HBL
l
l
(Upto 19.2.2014)
(Upto 24.2.2014)
Board of Directors
Mr. P. K. Joshi
Mr. K.V. Rao
Mr. B. K. Namdeo
Manager & CEO
Mr. Vinod Nehete
Chief Financial Officer
Mr. R. Sankaran
Company Secretary
Ms. Heena Shah
Statutory Auditors
S. K. Jha & Associates
Chartered Accountants
Bankers
State Bank of India
Union Bank of India
Registered Office:
HPCL Biofuels Limited
No. 271, Road No. 3E,
Post Box No. 126,
New Patliputra Colony,
Patna – 800 013, Bihar.
www.hpclbiofuels.co.in
E-mail: info@hpclbiofuels.co.in
2 NOTICE OF AGM
5 DIRECTORS' REPORT
10 MANAGEMENT DISCUSSION & ANALYSIS REPORT
11 C&AG'S COMMENTS
12 AUDITOR'S REPORT
16 BALANCE SHEET
17 PROFIT AND LOSS ACCOUNT
18 NOTES FORMING PART OF FINANCIAL STATEMENTS
36 CASH FLOW STATEMENT
37 CORPORATE GOVERNANCE REPORT
39 PROXY FORM
1
5th Annual Report 2013-2014
NOTICE OF FIFTH ANNUAL GENERAL MEETING
NOTICE is hereby given that the Fifth Annual General Meeting of HPCL Biofuels Limited will be held on 19 th August, 2014 at the registered office of the Company at No. 271, Road No. 3E, New Patliputra Colony, Patna – 800 013 at 04.00 p.m. to transact the following business:
ORDINARY BUSINESS
1.
To consider and adopt the audited financial statement of the Company for the financial year ended on March 31, 2014, the report of the Board of Directors and Auditors thereon.
2.
To appoint a Director in place of Mr. K V Rao (DIN: 05340626) who retires by rotation at this Annual General Meeting and being eligible has offered himself for re-appointment.
SPECIAL BUSINESS
3.
To consider and if thought fit to pass, with or without modification(s) the following Resolution(s) as an Ordinary Resolution:
“RESOLVED THAT Mr. Vinod Nehete, deputationist from HPCL be and is hereby re-appointed as ‘Manager’ under the Companies
Act, 2013 to be designated as Chief Executive Officer (CEO) of the Company for a period of (03) three years with effect from
01.06.2014, as per terms of deputation from HPCL.
RESOLVED FURTHER THAT in terms of the Article 123 of the Articles of Association of the Company, in accordance with the provisions of Sections 203, 196, 197 read with Schedule V and all other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or re-enactment thereof for the time being in force), subject to all such approval, as may be necessary, the consent of the Company be and is hereby accorded to the appointment of Mr. Vinod Nehete as the Manager of the Company, to be designated as CEO, for a period of three years commencing from 01st June, 2014 or conclusion/completion of deputation or withdrawal of deputation by
HPCL whichever is earlier, for a remuneration i.e. Salary ` 1,46,000/- p.m. and perquisite ` 73,000/- p.m. so as not to exceed the limits specified in Schedule V of the Companies Act, 2013 or any amendments thereto .
RESOLVED FURTHER THAT any Director or Company Secretary be and is hereby authorized to do all such things as may be necessary including filing of the requisite returns containing such particulars and documents as may be prescribed with MCA with regards to the re-appointment of Manager ”.
4.
To consider and if thought fit to pass, with or without modification(s) the following resolutions as an Ordinary Resolution:
“RESOLVED THAT pursuant to provisions of section 149, 152 and all other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) or re-enactment thereof for the time being in force) Mr. Balraj Kishor Namdeo (DIN: 06620620), who was appointed as an Additional Director pursuant to the provisions of Section 161(1) of the Companies Act, 2013 and the Articles of Association of the Company and who holds office up to the date of Annual General Meeting, and who is eligible for reappointment under the relevant provisions of the
Companies Act, 2013, and in respect of whom the company has received a notice in writing under section 160 of the Companies
Act, 2013 from a member proposing his candidature for the office of Director, be and is hereby appointed as Director of the company liable to retire by rotation.”
5.
To consider and if thought fit , to pass the following resolution(s) as an Ordinary Resolution:
“RESOLVED that pursuant to Section 148 and all other applicable provisions of the Companies Act, 2013 and the Companies
(Audit and Auditors) Rules, 2014 (including any statutory modification(s) or re-enactment thereof, for the time being in force),
M/s. R Nanabhoy & Co., Firm of Cost Auditors, be and is hereby appointed as Cost Auditor to conduct the audit of the cost records of the company for the financial year ending on 31 st March, 2015.
RESOLVED FURTHER that the Cost Auditor for providing the said services shall be paid a remuneration of ` 51,000/- (Rupees Fifty
One Thousand Only) plus applicable taxes and out of pocket expenses.
RESOLVED FURTHER that the Director or Secretary of the Company be and is hereby authorized to submit the necessary Forms/
Returns to MCA/Central Government and to do all such acts as may be necessary to give effect to the aforesaid resolution.
6.
To consider and if thought to fit to pass with or without modification(s), the following resolutions as a Special Resolution:
“RESOLVED THAT pursuant to Section 180 (1) (c) of the Companies Act, 2013 and other applicable provisions, if any, consent be and is hereby accorded to the Board of Directors to borrow from time to time, at its own discretion, on such terms and conditions as to repayment, interest or otherwise, any sums or sums of monies which together with the moneys already borrowed by the
Company (apart from temporary loans obtained from the bankers of the Company in ordinary course of business), may exceed the aggregate of the paid-up capital of the Company and its free reserves, that is to say, reserves not set apart for any specific purpose, provided that the total amount so borrowed by the Board of Directors shall not at any time exceed the limit of ` 900 Crores
[Rupees Nine Hundred Crores only].
RESOLVED THAT the consent of the Company be and is hereby accorded in terms of Section 180(1)(a) and other applicable provisions, if any, of the Companies Act, 2013 for mortgaging, hypothecating, assigning and/ or charging by the Board of Directors of the Company (hereinafter called the “Board” which term shall be deemed to include person(s) authorized and/or any committee which the Board may have constituted or hereinafter constitute to exercise its powers including the powers conferred by this resolution), of the movable and immovable properties of the Company whereever situated, present and future, all the book debts, operating cash flows, receivables, all other current assets, commission, revenues of the Company, (both present and future) in
2
favour of the Lenders or its agent or trustee to secure the Facility provided by the Lenders to the Company together with all fees, costs, charges, expenses and all other monies payable by the Company to the Lenders, its agents and/or security trustees in relation to the Facility.
RESOLVED FURTHER THAT THE Board be and is hereby authorised to finalise with the Lenders, its agents and other persons the documents for creating aforesaid mortgage, assignment and/or the charge.
RESOLVED FURTHER THAT THE Board be and is hereby authorised to finalise with the Lenders, its agents and other persons the documents for disbursement of the Facility and to do all such acts deeds and things as may be necessary for giving effect to the above resolution.”
All members are requested to kindly make it convenient to attend the meeting.
By Order of the Board
For HPCL Biofuels Ltd.
Dated: 30 th July, 2014
Registered Office:
No. 271, Road No. 3E
Post Box No. 126 (Patna GPO)
New Patliputra Colony
Patna - 800 013, Bihar.
Heena Shah
Company Secretary
Notes:-
1.
A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote instead of himself and the proxy need not be a member of the Company.
2.
The instrument appointing a proxy must be deposited at the Registered Office of the Company not later than forty eight hours prior to the time of commencement of the meeting.
3.
Corporate member intending to send their authorized representative to attend and vote on their behalf at the Meeting are requested to send letter of authorisation.
4.
All documents referred to in the Notice are open for inspection at the Registered Office of the Company.
Statement pursuant to section 102 of the Companies Act, 2013, in respect of item no. 3 to 6 is enclosed and forms part of this notice.
Item No. 3
The Board, on recommendations of the Nomination & Remuneration Committee, at their meeting held on 22 nd May, 2014 have re-appointed Mr. Vinod Nehete as Manager of the Company for a period of three years w.e.f. 01-06-2014 or his superannuation/ completion of deputation/withdrawal of deputation by HPCL with ever is earlier. The matter is being placed at General Meeting for consideration of shareholders to ratify the appointment and approving the remuneration terms in terms of section 197 to read with scheduled V to the Act and the Board of directors recommend passing of the resolution for re-appointment of Mr. Vinod Nehete. The terms of re-appointment including remuneration are set out in the resolution.
Mr. Vinod Nehete is Mechanical Engineering Diplomaholder ( DME) and has over 30 years’ experience in handing various challenging assignments at different departments of HPCL. He has also served Company as COO- Operations before his appointment as CEO and well versed with Company’s business.
In absence or inadequacy of profits in any financial year, the remuneration as set out in the resolution is considered as the minimum remuneration to Mr. Vinod Nehete, and is within the limits and in any case maximum remuneration payable to him will not exceed the limits prescribed by Schedule V to the Act. Mr. Vinod Nehete is currently in Deputy General Manager grade of Hindustan Petroleum
Corporation Limited (HPCL), the holding Company and is deputed as CEO of HPCL Biofuels Limited and hence his remuneration is governed by terms of deputation from HPCL.
The Board is of the opinion that his appointment as Manager to be designated as Chief Executive Officer (CEO) of the Company would be in the interest of the Company and accordingly the resolution at item no. 3 of the Notice is recommended for members’ approval.
Save and except Mr. Vinod Nehete, none of the other Directors/Key Managerial Personnel of the Company/their relatives are in any way, concerned or interested, financially or otherwise, in the resolution set out in item no. 3.
The Board of Directors recommends the resolutions for your approval as Ordinary Resolution.
Item No. 4
Mr. Balraj Kishor Namdeo was appointed as an additional Director on the Board effective 24. 02.2014 in terms of section 161(1) of the
Companies Act, 2013, he holds office of Director up to the date of Annual General meeting and is eligible for appointment as Director.
The company has received a notice in writing from a member along with the deposit of requisite amount, proposing him as a candidate for the office of Director in terms of section 160 of the Companies Act, 2013. Mr. B K Namdeo is Director Refineries of HPCL. The
Board recommends appointment of Mr. B K Namdeo as Director.
5th Annual Report 2013-2014
Save and except Mr. B K Namdeo, none of the other Directors/Key Managerial Personnel of the Company/ their relatives are in any way, concerned or interested, financially or otherwise, in the resolution set out in item no. 4.
The Board of Directors recommends the resolutions for your approval as Ordinary Resolution.
Item No. 5
The Board, on the recommendation of the Audit Committee, has approved the appointment and remuneration of the Cost Auditors to conduct the audit of the cost records of the company for the financial year ending March 31, 2015 for a remuneration of
` 51,000/- (Rupees Fifty One Thousand only).
In accordance with provisions of section 148 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to Cost Auditors has to be ratified by the shareholders of the company.
Accordingly, the consent of the members is sought for passing the ordinary resolution as set out at item no. 5 of the notice for ratification of the remuneration payable to cost auditors for the financial year ending on March 31, 2015.
None of the Directors/KMP of the Company/ their relatives are, in any way, concerned or interested, financially or otherwise, in the resolution set out at item no. 5 of the Notice.
The Board of Directors recommends the resolution set out at item no. 5 of the notice for approval of shareholders as an Ordinary
Resolution.
Item No. 6
In terms of Section 180(1)(c) of the Companies Act, 2013, the Board of Directors of a Company, shall exercise the power to borrow money, where money to be borrowed, together with the money already borrowed by the Company will exceed aggregate of its paid up share capital and free reserves, apart from temporary loans obtained from the Company’s bankers in the ordinary course of business only with the consent of the Company by passing a Special Resolution.
The Shareholders of the Company had at its general meeting held on 29 th July, 2010 inter-alia passed an Ordinary Resolution pursuant to Section 293(1)(d) and any other applicable provisions of the Companies Act, 1956 authorising the Board of Directors of the Company to borrow monies for and on behalf of the Company from time to time as deemed by it to be requisite and proper for the business of the
Company (apart from temporary loans obtained from the Company’s bankers in the ordinary course of business) and remaining outstanding shall not exceed ` 900 Crores (Rupees Nine Hundred Crores Only) in excess of the aggregate of the paid up capital of the
Company and its free reserve i.e. reserves not set apart for any specific purpose, as per the latest annual audited Financial statement.
Further Shareholders of the Company at its General meeting held on 29 th July, 2010 also passed pursuant to Section 293(1)(a) & all other applicable provisions, if any, of the Companies Act, 1956 an Ordinary Resolution authorising Board of Directors of the Company to create charge/provide security for the sum borrowed on such terms and conditions and in such form and manner and with such ranking as priority, as the Board in its absolute discretion thinks fit, on the assets of the Company.
