DIRECTORS’ REPORT

 

Your Directors are pleased to present the 16th Annual Report alongwith audited Statement of Accounts of the Company for the year ended 31st March 2004           .

FINANCIAL RESULTS

 

2003-2004

(Rs. In lacs)

2002-2003

(Rs. In lacs)

Revenue from Operations and other income

11500.66

11175.11

Profit before Interest, Tax and Depreciation

5487.23

6477.57

Less : Interest and Finance Charges

2658.59

3548.78

Less : Depreciation

2125.41

1773.79

Profit before Tax

703.22

1155.00

Less : Provision for Tax (including deferred tax)

57.33

95.77

Profit after tax

645.89

1059.23

Less : Previous year adjustments

---

17.28

Adjusted Net Profit

645.89

1041.95

Add : Surplus brought forward from earlier years

4499.64

4582.69

Profit available for appropriation

5145.53

5624.64

Less : Appropriations

 

 

          Transfer to capital redemption reserve

---

1000.00

           Preference shares-Interim Dividend

---

125.00

Surplus carried to Balance Sheet

5145.53

4499.64

 

Revenue from power supply and other income was at Rs.11500.66 Lacs as against Rs. 11175.11 lacs during the year 2002-03 and the Profit before tax and depreciation stood at Rs. 5487.23 lacs as against Rs. 6477.57 lacs during the previous year. The decrease in profit is mainly due to higher provisioning for bad and doubtful debts.

 

OPERATIONS

The operations of the company’s power plants at Adamtilla and Banskandi in Assam and at Rajrappa and Gidi in Jharkhand were very good with plant load factor of above 95% in the case of Assam power plants and above 80% in the case of Giddi and Rajrappa plants. The operations of the Madhuband plant had stabilised during the year, but from 4th February 2004 onwards the plant is shutdown due to unforeseen damage to turbine. Reinstallation is in process and the plant is expected to be re-commissioned by 15th September 2004.

 

All efforts are being made for early realisation of outstanding payments from Assam State Electricity Board and Coal India Limited.

 

BUSINESS OUTLOOK

The Government of India has enacted the Electricity Act, 2003 in June 2003. This new Act is likely to streamline, generation, transmission and distribution/ trading of power. The regulations for inter-state power trading and open access to transmission and distribution facilities have been notified by the CERC, which augurs well for your company.

 

To tap the business opportunity, your company has altered the Main Object Clause of the Memorandum of Association of the Company, which now also authorises your company to carry the business of Inter State trading of Power. Your company has also applied to Central Electricity Regulatory Commission for issue of license for Inter / Intra state power trading which is in process for decision by the Commission.

 

DIVIDEND

The Directors, in order to conserve the resources for operational purposes, have not recommended any dividend on the equity share capital.

 

DIRECTORS

Shri Rajiv Singh, Shri R. S. Cheema and Shri C. P. Poonacha, Directors retire at the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment.  The Board recommends their re-appointments.

Shri K. K. Bhattacharya was appointed as the Additional Director of the Company with effect from 19th December, 2003.   It is recommended to appoint Sh. K. K. Bhattacharya as Director of the Company Liable to retire by rotation.

 

AUDITORS

M/s S. S. Kothari Mehta & Co., Chartered Accountants, New Delhi are eligible for re-appointment as the Statutory Auditors of the Company from the conclusion of the ensuing Annual General Meeting till the conclusion of the next Annual General Meeting.  The Board recommends their appointment.

 

AUDITORS’ REPORT

The observations of the auditors are self-explanatory and are adequately explained in the notes to the accounts.

 

AUDIT COMMITTEE

The  Audit Committee  comprises of two Non-executive directors viz., Shri Ram Ganapati and Shri A.S. Minocha, and the Managing Director, Shri R. S. Cheema. Shri Ram Ganapati, Non Executive Independent Director is the Chairman of the Committee. The Statutory Auditor, Internal Auditor, Director (Finance  & Commercial), Director (Operations), Sr. General Manager  (Finance)  were special invitees to the Meetings of the Committee. The Company Secretary acts as Secretary of the Committee.

 

PUBLIC DEPOSITS

The company has neither invited nor accepted any deposits from the public, within the meaning of Section 58A of the Companies Act, 1956.

 

PARTICULARS OF EMPLOYEES

A statement giving particulars of employees as per Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended uptodate, is given in Annexure-A to this report.

 

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO

The company continued its drive for conservation of resources like fuel, water, gas and Power. The Assam plants are being run in a combined cycle mode, thereby, taking full advantage of the waste heat from the gas turbines and increasing cycle efficiency. The Company has also been successful in using the low calorific value rejects of coal washeries for production of electricity in Rajrappa, Gidi & Madhuband power plants by using 'fluidised bed combustion' technology. Certain actions have been taken for reduction in auxiliary power consumption at the CIL Plants. The Company has not earned any foreign exchange during the year. The total foreign exchange used during the year is Rs.110.82 lacs as against Rs. 257.77 Lacs during the year 2002-2003.

 

Form ‘A’ of the Annexure to the Companies (Disclosure of particulars in the Board of Directors Report) Rules, 1988 is not applicable to the Company.

 

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act,1956, your Directors confirm the following :-

a)                   In the preparation of the Annual Accounts, the applicable accounting standards have been followed.

b)                   selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for that period.

c)                   Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of Companies Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

d)                   The   Annual Accounts  have been prepared on a going concern basis.

 

ACKNOWLEDGEMENT

Your Directors wish to place on record their appreciation for the co-operation and contributions made by the employees at all levels.

Your Directors also take this opportunity for recording their appreciation for the active support and help extended by the Government of India, Govt. of Assam, Govt. of Jharkhand, Assam State Electricity Board, Coal India Limited and its subsidiaries  - Central Coalfields Limited and Bharat Coking Coal limited, Financial Institutions, Banks and other agencies and look forward to their continued support.

 

                                                                                                On behalf of the Board

 

 

Dated :  August 12, 2004                                     R.S.Cheema                      C.P.Poonacha

Place : New Delhi                                         Managing Director        Director (Finance & Commercial)




 

 

                                                                                                                                                                                            ANNEXURE ‘A’

Statement showing the particulars of employees pursuant to Section 217(2A) of the Companies (Particulars of Employees) Rules, 1975 as amended upto date.

 

Annexed to and forming part of the Director’s Report for the year ended 31st March, 2004

 

Employed throughout the year and in receipt of remuneration aggregating not less than Rupees 2400000/- Per Annum

S.No.     Name                          Age          Descriptions/         Qualifications             Year of           Gross                   Date of                     Particulars of last

                                              (Years)      Nature of Duties                                    Experience      Remuneration       Commencement of     employment  Employer                 

                                                                                                                                                                         Employment              and Designation 

                                                                                                                                                      

1           Sh. R.S. Cheema              57        Managing              M. Sc. (Mech.                    34          69,92,290.00        01.10.1998                DLF Industries Ltd. -

                                                              Director                Engg.)                                                                                                      Managing Director        

 

Employed for part of the year and in receipt of remuneration aggregating not less than Rupees 200000/- Per Month

                                                                                                                       Nil

 

NOTES:

 

          1  Remuneration shown as above includes Salary, House Rent Allowance, commission on net profits, Company’s contribution to Provident Fund,    

              Superannauation Fund, Leave Travel, Bonus, Medical Expenses reimbursed, expenses on water, gas, electricity & perquisite value of car and hard

              furnishing as per Income-Tax Rules.

 

          2  The appointment of Shri R.S. Cheema is contractual. He is not a relative of any Director of the Company.