57 – Finance provided (Equity Contributions in Cash) 3,499.43 – M/s. Nava Bharat Projects Limited Services received 555.00 – Advances/Loans given/(received back) (0.04) 0.04 Finance provided (Equity Contributions in Cash) – 1,328.40 M/s. Nav Energy Private Limited Trustee Fee 0.15 0.15 Advances/Loans given/(received back) 0.00 0.00 Dr. Devineni Subbarao Trust Donation given 500.00 200.00 M/s. Beardsell Limited Loans received/(repaid) (25.49) 19.98 Advances/Loans given/(received back) 115.02 – M/s. Nava Bharat Realty Limited Advances/Loans given/(received back) (0.02) 0.02 Finance provided (Equity Contributions in Cash) 417.00 1,540.00 M/s. Brahmani Infratech Private Limited Advances/Loans given/(received back) – (0.19) Finance provided (Equity Contributions in Cash) – 1,989.50 M/s. Kinnera Power Company Limited Advances/Loans given/(received back) (1.29) 1.29 M/s. Nava Bharat Energy India Limited Finance provided (Equity Contributions in Cash) 5.00 – M/s. Nava Bharat Sugar and Bio Fuels Limited Finance provided (Equity Contributions in Cash) 5.00 –
72 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 73
Annual Report 2008-09
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009
21. NOTES ON ACCOUNTS (Contd.) c) Amount due from/to related parties as at the year end: (Rs. in lakhs) Sl. Name of th party Current year Previous year No. due to due from due to due from 1. Key Management personnel: Sri D Ashok 1,042.75 774.58 Sri P Trivikrama Prasad 1,042.75 774.58 2. Relatives of Key Management personnel: Smt. D. Bhakta Priya 20.00 20.00 Smt. G. S. P Kumari – 2.89 Mr. G. Raghu Chaitanya – 2.17 Kum G. Ramya Sudha – 2.17 3. Associates/subsidiaries: M/s. Beardsell Limited 85.02 55.49 M/s. Nav Energy Private Limited – 0.01 M/s. Nava Bharat (Singapore) Pte Limited 8,419.33 6,145.47 M/s. Nava Bharat Realty Limited – 0.02 M/s. Nava Bharat Projects Limited – 0.04 M/s. Kinnera Power Company Limited – 1.29
25. Earnings per share (E.P.S.) Current year Previous year i) Net Profit as per Profit and Loss Account available for Equity Shareholders (Rs. in lakhs) 45,543.94 31,535.20 ii) Weighted average number of Equity Shares for Basic EPS 76,308,592 72,214,766 Add: Adjustment for : Employees stock options granted 257,699 285,890 : Foreign Currency Convertible Bonds issued 3,293,310 3,605,358 Weighted average number of Equity Shares for diluted EPS 79,859,601 76,106,014 iii) Nominal value of the share (Rupees) 2.00 2.00 iv) Basic earnings per share (Rupees) 59.68 43.67 v) Diluted earnings per share (Rupees) 57.03 41.44
26. Previous year figures have been re-grouped wherever necessary to make them comparable with those of current year.
Per our report of even date. For and on behalf of the Board For Brahmayya & Co. Chartered Accountants G. R. K. Prasad Director (Finance & Corporate Affairs) P. Chandramouli Partner P. Trivikrama Prasad Managing Director M. Subrahmanyam Hyderabad Company Secretary & D. Ashok May 30, 2009 Vice President Chairman
73 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 74
Nava Bharat Ventures Limited
Statement pursuant to part-IV of Schedule VI to the Companies Act, 1956
Balance Sheet abstract and Company's general business profile I. Registration details Registration No. L27101AP1972PLC001549 State Code 01 Balance Sheet Date 31 03 2009
II. Capital raised during the year (Rupees in thousands) Public issue NIL Rights issue NIL Bonus Shares NIL Private placement (ESOS) 63
III. Position of mobilisation and deployment of funds (Rupees in thousands) Total Liabilities 18543302 Total Assets 18543302 Sources of Funds: Paid-up Capital 152377 Share Application Money NIL Reserves & Surplus 11561613 Secured Loans 2886628 Unsecured Loans 1417101 Deferred tax liability 211361 Application of Funds: Net Fixed Assets 7150963 Investments 371669 Net Current Assets 8706448 Secured Loans 2886628 Accumulated Losses NIL Miscellaneous Expenditure NIL
IV. Performance of Company (Rupees in thousands) Turnover (Gross Revenue) 14257136 Total Expenditure 9297077 +/- Profit or Loss before Tax +4960059 +/- Profit or Loss after Tax +4551041 Earnings per share in Rs. Dividend Rate % 400 – Basic 59.68 – Diluted 57.03
V. Generic name of three principal products/services of Company (as per monetary terms) Item Code No. (ITC Code) 72023000 Item Code No. (ITC Code) 72021100 Product description Silico Manganese Product description Ferro Manganese Item Code No. (ITC Code) 72024100 Item Code No. (ITC Code) 72022100 Product description Ferro Chrome Product description Ferro Silicon Item Code No. (ITC Code) 17011109 Product description Cane Sugar Product description Generation and supply of power
For and on behalf of the Board
G. R. K. Prasad Director (Finance & Corporate Affairs)
P. Trivikrama Prasad Managing Director M. Subrahmanyam Hyderabad Company Secretary & D. Ashok May 30, 2009 Vice President Chairman
74 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 75
Annual Report 2008-09
Statement pursuant to Section 212 of the Companies Act, 1956, related to Subsidiary Companies
1. Name of the subsidiary Nava Bharat Brahmani Kinnera Nava Bharat Nava Bharat Nava Bharat Nava Bharat (Singapore) Infratech Power Company Realty Projects Energy India Sugar and Bio Pte. Limited Private Limited Limited Limited Limited Limited Fuels Limited 2. Financial year of the subsidiary ended on March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2009 3. Shares of the subsidiary held by the Company on the above date: a) Number of Shares 1,336,870 10,000 50,000 2,50,000 2,50,000 2,50,000 2,50,000 Face value 16,870 Equity Shares Equity Shares Equity Shares Equity Shares Equity Shares Equity Shares Equity Shares of S$ 1/- each and of Rs.10/- each of Rs.10/- each of Rs.2/- each of Rs.2/- each of Rs.2/- each of Rs.2/- each 1,320,000 Equity Shares of US $ 1/- each b) Extent of holding 100.00% 99.98% 50.30% 100.00% 100.00% 100.00% 100.00% 4. Net aggregate amount of profits/(losses) of the subsidiary for the above financial year of the subsidiary so far as they concern members of the Company: a) dealt with in the accounts of the Company for the year ended March 31, 2009 Nil Nil Nil Nil Nil Nil Nil b) not dealt with in the accounts of the Company for the year ended USD 254,395 228.69 (5.22) (3.90) 47.59 (8.66) (1.60) March 31, 2009 (Rs. in lakhs) (Rs.129.03 lakhs) 5. Net aggregate amount of profits/(losses) for previous years of the subsidiary, since it became a subsidiary so far as they concern members of the Company: a) dealt with in the accounts of the Company for the year ended March 31, 2009 (Rs. in lakhs) Nil Nil Nil Nil Nil Nil Nil b) not dealt with in the accounts of the Company for the year ended USD 1,795,867 66.94 (11.39) (18.09) 82.96 (8.66) (1.60) March 31, 2009 (Rs. in lakhs) (Rs.910.86 lakhs) 6. Change in the interest of the Company in the subsidiary between the end of the financial year of the subsidiary and that of the Company Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable 7. Material Changes between the end of the financial year of the subsidiary and end of the financial year of the Company in respect of the subsidiary's fixed assets, investments, lending and borrowing for the purpose other than meeting their current liabilities Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable 8. Remarks Nil Nil Nil Nil Nil Nil Nil
For and on behalf of the Board
G. R. K. Prasad Director (Finance & Corporate Affairs)
P. Trivikrama Prasad Managing Director M. Subrahmanyam Hyderabad Company Secretary & D. Ashok May 30, 2009 Vice President Chairman
75 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 76
Nava Bharat Ventures Limited
Annual Reports of Subsidiary Companies
Nava Bharat (Singapore) Pte. Limited
Brahmani Infratech Private Limited
Kinnera Power Company Limited
Nava Bharat Realty Limited
Nava Bharat Projects Limited
Nava Bharat Energy India Limited
Nava Bharat Sugar and Bio Fuels Limited
76 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 77
Nava Bharat (Singapore) Pte Limited
Report of the Directors
The directors present their report to the members together with the audited accounts of the Company for the financial year ended March 31, 2009.
Directors The directors in the office at the date of this report are: Ashok Devineni Pinnamaneni Trivikrama Prasad Chalasani Venu Durga Prasad Ashwin Devineni
Arrangements to enable directors to acquire shares or debentures Neither at the end nor at any time during the financial year was the Company a party to any arrangement whose object is to enable the directors of the Company to acquire benefits by means of the acquisition of shares or debentures in the Company or any other body corporate.
Directors' Interest in Shares or Debentures The directors holding office at the end of the financial year and their interests in the share capital of the company and related company as recorded in the register of directors' shareholdings were as follows:-
Name of Directors Beginning of year At end of year Nava Bharat (Singapore) Pte Limited Ordinary Shares Ashok Devineni –– Pinnamaneni Trivikrama Prasad –– Chalasani Venu Durga Prasad –– Ashwin Devineni ––
Name of Directors At beginning of year At end of year Nava Bharat Ventures Ltd Equity Shares of Rs.2/- each Equity Shares of Rs.2/- each Ashok Devineni 480,595 638,100 Pinnamaneni Trivikrama Prasad 1,389,992 1,479,992 Pinnamaneni Trivikrama Prasad(HUF) 270,565 270,565 Chalasani Venu Durga Prasad 40,325 40,325 Ashwin Devineni 14,36,735 14,36,735
77 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 78
Nava Bharat (Singapore) Pte Limited
Report of the Directors (Contd.)
Director's contractual benefits Since the end of previous financial period no director has received or become entitled to receive a benefit by reason of a contract made by the Company or a related corporation with the director or with a firm of which he is a member, or with a company in which he has a substantial financial interest.
Options granted No option to take up unissued shares of the Company was granted during the financial year.
Options exercised No shares have been issued during the financial year by virtue of the exercise of option to take up unissued shares of the Company.
Option outstanding At the end of the financial year, there were no unissued shares of the company under option.
Auditors Messers Shashi Kala Devi Associates, Certified Public Accountant, have expressed their willingness to accept re-appointment as auditors.
On behalf of the directors
Ashok Devineni
Singapore: May 29, 2009 Pinnamaneni Trivikrama Prasad
Statement by Directors In the opinion of the directors, the accompanying financial statements of the company set out on pages 5 to 17 are drawn up so as to give a true and fair view of the state of affairs of the company as at March 31, 2009 and of the results of the company, changes in equity of the company and cash flows of the company for the financial year then ended and at the date of this statement there are reasonable grounds to believe that the company will be able to pay its debts as and when they fall due. On behalf of the directors
Ashok Devineni
Singapore: May 29, 2009 Pinnamaneni Trivikrama Prasad
Note: Page nos. 5 to 17 stated in the above statement may be referred as 80 to 88 in this Annual Report.
78 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 79
Annual Report 2008-09
Report of the Auditors
To The Members of Nava Bharat (Singapore) Pte Limited (Incorporated in the Republic of Singapore)
We have audited the accompanying financial statements of Nava An audit involves performing procedures to obtain audit evidence Bharat (Singapore) Pte Limited, which comprise the balance sheet as at about the amounts and disclosures in the financial statements. The March 31, 2009, and the income statement, statement of changes in procedures selected depend on the auditor's judgment, including the equity and cash flow statement for the year then ended, and a assessment of the risks of material misstatement of the financial summary of significant accounting policies and other explanatory statements, whether due to fraud or error. In making those risk notes. assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in Management's Responsibility for the Financial Statements order to design audit procedures that are appropriate in the Management is responsible for the preparation and fair presentation of circumstances, but not for the purpose of expressing an opinion on the these financial statements in accordance with the provisions of the effectiveness of the entity's internal control. An audit also includes Singapore Companies Act, Cap.50 (the "Act") and the Singapore evaluating the appropriateness of accounting policies used and the Financial Reporting Standards. This responsibility includes: reasonableness of accounting estimates made by directors, as well as (a) Devising and maintaining a system of internal accounting controls evaluating the overall presentation of the financial statements. sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and We believe that the audit evidence we have obtained is sufficient and transactions are properly authorised and that they are recorded as appropriate to provide a basis for our audit opinion. necessary to permit the preparation of true and fair profit and loss In Our opinion, accounts and balance sheets and to maintain accountability of a) the financial statements are properly drawn up in accordance with assets. the provisions of the Singapore Financial Reporting Standards so as
(b) Selecting and applying appropriate accounting policies; and to give a true and fair view of the state of affairs of the Company as at March 31, 2009 and the results, changes in equity and cash (c) Making accounting estimates that are reasonable in the flows of the company for the year ended on that date; and circumstances. b) the accounting and other records (excluding registers) required by Auditor's Responsibility the Act to be kept by the company have been properly kept in Our responsibility is to express an opinion on these financial statements accordance with the provisions of the Act. based on our audit. We conducted our audit in accordance with
Singapore Standards on Auditing. Those standards require that we Sashi Kala Devi Associates comply with ethical requirements and plan and perform the audit to Public Accountants and obtain reasonable assurance whether the financial statements are free Certified Public Accountants from material misstatement. Date: May 29, 2009 Singapore
79 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 80
Nava Bharat (Singapore) Pte Limited
Balance Sheet as at March 31, 2009
NOTE 2009 2009 2008 2008 USD INR USD INR ASSETS Non-Current assets Property, plant & equipment 3 595,147 3,01,85,856 440,352 1,76,64,720 Investment in unquoted shares 4 3000,000 15,21,60,000 – – Investment expense in progress 4 1,595,477 8,09,22,593 – – 5,190,624 26,32,68,449 440,352 1,76,64,720 Current assets Trade and other receivables 5 4,598,407 23,32,31,203 10,996,129 44,11,09,715 Cash & cash equivalents 6 14,336,757 72,71,60,315 5,668,650 22,73,97,895 Short term investments 1,631,061 8,27,27,414 – – 20,566,225 1,04,31,18,932 16,664,779 66,85,07,610 Total assets 25,756,849 130,63,87,381 17,105,131 68,61,72,330 EQUITY AND LIABILITIES Capital and reserves Share capital 7 7,300,000 37,02,56,000 10,000 4,01,150 Retained earnings 1,795,867 9,10,86,375 1,541,472 6,18,36,149 9,095,867 46,13,42,375 1,551,472 6,22,37,299 Current liabilities Trade and other payables 8 4,753,677 24,11,06,497 15,351,300 61,58,17,400 Accruals 5,085 2,57,911 5,290 2,12,208 Taxation 9 57,760 29,29,587 197,069 79,05,423 Amount due to a director 10 44,460 22,55,011 – – Loan from holding company 11 11,800,000 59,84,96,000 – – 16,660,982 84,50,45,006 15,553,659 62,39,35,031 Total equity and liabilities 25,756,849 130,63,87,381 17,105,131 68,61,72,330
The annexed notes form an integral part of and should be read in conjunction with this statement.
Income Statement for the year ended March 31, 2009
NOTE 2009 2009 2008 2008 USD INR USD INR Revenue 12 91,486,651 464,02,02,939 125,987,997 505,40,08,500 Purchases (90,221,845) (457,60,51,978) (124,655,996) (500,05,75,280) Other income 45,503 23,07,912 43,549 17,46,968 Depreciation (48,682) (24,69,151) (23,176) (9,29,705) Staff cost 13 (301,973) (1,53,16,071) – – Other operating expenses (648,689) (3,29,01,506) (146,872) (58,91,771) Profit from operations 14 310,965 157,72,145 1,205,502 4,83,58,712 Taxation (56,570) (28,69,230) (197,069) (79,05,423) Profit after taxation 254,395 1,29,02,915 1,008,433 4,04,53,289
The annexed notes form an integral part of and should be read in conjunction with this statement.
80 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 81
Annual Report 2008-09
Statement of Changes in Equity for the year ended March 31, 2009
Share Retained Total Capital earnings USD USD USD INR Balance at 31.03.2007 10,000 533,039 543,039 2,75,42,938 Net profit for the year – 1,008,433 1,008,433 5,11,47,722 Balance at 31.03.2008 10,000 1,541,472 1,5 51,472 7,86,90,660 Share issue 7,290,000 – 7,290,000 36,97,48,800 Net profit for the year – 254,395 254,395 1,29,02,915 Balance at 31.03.2009 7,300,000 1,795,867 9,095,867 46,13,42,375
The annexed notes form an integral part of and should be read in conjunction with this statement.
Cash Flow Statement for the year ended March 31, 2009
NOTE 2009 2009 2008 2008 USD INR USD INR Cash flows from operating activities Profit before taxation 310,965 1,57,72,145 1,205,502 4,83,58,712 Adjustments for: Depreciation 48,682 24,69,151 23,176 9,29,705 Operating cash flow before working capital change 359,647 1,82,41,296 1,228,678 4,92,88,417 Changes in working capital 15 (5,786,707) (29,35,01,779) 4,864,458 19,51,37,733 Cash generated from (used in) operating activities (5,427,060) (27,52,60,483) 6,093,136 24,44,26,150 Income tax paid (195,879) (99,34,983) (28,018) (11,23,942) Cash inflows from investing activities Purchase of property – – (463,528) (1,85,94,425) Purchase of fixed assets (203,477) (1,03,20,354) – – Investment expense in progress (4,595,477) (23,30,82,593) – – Loan from holding company 11,800,000 59,84,96,000 – – Issue of shares 7,290,000 36,97,48,800 – – Net change in cash & cash equivalents 8,668,107 43,96,46,387 5,601,590 22,47,07,783 Cash & cash equivalents at beginning of year 5,668,650 28,75,13,928 67,060 26,90,112 Cash & cash equivalents at end of year 6 14,336,757 72,71,60,315 5,668,650 22,73,97,895
The annexed notes form an integral part and should be read in conjunction with this statement.
81 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 82
Nava Bharat (Singapore) Pte Limited
Notes to the Financial Statements for the year ended March 31, 2009
The notes form an integral part of and should be read in conjunction with the accompanying financial statements. 1. GENERAL The company, which is domiciled and incorporated in Singapore, has its registered office at, 31, Cantonment Road, Singapore 089747. The principal activities of the Company are to carry on the business of general trading and exporters of natural minerals, coke, ferro alloys, ores and alloys. There have been no significant changes in the principal activities during the financial year. These financial statements of the company were authorised for issue in accordance with a resolution of the Board of Directors on May 29, 2009.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a. Basis of preparation The financial statements have been prepared in accordance with Singapore Financial Reporting Standards (FRS). The financial statements have been prepared on the historical cost basis except for certain financial assets and financial liabilities, which are stated at, amortised cost. The financial statements are presented in United States dollars, which is the Company's functional currency. The preparation of financial statements in conformity with FRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. There are no significant areas of estimation uncertainty or critical judgements in the application of accounting policies that have significant effect on the amount recognised in the financial statements. The accounting policies set out below have been applied consistently by the Company to all periods presented in these financial statements. The Company has not applied new or revised FRS and interpretation of FRS ("INT FRS") that have been issued but are not effective as at balance sheet date. The Management is of the opinion of these FRS and INT FRS is not expected to have significant impact on the financial statements for the year ended March 31, 2009.
b. Financial assets Financial assets are classified as either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available-for-sale financial assets, as appropriate. Financial assets are recognized on the balance sheet when, and only when, the Company becomes a party to the contractual provisions of the financial instrument. When financial assets are recognized initially, they are measured at fair value, plus, in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs. The Company determines the classification of its financial assets after initial recognition and, where allowed and appropriate, re-evaluates this designation at each financial year-end. Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss are financial assets classified as held for trading. Financial assets classified as held for trading are derivatives or are acquired principally for the purpose of selling or repurchasing them in the near term. Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in fair value of the financial assets are recognized in the income statement. Net gains or net losses on financial assets at fair value through profit or loss include exchange differences, interest and dividend income. Receivables Non-derivative financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Such assets are carried at amortised cost using the effective interest method, less impairment losses. Gains and losses are recognized in income statement when the loans and receivables are derecognised or impaired, as well as through the amortization process. The Company classifies the following financial assets as receivables: – Cash and short term deposits – Trade and other receivables
82 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 83
Annual Report 2008-09
Notes to the Financial Statements for the year ended March 31, 2009
Derecognition of financial assets and liabilities (i) Financial assets Receivable is derecognised when the contractual rights to receive cash flow from the asset have expired which usually coincides with receipt of payments for the asset. On derecognition, the difference between the carrying amount and the sum of the consideration received is recognized in the income statement. (ii) Financial liabilities A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. Impairment of financial assets The company assesses at each balance sheet date whether there is any objective evidence that a financial asset or group of financial assets is impaired. If there is objective evidence that an impairment loss on loans and receivables carried at amortised cost has been incurred, the amount of loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset's original effective interest rate (i.e. the effective interest rate computed at initial recognition). The carrying amount of the asset is reduced through the use of an allowance account. The amount of the loss is recognized in the income statement. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognized impairment loss is reversed. Any subsequent reversal of an impairment loss is recognised in the income statement, to the extent that the carrying value of the asset does not exceed its amortised cost at the reversal date. Impairment of non-financial assets The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset (i.e. an intangible asset with an indefinite useful life, or an intangible asset not yet available for use) is required, the Company makes an estimate of the assets recoverable amount. An asset's recoverable amount is the higher of an asset's or cash-generating unit's fair value less costs to sell and its value. in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Impairment losses of continuing operations are recognized in the income statement as `impairment losses'. An assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses recognized for an asset other than goodwill may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognized impairment loss is reversed only if there has been a change in the estimates used to determine the asset's recoverable amount since the last impairment loss was recognized. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Reversal of an impairment loss is recognised in the income statement. After such a reversal, the depreciation charge is adjusted in future periods to allocate the asset's revised carrying amount less any residual value on a systematic basis over its remaining useful life.
c. Financial liabilities Financial liabilities include trade payables, which are normally settled on 30-90 day terms, other payables and interest-bearing borrowings. The financial liabilities are recognized on the balance sheet when, and only when, the Company becomes a party to the contractual provisions of the financial instrument. Financial liabilities are initially recognized at fair value of consideration received less directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method.
83 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 84
Nava Bharat (Singapore) Pte Limited
Notes to the Financial Statements for the year ended March 31, 2009
Gains and losses are recognized in the income statement when the liabilities are derecognised as well as through the amortization process. The liabilities are derecognised when the obligations under the liability is discharged or cancelled or expired.
d. Foreign currency balances & transactions The Company's books and records are maintained in US Dollars, which is the functional currency of the Company. Foreign currency transactions during the year are translated into US Dollars at rates of exchange ruling on transaction dates. Monetary assets and liabilities in foreign currencies are translated into US Dollars at the rates of exchange closely approximate to those ruling at the balance sheet date. Translation differences are dealt with through the income statement.
e. Property, plant & equipment Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Depreciation is charged so as to write off the costs of assets over the estimated useful lives using the straight line method on the following bases: Motor vehicle 10 years Leasehold Building 60 years Renovation 3 years Computer 100% Fully depreciated assets are retained in the accounts until they are no longer in use.
f. Loans and borrowings Loans and borrowings are initially recognized at the fair value of the consideration received less directly attributable transaction costs. After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. Gains and losses are recognised in the income statement when the liabilities are derecognised as well as through the amortisation process.
g. Cash and cash equivalents Cash and cash equivalents are stated in the balance sheet at their fair values. For the purposes of cash flow statement, cash and cash equivalents comprise of cash in hand and. balances in bank.
h. Income Tax Tax expense is determined on the basis of tax effect accounting using the liability method and it is applied to all significant temporary differences arising between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, except that a debit to the deferred tax balance is not carried forward unless there is a reasonable expectation of realization in the foreseeable future. Deferred tax is charged or credited to the profit and loss statement except when it relates to items charged or credited directly to equity in which case the deferred tax is also dealt within equity. Deferred tax assets and liabilities are offset when the relate to income taxes levied by the same tax authority.
i. Revenue Recognition Revenue from the sale of goods is recognised when the goods are delivered to the customer which is taken to be the point in time when the customer has accepted the goods and related risks and rewards of ownership.
J Financial risk management The company's activities expose it to credit, foreign currency and liquidity risks. Risk management is carried out by the executive directors and senior management under policies approved by the Board. The Board provides principles for overall risk management as well as policies covering specific areas, such as credit risk and liquidity risks. Credit risk The company has no significant concentration of credit risk. The company has policies in place to ensure that sales of products are made to customers with an appropriate credit history and has a system of vigilant follow-up of debtors. Liquidity risk The company actively manages its operating cash flows and availability of funding and maintains adequate balance to finance the company's operations.
84 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 85
Annual Report 2008-09
Notes to the Financial Statements for the year ended March 31, 2009
Exchange risk The Company's sales and purchase are in USD and hence there is no significant foreign exchange risk. Fair value of financial assets and financial liabilities The carrying amounts of cash and cash equivalents, trade and other receivables, trade and other payables approximate their fair values due to the relatively short term maturity of these financial instruments.
3. PROPERTY, PLANT & EQUIPMENT Leasehold Computer Motor Renovation Total Building S$ S$ Vehicle S$ S$ S$ INR COST As at 1-4-2008 463,528 – – – 463,528 2,35,10,140 Additions during the year – 1,113 118,331 84,033 203,477 1,03,20,354 As at 31.3.2009 463,528 1,113 118,331 84,033 667,005 3,38,30,494 Depreciation As at 1-4-2008 23,176 – – – 23,176 11,75,487 Charges for year 7,725 1,113 11,833 28,011 48,682 24,69,151 As at 31.3.2009 30,901 1,113 11,833 28,011 71,858 36,44,638 NBV as at 31.3.2009 432,627 – 106,498 56,022 595,147 3,01,85,856 NBV as at 31.3.2008 440,352 – – – 440,352 1,76,64,720
4. INVESTMENT IN UNQUOTED SHARES 2009 2009 2008 2008 USD INR USD INR 15% Equity in PT Indonesia Camerlang 3,000,000 15,21,60,000 – –
INVESTMENT EXPENSE IN PROGRESS 2009 2009 2008 2008 USD INR USD INR Incidental expenses (Legal and professional expenses) 1,595,477 8,09,22,593 – – The investment expenses include legal and professional expenses incurred during the year towards acquisition of interest in companies which are primarily engaged in mining activities.
5. TRADE AND OTHER RECEIVABLES 2009 2009 2008 2008 USD INR USD INR Trade 4,585,320 23,25,67,430 10,996,129 44,11,09,715 GST 13,087 6,63,773 – – 4,598,407 23,32,31,203 10,996,129 44,11,09,715
85 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 86
Nava Bharat (Singapore) Pte Limited
Notes to the Financial Statements for the year ended March 31, 2009
6. CASH IN HAND AND BANK 2009 2008 Total Total USD USD SGD INR USD USD SGD INR Cash at bank 14,336,756 14,102,135 234,621 72,71,60,264 5,668,649 5,602,998 65,651 22,73,97,855 Cash in hand 1 – 1 51 1 – 1 40 14,336,757 14,102,135 234,622 72,71,60,315 5,668,650 5,602,998 65,652 22,73,97,895
7. SHARE CAPITAL 2009 2009 2008 2008 USD INR USD INR Issued and paid up with no par value 7,300,000/ 16,870 ordinary shares 7,300,000 37,02,56,000 10,000 4,01,150 The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All shares rank equally with regard to the Company's residual assets.
8. TRADE AND OTHER PAYABLES 2009 2009 2008 2008 USD INR USD INR Third party 71 3,601 – – Expenses payable to holding company 243,874 1,23,69,289 – – Trade payables to holding company 4,509,732 22,87,33,607 15,351,300 61,58,17,400 4,753,677 24,11,06,497 15,351,300 61,58,17,400
9. TAXATION 2009 2009 2008 2008 USD INR USD INR Current year 57,760 29,29,587 197,069 79,05,423 Prior year over paid (1,190) (60,357) – – 56,570 28,69,230 197,069 79,05,423 The income tax expense varies from the amount of income tax expense determined by applying the Singapore income tax rate of 17% (2008-18%) to profit before income tax as a result of certain non deductible items, tax exemption and rebates. 2009 2009 2008 2008 USD INR USD INR Profit before tax 310,965 1,57,72,145 1,205,502 4,83,58,712 Tax at 17%/18% 52,864 26,81,262 216,990 87,04,554 Less : Effect on tax on non taxable income 23,109 11,72,088 (1,324) (53,112) Less : Effect on tax of tax exemption (18,213) (9,23,763) (18,597) (7,46,019) Tax on current year income 57,760 29,29,587 197,069 79,05,423 Provision for taxation Balance at the beginning of year/date of incorporation 197,069 99,95,340 28,018 11,23,942 Current year charge 57,760 29,29,587 197,069 79,05,423 Payment during the year (197,069) (99,95,340) (28,018) (11,23,942) 57,760 29,29,587 197,069 79,05,423
86 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 87
Annual Report 2008-09
Notes to the Financial Statements for the year ended March 31, 2009
10. AMOUNT DUE TO DIRECTORS The amounts due to a director are non-trade unsecured, interest free and have no fixed terms of repayment.
11. LOAN FROM HOLDING COMPANY The loan from holding company is unsecured, interest bearing which is payable quarterly and repayable in 60 monthly installments commencing 12 months after the date of first disbursement.
12. REVENUE Revenue represents income from sale of minerals, ores and alloys.
13. STAFF COST 2009 2009 2008 2008 S$ INR S$ INR Director's salary 95,759 48,56,897 – – Staff Salary 204,704 1,03,82,587 – – CPF 1,464 74,254 – – Skill development levy 46 2,333 – – 301,973 1,53,16,071 – –
14. OPERATING PROFIT The following items have been included in arriving at profit from operations 2009 2009 2008 2008 USD INR USD INR Charging Audit fee 1,368 69,385 1,449 58,127 Exchange difference- net loss/ (gain) 87,712 44,48,753 (28,878) (11,58,441)
15. CHANGES IN WORKING CAPITAL 2009 2009 2008 2008 USD INR USD INR Changes in working capital Trade debtors 6,397,722 32,44,92,460 (5,203,082) (20,87,21,634) Trade creditors (10,597,623) (53,75,11,439) 10,066,754 40,38,27,837 Accruals (205) (10,397) 786 31,530 Amount due to directors 44,460 22,55,011 – – Short term investments (1,631,061) (8,27,27,414) – – (5,786,707) (29,35,01,779) 4,864,458 19,51,37,733
87 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 88
Nava Bharat (Singapore) Pte Limited
16. RELATED PARTY DISCLOSURES An entity or individual is considered a related party of the Company for the purposes of the financial statements if. (i) it possessed the ability (directly or indirectly) to control or exercise significant influence over the operating and financial decisions of the Company vice versa; or (ii) it is subject to common control or common significant influence. (a) Compensation of key management personnel 2009 2009 2008 2008 S$ INR S$ INR Short-term employee benefits 300,463 1,52,39,483 – – Provident fund contributions 1,464 74,254 – – Total compensation paid/payable to key management personnel 301,927 1,53,13,737 – – Comprising amounts paid / payable to: – Directors of the Company 95,759 48,56,896 – –
Other than disclosed elsewhere in the financial statements, the transactions with related parties carried out on terms agreed between the parties are as follows: 2009 2009 2008 2008 USD INR USD INR Purchases from holding company 90,221,845 457,60,51,978 124,855,996 500,05,75,280 Expenses reimbursed 243,874 1,23,69,289 – – Note: Indian Rupee equivalent of figures have been arrived at by applying the year and inter bank exchange rate USD = Rs. 50.72 (previous year Rs. 40.115) and do not form part of the Reports of Nava Bharat (Singapore) Pte Limited as made out in accordance with the laws of the country of incorporation.
88 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 89
Brahmani Infratech Private Limited
Notice to Shareholders
Notice is hereby given that the 10th Annual General Meeting of the such proxy need not be a member of the Company. The proxy form Company will be held on Thursday, the 30th July, 2009 at 11.00 a.m. duly signed must be deposited at the Registered Office of the at 6-3-1109/1, ‘Nava Bharat Chambers’, Raj Bhavan Road, Hyderabad Company not later than 48 hours before the time of holding the – 500 082, to transact the following business: meeting. Ordinary Business: 2. The Explanatory Statement in respect of Special Business in the 1. To receive, consider and adopt the audited Profit & Loss Account Notice, pursuant to Section 173 (2) of the Companies Act, 1956, for the year ended March 31, 2009 and the Balance Sheet as at is annexed hereto. that date and the Reports of the Directors and Auditors thereon. 2. To appoint a Director in place of Sri P. Trivikrama Prasad, who retires Explanatory statement (pursuant to Section 173 (2) of the by rotation and, being eligible, offers himself for Companies Act 1956): re-appointment. Item No. 4 Appointment of Dr. M. V. G. Rao as Director, liable to retire by 3. To appoint Auditors and fix their remuneration. rotation: Special Business: Pursuant to Clause 49 of the Listing Agreement, one of the 4. Appointment of Dr. M. V. G. Rao as Director, liable to retire by Independent Directors of the Holding Company is required to be rotation : appointed on the Board of subsidiary Companies. The Board of Nava To consider and if thought fit, to pass with or without Bharat Ventures Limited (Holding Company) accordingly nominated modification(s), the following resolution as an Ordinary Resolution: earlier Dr. G. Sreeramjee on the Board of the Company which was “RESOLVED THAT Dr. M. V. G. Rao, in respect of whom, the approved by the General Body of the Company. Dr. G. Sreeramjee, Company has received a notice in writing under Section 257 of the Director of the Company, expressed his unwillingness to continue on Companies Act, 1956, from a member signifying his intention to the Board on health grounds, with effect from the forthcoming Annual propose him as a candidate for the office of Director of the General Meeting. The Board of Nava Bharat Ventures Limited, therefore Company, be and is hereby appointed as a Director of the nominated one of its Independent Directors, Dr. M.V.G.Rao, for Company, liable to retire by rotation.” appointment as Director of the Company. In this regard, the Company has also received a notice in writing under By Order of the Board Section 257 of the Companies Act, 1956, from a member along with for Brahmani Infratech Private Limited a deposit of Rs.500/- signifying the intention to propose him as a Place: Hyderabad P. Trivikrama Prasad candidate for the office of Director at the ensuing Annual General Date : May 28, 2009 Director Meeting of the Company.