The Ministry of Corporate Affairs (MCA), New Delhi vide their Notification No. 2754 dated September 12, 2013 had notified inter-alia the applicability of provisions of Section 180(1)(c) and Section 180(1)(a) of the Companies Act, 2013 with effect from September 12,
2013, which stipulates obtaining prior approval of the Shareholders of the Company by way of Special Resolution for exercising the specified powers of the Board of Directors relating to borrowing and selling/disposing off etc. of an undertaking of the Company respectively. Further MCA also vide its circular No. 04/2014 dated 25.03.2014 have clarified that the resolution passed under Section
293 of the Companies Act, 1956 prior to 12.09.2013 with reference to borrowings and / or creation of security on the assets of the
Company will be regarded as sufficient compliance of the requirements of Section 180 (Restriction on the Powers of the Board) of the
Companies Act, 2013 for a period of one year from the date of notification indicating the applicability of Section 180 of the Act, 2013.
Therefore Company is now required to obtain consent of the Company by a Special Resolution before 12.09.2014.
Shareholders may kindly note that there is no change proposed in the Borrowing limits and the current proposal is only to comply with the requirement of passing of Special Resolution under Section 180 of the Companies Act, 2013.
The relevant resolutions proposed for the Member’s approval are specified collectively at item No. 6.
None of the Directors, Key Managerial Personnel or their relatives are in any way concerned or otherwise interested in this Resolution.
The Board of Directors recommend the Special Resolution as set out in item No. 6 of the Notice for the approval of the Shareholders.
By Order of the Board
For HPCL Biofuels Ltd.
Heena Shah
Company Secretary
Dated:30 th July, 2014
Registered Office:
No. 271, Road No. 3E
Post Box No. 126 (Patna GPO)
New Patliputra Colony
Patna - 800 013, Bihar.
4
DIRECTORS' REPORT
Dear Shareholders,
Your Directors are pleased to present the Fifth Annual Report and audited accounts for the financial year ended
31 st March, 2014.
PHYSICAL PERFORMANCE
Highlights of the physical performance of the plants during the year 2013-14 are given below:
Particulars
No. of days operated
Quantity of cane crushed
Sugar manufactured
Sugar Recovery
Ethanol manufactured
Power generated
Power exported
Unit of Measurement
Days
Lac MT
MT
%
KL
MWhr
MWhr
Sugauli
105
2.27
17,528
8.02
4104
26,570
15,528
Lauriya
98
2.41
15,724
7.95
3,579
22,495
17,171
FINANCIAL PERFORMANCE
Summary of financial performance is given as under:
Income from Operations
Other Income
Total Income
Total Expenses
PBDIT
Less-Depreciation
Less-Interest
Profit / (Loss) before Prior Period Items and Tax
Prior Period Item
Profit / (Loss) for the year before Tax
Provision/(Reversal) for Taxes
Profit / (Loss) for the year after Tax carried forward to Balance Sheet
For the year ended For the year ended
31.03.2014
31.03.2013
(`) ( ` )
133,33,99,425
20,55,114
133,54,54,539
139,77,12,769
(6,22,58,230)
31,69,15,819
78,85,58,964
(116,77,33,013)
89,15,457
(115,88,17,556)
0
(115,88,17,556)
91,48,57,354
56,47,752
92,05,05,106
1,17,81,37,334
(25,76,32,228)
45,40,77,741
76,03,56,798
(147,20,66,767)
(1,00,000)
(147,21,66,767)
0
(147,21,66,767)
PLANT OPERATIONS
The season pertaining to the financial year 2013-14 was the third year of operation of both the mills and they were geared up after augmentation of the sugar boiling house to process the entire 3500 TCD of cane crushing. The major contractor for this job abandoned the job midway leading to stoppage of work and delay in the execution of the job. However, the efforts of the
HBL personnel to get the job done through a third party within a short span of time, ensured that the plant was ready for the season made it possible to run the plants during the season.
There was a delay in start of the crushing season this year due to the impasse in the fixation of the price to be paid for sugar cane. This had shifted the season to middle of December and accordingly, the season extended into April/May 2014 i.e. into the next financial year. Thus the figures given above for the financial year 2013-14 do not fully capture the season 2013-14 and hence the discussion below covers the full season 2013-14, which is more realistic to analyse.
5
5th Annual Report 2013-2014
Sugar Plant
Sugar Plant performance was much better than previous year with Sugauli registering an increase of 18% and Lauriya 30% over previous year’s crushing figures. However, the sugar recovery was lower at both Sugauli and Lauriya which stood at
7.24% and 7.53% (8.60% & 7.11% for previous year) respectively. Lower recovery was mainly due to lower quality of sugar cane supplied and certain process issues in the plant. Due to late of start of the plants resulting from delay in completion of BH expansion work, early / premium variety of cane was used up by the neighbouring mills which affected the overall recovery.
These are being addressed on war footing so that the ensuing season could be operated at better recovery rates.
Ethanol Plant
Ethanol plants have performed quite well and even beyond their rated capacity. However, the production was restricted to the molasses in stock and generated during the season as the efforts of the company to get additional allocation from GoB did not materialize. The company is looking other alternatives to maximize the utilization of the ethanol plants.
Cogen Plant
The Cogen plants have stabilised registering an increase of 21% at Sugauli and at Lauriya over the last year generation. Even the net power export saw significant increase with Sugauli seeing a hike of 33% and lauriya 15% over last year. The design capacity is however yet to be achieved in both the plants.
CANE MANAGEMENT
Development of its cane command area in terms of increasing the acreage of cane cultivation as well as the productivity of cane in the cane command area has been in the focus of your company all through. As a result the availability of cane in the command areas was quite good, which facilitated crushing of 30.19 lac quintals of sugar cane at Sugauli and 26.17 lac quintals at Lauriya.
However, due to certain varieties of cane failing to meet the targets of sugar content, the total recovery at the plants was lower than the neighboring mills. This aspect is being addressed immediately and the farmers are being contacted and advised personally by the cane department personnel for switching over to better and high yielding varieties, which is in the mutual interest of both the mills and farmers.
The liquidity position of your company during the year was not quite healthy due to expenditures in the sugar boiling house expansion and payments to the bank. The company was not in a position to raise any further funds and hence there had been some delay in payment to the farmers for the cane procured during the year. However, your company is taking all necessary steps to meet the payment obligations expeditiously.
MARKETING ACTIVITIES
Sugar
Your company is marketing sugar only through the online platform NCEDX Spot and the entire sales during the year 2013-14 has been sold through the platform. The realisation has been good and comparable to the neighboring mills. Taking cue on the upbeat trend during March 2014, your company could even collect advance payment from buyers for sale of sugar, which eased the cash flow position to a good extent.
Ethanol
Ethanol is being sold only to the promoter company M/s HPCL and is being supplied even to far away depots like Ajmer, Rewari etc. Your company would like to acknowledge the timely help extended by HPCL by providing advance payment for ethanol supplies, which funds were very handy for HBL during the latter part of the year.
Power
Your company has a PPA with BSEB under which the surplus power generated is sold to them and the payments from BSEB for the power supply has been prompt.
LOAN CONVERSION
There was an outstanding balance of ` 385.46 Cr relating to bridge loans taken from the promoter company HPCL. As the company was not in a position to repay the loans and the interest payable thereon was putting lot of strain on the profitability, the company took it up with HPCL for converting the same to capital. With due approval from the Board of HPCL as well as
HBL, the said balance along with the interest thereon for the year 2013-14 was converted to 5% Non cumulative 14 year redeemable Preference Shares and the allotment has been made to HPCL in March 2014 itself.
DIVIDENDS
Since the company has just commissioned it’s both the plants during season of financial year 2011-12 and is yet to stabilize in terms of commercial operations, Directors have decided not to declare any dividend for the year.
6
CREDIT RATING
Your company has been able to retain rating as ‘Fitch A (ind)’ for the year 2013-14 from M/s Fitch Ratings for the National Long-
Term rating, reinforcing the faith of the rating agency in the in built resilience of your company.
INSURANCE
Insurance for Plant & Machinery has been obtained from Oriental Insurance Company for the period 20th January 2014 to
19 th January 2015. With a good track record in safe operations and dialogue with the insurers, your company has been able to get a substantial reduction in the premiums amounts without any reduction in the coverage.
AUDITORS
M/s. S K Jha & Associates, Chartered Accountants, were appointed as Statutory Auditors by Comptroller & Auditor General of
India (C&AG) by their letter dated 26th August 2013 and will retire at the conclusion of this Annual General Meeting.
As per provisions of the Companies Act, the Board of directors have authorized CEO/CFO to advised C&AG to appoint
Auditors of the Company for the financial year 2014-15 to hold office of the auditors from conclusion of this Annual General
Meeting (AGM) till the conclusion of the next AGM
COST AUDITOR
M/s. R. Nanabhoy & Co have been appointed as cost auditors, in accordance with the guidelines issued in this regard. The cost statements for the year 2013-14 as stipulated under the cost audit rules have been prepared and submitted to them for audit.
The cost audit report would be filed within the stipulated due date.
RENEWABLE ENERGY BENEFITS
Your company had got registered with the competent authority for issue of Renewable Energy Certificates (REC) in respect of the captive consumption of power generated by its cogen plant operating on Bagasse / Biomass. Renewable Energy Certificates have been obtained by the company in accordance with the rules and they are being regularly sold through Power Exchange.
The REC that is likely to be earned for the season 2013-14 is about ` 1.5 Cr which is under process. This has opened up another revenue stream for the company.
AUDIT COMMITTEE
The Audit Committee of your Company has carried out its functions in accordance with provisions of the Companies Act.
DEPOSITS
Your Company has not accepted any deposits from Public during the year.
SAFETY, HEALTH AND ENVIRONMENT
Your Company is focused on the Health, Safety and Environment management which is an integral part of all activities carried out at both the Plants i.e. at Sugauli& at Lauriya. It is a proud moment to note that your Company had accident free operations during the period under review.
Your Company has acquired all environmental approval & permission for its operations.
Your company believes that employees are its biggest assets and hence it takes care to ensure the health & well being of all employees.
DIRECTORS’ RESPONSIBILITY STATEMENT
Pursuant to provisions of the Companies Act, your Directors give hereunder the Director’s Responsibility Statement pertaining to the accounts of the Company that:
A) In the preparation of annual accounts, applicable accounting standards have been followed along with proper explanations relating to material departures;
B) The Company has selected such accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the State of Affairs of the Company as on 31 st March,
2014 and of the Profit and Loss account of the Company for the year ended on that date.
C) The Company has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.
D) These Accounts have been prepared on a going concern basis.
7
5th Annual Report 2013-2014
DIRECTORS
Shri B Mukherjee, Director of the company superannuated from HPCL w.e.f. 31.05.2013, consequently, HPCL nominated Shri
K V Rao as Director on Board of the company in place of Shri B Mukherjee effective 01.06.2013.
Shri K Murali, superannuated from HPCL w.e.f. 30.06.2013 and HPCL nominated Shri Pushp Kumar Joshi as Director on the
Board of the Company in his place effective 01.07.2013.
Shri R S Pandey, Chairman resigned from the post and the Board with effect from 19.02.2014.
Thereafter, HPCL nominated Shri B K Namdeo in place of Smt. Nishi Vasudeva on the Board of the company and
Shri B K Namdeo was appointed as additional Director with effect from 24.02.2014 and shall continue to hold the office of
Director up to next Annual General Meeting of the Company.
The Board of Directors of the company presently comprises of Shri Pushp Kumar Joshi, Shri K V Rao and Shri B K Namdeo.
As per the provisions of the Companies Act, 2013, Shri K V Rao will retire by rotation at this Annual General Meeting and is eligible for re-appointment.
The Board of Directors places on record its sincere appreciation of the valuable services rendered by Shri R S Pandey,
Shri B Mukherjee, Shri K Murali and Smt Nishi Vasudeva during their tenure on the Board.
PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING/ OUTGO AS PER COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS)
RULES, 1988
In accordance with the requirements of the Companies Act, read with applicable Rules, statement showing the particulars with respect to conservation of energy, technology absorption and foreign exchange earnings and outgo are enclosed hereto and forms part of this report marked as Annexure.
PARTICULARS OF EMPLOYEES
As regards provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees)
Rules, 1975, none of the employees was in receipt of remuneration exceeding the limits prescribed.
ACKNOWLEDGMENTS
The Directors gratefully acknowledge the valuable guidance and support extended by HPCL, Dept. of Industries and Dept.
Cane Government of Bihar, BSEB and BSPCB of Government of Bihar, MOE&F, GoI, Ministry of Food & Public Distribution GoI and other State Government Agencies.
Your Directors also wish to place on record their appreciation of the dedicated services of the employees of the Company including those deputed by HPCL.
