SIXTH ANNUAL REPORT 2013-2014 - Sembcorp

Generating Power for Generations

SIXTH ANNUAL REPORT

2013-2014

thermalpowertech

1

BOARD OF DIRECTORS

Mr. Tang Kin Fei Chairman

Mr. T. V. Sandeep Kumar Reddy Managing Director

Mr. Tan Cheng Guan Director

Mr. Koh Chiap Khiong Additional Director

Mr. Ng Meng Poh Director

Mr. D. Venkata Chalam Director

Mr. S.N.Gaikwad Nominee Director, REC

Mr. P.K.Singh Nominee Director, PFC

LENDERS

Rural Electrification Corporation Limited REC

Power Finance Corporation Limited PFC

Life Insurance Corporation of India LIC

PTC India Financial Services Limited PFSL

Oriental Bank of Commerce OBC

Punjab National Bank PNB

United Bank of India UBI

Bank of Baroda BOB

Syndicate Bank SB

STATUTORY AUDITORS B S R & Associates LLP

Chartered Accountants

Reliance Humsafar, IV Floor,

Road No.11, Banjara Hills,

Hyderabad - 34

INTERNAL AUDITORS M B R & Co

Chartered Accountants, Hyderabad

CHIEF EXECUTIVE OFFICER Atul Mohan Nargund

CHIEF FINANCIAL OFFICER B.N.K Reddy

COMPANY SECRETARY Nagamani Alluri

REGISTERED OFFICE 6-3-1090, A-5, TSR Towers,

Rajbhavan Road,

Somajiguda, Hyderabad - 500 082

SITE OFFICE Pyanampuram/Nelaturu Villages,

Muthukur Mandal,

SPSR Nellore - 524344,

Andhra Pradesh, India.

Corporate Information

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THERMAL POWERTECH CORPORATION INDIA LIMITEDCIN: U40103AP2008PLC057031

Registered Off: 6-3-1090, A-5, TSR Towers, Rajbhavan Road, Somajiguda,Hyderabad - 500 082. Phone: 040-49048300, Fax: 040-23370360

Website: www.tpcil.com, Email: [email protected]

NOTICE

NOTICE is hereby given that the 6th Annual General Meeting of M/s. Thermal Powertech

Corporation India Limited will be held on Friday the 26th day of September, 2014 at 11.00 AM.

at A-5, 6-3-1090, T.S.R Towers, Rajbhavan Road, Somajiguda, Hyderabad - 500 082, to transact

the following items of business.

ORDINARY BUSINESS:

1. To receive, consider and adopt the Financial Statements of the Company

for the year ended March 31, 2014 including audited Balance Sheet as at

March 31, 2014 and the Statement of Profit and Loss other for the year

ended on that date and the Reports of the Board of Directors and Auditors

thereon.

2. To re-appoint Mr. T.V.Sandeep Kumar Reddy (DIN 00005573), a director

who retires by rotation and being eligible offers himself for reappointment.

3. To re-appoint Mr. D V Chalam (DIN 02749496), a director who retires by

rotation and being eligible offers himself for reappointment

4. To appoint M/s B S R & Associates LLP, Chartered Accountants, Hyderabad

(ICAI Reg No 116231W) as Statutory Auditors of the Company and to

authorize the Board of Directors to fix their remuneration and to pass the

following Resolution:

RESOLVED THAT pursuant to the provisions of section 139, 141 and other

applicable provisions if any, under the Companies Act, 2013 M/s B S R &

Associates LLP, Chartered Accountants, Hyderabad (ICAI Reg.No

116231W) be and are hereby appointed as Statutory Auditors of the

Company to hold office from the conclusion of this Annual General Meeting

until the conclusion of the Eighth Annual General Meeting subject to

confirmation of the Members at every Annual General Meeting and in this

regard the Board of Directors be and are hereby authorized to fix their

remuneration plus traveling and other out of pocket expenses incurred by

them in connection with statutory audit and/or continuous audit and also

such other remuneration, as may be decided to be paid by the Board of

Directors/Audit & Risk Committee of the Board of Directors, for performing

duties other than those referred to herein above.

SPECIAL BUSINESS:

5. To consider and, if thought fit, to pass with or without modification(s), the

following resolution as an Ordinary Resolution:

Resolution 1

Resolution 2

Resolution 3

Resolution 4

Resolution 5

Notice

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Appointment of Mr. Koh Chiap Khiong (DIN 05253449) as Director liable

to retire by rotation

"RESOLVED THAT Mr. Koh Chiap Khiong (DIN 05253449), who was

appointed as an Additional Director of the Company by the Board of

Directors with effect from July 14, 2014, in terms of Section 152, 161(1) of

the Companies Act, 2013 and any other applicable provisions of the

Companies Act, 2013 and Article 88 of the Articles of Association of the

Company and whose term of office expires at the Annual General Meeting

and in respect of whom the Company has received a notice in writing from

a member proposing his candidature for the office of Director, be and is

hereby appointed as a Director of the Company whose period of office

shall be liable to determination by retirement of directors by rotation.

"RESOLVED FURTHER THAT the Board of Directors and the Company

Secretary of the Company be and are hereby severally authorized to do all

such acts, deeds or things as may be necessary to give effect to the above

resolution."

6. To consider and, if thought fit, to pass with or without modification(s), the

following resolution as an Special Resolution:-

AMENDMENT OF ARTICLES OF ASSOCIATION OF THE COMPANY

To consider and if thought fit, to pass, with or without modifications the

following resolution as Special Resolution

"RESOLVED THAT pursuant to the provisions of Section 14 and other

applicable provisions, if any, of the Companies Act, 2013 the members

of the Company hereby consider and approve for modification of existing

Articles of Association of the Company by inserting a new clause 2C

after existing clause 2B and replacing of Clause 125 as given below:

"2 C. Lenders Rights

Notwithstanding anything to the contrary, the provisions of the Financing

Agreements entered into/to be entered into with the Lenders of the Project

shall be deemed to be incorporated by reference herein for the purposes

of observance thereof by the Company and its Shareholders, and it is

hereby acknowledged and confirmed that: (i) the rights and interests of

the Lenders shall prevail over any provision inconsistent therewith

(whether contained herein or in any other document/instrument entered

into by the Company and/or its Shareholders); and (ii) any modification

hereto shall be made only with the prior written consent of the Lenders."

"125. SEAL HOW AFFIXED

"The Seal shall not be affixed to any instrument except by authority of a

resolution of the Board or of a committee and unless the Board otherwise

determines every deed or other instruments to which the seal is required

to be affixed shall, unless the same is executed by a duly constituted

attorney for the Company, be signed by one of the Directors or a person

Resolution 6

Notice

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authorised by the Board from time to time, in whose presence, the seal

shall have been affixed and countersigned by the company secretary or

such other person as may from time to time be authorised by the Board,

provided nevertheless that any instrument bearing the seal of the Company

and issued for valuable consideration shall be binding on the Company

notwithstanding any irregularity touching the authority to issue the same"

RESOLVED FURTHER THAT the Board of the Directors and the Company

Secretary of the Company be and are hereby severally authorised to do

all acts, deeds, things and take all necessary steps to give effect to the

above resolution."

By order of the Board

For THERMAL POWERTECH CORPORATION INDIA LIMITED

(Nagamani Alluri)

Place : Hyderabad, Company Secretary

Date : September 17, 2014 M.No. A25304

Registered office:

6-3-1090, A Block, 5th Floor, TSR Towers,

Rajbhavan Road, Somajiguda, Hyderabad 500 082

Notes:

1. A member entitled to attend and vote is entitled to appoint a proxy to attend and vote instead ofhimself and the proxy need not be a member of the Company. Proxies, in order to be effective mustbe received at the Company's Registered Office not less than 48 hours before the meeting. Proxiessubmitted on behalf of limited companies, societies, partnership firms, etc. must be supported byappropriate resolution / authority as applicable, issued on behalf of the nominating organization.Members/Proxies should bring filled attendance slips attached herewith for attending the meeting.A person can act as Proxy on behalf of members not exceeding 50 and holding in the aggregate notmore than 10% of the total share capital of the company. A member holding more than 10% of thetotal share capital of the company may appoint a single person as proxy and such person shall notact as proxy for any other person or shareholder.

2. Corporate members intending to send their authorized representatives to attend the meeting arerequested to send a certified copy of board resolution on the letterhead of the company, signed byone of the directors, company secretary or any other authorized signatory named in the resolution,authorizing their representatives to attend and vote their behalf at the meeting.

3. Shareholders are requested to bring their copies of Annual Report to the Annual General Meeting.

4. A member desirous of seeking any information on the accounts or operations of the Company isrequested to forward his / her query to the Company at least seven working days prior to themeeting, so that the required information can be made available at the meeting.

5. Statutory Registers maintained will be available for inspection by the members at the AGM.

6. The Explanatory Statement pursuant to Section 102 of the Companies Act, 2013 in respect of theSpecial Business to be transacted at the Annual General Meeting (AGM), as set out in the Notice isannexed hereto

Notice

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ANNEXURE TO NOTICE

EXPLANATORY STATEMENT UNDER SECTION 102 OF THE COMPANIES

ACT, 2013

ITEM NO. 5:

The Board at its meeting held on July 14, 2014 appointed Mr Koh Chiap Khiong, GCFO, SCI,as an Additional Director in terms of Section 161 of the Companies Act, 2013 (the "Act"), whoholds office up to the date of this Annual General Meeting. Further, the Board at its meetingheld on September 17, 2014, subject to the approval of the Members, also appointed him as aDirector of the Company. The Audit & Risk Committee at its meeting held on September 05,2014 has recommended the appointment of Koh Chiap Khiong as a Director.

Mr Koh is responsible for corporate finance and treasury, reporting, accounts, tax, informationtechnology and risk management at Sembcorp Industries and oversees these functions acrossthe Sembcorp Group. He also handles investor relations matters as Sembcorp Group ChiefFinancial Officer (CFO) and is a director on the boards of various Sembcorp companies, includingseparately-listed Sembcorp Marine.

Mr Koh brings with him over 20 years' extensive expertise in financial reporting, tax, corporatefinance, mergers and acquisitions, treasury, risk management and audit. He has over a decade'sexperience in managing infrastructure businesses and a strong knowledge of the energy andwater sectors. He rejoined Sembcorp in 2008 after a three-year stint with Power Seraya as itsCFO. Prior to that, he spent seven years in Sembcorp and served as the Utilities business'Head of Finance and Chief Risk Officer. Mr Koh holds a First Class Honours degree inAccountancy from the National University of Singapore and completed the AdvancedManagement Programme at Harvard Business School.

