Mar 31, 2019
Note No. 35 to Standalone Financial Statements
During the year ended on 31.03.2019, retrospective reclassifications/restatements have been carried out in respect of certain items in the financial statements of previous periods. Accordingly, to comply with the requirements of Ind AS 1, the company has presented a 3rd Balance Sheet as at the begnining of preceding period, i.e. as on 01.04.2017. Major restatements/reclassifications are explained as under:-
(A) Restated Standalone Financial Statements for the year ended 31st March, 2018 and as at 1st April, 2017 RESTATED STANDALONE BALANCE SHEET AS AT 31ST MARCH, 2018 and as at 1st April, 2017
PARTICULARS |
Note No. of Standalone Financial Statements |
Notes |
As at 31st March, 2018 (Reported Earlier) |
Impact of Restatements/ Reclassifi cations |
As at 31st March, 2018 (Restated) |
As at 1st April, 2017 (Reported Earlier) |
Impact of Restatements/ Reclassifi cations |
As at 1st AprilI, 2017 (Restated) |
ASSETS |
||||||||
(1) NON-CURRENT ASSETS |
||||||||
a) Property, Plant and Equipment |
2.1 |
35.3 |
19,066.44 |
23.67 |
19,090.11 |
20,038.58 |
13.29 |
20,051.87 |
b) Capital Work In Progress |
2.2 |
18,813.96 |
- |
18,813.96 |
17,350.13 |
- |
17,350.13 |
|
c) Investment Property |
2.3 |
4.49 |
- |
4.49 |
4.49 |
- |
4.49 |
|
d) Intangible Assets |
2.4 |
923.38 |
- |
923.38 |
934.14 |
- |
934.14 |
|
e) Financial Assets |
- |
- |
- |
- |
||||
i) Investments |
3.1 |
2,209.56 |
- |
2,209.56 |
2,100.32 |
- |
2,100.32 |
|
ii) Trade Receivables |
3.2 |
184.45 |
- |
184.45 |
- |
- |
- |
|
iii) Loans |
3.3 |
35.5 |
339.88 |
361.86 |
701.74 |
360.96 |
324.86 |
685.82 |
iv) Others |
3.4 |
35.5 |
1,915.23 |
(343.81) |
1,571.42 |
1,863.83 |
(296.84) |
1,566.99 |
f) Non Current Tax Assets (Net) |
4 |
163.67 |
- |
163.67 |
73.68 |
- |
73.68 |
|
g) Other Non Current Assets |
5 |
35.5 |
1,279.63 |
518.01 |
1,797.64 |
1,125.74 |
(28.02) |
1,097.72 |
TOTAL NON CURRENT ASSETS |
44,900.69 |
559.73 |
45,460.42 |
43,851.87 |
13.29 |
43,865.16 |
||
(2) CURRENT ASSETS |
||||||||
a) Inventories |
6 |
95.77 |
- |
95.77 |
91.64 |
- |
91.64 |
|
b) Financial Assets |
- |
- |
- |
- |
||||
i) Trade Receivables |
7 |
1,097.07 |
- |
1,097.07 |
1,492.90 |
- |
1,492.90 |
|
ii) Cash & Cash Equivalents |
8 |
6.96 |
- |
6.96 |
59.89 |
- |
59.89 |
(Rs in crore)
PARTICULARS |
Note No. of Standalone Financial Statements |
Notes |
As at 31st March, 2018 (Reported Earlier) |
Impact of Restatements/ Reclassifi cations |
As at 31st March, 2018 (Restated) |
As at 1st April, 2017 (Reported Earlier) |
Impact of Restatements/ Reclassifi cations |
As at 1st ApriI, 2017 (Restated) |
iii) Bank balances other than Cash & Cash Equivalents |
9 |
1,465.43 |
1,465.43 |
1,473.25 |
1,473.25 |
|||
iv) Loans |
10 |
35.5 |
46.80 |
1.17 |
47.97 |
43.84 |
117.40 |
161.24 |
v) Others |
11 |
35.5 |
1,919.42 |
(536.06) |
1,383.36 |
1,858.25 |
- |
1,858.25 |
c) Current Tax Assets (Net) |
12 |
0.40 |
- |
0.40 |
55.93 |
(0.00) |
55.93 |
|
d) Other Current Assets |
13 |
35.5 |
342.18 |
(1.17) |
341.01 |
475.21 |
(117.40) |
357.81 |
TOTAL CURRENT ASSETS |
4,974.03 |
(536.06) |
4,437.97 |
5,550.91 |
- |
5,550.91 |
||
(3) Regulatory Deferral Account |
14 |
35.1 |
3,600.46 |
2,068.75 |
5,669.21 |
2,904.32 |
2,726.24 |
5,630.56 |
Debit Balances |
||||||||
TOTAL ASSETS AND REGULATORY DEFERRAL |
53,475.18 |
2,092.42 |
55,567.60 |
52,307.10 |
2,739.53 |
55,046.63 |
||
ACCOUNT DEBIT BALANCES |
||||||||
EQUITY AND LIABILITIES |
||||||||
(1) EQUITY |
||||||||
a) Equity Share Capital |
15.1 |
10,259.32 |
- |
10,259.32 |
10,259.32 |
- |
10,259.32 |
|
b) Other Equity |
15.2 |
18,068.83 |
23.67 |
18,092.50 |
16,682.81 |
13.29 |
16,696.10 |
|
TOTAL EQUITY |
28,328.15 |
23.67 |
28,351.82 |
26,942.13 |
13.29 |
26,955.42 |
||
(2) LIABILITIES |
||||||||
NON-CURRENT LIABILITIES |
||||||||
a) Financial Liabilities |
||||||||
i) Borrowings |
16.1 |
16,728.20 |
- |
16,728.20 |
17,245.64 |
- |
17,245.64 |
|
ii) Other financial |
16.2 |
38.47 |
- |
38.47 |
25.63 |
- |
25.63 |
|
liabilities |
||||||||
b) Provisions |
17 |
25.47 |
- |
25.47 |
486.93 |
- |
486.93 |
|
c) Deferred Tax Liabilities (Net) |
18 |
35.1 |
1,076.64 |
2,068.75 |
3,145.39 |
938.49 |
2,726.24 |
3,664.73 |
d) Other non-current Liabilities |
19 |
1,625.00 |
- |
1,625.00 |
1,472.47 |
- |
1,472.47 |
|
TOTAL NON CURRENT LIABILITIES |
19,493.78 |
2,068.75 |
21,562.53 |
20,169.16 |
2,726.24 |
22,895.40 |
(Rs in crore)
PARTICULARS |
Note No. of Standalone Financial Statements |
Notes |
As at 31st March, 2018 (Reported Earlier) |
Impact of Restatements/ Reclassifi cations |
As at 31st March, 2018 (Restated) |
As at 1st April, 2017 (Reported Earlier) |
Impact of Restatements/ Reclassifications |
As at 1st ApriI, 2017 (Restated) |
(3) CURRENT LIABILITIES |
||||||||
a) Financial Liabilities |
||||||||
i) Borrowings |
20.1 |
279.99 |
- |
279.99 |
302.50 |
- |
302.50 |
|
ii) Trade Payables |
20.2 |
- |
- |
- |
- |
|||
Total outstanding dues of micro enterprises and small enterprises |
5.29 |
5.29 |
4.28 |
4.28 |
||||
Total outstanding dues of Creditors other than micro enterprises and small enterprises |
35.5 |
166.26 |
10.31 |
176.57 |
142.80 |
17.72 |
160.52 |
|
iii) Other financial liabilities |
20.3 |
35.5 |
2,778.81 |
(10.31) |
2,768.50 |
2,549.63 |
(17.72) |
2,531.91 |
b) Other Current Liabilities |
21 |
669.86 |
- |
669.86 |
706.65 |
- |
706.65 |
|
c) Provisions |
22 |
1,753.04 |
- |
1,753.04 |
1,489.95 |
- |
1,489.95 |
|
d) Current Tax Liabilities (Net) |
23 |
- |
- |
- |
- |
- |
- |
|
TOTAL CURRENT LIABILITIES |
5,653.25 |
0.00 |
5,653.25 |
5,195.81 |
(0.00) |
5,195.81 |
||
TOTAL EQUITY & LIABILITIES |
53,475.18 |
2,092.42 |
55,567.60 |
52,307.10 |
2,739.53 |
55,046.63 |
(B) RESTATED STANDALONE STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2018
(Rs in crore) |
|||||
PARTICULARS |
Note No. of Standalone Financial Statements |
Notes |
For the Year ended 31st March, 2018 (Reported Ealier) |
Impact of Restatements/ Reclassifications |
For the Year ended 31st March, 2018 (Restated) |
INCOME |
|||||
i) Revenue from Operations |
24.1 |
35.5 |
6,934.03 |
4.19 |
6,938.22 |
ii) Revenue from Power Trading |
24.2 |
- |
- |
- |
|
iii) Other Income |
24.3 |
35.4 & 35.5 |
1,491.00 |
(70.45) |
1,420.55 |
TOTAL INCOME |
8,425.03 |
(66.26) |
8,358.77 |
||
EXPENSES |
|||||
i) Generation Expenses |
25 |
716.39 |
- |
716.39 |
|
ii) Employee Benefits Expense |
26 |
35.4 |
1,585.33 |
(49.44) |
1,535.89 |
iii) Finance Costs |
27 |
922.32 |
- |
922.32 |
|
iv) Depreciation and Amortization Expense |
28 |
35.3 |
1,405.89 |
(10.38) |
1,395.51 |
v) Other Expenses |
29 |
35.4 |
989.18 |
(16.82) |
972.36 |
TOTAL EXPENSES |
5,619.11 |
(76.64) |
5,542.47 |
||
PROFIT BEFORE EXCEPTIONAL ITEMS, RATE REGULATED ACTIVITIES AND TAX |
2,805.92 |
10.38 |
2,816.30 |
||
Exceptional items |
- |
||||
PROFIT BEFORE RATE REGULATED ACTIVITIES AND TAX |
2,805.92 |
10.38 |
2,816.30 |
||
Tax Expenses |
30 |
||||
i) Current Tax |
35.5 |
634.68 |
(6.91) |
627.77 |
|
ii) Adjustments for Income Tax |
35.5 |
(6.91) |
6.91 |
- |
|
iii) Deferred Tax |
35.2 |
139.32 |
(657.49) |
(518.17) |
|
Total Tax Expenses |
767.09 |
(657.49) |
109.60 |
||
PROFIT FOR THE YEAR BEFORE NET MOVEMENTS IN REGULATORY DEFERRAL ACCOUNT BALANCES |
2,038.83 |
667.87 |
2,706.70 |
||
Movement in Regulatory Deferral Account Balances (Net of Tax) |
31 |
35.2 |
719.82 |
(657.49) |
62.33 |
PROFIT FOR THE YEAR (A) |
2,758.65 |
10.38 |
2,769.03 |
||
OTHER COMPREHENSIVE INCOME (B) |
|||||
(i) Items that will not be reclassified to profit or loss |
|||||
(a) Remeasurement of the defined benefit plans |
44.78 |
- |
44.78 |
||
Less: Income Tax on remeasurement of the defined benefit plans |
14.80 |
- |
14.80 |
||
Less: Deferred Tax Adjustment Against Deferred Tax Liabilities on Remeasurement of defined benefit plans |
(13.85) |
- |
(13.85) |
||
-Movement in Regulatory Deferral Account Balances-Remeasurement of defined benefit plans |
(23.68) |
- |
(23.68) |
||
Sub total (a) |
20.15 |
- |
20.15 |
||
(b) Investment in Equity Instruments |
(7.30) |
- |
(7.30) |
||
Sub total (b) |
(7.30) |
- |
(7.30) |
||
Total (i) = (a) (b) |
12.85 |
- |
12.85 |
||
(ii) Items that will be reclassified to profit or loss |
- |
||||
Investment in Debt Instruments |
(9.09) |
- |
(9.09) |
||
Less: Income Tax on investment in Debt Instruments |
(2.12) |
- |
(2.12) |
||
Total (ii) |
(6.97) |
- |
(6.97) |
||
Other Comprehensive Income (B) = (i ii) |
5.88 |
- |
5.88 |
||
TOTAL COMPREHENSIVE INCOME FOR THE YEAR (A B) |
2,764.53 |
10.38 |
2,774.91 |
||
Earning per share (Basic and Diluted) (Equity shares, face value of 10/- each) |
|||||
Before movements in Regulatory Deferral Account Balances |
35.6 |
1.99 |
0.65 |
2.64 |
|
After movements in Regulatory Deferral Account Balances |
35.6 |
2.69 |
0.01 |
2.70 |
(C ) STATEMENT OF CHANGES IN EQUITY AS AT 31ST MARCH, 2018 (Extract) OTHER EQUITY
(Rs in crore)
Particulars |
Notes |
Reserve and Surplus |
Other Comprehensive Income |
|||||||
Capital Redemption Reserve |
Securities Premium |
Bond Redemption Reserve |
Research & Development Fund |
General Reserve |
Surplus/ Retained Earnings |
Equity Instruments through OCI |
Debt instruments through OCI |
Total |
||
Balance as at 1st April, 2017 (As previously Reported) |
2,041.42 |
242.81 |
1,609.27 |
43.90 |
10,088.11 |
2,522.54 |
100.08 |
34.68 |
16,682.81 |
|
Correction of Error (Net of Tax) |
35.3 |
13.29 |
||||||||
Restated Balance as at 1st April, 2017 |
2,041.42 |
242.81 |
1,609.27 |
43.90 |
10,088.11 |
2,535.83 |
100.08 |
34.68 |
16,696.10 |
|
Profit for the year |
- |
- |
- |
- |
- |
2,769.03 |
- |
- |
2,769.03 |
|
Other Comprehensive Income |
- |
- |
- |
- |
- |
20.15 |
(7.30) |
(6.97) |
5.88 |
|
Total Comprehensive Income |
- |
- |
- |
- |
- |
2,789.18 |
(7.30) |
(6.97) |
2,774.91 |
|
Transfer to Retained Earning |
||||||||||
Amount transferred from Bond Redemption Reserve |
- |
- |