Place : Mumbai
Date : 30.07.2014
On behalf of the Board of Directors
P.K. Joshi
Director
8
ANNEXURE TO THE DIRECTOR’S REPORT
A.
CONSERVATION OF ENERGY
(a) The Company is a green field project and is undertaking manufacturing of Sugar, Ethanol & Cogen Power from crushing of Sugar cane at Sugauli & Lauriya, in the State Bihar.
(b) The year 2013-14 has been the third year of the operation of the plants which are in the phase of stabilization and hence measures for reduction of energy consumption would be studied, implemented and their impacts would be assessed in the coming years.
B.
TECHNOLOGY ABSORPTION
1.
Specific areas in which R & D carried out by the company.
Your company is in constant dialogue with the Cane department of GoB as well as the agricultural university at Pusa in various areas of cane development. In the years to come, as more specific program would be developed in
(a) Technology for improving cane yield per hectare and its recovery
(b) Intercropping options based on local needs
(c) Introduction of high yielding varieties of seeds for maximizing ethanol production
2.
Future plan action.
Would embark on the scheme as the plants stabilize in commercial terms
3.
Expenditure on R & D.
Nil (Previous year Nil)
TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION
1.
Efforts in brief, made towards technology absorption, adaptation and innovation.
The following technologies have been used in the plants and the personnel are getting trained in operating and trouble-shooting the equipments along with the technology.
a) Cane Diffusion Technology b) Producing Ethanol directly from Sugar Cane Juice c) Molecular Sieve Technology
2.
Benefits derived as a result of the above efforts.
Benefits will accrue in the coming years as the plants stabilize on commercial terms.
3.
Information regarding Technology imported during the last 5 yea rs
(a) Details of technology imported and year of import.
Not Applicable
(b) Has technology been fully absorbed, and if not fully absorbed, areas where this has not taken place, reasons thereof and future plans of action.
Not Applicable
C.
FOREIGN EXCHANGE EARNINGS AND OUTGO
(a) Activities relating to exports; initiatives taken to increase exports; developments of new export markets for products and services; and export plans.
-Nil-
(b) Total foreign exchange used and earned.
(In ` ‘000s)
Total foreign exchange used
Consultancy services/others
Total foreign exchange earnings
Nil
Nil
9
5th Annual Report 2013-2014
MANAGEMENT DISCUSSION & ANALYSIS REPORT
Indian Sugar Industry welcomed the year 2013-14 with great cheers as the regulatory framework of the industry started giving way to market dynamics. The recommendations of Rangarajan Committee were partially implemented by abolition of levy sugar and quota release systems. However, this freedom, which has been felt perhaps for the first time in the memory of free
India, brought also some anxiety to the millers as the market became volatile and the prices slided substantially. Added to that was the threat from raw sugar imports which literally ate into the millers pockets.
It is to the credit of the Indian Sugar Industry that they withstood this change over syndrome quite well and have faced the
2013-14 season with more stability and equanimity. For your company, which is a lone upstart public sector company in the industry, it was a tough year but they have also managed to come out of the shocks with good credentials.
Specific to the state of Bihar, there was a long dispute between the farmers and the Government regarding fixation of the price of cane for the season, which had delayed the start of the season by about three weeks which also pushed the closure of the season well into April / May, 2014. This had an impact in the recovery of sugar towards the last leg of the season when the ambient temperatures rose sharply but there was enough cane to be crushed.
Linking of the sugar cane prices to the sugar prices, which is a major recommendation of the Rangarajan Committee, is yet to be implemented. In the wake of dropping prices, stiff competition from importers and rising cost of operations, this is more than ever required and the industry is eagerly awaiting the same.
The year also opened with the decontrol of the Ethanol pricing. Instead of fixing the prices, the Union Government asked the
Oil Marketing Companies to procure ethanol through tendering process. This saw that the realisation of ethanol go up from
` 27 per litre to more than ` 34 per litre, which has added considerably to the bottom line of sugar mills producing ethanol. The process is likely to be continued which rises the hopes that there would be periodical increase in ethanol prices reflecting the current demand supply situation of the market and the cost of production.
An empowered committee of the Government of India had announced that the sugar mills will be extended interest free loan to assist them in clearing the pending payments of cane growers. Though it raised expectations of the sugar mills for a respite in the right direction, the guidelines and methodology for its implementation is yet to be announced.
The year ahead already has predictions about the El Nino effects which may hamper the rainfall and consequently the cane crop for the season. Prospects of an upswing during the season year 2014-15 would largely depend on this factor as well as government policies on matters like exports and subsidies.
Kindly check whether the given parameters are covered on the report, if not kindly includes the same as these are qualifying parameter under Corporate Governance Report of DPE.
Place : Mumbai
Date : 30.07.2014
For and on behalf of Board of Directors
P.K. Joshi
Director
10
COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 619 (4)
OF THE COMPANIES ACT, 1956 ON THE ACCOUNTS OF HPCL BIOFUELS LIMITED FOR THE YEAR
ENDED 31 MARCH, 2014.
The preparation of financial statements of HPCL Biofuels Limited for the year ended 31 March 2014 in accordance with the financial reporting framework prescribed under the Companies Act, 1956 is the responsibility of the management of the company. The statutory auditors appointed by the Comptroller and Auditor General of India under Section 619(2) of the
Companies Act, 1956 are responsible for expressing opinion on these financial statements under section 227 of the Companies
Act, 1956 based on independent audit in accordance with the standards on auditing prescribed by their professional body the
Institute of Chartered Accountants of India. This is stated to have been done by them vide their Audit Report dated
22 May 2014.
I, on the behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit under section 619(3)(b) of the Companies Act, 1956 of the financial statements of HPCL Biofuels Limited for the year ended 31 March 2014.
On the basis of my audit nothing significant has come to my knowledge which would give rise to any comment upon or supplement to Statutory Auditors' report under section 619(4) of the Companies Act, 1956.
For and on the behalf of the
Comptroller and Auditor General of India
Parama Sen
Principal Director of Commercial Audit
& ex-officio Member Audit Board II, Mumbai
Place: Mumbai
Date: 17 July 2014
11
5th Annual Report 2013-2014
To,
The Members of HPCL Biofuels Limited
INDEPENDENT AUDITOR’S REPORT
Report on the Financial Statements
1.
We have audited the accompanying financial statements of the HPCL Biofuels Limited, which comprise the Balance Sheet as at 31st March, 2014 and the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
2.
Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 (“the Act”). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
3.
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 Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
4.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
5.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
6.
In our opinion and to the best of our information and according to the explanations given to us, the said accounts together with the notes thereon give the information required by the Companies Act, 1956, in the manner so required for companies and give a true and fair view in conformity with the accounting principles generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2014;
(ii) in the case of the Profit and Loss Account of the loss for the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of cash flows for the year ended on that date.
Emphasis of Matter
7.
Your attention is hereby drawn to Note No.- 31A [relating to Provision for Gain/(Loss) on Inventory Variation] and Note
No. 57 [dealing with the details of the said variation] of the financial statements. The reasons of such variations and the period to which the same relates could not be made available to us. However, considering that the said variation has been disclosed as exceptional item in the statement of profit and loss, our opinion is not qualified in this matter.
8.
The quantitative details of consumption of raw materials and production of manufactured goods mentioned in Note
No. 33 of the Financial Statements could not be verified from the books of accounts. Our opinion is not qualified in this matter.
Report on Other Legal and Regulatory Matters
9.
As required by the Companies (Auditor’s Report) Order, 2003, issued by the Central Government of India in terms of
Section 227 (4A) of the Companies Act, 1956 and in terms of the information and explanations given to us and also on the basis of such checks as we considered appropriate, we enclose in the annexure a statement on the matters specified in paragraphs 4 & 5 of the said order.
10. 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 our knowledge and belief were necessary for the purpose of our audit and have found them to be satisfactory;
12
b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books.
c) The Balance Sheet, the Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account; d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956 ; e) In our opinion provisions of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956 is not applicable to a Government Company in view of clarification issued by the Department of Company affairs vide No. 2/5/2001-
CL-V; General Circular No. 8/2002 dated 22.03.2002.
f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, we are unable to comment on this particular issue.
For S. K. JHA & ASSOCIATES
Chartered Accountants
Place : Mumbai
Date : 22 nd May, 2014
(CA. RATENDRA KUMAR)
Partner
Membership Number- 075813
Firm Registration Number- 006189C
13
5th Annual Report 2013-2014
ANNEXURE TO THE INDEPENDENT AUDITORS’ REPORT
Referred to in paragraph (9) of our report of even date on financial statements of HPCL Biofuels Limited for the year ended on 31 st March, 2014
(i) (a) The company has maintained proper records of fixed assets showing full particulars including quantitative details and situation of fixed assets.
(b) We have been explained that physical verification of fixed assets is planned in the next year in view of the age of the capital assets and no physical verification could be conducted during the year. Considering all the facts and even after taking into account the age of the capital assets, it appears that physical verification of fixed assets have not been conducted at intervals which might be considered reasonable. The question of any material discrepancies noticed on such verification and its dealing in books of accounts, therefore, does not arise.
(c) During the year, the company has not disposed off substantial part of its fixed assets.
(ii) (a) Physical verification of inventory has been conducted by the management during the year.
(b) The procedures of physical verification of inventory followed by the management appear reasonable and adequate in relation to the size of the company and nature of its business.
(c) On the basis of our examination of controls and records, proper records of inventory do not appear to have been maintained. Material discrepancies have been noticed on physical verification which have been properly dealt with in the books of accounts.
(iii) According to the information and explanation given to us, the company has not granted or taken any loan, secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 301 of the Companies
Act, 1956.
(iv) Except for the possible effects of the matters described in the Emphasis of Matter paragraph, in our opinion and according to the information and explanations given to us, there appears to be adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.
(v) According to the information and explanations given to us, the company has not entered into any transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956.
(vi) In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public.
(vii) The internal audit of the company is carried out by the internal auditors belonging to the parent company which, in our opinion, is commensurate with its size and nature of its business.
(viii) We have broadly reviewed the books of account relating to material, labour and other items of cost maintained by the company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209
(1)(d) of the Companies Act, 1956 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained.
(ix) (a) On the basis of our examination of the records and according to the information and explanations given to us, the company is generally regular in depositing undisputed statutory dues with appropriate authorities except for a few instances where it has delayed in depositing the statutory dues by few days. There is, however, no arrear of statutory dues as on the last day of the financial year which was outstanding for a period of more than 6 months from the date the same became payable.
(b) According to the information and explanations given to us, there are no dues which have not been deposited with appropriate authorities on account of dispute. Further since the Central Government of India has, till date, not prescribed the amount of cess payable under Section 441A of the Companies Act, 1956, there is no statutory due payable under Section 441A of the Act.
(x) The company has been registered for a period which is less than five years as at end of financial year 31.03.2014, hence the provisions of clause 4(x) of the Companies (Auditor’s Report) Order, 2003 is not applicable.
(xi) On the basis of our examination of the records and according to the information and explanations given to us, the company has not defaulted in repayment of dues to a financial institution and bank.
(xii) According to the information and explanations given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.
(xiii) In our opinion, the company is not a chit fund or a nidhi mutual benefit fund/society and hence the provisions of clause
4(xiii) of the Companies (Auditor’s Report) Order, 2003 is not applicable to the company.
14
(xiv) The company is not dealing in or trading in shares, securities, debentures and other investments and hence the provisions of clause 4(xiv) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the company.
(xv) The company has given guarantees for loans taken by others from banks or financial institutions, the terms and conditions whereof do not seem prejudicial to the interests of the company.
(xvi) According to the information and explanations given to us, the term loans were applied for the purpose for which they were obtained.
(xvii) In our opinion and according to the information and explanations given to us, funds amounting to ` 25,86,15,823 raised on short term basis have been used for meeting commitments towards long term assets and therefore have been used for long term investment.
(xviii) The company has not made any preferential allotment of shares during the year to the parties or companies covered in the register maintained under section 301 of the Companies Act, 1956. Hence the provisions of clause 4(xviii) of the
Companies (Auditor’s Report) Order, 2003 are not applicable to the company.
(xix) The company has not issued any debenture during the year. Hence the provisions of clause 4(xix) of the Companies
(Auditor’s Report) Order, 2003 are not applicable to the company.
(xx) The company has not raised any money by public issue. Hence the provisions of clause 4(xx) of the Companies (Auditor’s
Report) Order, 2003 are not applicable to the company.
(xxi) No fraud on or by the company during the year were either noticed during our checking or were reported to us.
Place : Mumbai
Date : 22 nd May, 2014
For S. K. JHA & ASSOCIATES
Chartered Accountants
(CA. RATENDRA KUMAR)
Partner
Membership Number- 075813
Firm Registration Number- 006189C
15
5th Annual Report 2013-2014
Balance Sheet as at 31st March, 2014
PARTICULARS Note No.