The Company has received a notice in writing from a Member along with the deposit of requisiteamount under Section 160 of the Act proposing the candidature of Koh Chiap Khiong for theoffice of Director of the Company. Mr Koh Chiap Khiong intimated to the Company that he isnot disqualified from being appointed as a Director in terms of Section 164 of the Act and hasgiven his consent to act as a Director. In view of vast knowledge and expertise of Mr KohChiap Khiong, the Board considers that his appointment as a Director would be of immensebenefit to the Company.

The Board recommends the resolutions set out at Item No. 5 of this Notice for your approval byway of Ordinary Resolution.

Except Koh Chiap Khiong and his relatives, to the extent of their shareholding interest, if any,in the Company, none of the other Directors / Key Managerial Personnel of the Company andtheir relatives is, in any way, concerned or interested, financially or otherwise, in the resolutionsset out at Item No.5 of this Notice

ITEM NO. 6:

The members of the company are informed that pursuant to the Lenders recommendation tocapture a clause on Lenders Supremacy rights, the Company is required to amend the Articlesof Association of the Company to capture the suggested clauses.

Notice

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Further it is also proposed to replace article no.125 with new article for effective managementof the documentations required to be executed by the Company.

The Board accordingly recommends the Resolutions for approval and adoption of proposedamendments to the Articles of Association.

Memorandum of concern or interest:

None of the Directors, key managerial personnel or their relatives of your Company areconcerned or interested in the resolution.

By order of the Board

For THERMAL POWERTECH CORPORATION INDIA LIMITED

(Nagamani Alluri)

Company Secretary

M.No. A25304

Place : Hyderabad,

Date : September 17, 2014

Registered office:

6-3-1090, A Block, 5th Floor, TSR Towers,

Rajbhavan Road, Somajiguda,

Hyderabad 500 082

Notice

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DIRECTORS' REPORT

DEAR SHAREHOLDERS,

Your Directors of Thermal Powertech Corporation India Limited ("TPCIL") are pleased to present theCompany's Sixth Annual Report, together with the Audited Balance Sheet of the Company as at March31, 2014 and the Auditors' Report thereon.

The Company is committing a capital outlay of about Rs 6,869 crores in its 1,320-megawatt coal-firedsupercritical thermal power plant in Muthukur Mandal, Nellore District of Andhra Pradesh. This is beingmet by long-term rupee debt from a consortium of lenders and equity from the promoters M/s. GayatriEnergy Ventures Private Limited and M/s. Sembcorp Utilities Pte Ltd ("SCU"), Singapore, in the ratio of3:1 respectively. The power project is in the implementation stage with most of the civil works nearingcompletion, while the mechanical erection of equipment is in an advanced stage.

FINANCIAL PERFORMANCE� The Company is in the process of constructing its 1,320-megawatt thermal power plant and therefore

does not have operational income. However, during the year, the Company earned a total incomeof Rs 459,726,067 by way of income earned from short-term deposits with banks. Accountingtreatment for this Income from temporary investments has been effected as per relevant accountingstandards.

� During the year, the Company raised long-term loans from a consortium of lenders amounting toRs 1,622 crores and buyer's credit of Rs 842.97 crores from DBS Bank Limited, Singapore. Theterm loans and buyer's credit outstanding as at March 31, 2014 were Rs 3,559 crores (as at March31, 2013: Rs 1,937 crores) and Rs 2,300.82 crores (as at March 31, 2013: Rs 1,457.85) respectively.Total loan as at March 31, 2014 amounts to Rs 5,859.82 crores.

ISSUE OF 5% CUMULATIVE PARTICIPATORY REDEEMABLE CONVERTIBLE PREFERENCESHARES ("CPRCPS"):� During the year, the Company approved and issued 5% Cumulative Participatory Redeemable

Convertible Preference Shares ("CPRCPS") to SCU, a shareholder holding 49% Equity Shares inthe Company, and allotted Tranche III & IV of 275,711,344 CPRCPS amounting to Rs 357.35crores in the month of September, 2013 and December, 2013 respectively. Terms and rights attachedto CPRCPS:

(i) Term of the 5% CPRCPS of Rs 10 each is six years commencing from the date of allotmentwith an option given to the shareholder for conversion.

(ii) Further, to the extent permitted under applicable law, the holder of the CPRCPS shall, inaddition to the right to preferential CPRCPS Dividend, be entitled to participate in any dividenddeclared by the board and approved by shareholders in respect of the share capital of theCompany ("ordinary dividend"), on a pari passu basis and as converted basis along with theshareholders of the Company.

� The Company's long-term debt paper is rated CARE BBB [Triple B] by CARE Limited. This indicatesmoderate degree of safety with regard to timely servicing of financial obligations and considered asInvestment Grade.

DIVIDEND

Equity DividendSince commercial operations have not commenced, the Company has not declared any dividend onequity shares for the year ended on March 31, 2014.

Dividend on CPRCPS

For the Financial Year 2013-2014, the amount of dividend due was Rs 201,415,094 including DividendDistribution Tax (DDT) of Rs 29,222,902. Since the project has not yet been commissioned, the Companyhas not prepared the Statement of Profit and Loss Account for the Financial Year 2012-2013. However,the dividend on CPRCPS for Rs 201,415,094 shall be cumulative though not declared. The dividendtherefore may be accrued and accumulated for appropriate consideration in the succeeding financialyears.

Directors’ Report

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PROGRESS OF THE PROJECT

Development of the 1,320-megawatt thermal power plant in Nellore District, Andhra Pradesh, at a cost ofRs 6,869 crores, is progressing well. As at March 31, 2014, the Company has spent Rs 4,108.63 croreson the project. The Company has executed loan documents for Rs 5,151 crores from the consortium ofnine lenders led by Rural Electrification Corporation Limited. The progress of the project is as follows:

1) TPCIL PROJECT OVERALL PROGRESS (BTG+BOP+OSBL+INFRA).

Overall progress is 92.67% as on March 31, 2014.

2) BOILER TURBINE GENERATOR SUPPLY BRIEF SUMMARY

� Total BTG equipment manufacturing, Testing & Delivery completed.� The progress of the supply of steel structure and miscellaneous mechanical items is 100% as

of end Mar 2014.

3) BALANCE OF PLANT BRIEF SUMMARY

� BOP has completed all procurement activities, Most of the material / equipment delivered tosite.

Civil Works:

� Unit-1 Power House Building: All floors and equipment foundations completed.� Unit-2 Power House Building:� TG Deck casting completed on 06-Dec-13.� Preparatory works in progress for starting erection of Turbine.� Control Building: All Floors casting completed and Interior works under progress.� Fans Unit-1: All PA, FD & ID foundation casting completed.� Fans Unit-2:

� ID Fan 2A: Deck casted on 12-Mar-14.� ID Fan 2B and PA & FD Fan 2B: Foundation works in progress.

� Cooling Tower Unit-1: Casting up to full height completed on 19-Mar-2014. Internal works arein progress.

� Cooling Tower Unit-2: Foundation works completed on 31-May-2013 and shell casting worksin progress.

� Sea Water Intake Piping: CT makeup line, Outfall line & Desalination feed line laying completed.� SWPH: Pump house & MCC Building works completed. Gates & Screens grouting work in

progress.� CWPH: Fore bay & Pump house casting completed.� Chimney shell construction completed on 01-July-2013.

Mechanical Works:

� Boiler Unit-1: Pressure parts erection completed. Drainable hydro test completed on 29-Oct-2013 and overall Hydro test completed on 20-Apr-2014. Piping, ducting & Insulation works inprogress.

� Boiler Unit-2: Pressure parts erection competed. Critical piping works are in progress. Hydrotest is planned in the month of May 2014

� Power House Unit-1 :� All heaters & Deaerator erection completed.� Turbine: ALP & BLP turbines erection works in progress.� Generator: Stator erection and Rotor insertion completed.� Condenser: Tubes erection at ALP completed. Tube erection at BLP in progress.

� Power House Unit-2:� 80 % structures erection completed.� Sole plate erection in progress at Generator.

� ESP Unit-1: Emitting & Collecting electrode erection completed. Transformers & Rectifierserection in progress.

Directors’ Report

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� ESP Unit-2: Emitting electrode erection completed. Collecting electrodes erection nearcompletion. Hoppers erection in progress.

� Mill Bunker Unit-1 (RHS):� Major structures erection completed. Bunker erection completed.� Mills erection in progress.

� Mill Bunker Unit-2 (LHS):� 95% structures erection completed. 85% Bunker shell erection completed.

� ESP Control building structural erection completed on 29-June-2013. Panels erection & earthingwork in progress.

� Chimney Flue cans Unit-1 erection works in progress.� SWPH: Screen & Gates erection in progress. Target for running of the pumps in 2nd week of

May 2014.� CWPH: CW Blow down pumps erection in progress.� WTP: RO & DM equipment erection completed. Piping & equipment erection is in advance

stage of erection. Mech erection completion is targeted in the 2nd week of May 2014.� Pipe rack: 70% structural erection completed� LP Piping: 60% pipes laying & fit up works completed.� CW Piping: 90% pipe erection completed. Target for Unit-1 piping completion by May14.� ICHP: 80% Fabrication & 50% erection works completed. 2 nos of SCRs (Stacker cum

Reclaimer) erection in progress.

� Electrical Work:

� GIS (Bus-1) Charging completed on 28-Feb-14� AIS (Line-1) Charging completed on 28-Feb-14� ST bay & Transformer charging completed.� Transformer yard works are expected to complete by 15-May-14.� MCC Rooms at different areas are in advance stage of completion.

4) OUTSIDE BATTERY LIMIT (OSBL)

✦ Sea Water Intake and Outfall system (SWIO)

� Pipe stringing & connection to SWPH completed.

✦ External Coal Handling Plant (ECHP)� Trestle foundation: 190/ 190 completed.� Trestles: 190 / 190 completed up to bolt lift.� Galleries: 185 / 195 erection completed.� Conveyor Belt: Belt erection (1150/9650Mtrs) erection in progress.

COMMERCIAL HIGHLIGHTS

Power Purchase Agreement (PPA)

PPA for the supply of 500 megawatts net capacity for a period of 25 years has been signed with theAndhra Pradesh Discoms in the first quarter of Financial Year 2013-14.