Regd. Office: The Board commended the Resolution for your approval. 6-3-1109/1, ‘Nava Bharat Chambers’ None of the Directors is interested or concerned in the above proposed Raj Bhavan Road Ordinary resolution. Hyderabad - 500 082 By Order of the Board for Brahmani Infratech Private Limited NOTES : 1. A member entitled to attend and vote at the meeting is entitled to Place: Hyderabad P. Trivikrama Prasad appoint a proxy to attend and vote instead of himself/herself and Date : May 28, 2009 Director
89 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 2:39 PM Page 90
Brahmani Infratech Private Limited
Directors' Report
Dear Members, from a member signifying the intention to propose him as a candidate for Your Directors have pleasure in presenting their 10th Annual Report the office of Director at the ensuing Annual General Meeting of the together with the Audited Balance Sheet of the Company as at March 31, Company. 2009 together with the Auditors' Report thereon. Fixed Deposits: Review of operations : The Company has not accepted nor held any public deposits pursuant to The Company entered into a Joint Development Agreement with Section 58A of the Companies Act, 1956, read with The Companies M/s. Mantri Technology IT Parks Private Limited (MTPL), a subsidiary of M/s. (Acceptance of Deposits) Rules, 1975. Mantri Developers Private Limited of Bangalore (Mantri) for development of Auditors: IT/ITES SEZ facility and commercial and residential amenities attendant to M/s. Brahmayya & Co., Chartered Accountants, the Auditors of the such facility. Company retire at the conclusion of the Annual General Meeting and have The development plan envisages compliance with the conditions stipulated expressed their willingness to continue in office, if re-appointed. by the Government of Andhra Pradesh / APIIC within the permissible time frame, as amended from time to time. Directors’ Responsibility Statement: The Directors confirm that in the preparation of Annual Accounts for the Mantri is inducted as a co-developer and technical associate of the SEZ year ended 31.03.2009: project and will implement the scheme in a period of 5 years. MTPL was - Applicable accounting standards have been followed. approved as the Co-Developer by the Board of Approvals, Ministry of Commerce on January 15, 2009. APIIC executed the Sale Deed for 150 acres - The accounting policies framed in accordance with the guidelines of (SEZ Area) in favour of the Company on February 02, 2009. the Institute of Chartered Accountants of India have been applied. NOC from Airports Authority for construction was also received during - Reasonable and prudent judgement and estimates were made so as to March 2009. give a true and fair view of the state of affairs of the Company. During the year under review, the Authorized Share Capital of the Company - Proper and sufficient care has been taken for the maintenance of was enhanced to Rs. 50 Crores. adequate accounting records in accordance with the provisions of the Companies Act, as applicable. Directors: Sri P. Trivikrama Prasad, Director, retires at the ensuing Annual General - The accounts have been prepared on ‘a going concern’ basis. Meeting and being eligible, offers himself for re-appointment. Conservation of Energy, Technology Absorption and Foreign Exchange Dr. G. Sreeramjee, Director of the Company, expressed his unwillingness to earnings and outgo: continue on the Board on health grounds, with effect from the forthcoming Technology Absorption, conservation of Energy, Foreign Exchange earnings Annual General Meeting. The Board recorded its appreciation of his valuable and outflow are nil, as the Company has not yet started the commercial contributions during his long tenure on the Board of the Company. operations.
The Board of M/s. Nava Bharat Ventures Limited (Holding Company) Particulars of Employees: nominated one of its Independent Directors, Dr. M.V.G.Rao, for As required by the provisions of Section 217 (2A) of the Companies Act appointment as Director of the Company. In this regard, the Company has 1956 read with the Companies Particulars of Employees Rules, 1975 as received a notice in writing under Section 257 of the Companies Act, 1956, amended, the particulars of the employees are as follows :
Sl. Name of the Employee Designation/ Age Qualification Experience [Total Remuneration Date of Details of last No. Nature of duties (Years) period in career] (Rs. in Lakhs) Commencement of employment (Years) employment 1 Sri G. Chaitanya Reddy Vice President 33 BBM., MIB. 11 24.00 01.03.2007 Vice President (Infrastructure) Malaxmi NBFA Ventures Private Limited
Acknowledgements: Your Directors gratefully acknowledge the support and co-operation extended by the Regulatory Authorities and Company’s Bankers.
By Order of the Board for Brahmani Infratech Private Limited
P. Trivikrama Prasad Director
Place: Hyderabad D. Ashok Date : May 28, 2009 Director
Regd. Office: 6-3-1109/1 ‘Nava Bharat Chambers’ Raj Bhavan Road Hyderabad – 500 082
90 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 91
Annual Report 2008-09
Auditors’ Report
To The Members of Brahmani Infratech Private Limited Hyderabad
1. We have audited the attached Balance Sheet of BRAHMANI iv) In our opinion, the Balance Sheet, Profit and Loss account and INFRATECH PRIVATE LIMITED HYDERABAD (A.P) as at March 31, Cash Flow Statement dealt with by this report comply with the 2009 and also the Profit and Loss Account and the Cash Flow accounting standards referred to in sub-section (3C) of Section Statement for the year ended on that date annexed thereto. These 211 of the Companies Act, 1956:
financial statements are the responsibility of the Company’s v) On the basis of written representations received from the Management. Our responsibility is to express an opinion on these Directors, as on March 31, 2009 and taken on record by the financial statements based on our audit. Board of Directors, we report that, none of the Directors is
2. We conducted our audit in accordance with the auditing standards disqualified as on March 31, 2009 from being appointed as a generally accepted in India. Those Standards require that we plan Director in terms of clause (g) of sub-section (1) of Section 274 and perform the audit to obtain reasonable assurance about of the Companies Act, 1956; whether the financial statements are free of material misstatement. vi) In our opinion and to the best of our information and An audit includes examining, on a test basis, evidence supporting according to the explanations given to us, the said accounts the amounts and disclosures in the financial statements. An audit read in conjunction with the Schedules annexed therewith give also includes assessing the accounting principles used and the information required by the Companies Act, 1956, in the significant estimates made by management, as well as evaluating manner so required and give a true and fair view in conformity the overall financial statement presentation. We believe that our with the accounting principles generally accepted in India: audit provides a reasonable basis for our opinion. a) in the case of the balance sheet, of the state of affairs of the Company as at March 31, 2009; 3. As required by the Companies (Auditors’ Report) Order, 2003 ( as amended), issued by the Central Government of India in terms of b) in the case of the profit and loss account, of the Profit of sub-section (4A) of Section 227 of the Companies Act, 1956, we the Company for the year ended on that date; and enclose in the Annexure a statement on the matters specified in c) in the case of cash flow statement, of the cash flows for paragraphs 4 and 5 of the said Order. the year ended on that date.
4. Further to our comments in the Annexure referred to above, we for Brahmayya & Co. report that: Chartered Accountants i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the (P. Chandramouli) purposes of our audit. Place: Hyderabad Partner
ii) In our opinion, proper books of account as required by law Date : May 28, 2009 Membership No.25211 have been kept by the Company so far as appears from our examination of those books.
iii) The Balance Sheet, Profit and Loss Account and Cash Flow statement dealt with by this report are in agreement with the books of account.
91 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 92
Brahmani Infratech Private Limited
Annexure to the Auditor’s Report
referred to in paragraph 3 of our report of even date, Re: Brahmani Infratech Private Limited, Hyderabad.
1. a) The Company has maintained proper records showing full business with regard to purchase of inventory and fixed assets and particulars, including quantitative details and situation of fixed with regard to sale of goods and services. During the course of our assets. audit, we have not observed any continuing failure to correct
b) As explained to us, the management has physically verified all major weaknesses in internal control system.
the fixed assets during the year and there is a regular 5. a. On the basis of our examination of the books of account and programme of verification which, in our opinion, is reasonable according to the information and explanations given to us, the having regard to the size of the Company and the nature of Company has not entered into any transaction that needs to the assets. As informed, no material discrepancies were be entered in the Register maintained under Section 301 of the noticed on such verification. Companies Act, 1956.
c) During the year the Company has not disposed off any fixed b. In view of our comment in paragraph (a) above, clause V (b) of assets. aforesaid Order, in our opinion, is not applicable.
2. a) The inventory has been physically verified during the year by 6. The Company has not accepted any deposits from the public. the management. In our opinion, the frequency of verification Hence the provisions of Section 58A and 58AA or any other is reasonable. relevant provisions of the Companies Act, 1956, and the b) In our opinion, the procedures of physical verification of Companies (Acceptance of Deposits) Rules, 1975, do not apply to inventories followed by the management are reasonable and this Company. adequate in relation to the size of the Company and the nature 7 a. According to the records of the Company, the Company is of its business. regular in depositing with appropriate authorities undisputed c) The Company is maintaining proper records of inventory. The statutory dues including Provident Fund, Investor Education discrepancies noticed on physical verification between the and Protection Fund, Employees' State Insurance, Income-tax, physical stocks and book records were not material. Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty,
3. a. During the year, the Company has neither granted nor taken Cess and other material statutory dues applicable to it.
any loans, secured or unsecured to/from Companies, firms or b. According to the information and explanations given to us, no other parties covered in the register maintained under Section undisputed amounts payable in respect of Income-tax, wealth 301 of the Companies Act, 1956. tax, Sales tax, Custom Duty, Excise Duty and Cess were in b. In view of our comment in paragraph (a) above, (III) (b), (c), arrears, as at March 31, 2009 for a period of more than six (d), (e), (f) and (g) of paragraph 4 of the aforesaid order are months from the day they became payable. not applicable to the Company. c. According to the information and explanation given to us, 4. In our opinion and according to the information and explanations there are no dues of sale tax, income tax, custom duty, wealth given to us, there are adequate internal control systems tax, excise duty and Cess which have not been deposited on commensurate with the size of the Company and the nature of its account of any dispute.
92 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 93
Annual Report 2008-09
8. The Company has no accumulated losses as at the end of the 17. The Company has not issued any debentures during the year, financial year. The Company has not incurred any cash losses therefore the question of creating security or charge in respect during the financial year covered by our audit however there was thereof does not arise. cash losses in the immediately preceding financial year. 18. During the year, the Company has not made any public issue and 9. In our opinion and according to the information and explanations therefore the question of disclosing the end use of money raised by given to us, the Company has not defaulted in repayment of dues public issue does not arise. to any financial institutions and banks. 19. Based upon the audit procedures performed and according to the 10. The Company has not granted any loans and advances on the basis information and explanations given to us, we report that no fraud of security by way of pledge of shares, debentures and other on or by the Company has been noticed or reported during the securities. year.
11. The Company is not a chit fund or a nidhi/mutual benefit fund/ 20. The Clauses of 4 (vii) and (viii), of the Order are not applicable to society. Therefore, the provisions of clause 4(xiii) of the Companies the Company for the time being. (Auditor’s Report) Order, 2003 are not applicable to the Company. for Brahmayya & Co. 12. The Company is not dealing or trading in shares, securities, Chartered Accountants debentures and other investments. Therefore, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are (P. Chandramouli) not applicable to the Company. Place: Hyderabad Partner Date : May 28, 2009 Membership No.25211 13. According to the information and explanations given to us, the Company has not given any guarantee for the loans taken by others from banks or financial institutions.
14. During the year the Company has not obtained any term loans.
15. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.
16. During the year, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.
93 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 94
Brahmani Infratech Private Limited
Balance Sheet as at March 31, 2009
(Amount in Rupees) Particulars Schedule As at As at reference 31.3.2009 31.3.2008
I. SOURCES OF FUNDS: 1. Shareholders Funds: a) Share Capital 01 100,020 100,020 b) Surplus: Profit and Loss account balance 6,695,268 – Total 6,795,288 100,020 II. APPLICATION OF FUNDS: 1. Fixed Assets: 02 a) Gross Block 1,330,600 – b) Less:Depreciation 160,309 – c) Net Block 1,170,291 – 2. Current Assets, Loans and Advances: a) Inventories 03 521,977,160 500,022,105 b) Cash and Bank balances 04 297,255,013 256,641,553 c) Other Current Assets 05 8,782,636 48,021,134 d) Loans and Advances 06 20,853,550 10,912,347 848,868,359 815,597,139 Less: Current Liabilities and Provisions 07 a) Current Liabilities 831,960,083 831,760,007 b) Provisions 11,283,279 96,224 843,243,362 831,856,231 Net Current Assets 5,624,997 (16,259,092) 3. a) Miscellaneous Expenditure (to the extent not written off or adjusted) Preliminary Expenses – 181,269 b) Profit and Loss Account – 16,177,843 – 16,359,112 Total 6,795,288 100,020 Notes on Accounts 11
Per our report of even date. For and on behalf of the Board
For Brahmayya & Co. Chartered Accountants
P. Chandramouli Partner P. Trivikrama Prasad Director
Hyderabad D. Ashok May 28, 2009 Director
94 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 95
Annual Report 2008-09
Profit and Loss Account for the year ended March 31, 2009
(Amount in Rupees) Particulars Schedule Current year Previous year reference I. INCOME: Income from Investments 9,016,403 – Profit from sale of Short Term Investments 124,894 – Interest earned (Others) (Gross) 28,240,136 3,631,967 Tax Deducted at Source : Previous Year: Rs. 8,23,004/- Tax Deducted at Source : Current Year : Rs. 53,74,669/- Credit Balance Written Back – 181,269 Staff Supporting Charges 13,812 – Closing Work-in-progress 521,977,160 500,022,105 Total 559,372,405 503,835,341 II. OUTGOINGS: Opening Work-in-progress 500,022,105 523,671,317 Land Transfer Registration Fees 9,000,000 – Land Development charges – 2,188,401 Compound Wall Construction – 12,297,078 Electrical Works – 686,200 Payments and benefits to Employees 08 4,312,986 4,184,050 Finance Charges 09 3,109 16,683,594 Other Expenses 10 4,922,794 5,820,163 Depreciation 02 160,309 – Provision for Fringe Benefit Tax 84,530 80,000 Preliminary Expenses written off 181,269 – Expenditure pertaining to earlier years 6,876,633 – 525,563,735 565,610,803 Less: Amount reimbursed by the Co-developer 186,720 48,018,134 Total 525,377,015 517,592,669 III. PROFIT/(LOSS) FOR THE YEAR BEFORE TAXATION 33,995,390 (13,757,328) IV. PROVISION FOR TAXATION : Income Tax 10,000,000 – : Income Tax of earlier years 1,122,279 – 11,122,279 – V. PROFIT FOR THE YEAR AFTER TAXATION 22,873,111 (13,757,328) Less : Loss brought forward from last Year (16,177,843) (2,420,515) VI. PROFIT/(LOSS) CARRIED TO BALANCE SHEET 6,695,268 (16,177,843) Earnings per share – (Basic and Diluted) 2,399 (1,375) Notes on Accounts 11
Per our report of even date. For and on behalf of the Board
For Brahmayya & Co. Chartered Accountants
P. Chandramouli Partner P. Trivikrama Prasad Director
Hyderabad D. Ashok May 28, 2009 Director
95 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 96
Brahmani Infratech Private Limited
Cash Flow Statement for the year ended March 31, 2009
(Amount in Rupees) Particulars Year ended Year ended 31.3.2009 31.3.2008 A. CASH FLOW FROM OPERATING ACTIVITIES: Net Profit /(Loss) before Tax 34,079,920 (13,677,328) Adjustments for: Interest earned (28,240,136) (3,631,967) Income from Investments (9,016,403) – Profit from sale of Short Term Investments (124,894) – Credit balance written back – (181,269) Interest expenses – 16,644,827 Depreciation 160,309 – Preliminary Expenses written off 181,269 – Operating Profit before Working Capital Changes (2,959,935) (845,737) Adjustments for: Decrease in Trade and Other receivables 47,166,307 26,991,866 Increase in Inventories (21,955,055) 23,649,212 Increase in Trade and Other payables 200,076 180,176,485 Cash generated from Operations 22,451,393 229,971,826 Direct Taxes paid (9,870,450) (893,914) Net Cash from Operating Activities (A) 12,580,943 229,077,912 B. CASH FLOW FROM INVESTING ACTIVITIES: Purchase of Fixed Assets (1,330,600) – Purchase of Investments (including advances) (942,946,671) 50,000,000 Sale of Investments 942,946,671 – Interest received 20,221,820 3,631,967 Income from Investments 9,016,403 – Profit from sale of Short Term Investments 124,894 – Net Cash used in Investing Activities (B) 28,032,517 53,631,967 C. CASH FLOW FROM FINANCING ACTIVITIES: Proceeds from borrowings – (10,154,110) Interest Paid – (16,644,827) Net Cash generated in Financing Activities (C) – (26,798,937) Net increase in Cash and Cash Equivalents (A+B+C) 40,613,460 255,910,942 Cash and Cash equivalents as at April 01, 2008 256,641,553 730,611 Cash and Cash equivalents as at March 31, 2009 297,255,013 256,641,553 Notes: Cash and Cash equivalents include: Cash and Cheques on hand – 252,036,850 Balance with Scheduled banks in Current Accounts 107,255,013 4,604,703 Balance with Scheduled banks in Deposit Accounts 190,000,000 – 297,255,013 256,641,553
Per our report of even date. For and on behalf of the Board
For Brahmayya & Co. Chartered Accountants
P. Chandramouli Partner P. Trivikrama Prasad Director
Hyderabad D. Ashok May 28, 2009 Director
96 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 97
Annual Report 2008-09
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009
(Amount in Rupees) Particulars As at As at 31.3.2009 31.3.2008 1. SHARE CAPITAL Authorised: 50,000,000 (Previous year 10,000,000)- Equity Shares of Rs.10/- each 500,000,000 100,000,000 500,000,000 100,000,000 Issued, subscribed and paid-up: 10,002 - Equity Shares of Rs.10/- each fully paid 100,020 100,020 Total 100,020 100,020
2. FIXED ASSETS S.No Particulars Gross Block Depreciation Net Block Additions for the Year up to 31.03.09 as on 31.03.09 during the year 1 Computers 101,000 23,687 23,687 77,313 2 Furnitures and Fixtures (Interiors) 1,229,600 136,622 136,622 1,092,978 Total 1,330,600 160,309 160,309 1,170,291
Particulars As at As at 31.3.2009 31.3.2008 3. INVENTORIES (at cost) Project work-in-progress 521,977,160 500,022,105 Total 521,977,160 500,022,105
4. CASH AND BANK BALANCES Cash in hand – 56,880 Cash with Scheduled Banks : In Current Account 107,255,013 4,604,703 : In Deposit Account 190,000,000 – : Cheques on hand – 251,979,970 Total 297,255,013 256,641,553
5. OTHER CURRENT ASSETS Accrued Interest 8,018,316 – Other receivables 586,720 48,018,134 Deposits Recoverable 177,600 3,000 Total 8,782,636 48,021,134
6. LOANS AND ADVANCES (Unsecured, considered good, recoverable in cash or in kind or for value to be received) Advance for Expenses and others 10,090,507 10,000,000 Advance Tax and Tax Deducted at Source 10,763,043 912,347 Total 20,853,550 10,912,347
97 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 98
Brahmani Infratech Private Limited
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009
(Amount in Rupees) Particulars As at As at 31.3.2009 31.3.2008 7. CURRENT LIABILITIES AND PROVISIONS a) Current liabilities: Sundry Creditors: – Due to Micro and Small Enterprises 422,531 378,528 – Due to other than Micro and Small Enterprises – – Creditors for Other Finance 287,552 131,479 Share Application Money pending allotment 831,250,000 831,250,000 Total (a) 831,960,083 831,760,007 b) Provisions: – for Income Tax 11,122,279 – – for Fringe Benefit Tax 161,000 96,224 Total (b) 11,283,279 96,224 Total (a+b) 843,243,362 831,856,231
Particulars Current year Previous year 8. PAYMENTS AND BENEFITS TO EMPLOYEES Salaries, Wages and Bonus 3,405,341 3,472,137 Workmen and Staff Welfare Expenses 907,645 711,913 Total 4,312,986 4,184,050
9. FINANCE CHARGES Interest on : Term Loans – 2,321,774 : Others – 14,323,053 Bank Charges and Commission 3,109 38,767 Total 3,109 16,683,594
10. OTHER EXPENSES Rent 935,004 1,052,493 Electricity Charges 135,087 169,086 Office Maintenance Expenses 18,579 – Rates and Taxes 502,892 34,805 Printing and Stationery 24,702 98,550 Communications 154,726 166,765 Travelling and Conveyance 198,258 436,185 Professional charges 313,000 991,456 Security Charges 52,133 577,252 Auditors remuneration : as Auditors 55,150 56,180 : for Certification 1,102 – Filing Fees 2,001,500 – General Charges 261,265 386,502 Advertisement and Business Promotion 212,638 1,764,264 Subscriptions and Membership Fees 54,000 – Repairs and Maintenance to other Assets 2,758 – Expenditure relating to earlier years – 86,625 Total 4,922,794 5,820,163
98 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 99
Annual Report 2008-09
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009
11. NOTES ON ACCOUNTS 1. The following are the significant accounting policies adopted by the Company in the preparation and presentation of financial statements. a) Financial statements are based on historical costs and on accrual basis. b) The preparation of financial statements requires the management of the Company to make certain estimates and assumptions that effect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expenditure during the year. Any revision to such estimates is recognized prospectively in the year in which it is revised. c) Tangible Fixed Assets are stated at cost net of depreciation provided/amortisation. d) Depreciation on the assets of the Company is provided on written down value method as per Schedule XIV to the Companies Act, 1956, except partitions and interiors carried out to leased premises which are amortized over the primary lease period. e) Work-in-progress is valued at cost. f) Preliminary Expenses are written off in the year in which there is profit to absorb the same. g) All contingent liabilities are indicated by way of a note and will be provided/paid on crystalisation. h) All items of income/expenditure pertaining to prior period, which are material, are accounted through "prior period adjustments" and the others are shown under respective heads of account in the Profit and Loss Account. i) Deferred tax asset and liability is calculated by applying the tax rate and tax laws that have been enacted or substantially enacted by the balance sheet date. Deferred tax assets are recognized and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised.
2. Out of 10,002 Equity Shares of Rs.10/- each fully paid up,10,000 shares are held by the holding Company viz., Nava Bharat Ventures Limited, Hyderabad.
3. Share application money includes an amount of Rs.63,00,00,000/- (Previous year Rs.63,00,00,000/-) received from Nava Bharat Ventures Limited., the holding Company.
4. Depreciation on the assets of the Company is provided on written down value method as per Schedule XIV to the Companies Act, 1956, except partitions and interiors carried out to leased premises which are amortized over the primary lease period.
5. a. During the year 2006-2007 the Company has started development of IT Park cum Special Economic Zone (SEZ) in 250 Acres of land allotted by APIIC Limited. Out of which an IT/ITES SEZ in 150 acres and Residential/amenities in the balance 100 acres was envisaged. The expenditure incurred for development of the said land is treated as work-in-progress for the time being and will be written off in proportion of its utilization on completion of development. b. The Company has entered into a development Agreement with M/s. Mantri Technology Parks Pvt Ltd., Bangalore for the development of IT/ITES SEZ in 150 Acres of the land allotted as above. The Developer has, pursuant to this agreement, undertaken compliance of the conditions stipulated by the GoAP/APIIC Limited including construction, development and marketing of the developed space covering IT/ITES, commercial and residential accommodation. The Developer has, at the behest of the Company, paid security deposit pursuant to this agreement to the holding company, Nava Bharat Ventures Limited, and appropriate interest compensation thereof has been provided in the books of the Company.
6. In the opinion of the management, the current assets, loans and advances are expected to realise at least the amount at which they are stated, if realised in the ordinary course of business and provision for all known liabilities have been adequately made in the accounts.
7. Disclosure of Sundry Creditors under current liabilities is based on the information available with the Company regarding the status of the suppliers as defined under the “Micro, Small and Medium Enterprises Development Act, 2006” and relied upon by the Auditors. During the year the Company has paid no interest in terms of Section 16 of the said Act.
8. The other particulars as required under part II, Schedule VI to the Companies Act, 1956 are not given as they are not applicable to the Company for the time being.
99 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 100
Brahmani Infratech Private Limited
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009
11. NOTES ON ACCOUNTS (Contd.) 9. Calculation of Earnings per share (Amount in Rupees) Current year Previous year a) Net profit available to Equity shareholders (in Rs.) 239,95,390 (137,57,328) b) Weighted average number of Equity shares (Nos.) 10,002 10,002 c) Face value as per share (in Rs.) 10 10 d) Earnings per share (in Rs.)- Basic and Diluted 2,399 (1,375)
10. In terms of Accounting Standard (AS 22) on "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, there is a net deferred tax asset as on March 31, 2009. In compliance with the provisions of the Accounting Standard and based on general prudence, the Company has not recognized the said deferred tax asset while preparing the accounts for the current year.
11. Investments bought and sold during the year (units in Mutual Funds): Name of the Fund Face Value No. of Purchase cost Rs. units Rs. Kotak Flexi Debt Fund 10 4,984,498 50,000,000 Kotak Flexi Debt Fund-Institutional 10 9,009,450 90,522,452 DSP ML Liquid Plus Fund 1,000 99,920 100,000,000 Birla Sunlife Liquid Plus Fund 10 9,993,205 100,000,000 ICICI Flexible Income Plan Fund 10 9,457,606 100,000,000 ICICI Intervel Fund 10 10,160,267 101,603,686 Mirae Asset Liquid Plus Fund 1,000 99,860 100,000,000 Birla Sunlife Liquid Plus Fund 10 9,993,205 100,000,000 Templeton India Ultra Short Fund 10 9,988,413 100,000,000 Templeton India Treasury Management Fund 1,000 100,753 100,820,533 Total 942,946,671
12. The details of related party transactions in terms of Accounting Standard (AS 18) are as follows: a. Names of related parties and relation with the Company: i. Key Management Personnel: Sri D Ashok, Director Sri P Trivikrama Prasad, Director Sri Y Harish Chandra Prasad, Director Dr G Sreeramjee, Director ii. Enterprises controlling the reporting Enterprise. M/s.Nava Bharat Ventures Limited b. Transactions with related Parties during the year: (Amount in Rupees) Enterprises controlling the reporting Enterprise. 2008-09 2007-08 Nava Bharat Ventures Limited Share Application Money received – 198,950,000 c. Balances due as at the year end. Nil
13. Previous year figures are regrouped and reclassified where ever necessary to make them comparable with those of current year.
Per our report of even date. For and on behalf of the Board For Brahmayya & Co. Chartered Accountants P. Chandramouli Partner P. Trivikrama Prasad Director
Hyderabad D. Ashok May 28, 2009 Director
100 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 101
Annual Report 2008-09
Statement pursuant to part-IV of Schedule VI to the Companies Act, 1956
Balance Sheet abstract and Company's general business profile I. Registration details Registration No. U40109AP1999PTC032289 State Code 01 Balance Sheet Date 31 03 2009
II. Capital raised during the year (Rupees in thousands) Public issue NIL Rights issue NIL Bonus Shares NIL Private placement NIL
III. Position of mobilisation and deployment of funds (Rupees in thousands) Total Liabilities 850039 Total Assets 850039 Sources of Funds: Paid-up Capital 100 Share Application Money NIL Reserves & Surplus 6695 Secured Loans NIL Unsecured Loans NIL Deferred tax liability NIL Application of Funds: Net Fixed Assets 1170 Investments NIL Net Current Assets 5625 Miscellaneous Expenditure NIL Accumulated Losses NIL
IV. Performance of Company (Rupees in thousands) Turnover (Gross Revenue) 559372 Total Expenditure 525377 +/- Profit or Loss before Tax + 33995 +/- Profit or Loss after Tax + 22873 Earnings per share in Rs. 2399 Dividend Rate % NIL
V. Generic name of three principal products/services of Company (as per monetary terms) Product description Development of Special Economic Zones (SEZs) and Infrastructure
Per our report of even date. For and on behalf of the Board For Brahmayya & Co. Chartered Accountants P. Chandramouli Partner P. Trivikrama Prasad Director
Hyderabad D. Ashok May 28, 2009 Director
101 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 102
Kinnera Power Company Limited
Notice to Shareholders
Notice is hereby given that the 16th Annual General Meeting of the Company not later than 48 hours before the time of holding the Company will be held on Thursday, the 30th July, 2009 at 12.30 p.m. meeting. at 6-3-1109/1, 'Nava Bharat Chambers', Raj Bhavan Road, Hyderabad - 2. An Explanatory Statement pursuant to Section 173(2) of the 500 082 to transact the following business: Companies Act, 1956, relating to the Special Business to be Ordinary Business: transacted at the Meeting is annexed hereto. 1. To receive, consider and adopt the audited Profit & Loss Account for the year ended March 31, 2009 and the Balance Sheet as at Explanatory statement (pursuant to Section 173 (2) of the that date and Reports of the Directors and Auditors thereon. Companies Act 1956): 2. To appoint a Director in the place of Sri J. Ramesh, who retires by Item No. 4 rotation and, being eligible, offers himself for re-appointment. Appointment of Dr. M. V. G. Rao as Director, liable to retire by rotation: 3. To appoint Auditors and fix their remuneration. Pursuant to Clause 49 of the Listing Agreement, one of the Special Business: Independent Directors of the Holding Company is required to be 4. Appointment of Dr. M. V. G. Rao as Director, liable to retire by appointed on the Board of subsidiary Companies. The Board of Nava rotation : Bharat Ventures Limited (Holding Company) accordingly nominated To consider and if thought fit, to pass with or without earlier Dr. G. Sreeramjee on the Board of the Company which was modification(s), the following resolution as an Ordinary Resolution: approved by the General Body of the Company. Dr. G. Sreeramjee “RESOLVED THAT Dr. M. V. G. Rao, in respect of whom, the expressed his unwillingness for re-appointment, since he was unable to Company has received a notice in writing under Section 257 of the attend the meetings on health grounds and therefore he would not like Companies Act, 1956, from a member signifying his intention to to offer himself for re-appointment at the forthcoming Annual General propose him as a candidate for the office of Director of the Meeting of M/s. Nava Bharat Ventures Limited and Kinnera Power Company, be and is hereby appointed as a Director of the Company Limited. The Board of Nava Bharat Ventures Limited, Company, liable to retire by rotation.” therefore nominated one of its Independent Directors, Dr. M. V. G. Rao, for appointment as Director of the Company. By Order of the Board In this regard, the Company has also received a notice in writing under for Kinnera Power Company Limited Section 257 of the Companies Act, 1956, from a member along with Place: Hyderabad B. Srinivas a deposit of Rs. 500/- signifying the intention to propose him as a Date : May 28, 2009 Managing Director candidate for the office of Director at the ensuing Annual General Regd. Office: Meeting of the Company. 6-3-1109/1, ‘Nava Bharat Chambers’ The Board commended the Resolution for your approval. Raj Bhavan Road None of the Directors is interested or concerned in the above proposed Hyderabad – 500 082 Ordinary resolution.
NOTES : By Order of the Board 1. A member entitled to attend and vote at the meeting is entitled to for Kinnera Power Company Limited appoint a proxy to attend and vote instead of himself/herself and such proxy need not be a member of the Company. The proxy form Place: Hyderabad B. Srinivas duly signed must be deposited at the Registered Office of the Date : May 28, 2009 Managing Director
102 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 103
Annual Report 2008-09
Directors' Report
Dear Members: nominated one of its Independent Directors, Dr. M.V.G.Rao, for Your Directors have pleasure in presenting the 16th Annual Report appointment as Director of the Company. In this regard, the Company together with the Audited Balance Sheet of the Company as on has received a notice in writing under Section 257 of the Companies March 31, 2009 and Auditors' Report thereon. Act, 1956, from a member signifying the intention to propose him as a candidate for the office of Director at the ensuing Annual General Operations: Meeting of the Company. The Company is a subsidiary of Nava Bharat Ventures Limited (NBVL) with 51% equity stake. The balance equity is held by M/s. Meenakshi Audit Committee: Infrastructure Private Limited (MIPL). The Board of Directors has constituted the Audit Committee in
The project relating to development, construction and operation of the conformity with the requirements of Section 292A of the Companies Highway on a full turn key basis was entrusted to MIPL of Meenakshi Act, 1956. Group, a renowned Organization in this field. The Audit Committee comprises three Independent Directors as follows: The Company continues to act as an investment vehicle for Nava Bharat Sri C. S. Prasad Chairman Ventures Limited for the National Highway Project, which is being Sri K. S. Rao Member implemented by the Company and M/s. Malaxmi Highway Private Sri D. Suresh Member Limited (MHPL) Special Purpose Vehicle. The Committee met twice during the year 2008-09 on 15.05.2008 and Nava Bharat Ventures Limited intends to dilute its equity stake in favour 30.10.2008 respectively and reviewed, inter alia, annual and half yearly of Meenakshi Infrastructure Group, as permitted under NHAI financial statements. guidelines in due course.