(148.17) |
- |
- |
148.17 |
- |
- |
- |
|
Amount transferred from Research & Development Fund |
- |
- |
(43.90) |
43.90 |
- |
|||||
Transfer from Retained Earning |
||||||||||
Final Dividend (2016-17) |
- |
- |
- |
- |
- |
(102.60) |
- |
- |
(102.60) |
|
Interim Dividend (2017-18) |
(1,149.05) |
(1,149.05) |
||||||||
Tax on Dividend |
- |
- |
- |
- |
- |
(126.86) |
- |
- |
(126.86) |
|
Transfer to Bond Redemption Reserve |
- |
- |
668.45 |
- |
- |
(668.45) |
- |
- |
- |
|
Balance as at 31st March, 2018 |
2,041.42 |
242.81 |
2,129.55 |
- |
10,088.11 |
3,470.12 |
92.78 |
27.71 |
18,092.50 |
Notes :-
35.1 As per CERC Tariff Regulations, deferred tax for the tariff period 2004-09 is recoverable from beneficiaries in the year the same materialises as current tax and for tariff period 2014-19 by way of grossing up of Return on Equity by the effective tax rate based on actual tax paid, Till 31 st March, 2018 the deferred tax recoverable from beneficiaries in future years was adjusted against deferred tax liability. Pursuant to an opinion of the Expert Advisory Committee of the Institute of Chartered Accountants of India obtained during FY 2018-19, the Company has reclassified the deferred tax recoverable as Regulatory Deferral Account balance as against adjusting the same with deferred tax liability. Consequent upon this change, impact of Rs (-) 81.22 crore on account of tax liability pertaining to period 2014-15 to 2017-18 has been adjusted/ considered in the tax computation for the current year.
35.2 Deferred Tax expense to the extent of Rs 657.49 crore of FY 2017-18 has been reclassified/ restated as movement in Regulatory Deferral Account balances consequent upon reclassification of deferred tax recoverable from beneficiaries as explained at SI. No.35.1 above.
35.3 The depreciation on assets acquired and available for use during the " fag-end" as per CERC Tariff Regulations 2014-19 (last 5 years) of the operating life of a Power Station was charged based on the originally estimated useful life as against the extended life of the generating station under CERC Tariff Regulation/ Orders. (Refer S.No-32 of Note 34). As a result, excess depreciation pertaining to earlier periods have been written-back to Property, Plant & Equipment with consequential increase in "Other Equity".
35.4 Till FY 2017-18, reversal of provisions were being presented as "Other Income". Pursuant to an opinion of the Expert Advisory Committee of the Institute of Chartered Accountants of India, the Company has adjusted reversal of provisions of earlier years to the extent of provisions created during the year and consequently "Other Income" and related expenses have also been adjusted to that extent. However there is no impact of such reclassification on the profit of the respective year.
35.5 Further to above, following reclassifications/restatements have also been made in the Balance Sheet and Statement of Profit and Loss to correspond to the current year classification:
a) Deposits of perpetual nature earlier classified as "Other Current Assets"/ "Other Non Current Assets" have been reclassified as "Current-Financial Assets-Loans"/ "Non-Current-Financial Assets-Loans".
b) Interest accrued on Loan to Govt of Arunachal Pradesh, earlier classified as "Financial Assets-Others" has been reclassified as "Financial Assets-Loans" along with the loan balance.
c) Payments made to contractors in pursuance to Niti Aayog guidelines (refer Note 34(1 )(e) of the Financial Statements) earlier presented under "Financial Assets-Current- Others" have been reclassified as "Other Non-Current Assets".
d) Certain liabilities incurred in the normal course of business have been reclassified from "Other Financial Liabilities-Current" to "Trade Payables-Current".
e) Income on account of Generation Based Incentive (GBI) earlier presented as "Other Income" has been reclassified as "Revenue from Operations".
f) In Tax Expenses, Adjustments for Income Tax is clubbed in current taxes.
35.6 Basic and Diluted earning per share for the year 2017-18 have also been restated. The basic and diluted earnings per share has increased by Rs 0.65 before movement in regulatory Deferral Account Balances and by Rs 0.01 per share after movement in regulatory Deferral Account Balances.
35.7 There is no impact due to the above restatement/reclassifications on the Statement of Cash Flow of the Year 2017-18.
For and on behalf of the Board of Directors |
|||
VIJAY GUPTA |
MAHESH KUMAR MITTAL |
BALRAJ JOSHI |
|
Company Secretary |
Director (Finance) |
Chairman & Managing Director |
|
DIN 02889021 |
DIN 07449990 |
||
As per report of even date |
|||
FOR ARORA VOHRA & CO. |
FOR DSP & ASSOCIATES |
FOR LODHA & CO. |
|
Chartered Accountants |
Chartered Accountants |
Chartered Accountants |
|
FRN 009487N |
FRN: 006791N |
FRN: 301051E |
|
(PREM C. BANSAL) |
(Sanjay Jain) |
(R.R SINGH) |
|
Partner |
Partner |
Partner |
|
M. No. 083597 |
M. No. 084906 |
M. No. 052438 |
|
Place : Date: |
New Delhi 27th May, 2019 |
Mar 31, 2018
(I) Reporting entity
NHPC Limited (the âCompanyâ) is a Company domiciled in India and limited by shares. The shares of the Company are publicly traded on the National Stock Exchange of India and BSE Limited. The address of the Companyâs registered office is NHPC LIMITED, NHPC Office Complex, Sector-33, Faridabad, Haryana -121003. The Company is primarily involved in the generation and sale of bulk power to various Power Utilities. Other business includes providing consultancy, project management & supervision.
(II) Basis of preparation
(A) Statement of Compliance
These standalone financial statements are prepared on accrual basis of accounting except for the Statement of Cash Flows and comply with the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 and subsequent amendments thereto, the Companies Act, 2013 (to the extent notified and applicable), applicable provisions of the Companies Act, 1956, and the provisions of the Electricity Act, 2003 to the extent applicable.
(B) Basis of Measurement
The financial statements have been prepared on historical cost basis, except for following financial assets and financial liabilities which are measured at fair value:
- Certain financial assets and liabilities measured at fair value.
- Plan assets of defined employee benefit plans.
The methods used to measure fair values are discussed in Note 33.
(C) Functional and presentation currency
These financial statements are presented in Indian Rupees (INR), which is the Companyâs functional currency. All financial information presented in INR has been rounded off to the nearest crores (upto two decimals) for the Company.
(D) Use of estimates and management judgments
The preparation of financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions that may impact the application of accounting policies and the reported value of assets, liabilities, income, expenses and related disclosures including contingent assets and liabilities at the Balance Sheet date. The estimates and managementâs judgments are based on previous experience and other factors considered reasonable and prudent in the circumstances. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised.
In order to enhance understanding of the financial statements, information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that may have the most significant effect on the amounts recognised in the financial statements are included in the following notes:
Critical judgments and estimates
a) Determining whether an arrangement contains a lease
Appendix C, Ind AS 17 âDetermining whether an arrangement contains a leaseâ requires an assessment of whether:
- -fulfilment of the arrangement is dependent on the use of a specific asset or assets (the asset); and
- -the arrangement conveys a right to use the asset.
Further, an arrangement conveys a right to use the asset if facts and circumstances indicate that it is remote that one or more parties other than the purchaser will take more than an insignificant amount of the output or other utility that will be produced or generated by the asset during the term of the arrangement, and the price that the purchaser will pay for the output is neither contractually fixed per unit of output nor equal to the current market price per unit of output as of the time of delivery of the output.
The Company enters into power purchase agreements with beneficiaries. Power Purchase Agreements (PPA) in the nature of embedded lease with a single beneficiary where the minimum lease term is for the major part of the plantâs economic life and the minimum lease payments amount to substantially all the fair value of the plant are considered as a Finance Lease. Other embedded leases are considered as Operating Lease.
For embedded leases in the nature of a Finance Lease, the investment in the plant is recognised as a Lease Receivable. The minimum lease payments are identified by segregating the embedded lease payments from the rest of the contract amounts. Each lease receipt is allocated between the receivable and finance lease income so as to achieve a constant rate of return on the Lease Receivable outstanding.
In the case of operating leases or embedded operating leases, the lease income from the operating lease is recognised in revenue on a straight-line basis over the lease term. The respective leased assets are included in the Balance Sheet based on their nature.
b) Useful life of Property, Plant and Equipment and Intangible Assets
The estimated useful life of property, plant and equipment and intangible assets are based on a number of factors including the effects of obsolescence, demand, competition and other economic factors (such as the stability of the industry and known technological advances) and the level of maintenance expenditures required to obtain the expected future cash flows from the asset.