I EQUITY AND LIABILITIES
Shareholders’ Funds
(a) Share Capital
(b) Reserves & Surplus
(c) Money Received against Share Warrants
Share Application Money Pending Allotment
Non-Current Liabilities
(a) Long-Term Borrowings
(b) Deferred Tax Liabilities (Net)
(c) Other Long Term Liabilities
(d) Long-Term Provisions
Current Liabilities
(a) Short-Term Borrowings
(b) Trade Payables
(c) Other Current Liabilities
(d) Short-Term Provisions
TOTAL
II ASSETS
Non-Current Assets
(a) Fixed Assets
(i) Tangible Assets
(ii) Intangible Assets
(iii) Capital Work-in-Progress
(iv) Intangible Assets under Development
(v) Fixed Assets Held for Sale
(b) Non-Current Investments
(c) Deferred Tax Assets (Net)
(d) Long-Term Loans & Advances
(e) Other Non-Current Assets
Current Assets
(a) Current Investments
(b) Inventories
(c) Trade Receivables
(d) Cash & Cash Equivalents
(e) Short-Term Loans & Advances
(f) Other Current Assets
TOTAL
The Accompanying Notes are Integral Part of the Financial Statements
3
4
5
6
7
8
9
10
11
13
12
14
15
16
17
18
19
20
21
22
As at 31.03.2014
Amount ( ` )
6,251,715,110
(3,165,709,083)
—
—
2,627,003,607
—
—
3,283,373
220,012,985
979,435,059
1,516,861,500
38,201
8,432,640,752
6,581,400,110
3,265,457
42,691,747
—
—
—
—
323,906,716
—
—
1,134,777,772
102,589,994
86,379,097
140,011,969
17,617,890
8,432,640,752
As per our report of even date attached
For S K Jha & Associates
Chartered Accountants
(C A Ratendra Kumar)
Partner
Membership No. 075813
Firm’s ICAI Reg. No. 006189C
Place : Mumbai
Date : 22 nd
May, 2014
(B. K. Namdeo)
Director
For and on behalf of the Board
(K.V. Rao)
Director
(R. Sankaran)
Chief Finance Officer
16
(Vinod Nehete)
CEO & Manager
As at 31.03.2013
Amount ( ` )
2,055,200,000
(2,006,891,527)
—
—
6,142,623,696
—
—
3,501,469
13,631,957
229,097,565
1,789,997,823
145,027
8,330,981,490
6,406,355,673
3,170,547
156,171,442
—
—
—
—
419,647,172
—
—
1,043,668,577
62,168,820
70,458,425
54,262,314
11,403,040
8,330,981,490
(P. K. Joshi)
Director
(Heena Shah)
Company Secretary
Statement of Profit and Loss for the year ended 31st March, 2014
For the Year ended
31.03.2014
Amount ( ` )
For the Year ended
31.03.2013
Amount ( ` )
PARTICULARS
Income
I.
Revenue from Operations (Gross)
Less: Excise Duty
Revenue from Operations (Net)
II. Other Income
Total Revenue (I+II)
Expenses
Cost of Materials Consumed
Consumption of Stores & Consumables
Packing Expenses
Excise Duty on Inventory Differential
Power & Fuels
Changes in Inventories of Finished Goods, WIP & Stock in Trade
Employee Benefits Expense
Chemicals Consumed
Finance Costs
Depreciation & Amortization Expense
Other Expenses
Total Expenses
Note No.
23
24
25
26
27
28
29
30
Profit/(Loss) Before Exceptional & Extraordinary Items and Tax
Exceptional Items
Prior Period Items
Provision for Gain/(Loss) on Inventory Variation
Profit/(Loss) Before Extraordinary Items & Tax
Extraordinary Items
Profit/(Loss) Before Tax
Tax Expense
(1) Current Tax Expense for Current Year
(2) (Less) MAT Credit
(3) Provision for Tax for Earlier year Written off/provided for
(4) Deferred Tax
(5) Current Tax Expenses Pertaining to Prior Years
Net Current Tax
31
31A
32
1,394,006,357
(60,606,932)
1,333,399,425
2,055,114
1,335,454,539
1,177,496,365
24,020,423
14,521,970
8,569,387
49,439,319
(92,176,953)
121,661,153
19,964,537
788,558,964
316,915,819
95,220,122
2,524,191,106
(1,188,736,567)
8,915,457
(9,649,027 )
(1,189,470,137)
30,652,581
(1,158,817,556
954,827,164
(39,969,810)
914,857,354
5,647,752
920,505,106
1,107,641,601
13,302,725
17,108,091
35,949,262
99,846,810
(340,446,367)
112,942,772
23,474,647
760,356,798
454,077,741
108,317,793
2,392,571,873
(1,472,066,767)
(100,000)
—
(1,472,166,767)
—
(1,472,166,767)
Profit/(Loss) from Continuing Operations
Discontinuing Operations
Profit/(Loss) from Discontinuing Operations (Before Tax)
Total Operations
Tax Expense on Discontinuing Operations
Profit/(Loss) from Discontinuing Operations (After Tax)
Profit/(Loss) for the Year
Earnings Per Equity Share (of ` 10/- each) :
(1) Basic before extraordinary items
(2) Diluted before extraordinary items
(3) Basic after extraordinary items
(4) Diluted after extraordinary items
The accompanying Notes Are Integral Part of the Financial Statements
As per our report of even date attached
For S K Jha & Associates
Chartered Accountants
(B. K. Namdeo)
Director
(C A Ratendra Kumar)
Partner
Membership No. 075813
Firm’s ICAI Reg. No. 006189C
Place : Mumbai
Date : 22 nd
May, 2014
(R. Sankaran)
Chief Finance Officer
—
—
—
—
—
—
—
(1,158,817,556
—
—
—
(1,158,817,556
For and on behalf of the Board
(K.V. Rao)
Director
(Vinod Nehete)
(5.79)
(5.79)
(5.64)
(5.64)
CEO & Manager
—
—
—
—
—
—
—
(1,472,166,767)
—
—
(1,472,166,767)
(P. K. Joshi)
Director
(7.16)
(7.16)
(7.16)
(7.16)
(Heena Shah)
Company Secretary
—
17
5th Annual Report 2013-2014
Notes Forming Part of the Financial Statements for the year 2013-14
1.
CORPORATE INFORMATION
The Company has been formed as a wholly owned subsidiary of M/s Hindustan Petroleum Corporation Limited, a Public Sector undertaking, as a backward integration initiative. The Company had taken over two of the closed sugar mills of Bihar State Sugar Corporation at
Sugauli in East Champaran and Lauriya in West Champaran in the state of Bihar. The company is engaged in the business of manufacturing sugar and ethanol from crushing of sugar and generation of power from the bagasse generated in the process. Both the units of the company were commissioned during the financial year 2011-12.
2.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
A.
Preparation of Financial Statements
The financial statements are prepared under historical cost convention and on accounting principles of going concern in accordance with Generally Accepted Accounting Principles (GAAP), Accounting Standards referred to in the Companies (Accounting Standards)
Rule, 2006 issued by the Central Government and the relevant provisions of the Companies Act, 1956. Presentation and Disclosure of Financial Statements is done in accordance with Revised Schedule VI.All income and expenditure having material bearing are recognized on accrual basis, except where otherwise stated. Necessary estimates and assumption of income and expenditure are made during the reporting period and difference between the actual and the estimates are recognized in the period in which the results materialize.
B.
Fixed Assets
1.
Land acquired on lease for 99 years or more is treated as freehold land. Land acquired for less than 99 years is treated as lease hold land.
2.
Fixed Assets are carried at cost less accumulated depreciation.
C.
Intangible Assets
1.
Costs incurred on technical know-how/license fee relating to process designs/plants/facilities are capitalized as Intangible
Assets.
2.
Cost of Software directly identified with hardware is capitalized along with the cost of hardware. Application software is capitalized as Intangible Asset.
3.
Intangible Assets are amortized on a straight line basis over the useful life of the parent asset.
D.
Construction Period Expenses
Expenditure directly or indirectly related with the project, during construction period, start-up and commissioning of the project are capitalized. Pre-operative expenses have been capitalized up to the date of commencement of commercial production as provided in AS 10.
E.
Depreciation
1.
Depreciation on Fixed Assets is provided on the Straight Line method on the basis of useful life determined, in the manner and at the rates prescribed under Schedule XIV to the Companies Act, 1956 and is charged pro rata on a daily basis on assets, from/up to and inclusive of the month of capitalization/sale, disposal or deletion during the year. In case of restatement of carrying value of any asset due to any price adjustments warranted due to receipt of government grants, the depreciation on revised unamortised depreciable amount is charged prospectively over the residual useful life of the asset. If such revised rate of depreciation is less than the rates specified in Schedule XIV of the Companies Act 1956, then the rate as per the said
Schedule XIV is applied.
2.
All assets costing up to ` 5000/- are fully depreciated in the year of capitalization.
3.
Premium on leasehold land is amortized over the period of lease. The lease rent is charged in the respective year.
4.
Machinery Spares, which can be used only in connection with an item of fixed asset and the use of which is expected to be irregular, are depreciated over a period not exceeding the useful life of the principal item of fixed asset.
F.
Impairment of Assets
At each balance sheet date, an assessment is made of whether there is any indication of impairment. An impairment loss is recognized whenever the carrying amount of assets of cash generating units (CGU) exceeds their recoverable amount.
G.
Provisions, Contingent Liabilities and Contingent Assets
1.
A provisions is recognized when there is a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation in respect of which reliable estimate can be made.
2.
No provision is recognized for:
• Any obligation that may arise from past events but the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the company.
• Any obligation that may arise from past events but is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation.
• Any obligation, the reliable estimate of which cannot be made.
18
Notes Forming Part of the Financial Statements for the year 2013-14 (Contd.)
However such obligations are recorded as contingent liabilities. These are assessed at regular intervals and only that part of the obligation for which an outflow of resources embodying economic benefits is probable, is provided for, except in the extremely rare circumstances where no reliable estimate can be made.
3.
Contingent Assets are not recognized in the financial statements as this may result in the recognition of income that may never be realized.
H.
Taxes on Income
1.
Provision for current tax is made in accordance with the provisions of the Income Tax Act, 1961.
2.
Deferred tax on account of timing difference between taxable and accounting income is provided by using tax rates and tax laws enacted or substantively enacted as at the balance sheet date.
I.
Employee Retirement Benefits
1.
In respect of provident fund, the contribution for the period is recognized as expenses and charged to Profit & Loss Account.
2.
Provision for Gratuity is made based on the actuarial valuation and the difference in the provision required at year end is charged to the Profit & Loss Account. The provision is calculated using Projected Unit Credit Method which is also recommended under AS-15.
3.
Provision for Leave Encashment is made based on the actuarial valuation and the difference in the provision required at year end is charged to the Profit & Loss Account. The provision is calculated using Projected Unit Credit Method which is also recommended under AS-15.
J.
Inventory Cost
1.
Finished goods are valued at cost on FIFO basis or net realizable value whichever is lower. Cost includes Material Cost,
Conversion cost and other cost incurred to bring the inventory to its present condition and location. Absolute Alcohol has been considered as finished product as it meets all specs of ethanol.
2.
Work In Progress is valued at lower of cost or estimated realizable value. Cost includes Material Cost & conversion cost as applicable.
3.
By products are valued at estimated realizable value.
4.
Stock in trade is valued at cost on weighted average basis or net realizable value whichever is lower.
5.
Stocks of stores are valued at cost on weighted average cost.
K.
Cash Flow Statement
The cash flow statement is prepared by indirect method set out in AS-3 on cash flow statements and presents the cash flows by operating, investing & financing activities of the company. Cash & cash equivalent presented in the cash flow statement consist of balance in the Bank account and cash in hand.
L.
Excise Duty
Liability for excise duty in respect of goods produced by the company is accounted upon clearance and provision is made for excisable manufactured goods lying in stock as on the balance sheet date.
M.
Deferred Tax Assets / Deferred Tax Liabilities
Deferred Tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date.
Deferred Tax is recognised at the Balance Sheet date, subject to the considerations of prudence, on timing differences, being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Unabsorbed depreciation and carry forward of losses during the year which can be set off against future taxable income are also considered as timing differences and result in deferred tax assets, subject to consideration of prudence.
Deferred Tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such Deferred Tax assets can be realised. However, deferred tax assets originating due to unabsorbed depreciation or carry forward of losses under tax laws are recognized only to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available for their realization.