During the year under review the Authorised Share Capital was Remarks contained in the Auditors’ Report and explanation enhanced to Rs.30 Crores. thereto: With reference to the remarks of the Auditors in the annexure to their Directors: report at para 2, the Board considers that the Company did not have Dr. G. Sreeramjee and Sri J. Ramesh, Directors, retire by rotation at the any business with gross income of Rs.37,166/- and expenditure of ensuing Annual General Meeting. Sri J. Ramesh, being eligible offers Rs.10,75,027/- for the year ended 31.03.2009. The coverage of the himself for re-appointment. internal control procedures would be strengthened at the appropriate Dr. G. Sreeramjee, Director, expressed his unwillingness to continue on time so that the same will be commensurate with the size and nature the Board on health grounds and opted for retirement from the of the business. Directorship, with effect from the forthcoming Annual General Fixed Deposits: Meeting. The Board recorded its appreciation of his valuable The Company has not accepted nor held any public deposits pursuant contributions during his long tenure on the Board of the Company. to Section 58A of the Companies Act, 1956, read with The Companies The Board of Nava Bharat Ventures Limited (Holding Company) (Acceptance of Deposits) Rules, 1975.
103 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 104
Kinnera Power Company Limited
Auditors: Acknowledgement: M/s. Brahmayya & Co., Chartered Accountants, Hyderabad, retire at the Your Directors gratefully acknowledge the support and co-operation conclusion of the ensuing Annual General Meeting and have expressed extended by the Regulatory Authorities and Company’s Bankers. their willingness to continue in office, if re-appointed. By Order of the Board Directors’ Responsibility Statement: for Kinnera Power Company Limited The Directors confirm that in the preparation of Annual Accounts for P. Trivikrama Prasad the year ended 31.03.2009: Director – Applicable accounting standards have been followed. Place: Hyderabad B. Srinivas – The accounting policies framed in accordance with the guidelines Dated : May 28, 2009 Managing Director of the Institute of Chartered Accountants of India have been applied. Regd. Office:
– Reasonable and prudent judgment and estimates were made so as 6-3-1109/1, ‘Nava Bharat Chambers’ to give a true and fair view of the state of affairs of the company. Raj Bhavan Road Hyderabad – 500 082 – Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, as applicable.
– The accounts have been prepared on ‘a going concern’ basis.
Conservation of Energy, Technology Absorption and foreign exchange earnings and outgo: Technology Absorption, conservation of Energy, Foreign Exchange earnings and outflow are nil and the Company has not yet started the commercial operations.
Particulars of Employees: The provisions of Section 217 (2A) of the Companies Act 1956 read with the Companies Particulars of Employees Rules, 1975 regarding particulars of employees drawing remuneration of the prescribed sums are not applicable as there were no employees in that category.
104 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 105
Annual Report 2008-09
Compliance Certificate (Pursuant to the provisions of Section 383A of the Companies Act, 1956)
CIN: U40100AP1993PLC016204 Paid-up Capital: Rs. 23,47,32,000/-
To The Members M/s. Kinnera Power Company Limited Hyderabad
I have examined the registers, records, books and papers of recorded in the Minutes Book maintained for that purpose. M/s. Kinnera Power Company Limited (the Company) as required to be 8. The Company has not advanced any loan to its Directors and/or maintained under the Companies Act, 1956, (the Act) and the rules Persons or Firms or Companies referred in the Section 295 of the made thereunder and also the provisions contained in the Act. Memorandum and Articles of Association of the Company for the financial year ended on March 31, 2009. In my opinion and to the best 9. The Company has duly complied with the provisions of Section of my information and according to the examinations carried out by 297 of the Act in respect of contracts specified in that Section. me and explanations furnished to me by the Company, its officers and 10. The Company was not required to make any entries in the register agents, I certify that in respect of the aforesaid financial year that: maintained under Section 301 of the Act. 1. The Company has kept and maintained all registers as stated in Annexure 'A' to this certificate, as per the provisions and the rules 11. As there were no instances falling within the purview of Section made thereunder and all entries therein have been duly recorded. 314 of the Act, the Company has not obtained any approvals from the Board of Directors, Members or Central Government as the 2. The Company has duly filed the forms and returns as stated in case may be. Annexure 'B' to this certificate, with the Registrar of Companies within the time prescribed under the Act and the rules made 12. The Company has not issued any duplicate share certificates thereunder. during the financial year.
3. The Company, being closely held limited company, has the 13. During the year: minimum prescribed paid-up Capital. • the Company has delivered all the share certificates on allotment of securities in accordance with the provisions of the 4. The Board of Directors duly met 12 times during the year on Act, and no transfer of shares and split of shares were made 25.04.2008, 16.05.2008, 02.06.2008, 30.06.2008, 30.08.2008, during the year. 29.09.2008, 01.11.2008, 29.12.2008, 22.01.2009, 13.02.2009, • the Company has not posted warrants to any member of the 28.02.2009 and 25.03.2009 and in respect of which meetings, Company as no dividend was declared during the financial year. proper notices were given and the proceedings were properly recorded and signed in the Minutes Book maintained for that • the Company has duly complied with the requirements of purpose. Section 217 of the Act.
5. Being a closely held limited Company, the Company was not 14. The Board of Directors has appointed the Managing Director on required to close its Register of Members, and/or Debenture 20.03.2008 and the same was approved by an Ordinary holders during the financial year. Resolution by the Members at the Extra-ordinary General Meeting held on 18.04.2008. 6. The Annual General Meeting for the financial year ended on 31.03.2008 was held on 24.07.2008 after giving due notice to 15. The Company has not appointed any sole-selling agents during the members of the Company and the resolutions passed thereat the financial year. were duly recorded in Minutes Book maintained for that purpose. 16. The Company was not required to obtain any approvals of the
7. Three Extra-ordinary General Meetings were held during the Central Government, Company Law Board, Regional Director, financial year to increase the Authorized Share Capital of the Registrar or such other authorities as may be prescribed under the Company and the necessary resolutions passed thereat were duly various provisions of the Act.
105 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 106
Kinnera Power Company Limited
Compliance Certificate (Contd.)
17. The Directors have disclosed their interest in other Firms/ one state to another during the year. Companies to the Board of Directors pursuant to the provisions of 26. The Company has not altered the provisions of the Memorandum the Act and the rules made there under. with respect to the objects of the Company during the year. 18. The Company has issued 91,175 Preference Shares of Rs.1,000/- 27. The Company has not altered the provisions of the Memorandum each during the financial year and complied with the provisions of with respect to name of the Company during the year. the Act. 28. The Company has altered the provisions of the Memorandum with 19. The Company has not bought back any shares during the financial respect to share capital of the Company during the year and year under review. complied with the provisions of the Act. 20. There was no redemption of preference shares/debentures during 29. The Company has altered its Articles of Association during the the year. year relating to alteration of Authorized Share Capital and 21. There were no transactions necessitating the Company to keep in complied with the provisions of the Act. abeyance the rights to dividend, rights shares and bonus shares 30. There were no prosecutions initiated against or show cause pending registration for transfer of shares. notices received by the Company during the financial year, under 22. The Company has not invited/accepted any deposits including the Act. unsecured loans falling within the purview of Section 58A during 31. The Company has not received any amount as security from its the financial year. employees during the year. 23. The Company has not made any borrowings during the financial 32. The Company has not deducted any contribution towards year. Provident Fund during the financial year as there are no salaries / 24. The Company has made investments in other bodies corporate wages. and made the required entries in the register kept for that purpose.
25. The Company has not altered the provisions of the Memorandum Place: Hyderabad P. Renuka with respect to situation of the Company’s registered office from Date : May 28, 2009 C.P. No.3460
ANNEXURE A [Forming part of Compliance Certificate] Registers as maintained by the Company: 1. Register of Members under Section 150 2. Register of transfer of Shares 3. Copies of Annual Returns under Section 159 4. Books of Accounts under Section 209 5. Register of Directors 6. Directors Shareholding under Section 307 7. Register pertaining to Directors and Members attending their meetings 8. Minutes of Board & General Meetings under Section 193 9. Fixed Assets Register 10. Records of resolutions of which certified copies are issued 11. Records of Form No. 24AA 12. Register of application and allotment of shares
Place: Hyderabad P. Renuka Date : May 28, 2009 C.P. No.3460
106 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:10 PM Page 107
Annual Report 2008-09
ANNEXURE B [Forming part of Compliance Certificate] Forms and Returns as filed by the Company with the Registrar of Companies, Regional Director, Central Government or other authorities during the financial year ending on March 31, 2009.
Sl. Form / Return Filed under Particulars Date of filing Whether filed If delay, whether No. Number relevant section within the requisite additional of the Act. prescribed time fee paid (Yes/N.A)
1 Form 2 75 Return of allotment 11.04.2008 No Yes 2 Form 2 75 Return of allotment 11.04.2008 Yes N.A 3 Form 23 94 Inc.of Au. Capital 25.04.2008 Yes N.A 4 Form 5 94 Inc.of Au. Capital 25.04.2008 Yes N.A 5 Form 2 75 Return of allotment 07.05.2008 Yes N.A 6 Form 23 269 Appt. of MD 10.05.2008 Yes N.A 7 Form 32 269 Appt. of MD 10.05.2008 Yes N.A 8 Form 2 75 Return of allotment 27.06.2008 Yes N.A 9 Form 2 75 Return of allotment 10.07.2008 Yes N.A 10 Form 23AC & ACA 220 Balance Sheet and P& L Account 16.08.2008 Yes N.A 11 Form No. 66 383A Compliance Cert. 16.08.2008 Yes N.A 12 Form No. 20B 159 Annual Return 06.09.2008 Yes N.A 13 Form 2 75 Return of allotment 09.09.2008 Yes N.A 14 Form 2 75 Return of allotment 13.10.2008 Yes N.A 15 Form 2 75 Return of allotment 28.11.2008 Yes N.A 16 Form 23 94 Inc. of aut. Cap 01.12.2008 Yes N.A 17 Form 5 94 Inc.of Au. Capital 01.12.2008 Yes N.A 18 Form 2 75 Return of allotment 20.01.2009 Yes N.A 19 Form 2 75 Return of allotment 30.01.2009 Yes N.A 20 Form 2 75 Return of allotment 20.03.2009 Yes N.A 21 Form 23 94 Inc. of aut. Cap 20.03.2009 Yes N.A 22 Form 5 94 Inc.of Au. Capital 24.03.2009 Yes N.A
No Forms and Returns were filed by the Company with the Regional Director, Central Government or other authorities during the financial year ending on March 31, 2009.
Place: Hyderabad P. Renuka Date : May 28, 2009 C.P. No.3460
107 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 108
Kinnera Power Company Limited
Auditors’ Report
To The Members of Kinnera Power Company Limited Hyderabad
1. We have audited the attached Balance Sheet of KINNERA POWER iii) The Balance Sheet, Profit and Loss Account and Cash Flow COMPANY LIMITED, HYDERABAD (A.P) as at March 31, 2009 and statement dealt with by this report are in agreement with the also the Profit and Loss Account and the Cash Flow Statement for books of account.
the year ended on that date annexed thereto. These financial iv) In our opinion, the Balance Sheet, Profit and Loss account and statements are the responsibility of the Company’s Management. Cash Flow Statement dealt with by this report comply with the Our responsibility is to express an opinion on these financial accounting standards referred to in sub-section (3C) of Section statements based on our audit. 211 of the Companies Act, 1956:
2. We conducted our audit in accordance with the auditing standards v) On the basis of written representations received from the generally accepted in India. Those Standards require that we plan Directors, as on March 31, 2009 and taken on record by the and perform the audit to obtain reasonable assurance about Board of Directors, we report that, none of the Directors is whether the financial statements are free of material misstatement. disqualified as on March 31, 2009 from being appointed as a An audit includes examining, on a test basis, evidence supporting Director in terms of clause (g) of sub-section (1) of Section 274 the amounts and disclosures in the financial statements. An audit of the Companies Act, 1956;
also includes assessing the accounting principles used and vi) In our opinion and to the best of our information and significant estimates made by management, as well as evaluating according to the explanations given to us, the said accounts the overall financial statement presentation. We believe that our read in conjunction with the Schedules annexed therewith give audit provides a reasonable basis for our opinion. the information required by the Companies Act, 1956, in the
3. As required by the Companies (Auditors’ Report) Order, 2003 ( as manner so required and give a true and fair view in conformity amended), issued by the Central Government of India in terms of with the accounting principles generally accepted in India: sub-section (4A) of Section 227 of the Companies Act, 1956, we a) in the case of the balance sheet, of the state of affairs of enclose in the Annexure a statement on the matters specified in the Company as at March 31, 2009; paragraphs 4 and 5 of the said Order. b) in the case of the profit and loss account, of the Loss of the Company for the year ended on that date; and 4. Further to our comments in the Annexure referred to above, we c) in the case of cash flow statement, of the cash flows for report that: the year ended on that date. i) We have obtained all the information and explanations, which for Brahmayya & Co. to the best of our knowledge and belief were necessary for the Chartered Accountants purposes of our audit.
ii) In our opinion, proper books of account as required by law (P. Chandramouli) have been kept by the Company so far as appears from our Date : 28.05.2009 Partner examination of those books. Place: Hyderabad Membership No.25211
108 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 109
Annual Report 2008-09
Annexure to the Auditor’s Report
Referred to in paragraph 3 of our report of even date, Re: Kinnera Power Company Limited, Hyderabad.
1. a. During the year, the Company has neither granted nor taken 7. The Company is not a chit fund or a nidhi/mutual benefit any loans, secured or unsecured to/from Companies, firms or fund/society. Therefore, the provisions of clause 4 (xiii) of the other parties covered in the register maintained under Section Companies (Auditor’s Report) Order 2003 are not applicable to the 301 of the Companies Act, 1956. Company.
b. In view of our comment in paragraph (a) above, (III) (b), (c), 8. The Company is not dealing or trading in shares, securities, (d), (e), (f) and (g) of paragraph 4 of the aforesaid order are debentures and other investments. Therefore, the provisions of not applicable to the Company. clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are 2. In our opinion, the Company has no formal internal audit system. not applicable to the Company. There are however internal control procedures in different 9. According to the information and explanations given to us, the operating areas covering limited aspects of the transactions but the terms and conditions on which the Company has given guarantee coverage in our opinion needs to be enlarged so as to make it for the loans taken by others from banks are not prejudicial to the commensurate with the size and nature of the business of the interest of the company. Company. 10. During the year the Company has not obtained any term loans. 3. a. On the basis of our examination of the books of account and according to the information and explanations given to us, the 11. In our opinion and according to the information and explanations Company has not entered into any transaction that needs to given to us, the funds raised on short-term basis have not been be entered in the Register maintained under Section 301 of the used for long-term investment. Companies Act, 1956. 12. According to the information and explanations given to us, during b. In view of our comment in paragraph (a) above, clause V (b) of the year, the Company has made preferential allotment of shares aforesaid Order, in our opinion, is not applicable. to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.In our opinion and as 4. The Company has not accepted any deposits from the public. explained to us, the price at which the shares have been issued is Hence the provisions of Section 58A and 58AA or any other not prejudicial to the interest of the company. relevant provisions of the Companies Act, 1956, and the Companies (Acceptance of Deposits) Rules, 1975, do not apply to 13. The Company has not issued any debentures during the year and this Company. therefore the question of creating security or charge in respect thereof does not arise. 5. a. According to the records of the Company, the Company is regular in depositing with appropriate authorities undisputed 14. During the year, the Company has not made any public issue and statutory dues including Provident Fund, Investor Education therefore the question of disclosing the end use of money raised by and Protection Fund, Employees' State Insurance, Income-tax, public issue does not arise. Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, 15. Based upon the audit procedures performed and according to the Cess and other material statutory dues applicable to it. information and explanations given to us, we report that no fraud b. According to the information and explanations given to us, no on or by the Company has been noticed or reported during the undisputed amounts payable in respect of Income-tax, wealth year. tax, Sales tax, Custom Duty, Excise Duty and Cess were in 16. The Clauses of 4 (i), (ii), (iv), (viii), (xi) and (xii) of the Order are not arrears, as at March 31, 2009 for a period of more than six applicable to the Company for the time being. months from the day they became payable. c. According to the information and explanation given to us, for Brahmayya & Co. there are no dues of sale tax, income tax, custom duty, wealth tax, excise duty and Cess which have not been deposited on Chartered Accountants account of any dispute.
6. The accumulated losses of the Company at the end of the financial year are not more than fifty percent of net worth of the Company. (P. Chandramouli) The Company has incurred cash losses during the year covered by Date : 28.05.2009 Partner our audit and also in the immediately preceding financial year. Place: Hyderabad Membership No.25211
109 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 110
Kinnera Power Company Limited
Balance Sheet as at March 31, 2009
(Amount in Rupees) Particulars Schedule As at As at reference 31.3.2009 31.3.2008
I. SOURCES OF FUNDS 1. Share holders funds Share Capital 1 234,732,000 143,557,000 2. Loan Funds 2 50,000 50,000 Total 234,782,000 143,607,000 II. APPLICATION OF FUNDS 1. Investments 3 234,275,000 143,100,000 2. Current Assets, Loans and Advances: a) Cash and Bank balances 4 368,227 457,554 b) Other Current Assets 5 10,904 13,643 379,131 471,197 Less: Current Liabilities and Provisions 6 2,136,740 1,186,560 Net Current Assets (1,757,609) (715,363) 3. Profit and Loss account 2,264,609 1,222,363 Total 234,782,000 143,607,000 Notes on Accounts 7
Per our Report of even date. For and on behalf of the Board
For Brahmayya & Co. Chartered Accountants
P. Chandramouli Partner P. Trivikrama Prasad Director
Hyderabad B. Srinivas May 28, 2009 Managing Director
110 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 111
Annual Report 2008-09
Profit and Loss Account for the year ended March 31, 2009
(Amount in Rupees) Particulars Schedule Current year Previous year reference
I. INCOME Consultancy Charges 20,000 – Interest Earned (Gross) (Others) 17,166 22,693 Tax Deducted at Source : Previous Year: Rs.5,133/- Current Year: Rs.3,892/- Total 37,166 22,693 II. EXPENDITURE Filing Fee 760,000 806,000 Printing and Stationery – 190 General Charges 1,254 6,363 Bank Charges 8,962 17,781 Auditors Remuneration : as Auditors 55,150 56,180 : for Certification 2,806 – Professional Charges 19,200 7,000 Rates and Taxes 227,655 224,500 Total 1,075,027 1,118,014 III. LOSS FOR THE YEAR 1,037,861 1,095,321 Add: Income tax of earlier years 4,385 830 Add: Loss brought forward from last year 1,222,363 126,212 IV. TOTAL LOSS CARRIED TO BALANCE SHEET Total 2,264,609 1,222,363 Earnings per share - (Basic and Diluted) (10.44) (11.36) Notes on Accounts 7
Per our Report of even date. For and on behalf of the Board
For Brahmayya & Co. Chartered Accountants
P. Chandramouli Partner P. Trivikrama Prasad Director
Hyderabad B. Srinivas May 28, 2009 Managing Director
111 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 112
Kinnera Power Company Limited
Cash Flow Statement for the year ended March 31, 2009
(Amount in Rupees) Particulars Year ended Year ended 31.3.2009 31.3.2008
A. CASH FLOW FROM OPERATING ACTIVITIES: Net Loss before Tax (1,037,861) (1,095,321) Adjustments for: Interest earned (17,166) (22,693) Operating Profit before Working Capital Changes (1,055,027) (1,118,014) Adjustments for: Increase in Trade and Other payables 950,180 1,121,470 Cash generated from Operations (104,847) 3,456 Direct Taxes paid (5,451) (4,582) Net Cash from Operating Activities (A) (110,298) (1,126) B. CASH FLOW FROM INVESTING ACTIVITIES: Increase in Investments (91,175,000) (143,050,000) Interest received 20,971 25,952 Net Cash used in Investing Activities (B) (91,154,029) (143,024,048) C. CASH FLOW FROM FINANCING ACTIVITIES: Proceeds from issue of Share Capital 91,175,000 143,050,000 Net Cash generated in Financing Activities (C) 91,175,000 143,050,000 Net increase in Cash and Cash Equivalents (A+B+C) (89,327) 24,826 Cash and Cash equivalents as at April 01, 2008 457,554 432,728 Cash and Cash equivalents as at March 31, 2009 368,227 457,554 Note: Cash and Cash equivalents include: Cash and Cheques on hand 12,283 11,143 Balance with Scheduled banks in Current Accounts 355,944 125,643 Balance with Scheduled bank in Deposit Account – 320,768 368,227 457,554
Per our Report of even date. For and on behalf of the Board
For Brahmayya & Co. Chartered Accountants
P. Chandramouli Partner P. Trivikrama Prasad Director
Hyderabad B. Srinivas May 28, 2009 Managing Director
112 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 113
Annual Report 2008-09
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009
(Rs. in lakhs) Particulars As at As at 31.3.2009 31.3.2008 1. SHARE CAPITAL Authorised: 2,97,500 – (Previous Year 1,47,500) Non-Convertible, 297,500,000 147,500,000 Non-Cumulative, Redeemable Preference Shares of Rs.1,000/- each 2,50,000 – Equity Shares of Rs.10/- each 2,500,000 2,500,000 Total 300,000,000 150,000,000 Issued, subscribed and paid-up: 2,33,738 (Previous Year-1,42,563) – 0.001% Non-Convertible, 233,738,000 142,563,000 Non-Cumulative, Redeemable Preference Shares of Rs.1,000/- each fully paid up 99,400 Equity Shares of Rs.10/- each -fully paid up 994,000 994,000 Total 234,732,000 143,557,000
2. LOAN FUNDS Unsecured Loan from another body Corporate 50,000 50,000 Total 50,000 50,000
3. INVESTMENTS (At Cost, Non-trade, Long-term, Un-quoted) 234,275,000 143,100,000 2,34,27,500 (Previous year 1,43,10,000) Equity Shares of Rs.10/- each fully paid in Malaxmi Highway Private Limited 234,275,000 143,100,000
4. CASH AND BANK BALANCES Cash in hand 12,283 11,143 Cash with Scheduled Banks : In Current Accounts 355,944 125,643 : In Deposit Account – 320,768 Total 368,227 457,554
5. OTHER CURRENT ASSETS Interest accrued – 3,805 Advance Tax and Tax deducted at Source 10,904 9,838 Total 10,904 13,643
6. CURRENT LIABILITIES AND PROVISIONS Sundry Creditors: – Due to Micro and Small Enterprises 130,740 84,270 – Due to other than Micro and Small Enterprises Due to Holding Company – 129,290 Due to Directors 30,000 30,000 Due to Others 1,976,000 943,000 Total 2,136,740 1,186,560
113 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 114
Kinnera Power Company Limited
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009
7. NOTES ON ACCOUNTS 1. The following are the significant accounting policies adopted by the company in the preparation and presentation of financial statements.
a. Financial statements are based on historical costs and on Accrual Basis b. The preparation of financial statements requires the management of the company to make certain estimates and assumptions that effect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expenditure during the year. Any revision to such estimates is recognised prospectively in the year in which it is revised. c. Long term Investments are carried at cost. Provision for diminution, if any, in the opinion of the Board, in the value of each long term investment is made to recognize a decline, other than that of temporary in nature. d. All contingent liabilities are indicated by way of a note and will be paid/provided on crystalisation.
2. Out of 99,400 (Previous year 99,400) Equity Shares of Rs.10/- each fully paid up, 50,000 (Previous Year 50,000) shares held by the holding Company viz., Nava Bharat Ventures Limited, Hyderabad.
3. The Company is acting as an investment vehicle for the holding company, for the National Highway Project which is being implemented by a Special Purpose Vehicle, viz. M/s. Malaxmi Highway Private Limited which is an indirect subsidiary of the holding Company, viz. Nava Bharat Ventures Limited.
4. Out of 2,34,27,500 (Previous year 1,43,10,000) Equity Shares of Rs.10/- each fully paid up held by the Company in M/s.Malaxmi Highway Private Limited, 85,10,000 Equity Shares are pledged with a bank as security for Term Loans of Rs.211.92 crores raised by M/s. Malaxmi Highway Limited.
5. The details of related party transaction in terms of Accounting Standard (AS 18) are as follows: a) Names of related parties and description of relationship: i) Key Management Personnel: 1. Mr. B. Srinivas, Managing Director 2. Mr. C. S. Prasad, Director 3. Mr. K. S. Rao, Director 4. Mr. P. Trivikrama Prasad, Director ii) Associates / Subsidiaries: 1. M/s. Nava Bharat Ventures Limited (Holding Company) 2. M/s. Malaxmi Highway Private Limited 3. M/s. Meenakshi Infrastructures Private Limited
b) Transactions with associate Companies: (Amount in Rupees) Sl. No. Nature of the Transaction Current Year Previous Year 1 Cost of Investments – Meenakshi Infrastructures Pvt Ltd – 4,87,000
114 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 115
Annual Report 2008-09
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009
7. NOTES ON ACCOUNTS (Contd.) c) Amount due from/to related parties as at the year end: (Amount in Rupees) Sl. Name of th party Current year Previous year No. due to due from due to due from 1 M/s. Nava Bharat Ventures Ltd – – 129,290 – 2 M/s. Meenakshi Infrastructures Private Ltd 19,99,000 – 966,000 – 3 Key Management Personnel 57,000 – 57,000 –
6. Earnings per Share (E.P.S.) Current year Previous year i) Net Loss as per Profit and Loss Account (Rupees) 1,037,861 1,095,321 ii) Weighted average number of Equity Shares for EPS 99,400 96,473 iii) Nominal value of the share (Rupees) 10 10 iv) Earnings per share (Basic and Diluted) (Rupees) (10.44) (11.36)
7. Additional Information as required under part II of Schedule VI to the Companies Act, 1956 is not given since the said requirements are not applicable to the company for the time being as no commercial operations were carried by the Company during the year under reference.
8. Previous year's figures are regrouped wherever necessary.
Per our Report of even date. For and on behalf of the Board
For Brahmayya & Co. Chartered Accountants
P. Chandramouli Partner P. Trivikrama Prasad Director
Hyderabad B. Srinivas May 28, 2009 Managing Director
115 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 116
Kinnera Power Company Limited
Statement pursuant to part-IV of Schedule VI to the Companies Act, 1956
Balance Sheet abstract and Company's general business profile I. Registration details Registration No. U40100AP1993PLC016204 State Code 01 Balance Sheet Date 31 03 2009
II. Capital raised during the year (Rupees in thousands) Public issue NIL Rights issue NIL Bonus Shares NIL Private placement 91175
III. Position of mobilisation and deployment of funds (Rupees in thousands) Total Liabilities 236919 Total Assets 236919 Sources of Funds: Paid-up Capital 234732 Share Application Money NIL Reserves & Surplus NIL Secured Loans NIL Unsecured Loans 50 Deferred tax liability NIL Application of Funds: Net Fixed Assets NIL Investments 234275 Net Current Assets (1758 ) Miscellaneous Expenditure NIL Accumulated Losses 2265
IV. Performance of Company (Rupees in thousands) Turnover (Gross Revenue) 37 Total Expenditure 1075 +/- Profit or Loss before Tax – 1038 +/- Profit or Loss after Tax – 1038 Earnings per share in Rs. (10.44) Dividend Rate % NIL
V. Generic name of three principal products/services of Company (as per monetary terms) Product description Generation and Supply of power
Per our Report of even date. For and on behalf of the Board
For Brahmayya & Co. Chartered Accountants
P. Chandramouli Partner P. Trivikrama Prasad Director
Hyderabad B. Srinivas May 28, 2009 Managing Director
116 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 117
Nava Bharat Realty Limited
Notice to Shareholders
Notice is hereby given that the Third Annual General Meeting of the NOTES : Company will be held on Thursday, the 30th July, 2009 at 10.00 a.m. 1. A member entitled to attend and vote at the meeting is entitled to at 6-3-1109/1, ‘Nava Bharat Chambers’, Raj Bhavan Road, Hyderabad appoint a proxy to attend and vote instead of himself/herself and – 500 082, to transact the following business: such proxy need not be a member of the Company. The proxy form Ordinary Business: duly signed must be deposited at the Registered Office of the 1. To receive, consider and adopt the audited Profit & Loss Account Company not later than 48 hours before the time of holding the for the year ended March 31, 2009 and the Balance Sheet as at meeting. that date and the Reports of the Directors and Auditors thereon. 2. An Explanatory Statement pursuant to Section 173 (2) of the
2. To appoint a Director in the place of Sri P. Trivikrama Prasad, who Companies Act, 1956, relating to the Special Business to be retires by rotation and, being eligible, offers himself for transacted at the Meeting is annexed hereto. re-appointment. Explanatory statement (pursuant to Section 173(2) of the 3. To appoint Auditors and fix their remuneration. Companies Act 1956): Special Business : Item No. 4 4. Appointment of Sri K. Balarama Reddi, as Director, liable to Appointment of Sri K. Balarama Reddi, as Director, liable to retire retire by rotation: by rotation: To consider and, if thought fit, to pass with or without Sri K. Balarama Reddi was appointed as an Additional Director under modification(s), the following resolution as an Ordinary Resolution: Section 260 of the Companies Act, 1956 on the Board of the Company on January 23, 2009 and he would hold office up to the date of Annual “RESOLVED THAT Sri K. Balarama Reddi, whose term of office as an General Meeting. Additional Director of the Company expires at the Annual General Meeting and in respect of whom the Company has received a A notice in writing from M/s. Nava Bharat Ventures Limited (Holding notice under Section 257 of the Companies Act, 1956, proposing Company) has been received under Section 257 of the Companies Act, his candidature for the office of a Director, be and is hereby 1956, along with a deposit of Rs.500/- proposing his appointment as appointed as a Director of the Company, whose period of office a Director. will be liable to determination by retirement by rotation.” Accordingly, the Board commends the resolution for your approval.
By Order of the Board None of the Directors, except Sri K. Balarama Reddi, is deemed to be for Nava Bharat Realty Limited interested or concerned in the Resolution. By Order of the Board Place: Hyderabad P. Trivikrama Prasad for Nava Bharat Realty Limited Date : May 28, 2009 Director Place: Hyderabad P. Trivikrama Prasad Regd. Office: Date : May 28, 2009 Director 6-3-1109/1 ‘Nava Bharat Chambers’ Raj Bhavan Road Hyderabad – 500 082
117 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 118
Nava Bharat Realty Limited
Directors' Report
Dear Members, of the Institute of Chartered Accountants of India have been Your Directors have pleasure in presenting their Third Annual Report applied. together with the Audited Balance Sheet of the Company as at – Reasonable and prudent judgement and estimates were made so March 31, 2009 and the Auditors' Report thereon. as to give a true and fair view of the state of affairs of the company.