Useful life of the assets used for generation of electricity is determined by the Central Electricity Regulatory Commission (CERC) Tariff Regulations as mentioned in part B of Schedule II of the Companies Act, 2013 except for construction plant & machinery and computers & peripherals which are in accordance with Schedule II of the Companies Act, 2013 and mobile phones which are as per management assessment.
c) Recoverable amount of property, plant and equipment, capital work in progress and intangible assets
The recoverable amount of property, plant and equipment, capital work in progress and intangible assets are based on estimates and assumptions, in particular the expected market outlook and future cash flows associated with the power plants. Any changes in these assumptions may have a material impact on the measurement of the recoverable amount resulting in impairment.
d) Post-retirement benefit plans
Employee benefit obligations are measured on the basis of actuarial assumptions which include mortality and withdrawal rates as well as assumptions concerning future developments in discount rates, the rate of salary increase, the inflation rate and expected rate of return on plan assets. The Company considers that the assumptions used to measure its obligations are appropriate and documented. However, any changes in these assumptions may have an impact on the resulting calculations.
e) Revenue
The Company records revenue from sale of power based on Tariff approved by the CERC, as per the principles of Ind AS 18. However, in cases where tariff rates are yet to be approved, provisional rates are adopted considering the applicable CERC Tariff Regulations.
f) Provisions and contingencies
The assessments undertaken in recognising provisions and contingencies have been made in accordance with Ind AS 37, âProvisions, Contingent Liabilities and Contingent Assetsâ. The evaluation of the likelihood of the contingent events has been made on the basis of best judgment by management regarding probable outflow of economic resources. Such estimation can change following unforeseeable developments.
g) Recoverable Amount of Rate Regulated Assets
The operating activities of the Company are subject to cost-of-service regulations whereby tariff charged for electricity generated is based on allowable costs like interest costs, depreciation, operation & maintenance including a stipulated return. Guidance Note on Rate Regulated Activities issued by the ICAI (previous GAAP) and Ind AS 114- âRegulatory Deferral Accountsâ permits an entity to include in the rate base, as part of the cost of self-constructed (tangible) PPE or internally generated intangible assets, amounts that would otherwise be recognised as an expense in the statement of profit and loss in accordance with Ind AS. The Company estimates that items of regulatory deferral accounts recognised in the financial statements are recoverable as per the current CERC Tariff regulations 2014-19. However, changes in CERC tariff regulations beyond the current tariff period may affect the recoverability of such balances.
h) Impairment of Trade Receivables
Considering the historical credit loss experience for trade receivables, the Company does not envisage either impairment in the value of receivables from beneficiaries or loss due to time value of money owing to delay in realization of trade receivables, except to the extent already provided for.
i) Investment in Subsidiaries and Joint Ventures
Investment has been carried at costs and as per assessment by the Company, there is no indication of impairment on such investments. Any changes in assumption may have a material impact on the measurement of the recoverable amount.
j) Insurance Claim Recoverable
The recoverable amount of insurance claims in respect of damages to Property, Plant & Equipment is based on estimates & assumptions as per terms and conditions of insurance policies.
1) Expenditure attributable to Construction (EAC) includes Rs.371.10 Crore (Previous year Rs.377.54 Crore) towards borrowing cost capitalised during the period.
2) Capital Work in Progress (CWIP) includes a cumulative expenditure of Rs.1287.92 Crore (Previous Year Rs.1178.32 Crore) on projects under Survey & Investigation stage. Of this, a sum of Rs.43.52 Crore (Previous Year Rs.43.52 Crore) pertains to Subansiri Upper Project, which had been decided by Govt. of Arunachal Pradesh to be handed over to a Private Developer. However, pending handing over of the project & recovery of expenditure incurred on it, the said amount is already provided for in the books as an abundant precaution. Out of the balance of Rs.1244.40 Crore (Previous Year Rs.1134.80 Crore) pertaining to projects with the company, a sum of Rs.562.01 Crore (Previous Year Rs.535.74 Crore) has been provided upto date as an abundant precaution in respect of projects, where uncertainties are attached and Rs.682.39 Crore (Previous Year Rs.599.15 Crore), pertaining to other projects having reasonable certainty of getting clearance, is carried over.
3) Siang Basin, Subansiri Basin & Dibang Multipurpose Projects were taken over from Brahmaputra Board. Pending settlement of accounts with Brahmaputra Board, assets and liabilities have been accounted for to the extent of amounts incurred by the Company on these projects. Siang Lower & Siyom HE Projects (in Siang Basin) & Subansiri Middle (in Subansiri Basin) have since been handed over to Private Developer and liability arising out of settlement of accounts with Brahmaputra Board towards these projects if any, is recoverable from respective Private Developers.
4) Underground Works amounting to Rs.5177.50 Crore (Previous Year Rs.4923.90 Crore) created on Land - Right to use, are included under respective heads of Capital Work in Progress (CWIP).
5) Refer para no. 9 of Note no. 34 for information of non-current assets pledged with banks as security for related borrowings.
6) Capital Expenditure on projects approved by the competent authority undergoes revision over period of time as hydroelectric projects are time intensive and some takes longer period than envisaged. As a consequence the cost escalation occur, which requires approval of competent authority. Pending such approval the expenditure incurred is carried forward in Capital Work in Progress (CWIP).
1) Expenditure attributable to Construction (EAC) includes Rs.377.54 Crore (Previous year Rs.461.70 Crore) towards borrowing cost capitalised during the year.
2) Capital Work in Progress (CWIP) includes a cumulative expenditure of Rs.1178.32 Crore (Previous Year Rs.1069.48 Crore) on projects under Survey & Investigation stage. Of this, a sum of Rs.43.52 Crore (Previous Year Rs.43.52 Crore) pertains to Subansiri Upper Project, which had been decided by Govt. of Arunachal Pradesh to be handed over to a Private Developer. However, pending handing over of the project & recovery of expenditure incurred on it, the said amount is already provided for in the books as an abundant precaution. Out of the balance of Rs.1134.80 Crore (Previous Year Rs.1025.96 Crore) pertaining to projects with the company, a sum of Rs.535.74 Crore (Previous Year Rs.494.40 Crore) has been provided upto date as an abundant precaution in respect of projects, where uncertainties are attached and Rs.599.15 Crore (Previous Year Rs.531.56 Crore), pertaining to other projects having reasonable certainty of getting clearance, is carried over.
3) Siang Basin, Subansiri Basin & Dibang Multipurpose Projects were taken over from Brahmaputra Board. Pending settlement of accounts with Brahmaputra Board, assets and liabilities have been accounted for to the extent of amounts incurred by the Company on these projects. Siang Lower & Siyom HE Projects (in Siang Basin) & Subansiri Middle (in Subansiri Basin) have since been handed over to Private Developer and liability arising out of settlement of accounts with Brahmaputra Board towards these projects if any, is recoverable from respective Private Developers.
4) Underground Works amounting to Rs.4923.90 Crore (Previous Year Rs.4205.33 Crore) created on Land - Right to use, are included under respective heads of Capital Work in Progress (CWIP).
5) Refer para no. 9 of Note no. 34 for information of non-current assets pledged with banks as security for related borrowings.
6) Capital Expenditure on projects approved by the competent authority undergoes revision over period of time as hydroelectric projects are time intensive and some takes longer period than envisaged. As a consequence the cost escalation occur, which requires approval of competent authority. Pending such approval the expenditure incurred is carried forward in Capital Work in Progress (CWIP).
d) The Company has issued only one kind of equity shares with voting rights proportionate to the share holding of the shareholders. These voting rights are exercisable at meeting of shareholders. The holders of the equity shares are also entitled to receive dividend as declared from time to time for them.
e) Shares in respect of each class in the company held by its holding company or its ultimate holding company including shares held by subsidiaries or associates of the holding company or the ultimate holding company in aggregate: NIL
g) Shares reserved for issue under options and contracts/commitments for the sale of shares/disinvestment, including the terms and amounts : NIL
h) In preceding five financial years immediately preceding 31.03.2018, Company has not allotted any equity share as fully paid up pursuant to contract(s) without payment being received in cash/ not allotted any equity share as fully paid up by way of bonus share(s).
i) Terms of any securities convertible into equity shares issued along with the earliest date of conversion in descending order starting from the farthest such date:- NIL
j) Calls unpaid (showing aggregate value of calls unpaid by directors and officers) : NIL
k) Forfeited shares (amount originally paid up) :NIL
l) During the Financial Year 2016-17 the Company has completed buyback of 811347977 shares of Rs.10 each, from the shareholders on a proportionate basis by way of a tender offer at a price of Rs.32.25 per equity share for an aggregate amount of Rs.2616.60 crores in accordance with the provisions of the Companies Act, 2013 and the SEBI regulations.
Nature and Purpose of Reserves
1 Capital Redemption Reserve : The company is required to create a capital redemption reserve from distributable profit if the buy-back of shares is out of free reserves, the nominal value of the shares so purchased is required to be transferred to capital redemption reserve.
2 Securities Premium Account : Securities premium reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act.
3 Bond Redemption Reserve : The company is required to create a bond redemption reserve out of the profits which is available for the purpose of redemption of bonds.
4 Research & Development Fund : As per the requirement of Department of Public Enterprise (DPE) IOM no. 3(9)/2010-DPE (MoU) dated 23rd September 2011, creation of reserve for Research & Development (R&D) @ 0.5% of Profit after Tax was made a mandatory criteria for performance evaluation under the MoU system for Central Public Sector Companies. Accordingly, the Company had been creating R&D Reserve as per DPE guidelines till FY 2016-17. However, since FY 2016-17, targets for R&D no longer form part of MoU of the Company. Further, keeping in view the industry practice in this regard, the Company has ceased creation of R&D reserve w.e.f. the current financial year and balance of Rs.43.90 Crore in R&D Reserve as on 31st March, 2017 has been transferred to Retained Earnings during the year.
5 FVTOCI-Equity Instruments : The company has elected to recognise changes in the fair value of certain investments in equity securities in Other Comprehensive Income (OCI). These changes are accumulated within the FVOCI equity investments reserve within equity. The company transfers amounts from this reserve to retained earnings when the relevant equity securities are derecognised.
6 FVTOCI-Debt Instruments : The company has elected to recognise changes in the fair value of certain investments in debt securities in Other Comprehensive Income. These changes are accumulated within the FVTOCI debt investments reserve within equity. The company transfers amounts from this reserve to retained earnings through P&L when the relevant debt securities are derecognised.
* Particulars of security
1. Secured by pari-passu charge by way of Equitable mortgage/hypothecation against Immovable/Moveable assets (except for Book Debts and Stores) of Companyâs Chamera-I Power Station situated in the state of Himachal Pradesh.
2. Secured by pari-passu charge by way of Equitable mortgage/hypothecation against Immovable/Moveable assets (except for Book Debts and Stores) of Companyâs Uri-I Power Station situated in the state of Jammu & Kashmir.
3. Secured by pari-passu charge by way of Equitable mortgage/ hypothecation against Immovable / Moveable assets (except for Book Debts and Stores) of Companyâs Chamera-II Power Station situated in the state of Himachal Pradesh.
4. Secured by pari-passu charge by way of equitable mortgage and hypothecation against the immovable and moveable assets (except for Book Debts and Stores) of the Companyâs Parbati-II HE Project situated in the state of Himachal Pradesh.
5. Secured by pari-passu charge by way of equitable mortgage/hypothecation against immovable/movable assets (except for Book Debts and Stores) of Companyâs Teesta Low Dam-III Power Station situated in the state of West Bengal.
6. Secured by pari-passu charge by way of equitable mortgage and charge over all the immoveable and moveable assets (except for Book Debts and Stores) of the Companyâs Dhauliganga Power Station situated in the state of Uttrakhand.
7. Secured by way of first charge on pari-passu basis by way of hypothecation on whole of the Companyâs movable assets(except for Book Debts and Stores), both present and future, of Dulhasti Power Station situated in the state of Jammu & Kashmir.