Fuel Supply Agreement (FSA)

FSA for domestic coal with Coal India Ltd (CIL) was executed in the first quarter of Financial Year 2013-14. Subsequently an Addendum to FSA was signed wherein Annual Contracted Quantity (ACQ) of 2.543MMT was allotted based on AP PPA for 500 MW. The remaining quantity of 1.73 MMT shall be allotted onachieving another PPA for 334 MW. TPCIL is on CIL's list of projects which have met their conditionsprecedent for signing the FSA. Modalities are being worked out by Power & Coal Ministries with CIL forthe finalisation of price pooling or any other mechanism to meet the 80% fulfillment of the linkage quantity,in accordance with the FSA.

Coal Supply Agreement (Imported Coal)

FSA for one million tonnes of coal per annum was signed with PT Bayan Resources and the Companyplans to execute another agreement for the second tranche of imported coal.

Directors’ Report

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Port Service Agreement (PSA)Signed 15 years PSA with Krishnapatnam Port Company Ltd. (KPCL) for the handling of four to sixmillion tonnes per annum of domestic and imported coal.

ShippingContract signed with NYK Shipmanagement for the first tranche of imported coal. Domestic shipping willcommence only after FSA has been signed and clarity on price pooling methodology has been achieved.

SAFETY

✦ TPCIL has achieved 3,776,458 man-hours without Lost-Time-Accidents as at March 31, 2014.✦ TPCIL adopted a proactive continual enhancement on the HSE Management to adequately address

the evolving work challenges on site. Some of the enhancements include the following:� Regular revision of the Weekly Joint HSE Inspection regime to resolve the non-compliance to

HSE requirements at the root cause.� Imposing HSE Deterrence Fines to deter the contractors from deviating from the HSE

Standards established.� Conduct HSE Passport Training whereby the TPCIL Staff are equipped with the minimal HSE

requirements for specific hazardous work activities.� Clear demarcation of the project into sectors with responsible Sector IC for focused

management of HSE issues within.� Leading the contractors to comply with the local regulations.

The current challenge is to streamline the HSE procedures as the project transit from the Constructionto Operation Phase. Both the HSE and O&M Department will be coordinating to ensure compliance

INTERNAL CONTROL SYSTEMSThe Company has established internal controls and processes which are adequate and being consistentlyadhered to. Chartered Accounts M/s M. Bhaskara Rao & Co.is appointed as internal auditors for theFinancial Year 2013-14. The Internal Auditors independently evaluate the adequacy of internal controlsand concurrently audit as per the scope awarded.

There is no significant non-compliance with the internal controls. The periodical observations andrecommendations for improvement to processes reported by Internal Auditors are reviewed by themanagement and implemented as required by the Company.

INFORMATION TECHNOLOGY1. Implemented Intranet Portal, a centralized Document/Policy repository system, for all departments.2. Technical Support to SAP Plant Maintenance module Implementation, which completed User

Acceptance Sign off.3. Established complete IT Infrastructure, in the new Corporate Office, as per the targets given.4. Established Network facility, to the following offices, in the Plant.

First Aid Centre, Boiler Porta-cabin, Field Hostel, GIS building, CCB, Water Treatment Plant, TG 16mtr. floor and 11.3 Mtr.

5. Developed in-house package, for First Aid center, for maintaining patient master & Medicine master.6. Arranged dedicated Airtel mobile network tower, in the Plant.

HUMAN RESOURCESThe Company takes great pride in the commitment, competence and vigour shown by its workforce in itsbusiness. The Company continues to take new initiatives to further align its HR Policies to meet thegrowing needs of its business. Development initiatives pertaining to self and organisational development,team building, managerial effectiveness, training and upgrading of technical skills are continuouslyundertaken by the Company for improving the value of and contribution by its human asset. The Companyalso makes focused efforts in increasing productivity and overall improvement in the quality of work of theemployees by redefining business processes. Staff strength as at March 31, 2014 is 305 (as at March 31,2013: 153).

HOLDING COMPANYDuring the year under review, the Company continued to be a subsidiary of M/s Gayatri Energy VenturesPrivate Limited.

Directors’ Report

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DIRECTORS

At the ensuing annual general meeting (AGM), Mr T.V.Sandeep Kumar Reddy and Mr D V Chalam willretire by rotation and, being eligible, offer themselves for re-appointment in terms of provisions of Articlesof Association of the Company. The brief resume/details relating to directors who are to be appointed/re-appointed are furnished in the explanatory statement to the notice of the ensuing AGM.

STATUTORY DISCLOSURESNone of the Directors of the Company are disqualified as per the provisions of Section 274(1)(g) of theCompanies Act, 1956 and Section 162 of the Companies Act, 2013.

AUDITORSM/s BSR & Associates, Chartered Accountants, Hyderabad, who are the Statutory Auditors of the Company,hold office, in accordance with the provisions of the Companies Act, 1956, up to the conclusion of theforthcoming AGM and they would be seeking re-appointment at the ensuing AGM.

M/s BSR & Associates, Chartered Accountants, Hyderabadhave confirmed that they are eligible for theappointment for next 2 years and their appointment, if confirmed, shall be within the specified limits asstipulated under section 139 of the Companies Act, 2013. Shareholders are requested to appoint M/sBSR & Associates as Statutory Auditors at a remuneration to be fixed by the Board of Directors.

AUDITORS' REPORTThere is no qualificatory note in the Auditors' Report. Hence, no explanation is required.

FIXED DEPOSITSThe Company has not accepted fixed deposits from the public as defined by section 58A of the CompaniesAct, 1956 read with the Companies (Acceptance of Deposit Rules), 1975.

DISCLOSURE OF PARTICULARS OF EMPLOYEESAs required under the provisions of Section 217(2A) of the Companies Act, 1956 read with Companies(Particulars of employees) Rules, 1975, as amended, the names and other particulars of employee(s)are set out in the annexure of this report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGOThere is no information to be provided in terms of Section 217(1)(e) of the Companies Act, 1956 readwith Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988,regarding conservation of energy, technologies absorption as the Company has not commenced itsoperations.

FORM B: FOREIGN EXCHANGE EARNINGS AND OUTGOThere are no foreign exchange earnings during the period under review. However, the Company hasexpended a sum of Rs 810.33 crores during the year.

Description (Rs in crores)

Foreign Exchange Earned NIL

Foreign Exchange Used (Actual basis)

a) Import of Capital Goods 7030,305,737

b) Advance for Capital Goods

c) Professional & Consultant Fee 413,016,805

d) Interest on Buyers Credit 459,668,664

e) Travelling & Others 200,390,231

CORPORATE GOVERNANCE

Corporate Governance can be viewed as a set of arrangements internal to the organisation that definesthe relationship between managers and shareholders. These arrangements can be embedded in variouslaws among the key players in governing documents of the organisation such as bye-laws and shareholder

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agreements. As a part of developing better and enhanced corporate governance, the management hasdeveloped Human Resource Management, Information Technology, Safety and other policies for strictadherence within the Company. The Board of Directors of the Company has constituted Audit & Risk,Remuneration, Project Management, Project Executive and Taskforce for Imported Coal committees,even though it is not a listed company.

AUDIT COMMITTEE

Present members of the Audit Committee are Mr D.V. Chalam, Chairman, Mr Tan Cheng Guan,Mr T.V. Sandeep Kumar Reddy, Mr Koh Chiap Khiong and Mr Atul Mohan Nargund. During the yearunder review, three meetings of the Audit Committee were held on May 10, 2013, November 14, 2013and March 19, 2014. Composition of the committee and details of attendance of the members at thecommittee meetings during the year are given below:

Name of the Director No. of Meetings attended

Mr D.V. Chalam 3

Mr Tan Cheng Guan 3

Mr T.V. Sandeep Kumar Reddy 3

Mr Koh Chiap Khiong 3

Mr Atul Mohan Nargund 3

Composition of the committee is in compliance with the requirements of Section 177 (8) of the CompaniesAct, 2013. The Company Secretary acts to assist the committee. Committee meetings were also attendedby the representative of the Statutory Auditors and the Chief Financial Officer of the Company. Thecommittee also invites senior executives, as it considers it appropriate for them to attend the meetings ofthe committee.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Corporate Social Responsibility (CSR) is a Company's commitment to its stakeholders to conduct businessin an economically, socially and environmentally sustainable manner that is transparent and ethical.Stakeholders include employees, investors, shareholders, customers, business partners, clients, civilsociety groups, Government and non-Government organizations, local communities, environment andsociety at large.

The objective of TPCIL's CSR policy is to ensure that the local affected families improve their standardsof living and earning capacity through a process in which they participate through their own social andcultural institutions. Therefore, TPCIL's CSR Policy is developmental and participatory in nature withemphasis on ensuring that development in the area fosters full respect for their dignity, human rights andcultural uniqueness.

The villages in and around the project premises are classified into 'Inner Ring Villages' falling within 3Km. radius and 'Outer Ring Villages' falling beyond 3 Kms and upto 10 Kms radius. Unner Ring villages,being most affected are given special focus/attention.

CSR is mandatory under amended Indian Company's Act, effective from 1st April, 2014.

CSR at TPCIL focuses on (i) Education; (ii) Basic Healthcare; (iii) Sustainable Livelihood; (iv) Infrastructure;(v) Social Reforms.

i. EDUCATION

✦ Interventions towards improvement in education, strengthening the educational infrastructure asper local requirement and support to the activities directed towards improvement of educationthrough support to schools/institutions, sponsoring poor students, scholarships, buildinginfrastructure etc.

Activities

1. Distribution of Uniforms at Nelaturu palem Anganwadi school (Pre-school)2. Distribution of soaps, shampoo, coconut oil to Primary and Anganwadi school children of

Dibbameeda Girijana colony - continuous activity

Directors’ Report

13

3. School buses to school going children of Pynampuram and Nelaturu palem - continuous activity.4. Sponsored District-level merit talent tests conducted by fisherman community for their children

studying 10th class.5. Sharing cost of ITI being set up at Muthukur at the initiative of District Collector with short term

vocational courses for improving employability of the interested youth in the neighbouring villages- under process.

Uniform distribution to the Distribution of Slates, Meals School bus for children ofAnganwadi school children Plates, Blankets in schools Nelaturupalem and

at Nelaturu palem. of neighbouring villages. Nelaturu Harijanawada

ii. BASIC HEALTHCARE

Provide interventions in the field of health care and hygiene based on local requirements. Some of thepurposes of basic health care include: serving local communities; handling a wide range of basic healthcare needs; and providing health care services to poor and underserved groups that would otherwiselack access to decent health care.

Activities

1. Fortnightly village medical camps in Nelaturu palem, Nelaturu & Pynampuram Panchayat villages.Medicines are provided free of cost.