As At
31st March, 2014
(Amount in ` )
As At
31st March, 2013
NOTE 3
SHARE CAPITAL
A. Authorised:
25,00,00,000 Equity Shares of ` 10 each
45,00,00,000 Preference Shares of ` 10 Each
2,500,000,000
4,500,000,000
2,500,000,000
—
TOTAL 7,000,000,000 2,500,000,000
B. Issued, Subscribed, Called up & Fully Paid:
20,55,20,000 Equity Shares of ` 10 each Fully Paid up
(100% Held by HPCL) 2,055,200,000 2,055,200,000
TOTAL 2,055,200,000 2,055,200,000
19
5th Annual Report 2013-2014
Notes Forming Part of the Financial Statements for the year 2013-14 (Contd.)
As at 31.03.2014
Amount ( ` )
As at 31.03.2013
Amount ( ` )
1) Of the above 20,55,20,000 equity shares were allotted to the holding company
“Hindustan Petroleum Corporation Ltd” except 6 equity shares which were allotted to 6 nominees of the holding company.
2) Of the above paid up Equity Capital of ` 2,055,200,000/-
` 1,51,68,25,525 was received in cash after adjustment of ` 53,83,74,475/-
( ` 49,17,15,248 towards preliminary & pre-incorporation expense and
` 4,66,59,227 towards other expenses) incurred by HPCL, holding company on behalf of HPCL Biofuels Ltd.
41,96,51,511 nos 5 % Non Cumulative 14 year redeemable Preference Shares
@ ` 10/- each (100 % held by HPCL)
TOTAL
Above 41,96,51,511 Preference Shares were issued to HPCL on conversion of Bridge Loans of ` 385,46,00,000/and accrued interest of ` 34,19,15,110/- as of 24th March 2014.
TOTAL
Reconciliation of outstanding shares (nos.)
Equity Shares outstanding as on beginging of the year
Shares issued during the year
Equity Shares outstanding as on end of the year
Preference Shares outstanding as on beginging of the year
Shares issued during the year
Preference Share outstanding as on end of the year
CY
20,55,20,000
Nil
20,55,20,000
Nil
41,96,51,511
41,96,51,511
PY
20,55,20,000
Nil
20,55,20,000
Nil
Nil
Nil
NOTE 4
RESERVES & SURPLUS
Capital Reserve
Capital Redemption Reserve
Share Premium Account
Debenture Redemption Reserve
Revaluation Reserve
General Reserve
TOTAL
Capital Grant
Surplus / (Deficit) in Statement of Profit and Loss
Opening Balance
Add: Profit / (Loss) for the Year
Profit Appropriated to General Reserve
Profit Appropriated to Debenture Redemption Reserve
Profit Appropriated to Proposed Dividend
Profit Appropriated to Tax on Distributed Profits
Closing Balance
Other Reserve
TOTAL
4,196,515,110
4,196,515,110
6,251,715,110
`
2,055,200,000
—
2,055,200,000
—
4,196,515,110
4,196,515,110
—
(2,006,891,527)
(1,158,817,556)
—
—
—
—
(3,165,709,083)
—
(3,165,709,083)
—
—
2,055,200,000
`
2,055,200,000
—
2,055,200,000
—
—
—
(534,724,760)
(1,472,166,767)
—
—
—
—
(2,006,891,527)
—
—
—
—
—
—
—
—
(2,006,891,527)
20
Notes Forming Part of the Financial Statements for the year 2013-14 (Contd.)
As at 31.03.2014
Amount ( ` )
As at 31.03.2013
Amount ( ` )
NOTE 5
LONG-TERM BORROWINGS
Secured Loans (Against Hypothecation of Fixed & Current Assets)
Bank Term Loan (Repayable in 36 Instalments Starting from
Jan 2012) less 4 Instalments of ` 11.53 Cr Repayable in 2014-15
(Rate of Interest @ Base Rate + 1.75% Fixed Spread)
TOTAL A
Un - Secured Loans
Loans & Advances from related parties (Bridge Loan-I from HPCL)
Loans & Advances from related parties (Bridge Loan-II from HPCL)
Loans & Advances from related parties (Bridge Loan-III from HPCL)
Loans & Advances from related parties (Bridge Loan-IV from HPCL )
TOTAL B
TOTAL (A+B)
NOTE 6
OTHER LONG TERM LIABILITIES
Other Deposits
Accrued Charges/Credits
Other Liabilities
TOTAL
NOTE 7
LONG TERM PROVISIONS
Provision for Gratuity
Provision for Leave Encashment
TOTAL
NOTE 8
SHORT TERM BORROWINGS
Secured Loans
Cash Credit (Hypothecation of Debtors & Inventory)
(Rate of Interest @ Base Rate + 1.75% Fixed Spread)
Overdrafts from Banks (Secured by Hypothecation of Stock-in-Trade)
TOTAL A
Un-Secured Loans
Short Term Loans from Banks (Repayable in Foreign Currency)
Clean Loans from Banks
Inter Company Deposits
Commercial Paper
Loans & Advances from Related Parties
TOTAL B
TOTAL (A+B)
NOTE 9
TRADE PAYABLES
(i) Total Outstanding dues of Micro, Small & Medium Enterprises
(ii) Total outstanding dues of creditors other than above Creditors
Operating Expenses Payable to HPCL
Accrued Expense - Payable
Advance Received From Farmers for Cane seeds
Payable to Cane Growers
Retention from Vendors
Payable to Trade Vendors
TOTAL
3,088,003,607
(461,000,000)
2,627,003,607
—
—
—
—
—
2,627,003,607
2,131,467
1,151,906
3,283,373
220,012,985
—
220,012,985
—
—
—
—
—
—
220,012,985
—
49,264,122
64,293,151
—
835,794,831
12,120,553
17,962,402
979,435,059
—
—
—
—
3,549,023,696
(461,000,000)
3,088,023,696
1,074,600,000
—
1,000,000,000
980,000,000
3,054,600,000
6,142,623,696
1,956,362
1,545,107
3,501,469
13,631,957
—
—
—
—
—
—
13,631,957
—
36,738,858
59,766,151
—
112,813,695
8,524,608
11,254,253
229,097,565
—
—
—
—
13,631,957
21
5th Annual Report 2013-2014
Notes Forming Part of the Financial Statements for the year 2013-14 (Contd.)
As at 31.03.2014
Amount ( ` )
As at 31.03.2013
Amount ( ` )
NOTE 10
OTHER CURRENT LIABILITIES
WCT Payable (pertaining to March 2014)
TDS Payable (pertaining to March 2014)
Sales Tax Payable (pertaining to March 2014)
Excise Payable (pertaining to March 2014)
Payable to Contractor/Vendor (Capital Assets)
Security Deposit from Contractors
Road Map Scheme - Lauriya
Farmer Loan
Accrued Liability-EPCC Vendor
Payable to Zone Development Council
PF Contribution Employee
Unclaimed Cheque
HPCL-Other Payable
Interest Accrued but not due
Current Maturities of Long Term Debt
— Bank Term Loan (4 instalments of ` 11.53 Cr each)
— Loans & Advances from related parties (Bridge Loan-II from HPCL)
Inter Office Balance
Payable To Employee
Payable To Govt (Others)
Misc Other Current Liablities
Advance From Customers
TOTAL
NOTE 11
SHORT-TERM PROVISIONS
Provision for Other Employee Benefits
Provision for Tax (Net)
Provision For Dividend
Provision for Fringe Benefit Tax
Tax on Distributed Profits
Provision for Other Tax and Govt Payable
Provision for Other Liabliities
TOTAL
NOTE 12
CAPITAL WORK-IN-PROGRESS
Unallocated Capital Expenditure and Materials at Site
Capital Stores
Capital Stores Lying with Contractors
Capital Goods in Transit
TOTAL
Construction Period Expenses Pending Apportionment
(Net of recovery) :
Establishment Charges
Interest
Other Borrowing Cost
Depreciation
Other Expenses Incurred During Construction
TOTAL
230,126
39,018,845
1,978,904
44,531,877
447,155,895
11,248,733
11,032
36,499
148,863,688
692,828
1,262,661
835,354
—
7,465,460
—
461,000,000
—
—
15,651,601
13,112
117,067
336,747,818
1,516,861,500
38,201
—
—
—
—
—
—
38,201
42,691,747
—
—
—
42,691,747
—
—
—
—
—
—
145,027
—
—
—
—
—
—
145,027
156,171,442
—
—
—
156,171,442
—
—
—
—
—
—
300,991
1,355,363
—
35,949,262
350,987,955
9,434,414
11,032
34,376
107,945,619
—
2,277,109
1,040,913
—
8,248,341
461,000,000
800,000,000
—
8,632,040
350,000
2,430,408
—
1,789,997,823
22
Notes Forming Part of the Financial Statements for the year 2013-14 (Contd.)
23
5th Annual Report 2013-2014
Notes Forming Part of the Financial Statements for the year 2013-14 (Contd.)
As at 31.03.2014
Amount ( ` )
As at 31.03.2013
Amount ( ` )
NOTE 14
NON-CURRENT INVESTMENTS
Trade Investments
Quoted
Investment in Equity
Investments in Joint Venture
Un - Quoted
Investment in Equity
Investments in Subsidiary
Investments in Joint Venture
Investment in Preference Shares
Investments in Joint Venture
Total Trade Investments - A
Other Investments
Quoted
Investment in Equity
Investment in Government or Trust Securities
Un - Quoted
Investment in Government or Trust Securities
Investment in Debentures or Bonds
Investment in Other non - Current Investments
TOTAL OTHER INVESTMENTS - B
TOTAL NON - CURRENT INVESTMENTS (A+B)
NOTE 15
LONG-TERM LOANS & ADVANCES
Secured, Considered Good
Advances Recoverable in cash or in kind or for value to be received
Interest Accrued thereon
Capital Advances
Unsecured, Considered Good
Capital Advances
Advances Recoverable in Cash or in kind or for Value to be Received (BSEB)
Balances with Excise, Customs, Port Trust etc.
Other Deposits
Prepaid Expenses
Amounts Recoverable under Subsidy Schemes
Share Application Money Pending Allotment
Advance Towards Equity
Loan given to Subsidiaries & JVs
Other Accounts Receivable
Less : Provision for Doubtful Receivables
TOTAL A
Unsecured, Considered Doubtful:
Accounts Receivable & Deposits
Less : Provision for Doubtful Receivables
TOTAL B
TOTAL (A+B)
—
—
21,523,148
—
22,693,846
278,854,222
835,500
—
—
—
—
—
—
—
323,906,716
—
—
—
323,906,716
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
13,468,661
—
34,040,769
371,582,742
555,000
—
—
—
—
—
—
—
419,647,172
—
—
—
419,647,172
24
Notes Forming Part of the Financial Statements for the year 2013-14 (Contd.)
As at 31.03.2014
Amount ( ` )
—
As at 31.03.2013
Amount ( ` )
NOTE 16
OTHER NON-CURRENT ASSETS
NOTE 17
CURRENT INVESTMENTS
Non - Trade Investments (Quoted)
TOTAL
NOTE 18
INVENTORIES
A. Inventories as per books
(Inventory Taken, Valued & Certified by the Management)
Raw Materials (Including in Transit - Raw Materials)
Finished Products
Bio-Compost
Stock-in-Trade
Work in Progress
Packages
Process Materials & Lubes
Stores & Spares
TOTAL
B. Provision for Gain/(Loss) on Inventory Variation
Finished Products
Work in Progress
TOTAL
C. Net Inventories
Raw Materials (Including in Transit - Raw Materials)
Finished Products
Bio-Compost
Stock-in-Trade
Work in Progress
Packages
Process Materials & Lubes
Stores & Spares
TOTAL
NOTE 19
TRADE RECEIVABLES OVER SIX MONTHS (FROM THE DUE DATE):
Over six months (from the due date):
Secured Considered Good
Un - Secured Considered Good
Considered Doubtful
Less: Provision for Doubtful Debts
TOTAL A
Others
Secured Considered Good
Un - Secured Considered Good
Considered Doubtful
Less: Provision for Doubtful Debts
TOTAL B
Total (A+B)
—
—
—
944,368,880
4,550,000
50,148
139,315,125
7,090,525
13,144,451
35,907,670
1,144,426,799
(15,476,743)
5,827,716
(9,649,027)
—
928,892,137
4,550,000
50,148
145,142,841
7,090,525
13,144,451
35,907,670
1,134,777,772
—
102,589,994
—
—
102,589,994
102,589,994
—
—
—
—
—
—
—
—
843,335,012
4,275,000
8,459,642
140,037,547
8,426,798
22,324,716
16,809,862
1,043,668,577
—
—
—
—
843,335,012
4,275,000
8,459,642
140,037,547
8,426,798
22,324,716
16,809,862
1,043,668,577
—
62,168,820
—
—
62,168,820
62,168,820
—
—
—
—
—
25
5th Annual Report 2013-2014
Notes Forming Part of the Financial Statements for the year 2013-14 (Contd.)
As at 31.03.2014
Amount ( ` )
As at 31.03.2013
Amount ( ` )
NOTE 20
CASH AND CASH EQUIVALENTS i.