8. Secured by a first charge on pari-passu basis by way of equitable mortgage and hypothecation against the immovable and moveable assets (except for Book Debts and Stores) of the Companyâs Chamera-III Power Station situated in the state of Himachal Pradesh.
9. Secured by way of first charge on pari-passu basis by way of hypothecation on whole of the Companyâs movable assets (except for Book Debts and Stores), both present and future, of Salal Power Station situated in the state of Jammu & Kashmir, Sewa-II Power Station situated in the state of Jammu & Kashmir, Chutak Power Station situated in the state of Jammu & Kashmir, Nimmo-Bazgo Power Station situated in the state of Jammu & Kashmir, Uri-II Power Station situated in the state of Jammu & Kashmir & TLDP-IV Power Station situated in the state of West Bengal.
10. Secured by pari-passu charge by way of equitable mortgage and hypothecation against the immovable and moveable assets (except for Book Debts and Stores) of the Companyâs Parbati -III Power Station situated in the state of Himachal Pradesh.
11. Secured by pari-passu charge by way of equitable mortgage/hypothecation against immovable/movable assets (except for Book Debts and Stores) of Companyâs Teesta-V Power Station situated in the state of Sikkim.
12. Loans mentioned at sl. nos. C(i),F(i),F(ii) and F(iii) above are guaranteed by Government of India.
13. Secured by pari-passu charge by way of equitable mortgage and hypothecation against the immovable and moveable assets (except for Book Debts and Stores) of the Companyâs Parbati -II Power Station situated in the state of Himachal Pradesh.
14. Security creation by pari-passu charge by way of equitable mortgage and hypothecation against the immovable and moveable assets (except for Book Debts and Stores) of the Companyâs Parbati -II Power Station situated in the state of Himachal Pradesh and Secured by pari-passu charge by way of hypothecation against the moveable assets (except for Book Debts and Stores) of the Companyâs Dulhasti Power Station situated in the state of Jammu & Kashmir is under process.
*1) The Board has resolved to implement the directions of the Ministry of Power (MoP) vide its letter no. 11/17/2009 NHPC/ Vol. III dated 27th December 2013 conveying the approval of Competent Authority about pay scales in respect of below Board level Executives that the pay scales shall be fixed w.e.f. 01.01.2007 after correcting the aberrations in pay scales fixed w.e.f. 01.01.1997 and the deviant pay scales fixed w.e.f. 01.01.1997 shall not be regularized. The MoP has confirmed vide letter no. 11/17/2009-NHPC-Vol. III dated 25th Feb., 2016 that the recovery of personal pay adjustment w.e.f. 01.02.2014 is in conformity with the said directive of the Competent Authority. Accordingly, advance against personal pay adjustment of Rs.31.03 crore paid upto 31.01.2014 has been set-off against the Provision for wage revision. However, pending final decision in the matter, the balance amount of Rs.12.57 crore is continued in advance.
Thus, the cumulative amount provided towards the Personal Pay Adjustment w.e.f 01/02/2014 to 31/03/2018 under the head âProvision for Wage Revisionâ is Rs.12.57 crore (including provision for the current period Rs.2.47 crore) with corresponding amount shown as âAdvance paidâ.
2) Information about Provisions are given in para 21 of Note 34 of Balance Sheet
Total carried forward to Statement of Profit & Loss includes Rs.331.39 Crore (Previous period Rs.365.32 Crore) relating to Subansiri Lower Project as explained in para 22 of Note no-34. However Regulatory Deferral Account Balances for an equivalent amount of Rs.331.39 Crore pertaining to Subansiri Lower Project has been recognised as per Ind AS 114-âRegulatory Deferral Accountsâ.
i) Credit risk
Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The company is exposed to credit risk from its operating activities (primarily trade receivables/leased assets) and from its financing activities including deposits with banks and financial institutions.
ii) Liquidity risk
Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses.
iii) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise three types of risk: currency rate risk, interest rate risk and other price risks, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings, deposits and investments. Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.
The company operates in a regulated environment. Tariff of the company is fixed by the Central Electricity Regulatory Commission (CERC) through Annual Fixed Charges (AFC) comprising the following five components:
1. Return on Equity (RoE), 2. Depreciation, 3. Interest on Loans, 4. Operation & Maintenance Expenses and 5. Interest on Working Capital Loans. In addition to the above Foreign Currency Exchange variations and Taxes are also recoverable from Beneficiaries in terms of the Tariff Regulations. Hence variation in interest rate, currency exchange rate variations and other price risk variations are recoverable from tariff and do not impact the profitability of the company.
(B) Credit Risk
The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and other financial instruments.
Trade Receivables & lease receivables :-
The Company extends credit to customers in normal course of business. The Company monitors the payment track record of the customers. Outstanding receivables are regularly monitored. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are mainly state government authorities and operate in largely independent markets.
Lease receivables of the company are with regard to Power Purchase Agreements classified as deemed lease as per Appendix C of Ind AS 17- âLeasesâ as referred to in Note No. 34. The power purchase agreements are for sale of power to single beneficiary and recoverability of interest income and principal on leased assets i.e. PPE of the power stations are assessed on the same basis as applied for trade receivables.
Financial assets at amortised cost :-
Employee Loans: The Company has given loans to employees at concessional rates as per Companyâs policy which have been measured at amortised cost at Balance Sheet date. The recovery of the loan is on fixed instalment basis from the monthly salary of the employees. The loans are secured by way of mortgage/hypothecation of the assets for which such loans are given. Management has assessed the past data and does not envisage any probability of default on these loans.
Loans to Govt. of Arunanchal Pradesh : The Company has given loan to Govt. of Arunachal Pradesh at 9% rate of interest as per the terms and conditions of MOU signed between the Company and Govt of Arunachal Pradesh for construction of hydroelectric projects in the state. The loan has been measured at amortised cost. The loan is recoverable from the share of free power of the state government from the first hydroelectric project to be commissioned in the state. Management does not envisage any probability of default on the loan.
Financial instruments and cash deposits :-
The Company considers factors such as track record, size of the bank, market reputation and service standards to select the banks with which balances and deposits are maintained. Generally, the balances are maintained with the banks with which the Company has also availed borrowings. The Company invests surplus cash in short term deposits with scheduled banks. The company has balances and deposits with banks which are well diversified across private and public sector banks with limited exposure with any single bank.
(i) Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was as under:
(ii) Provision for expected credit losses :-
(a) Financial assets for which loss allowance is measured using 12 month expected credit losses
The Company assesses outstanding receivables on an ongoing basis considering changes in payment behaviour and provides for expected credit loss on case-to-case basis.
(b) Financial assets for which loss allowance is measured using life time expected credit losses
CERC Tariff Regulations 2014-19 allow the Company to raise bills on beneficiaries for late-payment surcharge. which adequately compensates the Company for time value of money arising due to delay in payment. Further, the fact that beneficiaries are primarily State Governments/ State Discoms and considering the historical credit loss experience for trade receivables, the Company does not envisage either impairment in the value of receivables from beneficiaries or loss due to time value of money due to delay in realization of trade receivables. However, the Company assesses outstanding trade receivables on an ongoing basis considering changes in operating results and payment behaviour and provides for expected credit loss on case-to-case basis. As at the reporting date company does not envisage any default risk on account of non-realisation of trade receivables.
(iii) Reconciliation of impairment loss provisions
The movement in the allowance for impairment in respect of financial assets during the year was as follows:
(C) Liquidity Risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due.
i) The Companyâs objective is to maintain optimum levels of liquidity at all times to meet its cash and collateral requirements. The Company relies on a mix of borrowings and excess operating cash flows to meet its need for funds. The current committed lines of credit and internal accruals are sufficient to meet its short to medium term expansion needs. The Company monitors rolling forecasts of its liquidity requirements to ensure that it has sufficient cash to meet capital expenditure and operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the borrowing limits or covenants (where applicable) are not breached on any of its borrowing facilities.
ii) Maturities of Financial Liabilities:
The amounts disclosed in the table below are the contractual undiscounted cash flows. Balances due within 1 year is equal to their carrying balances as the impact of discounting is not significant.
(D) Market Risk:
The sensitivity analysis excludes the impact of movements in market variables on the carrying value of post-employment benefit obligation provisions and on the non-financial assets and liabilities. The sensitivity of the relevant item of the Statement of Profit and Loss is the effect of the assumed changes in the respective market risks. The Companyâs activities expose it to a variety of financial risks, including the effects of changes in interest rates.
(i) Interest rate risk and sensitivity
The Companyâs exposure to the risk of changes in market interest rates relates primarily to the Companyâs long term debt obligations with floating interest rates. Companyâs policy is to maintain most of its borrowings at fixed rate. Companyâs fixed rate borrowings are carried at amortised cost and are not subject to interest rate risk. Further the company refinance these debts as and when favourable terms are available. The company is also compensated for variability in floating rate through recovery by way of tariff adjustments under CERC tariff regulations.
Interest Rate Sensitivity Analysis
Profit or loss is sensitive to higher/lower interest expense from borrowings as a result of change in interest rates. With all other variables held constant, the following table demonstrates the impact of borrowing cost on floating rate portion of loans and borrowings.
However there is no impact on profit or loss for increase and decrease in interest rates, as the same is recoverable from beneficiaries through tariff. Company does not have floating rate domestic borrowings as on 31.03.2018
(ii) Price Risk:
(a) Exposure
The companyâs exposure to price risk arises from investment in equity shares and debt instruments classified in the financial statements as Fair Value Through OCI. Companyâs investment in equity shares are listed in recognised stock exchange and are publicly traded in the stock exchanges. Companyâs investment in debt instruments comprise quoted Government Securities and Public Sector Bonds and are publicly traded in the market. The investment has been classified under non-current investment in Balance Sheet.
(b) Price Risk Sensitivity
For Investment in Equity Instruments (Investment in equity shares of IOB and PTC)
The table below summarises the impact of increase/decrease in the market price of investment in equity instruments on the companyâs equity for the year:
Sensitivity has been worked out based on the previous 3 years average of six monthly fluctuations in the share price as quoted on the National Stock Exchange (NSE).
For Investment in Debt Instruments (Investments in Govt and PSU Bonds)
The table below summarises the impact of increase/decrease of the market value of the debt instruments on companyâs equity for the year:
(iii) Foreign Currency Risk
The company is compensated for variability in foreign currency exchange rate through recovery by way of tariff adjustments under the CERC Tariff Regulations.
(a) Foreign Currency Exposure:
The companyâs exposure to foreign currency risk at the end of the reporting period expressed in INR are as follows:
(b) Sensitivity Analysis
There is no impact of foreign currency fluctuations on the profit of the company as these are either adjusted to the carrying cost of respective fixed asset/Capital Work-in-Progress or recovered through tariff as per CERC Tariff Regulation 2014-19.
(3) Capital Management
(a) Capital Risk Management
The primary objective of the Companyâs capital management is to maximize the shareholder value. CERC Tariff Regulations prescribe Debt : Equity ratio of 70:30 for the purpose of fixation of tariff of Power Projects. Accordingly the company manages its capital structure to maintain the normative capital structure prescribed by the CERC.
The Company monitors capital using Debt : Equity ratio, which is net debt divided by total capital. The Debt : Equity ratio are as follows:
Note: For the purpose of the Companyâs capital management, capital includes issued capital and reserves. Net debt includes interest bearing loans and borrowings.
(b) Loan Covenants:
Under the terms of the major borrowing facilities, the company is required to comply with the following financial covenants:-
1. Company shall maintain credit rating AAA and if rating comes down, rate of interest shall be increased by 25 basis point for each notch below AAA rating.