2. Distributing pamphlets in local language in villages on hygiene, health care and common diseasesand preventive measures as & when situation warrants.

3. Supporting pregnant women by providing nutritive supplements and medicines.4. Deworming of school children of above villages every quarter.5. Supply of drinking water through tankers to Nelaturu Harijanawada & Pynampuram villages.6. Supply of RO water to Nelaturu palem village - fishermen village.7. Mosquito control measures - Fogging & Anti Larva treatment in all Inner Ring Villages.8. A blood donation camp was organized in association with Govt. District Headquarter Hospital.

Medical camp at Devaradibba Drinking water supply to RO PlantGirijana colony. Nelaturu BC & ST colony.

iii. SUSTAINABLE LIVELIHOOD

Empowerment of the population through increased earning capabilities, which will be instrumental ineradication of extreme hunger and poverty. Activities for creation of livelihood/employment opportunitiesfor the deprived and underprivileged sections of the society for income generation shall be supported.

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14

Activities

1. Deployment of unskilled manpower with construction contractors of the Project and also in house-keeping, catering & security areas.

2. Deploying women of nearby villages in TPCIL Green Belt / Tree Plantation programme.3. Gainful engagement of villagers through hiring of tractors, water tankers, four wheelers & buses.4. Direct employment of qualified local candidates as per requirement & suitability.5. Distribution of rice and lumpsum cash to the villagers of Nelaturu palem as their fishing operations

are affected.

Deployment of locals for Deployment of local tractors Package distribution atGreen belt. for Green belt. Nelaturu palem village

iv. INFRASTRUCTURE

Support towards augmentation of basic infrastructure facilities as per the needs of the local communityat large, with special focus on one time assistance for sustainable development of water resources,roads and transportation, power, community facilities etc.

Activities

1. Demolition & reconstruction of Anganwadi centre (Pre-school) at Nelatur Harijanawads.2. Demolition & reconstruction of Anganwadi centre at Musunurivari palem.3. Construction of compound wall and toilets for Primary school in Wagartha Pynampuram.4. Construction of individual toilets in Nelaturu palem village.5. Leveling and repairing of road from Nelatur to Nelatur Harijanawada - Nelatur Panchayat under

progress.6. Leveling and repairing of road from Nelatur to Muthukur via Mamidipudi - Nelatur Panchayat. Cost

to be shared along with APGENCO & NCCPPL - under progress.7. Construction of a 550 Square Feet Revenue Building in Panchayat Office of Nelaturu Village8. Repair and re-conditioning of Veterinary Center in MV Palem village - work in progress.9. Construction of CC roads in Krishna Patnam panchayat villages - under progress.10. Laying of CC roads in Arcatpalem and Ramnagar villages.11. Street Lighting at Wagartha Pynampuram and surrounding hamlets.12. Power line modification & street lighting at Nelaturu palem.

Anganwadi Centre at Nelaturu Individual toilets at CC RoadsHarijanawada. Nelaturupalem. at Arcatpalem.

Directors’ Report

15

(v) SOCIAL & CULTURAL

Support towards preservation, conservation and up gradation of local heritage, art and culture, to promotegames & sports, discover talent in these areas etc.

Activities

1. Sponsoring/supporting events like village fairs, festivals, other social & cultural activities like Rangoli.2. Encouraging games & sports among the youth in the surrounding villages by providing playground,

sports kits & other infrastructure during conduct of village level competitions.

Rangoli Competitions

DIRECTOR’S RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representationsreceived from the operating management, confirm that:

a) The Annual Accounts for the period ended March 31, 2014, has been prepared in accordancewith the applicable Accounting Standards. Any material deviations are followed with properexplanations.

b) The Directors had selected such accounting policies and applied them consistently and madejudgements and estimates that are reasonable and prudent, so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profit or lossof the Company for that period.

c) The Directors had taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with provision of this Act to safeguard the assets of the Company andprevent and detect fraud and other irregularities.

d) The Directors had prepared the Annual Accounts for the period ended March 31, 2014, on agoing concern basis.

ACKNOWLEDGEMENTS

The Directors wish to place on record their sincere appreciation and acknowledge with gratitude, thesupport and continued guidance received from the Ministry of Power, Central Government, CIL, APDiscoms, Central Electricity Regulatory Commission, Central Electrical Authority, Power Grid Corporationof India Limited, local authorities and our financial institutions and banks.

The Board would also like to express its sincere appreciation for the commitment and contribution of allits employees. The Company also thanks its Shareholders for their continued support.

For and on behalf of the Board of Directors

Place : Hyderabad Tang Kin Fei T.V. SANDEEP KUMAR REDDY

Date : June 11, 2014 Chairman Managing Director(DIN: 03472658) (DIN: 00005573)

Directors’ Report

16

ANNEXURE TO THE DIRECTORS' REPORT

Information as per section 217(2A) of the Companies Act, 1956 read with the Companies

(Particulars of Employees) Rules, 1975, and forming part of the Directors' Report for

the year ended March 31, 2014.

Employed for part of the year with an average salary above Rs 5 Lakh per month:

Employee Title / Qualification Age Experience Joining Gross PreviousName Role (Years) Date Remuneration Employment

per month (Rs.)

Alluri Head BE 52 29 years Nov 19, 530,056 1. NTPC Ltd.Nageswara Projects Mecha- 2011 2. RelianceRao -nical Infra

3. L&T Power

For and on behalf of the Board of Directors

Tang Kin Fei T.V. SANDEEP KUMAR REDDY

Chairman Managing Director(DIN: 03472658) (DIN: 00005573)

Place : HyderabadDate : June 11, 2014

Directors’ Report

17

INDEPENDENT AUDITOR'S REPORT

To the Members of THERMAL POWERTECH CORPORATION INDIA LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of Thermal Powertech CorporationIndia Limited ("the Company") which comprises the Balance Sheet as at 31 March 2014, theStatement of Profit and Loss and the Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a trueand fair view of the financial position, financial performance and cash flows of the Company inaccordance with the Accounting Standards referred to in sub-section (3C) of Section 211 ofthe Companies Act, 1956 ("the Act"). This responsibility includes the design, implementationand maintenance of internal control relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement, whether dueto fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.We conducted our audit in accordance with the Standards on Auditing issued by the Instituteof Chartered Accountants of India. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment, including the assessment of the risks of material misstatement of the financialstatements, whether due to fraud or error. In making those risk assessments, the auditorconsiders internal control relevant to the Company's preparation and fair presentation of thefinancial statements in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of accounting policiesused and the reasonableness of the accounting estimates made by Management, as well asevaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us,the financial statements give the information required by the Act in the manner so required and

B S R & ASSOCIATES

Chartered Accountants

Reliance Humsafar, IV Floor, Road No. 11,Banjara Hills, Hyderabad - 500 034. India

Tel : +91 40 3046 5000 / Fax : +91 40 3046 5299

Auditor’s Report

18

give a true and fair view in conformity with the accounting principles generally accepted inIndia:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31March 2014;

(b) in the case of the Statement of Profit and Loss, of the loss for the year ended on thatdate; and

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on thatdate.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2003 ("the Order"), as amended,issued by the Central Government of India in terms of sub-section (4A) of Section 227 ofthe Act, we give in the Annexure a statement on the matters specified in paragraphs 4and 5 of the Order.

2. As required by Section 227(3) of the Act, we report that:

(a) we have obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purpose of our audit;

(b) in our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books;

(c) the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account;

(d) in our opinion, the Balance Sheet, the Statement of Profit and Loss and the CashFlow Statement comply with the Accounting Standards referred to in sub-section(3C) of Section 211 of the Companies Act, 1956 to the extent applicable; and

(e) on the basis of written representations received from the directors as on 31 March2014, and taken on record by the Board of Directors, none of the director is disqualifiedas on 31 March 2014, from being appointed as a director in terms of clause (g) ofsub-section (1) of Section 274 of the Companies Act, 1956.

For B S R & Associates

Chartered AccountantsFirm Registration No: 116231W

Vikash Somani

PartnerMembership No.: 061272

Place : HyderabadDate : May 08, 2014

Auditor’s Report

19

Annexure to Auditors’ Report

The Annexure referred to in the Independent Auditor's Report to the Members of Thermal PowertechCorporation India Limited ("the Company") on the financial statements for the year ended 31 March2014. We report that:

(i) (a) The Company has maintained proper records showing full particulars including quantitativedetails of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets by which allfixed assets are verified every year. In our opinion, the periodicity of physical verification isreasonable having regard to size of the Company and the nature of its assets. In accordancewith the programme, fixed assets were physically verified during the year. No materialdiscrepancies were observed on such verification.

(c) No fixed assets were disposed off during the year. Accordingly, paragraph 4(i)(c) of the Orderis not applicable.

(ii) The Company is in the process of setting up a power plant and accordingly, it did not hold anyphysical inventories during or at the end of the year. Hence, paragraph 4(ii) of the Order is notapplicable.

(iii) The Company has neither granted nor taken any loans, secured or unsecured, to or from companies,firms or other parties covered in the Register maintained under Section 301 of the Companies Act,1956.

(iv) In our opinion and according to the information and explanations given to us, and having regard tothe explanation that receipt of certain services and purchases of certain items of fixed assets arefor the Company' specialised requirements for which suitable alternative sources are not availableto obtain comparable quotations, there is an adequate internal control system commensurate withthe size of the Company and the nature of its business with regard to purchase of fixed assets. TheCompany is in the process of setting up a power plant and accordingly the activities of the Companydid not involve purchase of inventory and sale of goods or services during the period. We have notobserved any major weakness in the internal control system during the course of the audit.

(v) (a) In our opinion and according to the information and explanations given to us, the particularsof contracts or arrangements referred to in Section 301 of the Act have been entered in theRegister required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactionsmade in pursuance of such contracts and arrangements referred to in point (a) above andexceeding the value of Rs. 5 lakhs with any party during the year, have been made at priceswhich are reasonable having regard to the prevailing market prices at the relevant time exceptfor purchase of certain items of fixed assets and certain services availed which are for theCompany's specialised requirements and for which suitable alternative sources are notavailable to obtain comparable quotations. However, on the basis of information andexplanations provided, the same appear reasonable.

(vi) The Company has not accepted any deposits from the public.

(vii) In our opinion, the Company has an internal audit system commensurate with its size and nature ofits business.