Operations : – Proper and sufficient care has been taken for the maintenance of Nava Bharat Realty Limited (NBRL) is a subsidiary of Nava Bharat adequate accounting records in accordance with the provisions of Ventures Limited and is set up to focus on real estate ventures either the Companies Act, as applicable. directly or through Special Purpose Vehicles. The Company has no – The accounts have been prepared on ‘a going concern’ basis. operations at present excepting advances for land and investments. Conservation of Energy, Technology Absorption and Foreign Directors: Exchange earnings and outgo: Sri P. Trivikrama Prasad, Director, retires by rotation and, being eligible, Technology Absorption, conservation of Energy, Foreign Exchange offers himself for re-appointment. earnings and outflow are nil, as the Company has not yet started the commercial operations. The Board at its meeting held on January 23, 2009 appointed Sri. K. Balarama Reddi as Additional Director, whose term of office as Particulars of Employees: an Additional Director of the Company expires at the date of the The provisions of Section 217 (2A) of the Companies Act 1956 read Annual General Meeting. The Company has received a notice from with the Companies Particulars of Employees Rules, 1975 regarding Nava Bharat Ventures Limited with necessary deposit proposing the particulars of employees drawing remuneration of the prescribed sums appointment of Sri K. Balarama Reddi, as Director of the Company, are not applicable as there were no employees in that category. liable to retire by rotation at the ensuing Annual General Meeting, Acknowledgement: pursuant to the provisions of Section 257 of the Companies Act, 1956. Your Directors gratefully acknowledge the support and co-operation Fixed Deposits: extended by the Regulatory Authorities and Company’s Bankers. The Company has not accepted nor held any public deposits pursuant By Order of the Board to Section 58A of the Companies Act, 1956 read with The Companies for Nava Bharat Realty Limited (Acceptance of Deposits) Rules, 1975. P. Trivikrama Prasad Auditors: Director M/s Brahmayya & Co., Chartered Accountants, the Auditors of the Place: Hyderabad D. Ashok Company, retire at the conclusion of the Annual General Meeting and Date : May 28, 2009 Director have expressed their willingness to continue in office, if re-appointed. Regd. Office: Directors’ Responsibility Statement: 6-3-1109/1 The Directors confirm that in the preparation of Annual Accounts for ‘Nava Bharat Chambers’ the year ended 31.03.2009: Raj Bhavan Road – Applicable accounting standards have been followed. Hyderabad – 500 082 – The accounting policies framed in accordance with the guidelines
118 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 119
Annual Report 2008-09
Auditors’ Report
To The Members of Nava Bharat Realty Limited Hyderabad
1. We have audited the attached Balance Sheet of NAVA BHARAT iii) The Balance Sheet, Profit and Loss Account and Cash Flow REALTY LIMITED, HYDERABAD (A.P) as at March 31, 2009 and also statement dealt with by this report are in agreement with the the Profit and Loss Account and the Cash Flow Statement for the books of account.
year ended on that date annexed thereto. These financial iv) In our opinion, the Balance Sheet, Profit and Loss account and statements are the responsibility of the Company’s Management. Cash Flow Statement dealt with by this report comply with the Our responsibility is to express an opinion on these financial accounting standards referred to in sub-section (3C) of Section statements based on our audit. 211 of the Companies Act, 1956;
2. We conducted our audit in accordance with the auditing standards v) On the basis of written representations received from the generally accepted in India. Those Standards require that we plan Directors, as on March 31, 2009 and taken on record by the and perform the audit to obtain reasonable assurance about Board of Directors, we report that, none of the Directors is whether the financial statements are free of material misstatement. disqualified as on March 31, 2009 from being appointed as a An audit includes examining, on a test basis, evidence supporting Director in terms of clause (g) of sub-section (1) of Section 274 the amounts and disclosures in the financial statements. An audit of the Companies Act, 1956;
also includes assessing the accounting principles used and vi) In our opinion and to the best of our information and significant estimates made by management, as well as evaluating according to the explanations given to us, the said accounts the overall financial statement presentation. We believe that our read in conjunction with the Schedules annexed therewith give audit provides a reasonable basis for our opinion. the information required by the Companies Act, 1956, in the
3. As required by the Companies (Auditors’ Report) Order, 2003 ( as manner so required and give a true and fair view in conformity amended ), issued by the Central Government of India in terms of with the accounting principles generally accepted in India: sub-section (4A) of Section 227 of the Companies Act, 1956, we a) in the case of the balance sheet, of the state of affairs of enclose in the Annexure a statement on the matters specified in the Company as at March 31, 2009; paragraphs 4 and 5 of the said Order. b) in the case of the profit and loss account, of the Loss of the Company for the year ended on that date; and 4. Further to our comments in the Annexure referred to above, we report that: c) in the case of cash flow statement, of the cash flows for i) We have obtained all the information and explanations, which the year ended on that date. to the best of our knowledge and belief were necessary for the for Brahmayya & Co. purposes of our audit. Chartered Accountants
ii) In our opinion, proper books of account as required by law (P. Chandramouli) have been kept by the Company so far as appears from our Place: Hyderabad Partner examination of those books. Date : 28.05.2009 Membership No.25211
119 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 120
Nava Bharat Realty Limited
Annexure to the Auditor’s Report
referred to in paragraph 3 of our report of even date, Re: Nava Bharat Realty Limited, Hyderabad
1. a. During the year, the Company has neither granted nor taken 6. The Company is not a chit fund or a nidhi/mutual benefit any loans, secured or unsecured to/from Companies, firms or fund/society. Therefore, the provisions of clause 4(xiii) of the other parties covered in the register maintained under Section Companies (Auditor's Report) Order, 2003 are not applicable to the 301 of the Companies Act, 1956. Company.
b. In view of our comment in paragraph (a) above, (III) (b), (c), 7. The Company is not dealing or trading in shares, securities, (d), (e), (f) and (g) of paragraph 4 of the aforesaid order are debentures and other investments. Therefore, the provisions of not applicable to the Company. clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are 2. a. On the basis of our examination of the books of account and not applicable to the Company. according to the information and explanations given to us, the 8. According to the information and explanations given to us, the Company has not entered into any transaction that needs to Company has not given any guarantee for the loans taken by be entered in the Register maintained under Section 301 of the others from banks or financial institutions. Companies Act, 1956. 9. During the year the Company has not obtained any term loans. b. In view of our comment in paragraph (a) above, clause V (b) of aforesaid Order, in our opinion, is not applicable. 10. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we 3. The Company has not accepted any deposits from the public. report that no funds raised on short-term basis have been used for Hence the provisions of Section 58A and 58AA or any other long-term investment. relevant provisions of the Companies Act, 1956, and the Companies (Acceptance of Deposits) Rules, 1975, do not apply to 11. During the year, the Company has not made any preferential this Company. allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 4. a. According to the records of the Company, the Company is 1956. regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education 12. During the year, the Company has not issued any debentures, and Protection Fund, Employees' State Insurance, Income-tax, therefore the question of creating security or charge in respect Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, thereof does not arise Cess and other material statutory dues applicable to it. 13. During the year, the Company has not made any public issue and b. According to the information and explanations given to us, no therefore the question of disclosing the end use of money raised by undisputed amounts payable in respect of Income-tax, wealth public issue does not arise. tax, Sales tax, Custom Duty, Excise Duty and Cess were in 14. Based upon the audit procedures performed and according to the arrears, as at March 31, 2009 for a period of more than six information and explanations given to us, we report that no fraud months from the day they became payable. on or by the Company has been noticed or reported during the year. c. According to the information and explanation given to us, there are no dues of sale tax, income tax, custom duty, wealth 15. The Clauses of 4 (i), (ii), (iv), (vii), (viii), (xi) and (xii) of the Order are tax, excise duty and Cess which have not been deposited on not applicable to the Company for the time being.
account of any dispute. for Brahmayya & Co. 5. The Company is not in existence for more than five years from the Chartered Accountants date of registration till the last day of the financial year covered by this report. Therefore, the provisions of clause 4(x) of the (P. Chandramouli) Companies (Auditor's Report) Order, 2003 are not applicable to the Place: Hyderabad Partner Company. Date : 28.05.2009 Membership No.25211
120 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 121
Annual Report 2008-09
Balance Sheet as at March 31, 2009
(Amount in Rupees) Particulars Schedule As at As at reference 31.3.2009 31.3.2008
I. SOURCES OF FUNDS Share holders funds Share Capital 1 500,000 500,000 Total 500,000 500,000 II. APPLICATION OF FUNDS 1. Current Assets, Loans and Advances a. Cash and Bank balances 2 409,926 467,139 b. Loans and Advances 3 194,000,000 154,000,000 194,409,926 154,467,139 Less : Current liabilities 4 195,739,355 155,406,167 Net Current Assets (1,329,429) (939,028) 2. a. Miscellaneous Expenditure (to the extent not written off or adjusted) Preliminary Expenses 19,820 19,820 b. Profit and Loss account 1,809,609 1,419,208 1,829,429 1,439,028 Total 500,000 500,000 Notes on Accounts 5
Per our Report of even date. For and on behalf of the Board
For Brahmayya & Co. Chartered Accountants
P. Chandramouli Partner P. Trivikrama Prasad Director
Hyderabad D. Ashok May 28, 2009 Director
121 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 122
Nava Bharat Realty Limited
Profit and Loss Account for the year ended March 31, 2009
(Amount in Rupees) Particulars Schedule Current year Previous year reference
I. INCOME –– Total –– II. EXPENDITURE Salaries 299,194 – Filing Fee 2,400 1,090,600 General Charges 57,447 962 Professional Charges 6,000 5,000 Rates and Taxes 2,800 302,500 Bank Charges 500 – Payment to Auditors: As Auditors 22,060 13,483 Total 390,401 1,412,545 III. LOSS FOR THE YEAR 390,401 1,412,545 Add: Loss brought forward from last year 1,419,208 6,663 IV. TOTAL LOSS CARRIED TO BALANCE SHEET 1,809,609 1,419,208 Earnings per Share - (Basic and Diluted) (1.56) (5.65) Notes on Accounts 5
Per our Report of even date. For and on behalf of the Board
For Brahmayya & Co. Chartered Accountants
P. Chandramouli Partner P. Trivikrama Prasad Director
Hyderabad D. Ashok May 28, 2009 Director
122 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 123
Annual Report 2008-09
Cash Flow Statement for the year ended March 31, 2009
(Amount in Rupees) Particulars Year ended Year ended 31.3.2009 31.3.2008
A. CASH FLOW FROM OPERATING ACTIVITIES: Net Loss before Tax (390,401) (1,412,545) Operating Profit before Working Capital Changes (390,401) (1,412,545) Adjustments for: Decrease in Trade and Other payables 40,333,188 155,405,045 Net Cash from Operating Activities (A) 39,942,787 153,992,500 B. CASH FLOW FROM INVESTING ACTIVITIES: Advance for Investments (40,000,000) (154,000,000) Net Cash used in Investing Activities (B) (40,000,000) (154,000,000) C. CASH FLOW FROM FINANCING ACTIVITIES: Proceeds from Share Applications –– Net Cash generated in Financing Activities (C) – – Net increase in Cash and Cash Equivalents (A+B+C) (57,213) (7,500) Cash and Cash equivalents as at April 01, 2008 467,139 474,639 Cash and Cash equivalents as at March 31, 2009 409,926 467,139 Note: Cash and Cash equivalents consist of Balance with Scheduled bank in Current Account 409,926 467,139
Per our Report of even date. For and on behalf of the Board
For Brahmayya & Co. Chartered Accountants
P. Chandramouli Partner P. Trivikrama Prasad Director
Hyderabad D. Ashok May 28, 2009 Director
123 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 124
Nava Bharat Realty Limited
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009
(Amount in Rupees) Particulars As at As at 31.3.2009 31.3.2008 1. SHARE CAPITAL Authorised: 10,00,00,000 – Equity Shares of Rs.2/- each 200,000,000 200,000,000 200,000,000 200,000,000 Issued, subscribed and paid-up: 2,50,000 – Equity Shares of Rs.2/- each fully paid 500,000 500,000 Total 500,000 500,000
2. CASH AND BANK BALANCES Cash with a Scheduled Bank in Current Account 409,926 467,139 Total 409,926 467,139
3. LOANS AND ADVANCES (Unsecured, considered good, recoverable in cash or in kind or for value to be received) Advances for Investments 194,000,000 154,000,000 Total 194,000,000 154,000,000
4. CURRENT LIABILITIES Sundry Creditors: – Due to Micro and Small Enterprises 39,355 1,404,605 – Due to other than Micro and Small Enterprises – – Share Application money pending allotment 195,700,000 154,000,000 Due to Holding Company – 1,562 Total 195,739,355 155,406,167
5. NOTES ON ACCOUNTS 1. The following are the significant accounting policies adopted by the Company in the preparation and presentation of financial statements. a) Financial statements are based on historical costs and on accrual basis. b) The preparation of financial statements requires the management of the company to make certain estimates and assumptions that effect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expenditure during the year. Any revision to such estimates is recognised prospectively in the year in which it is revised. c) Preliminary Expenses are amortised equally over a period of 5 years commencing from the year of commercial operations. d) All contingent liabilities are indicated by way of a note and will be provided/paid on crystalisation.
2. The entire 2,50,000 Equity Shares of Rs.2/- each fully paid up are held by the holding Company viz., Nava Bharat Ventures Limited, Hyderabad.
3. Share application money amounting to Rs.19,57,00,000/- (Previous year Rs.15,40,00,000/-) has been received from Nava Bharat Ventures Limited., the holding company.
124 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 125
Annual Report 2008-09
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009
5. NOTES ON ACCOUNTS (Contd.) 4. In the opinion of the management, the current assets, loans and advances are expected to realise at least the amount at which they are stated, if realised in the ordinary course of business and provision for all known liabilities have been adequately made in the accounts.
5. Disclosure of Sundry Creditors under current liabilities is based on the information available with the Company regarding the status of the suppliers as defined under the “Micro, Small and Medium Enterprises Development Act, 2006” and relied upon by the Auditors. During the year the Company has paid no interest in terms of Section 16 of the said Act.
6. The other particulars as required under part II, Schedule VI to the Companies Act, 1956 are not given as they are not applicable to the Company for the time being.
7. Calculation of Earnings per share: (Amount in Rupees) Current Year Previous Year a) Net loss as per Profit and Loss Account (in Rs.) 3,90,401 14,12,545 b) Weighted average number of Equity shares (Nos.) 2,50,000 2,50,000 c) Face value as per share (in Rs.) 22 d) Earnings per share (Basic and Diluted) (in Rs.) (1.56) (5.65)
8. The details of related party transactions in terms of Accounting Standard (AS 18) are as follows: a. Names of related parties and relation with the company: i. Key Management Personnel: Sri D Ashok, Director Sri P Trivikrama Prasad, Director Sri G.R.K.Prasad, Director ii. Enterprises controlling the reporting Enterprise. M/s.Nava Bharat Ventures Limited b. Transactions with related Parties during the year: Enterprises controlling the reporting Enterprise. 2008-09 2007-08 Rs. Rs. Nava Bharat Ventures Limited Share Application Money received 4,17,00,000 15,40,00,000 c. Balances due to related parties as at the year end. Nava Bharat Ventures limited 19,57,00,000 15,40,01,562
9. Previous year figures are regrouped and reclassified where ever necessary to make them comparable with those of current year.
Per our Report of even date. For and on behalf of the Board
For Brahmayya & Co. Chartered Accountants
P. Chandramouli Partner P. Trivikrama Prasad Director
Hyderabad D. Ashok May 28, 2009 Director
125 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 126
Nava Bharat Realty Limited
Statement pursuant to part-IV of Schedule VI to the Companies Act, 1956
Balance Sheet abstract and Company's general business profile I. Registration details Registration No. U70102AP2006PLC049888 State Code 01 Balance Sheet Date 31 03 2009
II. Capital raised during the year (Rupees in thousands) Public issue NIL Rights issue NIL Bonus Shares NIL Private placement NIL
III. Position of mobilisation and deployment of funds (Rupees in thousands) Total Liabilities 196239 Total Assets 196239 Sources of Funds: Paid-up Capital 500 Share Application Money NIL Reserves & Surplus NIL Secured Loans NIL Unsecured Loans NIL Deferred tax liability NIL Application of Funds: Net Fixed Assets NIL Investments NIL Net Current Assets (1329 ) Miscellaneous Expenditure 20 Accumulated Losses 1809
IV. Performance of Company (Rupees in thousands) Turnover (Gross Revenue) NIL Total Expenditure 390 +/- Profit or Loss before Tax – 390 +/- Profit or Loss after Tax – 390 Earnings per share in Rs. (1.56) Dividend Rate % NIL
V. Generic name of three principal products/services of Company (as per monetary terms) Product description Construction and development
Per our Report of even date. For and on behalf of the Board
For Brahmayya & Co. Chartered Accountants
P. Chandramouli Partner P. Trivikrama Prasad Director
Hyderabad D. Ashok May 28, 2009 Director
126 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 127
Nava Bharat Projects Limited
Notice to Shareholders
Notice is hereby given that the Third Annual General Meeting of the NOTES : Company will be held on Thursday, the 30th July, 2009 at 10.30 a.m. 1. A member entitled to attend and vote at the meeting is entitled to at 6-3-1109/1, ‘Nava Bharat Chambers’, Raj Bhavan Road, Hyderabad appoint a proxy to attend and vote instead of himself/herself and – 500 082 to transact the following business: such proxy need not be a member of the Company. The proxy form Ordinary Business: duly signed must be deposited at the Registered Office of the 1. To receive, consider and adopt the audited Profit & Loss Account Company not later than 48 hours before the time of holding the for the year ended March 31, 2009 and the Balance Sheet as at meeting. that date and the Reports of the Directors and Auditors thereon. 2. An Explanatory Statement pursuant to Section 173 (2) of the 2. To appoint a Director in the place of Sri P. Trivikrama Prasad, who Companies Act, 1956, relating to the Special Business to be retires by rotation and, being eligible, offers himself for transacted at the Meeting is annexed hereto. re-appointment. Explanatory statement (pursuant to Section 173(2) of the 3. To appoint Auditors and fix their remuneration. Companies Act 1956): Special Business: Item No. 4 4. Appointment of Sri P. M. Reddy, as Director, liable to retire by Appointment of Sri P. M. Reddy, as Director, liable to retire by rotation: rotation: To consider and, if thought fit, to pass with or without Sri P. M. Reddy was appointed as an Additional Director under Section modification(s), the following resolution as an Ordinary Resolution: 260 of the Companies Act, 1956 on the Board of the Company on August 01, 2008 and he would hold office up to the date of Annual “RESOLVED THAT Sri P. M. Reddy, whose term of office as an General Meeting. Additional Director of the Company expires at the Annual General Meeting and in respect of whom the Company has received a A notice in writing from Nava Bharat Ventures Limited (Holding notice under Section 257 of the Companies Act, 1956 proposing Company) has been received under Section 257 of the Companies Act, his candidature for the office of a Director, be and is hereby 1956, along with a deposit of Rs.500/- proposing his appointment as appointed as a Director of the Company, whose period of office a Director, liable to retire by rotation. will be liable to determination by retirement by rotation.” Accordingly, the Board commends the resolution for your approval.
5. Appointment of Sri K. Balarama Reddi, as Director, liable to None of the Directors, except Sri P.M. Reddy, is deemed to be interested retire by rotation: or concerned in the Resolution. To consider and, if thought fit, to pass with or without Item No. 5 modification(s), the following resolution as an Ordinary Resolution: Appointment of Sri K. Balarama Reddi, as Director, liable to retire “RESOLVED THAT Sri K. Balarama Reddi, whose term of office as an by rotation: Additional Director of the Company expires at the Annual General Sri K. Balarama Reddi was appointed as an Additional Director under Meeting and in respect of whom the Company has received a Section 260 of the Companies Act, 1956 on the Board of the Company notice under Section 257 of the Companies Act, 1956 proposing on January 23, 2009 and he would hold office upto the date of Annual his candidature for the office of a Director, be and is hereby General Meeting. appointed as a Director of the Company, whose period of office A notice in writing from Nava Bharat Ventures Limited (Holding will be liable to determination by retirement by rotation.” Company) has been received under Section 257 of the Companies Act, By Order of the Board 1956, along with a deposit of Rs.500/- proposing his appointment as for Nava Bharat Projects Limited a Director. Place: Hyderabad P. Trivikrama Prasad Accordingly, the Board commends the resolution for your approval. Date : May 28, 2009 Director None of the Directors, except Sri K. Balarama Reddi is deemed to be Regd. Office: interested or concerned in the Resolution. 6-3-1109/1 By Order of the Board ‘Nava Bharat Chambers’ for Nava Bharat Projects Limited Raj Bhavan Road Place: Hyderabad P. Trivikrama Prasad Hyderabad – 500 082 Date : May 28, 2009 Director
127 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 128
Nava Bharat Projects Limited
Directors' Report
Dear Members, Company retire at the conclusion of the Annual General Meeting and Your Directors have pleasure in presenting their Third Annual Report have expressed their willingness to continue in office, if re-appointed. together with the Audited Balance Sheet of the Company as at Directors’ Responsibility Statement: March 31, 2009 and the Auditors' Report thereon. The Directors confirm that in the preparation of Annual Accounts for Operations: the year ended 31.03.2009: Nava Bharat Ventures Limited (NBVL) plans to create a power focussed – Applicable accounting standards have been followed. vertical, distinct from its diversified operations. Nava Bharat Projects – The accounting policies framed in accordance with the guidelines Limited (NBPL) is a wholly owned subsidiary of NBVL and is the of the Institute of Chartered Accountants of India have been designated power holding company. NBPL will drive the investments applied. into specific SPVs (Operating Companies) which implement power – Reasonable and prudent judgement and estimates were made so projects on a project finance and non recourse basis in India. as to give a true and fair view of the state of affairs of the company. Accordingly, NBPL will hold investments of 50% stake in – Proper and sufficient care has been taken for the maintenance of M/s. Navabharat Power Private Limited SPV implementing 3 x 350 MW adequate accounting records in accordance with the provisions of Power Plant in Orissa along with captive coal mine and 100% stake in the Companies Act, as applicable. Nava Bharat Energy India Limited which plans to implement two 150 MW coal fired Power Plants in Andhra Pradesh. Besides the – The accounts have been prepared on ‘a going concern’ basis.
investments, the NBPL intends to engage in power O & M activities and Conservation of Energy, Technology Absorption and Foreign EPC activities in due course. Exchange earnings and outgo: Directors: Technology Absorption, conservation of Energy, Foreign Exchange Sri P. Trivikrama Prasad, Director, retires by rotation and, being eligible, earnings and outflow are nil, as the Company has not yet started the offers himself for re-appointment. commercial operations.
The Board at its meeting held on August 01, 2008 appointed Particulars of Employees: Sri. P. M. Reddy as Additional Director, whose term of office as an The provisions of Section 217 (2A) of the Companies Act 1956 read Additional Director of the Company expires at the date of the Annual with the Companies Particulars of Employees Rules, 1975 regarding General Meeting. The Company has received a notice from Nava Bharat particulars of employees drawing remuneration of the prescribed sums Ventures Limited with necessary deposit proposing the appointment of are not applicable as there were no employees in that category. Sri P. M. Reddy, as Director of the Company, liable to retire by rotation Acknowledgement: at the ensuing Annual General Meeting pursuant to the provisions of Your Directors gratefully acknowledge the support and co-operation Section 257 of the Companies Act, 1956. extended by the Regulatory Authorities and Company’s Bankers. The Board at its meeting held on January 23, 2009 appointed Sri. K. Balarama Reddi as Additional Director, whose term of office as By Order of the Board an Additional Director of the Company, expires at the date of the for Nava Bharat Projects Limited Annual General Meeting. The Company has received a notice from Nava Bharat Ventures Limited with necessary deposit proposing the P. Trivikrama Prasad appointment of Sri K. BalaramaReddi, as Director of the Company, Director liable to retire by rotation at the ensuing Annual General Meeting pursuant to the provisions of Section 257 of the Companies Act, 1956. Place: Hyderabad D. Ashok Date : May 28, 2009 Director Fixed Deposits: Regd. Office: The Company has not accepted nor held any public deposits pursuant 6-3-1109/1 to Section 58A of the Companies Act, 1956 read with The Companies ‘Nava Bharat Chambers’ (Acceptance of Deposits) Rules, 1975. Raj Bhavan Road Auditors: Hyderabad – 500 082. M/s Brahmayya & Co., Chartered Accountants, the Auditors of the
128 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 129
Annual Report 2008-09
Auditors’ Report
To The Members of Nava Bharat Projects Limited Hyderabad
1. We have audited the attached Balance Sheet of NAVA BHARAT iii) The Balance Sheet, Profit and Loss Account and Cash Flow PROJECTS LIMITED, HYDERABAD (A.P) as at March 31, 2009 and statement dealt with by this report are in agreement with the also the Profit and Loss Account and the Cash Flow Statement for books of account.
the year ended on that date annexed thereto. These financial iv) In our opinion, the Balance Sheet, Profit and Loss account and statements are the responsibility of the Company’s Management. Cash Flow Statement dealt with by this report comply with the Our responsibility is to express an opinion on these financial accounting standards referred to in sub-section (3C) of Section statements based on our audit. 211 of the Companies Act, 1956;
2. We conducted our audit in accordance with the auditing standards v) On the basis of written representations received from the generally accepted in India. Those Standards require that we plan Directors, as on March 31, 2009 and taken on record by the and perform the audit to obtain reasonable assurance about Board of Directors, we report that, none of the Directors is whether the financial statements are free of material misstatement. disqualified as on March 31, 2009 from being appointed as a An audit includes examining, on a test basis, evidence supporting Director in terms of clause (g) of sub-section (1) of Section 274 the amounts and disclosures in the financial statements. An audit of the Companies Act, 1956;
also includes assessing the accounting principles used and vi) In our opinion and to the best of our information and significant estimates made by management, as well as evaluating according to the explanations given to us, the said accounts the overall financial statement presentation. We believe that our read in conjunction with the Schedules annexed therewith give audit provides a reasonable basis for our opinion. the information required by the Companies Act, 1956, in the
3. As required by the Companies (Auditors’ Report) Order, 2003 ( as manner so required and give a true and fair view in conformity amended ), issued by the Central Government of India in terms of with the accounting principles generally accepted in India: sub-section (4A) of Section 227 of the Companies Act, 1956, we a) in the case of the balance sheet, of the state of affairs of enclose in the Annexure a statement on the matters specified in the Company as at March 31, 2009; paragraphs 4 and 5 of the said Order. b) in the case of the profit and loss account, of the Profit of the Company for the year ended on that date; and 4. Further to our comments in the Annexure referred to above, we report that: c) in the case of cash flow statement, of the cash flows for i) We have obtained all the information and explanations, which the year ended on that date. to the best of our knowledge and belief were necessary for the For Brahmayya & Co. purposes of our audit. Chartered Accountants
ii) In our opinion, proper books of account as required by law (P. Chandramouli) have been kept by the Company so far as appears from our Place: Hyderabad Partner examination of those books. Date : May 28, 2009 Membership No.25211
129 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 130
Nava Bharat Projects Limited
Annexure to the Auditor’s Report
referred to in paragraph 3 of our report of even date, Re: Nava Bharat Projects Limited, Hyderabad
1. a) The Company has maintained proper records showing full b) In our opinion and according to the information and particulars, including quantitative details and situation of fixed explanations given to us, the transactions made in pursuance assets. of contracts or arrangements entered in the register
b) As explained to us, the management has physically verified all maintained under Section 301 of the Companies Act, 1956 the fixed assets during the year and there is a regular have been made at prices which are reasonable having regard programme of verification which, in our opinion, is reasonable to prevailing market prices at the relevant time.
having regard to the size of the Company and the nature of 5. The Company has not accepted any deposits from the public. the assets. As informed, no material discrepancies were Hence the provisions of Section 58A and 58AA or any other noticed on such verification. relevant provisions of the Companies Act, 1956, and the c) During the year the Company has not disposed off any fixed Companies (Acceptance of Deposits) Rules, 1975, do not apply to assets. this Company.
2. a. During the year, the Company has neither granted nor taken 6. a. According to the records of the Company, the Company is any loans, secured or unsecured to/from Companies, firms or regular in depositing with appropriate authorities undisputed other parties covered in the register maintained under Section statutory dues including Provident Fund, Investor Education 301 of the Companies Act, 1956. and Protection Fund, Employees' State Insurance, Income-tax,
b. In view of our comment in paragraph (a) above, (III) (b), (c), Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, (d), (e), (f) and (g) of paragraph 4 of the aforesaid order are Cess and other material statutory dues applicable to it. not applicable to the Company. b. According to the information and explanations given to us, no undisputed amounts payable in respect of Income-tax, wealth 3. In our opinion and according to the information and explanations tax, Sales tax, Custom Duty, Excise Duty and Cess were in given to us, there are adequate internal control systems arrears, as at March 31, 2009 for a period of more than six commensurate with the size of the Company and the nature of its months from the day they became payable. business with regard to purchase of inventory and fixed assets and with regard to sale of goods and services. During the course of our c. According to the information and explanation given to us, audit, we have not observed any continuing failure to correct there are no dues of sale tax, income tax, custom duty, wealth major weaknesses in internal control system. tax, excise duty and Cess which have not been deposited on account of any dispute. 4. a) According to the information and explanations given to us by the Management, we are of the opinion that the particulars of 7. The Company has no accumulated losses as at the end of the contracts or arrangements referred to in Section 301 of the financial year. The Company has not incurred any cash losses Companies Act, 1956 have been entered in the register to be during the financial year covered by our audit and the immediately maintained under that section. preceding financial year.
130 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 131
Annual Report 2008-09
8. In our opinion and according to the information and explanations 17. During the year, the Company has not made any public issue and given to us, the Company has not defaulted in repayment of dues therefore the question of disclosing the end use of money raised by to any financial institutions and banks. public issue does not arise.
9. The Company has not granted any loans and advances on the basis 18. Based upon the audit procedures performed and according to the of security by way of pledge of shares, debentures and other information and explanations given to us, we report that no fraud securities. on or by the Company has been noticed or reported during the year. 10. The Company is not a chit fund or a nidhi/mutual benefit fund/ society. Therefore, the provisions of clause 4(xiii) of the Companies 19. The Clauses of 4 (ii), (vii) and (viii), of the Order are not applicable (Auditor’s Report) Order, 2003 are not applicable to the Company. to the Company for the time being.
11. The Company is not dealing or trading in shares, securities, For Brahmayya & Co. debentures and other investments. Therefore, the provisions of Chartered Accountants clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company. (P. Chandramouli) 12. According to the information and explanations given to us, the Place: Hyderabad Partner Company has not given any guarantee for the loans taken by Date : May 28, 2009 Membership No.25211 others from banks or financial institutions.
13. During the year the Company has not obtained any term loans.
14. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.
15. During the year, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.
16. The Company has not issued any debentures during the year, therefore the question of creating security or charge in respect thereof does not arise.