2. Debt to net worth should not exceed 2:1.
3. Interest coverage ratio should be more than 2 times and should be calculated as ((Net Profit Non-Cash Expenditures Interest Payable-Non-Cash Income)/Interest Payable))
4. First Charge on Assets with 1:1.33 coverage on pari paasu basis.
During the year the company has complied with the above loan covenants.
NOTE NO. - 1: Other Explanatory Notes to Accounts
1. Disclosures relating to Contingent Liabilities:-
a) Claims against the Company not acknowledged as debts in respect of:
(i) Capital works
Contractors have lodged claims aggregating to Rs.9912.98 Crore (Previous year Rs.9612.16 Crore) against the Company on account of rate & quantity deviation, cost relating to extension of time, idling charges due to stoppage of work/ delays in handing over the site etc. These claims are being contested by the company as being not admissible in terms of provisions of the respective contracts or are lying at arbitration tribunal/other forums/under examination with the Company. These include Rs.3645.08 Crore (Previous year Rs.2858.26 Crore) towards arbitration awards including updated interest thereon, against the Company, which have been challenged/decided to be challenged in the Court of Law.
Management has assessed the above claims and recognized a provision of Rs.441.96 Crore (Previous year Rs.452.88 Crore) based on probability of outflow of resources embodying economic benefits and estimated Rs.9370.30 Crore (Previous year Rs.7848.60 Crore) as the amount of contingent liability i.e. amounts for which Company may be held contingently liable. In respect of such estimated contingent claims either the outflow of resources embodying economic benefits is not probable or a reliable estimate of the amount required for settling the obligation cannot be made. In respect of the rest of the claims/obligations, possibility of any outflow in settlement is considered as remote.
(ii) Land Compensation cases
In respect of land acquired for the projects, some of the erstwhile land owners have filed claims for higher compensation amounting to Rs.49.67 Crore (Previous year Rs.36.09 Crore) before various authorities/courts. Pending settlement, the Company has assessed and provided an amount of Rs.10.99 Crore (Previous year Rs.16.73 Crore) based on probability of outflow of resources embodying economic benefits and estimated Rs.38.68 Crore (Previous year Rs.19.36 Crore) as the amount of contingent liability as outflow of resources is considered as not probable. In respect of the rest of the claims/obligations, possibility of any outflow in settlement is considered as remote.
(iii) Disputed Tax Demands
Disputed Income Tax/Sales Tax/Service Tax/ other taxes/duties matters pending before various appellate authorities amount to Rs.454.44 Crore (Previous year Rs.395.48 Crore). Pending settlement, the Company has assessed and provided an amount of Rs.30.77 Crore (Previous year Rs.21.95 Crore) based on probability of outflow of resources embodying economic benefits and rest of the claims i.e. Rs.423.67 Crore (Previous year Rs.373.53 Crore) are being disclosed as contingent liability as outflow of resources is considered not probable. In respect of the rest of the claims/ obligations, possibility of any outflow in settlement is considered as remote.
(iv) Others
Claims on account of other miscellaneous matters amount to Rs.633.26 Crore (Previous year Rs.622.81 Crore). These claims are pending before various forums. Pending settlement, the Company has assessed and provided an amount of Rs.29.69 Crore (Previous year Rs.36.52 Crore) based on probability of outflow of resources embodying economic benefits and estimated Rs.601.69 Crore Previous year Rs.584.41 Crore) as the amount of contingent liability as outflow of resources is considered as not probable. In respect of the rest of the claims/obligations, possibility of any outflow in settlement is considered as remote.
(b) The above contingent liabilities do not include contingent liabilities on account of pending cases in respect of service matters & others where the amount cannot be quantified.
(c) It is not practicable to ascertain and disclose the uncertainties relating to outflow in respect of contingent liabilities.
(d) There is possibility of reimbursement to the company of Rs.235.73 Crore (Previous year Rs.221.02 Crore) towards above contingent liabilities.
(e) (i) An amount of Rs.536.06 Crore (Previous year â NIL) stands paid towards above Contingent Liabilities in respect of Capital Works, pursuant to Niti Aayog directions issued vide OM No. 14070/14/2016-PPPAU dated 5th September 2016, in cases where Arbitral Tribunals have passed orders in favour of contractors in arbitral proceedings and such awards/orders have been further challenged by the Company in a Court of Law, towards 75% of the arbitral award (including interest payable as per such award) subject to contractors fulfilling the terms and conditions laid down in the Standard Operating Procedures framed by the Company in this regard. The amount so paid is being shown as Current Financial Assets-Others (Note No. 11).
(ii) An amount of Rs.80.81 Crore (Previous year Rs.49.29 Crore) stands paid /deposited with courts towards above contingent liabilities to contest the cases and is being shown as Current Assets.
(f) The companyâs management does not expect that the above claims/obligations (including under litigation), when ultimately concluded and determined, will have a material and adverse effect on the companyâs results of operations or financial condition.
2. Contingent Assets: Contingent assets in respect of the company are on account of the following:
a) Counter Claims lodged by the company on other entities:
The company has lodged counter claims aggregating to Rs.588.08 Crore (Previous year Rs.399.74 Crore) against claims of other entities. These claims have been lodged on the basis of contractual provisions and are being contested at arbitration tribunal/other forums/under examination with the counterparty. It includes Rs.446.53 Crore (Previous year Rs.317.90 Crore) towards arbitration awards including updated interest thereon.
Based on Management assessment, a favourable outcome is probable in respect of the claims aggregating Rs.587.84 Crore (Previous year Rs.317.90 Crore) and for rest of the claims, the possibility of any inflow is remote. However, the amount has not been recognised.
b) Late Payment Surcharge:
CERC (Terms & Conditions of Tariff) Regulations 2014-19 provide for levy of Late Payment Surcharge by generating company in case of delay in payment by beneficiaries beyond 60 days from the date of presentation of bill. However, pending opinion from the Expert Advisory Committee of the Institute of Chartered Accountants of India in this regard, management has continued with its past practice of recognition of surcharge only when no significant uncertainty of ultimate collection exists. Accordingly, late payment surcharge of Rs.188.42 Crore (Previous year Rs.435.20 Crore) has not been recognised.
c) Revenue to the extent not recognised in respect of power stations:
Truing up order of 2009-14 and/or Tariff Order for 2014-19 are pending in respect of Sewa-II, Chamera III, Parbati-III, TLDP-III and TLDP-IV Power stations pending approval of revised cost estimate. Management has assessed the impact of these expenditures on tariff and considers that inflow of Rs.694.94 Crore (Previous year Rs.688.76 Crore) is probable.
d) Business Interruption Losses
Insurance Claims due to Business Interruption Losses in respect of Power Stations are recognised when no significant uncertainty of ultimate collection exists. Management has assessed that claim on account of Business Interruption losses aggregating to Rs.195.04 Crore (Previous Year Rs.345.95 Crore) is probable. Power Station-wise details of claims are given at Para 23 of this Note.
e) Other Cases
Claims on account of other miscellaneous matters amount to Rs.60.34 Crore (Previous year Rs.4.00 Crore). Management has assessed these claims and estimates that inflow of economic benefits of Rs.60.34 Crore (Previous year Rs.4.00 Crore) are probable.
3. Commitments:
(a) Estimated amount of contracts remaining to be executed on capital account and not provided for are as under:
(b) The Company has commitments of Rs.653.49 Crore (Previous year Rs.619.49 Crore) towards further investment in the subsidiary companies as at 31st March 2018.
(c) The Company has commitments of Rs.577.65 Crore (Previous year Rs.765.20 Crore) towards further investment in the joint venture entities as at 31st March 2018.
4. Pending approval of competent authority, provisional payments / provisions made towards executed quantities of works of some of the items beyond the approved quantities as also for extra items totaling to Rs.5.39 Crore (Previous year Rs.10.05 Crore) are included in Capital Work-in-Progress / Property, Plant and Equipment.
5. Other disclosure under IND AS 11- âConstruction Contractsâ are as under:
* There is however no impact on profitability of the Company, as the impact of change in foreign exchange rates is recoverable from beneficiaries in terms of prevailing CERC (Terms & Conditions of Tariff) Regulations 2014-19. The exchange rate variation for the year is transferred to deferred foreign currency fluctuation assets (recoverable from beneficiaries) as per Significant Accounting Policy of the Company.
6. Operating Segment:
a) Electricity generation (including income from embedded Finance/ Operating leases) is the principal business activity of the Company. Other operations viz., Contracts, Project Management and Consultancy works do not form a reportable segment as per the Ind AS - 108 on âOperating Segmentâ.
b) The Company has a single geographical segment as all its Power Stations are located within the Country.
The Company is a Central Public Sector Undertaking (CPSU) controlled by Central Government by holding majority of shares. Pursuant to Paragraph 25 & 26 of Ind AS 24, entities over which the same government has control or joint control of, or significant influence, shall be regarded as related parties. The Company has applied the exemptions available for government related entities and have made limited disclosures in the financial Statements in accordance with Ind AS 24.
The Company has business transactions with the state governments and entities controlled by the Govt. of India. Transactions with these entities are carried out at market terms on arms- length basis (except subordinate debts received from Central Govt. at concessional rate) through a transparent price discovery process against open tenders, except in a few cases of procurement of spares/services from Original Equipment Manufacturers (OEMs) for proprietary items on single tender basis due to urgency, compatibility or other reasons. Such single tender procurements are also done through a process of negotiation with prices benchmarked against available price data of same/similar items. Therefore, party-wise details of such transactions have not been given since such transactions are carried out in the ordinary course of business at normal commercial terms and are not considered to be significant.
7. Disclosures Under Ind AS-19 âEmployee Benefitsâ:
(A) Defined Contribution Plans-
(i) Social Security Scheme: The Company has a Social Security Scheme in lieu of the erstwhile scheme of compassionate appointment. The Company also makes a matching contribution per month per employee and such contribution was to be made for 8 years to build up corpus from the date the scheme is in operation i.e. 01.06.2007, which has been extended for another 2 years i.e. up to 31.05.2017 and further extended for another 3 years i.e. up to 31.05.2020. The scheme has been created to take care of and helping bereaved families in the event of death or permanent total disability of its employee. The expenses recognised during the year towards social security scheme is Rs.3.88 Crore (Previous year Rs.4.23 Crore).
(ii) Employees Defined Contribution Superannuation Scheme (EDCSS): The Company has an employee defined contribution superannuation scheme for providing pension benefits to employees. As per the scheme, each employee contributes @ 5% of Basic Pay & Dearness Allowance. The company contributes to the extent of balance available after deducting employersâ contribution to Provident Fund, contribution to Gratuity Trust and REHS Trust, from the amount worked out @ 30% of the Basic Pay & DA. The Scheme is managed by Life Insurance Corporation of India. The expenses recognised during the year towards Employees Defined Contribution Superannuation Scheme (EDCSS) is Rs.67.20 Crore (Previous year Rs.76.18 Crore).
(B) Defined Benefit Plans- Company has following defined post-employment benefit obligations:
(a) Description of Plans:
(i) Provident Fund: The Company pays fixed contribution to Provident Fund at predetermined rates to a separate Trust, which invests the funds in permitted securities. The contribution to the fund for the year is recognised as expense and is charged to the Statement of Profit & Loss/Expenditure Attributable to Construction. The obligation of the Company is to make fixed contribution and to ensure a minimum rate of return to the members as specified by Government of India (GoI).
(ii) Gratuity: The Company has a defined benefit gratuity plan. The ceiling limit of gratuity is fixed as per the Payment of Gratuity Act, 1972, whereby every employee who has rendered continuous service of five years or more is entitled to get gratuity at 15 days salary (15/26 X last drawn basic salary plus dearness allowance) for each completed year of service subject to a maximum of Rs.0.20 Crore on superannuation, resignation, termination, disablement or on death. The plan is being managed by a separate Trust created for the purpose and obligation of the company is to make contribution to the Trust based on actuarial valuation.