(viii) The Central Government has prescribed the maintenance of cost records under section 209(1)(d)of the Companies Act, 1956 for the Company. However, the same is not applicable to the Companyfor the year under audit, as the Company is yet to commence its operations. Hence, paragraph4(viii) of the Order is not applicable.

(ix) (a) According to the information and explanations given to us and on the basis of our examinationof the records of the Company, amounts deducted/ accrued in the books of account in respectof undisputed statutory dues including Provident Fund, Income-tax, Service tax, Customsduty and other material statutory dues have been generally regularly deposited during the

Auditor’s Report

20

year by the Company with the appropriate authorities though there were slight delays in fewcases. As explained to us, the Company did not have any dues on account of Investor Educationand Protection Fund, Employees' State Insurance, Sales-tax, Excise duty, and Wealth Tax.

According to the information and explanations given to us, no undisputed amounts payable inrespect of Provident Fund, Service tax, Customs duty, Income Tax and other material statutorydues were in arrears as at 31 March 2014 for a period of more than six months from the datethey became payable.

(b) According to the information and explanations given to us, there are no dues of Income tax,Service tax and Customs duty which have not been deposited with the appropriate authoritieson account of any dispute. As explained to us, the Company did not have any dues on accountof Sales tax, Wealth tax and Excise duty.

(x) The accumulated losses of the Company at the end of the financial year are less than fifty percentof its net worth. The Company has incurred cash losses during the current financial year as well asin the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has notdefaulted in repayment of dues to its bankers or to any financial institutions. The Company did nothave any outstanding debentures during the year.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledgeof shares, debentures and other securities.

(xiii) In our opinion and according to the information and explanations given to us, the Company is not achit fund / nidhi / mutual benefit fund / society.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading inshares, securities, debentures and other investments.

(xv) According to the information and explanations given to us, the Company has not given any guaranteefor loans taken by others from banks or financial institutions.

(xvi) According to the information and explanations given to us, the Company has applied the term loansfor the purpose for which they were taken.

(xvii) According to the information and explanation given to us and on an overall examination of theBalance Sheet of the Company, we are of the opinion that the funds raised on short term basishave not been used for long term investments.

(xviii) The Company has not made any preferential allotment of shares to companies/ firms/ parties coveredin the Register maintained under Section 301 of the Companies Act, 1956.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money by public issues.

(xxi) According to the information and explanations given to us, no fraud on or by the Company hasbeen noticed or reported during the course of our audit.

For B S R & Associates

Chartered AccountantsFirm Registration No: 116231W

Vikash Somani

PartnerMembership No.: 061272


Auditor’s Report

21

THERMAL POWERTECH CORPORATION INDIA LTD

BALANCE SHEET

Note As at As atParticulars 31 March 2014 31 March 2013

EQUITY AND LIABILITIES

Shareholders’ fundShare capital 2.1 9,541,160,790 6,784,047,350Reserves and surplus 2.2 2,792,651,114 1,996,915,093

12,333,811,904 8,780,962,443

Non-current liabilities

Long-term borrowings 2.3 35,590,000,000 33,948,494,922Other long term liabilities 2.4 142,184,087 5,284,950,095Long term provisions 2.5 4,507,548 5,052,786

35,736,691,635 39,238,497,803

Current liabilities

Other current liabilities 2.6 32,389,004,517 4,743,188,232Short term provisions 2.7 438,196 273,911

32,389,442,713 4,743,462,143

Total 80,459,946,252 52,762,922,389

ASSETS

Non current assets

Fixed assets- Tangible assets 2.8 2,337,179,760 1,971,303,856- Intangible assets 2.9 12,326,317 8,031,460- Capital work-in-progress 2.10 69,163,190,444 44,141,827,072

Long-term loans and advances 2.11 1,949,338,942 3,531,894,891Other non current assets 2.12 1,997,732,591 1,089,529,730

75,459,768,054 50,742,587,009

Current assets

Cash and bank balances 2.13 4,406,114,319 1,655,240,693Short-term loan and advances 2.14 553,709,164 349,876,594Other current assets 2.15 40,354,715 15,218,093

5,000,178,198 2,020,335,380

Total assets 80,459,946,252 52,762,922,389

Significant accounting policies and notes to accounts 1&2The notes referred to above form an integral part of balance sheet

(Amount in Rs.)

As per our books of even date attached For Thermal Powertech Corporateion India Limited

For B S R & Associates LLP

Chartered AccountantsFirm’s Registration No. : 116231W

Vikash Somani

PartnerMembership No. : 061272


Tang Kin Fei T V Sandeep Kumar Reddy


BNK Reddy Nagamani Alluri

Chief Financial Officer Company Secretary(M.No: 072148) (M.No: A25304)


Financials

22


STATEMENT OF PROFIT AND LOSS

Note For the year ended For the year endedParticulars 31 March 2014 31 March 2013

Revenue

Income from operations — —

Other income 2.16 16,129 3,108

Total revenue 16,129 3,108

Expenses

Employee benefits 2.17 14,103,483 8,108,708Other expenses 2.18 6,639,355 3,730,294

Total expenses 20,742,838 11,839,002

Loss before taxes (20,726,709) (11,835,894)Tax expense — —

Loss after taxes (20,726,709) (11,835,894)

Earnings per share

(face value of share Rs.10 each)

Basic and diluted (0.47) (0.04)

Significant accounting policies and notes toaccounts 1&2

The notes referred to above form an integralpart of statement of profit and loss.

(Amount in Rs.)




Vikash Somani








Financials

23


CASH FLOW STATEMENT

For the year ended For the year endedParticulars 31 March 2014 31 March 2013

A. Cash from operating activities

Net profit/(loss) before tax (20,726,709) (11,835,894)

Adjustments:Profit/loss on sale of fixed assets — 3,108Operating profit before working capital changes (20,726,709) (11,839,002)

(Increase)/ decrease in assets (303,238,263) (1,080,052,856)Increase/ (decrease) in liabilities (42,746,181) 32,636,649

Cash generated from/ (used in) operations (366,711,153) (1,059,255,209)Income taxes paid (27,181,068) (21,539,483)

Net cash used in operating activities (393,892,221) (1,080,794,692)

B. Cash flows from investing activities:

Changes in capital work-in-progress (20,917,917,497) (20,980,496,892)Purchases of fixed assets (94,860,213) (334,820,583)Proceeds from sale of fixed assets — 16,047Bank deposits (having maturity of more than 3 months) (385,270,079) 5,096,077,801Interest received 271,517,751 535,146,658Net cash used in investing activities (21,126,530,038) (15,684,076,969)

C. Cash flows from financing activities

Proceeds from issue of CPRCPS includingsecurities premium 3,573,576,170 2,780,000,000Proceeds from long-term borrowings 39,228,288,094 4,620,000,000Proceeds from unsecured loans (14,578,494,922) 13,064,469,195Finance charges paid (4,329,193,462) (2,343,465,082)Net cash from financing activities 23,894,175,880 18,121,004,113Net decrease in cash and cash equivalents 2,373,753,621 1,356,132,452Cash and cash equivalents at the beginning of the period 1,644,840,073 288,707,621Cash and cash equivalents at the end of the period 4,018,593,694 1,644,840,073

Note:

Cash and cash equivalents comprise:Cash in hand 528,386 586,363Balance with scheduled banks

-in current accounts 2,368,065,308 1,554,253,710-in deposit accounts 1,650,000,000 90,000,000

Total cash and cash equivalents 4,018,593,694 1,644,840,073

The notes reffered to above form an integral part of financial statement.

(Amount in Rs.)




Vikash Somani








Financials

24


Schedule 1: Significant accounting policies

Company Overview

Thermal Powertech Corporation India Limited ("the Company") was incorporated on 8 January 2008 as a public

limited company. The Company has been established for developing, constructing, commissioning, operating and

maintaining a 1,320 megawatt coal based thermal power plant at Pynampuram and Nelatur villages, Muthukur Mandal,

Nellore District in the state of Andhra Pradesh.

1. Significant accounting policies

(a) Basis of preparation of financial statements

The financial statements have been prepared and presented under the historical cost convention on the

accrual basis of accounting in accordance with the Generally Accepted Accounting Principles in India

("Indian GAAP") and comply with the Accounting Standards (AS) notified by the Central Government of

India under Section 211 (3C) of the Companies Act, 1956 ("the Act"), other pronouncements of the

Institute of Chartered Accountants of India ("ICAI") and the relevant provisions of the Companies Act,

1956, to the extent applicable. The financial statements are presented in Indian Rupees.

(b) Current-non-current classification

All assets and liabilities are classified into current and non-current.

Assets

An asset is classified as current when it satisfies any of the following criteria:

(a) it is expected to be realised in, or is intended for sale or consumption in, the Company's normal operating

cycle;

(b) it is held primarily for the purpose of being traded;

(c) it is expected to be realised within 12 months after the reporting date; or

(d) it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at

least 12 months after the reporting date.

Current assets include the current portion of non-current financial assets. All other assets are classified as non-

current.

Liabilities

A liability is classified as current when it satisfies any of the following criteria:

(a) it is expected to be settled in the Company's normal operating cycle;

(b) it is held primarily for the purpose of being traded;

(c) it is due to be settled within 12 months after the reporting date; or

(d) the Company does not have an unconditional right to defer settlement of the liability for at least 12

months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in

its settlement by the issue of equity instruments do not affect its classification.

Current liabilities include the current portion of non-current financial liabilities.

(c) Use of estimates

The preparation of financial statements in conformity with Indian GAAP requires management to make

estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of

contingent liabilities on the date of the financial statements and reported amounts of revenue and expense

for the year. Actual results could differ fromthose estimates. Any revision to accounting estimates is

recognised prospectively in current and future periods.

(d) Fixed assets and depreciation

Fixed assets are carried at cost of acquisition less accumulated depreciation. The cost of fixed assets comprises

the purchase price, taxes, duties, freight and any other directly attributable costs of bringing the assets to their

working condition for their intended use. Borrowing costs directly attributable to construction of those fixed

assets which necessarily take a substantial period of time to get ready for their intended use are capitalised.

Advances paid towards the acquisition of fixed assets outstanding at each balance sheet date and the cost of

fixed assets acquired but not ready for their intended use before such date are disclosed as capital work-in-

progress.