131 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 132
Nava Bharat Projects Limited
Balance Sheet as at March 31, 2009
(Amount in Rupees) Particulars Schedule As at As at reference 31.3.2009 31.3.2008
I. SOURCES OF FUNDS 1. Share holders funds a. Share Capital 1 500,000 500,000 b. Surplus: Profit and Loss Account balance 8,296,489 3,537,158 Total 8,796,489 4,037,158 II. APPLICATION OF FUNDS 1. Fixed Assets: 2 Gross Block 1,267,700 – Less:Depreciation 140,856 – Net Block 1,126,844 – 2. Investments 3 13,202,636 28,864,182 3. Current Assets, Loans and Advances a. Cash and Bank balances 4 5,580,217 20,173,414 b. Loans and Advances 5 155,133,419 92,057,991 160,713,636 112,231,405 Less: Current Liabilities and Provisions 6 a) Current Liabilities 153,818,231 135,173,901 b) Provisions 12,440,000 1,900,000 166,258,231 137,073,901 Net Current Assets (5,544,595) (24,842,496) 4. Miscellaneous Expenditure (to the extent not written off or adjusted) Preliminary Expenses 11,604 15,472 Total 8,796,489 4,037,158 Notes on Accounts 7
Per our Report of even date. For and on behalf of the Board
For Brahmayya & Co. Chartered Accountants
P. Chandramouli Partner P. Trivikrama Prasad Director
Hyderabad D. Ashok May 28, 2009 Director
132 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 133
Annual Report 2008-09
Profit and Loss Account for the year ended March 31, 2009
(Amount in Rupees) Particulars Schedule Current year Previous year reference I. INCOME Contract Receipts 55,500,000 19,494,000 Commission Received 415,711 3,897,306 Income from Investments – 192,780 Profit on sale of Short Term Investments – 307,072 Total 55,915,711 23,891,158 II. EXPENDITURE Sub-contract Payments 18,500,000 15,999,950 Salaries 4,251,570 847,533 Advertisement Charges – 26,075 Filing Fees 3,300 1,091,500 Rent 120,000 – Rates and Taxes 2,875 307,500 Printing and Stationery – 1,200 General Charges 21,915 1,242 Professional Charges 1,162,940 83,000 Bank Charges 225 2,125 Auditors remuneration : as Auditors 55,150 56,180 : for Certification 2,806 Communication Expenses 18,790 – Conveyance Expenses 24,050 – Travelling Expenses 646,489 – Depreciation 2 140,856 – Diminution in value of investments 15,661,546 – Prilimanary Expenses written off 3,868 3,868 Total 40,616,380 18,420,173 III. PROFIT FOR THE YEAR 15,299,331 5,470,985 IV. PROVISION FOR TAXATION : Fringe Benefit Tax 40,000 – : Income Tax 10,500,000 1,900,000 10,540,000 1,900,000 V. PROFIT FOR THE YEAR AFTER TAXATION 4,759,331 3,570,985 Add: Profit/(Loss) brought forward from last year 3,537,158 (33,827) VI. TOTAL PROFIT CARRIED TO BALANCE SHEET 8,296,489 3,537,158 Earnings per share (Rs.) - (Basic and Diluted) 19.04 14.28 Notes on Accounts 7
Per our Report of even date. For and on behalf of the Board
For Brahmayya & Co. Chartered Accountants
P. Chandramouli Partner P. Trivikrama Prasad Director
Hyderabad D. Ashok May 28, 2009 Director
133 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 134
Nava Bharat Projects Limited
Cash Flow Statement for the year ended March 31, 2009
(Amount in Rupees) Particulars Year ended Year ended 31.3.2009 31.3.2008
A. CASH FLOW FROM OPERATING ACTIVITIES: Net Profit before Tax 15,299,331 5,470,985 Adjustments for: Preliminary Expenses written off 3,868 3,868 Income from Investments – (192,780) Depreciation 140,856 – Diminution in value of Investments 15,661,546 – Profit on sale of Short Term Investments – (307,072) Operating Profit before Working Capital Changes 31,105,601 4,975,001 Adjustments for: Increase in Trade and Other receivables (2,429,012) (783) Increase in Trade and Other payables 18,644,330 135,140,901 Cash generated from Operations 47,320,919 140,115,119 Direct Taxes Paid (7,096,416) (1,997,208) Net Cash from Operating Activities (A) 40,224,503 138,117,911 B. CASH FLOW FROM INVESTING ACTIVITIES: Purchase of Investments (including advances) (53,550,000) (387,053,610) Sale of Investments – 268,436,500 Income from Investments – 192,780 Purchase of Fixed Assets (1,267,700) – Net Cash used in Investing Activities (B) (54,817,700) (118,424,330) C. CASH FLOW FROM FINANCING ACTIVITIES: (C) – – Net increase in Cash and Cash Equivalents (A+B+C) (14,593,197) 19,693,581 Cash and Cash equivalents as at April 01, 2008 20,173,414 479,833 Cash and Cash equivalents as at March 31, 2009 5,580,217 20,173,414 Notes: Cash and Cash equivalents include: Cash and Cheques on hand – 50 Balance with bank in Current Accounts 5,580,217 20,173,364 Cash and Cash equivalents considered as Investments 5,580,217 20,173,414
Per our Report of even date. For and on behalf of the Board
For Brahmayya & Co. Chartered Accountants
P. Chandramouli Partner P. Trivikrama Prasad Director
Hyderabad D. Ashok May 28, 2009 Director
134 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 135
Annual Report 2008-09
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009
(Amount in Rupees) Particulars As at As at 31.3.2009 31.3.2008 1. SHARE CAPITAL Authorised: 10,00,00,000 - Equity Shares of Rs.2/- each 200,000,000 200,000,000 200,000,000 200,000,000 Issued, subscribed and paid-up: 2,50,000 - Equity Shares of Rs.2/- each fully paid 500,000 500,000 Total 500,000 500,000
2. FIXED ASSETS S.No Particulars Gross Block Depreciation Net Block Additions for the Year upto 31.03.09 as on 31.03.09 during the year 1 Furnitures and Fixtures (Interiors) 1,267,700 140,856 140,856 1,126,844 Total 1,267,700 140,856 140,856 1,126,844
Particulars Face Number of Shares value As at Additions/ As at As at As at Rs. 31.3.2008 (Deletions) 31.3.2009 31.3.2009 31.3.2008
33. INVESTMENTS: (At Cost, Long-term) i) In Other Companies-Equity Shares fully paid-up, Un-Quoted: Navabharat Power Private Limited 10 2,500 – 2,500 25,000 25,000 Total (i) 25,000 25,000 ii) In Mutual Funds - Units, Un-Quoted: ICICI Prudencial Infrastructure Fund 10 321,022 – 321,022 11,393,058 11,393,058 Kotak Opportunity Fund 10 158,535 – 158,535 8,618,413 8,618,413 Sundaram BNP Paribas Select Focus Fund 10 78,930 – 78,930 8,321,876 8,321,876 Reliance Diversified Power Fund 10 6,018 – 6,018 505,835 505,835 Total (ii) 28,839,182 28,839,182 Total (i+ii) 28,864,182 28,864,182 Less: Diminution in value of Investments 15,661,546 – Total 13,202,636 28,864,182
Particulars As at As at 31.3.2009 31.3.2008 4. CASH AND BANK BALANCES Cash in hand – 50 Cash with a Scheduled Bank: In Current Account 5,580,217 20,173,364 Total 5,580,217 20,173,414
135 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 136
Nava Bharat Projects Limited
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009
(Amount in Rupees) Particulars As at As at 31.3.2009 31.3.2008 5. LOANS AND ADVANCES (Unsecured, considered good, recoverable in cash or in kind or for value to be received) Advances for Investments: – Navabharat Power Private Limited 88,060,000 83,560,000 – Nava Bharat Energy India Limited 29,000,000 – – Rio Realty Private Limited 13,550,000 – – Juventas Infrastructure Private Limited 13,000,000 – – Beas Projects Private Limited – 6,500,000 Advance Tax and Tax Deducted at Source 9,093,624 1,997,208 Other Receivables 2,249,012 – Other Advances 783 783 Deposits Recoverable 180,000 – Total 155,133,419 92,057,991
6. CURRENT LIABILITIES AND PROVISIONS a) Current liabilities: Sundry Creditors: – Due to Micro and Small Enterprises 163,862 1,890,423 – Due to other than Micro and Small Enterprises 18,398,149 – Creditors for other finance 2,416,220 439,616 Due to Holding Company – 3,862 Share Application Money pending allotment 132,840,000 132,840,000 Total (a) 153,818,231 135,173,901 b) Provisions: : Fringe Benefit Tax 40,000 – : Income Tax 12,400,000 1,900,000 Total (b) 12,440,000 1,900,000 Total (a+b) 166,258,231 137,073,901
136 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 137
Annual Report 2008-09
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009
7. NOTES ON ACCOUNTS 1. The following are the significant accounting policies adopted by the Company in the preparation and presentation of financial statements. a) Financial statements are based on historical costs and on accrual basis. b) The preparation of financial statements requires the management of the company to make certain estimates and assumptions that effect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expenditure during the year. Any revision to such estimates is recognised prospectively in the year in which it is revised. c) Tangible Fixed Assets are stated at cost net of depreciation provided/amortisation. d) Depreciation on the partitions and interiors carried out to leased premises which are amortised over the primary lease period. e) Long term Investments are carried at cost. Provision for diminution, if any, in the opinion of the Board, in the value of each long term investment is made to recognize a decline, other than that of temporary in nature. f) Preliminary Expenses are amortised equally over a period of five years. g) All contingent liabilities are indicated by way of a note and will be provided/paid on crystalisation. h) Deferred tax asset and liability is calculated by applying the tax rate and tax laws that have been enacted or substantially enacted by the balance sheet date. Deferred tax assets are recognised and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised.
2. The entire 2,50,000 Equity Shares of Rs.2/- each fully paid up are held by the holding Company viz., Nava Bharat Ventures Limited, Hyderabad.
3. Share application money amounting to Rs.13,28,40,000/- has been received from Nava Bharat Ventures Limited., the holding company.
4. Depreciation on the partitions and interiors carried out to leased premises which are amortised over the primary lease period.
5. In the opinion of the management, the current assets, loans and advances are expected to realise at least the amount at which they are stated, if realised in the ordinary course of business and provision for all known liabilities have been adequately made in the accounts.
6. Disclosure of Sundry Creditors under current liabilities is based on the information available with the Company regarding the status of the suppliers as defined under the “Micro, Small and Medium Enterprises Development Act, 2006” and relied upon by the Auditors. During the year the Company has paid no interest in terms of Section 16 of the said Act.
7. The other particulars as required under part II, Schedule VI to the Companies Act, 1956 are not given as they are not applicable to the Company for the time being.
8. Calculation of Earnings per share: (Amount in Rupees) Current Year Previous Year a) Net profit available to Equity shareholders (in Rs.) 47,59,331 35,70,985 b) Weighted average number of Equity shares (Nos.) 2,50,000 2,50,000 c) Face value as per share (in Rs.) 22 d) Earnings per share (Basic) (in Rs.) 19.04 14.28
137 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 138
Nava Bharat Projects Limited
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009
7. NOTES ON ACCOUNTS (Contd.) 9. In terms of Accounting Standard (AS 22) on "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, there is a net deferred tax asset as on March 31, 2009. In compliance with the provisions of the Accounting Standard and based on general prudence, the Company has not recognised the said deferred tax asset while preparing the accounts for the current year.
10. The details of related party transactions in terms of Accounting Standard (AS 18) are as follows: a. Names of related parties and relation with the company: i. Key Management Personnel: Sri D Ashok, Director Sri P Trivikrama Prasad, Director Sri G R K Prasad, Director ii. Enterprises controlling the reporting Enterprise M/s.Nava Bharat Ventures Limited b. Transactions with related Parties during the year: Enterprises controlling the reporting Enterprise. 2008-09 2007-08 Rs. Rs. 1 Navabharat Power Private Limited 45,00,000 8,35,60,000 Nava Bharat Energy India Limited 2,90,00,000 – - Share Application paid 2 Navabharat Power Private Limited – 25,000 - Cost of Investments paid 3 Nava Bharat Ventures Limited 5,55,00,000 – - Contract Receipts 4 Navabharat Power Private Limited – 783 - Advances given
c. Balances (due from) as at the year end. (Amount in Rupees) S.No Name of the Party Current Year Previous Year 1 Navabharat Power Private Limited (783) (783)
11. Previous year figures are regrouped and reclassified where ever necessary to make them comparable with those of current year.
Per our Report of even date. For and on behalf of the Board
For Brahmayya & Co. Chartered Accountants
P. Chandramouli Partner P. Trivikrama Prasad Director
Hyderabad D. Ashok May 28, 2009 Director
138 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 139
Annual Report 2008-09
Statement pursuant to part-IV of Schedule VI to the Companies Act, 1956
Balance Sheet abstract and Company's general business profile I. Registration details Registration No. U70102AP2007PLC052362 State Code 01 Balance Sheet Date 31 03 2009
II. Capital raised during the year (Rupees in thousands) Public issue NIL Rights issue NIL Bonus Shares NIL Private placement NIL
III. Position of mobilisation and deployment of funds (Rupees in thousands) Total Liabilities 175055 Total Assets 175055 Sources of Funds: Paid-up Capital 500 Share Application Money NIL Reserves & Surplus 8296 Secured Loans NIL Unsecured Loans NIL Deferred tax liability NIL Application of Funds: Net Fixed Assets 1127 Investments 13203 Net Current Assets (5545 ) Miscellaneous Expenditure 11 Accumulated Losses NIL
IV. Performance of Company (Rupees in thousands) Turnover (Gross Revenue) 55915 Total Expenditure 40616 +/- Profit or Loss before Tax + 15299 +/- Profit or Loss after Tax + 4759 Earnings per share in Rs. 19.04 Dividend Rate % NIL
V. Generic name of three principal products/services of Company (as per monetary terms) Product description Construction and development Generation and Distribution of Power
Per our Report of even date. For and on behalf of the Board
For Brahmayya & Co. Chartered Accountants
P. Chandramouli Partner P. Trivikrama Prasad Director
Hyderabad D. Ashok May 28, 2009 Director
139 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 140
Nava Bharat Energy India Limited
Notice to Shareholders
Notice is hereby given that the First Annual General Meeting of the NOTES : Company will be held on Thursday, the 30th July, 2009 at 11.30 a.m. 1. A member entitled to attend and vote at the meeting is entitled to at 6-3-1109/1, ‘Nava Bharat Chambers’, Raj Bhavan Road, Hyderabad appoint a proxy to attend and vote instead of himself/herself and – 500 082 to transact the following business: such proxy need not be a member of the Company. The proxy form Ordinary Business: duly signed must be deposited at the Registered Office of the 1. To receive, consider and adopt the audited Profit & Loss Account Company not later than 48 hours before the time of holding the for the year ended March 31, 2009 and the Balance Sheet as at meeting. that date and the Reports of the Directors and Auditors thereon. 2. An Explanatory Statement pursuant to Section 173 (2) of the 2. To appoint a Director in the place of Sri D. Ashok, who being first Companies Act, 1956, relating to the Special Business to be Director, retires and, being eligible, offers himself for transacted at the Meeting is annexed hereto. re-appointment. Explanatory statement (pursuant to Section 173(2) of the 3. To appoint a Director in the place of Sri P. Trivikrama Prasad, who Companies Act 1956): being first Director, retires and, being eligible, offers himself for Item No. 6 re-appointment. Appointment of Dr. M. V. G. Rao, as Director, liable to retire by 4. To appoint a Director in the place of Sri G. R. K. Prasad, who being rotation: first Director, retires and, being eligible, offers himself for Dr. M. V. G. Rao was appointed as an Additional Director under Section re-appointment. 260 of the Companies Act, 1956 on the Board of the Company on 5. To appoint Auditors and fix their remuneration. January 23, 2009 and he would hold office upto the date of Annual Special Business : General Meeting. 6. Appointment of Dr. M. V. G. Rao, as Director, liable to retire by A notice in writing from M/s. Nava Bharat Ventures Limited has been rotation: received under Section 257 of the Companies Act, 1956, along with a To consider and, if thought fit, to pass with or without deposit of Rs.500/- proposing his appointment as a Director, liable to modification(s), the following resolution as an Ordinary Resolution: retire by rotation. “RESOLVED THAT Dr. M. V. G. Rao, whose term of office as an Accordingly, the Board commends the resolution for your approval. Additional Director of the Company expires at the Annual General None of the Directors, except Dr. M.V.G. Rao is deemed to be interested Meeting and in respect of whom the Company has received a or concerned in the Resolution. notice under Section 257 of the Companies Act, 1956 proposing his candidature for the office of a Director, be and is hereby By Order of the Board appointed as a Director of the Company, whose period of office for Nava Bharat Energy India Limited will be liable to determination by retirement by rotation.”
By Order of the Board Place: Hyderabad P. Trivikrama Prasad for Nava Bharat Energy India Limited Date : May 28, 2009 Director Place: Hyderabad P. Trivikrama Prasad Date : May 28, 2009 Director
Regd. Office: 6-3-1109/1 ‘Nava Bharat Chambers’ Raj Bhavan Road Hyderabad – 500 082
140 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 141
Annual Report 2008-09
Directors' Report
Dear Members, – The accounting policies framed in accordance with the guidelines Your Directors have pleasure in presenting their First Annual Report of the Institute of Chartered Accountants of India have been together with the Audited Balance Sheet of the Company as at applied. March 31, 2009 and the Auditors' Report thereon. – Reasonable and prudent judgement and estimates were made so Operations: as to give a true and fair view of the state of affairs of the company. Nava Bharat Energy India Limited (NBEIL) is a subsidiary of Nava Bharat – Proper and sufficient care has been taken for the maintenance of Ventures Limited (NBVL) and is designated as a power operating adequate accounting records in accordance with the provisions of Company of the Group. NBEIL has drawn up plans to implement two the Companies Act, as applicable. 150 MW thermal Power Plants based predominantly on imported coal – The accounts have been prepared on ‘a going concern’ basis. in Andhra Pradesh. The projects are at the initial stage of Conservation of Energy, Technology Absorption and Foreign implementation with project land having been acquired and other Exchange earnings and outgo: approvals under process. The Company has entrusted the project Technology Absorption, conservation of Energy, Foreign Exchange appraisal and syndication of debt finance to IDBIL. earnings and outflow are nil, as the Company has not yet started the Directors: commercial operations. Sri D. Ashok, Sri P. Trivikrama Prasad and Sri G. R. K. Prasad, being Particulars of Employees: the first Directors, retire and being eligible, offer themselves for The provisions of Section 217 (2A) of the Companies Act 1956 read re-appointment. with the Companies Particulars of Employees Rules, 1975 regarding The Board at its meeting held on January 23, 2009 appointed particulars of employees drawing remuneration of the prescribed sums, Dr. M. V. G. Rao as Additional Director, whose term of office expires on are not applicable as there were no employees in that category. the date of the Annual General Meeting. The Company has received a notice from Nava Bharat Ventures Limited with necessary deposit Acknowledgement: proposing the appointment of Dr. M. V. G. Rao as Director of the Your Directors gratefully acknowledge the support and co-operation Company, liable to retire by rotation at the ensuing Annual General extended by the Regulatory Authorities and Company’s Bankers.
Meeting pursuant to the provisions of Section 257 of the Companies By Order of the Board Act, 1956. for Nava Bharat Energy India Limited Fixed Deposits: The Company has not accepted or held any public deposits pursuant to P. Trivikrama Prasad Section 58A of the Companies Act, 1956 read with The Companies Director (Acceptance of Deposits) Rules, 1975.
Auditors: Place: Hyderabad D. Ashok M/s Brahmayya & Co., Chartered Accountants, the First Auditors of the Date : May 28, 2009 Director
Company retire at the conclusion of the Annual General Meeting and Regd. Office: have expressed their willingness to continue in office, if re-appointed. 6-3-1109/1 Directors’ Responsibility Statement: ‘Nava Bharat Chambers’ The Directors confirm that in the preparation of Annual Accounts for Raj Bhavan Road the year ended 31.03.2009: Hyderabad – 500 082. – Applicable accounting standards have been followed.
141 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 142
Nava Bharat Energy India Limited
Auditors’ Report
To The Members of Nava Bharat Energy India Limited Hyderabad
1. We have audited the attached Balance Sheet of NAVA BHARAT iii) The Balance Sheet, Profit and Loss Account and Cash Flow ENERGY INDIA LIMITED, HYDERABAD (A.P) as at March 31, 2009, statement dealt with by this report are in agreement with the and also the Profit and Loss Account and the Cash Flow Statement books of account.
for the year ended on that date annexed thereto. These financial iv) In our opinion, the Balance Sheet, Profit and Loss account and statements are the responsibility of the Company’s Management. Cash Flow Statement dealt with by this report comply with the Our responsibility is to express an opinion on these financial accounting standards referred to in sub-section (3C) of Section statements based on our audit. 211 of the Companies Act, 1956;
2. We conducted our audit in accordance with the auditing standards v) On the basis of written representations received from the generally accepted in India. Those Standards require that we plan Directors, as on March 31, 2009 and taken on record by the and perform the audit to obtain reasonable assurance about Board of Directors, we report that, none of the Directors is whether the financial statements are free of material misstatement. disqualified as on March 31, 2009 from being appointed as a An audit includes examining, on a test basis, evidence supporting Director in terms of clause (g) of sub-section (1) of Section 274 the amounts and disclosures in the financial statements. An audit of the Companies Act, 1956;
also includes assessing the accounting principles used and vi) In our opinion and to the best of our information and significant estimates made by management, as well as evaluating according to the explanations given to us, the said accounts the overall financial statement presentation. We believe that our read in conjunction with the Schedules annexed therewith give audit provides a reasonable basis for our opinion. the information required by the Companies Act, 1956, in the
3. As required by the Companies (Auditors’ Report) Order, 2003 ( as manner so required and give a true and fair view in conformity amended ), issued by the Central Government of India in terms of with the accounting principles generally accepted in India: sub-section (4A) of Section 227 of the Companies Act, 1956, we a) in the case of the balance sheet, of the state of affairs of enclose in the Annexure a statement on the matters specified in the Company as at March 31, 2009; paragraphs 4 and 5 of the said Order. b) in the case of the profit and loss account, of the Loss of the Company for the year ended on that date; and 4. Further to our comments in the Annexure referred to above, we report that: c) in the case of cash flow statement, of the cash flows for i) We have obtained all the information and explanations, which the year ended on that date. to the best of our knowledge and belief were necessary for the For Brahmayya & Co. purposes of our audit. Chartered Accountants
ii) In our opinion, proper books of account as required by law (P. Chandramouli) have been kept by the Company so far as appears from our Place: Hyderabad Partner examination of those books. Date : May 28, 2009 Membership No.25211
142 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 143
Annual Report 2008-09
Annexure to the Auditor’s Report
referred to in paragraph 3 of our report of even date, Re: Nava Bharat Energy India Limited, Hyderabad 1. a) The Company has maintained proper records showing full c. According to the information and explanation given to us, particulars, including quantitative details and situation of fixed there are no dues of sale tax, income tax, custom duty, wealth assets. tax, excise duty and Cess which have not been deposited on b) As explained to us, the management has physically verified all account of any dispute. the fixed assets during the year and there is a regular 7. The Company is not in existence for more than five years from the programme of verification which, in our opinion, is reasonable date of registration till the last day of the financial year covered by having regard to the size of the Company and the nature of this report. Therefore, the provisions of clause 4(x) of the the assets. As informed, no material discrepancies were Companies (Auditor's Report) Order, 2003 are not applicable to the noticed on such verification. Company. c) During the year the Company has not disposed off any fixed 8. The Company is not a chit fund or a nidhi/mutual benefit assets. fund/society. Therefore, the provisions of clause 4(xiii) of the 2. a. During the year, the Company has neither granted nor taken Companies (Auditor's Report) Order, 2003 are not applicable to the any loans, secured or unsecured to/from Companies, firms or Company. other parties covered in the register maintained under Section 9. The Company is not dealing or trading in shares, securities, 301 of the Companies Act, 1956. debentures and other investments. Therefore, the provisions of b. In view of our comment in paragraph (a) above, (III) (b), (c), clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are (d), (e), (f) and (g) of paragraph 4 of the aforesaid order are not applicable to the Company. not applicable to the Company. 10. According to the information and explanations given to us, the 3. In our opinion and according to the information and explanations Company has not given any guarantee for the loans taken by given to us, there are adequate internal control systems others from banks or financial institutions. commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and 11. During the year the Company has not obtained any term loans. with regard to sale of goods and services. During the course of our 12. According to the information and explanations given to us and on audit, we have not observed any continuing failure to correct an overall examination of the Balance Sheet of the Company, we major weaknesses in internal control system. report that no funds raised on short-term basis have been used for 4. a. On the basis of our examination of the books of account and long-term investment. according to the information and explanations given to us, the 13. During the year, the Company has not made any preferential Company has not entered into any transaction that needs to allotment of shares to parties and companies covered in the be entered in the Register maintained under Section 301 of the Register maintained under section 301 of the Companies Act, Companies Act, 1956. 1956. b. In view of our comment in paragraph (a) above, clause V (b) of 14. During the year, the Company has not issued any debentures, aforesaid Order, in our opinion, is not applicable. therefore the question of creating security or charge in respect 5. The Company has not accepted any deposits from the public. thereof does not arise Hence the provisions of Section 58A and 58AA or any other 15. During the year, the Company has not made any public issue and relevant provisions of the Companies Act, 1956, and the therefore the question of disclosing the end use of money raised by Companies (Acceptance of Deposits) Rules, 1975, do not apply to public issue does not arise. this Company. 16. Based upon the audit procedures performed and according to the 6. a. According to the records of the Company, the Company is information and explanations given to us, we report that no fraud regular in depositing with appropriate authorities undisputed on or by the Company has been noticed or reported during the statutory dues including Provident Fund, Investor Education year. and Protection Fund, Employees' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, 17. The Clauses of 4 (ii), (vii), (viii), (xi) and (xii) of the Order are not Cess and other material statutory dues applicable to it. applicable to the Company for the time being. b. According to the information and explanations given to us, no For Brahmayya & Co. undisputed amounts payable in respect of Income-tax, wealth Chartered Accountants tax, Sales tax, Custom Duty, Excise Duty and Cess were in (P. Chandramouli) arrears, as at March 31, 2009 for a period of more than six Place: Hyderabad Partner months from the day they became payable. Date : May 28, 2009 Membership No.25211
143 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 144
Nava Bharat Energy India Limited
Balance Sheet as at March 31, 2009
Particulars Schedule Amount reference (Rs.)
I. SOURCES OF FUNDS Share holders funds Share Capital 1 500,000 Total 500,000 II. APPLICATION OF FUNDS 1. Fixed Assets: a) Gross Block 2 26,511,417 b) Depreciation 52,811 c) Net Block 26,458,606 d) Unallocated Capital Expenditure 364,991 26,823,597 2. Current Assets, Loans and Advances: Cash and Bank balances: Balances with Scheduled Banks in Current accounts 1,823,758 1,823,758 Less :Current liabilities 3 29,013,236 Net Current Assets (27,189,478) 3. Profit and Loss account 865,881 Total 500,000 Notes on Accounts 5
Per our Report of even date. For and on behalf of the Board
For Brahmayya & Co. Chartered Accountants
P. Chandramouli Partner P. Trivikrama Prasad Director
Hyderabad D. Ashok May 28, 2009 Director
144 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 145
Annual Report 2008-09
Profit and Loss Account for the year ended March 31, 2009
Particulars Schedule Amount reference (Rs.)
I. INCOME Agricultural Income 45,915 Total 45,915 II. EXPENDITURE Professional Charges 919,130 Filing Fee 2,000 Bank Charges 955 General Charges 7,183 Printing and Stationery 13,350 Rates and Taxes 4,620 Auditors Remuneration : as Auditors 13,236 : for Certification 2,809 Agricultural Expenses 136,073 Depreciation 2 52,811 Preliminary Expenses written off 124,620 1,276,787 Less: Amount transferred to Project-in-Progress 4 364,991 Total 911,796 III. LOSS FOR THE YEAR CARRIED TO BALANCE SHEET 865,881 Earnings per Share - (Basic and Diluted) (3.56) Notes on Accounts 5
Per our Report of even date. For and on behalf of the Board
For Brahmayya & Co. Chartered Accountants
P. Chandramouli Partner P. Trivikrama Prasad Director
Hyderabad D. Ashok May 28, 2009 Director
145 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 146
Nava Bharat Energy India Limited
Cash Flow Statement for the year ended March 31, 2009
Particulars Amount (Rs.)
A. CASH FLOW FROM OPERATING ACTIVITIES:
Net Loss before Tax (865,881) Depreciation 52,811 Operating Profit before Working Capital Changes (813,070) Adjustments for:
Trade and Other payables 29,013,236 Net Cash from Operating Activities (A) 28,200,166 B. CASH FLOW FROM INVESTING ACTIVITIES:
Purchase of Fixed Assets (26,876,408) Net Cash used in Investing Activities (B) (26,876,408) C. CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from issue of Share Capital 500,000 Net Cash generated in Financing Activities (C) 500,000 Net increase in Cash and Cash Equivalents (A+B+C) 1,823,758
Cash and Cash equivalents as at March 31, 2009 1,823,758 Note: Cash and Cash equivalents consist of balance with Scheduled Banks in Current Accounts 1,823,758
Per our Report of even date. For and on behalf of the Board
For Brahmayya & Co. Chartered Accountants
P. Chandramouli Partner P. Trivikrama Prasad Director
Hyderabad D. Ashok May 28, 2009 Director
146 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 147
Annual Report 2008-09
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009
(Amount in Rupees) Particulars As at 31.3.2009 1. SHARE CAPITAL Authorised: 25,00,000 - Equity Shares of Rs.2/- each 5,000,000 5,000,000 Issued, subscribed and paid-up: 2,50,000 - Equity Shares of Rs.2/- each fully paid 500,000 Total 500,000
2. FIXED ASSETS S.No Particulars Gross Block Depreciation Net Block Additions for the Year upto 31.03.09 as on 31.03.09 during the year 1 Land 25,730,417 – – 25,730,417 2 Plant and Machinery (Drip Irrigation system) 781,000 52,811 52,811 728,189 26,511,417 52,811 52,811 26,458,606 Add: Unallocated Capital Expenditure 364,991 – – 364,991 Total 26,876,408 52,811 52,811 26,823,597
Particulars As at 31.3.2009 3. CURRENT LIABILITIES Sundry Creditors: – Due to Micro and Small Enterprises 13,236 – Due to other than Micro and Small Enterprises – Share Application money pending allotment 29,000,000 Total 29,013,236
4. AMOUNT TRANSFERRED TO PROJECT-IN-PROGRESS Professional Charges 357,330 General Charges 5,661 Rates and Taxes 2,000 Total 364,991
5. NOTES ON ACCOUNTS 1. The accounts dealt with in these statements are for the period from the date of incorporation i.e. April 8, 2008 to March 31, 2009.
2. The following are the significant accounting policies adopted by the Company in the preparation and presentation of financial statements. a) Financial statements are based on historical costs and on accrual basis. b) The preparation of financial statements requires the management of the company to make certain estimates and assumptions that effect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expenditure during the year. Any revision to such estimates is recognised prospectively in the year in which it is revised. c) Tangible Fixed Assets are stated at cost net of depreciation provided/amortisation. d) Depreciation on the assets of the Company is provided on straight line / written down value method as per Schedule XIV to the Companies Act, 1956.
147 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 148
Nava Bharat Energy India Limited
Schedules annexed to and forming part of the Accounts for the year ended March 31, 2009
5. NOTES ON ACCOUNTS (Contd.) e) Deferred tax asset and liability is calculated by applying the tax rate and tax laws that have been enacted or substantially enacted by the balance sheet date. Deferred tax assets are recognised and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised.
3. The entire 2,50,000 Equity Shares of Rs.2/- each fully paid up are held by the holding Company viz., Nava Bharat Ventures Limited, Hyderabad.
4. Share application money amounting to Rs.2,90,00,000/- has been received from Nava Bharat Ventures Limited., the holding company.
5. Depreciation on the assets of the Company is provided on written down value method as per Schedule XIV to the Companies Act, 1956.
6. Disclosure of Sundry Creditors under current liabilities is based on the information available with the Company regarding the status of the suppliers as defined under the “Micro, Small and Medium Enterprises Development Act, 2006” and relied upon by the Auditors. During the year the Company has paid no interest in terms of Section 16 of the said Act.
7. The other particulars as required under part II, Schedule VI to the Companies Act, 1956 are not given as they are not applicable to the Company for the time being. 8. Calculation of Earnings per share: (Amount in Rupees) Current Year a) Net loss as per Profit and Loss Account (in Rs.) 865,881 b) Weighted average number of Equity shares (Nos.) 243,150 c) Face value as per share (in Rs.) 2 d) Earnings per share (Basic and Diluted) (in Rs.) (3.56)
9. In terms of Accounting Standard (AS 22) on "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, there is a net deferred tax asset as on March 31, 2009. In compliance with the provisions of the Accounting Standard and based on general prudence, the Company has not recognised the said deferred tax asset while preparing the accounts for the current year.
10. The details of related party transactions in terms of Accounting Standard (AS 18) are as follows: a. Names of related parties and relation with the company: i. Key Management Personnel: Sri D Ashok, Director Sri P Trivikrama Prasad, Director Sri G R K Prasad, Director ii. Enterprises controlling the reporting Enterprise. M/s.Nava Bharat Ventures Limited b. Transactions with related Parties during the year: Enterprises controlling the reporting Enterprise. Amount Rs. Nava Bharat Ventures Limited Share Capital received 500,000
c. Balances due to related parties as at the year end. Nava Bharat Ventures Limited 29,000,000
11. Since this is the first financial year after incorporation of the Company there are no corresponding figures for the previous year.
Per our Report of even date. For and on behalf of the Board
For Brahmayya & Co. Chartered Accountants
P. Chandramouli Partner P. Trivikrama Prasad Director
Hyderabad D. Ashok May 28, 2009 Director
148 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 149
Annual Report 2008-09
Statement pursuant to part-IV of Schedule VI to the Companies Act, 1956
Balance Sheet abstract and Company's general business profile I. Registration details Registration No. U40106AP2008PLC058560 State Code 01 Balance Sheet Date 31 03 2009
II. Capital raised during the year (Rupees in thousands) Public issue NIL Rights issue NIL Bonus Shares NIL Private placement NIL
III. Position of mobilisation and deployment of funds (Rupees in thousands) Total Liabilities 29513 Total Assets 29513 Sources of Funds: Paid-up Capital 500 Share Application Money NIL Reserves & Surplus NIL Secured Loans NIL Unsecured Loans NIL Deferred tax liability NIL Application of Funds: Net Fixed Assets 26823 Investments NIL Net Current Assets ( 27189 ) Miscellaneous Expenditure NIL Accumulated Losses 866
IV. Performance of Company (Rupees in thousands) Turnover (Gross Revenue) 46 Total Expenditure 912 +/- Profit or Loss before Tax – 866 +/- Profit or Loss after Tax – 866 Earnings per share in Rs. (3.56) Dividend Rate % NIL
V. Generic name of three principal products/services of Company (as per monetary terms) Product description Generation and Supply of Power
Per our Report of even date. For and on behalf of the Board
For Brahmayya & Co. Chartered Accountants
P. Chandramouli Partner P. Trivikrama Prasad Director
Hyderabad D. Ashok May 28, 2009 Director
149 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 150
Nava Bharat Sugar and Bio Fuels Limited
Notice to Shareholders
Notice is hereby given that the First Annual General Meeting of the NOTES : Company will be held on Thursday, the 30th July, 2009 at 12.00 noon 1. A member entitled to attend and vote at the meeting is entitled to at 6-3-1109/1, ‘Nava Bharat Chambers’, Raj Bhavan Road, Hyderabad appoint a proxy to attend and vote instead of himself/herself and – 500 082 to transact the following business: such proxy need not be a member of the Company. The proxy form Ordinary Business: duly signed must be deposited at the Registered Office of the 1. To receive, consider and adopt the audited Profit & Loss Account Company not later than 48 hours before the time of holding the for the year ended March 31, 2009 and the Balance Sheet as at meeting. that date and the Reports of the Directors and Auditors thereon. 2. An Explanatory Statement pursuant to Section 173 (2) of the 2. To appoint a Director in the place of Sri D. Ashok, who being Companies Act, 1956, relating to the Special Business to be first Director, retires and, being eligible, offers himself for transacted at the Meeting is annexed hereto. re-appointment. Explanatory statement (pursuant to Section 173(2) of the 3. To appoint a Director in the place of Sri P. Trivikrama Prasad, who Companies Act 1956): being first Director, retires and, being eligible, offers himself for Item No. 6 re-appointment. Appointment of Dr. M. V. G. Rao, as Director, liable to retire by 4. To appoint a Director in the place of Sri G. R. K. Prasad, who being rotation: first Director, retires and, being eligible, offers himself for Dr. M. V. G. Rao was appointed as an Additional Director under Section re-appointment. 260 of the Companies Act, 1956 on the Board of the Company on 5. To appoint Auditors and fix their remuneration. January 23, 2009 and he would hold office upto the date of Annual General Meeting. Special Business : 6. Appointment of Dr. M. V. G. Rao, as Director, liable to retire by A notice in writing from Nava Bharat Ventures Limited has been rotation: received under Section 257 of the Companies Act, 1956, along with a deposit of Rs.500/- proposing his appointment as a Director, liable to To consider and, if thought fit, to pass with or without retire by rotation. modification(s), the following resolution as an Ordinary Resolution: Accordingly, the Board commends the resolution for your approval. “RESOLVED THAT Dr. M. V. G. Rao, whose term of office as an Additional Director of the Company expires at the Annual General None of the Directors, except Dr. M.V.G. Rao is deemed to be interested Meeting and in respect of whom the Company has received a or concerned in the Resolution. notice under Section 257 of the Companies Act, 1956 proposing his candidature for the office of a Director, be and is hereby By Order of the Board appointed as a Director of the Company, whose period of office for Nava Bharat Sugar and Bio Fuels Limited will be liable to determination by retirement by rotation.” By Order of the Board Place: Hyderabad P. Trivikrama Prasad for Nava Bharat Sugar and Bio Fuels Limited Date : May 28, 2009 Director Place: Hyderabad P. Trivikrama Prasad Date : May 28, 2009 Director
Regd. Office: 6-3-1109/1 ‘Nava Bharat Chambers’ Raj Bhavan Road Hyderabad – 500 082
150 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 151
Annual Report 2008-09
Directors' Report
Dear Members, – Reasonable and prudent judgement and estimates were made so Your Directors have pleasure in presenting their First Annual Report as to give a true and fair view of the state of affairs of the company. together with the Audited Balance Sheet of the Company as at – Proper and sufficient care has been taken for the maintenance of March 31, 2009 and the Auditors' Report thereon. adequate accounting records in accordance with the provisions of Operations: the Companies Act, as applicable. Nava Bharat Sugar and Bio Fuels Limited is a subsidiary of Nava Bharat – The accounts have been prepared on ‘a going concern’ basis. Ventures Limited (NBVL) to facilitate sugar operations as and when Conservation of Energy, Technology Absorption and Foreign such plan is taken up by the Group. At present, there are no operations Exchange earnings and outgo: in this subsidiary. The Company has yet to commence its operations. Technology Absorption, conservation of Energy, Foreign Exchange Directors: earnings and outflow are nil, as the Company has not yet started the Sri D. Ashok, Sri P. Trivikrama Prasad and Sri G. R. K. Prasad, being the commercial operations. first Directors, retire and, being eligible, offer themselves for Particulars of Employees: re-appointment. The provisions of Section 217 (2A) of the Companies Act 1956 read The Board at its meeting held on January 23, 2009 appointed with the Companies Particulars of Employees Rules, 1975 regarding Dr. M. V. G. Rao as Additional Director, whose term of office expires on particulars of employees drawing remuneration of the prescribed sums the date of the Annual General Meeting. The Company has received a are not applicable as there were no employees in that category. notice from Nava Bharat Ventures Limited with necessary deposit Acknowledgement: proposing the appointment of Dr. M. V. G. Rao as Director of the Your Directors gratefully acknowledge the support and co-operation Company liable to retire by rotation at the ensuing Annual General extended by the Regulatory Authorities and Company’s Bankers. Meeting pursuant to the provisions of Section 257 of the Companies Act, 1956. By Order of the Board Fixed Deposits: for Nava Bharat Sugar and Bio Fuels Limited The Company has not accepted or held any public deposits pursuant to Section 58A of the Companies Act, 1956 read with The Companies P. Trivikrama Prasad (Acceptance of Deposits) Rules, 1975. Director
Auditors:
M/s Brahmayya & Co., Chartered Accountants, the First Auditors of the Place: Hyderabad D. Ashok Company retire at the conclusion of the Annual General Meeting and Date : May 28, 2009 Director have expressed their willingness to continue in office, if re-appointed. Regd. Office: Directors’ Responsibility Statement: 6-3-1109/1 The Directors confirm that in the preparation of Annual Accounts for ‘Nava Bharat Chambers’ the year ended 31.03.2009: Raj Bhavan Road – Applicable accounting standards have been followed. Hyderabad – 500 082 – The accounting policies framed in accordance with the guidelines of the Institute of Chartered Accountants of India have been applied.