Cash & Cash Equivalents
Cash on Hand
Cheques Awaiting Deposit
Balances With Scheduled Banks:
— On Current Accounts
— On Non-operative Current Accounts ii. Other Bank Balances
With Scheduled Banks:
— On Fixed Deposit Accounts
— On Fixed Deposit Accounts (more than 12 months)
Earmarked for Unclaimed Dividend
TOTAL
NOTE 21
SHORT-TERM LOANS & ADVANCES
Secured, Considered Good
Advances recoverable in cash or in kind or for value to be received
Interest Accrued thereon
Unsecured, Considered Good
Advances recoverable in cash or in kind or for value to be received
Balances with Excise, Customs, Port Trust etc.
Other Deposits
Prepaid Expenses
Amounts Recoverable under Subsidy Schemes
Share Application Money Pending Allotment
Loans to Related Party
Employee Advance
Vendor Advance
LD Recoverable
Receivable from Farmer for Cane Seed
Other Accounts Receivable
Less : Provision for Doubtful Receivables
Other Advances
TOTAL A
Unsecured, Considered Doubtful
Accounts Receivable & Deposits
Provision for Doubtful Receivables
TOTAL B
TOTAL (A+B)
NOTE 22
OTHER CURRENT ASSETS
Interest Accrued on Bank Deposits/Investments
Rent Receivable
Other Recoverable
Instalment of BSEB Advance Receivable
TOTAL
16,298
—
86,362,799
—
—
—
—
86,379,097
—
—
—
107,623,618
—
5,015,601
22,253,363
—
—
455,941
928,397
—
863,049
2,872,000
—
—
140,011,969
31,119
(31,119)
—
140,011,969
—
139,817
6,131,150
11,346,923
17,617,890
258,050
—
70,200,375
—
—
—
—
70,458,425
—
—
—
56,117
—
11,346,923
11,403,040
—
34,851,664
5,000,000
6,991,982
—
—
—
833,589
3,564,128
—
146,951
2,874,000
—
—
54,262,314
—
—
—
54,262,314
26
Notes Forming Part of the Financial Statements for the year 2013-14 (Contd.)
As at 31.03.2014
Amount ( ` )
As at 31.03.2013
Amount ( ` )
NOTE 23
REVENUE FROM OPERATIONS
Gross Sales
Sale of Products
Sale of Services
Other Operating Income
Excise Duty
Recovery under Subsidy Schemes
TOTAL
1,386,757,660
—
7,248,697
(60,606,932)
—
1,333,399,425
954,827,164
—
—
(39,969,810)
—
914,857,354
NOTE 24
OTHER INCOME
Other Operating Revenue
Rent Recoveries
Miscellaneous Income
Other Income
Interest On Deposits
Interest On Staff Loans
Interest On Customers’ Accounts
Interest (Gross) Long Term Investments
Interest (Gross) Current Investments
Interest (Gross) On Others
Profit on Sale of Fixed Assets (Net)
Miscellaneous Income
TOTAL A
TOTAL B
TOTAL (A+B)
624,600
313,644
938,244
—
—
36,371
—
1,080,499
—
—
—
1,116,870
2,055,114
156,496
1,836,348
1,992,844
—
—
590,703
—
3,064,205
—
—
—
3,654,908
5,647,752
NOTE 25
COST OF MATERIALS CONSUMED
Cane Purchase
Cane Transportation
ZDC Commission
Cane-Other Procurement cost
TOTAL
1,151,453,286
17,575,358
2,182,374
6,285,347
1,177,496,365
1,070,037,557
25,290,577
10,640,943
1,672,524
1,107,641,601
NOTE 26
POWER & FUELS
Baggasse Cost ,Fuels & Handling
Rice Husk & Firewood
Power Import
TOTAL
26,698,831
1,628,119
21,112,369
49,439,319
57,010,390
13,876,802
28,959,618
99,846,810
27
5th Annual Report 2013-2014
Notes Forming Part of the Financial Statements for the year 2013-14 (Contd.)
As at 31.03.2014
Amount ( ` )
As at 31.03.2013
Amount ( ` )
NOTE 27
CHANGES IN INVENTORIES OF FINISHED GOODS
WORK-IN-PROGRESS & STOCK IN TRADE
Inventories at the end of the period (as per books)
Work in Progress
Finished Products
Bio Compost
Stock-In-Trade
Inventories at the begining of the period
Work in Progress
Finished Products
Bio Compost
Stock-In-Trade
TOTAL A
TOTAL B
TOTAL (B-A)
139,315,125
944,368,880
4,550,000
50,148
1,088,284,153
140,037,547
843,335,012
4,275,000
8,459,641
996,107,200
(92,176,953)
140,037,546
843,335,012
4,275,000
8,459,641
996,107,199
83,568,673
569,455,399
—
2,636,760
655,660,832
(340,446,367)
NOTE 28
EMPLOYEE BENEFITS EXPENSE
Salaries, Wages, Bonus, etc.
Employees Allowances & Other Benefits
Employees Recruitment & Training
Contribution to Provident Fund
Pension, Gratuity etc.
Employee Welfare Expenses
TOTAL
93,230,610
20,633,782
2,558,219
5,563,464
(324,922)
—
121,661,153
86,814,252
17,093,920
889,304
5,090,917
2,821,822
232,557
112,942,772
NOTE 29
FINANCE COSTS
(a) Interest Expense
(b) Other Borrowing Costs
(c) Applicable Net Gain/Loss on Foreign Currency
Transactions & Translation
TOTAL
788,446,604
112,360
—
788,558,964
760,356,798
—
—
760,356,798
NOTE 30
OTHER EXPENSES
Purchase of Stock in Trade
Repairs & Maintenance - Buildings
Repairs & Maintenance - Plant & Machinery
Repairs & Maintenance - Other Assets
Insurance
Rates & Taxes
Irrecoverable Taxes & Other Levies
Equipment Hire Charges
Rent
Travelling & Conveyance
Contract Labour
—
1,367,068
11,586,613
5,131,591
7,536,916
8,998,045
—
—
502,550
8,092,956
16,504,688
—
3,330,246
3,859,452
8,895,171
6,182,067
642,214
—
—
853,573
14,757,606
25,689,480
28
Notes Forming Part of the Financial Statements for the year 2013-14 (Contd.)
Printing & Stationery
Electricity & Water
Advisor Fees
Cane Development Expense
Discount on Cogen
Other Supplies
Telephone & Fax
Postage & Telegram
Sitting Fees
Provision for Doubtful Debts (After Adjusting Provision no Longer Required)
Other Manufacturing Expenses
Loss on Sale/ Write off of Fixed Assets/ CWIP (Net)
Security Charges
Advertisement & Publicity
Sundry Expenses & Charges (Not otherwise classified)
Consultancy & Technical Services
Auditor Expenses
— Statutory Audit Fees
— Other Services
— Other Expenses
Exchange Rate Variation (Net)
TOTAL
NOTE 31
PRIOR PERIOD INCOME/(EXPENSES)
Cane Development Expense
Other Expenses
Consumption of Stores & Consumables
Interest Received -Farmers
Interest on Borrowing Cost being Capitalised
Change in Fertiliser Inventory
TOTAL
NOTE 31A
PROVISION FOR GAIN/(LOSS) ON INVENTORY
VARIATION (REFER NOTE NO. 57)
Finished Goods
WIP
TOTAL
NOTE 32
EXTRAORDINARY ITEMS
Cane Subsidy from GOB
ZDC Commission Reversal of Last Year Provision
TOTAL
As at 31.03.2014
Amount ( ` )
401,469
292,327
186,192
1,381,792
50,896
164,477
473,454
169,809
80,000
—
4,929,684
—
11,552,382
442,310
12,104,168
3,094,267
—
80,000
24,000
72,468
—
95,220,122
83,092
(37,475)
(1,226,253)
28,162
9,339,931
728,000
8,915,457
(15,476,743)
5,827,716
(9,649,027)
22,253,363
8,399,218
30,652,581
As at 31.03.2013
Amount ( ` )
1,051,185
287,838
1,259,368
5,513,389
1,010,179
2,184,033
256,006
225,714
147,418
—
5,974,172
—
13,012,346
—
7,052,941
5,987,742
71,348
—
74,305
—
108,317,793
—
(100,000)
—
—
—
—
(100,000)
—
—
—
—
—
—
29
5th Annual Report 2013-2014
Notes Forming Part of the Financial Statements for the year 2013-14 (Contd.)
33 (a) Disclosures for a manufacturing company
Particulars
Work In Progress
Stock in Process
Sugar in Process
Rectified Spirit
Molasses
Syrup
Total
Book Stock
`
2013-14
Provision for
Gain/(Loss) Net Inventory
` `
Book Stock
`
50,642,049
141,609
29,936,592
—
—
—
50,642,049
141,609
29,936,592
7,228,245
9,390,794
82,098,287
58,594,875 5,827,715.51
— —
64,422,591
—
41,179,460
140,760
139,315,125 5,827,715.51
145,142,841 140,037,546
2012-13
Provision for
Gain/(Loss) Net Inventory
` `
—
—
—
7,228,245
9,390,794
82,098,287
—
—
41,179,460
140,760
— 140,037,546
(b) Raw Material
Raw Material
Particulars
Purchase of Cane
Other costs incidental to cane purchase
Total
Consumption
(2013-14)
Consumption
(2012-13)
Quantity MT Amount ` Quantity MT
467,860 1,151,453,286
Amount Rs
435,544 1,070,037,557
26,043,079 37,604,044
467,860 1,177,496,365 435,544 1,107,641,601
(c) Manufactured Goods
Particulars Opening Stock Production Sales Provision for Gain/(Loss) Closing Stock
Qty Amount ` Qty Qty Gross Turn over Rs.
Net Turn over `
Qty Amount ` Qty Amount `
Finished Goods
Sugar (MT)
Ethanol (KL)
Power (KWH)
21,951 707,756,791
(15,524) (452,018,548)
4,469 139,853,221
(4,350) (117,436,851)
—
—
33,252
(24,345)
7,684
(6,947)
32,433
(17,918)
6,880
(6,828)
962,622,491
(605,454,083)
267,907,916
(208,086,955)
931,486,412 (422.75) (15,474,895)
(588,270,676)
238,437,063
(185,300,552)
— 51,812,000 32,600,518 152,244,418 152,244,418
— (50,697,000) (30,651,725) (141,286,126) (141,286,126)
—
(0.05)
—
—
—
22,347
— (21,951) (707,756,791)
(1,848)
—
—
—
5,273 203,697,776
(4,469) (139,853,221)
—
—
725,194,361
—
—
Note: Figures in brackets represent previous year figures.
34 DEFERRED TAX LIABILITY FOR THE YEAR ENDED MARCH 31,2014
For the year 2013-14, total DTL calculated is much lower than the DTA calculated as per the provisions and are also eligible to be netted off against each other. Considering the significant uncertainty of availability of future taxable income in view of the past performance, uncertainty in sugar cane prices and volatility of sugar prices, net figure DTA after offsetting the amount of DTL has not been taken into accounts, as a matter of conservative approach and prudence. The working of DTL and DTA for the year is given below:
Sl Timing differences
No.
1
2
3
Differences in book & tax depreciation
WDV as per books of accounts as at March 31, 2014
Less : WDV as per Income Tax Act as at March 31, 2014
Difference
(If WDV as per IT is more than the WDV as per books then
DTA is created, othrwise DTL)
Expenditures covered by section 43 B which are outstanding as on 31 March and not paid on or before the due date of filing of return
Leave Encashment
Gratuity
Losses available for set off
Total as on March 31,2014
Net Deferred tax asset as on March 31, 2014
Net Deferred tax asset as on March 31 of the previous year
Amount to be debited / credited to statement of profit and loss
Amount (Rs)
6,584,665,567
4,159,388,667
(2,425,276,900)
(500,027)
175,105
DTA
@ 30.90%
(154,508)
54,107
4,758,318,143 1,470,320,306
1,470,219,905
720,809,343
720,809,343
DTL
@ 30.90%
749,410,562
749,410,562
—
—
30
Notes Forming Part of the Financial Statements for the year 2013-14 (Contd.)
35. Segment Reporting
1.
Company deals in the manufacturing and sales of Sugar, Ethanol and generation of Power. Business segment has been taken as
Primary Segment as three products are subject to different risks and rewards. There is no geographical segment as both the units operate in same location and business environment.
Sl No.