Significant Accounting Policies

25

Depreciation is provided using the straight-line method ("SLM"). The rates of depreciation prescribed in ScheduleXIV to the Act are considered as minimum rates. If the Management's estimate of the useful life of a fixed assetat the time of acquisition of the fixed asset or of the remaining useful life on a subsequent review is shorter thanthat envisaged in the aforesaid schedule, depreciation is provided at a higher rate based on the Management'sestimate of the useful life/ remaining useful life. Pursuant to this policy, depreciation has been provided basedon the following estimated useful lives of fixed assets:

Asset category Estimated useful life

Computers 4 yearsOffice equipment 10 - 20 yearsFurniture and fixtures 15 yearsProject office buildings 15 yearsBuildings - Residential, hostel & Townships 58 yearsBuildings - Roads, bridges and boundary wall 58 yearsPower supply systems 18 yearsMain Plant - Tools & Equipment's 20 YearsVehicles 10 years

Depreciation is calculated on a pro-rata basis fromupto the date the assets are purchased /sold.Temporarystructures are fully depreciated in the year of construction. Individual assets costing less than Rs. 5,000 aredepreciated at 100% in the year of purchase.

Administration and general overhead expenses specifically attributable to construction of projectare includedas part of cost of construction project and are allocated on a systematic basis to the cost of related assets.

(e) Intangibles assets and amortisation

Intangible assets are recorded at the consideration paid for acquisition. Intangible assets are amortised overtheir estimated useful lives on a straight-line basis from the date asset is available to the Company for its use.Management estimates the useful life for software to be three years.

(f) Foreign currency transactions and balances

Foreign currency transactions are recorded using the exchange rates prevailing on the date of the respectivetransactions. Exchange differences arising on foreign currency transactions settled during the year are recognisedin the statement of profit and loss.

Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date, are translated atyear-end rates. The resultant exchange differences are recognised in the statement of profit and loss. Non-monetary assets are recorded at the rates prevailing on the date of the transaction. Exchange difference arisingon settlement translation of long term foreign currency monetary items is adjusted to the carrying cost of asset,where such monetary items relates to acquisition of depreciable assets.

(g) Employee benefits

Gratuity, which is a defined benefit scheme, is accrued based on an actuarial valuation as at the balance sheetdate, carried out by an independent actuary.

Contributions to the recognised provident fund, which is a defined contribution scheme, are charged to thestatement of profit and loss.

Provision for long term compensated absences, which is a defined benefit scheme, is accrued based on anactuarial valuation at the balance sheet date, carried out by an independent actuary.

(h) Revenue recognition

Income from interest on deposits and interest bearing securities is recognized on the time proportionate methodusing the underlying interest rates.

Dividend income is recognised when the unconditional right to receive the income is established.

(i) Borrowing costs

Borrowing costs that are attributable to construction of a qualifying asset are capitalised as a part of the cost ofthat asset. The amount of borrowing costs eligible for capitalisation are determined as the actual borrowingcosts incurred on that borrowing during the period less any income on the temporary investment of thoseborrowings. Other borrowing costs are recognised as expenditure in the year in which they are incurred.

(j) Earnings / (loss) per share

The basic earnings per share ("EPS") is computed by dividing the net profit after tax for the year by the weightedaverage number of equity shares outstanding duringthe year. For the purpose of calculating diluted earnings


26

per share, net profit after tax for the year and the weighted average number of shares outstanding duringtheyear are adjusted for the effects of all dilutive potential equity shares. The dilutive potential equity shares aredeemed converted as of the beginning of the year,unless they have been issued at a later date.

(k) Leases

Leases under which the Company assumes substantially all the risks and rewards of ownership are classifiedas finance leases. Such assets are capitalised at fair value of the asset taken on lease or present value of theminimum lease payments at the inception of the lease, whichever is lower.

Leases that do not transfer substantially the risks and rewards of ownership are classified as operating leasesand recorded as expenses in the statement of profit and loss on a straight line basis over the lease term.

(l) Taxes on income

Income tax expense comprises current tax and deferred tax.

Current tax

The current charge for the income taxes is calculated in accordance with the relevant tax regulations applicableto the Company.

Deferred tax

Deferred tax charge or benefit reflects the tax effects of timing differences between accounting income andtaxable income, which originate during the year but reverse after the tax holiday period. The deferred taxcharge or benefit and the corresponding deferred tax liabilities or assets are recognised using the tax rates thathave been enacted or substantially enacted by the balance sheet date. Deferred tax assets are recognised onlyto the extent there is reasonable certainty that the assets can be realised in future; however, where there isunabsorbed depreciation or carry forward of losses, deferred tax assets are recognised only if there is a virtualcertainty of realisation of such assets. Deferred tax assets are reviewed at each balance sheet date and written-down or written-up to reflect the amount that is reasonably / virtually certain to be realised.

The break-up of the deferred tax assets and liabilities as at the balance sheet date is arrived at after setting-offdeferred tax assets and liabilities where the Company has a legally enforceable right and an intention to set-offassets against liabilities and where such assets and liabilities relate to taxes on income levied by the samegoverning taxation laws.

(m) Provisions and contingent liabilities

The Company recognises a provision when there is a present obligation as a result of an obligating event thatprobably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation.A disclosure for a contingent liability is made when there is a possible obligation or a present obligation thatmay, but probably will not, require an outflow of resources. Where there is a possible obligation or a presentobligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.

Provisions for onerous contracts i.e. contracts where the expected unavoidable costs of meeting the obligationsunder the contract exceed the economic benefits expected to be received under it, are recognised when it isprobable that an outflow of resources embodying economic benefits will be required to settle a present obligationas a result of an obligating event, based on a reliable estimate of such obligation.

(n) Impairment of assets

The Company assesses at each balance sheet date whether there is any indication that any assets formingpart of its cash generating units may be impaired. If any such indication exists, the Company estimates therecoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cashgenerating unit to which the asset belongs to is less than its carrying amount, the carrying amount is reduced toits recoverable amount. The reduction is treated as an impairment loss and is recognised in the statement ofprofit and loss. If at the balance sheet date, there is an indication that a previously assessed impairment loss nolonger exists, the recoverable amount is reassessed and the asset is reflected at the reassessed recoverableamount subject to a maximum of depreciated historical cost.


27


2. Notes on accounts

As at As at

31 March 2014 31 March 2013

2.1 Share capital

Authorised

Equity shares

3,009,803,921 (previous year : 3,009,803,921) equity shares of Rs. 10 each 30,098,039,210 35,000,000,000

490,196,079 (previous year : 490,196,079) 5% Cumlative participatory redeemable

convertible preference shares (CPRCPS) of Rs. 10 each 4,901,960,790 —

35,000,000,000 35,000,000,000

Issued, subscribed and fully paid up

463,920,000 (previous year 463,920,000) equity shares of Rs. 10 each fully paid up 4,639,200,000 4,639,200,000490,196,079 (previous year 214,484,735) 5% CPRCPS of Rs.10 each fully paid up 4,901,960,790 2,144,847,350

9,541,160,790 6,784,047,350

Of the above, 236,599,300 (previous year: 236,599,300) equity shares of Rs. 10 each, fully paid-up are held by Gayatri EnergyVentures Private Limited, the holding company. Gayatri Projects Limited is the ultimate holing company.

Of the above, 234,150,000 (previous year: 234,150,000) equity shares of Rs. 10 each, fully paid up are pledged against secured termloans.

The reconciliation of shares outstanding at the beginning and at the end of reporting period is set out below:

A. Equity Shares

Particulars As at 31 March 2014 As at 31 March 2013Number Amount in Rs Number Amount in Rs

Shares outstanding at the beginning of the year 463,920,000 4,639,200,000 463,920,000 4,639,200,000Shares issued during the year — — — —Shares outstanding at the end of the year 463,920,000 4,639,200,000 463,920,000 4,639,200,000

B. 5% Cumulative Participatory Reedemable Convertible Preference Shares (CPRCPS)

As at 31 March 2014 As at 31 March 2013Number Amount in Rs Number Amount in Rs

Shares outstanding at the beginning of the year 214,484,735 2,144,847,350 — —Shares issued during the year 275,711,344 2,757,113,440 214,484,735 2,144,847,350Shares bought back during the year — — — —Shares outstanding at the end of the year 490,196,079 4,901,960,790 214,484,735 2,144,847,350

The details of shareholder holding more than 5% shares along with number of shares held is set below:

A. Equity Shares

Name of shareholders As at 31 March 2014 As at 31 March 2013No. of "% of No. of % of

shares held holding shares held holding

Gayatri Energy Ventures Private Limited 236,599,300 51% 236,599,300 51%Sembcorp Utilities Pte Limited 227,320,000 49% 227,320,000 49%

B. 5% Cumulative Participatory Reedemable Convertible Preference Shares (CPRCPS)

Name of shareholders As at 31 March 2014 As at 31 March 2013No. of "% of No. of % of

shares held holding shares held holding

Sembcorp Utilities Pte Limited 490,196,079 100% 214,484,735 100%

Terms and rights attached to equity shares:

Equity shares of the Company has a par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share. TheCompany declared and pays dividends in Indian rupees. In the event of liquidation of the Company, the holders of equity shares will beentitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportionto the number of equity shares held by the shareholders.

Terms and rights attached to compulsorily convertible cumulative preference shares: Term of the 5% Cumulative ParticipatoryRedeemable Convertible Preference Shares of Rs.10 each is six years commencing from the date of allotment with an option to theshareholder for earlier conversion at any time.“Further, to the extent permitted under applicable law, the holder of the CPRCPS shall,in addition to the right to preferential CPRCPS dividend, be entitled to participate in any dividend declared by the board and approvedby shareholders in respect of the share capital of the Company (“ordinary dividend”), on a pari passu basis and as converted basisalong with the shareholders of the Company."

(Amount in Rs.)

Notes to the Financial Statements

28


2. Notes on accounts (continued) (Amount in Rs.)

As at As at

31 March 2014 31 March 2013

2.2 Reserves and surplus

Securities premium account

Opening balance 2,008,952,650 1,373,800,000Add: Amount received on issuance of 5% CPRCPS 816,462,730 635,152,650

Closing balance 2,825,415,380 2,008,952,650

Balance in statement of profit and loss

Opening balance (12,037,557) (201,663)Add: loss for the year (20,726,709) (11,835,894)

Closing balance (32,764,266) (12,037,557)

2,792,651,114 1,996,915,093

2.3 Long term borrowings

Secured

Term loans- from banks 9,690,000,000 5,300,000,000- from financial institutions 25,900,000,000 14,070,000,000

35,590,000,000 19,370,000,000

Unsecured

Buyers credit — 14,578,494,922

— 14,578,494,922

35,590,000,000 33,948,494,922

Term loans

Term loans from banks and financial institutions are secured by way of:

1. Pari passu first charge of registered mortgage of freehold land of 160 sq. mtrs. in Sudhagad Taluka,Raigad, Maharashtra and equitable mortgage of 728.15 acres of owned land and 680.55 acres ofland under lease situated at Pynampuram and Nelatur Villages, Muthukur Mandal in the state ofAndhra Pradesh.