151 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 152
Nava Bharat Sugar and Bio Fuels Limited
Auditors’ Report
To The Members of Nava Bharat Sugar and Bio Fuels Limited Hyderabad
1. We have audited the attached Balance Sheet of NAVA BHARAT iii) The Balance Sheet, Profit and Loss Account and Cash Flow SUGAR AND BIO FUELS LIMITED, HYDERABAD (A.P) as at statement dealt with by this report are in agreement with the March 31, 2009 and also the Profit and Loss Account and the Cash books of account.
Flow Statement for the year ended on that date annexed thereto. iv) In our opinion, the Balance Sheet, Profit and Loss account and These financial statements are the responsibility of the Company’s Cash Flow Statement dealt with by this report comply with the Management. Our responsibility is to express an opinion on these accounting standards referred to in sub-section (3C) of Section financial statements based on our audit. 211 of the Companies Act, 1956;
2. We conducted our audit in accordance with the auditing standards v) On the basis of written representations received from the generally accepted in India. Those Standards require that we plan Directors, as on March 31, 2009 and taken on record by the and perform the audit to obtain reasonable assurance about Board of Directors, we report that, none of the Directors is whether the financial statements are free of material misstatement. disqualified as on March 31, 2009 from being appointed as a An audit includes examining, on a test basis, evidence supporting Director in terms of clause (g) of sub-section (1) of Section 274 the amounts and disclosures in the financial statements. An audit of the Companies Act, 1956;
also includes assessing the accounting principles used and vi) In our opinion and to the best of our information and significant estimates made by management, as well as evaluating according to the explanations given to us, the said accounts the overall financial statement presentation. We believe that our read in conjunction with the Schedules annexed therewith give audit provides a reasonable basis for our opinion. the information required by the Companies Act, 1956, in the
3. As required by the Companies (Auditors’ Report) Order, 2003 ( as manner so required and give a true and fair view in conformity amended ), issued by the Central Government of India in terms of with the accounting principles generally accepted in India: sub-section (4A) of Section 227 of the Companies Act, 1956, we a) in the case of the balance sheet, of the state of affairs of enclose in the Annexure a statement on the matters specified in the Company as at March 31, 2009; paragraphs 4 and 5 of the said Order. b) in the case of the profit and loss account, of the Loss of the Company for the year ended on that date; and 4. Further to our comments in the Annexure referred to above, we report that: c) in the case of cash flow statement, of the cash flows for i) We have obtained all the information and explanations, which the year ended on that date. to the best of our knowledge and belief were necessary for the For Brahmayya & Co. purposes of our audit. Chartered Accountants
ii) In our opinion, proper books of account as required by law (P. Chandramouli) have been kept by the Company so far as appears from our Place: Hyderabad Partner examination of those books. Date : May 28, 2009 Membership No.25211
152 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 153
Annual Report 2008-09
Annexure to the Auditor’s Report
referred to in paragraph 3 of our report of even date, Re: Nava Bharat Sugar and Bio Fuels Limited, Hyderabad
1. a. During the year, the Company has neither granted nor taken 6. The Company is not a chit fund or a nidhi/mutual benefit any loans, secured or unsecured to/from Companies, firms or fund/society. Therefore, the provisions of clause 4(xiii) of the other parties covered in the register maintained under Section Companies (Auditor's Report) Order, 2003 are not applicable to the 301 of the Companies Act, 1956. Company.
b. In view of our comment in paragraph (a) above, (III) (b), (c), 7. The Company is not dealing or trading in shares, securities, (d), (e), (f) and (g) of paragraph 4 of the aforesaid order are debentures and other investments. Therefore, the provisions of not applicable to the Company. clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are 2. a. On the basis of our examination of the books of account and not applicable to the Company. according to the information and explanations given to us, the 8. According to the information and explanations given to us, the Company has not entered into any transaction that needs to Company has not given any guarantee for the loans taken by be entered in the Register maintained under Section 301 of the others from banks or financial institutions. Companies Act, 1956. 9. During the year the Company has not obtained any term loans. b. In view of our comment in paragraph (a) above, clause V (b) of aforesaid Order, in our opinion, is not applicable. 10. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we 3. The Company has not accepted any deposits from the public. report that no funds raised on short-term basis have been used for Hence the provisions of Section 58A and 58AA or any other long-term investment. relevant provisions of the Companies Act, 1956, and the Companies (Acceptance of Deposits) Rules, 1975, do not apply to 11. During the year, the Company has not made any preferential this Company. allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 4. a. According to the records of the Company, the Company is 1956. regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education 12. During the year, the Company has not issued any debentures, and Protection Fund, Employees' State Insurance, Income-tax, therefore the question of creating security or charge in respect Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, thereof does not arise Cess and other material statutory dues applicable to it. 13. During the year, the Company has not made any public issue and b. According to the information and explanations given to us, no therefore the question of disclosing the end use of money raised by undisputed amounts payable in respect of Income-tax, wealth public issue does not arise. tax, Sales tax, Custom Duty, Excise Duty and Cess were in 14. Based upon the audit procedures performed and according to the arrears, as at March 31, 2009 for a period of more than six information and explanations given to us, we report that no fraud months from the day they became payable. on or by the Company has been noticed or reported during the c. According to the information and explanation given to us, year. there are no dues of sale tax, income tax, custom duty, wealth tax, excise duty and Cess which have not been deposited on 15 The Clauses of 4 (i), (ii), (iv), (vii), (viii), (xi) and (xii) of the Order are account of any dispute. not applicable to the Company for the time being. For Brahmayya & Co. 5. The Company is not in existence for more than five years from the Chartered Accountants date of registration till the last day of the financial year covered by this report. Therefore, the provisions of clause 4(x) of the (P. Chandramouli) Companies (Auditor's Report) Order, 2003 are not applicable to the Place: Hyderabad Partner Company. Date : May 28, 2009 Membership No.25211
153 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 154
Nava Bharat Sugar and Bio Fuels Limited
Balance Sheet as at March 31, 2009
Particulars Amount (Rs.)
I. SOURCES OF FUNDS Share holders funds Share Capital Authorised : 25,00,000 Equity Shares of Rs.2/- each 5,000,000 Issued, Subscribed and paid-up : 2,50,000 Equity Shares of Rs.2/- each fully paid-up 500,000 Total 500,000 II. APPLICATION OF FUNDS 1) Current Assets Cash and Bank balances: Balances with Scheduled Bank in Current account 353,344 353,344 Less : Current liabilities for expenses 13,236 Net Current Assets 340,108 2) Profit and Loss Account 159,892 Total 500,000 Notes on Accounts - Annexured
Per our Report of even date. For and on behalf of the Board
For Brahmayya & Co. Chartered Accountants
P. Chandramouli Partner P. Trivikrama Prasad Director
Hyderabad D. Ashok May 28, 2009 Director
154 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 155
Annual Report 2008-09
Profit and Loss Account for the year ended March 31, 2009
Particulars Amount (Rs.)
I. INCOME – Total – II. EXPENDITURE Filing Fee 2,000 Bank Charges 750 Printing & Stationery Charges 13,750 General Charges 107 Rates and Taxes 2,620 Auditors remuneration : as Auditors 13,236 : for Certification 2,809 Preliminary Expenses 124,620 Total 159,892 III. LOSS FOR THE YEAR CARRIED TO BALANCE SHEET 159,892 Earnings per Share - (Basic and Diluted) (0.66) Notes on Accounts - Annexured
Per our Report of even date. For and on behalf of the Board
For Brahmayya & Co. Chartered Accountants
P. Chandramouli Partner P. Trivikrama Prasad Director
Hyderabad D. Ashok May 28, 2009 Director
155 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 156
Nava Bharat Sugar and Bio Fuels Limited
Cash Flow Statement for the year ended March 31, 2009
Particulars Amount (Rs.)
A. CASH FLOW FROM OPERATING ACTIVITIES:
Net Loss before Tax (159,892) Operating Profit before Working Capital Changes (159,892) Adjustments for:
Trade and Other payables (13,236) Net Cash from Operating Activities (A) (146,656) B. CASH FLOW FROM INVESTING ACTIVITIES: – Net Cash used in Investing Activities (B) –
C. CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from issue of Share Capital 500,000 Net Cash generated in Financing Activities (C) 500,000 Net increase in Cash and Cash Equivalents (A+B+C) 353,344
Cash and Cash equivalents as at March 31, 2009 353,344 Note: Cash and Cash equivalents consist of balance with Scheduled Bank in current Accounts 353,344
Per our Report of even date. For and on behalf of the Board
For Brahmayya & Co. Chartered Accountants
P. Chandramouli Partner P. Trivikrama Prasad Director
Hyderabad D. Ashok May 28, 2009 Director
156 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 157
Annual Report 2008-09
ANNEXURE - NOTES ON ACCOUNTS 1. The accounts dealt with in these statements are for the period from the date of incorporation i.e. April 8, 2008 to March 31, 2009.
2. The following are the significant accounting policies adopted by the Company in the preparation and presentation of financial statements. a) Financial statements are based on historical costs and on accrual basis. b) All contingent liabilities are indicated by way of a note and will be paid/provided on crystalisation.
3. The entire 2,50,000 Equity Shares of Rs.2/- each fully paid up are held by the holding Company viz., Nava Bharat Ventures Limited, Hyderabad.
4. The other particulars as required under part II, Schedule VI to the Companies Act, 1956 are not given as they are not applicable to the Company for the time being.
5. Calculation of Earnings per share Current year a) Net loss as per Profit and Loss Account (in Rs.) 159,892 b) Weighted average number of Equity shares (Nos.) 243,150 c) Face value as per share (in Rs.) 2 d) Earnings per share (in Rs.) – (Basic and Diluted) (0.66)
6. The details of related party transactions in terms of Accounting Standard (AS 18) are as follows: a. Names of related parties and relation with the company: i. Key Management Personnel: Sri D Ashok, Director Sri P Trivikrama Prasad, Director Sri G R K Prasad, Director ii. Enterprises controlling the reporting Enterprise. M/s. Nava Bharat Ventures Limited b. Transactions with related Parties during the year: Enterprises controlling the reporting Enterprise. Amount Rs. Nava Bharat Ventures Limited – Cost of Investments 500,000 c. Balances due as at the year end. NIL
7. Since this is the first financial year after incorporation of the Company there are no corresponding figures for the previous year.
Per our Report of even date. For and on behalf of the Board
For Brahmayya & Co. Chartered Accountants
P. Chandramouli Partner P. Trivikrama Prasad Director
Hyderabad D. Ashok May 28, 2009 Director
157 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 158
Nava Bharat Sugar and Bio Fuels Limited
Statement pursuant to part-IV of Schedule VI to the Companies Act, 1956
Balance Sheet abstract and Company's general business profile I. Registration details Registration No. U74999AP2008PLC058559 State Code 01 Balance Sheet Date 31 03 2009
II. Capital raised during the year (Rupees in thousands) Public issue NIL Rights issue NIL Bonus Shares NIL Private placement NIL
III. Position of mobilisation and deployment of funds (Rupees in thousands) Total Liabilities 500 Total Assets 500 Sources of Funds: Paid-up Capital 500 Share Application Money NIL Reserves & Surplus NIL Secured Loans NIL Unsecured Loans NIL Deferred tax liability NIL Application of Funds: Net Fixed Assets NIL Investments NIL Net Current Assets 340 Miscellaneous Expenditure NIL Accumulated Losses 160
IV. Performance of Company (Rupees in thousands) Turnover (Gross Revenue) NIL Total Expenditure 160 +/- Profit or Loss before Tax – 160 +/- Profit or Loss after Tax – 160 Earnings per share in Rs. (0.66) Dividend Rate % NIL
V. Generic name of three principal products/services of Company (as per monetary terms) Product description Manufacture of Sugar and allied products
Per our Report of even date. For and on behalf of the Board
For Brahmayya & Co. Chartered Accountants
P. Chandramouli Partner P. Trivikrama Prasad Director
Hyderabad D. Ashok May 28, 2009 Director
158 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 159
Annual Report 2008-09
Consolidated Auditors' Report
Nava Bharat Ventures Limited and Its Subsidiaries
1. We have audited the attached consolidated Balance Sheet of NAVA 4. We report that the consolidated financial statements have been BHARAT VENTURES LIMITED and its subsidiaries (collectively "the prepared by the Nava Bharat Ventures Limited's management in Group") as at March 31, 2009 and also the consolidated Profit accordance with the requirements of Accounting Standard (AS) and Loss Account and the consolidated cash flow statement for 21, "Consolidated Financial Statements", issued by the Institute of the year ended on that date, annexed thereto. These financial Chartered Accountants of India. statements are the responsibility of Nava Bharat Ventures Limited's 5. In our opinion and to the best of our information and according to management. Our responsibility is to express an opinion on these the explanations given to us and subject to our observation vide financial statements based on our audit. Para 3 above, the consolidated financial statements give a true and 2. We conducted our audit in accordance with the auditing standards fair view in conformity with the accounting principles generally generally accepted in India. Those Standards require that we plan accepted in India: and perform the audit to obtain reasonable assurance about a) in the case of Consolidated Balance Sheet, of the state of whether the financial statements are free of material misstatement. affairs of the Group as at March 31, 2009;
An Audit includes, examining on a test basis, evidence supporting b) in the case of the Consolidated Profit and Loss Account, of the the amounts and disclosures in the financial statements. An audit Profit of the Group for the year ended on that date; and also includes assessing the accounting principles used and c) in the case of the consolidated Cash Flow Statement, of the significant estimates made by management, as well as evaluating consolidated cash flows of the Group for the year ended on the overall financial statement presentation. We believe that our that date. audit provides a reasonable basis for our opinion. for Brahmayya & Co. 3. We did not audit the financial statements of one of the subsidiaries Chartered Accountants viz., Nava Bharat (Singapore) Pte. Ltd. Singapore, whose financial statements reflect total assets of US$ 25,756,849 equivalent to (P. Chandramouli) Rs.13,063.87 lakhs, total revenue of US$ 91,532,154 equivalent to Place: Hyderabad Partner Rs.46,425.11 lakhs and net cash flows amounting to US$ Date : May 30, 2009 Membership No.25211 8,668,107 equivalent to Rs.4,396.46 lakhs. The financial statements of the said subsidiary for the year ended March 31, 2009 were audited by other auditors, whose report has been furnished to us. Our opinion, insofar as it relates to the amounts included in respect of such subsidiary is solely based on the report of the other auditors.
159 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 160
Nava Bharat Ventures Limited
Consolidated Balance Sheet as at March 31, 2009
(Rs. in lakhs) Particulars Schedule As at As at reference 31.3.2009 31.3.2008 I. SOURCES OF FUNDS: 1. Shareholders Funds: a) Share Capital 1 1,523.77 1,558.73 b) Share Application Money – 6.73 c) Reserves and Surplus 2 116,823.97 79,258.59 118,347.74 80,824.05 2. Minority Interest 0.01 (0.03) 3. Loan Funds: a) Secured Loans 3 28,866.28 25,493.51 b) Unsecured Loans 4 14,171.01 14,436.85 43,037.29 39,930.36 4. Deferred tax liability 2,113.61 1,498.43 Total 163,498.65 122,252.81 II. APPLICATION OF FUNDS: 1. Fixed Assets: 5 a) Gross Block 90,797.51 58,646.98 b) Depreciation 20,255.87 16,578.04 c) Net Block 70,541.64 42,068.94 d) Capital Work-in-progress 1,561.05 22,488.02 72,102.69 64,556.96 2. Investments 6 323.93 2,376.81 3. Current Assets, Loans and Advances: a) Inventories 7 44,548.76 34,097.65 b) Sundry Debtors 8 9,474.59 6,734.12 c) Cash and Bank balances 9 44,461.55 26,670.89 d) Other Current Assets 10 2,906.87 3,678.67 e) Loans and Advances 11 15,079.37 9,032.80 116,471.14 80,214.13 Less: Current Liabilities and Provisions a) Current Liabilities 12 17,953.24 17,475.99 b) Provisions 13 7,446.18 7,421.26 25,399.42 24,897.25 Net Current Assets 91,071.72 55,316.88 4. Miscellaneous Expenditure (To the extent not written off or adjusted) Preliminary Expenses 0.31 2.16 Total 163,498.65 122,252.81 Notes on Accounts 21
Per our report of even date. For and on behalf of the Board For Brahmayya & Co. Chartered Accountants G. R. K. Prasad Director (Finance & Corporate Affairs) P. Chandramouli Partner P. Trivikrama Prasad Managing Director M. Subrahmanyam Hyderabad Company Secretary & D. Ashok May 30, 2009 Vice President Chairman
160 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 161
Annual Report 2008-09
Consolidated Profit and Loss Account for the year ended March 31, 2009
(Rs. in lakhs) Particulars Schedule Current year Previous year reference
I. EARNINGS: Sales (Gross) 146,564.32 110,998.81 Less: Inter-divisional transfers 9,808.47 16,427.45 136,755.85 94,571.36 Less: Excise Duty 3,117.60 2,649.60 Sales (Net) 133,638.25 91,921.76 Export Incentives 928.45 1,341.37 Other Revenue 14 2,266.78 1,908.12 Closing work-in-progress 5,219.77 5,000.22 Total 142,053.25 100,171.47 II. OUTGOINGS: Raw Materials 15 32,133.12 33,865.27 Purchased Power and Fuel for Power generation 19,251.80 9,494.18 Stores Consumed 889.66 1,209.11 Other Manufacturing Expenses 1,391.41 1,336.08 Opening Work-in-Progress 5,000.22 5,236.71 Land Transfer Registration fee 90.00 – Land Development Charges – 21.88 Compound Wall Construction – 122.97 Payments and benefits to Employees 16 5,732.98 4,383.93 Finance Charges 17 3,317.63 2,690.39 Other Expenses 18 19,631.89 12,709.52 Depreciation 5 3,809.02 2,524.10 Diminution in value of investments 163.07 8.76 91,410.80 73,602.90 (Increase)/Decrease in Stocks 19 (3,727.09) (8,234.96) 87,683.71 65,367.94 Less: Amount transferred to Projects-in-Progress 20 2,011.57 2,318.51 Amount reimbursed by Developer 1.87 480.18 Total 85,670.27 62,569.25 III. PROFIT FOR THE YEAR BEFORE TAXATION 56,382.98 37,602.22
161 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 162
Nava Bharat Ventures Limited
Consolidated Profit and Loss Account (Contd.) for the year ended March 31, 2009
(Rs. in lakhs) Particulars Schedule Current year Previous year reference
IV. PROVISION FOR TAXATION : Current Tax 5,933.69 5,948.05 : Deferred Tax 615.18 (455.00) : MAT Credit entitlement (2,300.00) – : Fringe Benefit Tax 76.25 140.80 4,325.12 5,633.85 V. PROFIT FOR THE YEAR AFTER TAXATION 52,057.86 31,968.37 Minority share (0.01) 0.03 Balance brought forward from last year 19,963.97 5,062.25 Excess Provision for Income Tax written back 22.31 50.69 VI. AMOUNT AVAILABLE FOR APPROPRIATIONS 72,044.13 37,081.34 VII. APPROPRIATIONS: Proposed Dividend on Equity 5,679.94 4,374.01 Corporate Dividend Tax 965.31 743.36 Capital Redemption Reserve 35.60 – Contingency Reserve 2,000.00 2,000.00 General Reserve 10,000.00 10,000.00 Surplus carried to Balance Sheet 53,363.28 19,963.97 Total 72,044.13 37,081.34 Earnings per share (Rs.) - Basic 68.25 44.34 - Diluted 65.21 44.34 Notes on Accounts 21
Per our report of even date. For and on behalf of the Board For Brahmayya & Co. Chartered Accountants G. R. K. Prasad Director (Finance & Corporate Affairs) P. Chandramouli Partner P. Trivikrama Prasad Managing Director M. Subrahmanyam Hyderabad Company Secretary & D. Ashok May 30, 2009 Vice President Chairman
162 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 163
Annual Report 2008-09
Consolidated Cash Flow Statement for the year ended March 31, 2009
(Rs. in lakhs) Particulars Year ended Year ended 31.3.2009 31.3.2008
A. CASH FLOW FROM OPERATING ACTIVITIES: Net Profit after Minority Share and before Tax 56,382.97 37,602.25 Adjustments for: Interest earned (851.23) (446.84) Miscellaneous Expenditure written off 4.35 0.04 Excess Provisions written back (2.17) (32.34) Input tax credit written off 80.70 88.66 Bad debts and Advances written off 1.70 123.36 Project expenditure written off – 314.92 Investments written off 4.60 – Diminution in the value of Inventories/Stocks written off 6,306.27 1.99 Depreciation 3,809.02 2,524.10 Assets discarded 2.29 7.52 Profit on sale of Assets (35.11) (3.57) Profit on sale of Investments (12.25) (101.73) Diminution in value of Investments 163.07 8.76 Dividend/Interest received from Investments (854.63) (405.20) Interest (excluding the amount capitalised) 1,507.28 1,541.76 Effect of Exchange Rate Change (5,818.51) (200.94) Operating Profit before Working Capital Changes 60,688.35 41,022.74 Adjustments for: Trade and Other receivables (3,439.84) (3,229.34) Inventories (16,757.38) (14,813.99) Trade and Other payables 498.47 5,356.58 Cash generated from Operations 40,989.60 28,335.99 Direct Taxes paid (6,629.42) (4,959.95) Net Cash from Operating Activities (A) 34,360.18 23,376.04 B. CASH FLOW FROM INVESTING ACTIVITIES: Loans/Advances to Bodies Corporate 1.30 (1.31) Purchase of Fixed Assets (excluding Interest capitalised) (11,283.42) (25,065.17) Sale of Fixed Assets 48.80 14.69 Fixed Deposits (13,094.84) 6576.84 Purchase of Investments (including advances) (129,168.86) (112,557.59) Sale of Investments 128,090.00 111,039.24 Interest received 609.96 477.74 Dividend/Interest received on Investments 854.63 405.20 Miscellaneous Expenditure (2.50) – Net Cash used in Investing Activities (B) (23,944.93) (19,110.36)
163 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 164
Nava Bharat Ventures Limited
Consolidated Cash Flow Statement (Contd.) for the year ended March 31, 2009
(Rs. in lakhs) Particulars Year ended Year ended 31.3.2009 31.3.2008
C. CASH FLOW FROM FINANCING ACTIVITIES: Proceeds from issue of Shares/Warrants/ Buy back of Shares (Net) (2,092.71) 12,419.95 Proceeds from Share Applications – (93.27) Proceeds from borrowings (net) 3,106.93 (7,862.90) Interest paid (including interest capitalised) (1,646.50) (1,861.19) Dividend paid (5,087.15) (2,489.72) Net Cash generated in Financing Activities (C) (5,719.43) 112.87 Net increase in Cash and Cash Equivalents (A+B+C) 4,695.82 4,378.55 Cash and Cash equivalents at the beginning of the year 6,885.78 2,507.23 Cash and Cash equivalents at the end of the year 11,581.60 6,885.78 Notes: Cash and Cash equivalents include: Cash and Cheques on hand 27.78 2,559.18 Balance with banks in Current Accounts 11,495.26 3,966.45 Balance with banks in Cash Credit Accounts 58.56 21.41 Balance with banks in Deposit Accounts 32,879.95 20,123.85 44,461.55 26,670.89 Less: Fixed Deposits considered as Investments 32,879.95 19,785.11 Cash and Cash equivalents considered for cash flow 11,581.60 6,885.78
Per our report of even date. For and on behalf of the Board For Brahmayya & Co. Chartered Accountants G. R. K. Prasad Director (Finance & Corporate Affairs) P. Chandramouli Partner P. Trivikrama Prasad Managing Director M. Subrahmanyam Hyderabad Company Secretary & D. Ashok May 30, 2009 Vice President Chairman
164 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 165
Annual Report 2008-09
Schedules annexed to and forming part of the Consolidated Accounts for the year ended March 31, 2009
(Rs. in lakhs) Particulars As at As at 31.3.2009 31.3.2008 1. SHARE CAPITAL
Authorised: 25,00,00,000 – Equity Shares of Rs.2/- each 5,000.00 5,000.00 5,000.00 5,000.00 Issued and subscribed: 7,81,56,703 (Previous year 7,81,25,143) – Equity Shares of Rs. 2/- each 1,563.13 1,562.50 1,563.13 1,562.50 Paid-up: 7,61,25,324 (Previous year 7,78,73,668 ) – Equity Shares of Rs.2/- each fully paid up 1,522.51 1,557.47 Add: Forfeited Shares (amount originally paid up) 1.26 1.26 Total 1,523.77 1,558.73
2. RESERVES AND SURPLUS
a) Subsidies: Cash Subsidy from Central/State Governments Balance as per last Balance Sheet 33.60 33.60 b) Capital Reserve Balance as per last Balance Sheet 60.20 60.20 c) Capital Redemption Reserve Balance as per last Balance Sheet 787.74 787.74 Add: Transferred during the year on buyback of Equity Shares 35.60 – 823.34 787.74 d) Securities Premium Account Balance as per last Balance Sheet 13,697.41 1,789.12 Add: Received during the year 35.08 12,433.83 13,732.49 14,222.95 Less: Premium on conversion of Foreign Currency Convertible Bonds and Issue expenses – 525.54 13,732.49 13,697.41 e) Foreign Currency Translation Reserve (arising on consolidation) Balance as per last Balance Sheet 465.67 666.61 Add: Addition during the year –– 465.67 666.61 Less: Deletion during the year 5,818.51 200.94 (5,352.84) 465.67 f) Contingency Reserve Balance as per last Balance Sheet 4,100.00 2,100.00 Add: Transferred during the year 2,000.00 2,000.00 6,100.00 4,100.00 g) General Reserve Balance as per last Balance Sheet 40,150.00 30,150.00 Less: Premium on buyback of Equity Shares 2,086.10 – 38,063.90 30,150.00 Add: Transferred during the year 10,000.00 10,000.00 48,063.90 40,150.00 h) Surplus: balance in profit and loss account 53,363.28 19,963.97 Total 116,823.97 79,258.59
165 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 166
Nava Bharat Ventures Limited
Schedules annexed to and forming part of the Consolidated Accounts for the year ended March 31, 2009
(Rs. in lakhs) Particulars As at As at 31.3.2009 31.3.2008 3. SECURED LOANS
i) Rupee Term Loans from: Industrial Development Bank of India Limited 3,000.00 3,750.00 Infrastructure Development Finance Company Limited 966.67 1,450.00 Andhra Bank 7,458.55 2,200.00 State Bank of India 2,054.05 2,515.90 BNP Paribas – 571.43 HDFC Bank Limited 187.50 437.50 The South Indian Bank Ltd – 500.00 ii) Foreign Currency Term Loans from: Bank of India 10,449.40 10,001.07 iii) Medium Term Loans from Banks 714.18 714.18 iv) Working Capital Loans from Banks 4,035.93 3,353.43 Total 28,866.28 25,493.51
4. UNSECURED LOANS Fixed Deposits 88.41 218.21 From : Other Bodies Corporate 30.00 55.50 : A P State Government (deferred sales tax liability) 35.37 35.37 : Orissa State Government (deferred sales tax liability) 21.71 132.25 Foreign currency convertible bonds 13,995.52 13,995.52 Total 14,171.01 14,436.85
166 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 167
Annual Report 2008-09
Schedules annexed to and forming part of the Consolidated Accounts for the year ended March 31, 2009 (Rs. in lakhs) hich is adjusted against Foreign which is adjusted against Foreign ar Rs.205.46 lakhs) 81,135.00 41,433.62 31,145.95 91,422.67 16,578.04 3,750.76 131.1964,556.96 71,225.06 20,197.61 31.3.2008 31.3.2009 31.3.2008 year deductions 31.3.2009 31.3.2009 31.3.2008 58,646.98 31,361.81 147.17 89,861.62 16,578.04 3,750.76 42,068.94 69,664.01 20,197.61 131.19 – Township– (Freehold) Others – (Leasehold) Others 975.64 185.94 744.56 67.42 302.84 49.16 –12.31 142.94 811.98 – – –601.62 1,278.48 656.73 155.25 235.10 121.92 17.03 9.30 3.92 – (2.44) 138.95 1,139.53 15.66 853.72 219.44 176.64 – Leasehold 106.20 24.44 – 130.64 1.93 1.21 –104.27 127.50 3.14 Currency Translation Reserve. Currency Translation Currency Translation Reserve. Currency Translation * Includes th foreign currency translation difference between the year beginning and ending rates amounting to Rs. 49.16 lakhs w b) Pre-operative expensesLess: Internal transfers (A)Total 2,384.89 2,011.57 (Other than internally generated) 4,388.52 (B)Total (A + B)Total – 7.94 –Previous year 30,998.78 81,135.00 30.998.78 10,434.84 37.19 – 147.17 – 91,422.67 81,135.00 11,370.73 – 16,578.04 56,143.11 – 3,750.76 25,138.96 147.17 – 37.19 131.19 – 20,197.61 92,358.56 71,225.06 147.07 64,556.96 16,578.04 935.89 – 81,135.00 3,809.02 14,182.37 – – 2,524.10 131.19 20,255.87 72,102.69 – 64,556.96 128.43 – 4.30 16,578.04 64,556.96 41,960.74 – 7.94 935.89 2,384.89 – – – 4.30 58.26 32.89 – – – – 58.26 877.63 – Add: Capital Work-in-Progress a) Cost of equipment 20,103.13 8,060.24 26,610.26 1,553.11 – – – – 1,553.11 20,103.13 ** Includes the foreign currency translation difference between year beginning and ending rates amounting to Rs. 2.44 lakhs *** Distribution Company. ownership of which vests with a State Owned Power Cost incurred by the Company, 5. FIXED ASSETS B. ASSETS INTANGIBLE 1. Computer Software Note: Additions to fixed assets during the year include borrowing costs capitalised aggregating Rs.433.58 lakhs (previous ye A. ASSETS TANGIBLE 1. Land – Freehold2. Buildings – Factory3. Plant and Machinery4. 2,061.35 Railway Siding5. 530.77 Works Water 4,825.95 2,932.83 6. and Fixtures Furniture 7. Motor VehiclesMachinery8. 1.00 7,757.78 1.19 47,817.92 1,168.57 Office Equipment 198.09 9. 26,526.80 Assets 2,590.93 3,657.38 Air Conditioners6,391.94 10.1,365.84 Workshop 0.82 11. Other 231.23 39.99 355.71 – 74,304.73 115.73 124.11 125.61 14,242.90 – 316.55 3,274.71 571.17 – 0.93 – 238.48 98.21 116.71 39.64 94.63 11.22 17,477.97 – 56,826.76 33,575.02 0.23 33.49 – 127.70 39.08 44.92 10.50 – 356.84 – 65.37 – 0.23 71.79 55.19 72.51 107.63 2.42 115.73 515.95 355.71 169.74 0.31 600.43 125.04 – 159.41 – 34.78 131.39 8.10 110.05 5.68 306.53 15.04 2,590.93 34.04 2,061.35 67.22 94.07 18.78 53.17 6.31 31.83 – 60.85 8.19 194.80 204.52 339.75 – – 321.15 152.32 0.26 260.68 157.14 33.82 61.49 40.35 264.64 61.10 321.89 84.69 340.67 70.29 90.07 45.04 Sl. DescriptionNo. As at GROSS BLOCK Additions* Deductions As at 12. Lines*** Power Upto the For **On DEPRECIATION Upto –2. As at 423.19 Drawing Rights Water As at NET BLOCK – 423.19 – 898.70 – 1.22 – 898.70 – 1.22 – 421.97 53.96 – – 53.96 844.74 –