Particulars
1
2
Segment Revenue a) b) c) d)
Total
Sugar
Ethanol
Co-Gen
Unallocated
Less: Inter Segment
Net Segment Revenue
Segment Results a) Sugar b) Ethanol c) Co-Gen d) Unallocated
Year ended
March 31, 2014
`
1,330,352,388
247,262,135
434,527,901
6,089,464
2,018,231,887
682,777,348
1,335,454,539
(165,723,918)
(29,748,592)
(67,423,940)
(73,397,642)
Year ended
March 31, 2013
`
786,512,747
186,583,678
229,448,119
5,647,752
1,208,192,296
287,687,190
920,505,106
(123,317,299)
(236,627,592)
(150,533,110)
(163,038,204)
3
4
5
6
7
8
Total
Less: Interest
Less: Other Unallocabale Exp.
Total Profit Before Tax
Segment Assets a) Sugar b) Ethanol c) Co-Gen d) Unallocated
Total
Segment Liability a) Sugar b) Ethanol c) Co-Gen d) Unallocated
Total
Capital Employed
[segment assetssegment liability]
Capital Expenditure incl.
change in CWIP a) Sugar b) Ethanol c) Co-Gen d) Unallocated
Total
Depreciation a) Sugar b) Ethanol c) Co-Gen d) Unallocated
Total
Non Cash expenditure other than Depreciation
(336,294,093)
788,558,964
33,964,499
(1,158,817,556)
3,643,439,691
1,471,192,090
2,171,994,071
1,146,014,901
8,432,640,752
1,281,013,221
539,466,093
73,424,937
3,452,730,474
5,346,634,725
3,086,006,027
395,773,597
2,134,452
30,887,409
—
428,795,458
120,096,213
58,768,772
114,160,399
23,890,434
316,915,819
Nil
(673,516,205)
760,356,798
37,973,433
(1,471,846,436)
3,871,522,899
1,603,738,237
2,423,215,316
617,110,573
8,515,587,024
305,049,714
169,974,947
104,069,698
7,888,184,193
8,467,278,552
48,308,473
7,450,559
—
—
—
7,450,559
255,859,152
62,664,961
113,046,802
22,506,825
454,077,741
Nil
31
5th Annual Report 2013-2014
Notes Forming Part of the Financial Statements for the year 2013-14 (Contd.)
Other Disclosures:
2.
Segments have been identified in line with the Accounting Standard - 17 “Segment Reporting” taking into account the organisation structure as well as differing risks and returns.
3.
The Segment revenue, results, assets and liabilities include respective amounts identifiable to each of the segment and amounts allocated on reasonable basis.
4.
The segment performance has been worked out after attributing the realisable value of inter segment transfer of material.
5.
Segment assets and liabilities represents assets and liabilities in respective segment. Assets and liabilities that cannot be allocated to segment on reasonable basis have been disclosed as unallocable.
6.
Previous year figures have been regrouped/reclassified wherever necessary.
36. Lease Hold Land
Leasehold Land is being amortized over a period of 60 years on SLM. Amortization value corresponding to pre-capitalization period has been capitalized. ` 1,50,44,688/- being amortization for the year 2013-14 ( ` 1,50,44,365/- for 2012-13) is being charged to Statement of Profit & Loss. The details of leasehold land (location wise) is as follows-
Unit wise Leasehold Land
Farm Area (Acres)
Lauriya Unit
138.79
Sugauli Unit
199.45
Total
338.24
Plant Area (Acres)
Total Leasehold Land (Acres)
Total Lease Premium (
Acquisition Cost `
(Net of Scrap Sale)
` )
56.65
195.44
450,000,000
408,443,952
89.92
289.37
500,000,000
494,237,312
146.57
484.81
950,000,000
902,681,264
37. Plant Capacity
Sl.
Plant Name
No.
1 Sugar Plant
2 Ethanol Plant
3 Cogen Plant
Capacity
(Sugauli)
3500 TCD
60 KLPD
20MW
Capacity
(Lauirya)
3500 TCD
60 KLPD
20MW
38. Excise Claim with GOB
Claim has been lodged with Government of Bihar for Reimbursement of excise duty on sugar sales. Considering the significant uncertainty over its realization, it would be accounted on receipt of the amount from GoB.
39. Consumption of Raw Materials
Consumption of bagasse generated from production is valued at ‘nil’ rate.
40. SLDC
SLDC charges or charges towards State Load Despatch Centre have been mentioned in the PPA with BSEB but SLDC in Bihar is yet to be established. Hence there has been no demand for SLDC charges and no provision has been made in this regard.
41. Renewable Energy Certificates (REC)
RECs earned for the captive consumption of power generated from renewable sources are not valued as stock on hand on the Balance
Sheet dates, since the cost of obtaining them is very negligible and their realization is not certain. The income from the sale of RECs is accounted as revenue in the year of sales. The RECs on hand on 31st March 2014 was 4559 units and their value at the floor price of
` 1500/- stood at ` 68,38,500/-.
42. Micro, Small & Medium Creditors
The company has no sundry creditors falling under the Micro, Small & Medium Enterprises Development Act 2006.
43. Cane Development Expenditure
Cane development expenditure is net of sale of seeds and fertilizers to the farmers of cane command area and own farm production of
Sugauli & Lauriya Unit.
44. Conversion of Loan to Capital
During the year, the balance of Bridge Loan taken from HPCL and the interest accrued (Net of TDS) was converted to Capital and 419,651,511 nos. 5% non-cumulative 14 year redeemable preference shares of ` 10 each were issued to HPCL. The break-up of the amount is:
Loan Balance `
Accrued Interest `
Less: TDS on Interest `
Total conversion `
—
379,905,678
37,990,568
—
3,854,600,000
—
341,915,110
4,196,515,110
32
Notes Forming Part of the Financial Statements (Contd.)
The said conversion was approved by the Board of Directors of Hindustan Petroleum Corporation Limited. To facilitate the issue of such
Preference Shares, the Authorized Capital of the company was increased in its EGM from ` 2,500,000,000 to ` 7,000,000,000 the additional ` 4,500,000,000 comprising of 450,000,000 of 5% non-cumulative 14 year redeemable preference shares of ` 10 each.
45. Secured Loan
Company had taken Term Loan of ` 4,125,400,000/- from Union Bank of India which is secured by equitable mortgage/hypothecation of Land, Building & Fixed Assets. Balance of Term loan as on 31.03.2014 being ` 3,088,003,607/-.(PY ` 3,549,023,696). Working
Capital Loan of ` 220,012,985/- as on 31.03.2014 ( ` 13,631,957 as on 31.03.2013) is secured by hypothecation of Stocks & Debtors of the company. The limit of working capital loan is ` 431,400,000/-.
46. CENVAT / Input Tax Credit
The CENVAT credit available for set-off against liability for excise duty has been shown separately from provisions made for excise duty against inventory and have not been netted off against each other. The unadjusted CENVAT credit is shown under the head Short Term
Loans and Advances while provision for excise duty on closing stock is shown under the head Other Current Liability.
CENVAT credit utilized during the year on sale of ethanol and sugar is ` 52,912,339/- ( ` 35,663,943/- in 2012-13) and Input Tax credit utilized on sale of ethanol is ` 9,002,432/- ( ` 5,584,088 in 2012-13).
47. Government Grant for Ethanol Plants
Capital Subsidy of ` 70,000,000/- received from Government of Bihar ( ` 35,000,000/- each for the two Ethanol plants) during the month of August 2013 which has been accounted as a reduction in the carrying cost of the Ethanol Plant & Machinery in line with the provisions of Accounting Standard -12.
48. Provision for Gratuity & Leave Encashment
Provision for gratuity of ` 2,131,467/- (PY- ` 1,135,378/-) has been made towards Retirement benefits for employees during the year based on Actuarial Valuation as of 31.3.2014. Provision for Leave Encashment of ` 1,190,107/- (PY – ` 1,690,134) has been made based on Actuarial Valuation as of 31.03.2014. The reduction in the provision on this account due to reduction in the number of employees and their leave balances compared to previous period.
49. Penalty Recovered & Kept as Retention Money
An amount of ` 151,416,403/- was recovered through encashment of Bank Guarantees from one of the EPCC contractors. Out of this
` 119,700,000/- is towards penalty for shortfall in performance and ` 31,716,403/- is towards additional retention against defective supplies. The contractor had invoked the Arbitration Clause and the Arbitrator has since been appointed. Hence this amount has been accounted as retention money in ‘Payable to Contractor / Vendor (Capital Assets)’ in Other Current Liabilities (Note no 10). Arbitration proceedings are in progress and depending upon the outcome of the arbitration proceedings, necessary accounting would be done.
50. Provision for Income Tax
As company has incurred losses during the current financial year, no provision for income tax has been made.
51. Provision for Receivable from Employees
An amount of ` 31,119/- has been provided under Short Term Advances – Unsecured Considered Doubtful related to amounts receivable from employees. Action is being taken to recover the same from the amounts payable to the concerned employees. Additionally legal notices have also been sent for recovery of the money. Depending upon the outcome of the recovery efforts, necessary action would be taken to account these provisions.
52. Remaining Contracts/Contingent Liabilities & Management Remuneration etc.
Sl.
Description
No.
A.
Estimated amount of contracts remaining to be executed on capital account not provided for
B.
Claims against the company not acknowledged as debts
Wrong disallowance of Input Tax Credit claimed on capital goods for 2010-11.
Appeal lying before Sales Tax Tribunal, Bihar
Erroneous demand for 2010-11 of Entry Tax based on proportional amounts, ignoring the actual tax paid
Arbitration against M/s Robarant Engineers for termination of contract.
Arbitration in progress
C.
Other Contingent Liabilities
Corporate Guarantee given to the State Bank of India for Agriculture financing arrangement with farmers
Interest and Penalty for Delay in deposit of Provident Fund dues.
2013-14
Amount ( ` )
1,824,088
69,844,013/-
6,811,732/-
14,200,000/-
20,000,000
32,103/-
2012-13
Amount ( ` )
386,491,673
Nil
Nil
Nil
20,000,000
—
33
5th Annual Report 2013-2014
Notes Forming Part of the Financial Statements for the year 2013-14 (Contd.)
D.
Managerial Remuneration
Salary & Allowances
(Chief Executive Officer on deputation from HPCL. The amount represents remuneration from HPCL and debited to the company. The salary includes salary, company contribution to PF, LFA, Bonus, medical, gratuity & leave encashment )
E.
Expenditure in Foreign Currency
F.
Earning in Foreign Currency
G.
C I F Value of imports during the year
3,406,460
Nil
Nil
Nil
2,706,758
Nil
Nil
Nil
53.
Related parties
Nature of relationship
Promoters
Key Management Personnel
Relative of Key Management Personnel
54. Details of transaction between the company and related party (HPCL)
Nature of transaction
Name of related parties
Hindustan Petroleum Corporation Ltd
Mr. Vinod Nehete (CEO)
Nil
Bridge Loan availed from HPCL
Advance Taken against supplies of Ethanol
Balance advance as on 31.03.2014
Interest Paid during the year to HPCL on Ethanol Advance
Interest Paid during the year to HPCL on Bridge Loan
Sale of Ethanol to HPCL (Net of Excise Duty)
Purchase of Lubes from HPCL
Sale of Movable Fixed Assets
Other Expenditure incurred by HPCL on behalf of HBL
Manpower cost of employees on deputation and establishment expenses including Service Tax
55. Payments to the auditors
Expenses incurred towards statutory auditor’s remuneration during the year as under:
2013-14
(Amount in ` )
Nil
540,000,000
293,569,917
7,226,540
—
238,437,063
1,997,894
5,790,528
1,110,027
11,415,236
As Auditors – Statutory audit :
(a) For Taxation matters :
(b) For Company law matters :
(c) For management services :
(d) For other services :
(e) For reimbursement of expenses :
56. Power Report
Description
2013-14
` 80,000/-
—
—
—
` 24,000/-
` 72,468/-
Generation
Export
Captive Consumption
Import
Energy Loss
Total Consumption
2013-14
Quantity in KWH
51,812,000
32,600,518
23,005,652
4,823,106
1,028,935
27,828,758
Amount
( ` )
241,962,040
152,244,419
107,436,397
22,523,903
4,805,128
129,960,300
2012-13
Quantity in KWH
50,697,000
30,651,730
19,269,130
6,302,640
776,140
25,571,770
2012-13
(Amount in ` )
1,980,000,000
Nil
Nil
—
276,071,289
184,356,000
2,718,448
Nil
5,064,301
20,823,846
2012-13
` 71,348/-
—
—
—
—
` 74,305/-
Amount
( ` )
233,676,530
141,286,126
88,814,337
28,960,004
3,576,067
117,774,341
34
i.
Power export and import figures are as per joint meter reading with Bihar State Electricity Board as provided in Power Purchase
Agreement.
ii.
Generation, consumption and captive consumption figures are as per company meter.
iii.
The figure stated as energy loss is a derived figure. Nature and reasons of energy loss is being looked into.
iv.
Reconciliation of difference noticed between company’s own meter reading and joint meter reading is in progress.
v.
The consumption for current year includes power consumed for Boiling House expansion project on chargeable basis from the contractors amounting to ` 14,11,534/- (units- 302256 KWH) (PY - Nil).