2. Pledge of 234,150,000 equity shares of Rs.10 each fully paid up of the Company.

3. First charge over all the present and future assets (both tangible and intangible) of the Company.

4. Corporate Guarantee of Gayatri Projects Limited.

Terms of Repayment :

Term loans are repayable in 48 equal quarterly installments commencing from the first repayment datefalling six months after the scheduled commercial operations date Unit - II (i.e., 30 September 2014) oractual commercial operations date of the project, which ever is earlier. The term loans carries an interestrate of 11.50% to 14%.

Buyers credit

The buyers credit facility has been guaranteed by Sembcorp Utilities Pte Limited, the 49% shareholder ofthe Company, in the form of corporate guarantee and is repayable within a period not exceeding 3 yearsfrom the date of shipment or 31 March 2015, whichever is earlier.


29



As at As at

31 March 2014 31 March 2013

2.4 Other long term liabilities

Capital creditors 142,184,087 5,284,950,095

142,184,087 5,284,950,095

2.5 Long term provisions

Provision for employee benefits- Gratuity ( refer note 2.25) 1,556,608 3,422,474- Compensated absences 2,950,940 1,630,312

4,507,548 5,052,786

2.6 Other current liabilities

Interest accrued but not due on borrowings 447,884,209 265,742,926Advances from customers 2,030,154 —Capital creditors 4,313,168,258 4,374,613,665Salaries payable 15,104,168 11,226,352Current maturities of long-term borrowings(Refer buyers' credit note in note 2.3) 23,008,288,094 —

Accrued expenses — 155,424Retention money payable 4,559,197,542 —Statutory liabilities 43,332,092 91,449,865

32,389,004,517 4,743,188,232

2.7 Short term provisions

Provision for employee benefits - Compensated absences 438,196 273,911

438,196 273,911


30

2.8

Tra

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8,0

31,4

60


31


2. Notes on accounts (continued)

2.10 Capital work-in-progress

Particulars Opening Additions during Capitalised during Closing Balance

Balance Year (note 1) the year

Plant and machinery 35,931,045,433 18,598,104,705 4,496,992 54,524,653,146

Civil packages 1,623,414,450 265,950,998 252,645,166 1,636,720,282Other packages 74,184,322 1,049,949,686 47,409,963 1,076,724,045Expenditure during construction period(note 2) 6,513,182,867 5,411,910,104 — 11,925,092,971

Total capital work-in-progress 44,141,827,072 25,325,915,493 304,552,121 69,163,190,444

Note:1. During the year an amount of Rs.2,313,638,003 (previous year: Rs.126,368,757) towards exchange loss (net)

on translation of long-term foreign currency monetary items has been adjusted to the carrying amount of capitalwork-in-progress.

2. Expenditure during construction period (Amount in Rs)

Particulars Opening Additions Closing

Balance during the year Balance

A. Employee benefitsSalaries 275,554,958 231,313,573 506,868,531Contributions to provident and other funds 16,298,805 13,991,158 30,289,963Staff welfare 17,115,705 22,661,424 39,777,129

308,969,468 267,966,155 576,935,623B. Administrative expenses

Rent 51,859,885 7,231,046 59,090,931Project development 534,064,654 311,944,675 846,009,329Travelling 57,577,839 28,875,967 86,453,806Rates and taxes 28,492,885 1,503,316 29,996,201Electricity 5,162,878 4,755,041 9,917,919Insurance 248,244,518 126,649,377 374,893,895Corporate social responsibility 53,145,373 39,864,967 93,010,340Safety expenses 2,158,085 7,551,107 9,709,192Legal and professional 917,498,893 460,151,528 1,377,650,421Other 54,649,082 73,151,662 127,800,744

1,952,854,092 1,061,678,686 3,014,532,778C. Finance

Interest on borrowings 3,737,598,095 4,074,073,895 7,811,671,990Other finance expenses 935,027,485 450,460,849 1,385,488,334Less: interest income (442,400,974) (459,726,067) (902,127,041)

4,230,224,606 4,064,808,677 8,295,033,283

D. Depreciation 21,134,701 29,241,573 50,376,274

E. Other incomeScrap income — (11,784,989) (11,784,989)

— (11,784,989) (11,784,989)

Total (A+B+C+D+E) 6,513,182,867 5,411,910,104 11,925,092,970

(Amount in Rs.)


32



As at As at

31 March 2014 31 March 2013

2.11 Long Term Loans and advances

Unsecured, considered good

Capital advances 1,151,550,171 2,363,284,635Margin money deposits 279,944,373 231,000,000

Other loans and advances - Advance recoverable in cash or kind 512,744,398 150,000,000 - Prepaid expenses — 47,322,055 - Electricity and other deposits — 735,288,201 - Balances with customs authorities

1,949,338,942 3,531,894,891

Capital advances stated above includes advancesto Gayatri Projects Ltd, ultimate holding company 368,279,480 527,176,610

Margin money deposits stated above is deposits withGayatri Projects Limited which has a common director 279,944,373 231,000,000Capital advances stated above includes advances toSembcorp Utilities India Private Limited which has acommon director 97,931 —

648,321,784 758,176,610

2.12 Other non current assetsUnamortised processing fees 166,000,000 179,200,000Other bank balances 177,964,586 —- Bank deposits due to mature after 12 months of thereporting date* 1,653,768,005 910,329,730

1,997,732,591 1,089,529,730

* Represents Rs. 1,653,768,005 (previous year:Rs. 910,329,730) held as margin money towardsbank guarantees.

2.13 Cash and bank balancesCash and cash equivalentsCash on hand 528,386 586,363Balance with banks 2,368,065,308 1,554,253,710- in current accounts 1,650,000,000 90,000,000- in deposit account (with original maturity of

3 months or less) 387,520,625 10,400,620

4,406,114,319 1,655,240,693

* Represents Rs.387,520,625 (previous year: Rs. 10,400,620) held as margin money towardsbank guarantees.Details of bank balances/depositsBank balance available on demand/deposits with originalmaturity of 3 months or less included under cash and cashequivalents 4,018,065,308 1,644,253,710Bank deposit due to mature within 12 months of thereporting date included under "Other bank balances' 387,520,625 10,400,620Bank deposit due to mature after 12 months of thereporting date included under "Other non-currentassets' (refer note 2.13) 1,653,768,005 910,329,730

6,059,353,938 2,564,984,060


33



As at As at

31 March 2014 31 March 2013

2.14 Short term loan and advances

Unsecured, considered good

Margin money deposits 353,713,094 149,884,620Other loans and advances - Advance taxes (net of provision) 77,766,827 50,585,759 - Prepaid expenses 119,718,770 148,120,364 - Rental deposits 1,231,400 436,400 - Staff advances 831,073 401,451 - Advances for expenses 448,000 448,000

199,996,070 199,991,974

553,709,164 349,876,594

Margin money deposits stated above is deposits withGayatri Projects Limited which has a common director 353,713,094 149,884,620

353,713,094 149,884,620

2.15 Other current assets

Unamortised processing fees 13,200,000 13,200,000Interest accrued on deposits 12,261,823 2,018,093Insurance claim receivable 14,892,892 —

40,354,715 15,218,093

For the year ended For the year ended31 March 2014 31 March 2013

2.16 Other income

Profit on sale of fixed assets 16,129 3,108

16,129 3,108

2.17 Employee benefits

Salaries 12,174,399 6,923,057Contribution to provident and other funds 736,377 567,006Staff welfare expenses 1,192,707 618,645

14,103,483 8,108,708

2.18 Other expenses

Power and fuel 250,265 95,168Rent 380,581 340,993Repairs and maintenance - others 816,118 153,513Rates and taxes 79,122 53,020Office maintenance — 58,887Traveling and conveyance 1,519,788 1,178,813Communication 408,639 214,198Training and seminar 2,072,038 1,224,318Printing and stationery 125,768 86,844Miscellaneous expenses 987,036 324,540

6,639,355 3,730,294


34



As at As at

31 March 2014 31 March 2013

2.19 Contingent liabilities and commitments

(to the extent not provided for)

a. Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for 6,735,083,721 21,039,685,972

6,735,083,721 21,039,685,972

b. Coal purchase commitment

The Company has entered into an agreement for purchase of coal on free on board basis from PT.Bayan Resources TBK as per agreement dated 23 February 2012. During the agreement period often years total quantity of coal agreed to be purchased shall be ten million metric tonnes at a pricewhich will be based on Global coal index at the time of delivery. The Company has provided corporateguarantee of Sembcorp Utilities Pte Ltd to PT Bayan Resources TBK for execution of the agreement.

c. Port services agreement

The Company has entered into an agreement with Krishnapatnam Port Company Limited (KPCL) on01 May 2012, for handling of coal to be imported by the Company. The agreement is valid for 15years from the date of agreement and is extendable by 10 years in the block of five years on mutuallyagreed terms. Further, the parties have entered into an agreement dated 14 March 2013, underwhich the Company will provide mobilisation advance of Rs. 500,000,000 to KPCL, at a simpleinterest rate of 12% per annum, for planned commissioning of coal handling facility. The Companyhas paid Rs.350,000,000 in the current year and Rs.150,000,000 to KPCL in previous year. Theadvance will be recovered subsequently as a reduction to port service charges dues payable at therate of Rs.50 per MT of coal handled.

d. Operation and maintenance agreement

The Company has entered into an agreement with Sembcorp Gaytri O&M Company Private Limited(SGOMC) on 11 February 2011 for operation and maintenance of thermal power plant at a fees ofRs.187,650,000 per year subject to future indexation.

e. Custom duty benefit availed

The Company had received the provisional Mega Power Project status on 26 September 2011 andhence is exempt from payment of customs duty on import of equipments for the project. The totalcustoms duty benefit availed under the said scheme till 31 March 2014 amounts to Rs.7,431,054,658.The Company may be required to make payment of the benefits availed in case of non-fulfilment ofconditions stipulated for Mega Power Project. In addition to the above, interest would also be levied.The said conditions are required to be fulfilled within 60 months from the date of import for provisionalmega power projects.


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2.20 Earnings per share (EPS)

Particulars For the year ended For the year ended31 March 2014 31 March 2013

Loss after tax (20,726,709) (11,835,894)Less: Preference dividend and tax thereon 195,202,145 6,212,949Net loss after tax attributable to the equity shareholders (215,928,853) (18,048,843)Number of shares at the beginning of the year 463,920,000 463,920,000Add: weighted average number of equity shares issuedduring the period — —Weighted number of equity shares outstandingduring the year 463,920,000 463,920,0005% CPRCPS Allotted 490,196,079 214,484,735Number of 5% CPRCPS outstanding during the period- for the purpose of diluted Earnings per share 333,693,140 10,691,473Earnings per share - basic (Rs.) (0.47) (0.04)Earnings per share - diluted (Rs.) (0.47) (0.04)

2.21 Dividend on cumulative preference share

During the year, the Company has issued 275,711,344 (previous year: 214,484,735) preference sharesto Sembcorp Utilities Pte Ltd. These preference shares are 5% CPRCPS. As on 31 March 2014, cumulativedividend due on preference shares is Rs.201,415,094 including corporate dividend tax amonting toRs.29,222,902.

2.22 Leases

The Company has taken rental premises on cancellable operating lease. Lease rental under suchcancellable leases amounting to Rs.7,611,628 (previous year: Rs 6,819,864) has been charged tostatement profit and loss (net of recoveries). Of this, the Company has transferred lease rentals of Rs7,231,047 (previous year: 6,478,871) to pre-operative expenditure pending for allocation under capitalwork-in-progress.

2.23 Segment reporting

The Company is in process of setting up a thermal power plant. Accordingly, pursuant to the explanationgiven in Accounting Standard -17 “Segment Reporting”, no segment disclosure has been made in thefinancial statements as the Company has only one business i.e., generation of power and one geographicalsegment i.e., India.


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2.24 Provision for employee benefits

Pursuant to the adoption of the Accounting Standard 15 (Revised) – ""Employee Benefits"" effective 1stApril 2007, the following table sets out the status of the gratuity plan:

As at As at 31 March 2014 31 March 2013

Reconciliation of opening and closing balance of the

present value of defined benefit obligations

Opening defined benefit obligation 3,422,474 2,902,110Current service cost 1,871,361 952,670Interest cost 273,798 232,169Actuarial (gain)/ loss 1,166,722 (664,475)Benefits paid — —

Closing defined benefit obligation 6,734,355 3,422,474

Change in the fair value of assets

Opening fair value of plan assets 3,504,397 1,091,226Expected return on plan assets 401,460 251,704Actuarial gains / (losses) —Contributions by employer 1,271,890 2,161,467Benefits paid — —

Closing fair value of plan assets 5,177,747 3,504,397

Amounts recognised in the balance sheet

Present value of funded obligation 6,734,355 3,422,474Fair value of plan assets at end of the year 5,177,747 (3,504,397)

Net (asset)/liability 1,556,608 (81,923)

Expense recognized in statement of profit and loss

Current service cost 1,871,361 952,670Interest on defined benefit obligation 273,798 232,169Expected return on plan assets (401,460) (251,704)Net actuarial losses / (gains) recognised in year 1,166,722 (664,475)

Amount, included in “employee benefit expense” 2,910,421 268,660

Summary of actuarial assumptions

Discount rate (%) 8.00 8.00Rate of return on plan assets (%) 8.75 9.00Salary escalation rate (%) 5.00 5.00

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

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

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


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2.24 Provision for employee benefits (contd.)

Amounts recognised in current year and previous four years(Amount in Rs)

Particulars 31 March 2014 31 March 2013 31 March 2012 31 March 2011 31 March 2010

Defined benefit obligation 6,734,355 3,422,474 2,902,110 314,311 —

Plan asset 5,177,747 (3,504,397) 1,091,226 — —

(Surplus)/ deficit 1,556,608 (81,923) 1,810,884 314,311 -

Experience adjustments in plan liabilities — — 1,281,962 — —

Experience adjustments in plan assets — — — — —

2.25 Details of dues to micro and small enterprises as defined under Micro, Small and MediumEnterprises Act, 2006

The Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated 26August 2008 which recommends that the Micro and Small Enterprises should mention in theircorrespondence with its customers the Entrepreneurs Memorandum Number as allocated after filing ofthe Memorandum. Accordingly, the disclosure in respect of the amounts payable to such enterprises asat 31 March 2014 has been made in the financial statements based on information received and availablewith the Company. Further in view of the management, the impact of interest, if any, that may be payablein accordance with the provisions of the aforesaid Act is not expected to be material. The Company hasnot received any claim for interest from any supplier under the said Act.

Particulars For year ended For year ended31 March 2014 31 March 2013

The principal amount and the interest due thereon remainingunpaid to any supplier as at the end of each accounting period; Nil Nil

The amount of interest paid by the Company along with theamounts of the payment made to the supplier beyond theappointed day during the period; Nil Nil

The amount of interest due and payable for the period of delayin making payment (which have been paid but beyond theappointed day during the period) but without adding theinterest specified under this Act; Nil Nil

The amount of interest accrued and remaining unpaid at theend of the period; and Nil Nil

The amount of further interest remaining due and payable evenin the succeeding years, until such date when the interest duesas above are actually paid to the small enterprise. Nil Nil

The list of undertakings covered under "Micro, Small and Medium Enterprises Development Act.2006"("MSMED") was determined by the Company on the basis of information available with the Companyand is relied upon by the auditors.

2.26 Foreign currency exposure not hedged by a derivative instrument or otherwise

Particulars Currencies For the year ended For the year ended

31 March 2014 31 March 2013

in Foreign in Indian in Foreign in Indian

Currency Rupees Currency Rupees

Buyers credit USD 385,024,400 23,008,288,094 268,038,760 14,578,494,918Capital creditors USD 96,789,126 5,783,924,592 115,008,606 6,779,156,076Capital creditors SGD — — 19,088 835,527Estimated amount of contractsremaining to be executed on capitalaccount and not provided for USD 6,333,196 378,459,101 123,787,925 6,732,738,604


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2.27 Related party disclosure

a) List of related parties

Name of the party Nature of relationship

Gayatri Energy Ventures Private Limited Holding companyGayatri Projects Limited Ultimate holding companySembcorp Utilities Pte Limited Significant influenceSembcorp Utilities India Private Limited Subsidiary of significant influence enterpriseT V Sandeep Kumar Reddy Key management personnel - Managing DirectorTang Kin Fei Key management personnel - ChairmanSembcorp Gayatri O&MCompany Limited Key management personnel having significant influenceDeep Corporation Private Limited Key management personnel having significant influenceGayatri Hi-Tech Hotels Limited Key management personnel having significant influence

b) The following are the transactions and balances with related parties during the year

(Amount in Rs)


1. Civil work packagesGayatri Projects Limited 1,000,943,206 2,083,951,502

2. RentDeep Corporation Private Ltd 6,183,428 5,165,984Gayatri Hi-Tech Hotels Limited 332,993 84,550

3. Project development /consultancy feesSembcorp Utilities Pte Limited 413,016,805 391,420,313Sembcorp Utilities India Private Limited 278,692,900 218,090,845

4. Bank guarantee fees/ commissionGayatri Projects Limited 15,575,041 12,278,312Sembcorp Utilities Pte Limited 66,136,272 1,850,276

5. Share capital money receivedSembcorp Utilities Pte Limited 3,573,576,170 2,780,000,000

6. Capital advances givenGayatri Projects Limited 239,425,121 285,376,610

7. Reimbursement of expensesSembcorp Utilities Pte Ltd 1,219,552 —Gayatri Energy Ventures Private Limited 2,357,975 3,433,413

8. Corporate guarantee for buyers credit facilitySembcorp Utilities Pte Ltd — 14,578,494,918(Amount represents the amount of facility availed)

9. Township development expensesGayatri Projects Limited 74,709,280 40,294,852

10. Margin money deposits advanced/(refund)Gayatri Projects Limited 402,772,847 355,880,000Gayatri Projects Limited (150,000,000) (330,880,000)

11. Corporate guarantee for term loanGayatri Projects Limited 35,590,000,000 19,370,000,000(Amount represents the amount of facility availed)


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c) Details of related party balances is as under:

As at As at 31 March 2014 31 March 2013

Related party receivables

Gayatri Projects Limited (margin money deposit) 633,657,467 380,884,620Gayatri Projects Limited (advance against projects) 368,279,480 527,176,610Sembcorp Utilities India Private Limited 97,931 —

1,002,834,278 908,061,230

Related party payables

Gayatri Projects Limited 188,356,461 333,318,459Gayatri Energy Ventures Private Limited 797,102 797,003Sembcorp Utilities Pte Limited 28,314,894 444,995,191Sembcorp Utilities India Pvt Limited 64,366,989 18,473,543

797,584,196 111,331,670

2.28 Auditor’s remuneration (excluding service tax)

(Amount in Rs)


- As auditors * 1,170,000 840,000 - for certification services 150,000 240,000 - for reimbursement of expenses 32,180 9,820

1,352,180 1,089,820

* Includes Rs.150,000 paid on account of cost overrun for the year ended 31 March 2013.

2.29 Value of imports calculated on C.I.F basis

Capital goods — 21,509,415,245

— 21,509,415,245

2.30 Expenditure in foreign currency

Professional and consultation fees 413,016,805 431,752,186Interest on buyers credit 459,668,664 139,391,420Others 200,390,231 75,975,759

1,073,075,700 281,835,446

2.31 The Company has established a comprehensive system of maintenance of information anddocuments as required by the transfer pricing legislation under Sections 92-92F of the Income-tax Act, 1961. Since the law requires existence of such information and documentation to becontemporaneous in nature, the Company is in the process of updating the documentation for thedomestic and international transactions entered into with the associated enterprise during thefinancial year and expects such records to be in existence latest by the end of September 2014,as required by law. The Management is of the opinion that its domestic and internationaltransactions are at arm’s length so that the aforesaid legislation will not have any impact on thefinancial statements, particularly on the amount of tax expenses and that of provision for taxation.


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2.32 The previous period figures have been regrouped / reclassified, wherever necessary to confirmwith the current period presentation.




Vikash Somani


Place : Hyderabad

Date : May 08, 2014





Place : Hyderabad

Date : May 08, 2014


Thermal Powertech Corporation India LtdCIN: U40103AP2008PLC057031

Registered Off: 6-3-1090, A-5, TSR Towers, Rajbhavan Road, Somajiguda,Hyderabad - 500 082. Phone: 040-49048300, Fax: 040-23370360

Website: www.tpcil.com, Email: [email protected]

Documents

SIXTH ANNUAL REPORT 2013-2014 - Sembcorp