167 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 168
Nava Bharat Ventures Limited
Schedules annexed to and forming part of the Consolidated Accounts for the year ended March 31, 2009
(Rs. in lakhs) Particulars Face Number of Shares value As at Additions/ As at As at As at Rs. 31.3.2008 (Deletions) 31.3.2009 31.3.2009 31.3.2008 6. INVESTMENTS: (At Cost, Long-term) a) Government Securities – Un-quoted: 6 year National Savings Certificates 3.01 1.41 Total (a) 3.01 1.41 b) Other Investments: i) In Other Companies – Equity Shares fully paid-up, Un-Quoted (Trade): A P Gas Power Corporation Limited 10 17 17 – – Malaxmi Highway Pvt Limited 10 406,600 200,000 606,600 60.66 40.66 Navabharat Power Private Limited 10 2,500 2,500 0.25 0.25 Total (b) (i) 60.91 40.91 ii) In Other Companies – Equity Shares fully paid up, Un-Quoted (Non-Trade): Kinnera Power Company Limited 10 50,000 50,000 5.00 5.00 Nava Bharat Envirotech Private Limited 10 1,000 1,000 0.05 0.05 Srinivasa Cystine Limited 10 75,000 75,000 5.00 5.00 Gunnam Subba Rao Investments Private Limited 10 8,000 8,000 0.56 0.56 Total (b) (ii) 10.61 10.61 iii) In Mutual Funds – Units, Quoted (Non-Trade): DWS Money Plus Advantage Fund 10 9,012,486 (9,012,486) – – 903.66 Tata Dynamic Bond Fund 10 9,550,985 (9,550,985) – – 1,003.16 ICICI Prudential Infrastructure Fund 10 321,022 – 321,022 113.93 113.93 Kotak Opportunity Fund 10 158,535 – 158,535 86.18 86.18 Reliance Diversified Power Fund 10 78,930 – 78,930 83.22 5.06 Sundaram BNP Paribas Select Focus Fund 10 6,018 – 6,018 5.06 83.22 Total (b) (iii) 288.39 2,195.21 iv) In Other Companies – Equity Shares fully paid-up, Quoted (Trade): Kothari Sugars and Chemicals Limited 10 200 200 10.00 10.00 The Jeypore Sugar Company Limited 10 2,857 2,857 1.16 1.16 Total (b) (iv) 11.16 11.16 v) In Other Companies – Equity Shares fully paid-up, Quoted (Non-Trade): Avanthi Leathers Limited 10 63,300 63,300 6.33 6.33 Beardsell Limited 10 548,250 548,250 73.39 73.39 NB Footwear Limited 10 76,830 76,830 7.68 7.68 Supreme Petrochem Ltd 10 51,877 51,877 31.13 31.13 Avanti Feeds Limited 10 1,500 1,500 0.15 0.15 Nagarjuna Finance Limited 10 9,850 (9,850) – – 4.08 Siris Limited 10 200 (200) – – 0.52 Industrial Development Bank of India Limited 10 8,000 8,000 6.50 6.50 Andhra Bank 10 22,800 22,800 2.28 2.28 Tata Consultancy Services Limited 1 6,142 6,142 26.10 26.10 Total (b) (v) 153.56 158.16 Total (b) (i to v) 524.63 2,416.05 Total (a+b) 527.64 2,417.46 Less: Diminution in value of Investments 203.71 40.65 Total 323.93 2,376.81
168 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:11 PM Page 169
Annual Report 2008-09
Schedules annexed to and forming part of the Consolidated Accounts for the year ended March 31, 2009
(Rs. in lakhs) Particulars As at As at 31.3.2009 31.3.2008 7. INVENTORIES At Cost: Stores and Spares 2,622.19 1,804.79 Fuel for power generation 3,688.98 1,928.90 Raw Materials 1,593.44 9,655.80 Finished Goods 3,633.33 13,333.63 Work-in-progress 234.82 567.28 Others 60.56 37.96 Goods-in-transit 323.03 1,520.97 Project work-in-progress 5,219.77 5,000.22 At realisable value: Raw Materials 13,164.69 – Work-in-progress 1,023.30 – Finished Goods 12,982.82 242.78 Scrap 1.83 5.32 Total 44,548.76 34,097.65
8. SUNDRY DEBTORS: (Unsecured, considered good) Debts due over six months 42.70 56.05 Other debts 9,431.89 6,678.07 Total 9,474.59 6,734.12
9. CASH AND BANK BALANCES Cash in hand 2.81 10.65 Cash with Scheduled Banks : In Current Accounts 11,495.26 3,966.45 : In Cash Credit Accounts 58.56 21.41 : In Deposit Accounts 32,879.95 20,123.85 Cheques/Demand Drafts on hand 24.97 2,548.53 Total 44,461.55 26,670.89
10. OTHER CURRENT ASSETS Prepaid Expenses 291.64 117.80 Deposits recoverable 120.99 218.26 Other receivables 1,703.69 2,742.23 Interest accrued 292.48 51.21 Balance with Central Excise Dept. 498.07 549.17 Total 2,906.87 3,678.67
169 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:12 PM Page 170
Nava Bharat Ventures Limited
Schedules annexed to and forming part of the Consolidated Accounts for the year ended March 31, 2009
(Rs. in lakhs) Particulars As at As at 31.3.2009 31.3.2008 11. LOANS AND ADVANCES (Unsecured, considered good, recoverable in cash or in kind or for value to be received) Advances to Other Bodies Corporate 0.01 1.31 Security Deposits with Power Supply Companies 364.45 390.51 Advances for : Capital goods 608.55 500.62 : Investments 5,416.93 2,440.60 : Purchases and expenses 5,760.01 4,220.96 Staff Advances 57.91 48.80 Advance Tax and Tax Deducted at Source (Net of provision) 566.30 – MAT Credit entitlement 2,305.21 1,430.00 Total 15,079.37 9,032.80
12. CURRENT LIABILITIES Sundry Creditors: Total outstanding dues of Micro and Small Enterprises 432.21 974.52 Total outstanding dues of creditors other than Micro and Small Enterprises 11,887.40 11,612.58 Share Application Money pending allotment 2,012.50 2,012.50 Investor Education and Protection Fund: (Appropriate amount shall be transferred to the Fund as and when due) i) Unpaid Dividend 95.30 65.08 ii) Unclaimed matured deposits – 0.10 Security Deposits 56.77 44.73 Advances received against supplies 217.92 236.79 Retention Deposits 412.70 290.49 Pre-received Income – 0.88 Interest accrued but not due 622.24 674.15 Due to directors 2,123.06 1,564.17 Bills discounted with Bankers 93.14 – Total 17,953.24 17,475.99
13. PROVISIONS For : Dividend 5,679.94 4,374.01 : Corporate Dividend Tax 965.31 743.36 : Taxation – 1,502.70 : Fringe Benefit Tax 6.39 3.97 : Gratuity 465.57 523.01 : Leave Encashment 328.97 274.21 Total 7,446.18 7,421.26
170 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:12 PM Page 171
Annual Report 2008-09
Schedules annexed to and forming part of the Consolidated Accounts for the year ended March 31, 2009
(Rs. in lakhs)
Particulars Current year Previous year 14. OTHER REVENUE Interest earned (others, gross) 851.23 446.84 (T.D.S. Current year Rs.134.97 lakhs, Previous year Rs.4.48 lakhs) Miscellaneous receipts 438.37 666.60 Power off take compensation – 194.40 Excess provisions/Credit Balances written back 2.17 32.34 Income from Investments 854.63 405.20 Rents earned 41.40 37.90 Claims received/receivable 31.62 19.54 Profit on sale of Assets 35.11 3.57 Profit on sale of Short Term Investments 12.25 101.73 Total 2,266.78 1,908.12
15. RAW MATERIALS Opening Stock 9,655.80 4,817.86 Add: Purchases 43,541.72 38,703.21 53,197.52 43,521.07 Less: Closing Stock 14,758.13 9,655.80 Diminution in value of materials 6,306.27 – Total 32,133.12 33,865.27
16. PAYMENTS AND BENEFITS TO EMPLOYEES Salaries, Wages and Bonus 5,053.29 3,808.09 Contribution to Provident and Other Funds 205.89 150.75 Gratuity and Superannuation 205.62 202.66 Workmen and Staff Welfare Expenses 268.18 222.43 Total 5,732.98 4,383.93
17. FINANCE CHARGES Interest on : Term Loans 1,284.88 1,510.49 : Other Loans 309.71 419.98 Bank Charges and Commission 494.52 369.47 Prompt Payment Rebate allowed 1,228.52 390.45 Total 3,317.63 2,690.39
18. OTHER EXPENSES Rent 196.20 103.88 Rates and Taxes 276.78 2,856.56 Freight and Transportation 1,677.19 1,741.81 Cane Development Expenses 138.93 58.72 Equipment Lease Rentals – 570.42 Insurance 362.71 391.80 Advertisement 53.19 38.60 Printing and Stationery 44.55 42.34 Communications 67.18 61.72 Travelling and Conveyance 403.45 313.88 Vehicle Maintenance 49.00 41.71
171 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:12 PM Page 172
Nava Bharat Ventures Limited
Schedules annexed to and forming part of the Consolidated Accounts for the year ended March 31, 2009
(Rs. in lakhs)
Particulars Current year Previous year 18. OTHER EXPENSES (Contd.) Legal and Professional charges 1,319.03 745.50 Directors Sitting fee 1.75 2.15 Payments to Auditors : As Auditors 13.30 10.82 : For Tax Audit 3.31 2.25 : For Tax Representation 8.51 2.15 : For Certification 5.29 2.78 : For Expenses 0.25 0.25 Fees to Cost Auditor 3.75 2.81 Electrical Works – 6.86 Repairs and Maintenance : Machinery 2,847.75 2,302.76 : Buildings 494.92 428.02 : Others 28.02 29.92 Commission on Sales 96.16 51.84 General Charges 1,347.14 663.93 Input tax credit written off 80.70 88.66 Bad Debts and Advances written off 1.70 123.36 Project Expenditure written off – 314.92 Investment written off 4.60 – Foreign exchange fluctuations 2,966.24 1,413.58 Diminution in value of Inventories/Stocks written off 6,306.27 1.99 Assets discarded 2.29 7.52 Donations and Charities 532.13 241.51 Expenditure relating to earlier years 295.25 44.46 Miscellaneous Expenditure written off 4.35 0.04 Total 19,631.89 12,709.52
19. (INCREASE)/DECREASE IN STOCKS a) Opening Stocks: Work-in-progress 567.28 413.34 Finished goods 13,576.41 5,494.03 Scrap 5.32 6.68 14,149.01 5,914.05 b) Closing Stocks: Work-in-progress 1,258.12 567.28 Finished goods 16,616.15 13,576.41 Scrap 1.83 5.32 17,876.10 14,149.01 (Increase)/decrease in Stocks (a-b) (3,727.09) (8,234.96)
172 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:12 PM Page 173
Annual Report 2008-09
Schedules annexed to and forming part of the Consolidated Accounts for the year ended March 31, 2009
(Rs. in lakhs)
Particulars Current year Previous year 20. AMOUNT TRANSFERRED TO PROJECTS-IN-PROGRESS Purchased Power and Fuel for Power generation 1,430.67 177.11 Stores Consumed –6.00 Manufacturing Expenses 48.28 – Salaries, Wages and Bonus 58.22 82.31 Contribution to Provident and Other Funds 2.74 4.69 Workmen and Staff Welfare Expenses 22.48 17.23 Interest on Term Loans 87.31 388.71 Bank Charges and Commission 76.36 78.83 Prompt Payment Rebate allowed 44.03 – Rent 3.89 5.31 Rates and Taxes 41.29 391.48 Insurance 26.51 40.40 Advertisement 1.19 4.13 Printing and Stationery 0.83 1.43 Communications 1.22 0.92 Travelling and Conveyance 30.95 60.44 Vehicle Maintenance 0.37 0.24 Legal and Professional charges 48.47 40.34 Repairs and Maintenance - Machinery 28.36 - General Charges 4.31 11.63 Foreign exchange fluctuations 49.64 1,006.37 Donations 0.20 0.01 Depreciation 4.25 0.93 Total 2,011.57 2,318.51 Less: Income during trial run: 2,201.41 78.81 Interest earned (Others) (Gross) (TDS: Nil) 0.50 27.79 Miscellaneous Receipts 117.28 28.92 Net Total (307.62) 2,182.99
21. NOTES ON ACCOUNTS 1. Consolidated financial statements have been prepared to meet the requirements of Clause 32 of the Listing Agreement with the Stock Exchanges. a) Basis of consolidation: The consolidation of accounts is done in accordance with the requirements of Accounting Standard (AS 21) "Consolidation of Financial Statements" issued by The Institute of Chartered Accountants of India. Financial statements of subsidiaries were prepared for the year ended March 31, 2009 and the same have been adopted for consolidation.
b) The subsidiary Companies considered in the consolidated financial statements are: Name of the Company Place of Percentage of incorporation shareholding Nava Bharat (Singapore) Pte Limited Singapore 100.00 Brahmani Infratech Private Limited India 99.98 Nava Bharat Realty Limited India 100.00 Nava Bharat Projects Limited India 100.00 Nava Bharat Energy India Limited India 100.00 Nava Bharat Sugar and Bio Fuels Limited India 100.00 In accordance with para 11 of AS 21 on "Consolidated Financial Statements" the financial Statements of Kinnera Power Company Limited and Malaxmi Highway Private Limited were not considered for consolidation.
173 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:12 PM Page 174
Nava Bharat Ventures Limited
Schedules annexed to and forming part of the Consolidated Accounts for the year ended March 31, 2009
21. NOTES ON ACCOUNTS (Contd.) c) Principles of consolidation: The consolidated financial statements have been prepared based on a line-by-line consolidation of Profit and Loss Account and Balance Sheet. All inter-company balances and transactions are eliminated on consolidation.
2. Minority Interest: (Rs. in lakhs) As at As at 31.3.2009 31.3.2008 2 Equity shares in the Share Capital of Brahmani Infratech Private Limited 0.00 0.00 Share in Reserves 0.01 (0.03) Total 0.01 (0.03)
3. The following are the significant Accounting policies adopted by the company in the preparation and presentation of consolidated financial statements. a) Financial statements are based on historical costs and on accrual basis. b) The preparation of financial statements requires the management of the Company to make certain estimates and assumptions that effect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expenditure for the year. Example of such estimates includes provision for doubtful debts, employee retirement benefits, provision for taxes etc. Any revision to such estimates is recognised prospectively in the year in which it is revised. c) Tangible Fixed Assets are stated at cost, net of accumulated depreciation, amortisation and impairment losses, if any. d) i) Depreciation on the assets is provided on straight line/written down value method as per Schedule XIV to the Companies Act, 1956. ii) The cost of leasehold land is amortised over the lease period. iii) Improvements to premises taken on lease are amortised over the primary lease period of three years. iv) Expenditure on Power Lines, ownership of which belongs to a State Owned Distribution Company is amortised over the period as permitted in the erstwhile "The Electricity Supply Act, 1948". v) Expenditure to acquire Water Drawing Rights from Government/Local Authorities or other parties, is amortised over the primary period of rights to use the facilities which is ten years for the time being. vi) Costs incurred towards purchase of Computer Software being in the nature of intangible assets are amortised over its estimated useful life of three to five years. e) i) Raw materials, work-in-progress and consumables are valued at lower of cost based on weighted average method and realisable value. ii) Goods-in-transit and standing crops are valued at cost. iii) The other stock-in-trade, loose tools, scrap and by-products are valued at lower of cost and realisable value. f) Long term Investments are carried at cost. Provision for diminution in the value of each long term investment is made to recognise a decline, other than that of temporary nature. g) The contingent liabilities are indicated by way of a note and will be provided/paid on crystalisation. h) Employee benefits: i) Short term benefits are recognised as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered. ii) Post employment and other long term employee benefits are recognised as an expense in the Profit and Loss Account for the year in which the employee has rendered service. The expense is recognised at the present value of the amount payable determined on the basis of actuarial valuation. Actuarial gains and losses in respect of post employment and other long term benefits are charged to Profit and Loss Account. iii) In respect of Employees Stock Options, the excess of fair price on the date of grant, over the exercise price, is recognised as Deferred Compensation cost and amortised over vesting period. iv) Compensation paid under the Company's Voluntary Retirement Scheme is charged to the Profit and Loss Account in the year of payment. i) Excise Duty payable on finished/saleable goods is accounted for on production of such goods.
174 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:12 PM Page 175
Annual Report 2008-09
Schedules annexed to and forming part of the Consolidated Accounts for the year ended March 31, 2009
21. NOTES ON ACCOUNTS (Contd.)
j) Sales are accounted for inclusive of sales tax collected. k) Borrowing costs that are directly attributable to the acquisition, construction or production of fixed assets are capitalised as part of the cost of that asset and it is the policy of the Company to capitalise the expenditure incurred in connection with the new projects as and when commercial operations begin, which for the time being is treated as Capital Works-in-progress. l) Export incentives, insurance claims and conversion escalations are accounted for on realisation. m) Dividend income is recognised when the right to receive the payment is established by the Balance Sheet date. n) Export sales in foreign currency are accounted for at the exchange rate prevailing at the time of sale. Gain/loss arising out of fluctuations in the exchange rates is taken to revenue on realisation. o) Foreign currency liabilities/assets covered by forward contracts are stated at forward cover rates and the premium on forward contracts is recognised as income or expense over the life of the contract. p) Foreign currency liabilities/assets not covered by forward contracts are restated at the exchange rates prevailing at the year end and the gain/loss arising out of such restatement is taken to revenue. q) Dividend as recommended by the Board of Directors is provided for in the accounts pending shareholders/lending institutions approval. r) Deferred tax assets and liabilities are recognised for future tax consequences attributable to the timing difference that results between the profit considered for income tax and the profit as per financial statements. Deferred tax assets and liabilities are measured as per the tax rates and laws that have been enacted or substantially enacted by the Balance Sheet date. However, deferred tax assets are recognised and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred asset can be realised. s) Foreign Currency Convertible Bonds issue expenses incurred and premium payable on redemption of such bonds are adjusted against Securities Premium Account as permitted by Section 78(2) of the Companies Act, 1956. t) Lease Transactions: i) Where the Company is the lessee: Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased term, are classified as operating leases. Operating lease payments are recognised as an expense in the Profit and Loss Account. ii) Where the Company is the lessor: Assets subject to operating leases are included in fixed assets. Lease Income is recognised in the Profit and Loss Account. Costs including depreciation are recognised as an expense in the Profit and Loss Account. 4. Disclosure of Sundry Creditors under Current Liabilities is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development Act, 2006" and relied upon by the Auditors. During the year the Company has paid no interest in terms of Section 16 of the said Act. 5. Fixed Deposit Receipts for Rs.429.34 lakhs (Previous year Rs.338.74 lakhs) are in lien with Bankers towards Margin Money for Bank Guarantees and Letters of Credit issued by them. 6. a) The Company’s land of about 5.08 acres was given possession to Hyderabad Vanaspathi Limited. The sale price of the same is yet to be adjusted pending permission from the Government of Andhra Pradesh. b) Land costing Rs.1.23 lakhs (previous year Rs.1.23 lakhs) admeasuring 6 acres and 23 guntas (previous year 6 acres 23 guntas) is not in the name of the Company. c) Cost of leasehold land amounting to Rs.113.07 lakhs shown under the head Fixed Assets represents the premium paid to the State Government of Orissa for alienation of 42.22 acres in favour of the Company by virtue of lease deeds for 99 years and the said land can be resumed by the said Government by giving 6 months notice in writing during the tenure of lease. 7. As required by Accounting Standard (AS 28) "Impairment of Assets", the management has carried out the assessment of impairment of assets and no impairment loss has been recognised during the year other than the assets discarded/dismantled and written off to Profit and Loss Account. 8. In the opinion of the management, the Current Assets, Loans and Advances are expected to realise at least the amount at which they are stated, if realised in the ordinary course of business and provision for all known liabilities have been adequately made in the accounts.
175 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:12 PM Page 176
Nava Bharat Ventures Limited
Schedules annexed to and forming part of the Consolidated Accounts for the year ended March 31, 2009
21. NOTES ON ACCOUNTS (Contd.) 9. Employee defined benefits as per AS-15 (Revised): Gratuity a) The amounts recognised in the Balance Sheet are as under: (Rs. in Lakhs) Particulars Current year Previous year Present value of obligation 786.07 772.07 Fair value of Plan Assets 320.50 300.75 Net Assets/(liability) recognised in Balance Sheet as provision (465.57) (471.32)
b) Changes in the present value of obligation representing reconciliation of opening and closing balances thereof are as under: Present value of obligation as at the beginning of the year 772.07 207.61 Interest cost 61.77 15.70 Past Service Cost – 224.06 Current Service Cost 27.52 23.36 Benefits paid (78.36) (73.38) Actuarial (gain)/loss on obligation 3.07 374.72 Present value of obligation as at the end of the year 786.07 772.07 Fair value of plan assets as at the beginning of the year 300.75 293.39 Return on plan assets 26.93 25.78 Contributions 32.84 22.82 Benefits paid 40.02 41.24 Fair value of plan assets as at the end of the year 320.50 300.75
c) The amounts recognised in the Profit and Loss Account are as under: Current Service Cost 27.52 23.36 Past Service Cost 74.69 74.69 Interest cost 61.77 15.70 Actuarial (gain)/loss recognised during the year (24.62) – Expenses recognised in the Profit and Loss Account 139.36 113.75
d) Principal actuarial assumptions at the Balance Sheet date are as follows: Mortality Table (LIC) 1994-96 1994-96 Discount rate per annum 8.00% 8.00% Rate of escalation in Salary (per annum) 4.00% 4.00% Attrition Rate 1.00% 1.00% Retirement age 58 years 58 years The rate of escalation in salary considered in actuarial valuation is estimated taking into account inflation, seniority, promotion and other relevant factors. The Company has determined the liability for employee benefits as at March 31, 2008 in accordance with the revised Accounting Standard 15 - Employee benefits issued by ICAI and the transitional liability in respect of gratuity is recognised as an expense on straight line basis over a period of 3 years commencing from the year 2007-08 in terms of the said Standard. The above information is certified by the actuary.
10. The Company uses derivative financial instruments such as forward contracts and currency swap to hedge currency exposures, present and anticipated, denominated mostly in US Dollars and Japanese Yen and all financial and derivative contracts entered into by the Company are for hedging purpose only. The information on derivative instruments are as follows: a) Derivative instruments outstanding: (Millions) Particulars Bought/Sold Amount in foreign currency As at 31.3.2009 As at 31.3.2008 Foreign currency contracts – USD/INR Sold 0.55 10.00 – JPY/INR Sold – 250.00
176 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:12 PM Page 177
Annual Report 2008-09
Schedules annexed to and forming part of the Consolidated Accounts for the year ended March 31, 2009
21. NOTES ON ACCOUNTS (Contd.) b) Foreign currency exposure not hedged by derivative instruments: (Millions) Particulars Currency Amount in foreign currency As at 31.3.2009 As at 31.3.2008 Term Loans payments JPY 2,029.12 2,843.32 Payables on account of import of goods EURO 0.01 1.70 Payables on account of import of goods JPY – 76.86
11. a) Working Capital Loans from Banks are secured by hypothecation of raw materials, Work-in- Progress, finished goods, stores and spares and book debts to the extent of Rs.17,000 lakhs and a second charge on fixed assets of the Company. b) The Term Loans from Industrial Development Bank of India Limited, Infrastructure Development Finance Company Limited, Andhra Bank, State Bank of India, BNP Paribas, HDFC Bank Limited, The South Indian Bank Limited, Bank of India, State Bank of Hyderabad and UCO Bank are secured by First Charge by way of equitable mortgage by deposit of title deeds to cover all immovable properties of the Company and hypothecation of all movable properties including movable Plant and Machinery, spares, tools and accessories, both present and future and a second charge by way of hypothecation of all movable properties both present and future (except book debts) subject to prior charges created/to be created in favour of Company's bankers on its stocks of raw materials, semi-finished and finished goods, consumable stores for securing borrowings for working capital requirements. The mortgage/charges created above shall rank pari-passu with the charges created/to be created in favour of other Financial Institutions/Banks. c) The Term Loan availed during the year from Andhra Bank amounting to Rs.6000.00 lakhs out of the sanction of Rs.20,000 lakhs for funding to a foreign subsidiary Company, i.e.Nava Bharat (Singapore) Pte Ltd is also further secured by pledge of 30% of shares held by Company in the said subsidiary and hypothecation of mineral and mining rights of subsidiary. d) The above said loans are also guaranteed by some of the directors of the Company in their personal capacity.
12. Contingent liabilities not provided for on account of:. (Rs. in lakhs) As at 31.3.2009 As at 31.3.2008 a) Guarantees given by the Bankers 1,007.09 305.00 b) Guarantees given by the Company 732.70 732.70 c) Guarantees given by the Company on behalf of others 10.40 10.40 d) Claims against the Company not acknowledged as debts 727.59 736.14 e) Demand raised by A. P. State Electricity Board (reconstituted as Transmission Corporation of Andhra Pradesh Ltd) towards additional charges on power tariff difference between HT I and HT III categories and surcharge on belated payments disputed by the Company, pending in appeal with High Court of A.P. 136.45 136.45 f) Interest on dues to A. P. State Electricity Board (reconstituted as Transmission Corporation of Andhra Pradesh Ltd). 62.35 62.35 g) Demand from Income-tax department disputed and pending in appeals 1,377.71 936.90
13. Showcause notices received from Central Excise Department to issue demand notices for an amount of Rs.5,374.89 lakhs are pending for final consideration and the Company has already submitted its objections in writing against the said demands.
14. The amount of contracts remaining to be executed on capital account and not provided for are estimated at Rs.385.75 lakhs (previous year Rs.4,668.76 lakhs).
15. Segment reporting as per A S 17 issued by the Institute of Chartered Accountants of India. A. Primary disclosures: The company has identified the reportable primary business segments considering: i) the nature of products and services; ii) the differing risks and returns; iii) the organisation structure; and iv) the internal financial reporting system.
177 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:12 PM Page 178
Nava Bharat Ventures Limited
Schedules annexed to and forming part of the Consolidated Accounts for the year ended March 31, 2009
21. NOTES ON ACCOUNTS (Contd.) (Rs. in lakhs) Current year Previous year Particulars Ferro Alloys Power Sugar Others Total Ferro Alloys Power Sugar Others Total 1. Segment Revenue (gross) 72,192.49 69,175.48 7,379.74 386.26 149,133.97 68,505.11 36,124.49 8,839.74 778.96 114,248.30 Less: Inter segment revenue – 9,619.74 338.62 – 9,958.36 – 16,259.22 168.23 – 16,427.45 Segment Revenue (net) 72,192.49 59,555.74 7,041.12 386.26 139,175.61 68,505.11 19,865.27 8,671.51 778.96 97,820.85 2. Segment Result 18,997.11 38,480.24 795.96 455.19 58,728.50 18,545.89 21,125.18 (383.74) 44.57 39,331.90 3. Segment Result excluding inter segment margin 25,310.93 32,220.24 742.14 455.19 58,728.50 27,954.09 11,716.37 (383.13) 44.58 39,331.91 Add: Other unallocable Income 775.47 501.92 Less: a) Finance Charges 3,109.93 2,222.85 b) Other unallocable expenditure 11.06 8.76 Profit before tax 56,382.98 37,602.22 Taxation for the year 4,325.12 5,633.85 Net Profit 52,057.86 31,968.37 4. Segment Assets 67,033.88 90,184.47 10,431.56 12,037.93 179,687.84 52,306.68 59,061.88 9,968.92 1,676.97 123,014.45 Unallocated 9,276.18 24,135.61 Total Assets 188,964.02 147,150.06 5. Segment Liabilities 4,843.10 4,899.51 1,127.66 11,870.90 22,741.17 7,037.56 2,680.82 949.38 67.11 10,734.87 Unallocated 166,222.85 136,415.19 Total liabilities 188,964.02 147,150.06 6. Capital expenditure 783.30 10,019.40 133.62 434.40 11,370.72 1,112.08 23,528.89 705.79 (207.79) 25,138.97 Depreciation 713.45 2,634.24 384.94 76.39 3,809.02 656.36 1,486.31 336.67 44.76 2,524.10 Non-cash expenses other than depreciation 6,322.82 67.36 2.58 8.25 6,401.01 75.65 66.22 9.51 73.41 224.79
B. Secondary disclosures: Total carrying amount of Segment Assets by geographical location of Assets, for each geographical Segment whose Segment Assets are 10 per cent or more of the total Assets of all geographical Segments. (Rs. in lakhs) Current year Previous year Cost incurred to acquire Assets Carrying Cost incurred to acquire Assets Carrying Geographical Segment (Tangible and Intangible) amount of (Tangible and Intangible) amount of Put to use Capital Segment Put to use Capital Segment Work-in-progress Assets Work-in-progress Assets Ferro Alloy Plant 1,015.16 388.99 38,573.80 643.57 674.16 26,798.94 Paloncha, Khammam Dist., A.P. Ferro Alloy Plant 15.26 94.96 17,688.97 87.80 71.73 24,791.49 Kharagprasad, Dhenkanal Dist. Orissa Power Plant 542.78 825.34 48,475.74 8,343.26 2,866.33 28,434.97 Paloncha, Khammam Dist., A.P. Power Plant 20,290.00 2,660.04 28,655.42 160.88 15,087.25 24,998.57 Kharagprasad, Dhenkanal Dist. Orissa Power Plant 9,583.81 5,767.82 12,766.84 1,425.43 3,848.68 5,628.34 Dharmavaram, East Godavari Dist. A.P.
16. The details of related party transactions in terms of Accounting Standard (AS 18) are as follows: a) Names of related parties and description of relationship: Name of the related party Nature of relationship i) Key Management Personnel Sri D. Ashok Chairman Sri P. Trivikrama Prasad Managing Director Sri C. V. Durga Prasad Director (Business Development) Sri G. R. K. Prasad Director (Finance & Corporate Affairs) ii) Relatives of key management personnel: Smt. D. Bhakta Priya Mother of Sri D Ashok Dr. D. Rajasekhar Brother of Sri D Ashok
178 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:12 PM Page 179
Annual Report 2008-09
Schedules annexed to and forming part of the Consolidated Accounts for the year ended March 31, 2009
21. NOTES ON ACCOUNTS (Contd.) Smt. A. Neelima Sister of Sri D Ashok Dr. C. Sudha Sister of Sri P Trivikrama Prasad Smt. C. Umamaheswari Wife of Sri C V Durga Prasad Smt. G. S. P. Kumari Wife of Sri G R K Prasad Mr G. Raghu Chaitanya Son of Sri G R K Prasad Kum G. Ramya Sudha Daughter of Sri G R K Prasad iii) Associates/subsidiary: M/s. Beardsell Limited Associate Company Dr. Devineni Subbarao Trust Promoter Group Entity M/s. Nav Energy Private Limited Promoter Group Entity M/s. Kinnera Power Company Limited Subsidiary Company
b) Particulars of transactions during the year: (Rs. in lakhs) Nature of transactions Current year Previous year i) Transactions with Key Management personnel: Sri D. Ashok Remuneration 1,182.78 838.03 Sri P. Trivikrama Prasad Remuneration 1,184.74 837.78 Sri C. V. Durga Prasad Remuneration 85.07 53.71 Sri G. R. K. Prasad Remuneration 84.25 54.89 ii) Transactions with relatives of Key Management personnel: Dr. D. Rajasekhar Rent 14.48 14.50 Interest – 1.89 Deposits received/(repaid) – (70.00) Smt. C. Umamaheswari Rent 21.60 14.40 Smt. G. S. P. Kumari Rent 21.60 14.40 Interest 0.13 0.27 Deposits received/(repaid) (2.89) – Smt. D. Bhakta Priya Interest 1.60 3.77 Deposits received/(repaid) – (175.00) Smt. A. Nilima Interest – 0.06 Deposits received/(repaid) – (10.00) Dr. C. Sudha Interest – 1.79 Deposits received/(repaid) – (19.00) Mr G. Raghu Chaitanya Interest 0.17 0.20 Deposits received/(repaid) (2.17) – Kum. G. Ramya Sudha Interest 0.17 0.20 Deposits received/(repaid) (2.17) –
179 NavaBharat_AR09_JNT_FL_pap.qxd:Inside pgs 6/27/09 12:12 PM Page 180
Nava Bharat Ventures Limited
Schedules annexed to and forming part of the Consolidated Accounts for the year ended March 31, 2009
21. NOTES ON ACCOUNTS (Contd.) b) Particulars of transactions during the year: (Contd.) (Rs. in lakhs) Nature of transactions Current year Previous year iii) Transactions with Associates/Subsidiary: M/s. Nav Energy Private Limited Trustee Fee 0.15 0.15 Advances/Loans given/(received back) 0.00 0.00 Dr. Devineni Subbarao Trust Donation given 500.00 200.00 M/s.Beardsell Limited Loans received/(repaid) (25.49) 19.98 Advances/Loans given/(received back) 115.02 – M/s. Kinnera Power Company Limited Advances/Loans given/(received back) (1.29) 1.29
c) Amount due from/to related parties as at the year end: (Rs. in lakhs) Sl. Name of th party Current year Previous year No. due to due from due to due from 1. Key Management personnel: Sri D. Ashok 1,042.75 774.58 Sri P. Trivikrama Prasad 1,042.75 774.58 2. Relatives of Key Management personnel: Smt. D. Bhakta Priya 20.00 20.00 Smt. G. S. P. Kumari – 2.89 Mr G. Raghu Chaitanya – 2.17 Kum G. Ramya Sudha – 2.17 3. Associates/subsidiary: M/s. Beardsell Limited 85.02 55.49 M/s. Nav Energy Private Limited – 0.01 M/s. Kinnera Power Company Limited – 1.29
17. Earnings per share (E.P.S.) Current year Previous year i) Net Profit as per Profit and Loss Account available for Equity Shareholders (Rs. in lakhs) 52,080.16 32,019.09 ii) Weighted average number of Equity Shares for Basic EPS 76,308,592 72,214,766 Add : Adjustment for :Employees stock options granted 257,699 285,890 : Foreign Currency Convertible Bonds issued 3,293,310 3,605,358 Weighted average number of Equity Shares for diluted EPS 79,859,601 76,106,014 iii) Nominal value of the share (Rupees) 2.00 2.00 iv) Basic earnings per share (Rupees) 68.25 44.34 v) Diluted earnings per share (Rupees) 65.21 42.07
18. Previous year figures have been re-grouped wherever necessary to make them comparable with those of current year.
Per our report of even date. For and on behalf of the Board For Brahmayya & Co. Chartered Accountants G. R. K. Prasad Director (Finance & Corporate Affairs) P. C h a n d r a m o u l i Partner P. Tr i v i k r a m a P r a s a d Managing Director M. Subrahmanyam Hyderabad Company Secretary & D. Ashok May 30, 2009 Vice President Chairman
180 Highlights
Accretion of Power Capacity : 153 MW to 237 MW
Gross Income : Rs. 1425.71 Crs…… Up by 26%
Profit After Tax : Rs. 455.10 Crs……. Up by 45%
EPS (FV : Rs. 2) : Rs. 57.03 ….…….. Up by 38%
Book Value : Rs. 153.88.………. Up by 49%
Equity Dividend : 400% (300% Previous Year)
A PRODUCT [email protected] [email protected] 43.32
Nava Bharat Ventures Limited 6-3-1109/1, ‘Nava Bharat Chambers’, Raj Bhavan Road, Hyderabad – 500 082, Andhra Pradesh, India Website: www.nbventures.com NavaBharat_Notice_pap.qxp:Inside pgs 6/26/09 6:14 PM Page 1
Nava Bharat Ventures Limited Registered Office: ‘Nava Bharat Chambers’, 6-3-1109/1, Raj Bhavan Road, Hyderabad – 500 082.
NOTICE TO SHAREHOLDERS
NOTICE is hereby given that the 37th Annual General Meeting of the a) Housing: Members of Nava Bharat Ventures Limited will be held on Friday, the i) Where accommodation in the company owned house is 31st July 2009 at 10.00 A.M. at Hotel Green Park, 7-1-26, Greenlands, provided, he shall pay to the Company, by way of rent Begumpet, Hyderabad – 500 016 to transact the following business: 10% of the salary; Ordinary Business: ii) Where hired accommodation is provided, the expenditure 1. To receive, consider and adopt the Audited Profit and Loss Account incurred by the Company on hiring furnished for the year ended 31st March, 2009 and the Balance Sheet as at accommodation for him will be subject to a ceiling of that date and the Reports of the Directors and Auditors thereon. 60% of the salary; 2. To declare Dividend on the Equity Shares. iii) In case, the Company does not provide accommodation, House rent allowance shall be paid @ 60% of the salary; 3. To appoint a Director in place of Sri G.R.K. Prasad, who retires by and rotation and, being eligible, offers himself for re-appointment. iv) The expenditure incurred by the Company on gas, 4. To appoint Auditors and to fix their remuneration. electricity, water and furnishing will be subject to a ceiling Special Business: of 10% of the salary. 5. Appointment of Dr. D. Nageswara Rao, Additional Director as b) Medical Reimbursement/Allowance for self and family: Director: Reimbursement of expenses actually incurred for self and To consider and, if thought fit, to pass with or without family or medical allowance, the total cost of which to the modification(s), the following resolution as an Ordinary Resolution: Company shall not exceed one month’s salary in a year or “RESOLVED THAT Dr. D. Nageswara Rao, whose term of office as an three months’ salary over a period of three years; Additional Director of the Company expires at the Annual General c) Leave Travel concession or Allowance: For self and family, Meeting and in respect of whom the Company has received a notice once in a year either in India or abroad in accordance with under Section 257 of the Companies Act, 1956, be and is hereby the rules of the Company; appointed as a Director of the Company, whose period of office will d) Club fees: Fees of clubs, subject to a maximum of two clubs; be liable to determination by retirement by rotation.” e) Personal accident insurance: As per the rules of the 6. Appointment of Sri D. Ashok, Managing Director as Chairman: Company; To consider and, if thought fit, to pass with or without f) Car: Free use of Company’s car with driver; modification(s), the following resolution as a Special Resolution: g) Contribution to Provident Fund, Superannuation Fund or “RESOLVED THAT pursuant to the provisions of Sections 198, 269, Annuity Fund, as per the rules of the Company; 309, 310, 314 and Schedule XIII and other applicable provisions, if h) Gratuity payable, shall not exceed, half a month’s salary, for any, of the Companies Act, 1956 and subject to such other approvals each completed year of service; and consents as may be required, the consent and approval of the Company, be and is hereby accorded to the appointment of Sri D. i) Communication Facilities: Free communication facilities like Ashok, Managing Director, as Chairman and Director in the whole- Telephones / Internet / Mobiles / Fax at residence; time employment of the Company with effect from 29th January, j) Leave on full pay and allowances as applicable to other 2009 for the balance of his tenure i.e., upto 14th August, 2009 at employees of the Company but not exceeding one month for the same terms and conditions, remuneration, commission, every 11 months’ service; perquisites/allowances payable to him, as approved by the General k) He shall also be entitled to reimbursement of expenses Body earlier from time to time and as mentioned below: actually and properly incurred for the business of the A. Salary : Rs. 5,00,000/- per month Company; and B. Commission : @ 2% on the net profits of the Company for l) Any other perquisites that may be allowed as per the each/every financial year; and guidelines issued by the Central Government from time to C. Perquisites : In addition to the Salary and Commission, he shall time.” be entitled to the allowances and other “RESOLVED FURTHER THAT the remuneration aforesaid including perquisites as set out below: the perquisites and other allowances shall be paid and allowed to NavaBharat_Notice_pap.qxp:Inside pgs 6/26/09 6:14 PM Page 2
Nava Bharat Ventures Limited
Sri D. Ashok, Director in whole-time employment as Chairman, as c) Leave Travel Concession or Allowance: For self and family, minimum remuneration during the remaining period of his tenure, once in a year either in India or abroad in accordance with in the event of loss or inadequacy of profits in any financial year for the rules of the Company; a period not exceeding 3 years.” d) Club fees: Fees of Clubs, subject to a maximum of two clubs; 7. Re-appointment of and remuneration payable to Sri D. Ashok, e) Personal accident insurance: As per the rules of the Chairman, with effect from 14th August, 2009: Company; To consider and, if thought fit, to pass with or without f) Car: Free use of Company’s car with driver; modification(s), the following resolution as a Special Resolution: g) Contribution to Provident Fund, Superannuation Fund or “RESOLVED THAT pursuant to the provisions of Sections 198, 269, Annuity Fund, as per the rules of the Company; 309, 310, 314 and Schedule XIII and other applicable provisions, if h) Gratuity payable, shall not exceed, half a month’s salary, for any, of the Companies Act, 1956 and subject to such other each completed year of service; approvals and consents as may be required, the consent and approval of the Company be and is hereby accorded to the i) Communication Facilities: Free communication facilities like re-appointment of Sri D. Ashok as Chairman of the Company, who Telephones / Internet / Mobiles / Fax at residence; would be Director in whole-time employment of the Company, not j) Leave on full pay and allowances as applicable to other liable to retire by rotation, for a further period of 5 years with effect employees of the Company but not exceeding one month for from 14th August, 2009 on the remuneration, commission, every 11 months’ service; perquisites, benefits and other allowances as under: k) Reimbursement of expenses actually and properly incurred by A. Salary : Rs. 5,00,000/- per month; him for the business of the Company; B. Commission : @ 2% on the net profits of the Company for l) Any other allowances and benefits as per Rules of the each/every financial year; and Company as may be applicable to all other employees; and C. Perquisites : In addition to the Salary and commission, he shall m) Any other perquisites that may be allowed as per the be entitled to the allowances and perquisites as guidelines issued by the Central Government from time to set out below: time.” a) Housing: “RESOLVED FURTHER THAT the remuneration aforesaid including i) Where accommodation in the Company owned house is the perquisites and other allowances shall be paid and allowed to provided, he shall pay to the Company, by way of rent Sri D. Ashok, Director in whole-time employment as Chairman, as 10% of the Salary; minimum remuneration during the currency of his tenure, in the event of loss or inadequacy of profits in any financial year for a ii) Where hired accommodation is provided, the expenditure period not exceeding 3 years.” incurred by the Company on hiring furnished accommodation for him will be subject to a ceiling of 8. Appointment of Sri P. Trivikrama Prasad, Executive Director as 60% of the Salary; Managing Director: iii) In case, the Company does not provide accommodation, To consider and, if thought fit, to pass with or without House rent allowance shall be paid @ 60% of the Salary; modification(s), the following resolution as a Special Resolution: and “RESOLVED THAT pursuant to the provisions of Sections 198, 269, iv) The expenditure incurred by the Company on gas, 309, 310, 314 and Schedule XIII and other applicable provisions, if electricity, water and furnishing will be subject to a ceiling any, of the Companies Act, 1956 and subject to such other of 10% of the Salary. approvals and consents as may be required, the consent and approval of the Company, be and is hereby accorded to the b) Medical Reimbursement / Allowance for self and family: appointment of Sri P. Trivikrama Prasad as Managing Director, not Reimbursement of expenses actually incurred for self and liable to retire by rotation, with effect from 29th January, 2009 for family or medical allowance, the total cost of which to the the balance of his tenure i.e., upto 18th March, 2012 at the same Company shall not exceed one month’s salary in a year or terms and conditions, remuneration, commission, perquisites/ three months’ salary over a period of three years; allowances payable to him as approved by the General Body earlier
2 NavaBharat_Notice_pap.qxp:Inside pgs 6/26/09 6:14 PM Page 3
Nava Bharat Ventures Limited
and as mentioned below: l) Any other perquisites that may be allowed as per the guidelines A. Salary : Rs. 5,00,000/- per month; issued by the Central Government from time to time.” B. Commission : @ 2% on the net profits of the Company for “RESOLVED FURTHER THAT the remuneration aforesaid including each/every financial year; and the perquisites and other allowances shall be paid and allowed to Sri P. Trivikrama Prasad, Managing Director, as minimum C. Perquisites : In addition to the Salary and Commission, he shall remuneration during the remaining period of his tenure, in the be entitled to the allowances and other event of loss or inadequacy of profits in any financial year for a perquisites as set out below: period not exceeding 3 years.” a) Housing: 9. Appointment of Sri D. Ashwin as Chief Executive Officer of Nava i) Where accommodation in the company owned house is Bharat (Singapore) Pte. Limited: provided, he shall pay to the Company, by way of rent To consider and, if thought fit, to pass with or without 10% of the salary; modification(s), the following resolution as a Special Resolution: ii) Where hired accommodation is provided, the expenditure “RESOLVED THAT the Company approves, pursuant to Section incurred by the Company on hiring furnished 314(1)(b) and other applicable provisions, if any, of the Companies accommodation for him will be subject to a ceiling of Act, 1956 and subject to such consents, approvals and permissions 60% of the salary; as may be required, the appointment of Sri D. Ashwin, relative of iii) In case, the Company does not provide accommodation, the Chairman, and one of the Directors of the Company’s House rent allowance shall be paid @ 60% of the salary; Subsidiary, Nava Bharat (Singapore) Pte. Limited, to hold an office and or place of profit under the Company’s Subsidiary, Nava Bharat iv) The expenditure incurred by the Company on gas, (Singapore) Pte. Limited, as Chief Executive Officer with effect from electricity, water and furnishing will be subject to a ceiling 1st October, 2008 on the following remuneration: of 10% of the salary. Salary : SGD $ 20,000 per month with an Annual Increment of not b) Medical Reimbursement/Allowance for self and family: exceeding 30% as may be decided by the Board. Reimbursement of expenses actually incurred for self and family or medical allowance, the total cost of which to the Company By order of the Board shall not exceed one month’s salary in a year or three months’ For Nava Bharat Ventures Limited salary over a period of three years; c) Leave Travel concession or Allowance: For self and family, once Place: Hyderabad M. Subrahmanyam in a year either in India or abroad in accordance with the rules Date : May 30, 2009 Company Secretary & Vice President of the Company; Registered Office: d) Club fees: Fees of clubs, subject to a maximum of two clubs. ‘Nava Bharat Chambers’ e) Personal accident insurance: As per the rules of the Company. 6-3-1109/1, Raj Bhavan Road Hyderabad – 500 082. f) Car: Free use of Company’s car with driver; g) Contribution to Provident Fund, Superannuation Fund or Annuity Fund, as per the rules of the Company; h) Gratuity payable, shall not exceed, half a month’s salary, for each completed year of service; i) Communication Facilities: Free communication facilities like Telephones / Internet / Mobiles / Fax at residence; j) Leave on full pay and allowances as applicable to other employees of the Company but not exceeding one month for every 11 months’ service; k) He shall also be entitled to reimbursement of expenses actually and properly incurred for the business of the Company; and
3 NavaBharat_Notice_pap.qxp:Inside pgs 6/26/09 6:14 PM Page 4
Nava Bharat Ventures Limited
NOTES
1. The Explanatory Statement in respect of the special business in the Image Hospital, Vittalrao Nagar, Madhapur, Hyderabad - 500 081. Notice, pursuant to Section 173(2) of the Companies Act, 1956 is 7. Members seeking any information or clarification on the accounts annexed hereto. are requested to send in writing queries to the Company, at least 2. A Member entitled to attend and vote at the meeting is entitled to one week before the date of the meeting. Replies will be provided appoint a Proxy to attend and vote on a poll only, on his/her behalf in respect of such written queries, at the meeting. and such Proxy need not be a Member of the Company. The Proxy 8. Members holding shares in identical order of names in more than Form duly completed and signed must be deposited at the one folio are requested to write to the Company’s Registrars and Registered Office of the Company not later than 48 hours before Transfer Agents enclosing their share certificates to enable the Meeting. consolidation of their shareholdings in one folio. 3. The Share Transfer Register and the Register of Members of the 9. Pursuant to the directions/notifications of SEBI and Depositories, Company will remain closed from 23.07.2009 to 31.07.2009 (both the demat account holders can operate their accounts if they had days inclusive) in connection with the Annual General Meeting and already provided Income Tax Permanent Account Number either at Dividend. the time of opening of the account or subsequently. In case they 4. The dividend for the year ended 31st March, 2009 as have not furnished the Income Tax Permanent Account Number to recommended by the Board, if sanctioned at the meeting, will be the Depository Participants, such demat account holders are paid to those members whose names appear in the Company’s requested to contact their DPs with a photocopy of the PAN Card Register of Members after effecting valid transfers received upto (with original PAN Card for verification), so that the frozen demat the close of business hours on 22nd July, 2009. In respect of shares accounts would be available for operation and further held in electronic form, the dividend will be payable on the basis of consequences of non-compliance with the aforesaid directives beneficial ownership as per details provided as at the close of would be obviated. business hours on 22nd July, 2009 by National Securities Securities and Exchange Board of India, vide Circular Depository Limited and Central Depository Services (India) Limited ref.no.MRD/Dop/Cir-05/2009 dated May 20, 2009 made it for this purpose. mandatory to have PAN particulars for registration of physical share 5. The unclaimed dividends, both preference and equity for the year transfer requests. Based on the directive contained in the current ended 31st March, 2002 will be transferred on 26.10.2009 to the circular, all share transfer requests received after 20th May, 2009 `Investor Education and Protection Fund’ on expiry of 7 years from should therefore be accompanied with PAN details. the date of transfer to the Unpaid Dividend Account, pursuant to 10. Retirement of Directors by Rotation: Section 205C of the Companies Act, 1956. It may be noted that Dr. G. Sreeramjee vide his letter dated 6th April, 2009 expressed his after the expiry of the said period of 7 years on 26.10.2009, no unwillingness for re-appointment since he was unable to attend claim shall lie in respect of unclaimed dividend. Members who have the meetings on health grounds and therefore he would not like to not encashed their Dividend Warrants for the said financial year or offer himself for re-appointment at the forthcoming AGM. subsequent year(s) are requested to send the same for revalidation Dr. G. Sreeramjee, Director of the Company, retires by rotation at to the Company. the ensuing Annual General Meeting. The unpaid dividend upto and including for the year 1994-95 has Sri G.R.K. Prasad, Director (Finance & Corporate Affairs) of the already been transferred to the General Revenue Account of the Company retires by rotation at the ensuing Annual General Central Government and the Investor Education & Protection Fund Meeting and, being eligible, offers himself for re-appointment. for the years 1995-1996 to 2000-2001 as per the provisions of the Companies Act, 1956 read with the relevant rules framed Sri G.R.K. Prasad is a Fellow Member of The Institute of Chartered thereunder. Accountants of India and The Institute of Company Secretaries of India and has 28 years of varied professional experience and has 6. Members are requested to furnish change of address, details of been incharge of Finance, Accounts and Corporate Affairs of the their bank accounts viz., name of bank, full address of the branch, Company since August, 1995. account number and folio number for incorporation on the dividend warrant, to the Company’s Registrars and Transfer Agents, Directors commend the re-appointment of Sri G.R.K. Prasad, as a M/s Karvy Computershare Private Limited, Plot No. 17 to 24, near Director liable to retire by rotation.
4 NavaBharat_Notice_pap.qxp:Inside pgs 6/26/09 6:14 PM Page 5
Nava Bharat Ventures Limited
11. Details of Directors seeking re-appointment at the forthcoming Annual General Meeting (Pursuant to Clause 49 of the Listing Agreement) As required under the Listing Agreement, the particulars of Directors, Sri D. Ashok, Sri P. Trivikrama Prasad, Sri G.R.K. Prasad and Dr. D. Nageswara Rao, who are proposed to be appointed/re-appointed are given below:
a Name Sri D. Ashok Sri P. Trivikrama Prasad Sri G.R.K. Prasad Dr. D.Nageswara Rao b Brief Resume: i) Age 52 Years 56 Years 51 years 62 years ii) Qualification M.B.A. from U.S.A. M.B.A from U.S.A. B.Sc., FCA, FCS M.E., Ph.D iii) Experience in 27 Years 27 Years 28 years 35 years Specific Functional area iv) Date of 19.03.1992 19.03.1992 28.06.2003 25.07.2008 appointment on the Board of the Company (Nava Bharat Ventures Ltd.) c Nature of expertise Highly experienced professional, Chief Executive of the Company Highly experienced Expertise in in specific functional has substantially contributed to the heading all the disciplines and in all facets of Electronic areas development of the Company by functional aspects of the Company Finance and Engineering, Science his rich experience and expertise with special emphasis on finance Accounts Spanning and Technology, and the Company has derived and accounts of all the units of 28 years and is in- Electricity considerable benefits which is the Company and closely monitors charge of Finance, Equipment, evident from the enormous growth the operations of all the Plants. Accounts and monitoring and achieved in terms of diversification, Corporate Affairs. management turnover and profitability in the systems and power past few years. plant operations. d Name(s) of other 1. M/s. Nava Bharat (Singapore) Pte. 1. M/s. Kinnera Power Company Ltd. 1. M/s. Nava 1. M/s. X_Design Companies in which Ltd. 2. M/s. Brahmani Infratech Private Ltd. Bharat Realty Ventures Directorships held Ltd. Pvt. Ltd. 2. M/s. Chapter One-Books Pte. Ltd. 3. M/s. Nava Bharat (Singapore) Pte. Ltd. (as per Sections 275 3. M/s. Brahmani Infratech Pvt. Ltd. 4. M/s. Nav Finance and Leasing Ltd. 2. M/s. Nava 2. M/s. Kushai guda and 278 of the Bharat Projects Electronics 4. M/s. Nav Finance and Leasing Ltd. 5. M/s. Navabharat Power Private Ltd. Companies Act, Ltd. Pvt. Ltd. 1956) 5. M/s. A9 Homes Pvt. Ltd. 6. M/s. Malaxmi NBFA Ventures Private Ltd. 3. M/s. Nava 3. M/s. Jayem 6. M/s. A.V. Dwellings Pvt. Ltd. 7. M/s. Rio Reality Private Ltd. Bharat Energy Automotives Ltd. 7. M/s. V9 Avenues Pvt. Ltd. 8. M/s. Nava Bharat Realty Ltd. India Ltd. 8. M/s. Nava Bharat Realty Ltd. 9. M/s. Nava Bharat Projects Ltd. 4. M/s. Nava 9. M/s. Nava Bharat Projects Ltd. 10. M/s. V9 Avenues Private Ltd. Bharat Sugar 10. M/s. Nava Bharat Natural Resources 11. M/s. A9 Homes Private Ltd. and Bio Fuels India Ltd. 12. M/s. AV Dwellings Private Ltd. Ltd. 11. M/s. Nava Bharat Energy India Ltd. 13. M/s. V9 Infra Ventures Pvt. Ltd. 12. M/s. Nava Bharat Sugar and Bio 14. M/s. Malaxmi Highway Pvt. Ltd. Fuels Ltd. 15. M/s. Nava Bharat Natural Resources 13. M/s. Operation Eyesight Universal India Ltd. (India) 16. M/s. Nava Bharat Energy India Ltd. 14. M/s. Usha Mullapudi Cardiac Centre 17. M/s. Nava Bharat Sugar and Bio Fuels 15. Dr. Devineni Subbarao Trust Ltd. 16. M/s. G.S.R.Trust 18. Dr. Devineni Subbarao Trust
5 NavaBharat_Notice_pap.qxp:Inside pgs 6/26/09 6:14 PM Page 6
Nava Bharat Ventures Limited
Name Sri D. Ashok Sri P. Trivikrama Prasad Sri G.R.K. Prasad Dr. D.Nageswara Rao e Name(s) of Shareholders’/Investors’ Grievances Allotment Companies in which Committee of Nava Bharat Ventures LimitedCommittee of Committee NIL Nava Bharat NIL Membership(s)/ Ventures Limited Chairmanship(s) held f No. of shares of Rs. 2/- each held by: the Director 638100 1750557 2866 NIL his relatives 7503240 3784797 106000 Total 8141340 5535354 108866 g No. of ESOPs NIL NIL 39600 – granted on 05.01.2007 h Relationship Related to Sri P. Trivikrama Prasad Related to Sri D. Ashok between Directors (Sister’s husband) (Wife’s brother) inter se Nil Nil (As per Section 6 and Schedule 1A of the Companies Act, 1956)
12. Members are requested to bring their copies of the Annual Report to the Meeting.
6 NavaBharat_Notice_pap.qxp:Inside pgs 6/26/09 6:14 PM Page 7
Nava Bharat Ventures Limited
Explanatory Statement (Pursuant to Section 173 (2) of the Companies Act, 1956)
Item No. 5: Appointment of Dr.D.Nageswara Rao, Additional The Board at its meeting held on 29th January, 2009 approved the Director as Director: change in the designation of Sri D. Ashok, Managing Director as Dr. D. Nageswara Rao was appointed as Additional Director under Chairman. He would be the Executive Chairman and Director in the Section 260 of the Companies Act, 1956 and he would hold office whole-time employment of the Company. The tenure, terms and upto the date of Annual General Meeting. conditions, salary, perquisites/allowances and commission payable to him, as approved by the Board/General Body earlier, will remain the The Company has received notice with necessary deposit proposing same. that Dr. D. Nageswara Rao, be appointed as Director, liable to retire by rotation pursuant to the provisions of Companies Act, 1956. The Board at its meeting held on 14th April, 2009 re-appointed Sri D. Ashok as Chairman for a period of 5 years from 14th August Dr. D. Nageswara Rao is a Post Graduate in Electronic Engineering from 2009 on the remuneration, commission and perquisites as set out in Birla Institute of Science & Technology, Pilani, and a Doctorate from the resolution placed before you for approval, pursuant to the University of Strathclyde, UK. He is an active member in many Trade recommendation of the Remuneration Committee. Associations at State and National levels and was also Director of APEDC, Govt. of A.P. He holds Directorship in the following Companies and Trusteeship in the Trusts and does not hold any Committee Chairmanship/ The Board commends the resolution for members’ approval. Membership: None of the Directors except Dr. D. Nageswara Rao, is deemed to be 1. M/s. Nava Bharat (Singapore) Pte. Limited interested or concerned in the Resolution. 2. M/s. Chapter One-Books Pte. Limited Item Nos.6 & 7: Appointment of Sri D. Ashok, Managing Director as 3. M/s. Brahmani Infratech Private Limited Chairman and Re-appointment of and remuneration payable to 4. M/s. Nav Finance and Leasing Limited Sri D. Ashok, Chairman with effect from 14th August, 2009: 5. M/s. A9 Homes Pvt. Limited Sri D. Ashok, an M.B.A. from U.S.A. has been holding senior positions in the Company since 1981. He took over as the Executive Director in 6. M/s. A.V. Dwellings Pvt. Limited 1992 and as the Managing Director in 1999. 7. M/s. V9 Avenues Pvt. Limited Sri D. Ashok has brought the Company to a pre-eminent position in the 8. M/s. Nava Bharat Realty Limited Ferro Alloy Industry pursuing dynamic production and marketing 9. M/s. Nava Bharat Projects Limited strategies. The Company received several accolades in the areas of 10. M/s. Nava Bharat Natural Resources India Limited exports, productivity, quality, industrial safety, environmental 11. M/s. Nava Bharat Energy India Limited protection etc., under his leadership. The Company has gained distinct competitive edge through well timed expansion, modernization and 12. M/s. Nava Bharat Sugar and Bio Fuels Limited diversification measures like setting up of coal based power plants and 13. M/s. Operation Eyesight Universal (India) earned a name for execution of large projects well within estimated 14. M/s. G.S.R. Trust time and cost parameters. 15. M/s. Usha Mullapudi Cardiac Centre Sri D. Ashok being highly experienced professional, has substantially 16. Dr. Devineni Subbarao Trust contributed to the development of the Company by his rich experience and expertise and the Company has derived considerable benefits The resolutions set out at Item Nos.6 & 7 together with this Explanatory which is evident from the enormous growth achieved in terms of Statement constitute abstract of terms of the remuneration and the diversification, turnover and profitability in the past few years. Memorandum of Interest of the Chairman and also the Managing Director under Section 302 of the Companies Act, 1956. Sri D. Ashok was re-appointed as Managing Director by the Board and General Body with effect from 14th August, 2004. He was also elected The Board commends the Resolutions for members’ approval. as Chairman by the Board on 25th July, 2008. Except Sri D. Ashok and Sri P. Trivikrama Prasad, being related, no The Salary, commission and perquisites/allowances payable to him other Director is deemed to be interested or concerned in the were approved and revised by the General Body from time to time. Resolutions.
7 NavaBharat_Notice_pap.qxp:Inside pgs 6/26/09 6:14 PM Page 8
Nava Bharat Ventures Limited
Item No. 8: Appointment of Sri P. Trivikrama Prasad, Executive The resolution set out at Item No.8 together with this Explanatory Director as Managing Director: Statement constitute abstract of terms of the remuneration and the Sri P. Trivikrama Prasad, Executive Director, was appointed as Managing Memorandum of Interest of the Managing Director and also the Director by the Board with effect from 29th January, 2009. Chairman under Section 302 of the Companies Act, 1956. The Salary, commission and perquisites/allowances payable to him The Board commends the Resolution for members’ approval. were approved and revised by the General Body from time to time. Except Sri P. Trivikrama Prasad, Managing Director and Sri D. Ashok, The Board at its meeting held on 29th January, 2009 approved the Chairman, being related, no other Director is deemed to be interested change in the designation of Sri P. Trivikrama Prasad as Managing or concerned in the Resolution. Director. The tenure, terms and conditions, salary, perquisites/ Item No. 9: Appointment of Sri D. Ashwin as Chief Executive Officer allowances and commission payable to him, as approved by the in Nava Bharat (Singapore) Pte.Limited: Board/General Body earlier, will remain the same. Sri D. Ashwin, son of the Chairman of the Company, is a Director on Sri P. Trivikrama Prasad is an M.B.A. from U.S.A, joined the Company in the Board of Nava Bharat (Singapore) Pte.Limited, a Subsidiary of the 1981 and was appointed as Executive Director in 1992. He has vast Company with effect from 07.04.2008. He was appointed as Chief experience of about 27 years holding responsible positions. He is Executive Officer of Nava Bharat (Singapore) Pte. Limited with effect incharge of all the disciplines and functional aspects of the Company from 1st October, 2008. Pursuant to Section 314(1)(b) and other and he closely monitors the operations of all the Plants. applicable provisions, if any, of the Companies Act, 1956, the Board of Sri P. Trivikrama Prasad, being experienced professional, has your Company approved the same subject to your consent by way of substantially contributed to the development of the Company by his Special Resolution as the same is required in terms of Section 314(1)(b) rich experience and expertise and the Company has derived of the Companies Act, 1956 for holding an office or place of profit by considerable benefits which is evident from the enormous growth a relative of the Director, in the Subsidiary of the Company. achieved in terms of diversification, turnover and profitability in the Sri D. Ashwin was a Graduate in Industrial Engineering from the past few years. University of Washington and has varied experience and functioned as He holds Directorships in the following Companies/Trusteeship in the Senior Officer and Director (Business Development) at Hewlett Packard Trust and membership on the Shareholders/Investors’ Grievances (based in Singapore). Committee of Nava Bharat Ventures Limited: The resolution set out at Item No. 9 together with this Explanatory 1. M/s. Kinnera Power Company Limited Statement constitute abstract of terms of the remuneration and the 2. M/s. Brahmani Infratech Private Limited Memorandum of Interest of the Chairman and also the Managing 3. M/s. Nava Bharat (Singapore) Pte. Limited Director under Section 302 of the Companies Act, 1956. 4. M/s. Nav Finance and Leasing Limited The Board commends the resolution for members’ approval. 5. M/s. Navabharat Power Private Limited None of the Directors of the Company, except Sri D. Ashok, Chairman 6. M/s. Malaxmi NBFA Ventures Private Limited and Sri P. Trivikrama Prasad, Managing Director, being relatives, is deemed to be concerned or interested in the resolution. 7. M/s. Rio Realty Private Limited By order of the Board 8. M/s. Nava Bharat Realty Limited For Nava Bharat Ventures Limited 9. M/s. V9 Avenues Private Limited
10. M/s. A9 Homes Private Limited Place: Hyderabad M. Subrahmanyam 11. M/s. AV Dwellings Private Limited Date : May 30, 2009 Company Secretary & Vice President 12. M/s. Nava Bharat Projects Limited Registered Office: 13. M/s. Nava Bharat Natural Resources India Limited ‘Nava Bharat Chambers’ 14. M/s. Nava Bharat Energy India Limited 6-3-1109/1, Raj Bhavan Road 15. M/s. Nava Bharat Sugar and Bio Fuels Limited Hyderabad – 500 082. 16. M/s. Malaxmi Highway Private Limited 17. M/s. V9 Infra Ventures Private Limited 18. Dr. Devineni Subbarao Trust
8