57. Provision for Gain/(Loss) on Inventory
Considering the weak internal control and other factors pointed out by the independent auditor a physical verification was carried out by the HPCL internal auditors from 14/05/2014 to 19/05/2014 and based on their report the following variations were observed :-
Lauriya Plant
Sugar (bags)
Molasses-Sugar (MT)
Molasses-Ethanol (MT)
Ethanol (Ltrs.)
Rectified Spirit (Ltrs.)
Total Lauriya (A)
Sugauli Plant
Sugar (bags)
Molasses-Sugar (MT)
Molasses-Ethanol (MT)
Ethanol (Ltrs.)
Rectified Spirit (Ltrs.)
Total Sugauli (B)
Total
Sugar (bags)
Molasses-Sugar (MT)
Molasses-Ethanol (MT)
Ethanol (Ltrs.)
Rectified Spirit (Ltrs.)
Total (A+B)
Books
289,639
6,592
4,799
2,107,210
127,109
165,607
7,336
12,523.6
3,172,163
942,055
455,246
13,928
17,323
5,279,373
1,069,164
Physical
290,730
6,748
5,641
2,107,149
127,109
15,6061
7,286.29
14,682.68
3,172,176
942,055
446,791
14,035
20,324
5,279,325
1,069,164
Variation (Qty.)
1,091
156
842
(61)
—
(9,546)
(49.71)
2,159.08
13
—
(8,455)
107
3,001
(48)
—
Amount ( ` )
2,124,406
293,400
1,579,238
(2,350)
—
3,994,693
(17,599,300)
(93,201)
4,048,279
502
—
(13,643,720)
(15,474,895)
200,199
5,627,516
(1,848)
—
(9,649,027)
The reason for the differences could not be identified. Further the identified gain/(loss) is yet to get the approval of the appropriate authority. Hence a provision for the same has been made which shall be appropriately accounted after due approval.
58. Change in Accounting Policy
In cases where restatement of carrying value of any asset due to any price adjustments was warranted due to receipt of government grants, the Company was hitherto providing depreciation based on revised unamortized depreciable amount and the residual useful life of the asset. This year the policy has been modified to the extent that the depreciation rate so obtained shall not be lower than the rate prescribed in Schedule XIV to the Companies Act, 1956. Had the old accounting policy been followed this year also, the depreciation and net loss for the year would have been lower by ` 206,737/-.
59. Previous year figures
Previous year figures have been rearranged / regrouped where ever necessary. Figures have been rounded off to nearest rupee.
60. Presentation of Negative Amounts
Unless otherwise stated or the context requires it to be interpreted otherwise, figures in bracket in the financial statements represent negative amounts.
As per our report of even date attached
For S K Jha & Associates
Chartered Accountants
(C A Ratendra Kumar)
Partner
Membership No. 075813
Firm’s ICAI Reg. No. 006189C
Place : Mumbai
Date : 22 nd
May, 2014
(B. K. Namdeo)
Director
(R. Sankaran)
Chief Finance Officer
For and on behalf of the Board
(K.V. Rao)
Director
(Vinod Nehete)
CEO & Manager
(P. K. Joshi)
Director
(Heena Shah)
Company Secretary
35
5th Annual Report 2013-2014
Cash Flow Statement for the Year Ended 31st March, 2014
Sl.
PARTICULARS
No.
(A) CASH FLOW FROM OPERATING ACTIVITIES
1 NET PROFIT/(LOSS) BEFORE TAX AND EXTRAORDINARY ITEMS
(i) Depreciation
(ii) Provision for Deferred Tax Liability
(iii) Tax Payment of last year during Current Year
(iv) Interest Income
2 OPERATING PROFIT/(LOSS) BEFORE WORKING CAPITAL CHANGES
(a) Working Capital Changes
(i) Decrease in Current Assets (Except Cash & Cash Equivalents)
(ii) Increase in Current Liabilities
(iii) Decrease in Current Liabilities
(iv) Increase in Current Assets (Except Cash & Cash Equivalents)
(b) Changes in Long Term Provisions
Provision for Gratuity & Leave Encashment
3 CASH GENERATED FROM OPERATIONS BEFORE TAX
(i) Income Tax Paid
(ii) Tax Refund Received
4 CASH FLOW BEFORE EXTRAORDINARY ITEMS
Less: Extraordinary Items- Cane Subsidy from GOB
5 MISC EXPENDITURE (LAST YEAR P&L BALANCE)
NET CASH OUTFLOW FROM OPERATING ACTIVITIES AFTER TAX &
EXTRAORDINARY ITEMS
(B) CASH FLOW FROM INVESTING ACTIVITIES
(i) Interest Received
(ii) Purchase of Fixed Assets & Investments
(iii) Capital Work in Progress - Project Management Expenses
(iv) Inventory from Trial Production
NET CASH INFLOW/(OUTFLOW) FROM INVESTING ACTIVITIES
(C) CASH FLOW FROM FINANCING ACTIVITIES
(i) Proceeds from Issue of Shares
(ii) Loan Taken
(iii) Advance against Equity pending Allotment
NET CASH INFLOW FROM FINACING ACTIVITIES
(D) NET INCREASE/(DECREASE) IN CASH & CASH EQUIVALENTS (A+B+C)
(E) Add: Cash & Cash Equivalent as at Beginning of the Year
(F) Cash & Cash Equivalent as at End of the Year
For the Year ended
31st March, 2014
Amount ( ` )
(1,189,470,137)
316,915,819
—
—
—
(872,554,318)
—
—
956,718,522
(273,243,149)
(223,494,874)
(218,096)
(412,791,915)
—
—
(412,791,915)
30,652,581
-
(382,139,334)
—
(396,314,710)
113,479,695
—
(282,835,015)
4,196,515,110
(3,515,620,089)
—
680,895,021
15,920,672
70,458,425
86,379,097
For the Year ended
31st March, 2013
Amount ( ` )
(1,472,166,767)
454,077,741
—
—
—
(1,018,089,026)
23,891
966,817,099
(329,055,527)
(357,119,642)
2,676,795
(734,746,410)
—
—
(734,746,410)
—
(734,746,410)
139,251,911
(156,171,442)
—
(16,919,531)
—
728,052,920
—
728,052,920
(23,613,021)
94,071,446
70,458,425
As per our report of even date attached
For S K Jha & Associates
Chartered Accountants
(C A Ratendra Kumar)
Partner
Membership No. 075813
Firm’s ICAI Reg. No. 006189C
Place : Mumbai
Date : 22 nd
May, 2014
(B. K. Namdeo)
Director
(R. Sankaran)
Chief Finance Officer
For and on behalf of the Board
(K.V. Rao)
Director
(Vinod Nehete)
CEO & Manager
(P. K. Joshi)
Director
(Heena Shah)
Company Secretary
36
CORPORATE GOVERNANCE REPORT
Corporate Governance may be defined as a set of systems, processes and principles which ensure that a company is governed in the best interest of all stakeholders. It is the system by which companies are directed and controlled. In simple words,
Corporate Governance is the key to proper management of the business of a company.
Your Company although unlisted company has been pioneer in voluntarily exercise of the good corporate governance practices in order to maintain transparency, accountability and ethics in line with the governance parameters set by its the promoter
Company, Hindustan Petroleum Corporation Limited.
Although, Corporate Governance was mostly focused on listed companies with dispersed shareholdings and most of the compliance was voluntary even for unlisted subsidiary companies of listed Companies. But with notification of the Companies
Act 2013, the bar for Corporate Governance has been raised even for unlisted public companies like ours. There is a clear shift towards closely monitoring unlisted public companies and large private companies with enhanced compliance requirements encompassing disclosures, transparency and governance procedures. And your Company is gearing up to comply with the new regime of compliances.
CORPORATE INFORMATION
Corporate Identity Number — U24290BR2009GOI014927
BOARD OF DIRECTORS
The Board of HPCL Biofuels Limited is consists of three Directors as under;
1.
Mr. Pushp Kumar Joshi — Director
2.
Mr. K V Rao
3.
Mr. B K Namdeo
— Director
— Additional Director
Abbreviated resumes of all directors are furnished hereunder;
Mr. P K Joshi - Director
Mr. Pushp Kumar Joshi is a Bachelor of Law and an alumnus of XLRI, Jamshedpur, took charge as Director of the company effective 1 st July, 2013. He is Director Human Resources of HPCL since August, 2012.
Mr. Pushp Kumar Joshi joined HPCL in 1986. Since then he has held various key positions in Human Resources and Industrial
Relations functions at HQO, Marketing and Refineries Divisions of HPCL. He has been responsible for the design and deployment of key HR policies and practices that are employee oriented and aim at building high performance culture
Mr. K V Rao - Director
Mr. K V Rao is a member of the Institute of Chartered Accountants of India (ICAI), took charge as Director effective 1st June
2013. He is Director Finance of HPCL.
Mr. Rao brings with him rich experience of over three decades in handling various challenging assignments in HPCL in the fields of Corporate Finance, Treasury Management, Internal Audit and Marketing & Refinery Finance.
Mr. Rao has expertise in various areas in Financial Management, and is credited with effective treasury management in raising
External Commercial Borrowing, Debentures, and various other types of financial instruments at very competitive interest rates as compared with the Industry.
Mr. B K Namdeo- Additional Director
Mr. B. K Namdeo is appointed as additional Director effective 24 th February, 2014 in place of Ms. Nishi Vasudeva. He is
Director Refineries of HPCL.
A Mechanical Engineer and a Master of Technology from IIT Bombay, he has over 32 years of experience in various refinery functions and has held key positions in Central Engineering (Refinery Projects), Operations, Projects and Maintenance of the
Refineries.
SHAREHOLDING
HPCL Biofuels Limited is wholly owned subsidiary company of Hindustan Petroleum Corporation Limited.
DETAILS OF BOARD MEETINGS
During the year ended 31st March, 2014 Eight (08) meetings of the Board of Directors took place. The Company has held at least one meeting in every quarter and the time gap between two board meetings did not exceed 120 days as prescribed under the Companies Act.
37
5th Annual Report 2013-2014
The details of the board meetings as follows:
Meeting
No.
31
32
33
34
35
36
Date of Meeting
25 th April, 2013
19 th July, 2013
02 nd September, 2013
10 th October, 2013
6 th November, 2013
22 nd January, 2014
Total Strength of the Board
4
4
4
4
4
4
37 24 th March, 2014 3
The overall attendance of Directors at the board meetings was 94% .
Directors
Present
4
4
3
3
4
4
3
Duration between this and next meeting
85
45
38
27
77
61
—
CONDUCT OF BOARD PROCEEDINGS
The day-to-day business is conducted by the CEO of the Company under the direction and the supervision of the Board. The
Board holds periodic meetings to discuss the performance of the Company, provide directives, review the operations and other pertinent issues relating to the Company.
DETAILS OF AUDIT COMMITTEE MEETING
Composition of Audit Committee was three members, namely;
Ms. Nishi Vasudeva — Chairperson,
Mr. Pushp Kumar Joshi — Member and
Mr. K V Rao — Member
Consequent to nomination of Mr. B K Namdeo as Director in place of Ms. Nishi Vasudeva by HPCL effective
24 th February, 2014, the Committee was reconstituted and presently, the Audit Committee consist of three Members as under;
Mr. Pushp Kumar Joshi — Chairman
Mr. K V Rao — Member
Mr. B K Namdeo — Member
There were four audit committee meetings were held during the year as under;
Meeting No.
Date of Audit Committee Total Strength Duration between this
14
15
16
17
25 th
2 nd September, 2013
10 th October, 2013
24 th
April, 2013
March, 2014
3
3
3
3
Members Present and next meeting
3
3
3
3
130
38
165
-
COMPLIANCE
The Company monitors the compliance of applicable laws, regulations and rules including the Companies Act and all applicable corporate laws and places confirmation of such compliance before the Board at regular interval.
DETAILS OF ANNUAL GENERAL MEETING
AGM No.
1
2
3
4
Year
2009-10
2010-11
2011-12
2012-13
Meeting Date
10 th December, 2010
16 th September, 2011
15 th December, 2012
3 rd December, 2013
Location
Patna
Patna
Patna
Patna
For and on behalf of Board of Directors
Place : Mumbai
Date : 30.07.2014
P.K. Joshi
Director
38
Patna atno. 271, Road No. 3E, New Patliputra Colony, Patna – 800 013
I/We of in the district of being a Member/Members of the above Company, hereby appoint
in the district of
of
or failing him
of in the district of as my/our Proxy to attend and vote for me/us and on my/our behalf at the 5 th Annual General Meeting of the Company to be held on 19th August, 2014 and any adjournment thereof.
Signed this day of , 2014
Affix
Re 1/-
Revenue
Stamp
Registered Folio No.: