The rules promulgated under Sub-section 1 of Section 642 read with Clause (d) of Sub-section (1) of Section 209 of the Companies Act, 1956, shall apply to companies engaged in generation of electricity from thermal power, gas turbine, hydro-electric power, atomic power, wind power and any other source of energy. Besides, it will apply to transmission and bulk supply of electricity, distribution and retail supply of power.

    However, the rules will exempt companies not exceeding the limits as specified for a small scale industrial undertaking under the provisions of Industries (Development and Regulation) Act, 1951. It shall also exempt the companies whose aggregate value of the turnover from sale or supply of products of activities during the financial year does not exceed Rs. 10 crore.

    The rules provide for stringent norms for maintenance of records and penalty for violation of such norms. The penalty for contravention of these rules under Section 209 of the Companies Act is fine which may extend to Rs. 5000 and if it continues for the subsequent years then with a fine which may extend to Rs. 500 for every day after the first day during which such contravention continues.

    The rules cover materials, salaries and wages, service department expenses, utilities, workshop or repairs and maintenance or tool rooms, fixed assets and depreciation, leasing charges, other overheads, royalty or technical know-how fee, research and development expenses, interest, expenses or incentives on exports, cost statements, production records, reconciliation of cost and financial accounts, adjustment of cost variances, statistical records, captive consumption, pollution control, human resource development and related party transactions.

    The rules also provide for various proforma for maintaining of records and filing of annual returns before the Registrar of Companies. These proforma will cover quantitative information, cost information, statement showing procurement of conventional and non-conventional fuel, cost of generation of power, cost of transmission, consumer service and billing, allocation and appointment.

    All items of income and expenses in these proforma are required to be reconciled with the financial accounts for the relevant period or year. The items that are not applicable to particular company shall be deleted for maintenance of records and filing of annual returns.