(iii) Retired Employees Health Scheme (REHS): The Company has a Retired Employee Health Scheme, under which retired employee and/or spouse of retiree and eligible dependent children of deceased employees are provided medical facilities in the Company hospitals / empanelled hospitals. They can also avail treatment as Out-Patient subject to a ceiling fixed by the Company. The liability for the same is recognised on the basis of actuarial valuation. The Scheme is being managed by a separate Trust created for the purpose and obligation of the company is to make contribution to the Trust based on such actuarial valuation.
(iv) Allowances on Retirement/Death: Actual cost of shifting from place of duty at which employee is posted at the time of retirement to any other place where he / she may like to settle after retirement is paid as per the rules of the Company. In case of death, family of deceased employee can also avail this facility. The liability for the same is recognised on the basis of actuarial valuation.
(v) Memento to employees on attaining the age of superannuation: The Company has a policy of providing Memento valuing Rs.5000/- to employee on superannuation. The liability for the same is recognised on the basis of actuarial valuation
As per the provisions of the Employeesâ Provident Funds and Miscellaneous Provisions Act, 1952, the Company has no right to the benefits either in the form of refund from the plan or lower future contribution to the plan towards the net surplus of Rs.19.66 Crore determined through actuarial valuation. Accordingly, Company has not recognised the surplus as an asset, and the actuarial gains in Other Comprehensive Income, as these pertain to the Provident Fund Trust and not to the company.
(e) Risk Exposure: Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
Description of Risk Exposures:
Valuations are based on certain assumptions, which are dynamic in nature and vary over time. As such, the company is exposed to various risks as follow -
A) Salary Increase- Actual salary increase will increase the Planâs liability. Increase in salary increase rate assumption in future valuations will also increase the liability.
B) Investment Risk - If Plan is funded then assets liabilities mismatch & actual investment return on assets lower than the discount rate assumed at the last valuation date can impact the liability.
C) Discount Rate: Reduction in discount rate in subsequent valuations can increase the planâs liability.
D) Mortality & disability - Actual deaths & disability cases proving lower or higher than assumed in the valuation can impact the liabilities.
E) Withdrawals - Actual withdrawals proving higher or lower than assumed withdrawals and change of withdrawal rates at subsequent valuations can impact Planâs liability.
(f) Defined benefit liability and employer contributions: Funding levels are monitored on an annual basis and the current contribution rate is 30% of basic salary & dearness allowance. The Company considers that the contribution rates set at the last valuation date are sufficient to eliminate the deficit over the agreed period and that regular contributions, which are based on service costs, will not increase significantly.
Expected contributions to defined-benefit plans for the year ending March 31, 2019 are Rs.132.53 Crore (March 31, 2018 Rs.137.86 Crore).
The weighted average duration of the defined benefit obligations is 10.38 Years (2017 - 9.62 years).
The expected maturity analysis of undiscounted defined benefit plans is as follows:
(C) Other long-term employee benefits (Leave Benefit): The Company provides for earned leave and half-pay leave to the employees which accrue annually @ 30 days and 20 days respectively. The maximum ceiling of encashment of earned leave is limited to 300 days. However, any shortfall in the maximum limit of 300 days in earned leave on superannuation shall be fulfilled by half pay leave to that extent. The liability for the same is recognised on the basis of actuarial valuation.
The leave obligation covers the Companyâs liability towards employeesâ leave entitlements. The amount of provision for the year ended 31.03.2018 amounting to Rs.58.96 crore has been disclosed as Current since the same is to be paid to the trust set up by the Company as against in the Previous year wherein the amount of Rs.447.32 crore and Rs.66.14 crore were presented as Non-current and Current respectively as the same was unfunded till 31.03.2017. The current leave obligation estimated to settle within the next 12 months is Rs.46.03 crore (Previous year Rs.66.14 crore).
During the year the Company has created a Leave Encashment Trust to administer the funds towards provision for leave encashment appearing in its books till financial year 2016-17. Accordingly, the Company has remitted Rs.369.27 crore to the trust during the current year being the net liability in respect of leave encashment as on that date.
8. Disclosure related to Confirmation of Balances is as under :
(a) Balances shown under material issued to contractors, claims recoverable including insurance claims, advances for Capital expenditure, Sundry Debtors, Advances to Contractors, Sundry Creditors and Deposits/Earnest money from contractors are subject to reconciliation/ confirmation and respective consequential adjustments. Claims recoverable also include claims in respect of projects handed over or decided to be handed over to other agencies in terms of Government of India directives.
(b) The confirmation from external parties in respect of Trade Receivables, Trade Payables, Deposits, Advances to Contractors/Suppliers/Service Providers/Others including for capital expenditure and material issued to contractors is sought for outstanding balances of Rs.0.05 crore or above in respect of each party as at 31st December of every year. Status of confirmation of balances as at December 31, 2017 as well as amount outstanding as on 31.03.2018 is as under:
(c) In the opinion of the management, unconfirmed balances will not have any material impact.
(ii) Other disclosures:-
(a) Details of expenditure incurred during the year ended on 31.03.2018 paid and yet to be paid along with the nature of expenditure (capital or revenue nature) is as under:-
(b) As stated above, a sum of Rs.1.89 crore out of total expenditure of Rs.38.55 crore is yet to be paid to concerned parties which are included in the relevant head of accounts pertaining to liabilities.
(iii) As per Section 135 read with Section 198 of Companies Act 2013, the amount required to be spent towards CSR works out to Rs.59.52 Crore for financial year 2017-18 (based on 2% of average net profit of preceding three financial years). The Board of Directors had allocated total budget of Rs.59.52 Crore for financial year 2017-18, out of which an amount of Rs.20.97 Crore remained unspent.
9. Disclosures as required under Section 22 of The Micro, Small and Medium Enterprises Development Act, 2006 read with notification of Ministry of Corporate Affairs dated 04.09.2015 (Refer Note no. 20.2 and 20.3 of the Balance Sheet) are as under:
16. Disclosures regarding leases as per IND AS -17 âLeasesâ:
A) Operating leases- Company as Lessee
a) The Companyâs significant leasing arrangements are in respect of operating leases of premises for residential use of employees. These leasing arrangements, which are not non-cancellable, are usually renewable on mutually agreeable terms. Lease payments in respect of premises for residential use of employees amounting to Rs.41.25 Crore (Previous year Rs.45.52 Crore) included under Salaries, wages, allowances in Note 26.
b) The Company has taken premises for offices, guest houses & transit camps on operating leases which are not non-cancellable and are usually renewable on mutually agreeable terms. Lease payments in respect of premises for offices, guest houses & transit camps amounting to Rs.7.05 Crore (Previous year Rs.6.38 Crore) are shown under Rent & Hire Charges in Note 29.
c) The Company has taken vehicles on operating leases generally for a period of 1 to 2 years and such leases are not non-cancellable. Lease payments in respect of hiring of vehicles amounting to Rs.34.16 Crore (Previous year Rs.32.43 Crore) are shown under Rent & Hire Charges in Note 29.
B) Finance Lease - Company as Lessor
The Company has entered into an arrangement with a single beneficiary, PDD J&K for sale of the entire power generated by two power stations, namely Nimmo Bazgo Power Station & Chutak Power Station for 35 years, which is equal to the expected life of these Power Stations. Under the agreements, the customer is obliged to purchase the entire output at prices determined by the Central Electricity Regulatory Commission (CERC). The Company has classified these Power Stations as embedded Finance Lease as per Appendix-C to Ind AS 17- Leases. Other Financial Assets (Current and NonCurrent) include lease receivables representing the present value of future lease rentals receivable on the embedded finance lease arrangements entered into by the company.
C) Operating Lease -Company as Lessor :
The Company has entered into an arrangement with West Bengal State Electricity Board for sale of power from TLDP-III and TLDP-IV power stations for a period of 5 years and with Jodhpur Vidyut Vitran Nigam Ltd. for sale of power from Wind Power Project, Jaisalmer for a period of 3 years. Under the agreements, the customer is obliged to purchase the output at prices determined by the Central Electricity Regulatory Commission. Accordingly, the Company has classified these Power Stations as Operating Leases as per Appendix-C to Ind AS 17- Leases.
* Equity investments in Subsidiaries and Joint Ventures are measured at cost as per the provisions of Ind AS 27 on âSeparate Financial Statementsâ.
**During the year, the company has further invested Rs.122.36 crore in Chenab Valley Power Project Ltd. (CVPPL), as a result of which the companyâs shareholding increased to 55.39%. However, CVPPL continues to be a Joint Venture owing to control exercised jointly with the other joint venturer, pursuant to the Joint Venture agreement.
10. The management is of the opinion that no case of impairment of assets including regulatory deferral account balances exists under the provisions of Ind AS-36 on âImpairment of Assetsâ as at 31st March 2018.
11. As per Hydro Policy 2008, energy corresponding to 100 units of electricity is to be provided to each Project Affected Family (PAF) notified by the State Government through the concerned distribution licensee for a period of 10 years from the date of commissioning of a project. Notification by the respective State Governments regarding PAFs is yet to be made. Since the total saleable energy of a power station is to be arrived at by deducting such free power from the design energy, there would not be any impact on the profit of the Company.
12. Pending approval of tariff for the period 2014-19 by Central Electricity Regulatory Commission (CERC) as per notification no. L-1/144/2013/CERC dated 21st February 2014, sales have been recognized provisionally as per tariff notified by CERC for the period 2009-14 in respect of Sewa-II, Chamera-III, TLDP-III and Parbati-III Power Stations. CERC Regulations for the tariff period 2014-19 provide for recovery of income tax from the beneficiaries by way of grossing up of the Return on Equity with effective tax rate of the respective financial year i.e. actual tax paid during the year on the generating income.
13. Nature and details of provisions (refer Note No. 17 and 22 of Balance Sheet)
(i) General
Provisions are recognised when the company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the company expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a Finance Cost.
(ii) Provision for employee benefits (Other than provisions for defined contribution and defined benefit plans which have been disclosed as per Ind AS-19 at S. No. 10 of Note No. 34):
a) Provision for Performance Related Pay/Incentive:
Short-term Provision has been recognised in the accounts towards Performance Related Pay/ incentive to employees for the year (Previous Year 2016-17) on the basis of Management Estimates as per companyâs rules in this regard which are based on the guidelines of the Department of Public Enterprises, Government of India.
b) Provision For Wage Revision as per 3rd Pay Revision Committee (PRC):
Short term provision for wage revision of the employees of the company has been recognised in the accounts for the period 1.01.2017 to 31.03.2018 as per notification of the Department of Public Enterprises, Government of India.
(iii) Other Provisions:
a) Provision For Tariff Adjustment:
Provision for tariff adjustment is made on estimated basis against probable refund to beneficiaries on reassessment of tariff billed, pending approval of Tariff/truing up for the period 2014-19 by Central Electricity Regulatory Commission (CERC).
b) Provision for Livelihood Expenses:
Provision has been recognised at discoun
Mar 31, 2015
1. Secured by pari-passu charge by way of equitable
mortgage/hypothecation against the assets (except for Book Debts and
Stores) of Company''s Loktak Power Station situated in the state of
Manipur.
2. Secured by pari-passu charge by way of equitable mortgage and
hypothecation against the immovable and moveable assets (except for
Book Debts and Stores) of the Company''s Parbati-II HE Project situated
in the state of Himachal Pradesh.
3. Secured by pari-passu charge by way of equitable
mortgage/hypothecation against immovable/movable assets (except for
Book Debts and Stores) of Company''s Teesta Low Dam-III Project situated
in the state of West Bengal.
4. Secured by pari-passu charge by way of equitable mortgage and
charge over all the immoveable and moveable assets (except for Book
Debts and Stores) of the Company''s Dhauliganga Power Station situated
in the state of Uttrakhand.
5. Secured by way of frst charge on pari-passu basis by way of
hypothecation on whole of the Company''s movable assets(except for Book
Debts and Stores), both present and future, of Dulhasti Power Station
situated in the state of Jammu & Kashmir.
6. Secured by exclusive charge by way of equitable mortgage against
the assets (except for Book Debts and Stores) of Company''s Bairasiul
Power Station situated in the state of Himachal Pradesh.
7. Secured by a frst charge on pari-passu basis by way of equitable
mortgage and hypothecation against the immovable and moveable assets
(except for Book Debts and Stores) of the Company''s Chamera-III HE
Project-situated in the state of Himachal Pradesh.
8. Secured by way of frst charge on pari-passu basis by way of
hypothecation on whole of the Company''s movable assets (except for Book
Debts and Stores), both present and future, of Salal Power Station
situated in the state of Jammu & Kashmir, Sewa-II Power Station
situated in the state of Jammu & Kashmir, Chutak Power Station situated
in the state of Jammu & Kashmir, Nimmo-Bazgo Power Station situated in
the state of Jammu & Kashmir, Uri-II HE Project situated in the state
of Jammu & Kashmir & TLDP-IV HE Project situated in the state of West
Bengal.
9. Secured by pari-passu charge by way of equitable mortgage and
hypothecation against the immovable and moveable assets (except for
Book Debts and Stores) of the Company''s Parbati -III Power Station
situated in the state of Himachal Pradesh.
10. Secured by pari-passu charge by way of equitable
mortgage/hypothecation against immovable/movable assets (except for
Book Debts and Stores) of Company''s Teesta-V project situated in the
state of Sikkim.
11. Loans mentioned at sl. nos. C(i),C(ii),C(iii),C(iv) and E(i) above
are guaranteed by Government of India.
Explanatory Note: -
The Board has resolved to implement the directions of the Ministry of
Power (MOP) vide its letter no. 11/17/2009-NHPC/Vol. III dated 27th
December 2013 conveying the approval of Competent Authority about pay
scales in respect of below Board level Executives that the pay scales
shall be fxed w.e.f. 01.01.2007 after correcting the aberrations in pay
scales fxed w.e.f. 01.01.1997 and the deviant pay scales fxed w.e.f.
01.01.1997 shall not be regularized. The MoP has been intimated vide
letter no.PWA-504-Vol-IV/62 dated 14.05.2014 to confrm that the
recovery of personal adjustment w.e.f. 01.02.2014 is in conformity with
the said directive of the Competent Authority. In the meanwhile, NHPC
Offcers Association has got a stay from Hon''ble High Court of Delhi
against the implementation of stoppage of Personal Pay Adjustment
(ftment benefts). In view of the directions of the Hon''ble High Court,
Personal Pay Adjustments to the employees is continued to be paid along
with the Salary. Thus, the cumulative amount provided towards the
Personal Pay Adjustment under the head Provision for Wage Revision is Rs.
33.78 crore (including provision for the current year Rs. 6.19 crore)
with corresponding amount shown as Advance paid.
Explanatory Note: -
1) Expenditure during Construction (EDC) includes Rs. 330.43 crore
(Previous year Rs. 472.52 crore) towards borrowing cost capitalised
during the year.
2) Capital Work in Progress (CWIP) includes a cumulative expenditure of
Rs. 941.18 crore (Previous Year Rs. 798.99 crore) on projects under Survey
& Investigation stage. Of this, a sum of Rs. 43.52 crore pertains to
Subansiri Upper Project, which had been decided by Govt. of Arunachal
Pradesh to be handed over to a Private Developer, however pending
handing over of the project & recovery of expenditure incurred on it,
the said amount is already provided for in the books as an abundant
precaution. Out of the balance of Rs. 897.66 crore (Previous Year Rs.
755.47 crore) pertaining to projects with the company, a sum of Rs.
161.15 crore (Previous Year Rs. 114.34 crore) has been provided as an
abundant precaution in respect of projects, where uncertainties are
attached and Rs. 736.51 crore (Previous Year Rs. 641.13 crore), pertaining
to other projects having reasonable certainty of getting clearance, is
carried over.
3 Siang Basin, Subansiri Basin & Dibang Multipurpose Projects were
taken over from Brahmaputra Board. Pending settlement of accounts with
Brahmaputra Board, assets and liabilities have been accounted for to
the extent of amounts incurred by the Company on these projects. Siang
Lower & Siyom HE Projects (in Siang Basin) & Subansiri Middle (in
Subansiri Basin) have since been handed over to Private Developer and
liability arising out of settlement of accounts with Brahmaputra Board
towards these projects is recoverable from respective Private
Developers.
4) Underground Works amounting to Rs. 3995.69 crore (Previous Year Rs.
3774.90 crore) created on Land - Right to use, are included under
respective heads of Capital Work in Progress (CWIP).
5) Capital Expenditure on projects approved by the competent authority
undergoes revision over period of time as hydroelectric projects are
time intensive and some takes longer period than envisaged. As a
consequence the cost escalation occur, which requires approval of
competent authority. Pending such approval the expenditure incurred
during the period is carried forward in Capital Work in Progress
(CWIP).
Previous year
* On account of transition provision to recognise rate regulatory
assets in respect of expenditure incurred during the period of
interruption of construction activities i.e. from 16.12.2011 to
31.3.2014 by corresponding credit to opening balance of Surplus.
Explanatory Note: -
National Power Exchange Limited (A Joint Venture of the Company) is
under liquidation. Accordingly, upto date provision of Rs. 1.06 Cr
(Previous Year Rs. 1.06 Cr.) towards the diminunition in the value of
investment in the said joint venture has been made.
Explanatory Note: -
1) Out of the Initial Public Offering (IPO) proceeds of Rs. 6038.55 crore
made during fnancial year 2009-10, sale proceeds of Rs. 2012.85 crore was
paid to Ministry of Power, Govt. of India and Rs. 4025.70 crore was
retained by the company. Out of Rs. 4025.70 crore, a sum of Rs. 3986.99
crore has been utilised up to 31.03.2015 for re-coupment of capital
expenditure already incurred from internal accruals on the projects
specifed for utilisation and Rs. 38.71 crore recouped for meeting IPO
expenditure.
2) Cash and Bank Balances include Rs. 268.05 crore (Previous Year Rs.
320.63 crore), held for Rural Road and Rural Electrifcation works being
executed by Company on behalf of other agencies and are not freely
available for the business of the Company.
* includes an amount of Rs. 3.80 crore on account of Self Insurance Fund.
Explanatory Note: -
1) Interest accrued on Loan to State Government in settlement of dues
from customers includes Rs. 32.97 crore (Previous Year Rs. 32.97 crore) on
account of payment of incentive to M/s Delhi Transco Limited. The
equivalent amount is appearing as liability under other liabilities in
Note-9 (Other Current Liabilities) since the issue of payment of
incentive to M/s Delhi Transco has not been resolved yet.
2) Receivable on account of Unbilled Revenue represents i) J&K water
cess Rs. 216.38 crore (Previous Year Rs. 210.27 crore) ii) Tax Adjustment Rs.
63.04 crore (Previous Year Rs. (-) 10.34 crore) iii) MEA sales Rs. 4.71
crore (Previous Year Rs. 1.72 crore) iv) Other Rs. 318.34 crore (Previous
Year Rs. 224.39 crore)
3) Receivable from Subsidiaries / JV''s mainly includes claim of the
company towards capital expenditure incurred on Pakaldul, Kiru & Kawar
HE Projects which has been transferred to M/s CVPPPL (a joint venture
company of NHPC, JKSPDC and PTC).
4) Surplus Assets / Obsolete Assets held for disposal are shown at
lower of book value and net relizable value.
Explanatory Note: -
1) CERC tariff notifcation for the period 2014-19 has been notifed vide
notifcation no No.L-1/144/2013/CERC dt 21st February 2014. However,
Pending approval of tariff for the period 2014-19 by Central
Electricity Regulatory Commission (CERC), sales have been recognized
provisionally as per tariff notifed by CERC for the period 2009-14 and
taking into account provision towards truing up of capital cost of the
power stations in line with CERC tariff regulations 2014. Further for
the purpose of recognizing sales, Return on equity ( a component of
tariff) has been grossed up using effective tax rate for FY 2014-15.
2) Sales includes Rs. 18.76 crore (Previous year Rs. 60.50 crore ) on
account of earlier year sales arising out of fnalisation of tariff in
current year.
3) Sales includes Rs. 86.80 crores (Previous year Rs. 20.09 crores) on
account of ''deemed generation'' in respect of Chutak and NimmoBazgo
Power stations as allowed by ''CERC''.
4) Due to non payment of dues by some of the benefciaries, share of
power allocated to them has been regulated in terms of CERC Regulation
No.L-1/42/2010-CERC Dated 28th September 2010 and accordingly sales
includes an amount of Rs. 122.01 crore (Previous year Rs. 11.01 crore)
towards regulated power, which has been sold through bidding at Power
Exchange. ibid regulation further provides that margin earned on such
sale after adjusting expenditure for effecting sale of regulated power
should be passed on to benefciaries, whose power has been regulated.
Accordingly an amount of Rs. 67.50 crore (Previous year Rs. 4.94 crore)
has been adjusted against the outstanding dues of those benefciaries.
5) Sales includes Rs. 658.21 crore (Previous year Rs. 502.80 crore )
which is yet to be billed.
6) Tariff regulation notifed by CERC vide notifcation dated 21.02.2014
inter-alia provides that capital cost considered for fxation of tariff
for current tariff period shall be subject to truing up at the end of
the tariff period, which may result in increase or decrease in tariff.
Accordingly, an amount of Rs. 143.03 crore (Previous year Rs. 1.13 crore)
has been provided in the books during the year as an abundant
precaution.
7) In terms of regulation No. 49 of tariff regulation issued vide
Central Electricity Regulatory Commission (CERC) notifcation No.
L-1/144/2013-CERC dated 21.02.2014, deferred tax liabilities for the
period upto 31st March 2009 whenever it materializes is recoverable
directly from the benefciaries and are accounted for on yearly basis.
Accordingly current year sale includes Rs. 146.11 crore (Previous year Rs.
114.05 crore) on account of deferred tax materialised during the year.
2) Total carried forward to Statement of Proft & Loss includes Rs. 107.02
crore (Previous year Rs. 58.72 crore) relating to Subansiri Lower Project
& Teesta Low Dam IV Project as explained in Explanatory Note no 29,
para 10 (read with para 23) & para 11 repectively. However Rate
Regulatory Assets for an equivalent amount of Rs. 72 crore pertaining to
Subansari Lower Project has been recognised in compliance to Guidenance
Note on Accounting for Rate Regulated Activities issued by ICAI.
Explanatory Note: -
1) The Company''s signifcant leasing arrangements are in respect of
operating leases of premises for offces, guest houses & transit camps.
These leasing arrangements, which are not non-cancellable, are usually
renewable on mutually agreeable terms. Lease payments in respect of
premises for offces, guest house & transit camps are shown in Rent.
2) Pending notifcation of revision order by CERC in respect of truing
up application fled by the company under CERC notifcation dated
19.01.2009, an amount of Rs. 20.51 crore (Previous year Rs. 9.29 crore)
has been provided in the books during the year ended 31.03.2015 towards
Interest to Benefciary States,which may have to be paid in case of
reduction in tariff as a result of said revision order.
3) Detail of Audit Expenses are as under: -
4) Total carried forward to Statement of Proft & Loss includes Rs. 68.69
crore (Previous year Rs. 220.70 crore) relating to Subansiri Lower
Project & Teesta Low Dam IV Project as explained in Explanatory Note no
29, para 10 (read with para 23) & para 11 repectively. However Rate
Regulatory Assets for an equivalent amount of Rs. 62.71 crore pertaining
to Subansari Lower Project has been recognised in compliance to
Guidenance Note on Accounting for Rate Regulated Activities issued by
ICAI.
* Refer para no. 24 to Note No. 29 for the necessary disclosures
relating to expenditure on CSR.
NOTE NO. : 12 Â OTHER EXPLANATORY NOTES TO ACCOUNTS
1. Disclosure relating to Contingent Liabilities:-
a) Claims against the Company not acknowledged as debts in respect of:
(i) Capital works
Contractors have lodged claims aggregating to Rs. 9014.70 crore (previous
year Rs. 8,752.57 crore) against the Company on account of rate &
quantity deviation, cost relating to extension of time and idling
charges due to stoppage of work/ delays in handing over the site etc.
These claims are being contested by the company as being not admissible
in terms of provisions of the respective contracts or are lying at
arbitration tribunal/other forums/under examination with the Company.
It includes Rs. 1,491.31crore (previous year Rs. 761.66 crore) towards
arbitration awards including updated interest thereon, against the
Company, which have been challenged/decided to be challenged in the
Court of Law.
The Management has assessed the above claims and recognized a provision
of Rs. 429.61 crore (previous year Rs. 154.56 crore) based on probability
of outfow of resources embodying economic benefts and estimated Rs.
8,207.65 crore (previous year Rs. 8,598.01 crore) as the amount of
contingent liability i.e. amounts for which Company may be held
contingently liable. In respect of such estimated contingent claims
either outfow of resources embodying economic benefts is not probable
or a reliable estimate of the amount required for settling the
obligation cannot be made. In respect of the rest of the
claims/obligations, possibility of any outfow in settlement is
considered as remote.
(ii) Land Compensation cases
In respect of land acquired for the projects, some of the land losers
have fled claims for higher compensation amounting to Rs. 47.53 crore
(previous year Rs. 40.28 crore) before various authorities/courts.
Pending settlement, the Company has assessed and provided an amount of
Rs. 35.16 crore (previous year Rs. 28.63 crore) based on probability of
outfow of resources embodying economic benefts and estimated Rs. 12.37
crore (previous year Rs. 11.65 crore) as the amount of contingent
liability as outfow of resources is considered as not probable. In
respect of the rest of the claims/obligations, possibility of any
outfow in settlement is considered as remote.
(iii) Disputed Tax Demands
Disputed Income Tax/Sales Tax/Service Tax/ other taxes/duties matters
pending before various appellate authorities amount to Rs. 307.95 crore
(previous year Rs. 337.51 crore). Pending settlement, the Company has
assessed and provided an amount of Rs. 25.40 crore (previous year Rs. 7.78
crore) based on probability of outfow of resources embodying economic
benefts and rest of the claims i.e. Rs. 282.26 crore (previous year Rs.
329.73 crore) are being disclosed as contingent liability as outfow of
resources is considered not probable. In respect of the rest of the
claims/obligations, possibility of any outfow in settlement is
considered as remote.
(iv) Others
Claims on account of other matters amount to Rs. 655.15 crore (previous
year Rs. 417.47 crore). These claims are pending before various forums.
Pending settlement, the Company has assessed and provided an amount of
Rs. 28.94 crore (previous year Rs. Nil crore) based on probability of
outfow of resources embodying economic benefts and estimated Rs. 624.43
crore (previous year Rs. 417.47 crore) as the amount of contingent
liability as outfow of resources is considered as not probable. In
respect of the rest of the claims/obligations, possibility of any
outfow in settlement is considered as remote.
The above is summarized as below: (Rs. in crore)
S. Particulars Claims
as on Provision Contingent Contingent Addition
of
No. 31.03.
2015 against
the liability
as on liability
as on contingent
claims 31.03.2015 31.03.2014 liability
for the
year
1. Capital
Works 9014.70 429.61 8207.65 8598.01 (390.36)
2. Land
Compensation 47.53 35.16 12.37 11.65 0.72
3. Disputed
tax matters 307.95 25.40 282.26 329.73 (47.47)
4. Others 655.15 28.94 624.43 417.47 206.96
Total 10025.33 519.11 9126.71 9356.86 (230.15)
(b) The above contingent liabilities do not include contingent
liabilities on account of pending cases in respect of service matters &
others where the amount cannot be quantifed.
(c) It is not practicable to ascertain and disclose the uncertainties
relating to outfow in respect of contingent liabilities.
(d) There is possibility of reimbursement to the company of Rs. 240.85
crore (previous year Rs. 52.24 crore) towards above contingent
liabilities.
(e) An amount of Rs. 53.19 crore (previous year Rs. 10.86 crore) stands
paid towards above contingent liabilities to contest the cases and is
being shown as Current Assets.
The company''s management does not reasonably expect that the above
claims/obligations (including under litigation), when ultimately
concluded and determined, will have a material and adverse effect on
the company''s results of operations or fnancial condition.
2. Estimated amount of contracts remaining to be executed on capital
account and not provided for is Rs. 3560.38 crore (Previous year Rs.
3,473.95 crore).
3. Pending approval of competent authority, provisional payments /
provisions made towards executed quantities of works of some of the
items beyond the approved quantities as also for extra items totalling
to Rs. 42.71 crore (Previous year Rs. 38.61 crore) are included in Capital
Work-in-Progress/Fixed Asset.
4. a) Balances shown under material issued to contractors, claims
recoverable including insurance claims, advances for Capital
expenditure, Sundry Debtors, Advances to Contractors, Sundry Creditors
and Deposits/Earnest money from contractors are subject to
reconciliation/ confrmation and respective consequential adjustments.
Claims recoverable also include claims in respect of projects handed
over or decided to be handed over to other agencies in terms of
Government of India directives. Trade receivables of Rs. 2497.10 crore
are outstanding as on 31.03.2015. In the opinion of the management, an
amount of Rs. 1714.86 crore was reconciled periodically during the year
and unconfrmed balance will not have any material impact.
b) In the opinion of the management, the value of current assets, loans
and advances on realisation in the ordinary course of business, will
not be less than the value at which these are stated in the Balance
Sheet.
5. During the year, following accounting policies have been
modifed/deleted:
(Rs. in crore)
Policy Description Impact on Profit for
No. the year
2.5 Policy deleted due to presentation
of Fixed Assets declared surplus/
awaiting disposal No impact
action in "Other current assets"
instead of presenting them as Fixed
Assets.
5.2.3 Policy on charging of depreciation
in respect of items for which the
Company (0.69)
assessed rates are used. The policy
has been changed to adopt the
useful life and residual value as
per Schedule-II of the Companies Act,
2013 with effect from 01.04.2014.
5.3 Policy on charging of depreciation
in respect of items (excluding
immovable assets) 0.58
with written down value of Rs. 5000/-
or less at the beginning of the
year are fully depreciated during
the year with Rs. 1/- as WDV.
7.3 Policy on writing off loose tools in
use having value of Rs. 5000/- or more
have been (0.10)
deleted.
9.3 Policy on expenses on Ex-gratia
payments & Notice Pay under Voluntary
Retirement No impact as
the policy
Scheme has been deleted. was redundant.
Besides above, certain other accounting policies have been
reworded/re-classifed for the purpose of better disclosure which has no
impact on proft.
6. Signifcant Accounting policy No. 2.3.4 (4.4 of FY 2013-14), which
was introduced during FY 2013-14, has been referred to Expert Advisory
Committee (EAC) of the Institute of Chartered Accountants of India
(ICAI) for its opinion. Pending receipt of opinion, the same accounting
treatment has been continued and an amount of Rs. 173.61 crore (Previous
year Rs. 167.85 crore) has been capitalised/charged to Expenditure during
construction till 31.03.2015 as per ibid policy.
7. The Ministry of Environment, Forests & Climate Change (MoEF & CC)
vide letter No. F.No.8-85/2011-FC dated 15.04.2015 has accorded the
in-principle approval for diversion of forest land for construction of
Dibang Multipurpose Project (3000 MW). Further, Environment clearance
to the Project has been accorded by MoEF & CC vide letter dated
19.05.2015. In view of above, a sum of Rs. 169.47 crore incurred on the
Project is being carried forward as Capital Work in Progress.
8. Kotlibhel-1A project is one of the 24 hydro-electric projects
located in the State of Uttarakhand which is covered by the order dated
13.08.2013 of Hon''ble Supreme Court of India directing MoEF not to
grant these projects environmental/forest clearance until further order
and to examine the signifcant impact on the bio-diversity of Alaknanda
& Bhagirathi river basin. Pending adjudication about the fate of this
project, the expenditure incurred upto the date of the above order
amounting to Rs. 125.53 crore has been kept under capital work in
progress. However, subsequent expenditure incurred on this project has
been provided for.
9. Board of Directors in its meeting held on 20.03.2014 discussed that
the viability of Bursar HE Project is dependent upon fnancial support
from Govt. of India and Govt. of Jammu & Kashmir. Ministry of Power
(MoP), Govt. of India, was approached to provide funding of Survey &
Investigation Expenditure of Bursar Project to make it viable. As
advised by the MoP, Ministry of Water Resources (MoWR) was approached
to provide funds. In the meeting held in MoWR on 27.04.2015, it has
been informed by representatives of MoWR that the request of NHPC for
release of funds for preparation of DPR is under consideration for
approval of Govt. of India. Accordingly, the preliminary investigations
of the project are continued and the expenses of Rs. 177.07 crore
incurred thereon are being carried forward as Capital Work in Progress.
10. Construction activities at site of Subansiri Lower Project have
been interrupted w.e.f. 16.12.2011 due to protest of anti dam
activists. Technical and administrative work is however continuing.
Management is making all out efforts to restart the work at site. In
line with the opinion of Expert Advisory Committee (EAC) of the
Institute of Chartered Accountants of India (ICAI), borrowing cost of Rs.
406.83 crore (up to previous year Rs. 766.90 crore) and administration
and other cost of Rs. 115.12 crore (up to previous year Rs. 341.54 crore)
have been charged to the Statement of Proft & Loss.
The company has, however, adopted the accounting as per Guidance Note
on Rate Regulated Activities issued by the Institute of Chartered
Accountants of India which allows recognition of ''Regulatory Asset'' and
corresponding ''Regulatory Income'' of the right to recover such expense
which are not allowed to be capitalized as part of cost of relevant
fxed asset in accordance with the Accounting Standards, but are
nevertheless permitted by Central Electricity Regulatory
Commission(CERC), the regulator, to be recovered from the benefciaries
in future through tariff,. (Detailed disclosure as per the ibid
Guidance Note is given at para no. 23 below of this Note.)
11. Active construction work at Teesta Low Dam-IV project, which was
interrupted due to stoppage of work by one of the contractors w.e.f.
20.03.2013, has resumed on 01.11.2014. Accordingly, borrowing cost and
administrative & other cost amounting to Rs. 43.72 crore for the period
from 01.04.2014 upto 31.10.2014 (previous fnancial year Rs. 156.79 crore)
has been charged to the Statement of Proft & Loss.
12. The company, under mega insurance policy, has lodged insurance
claim, as on date amounting to Rs. 191.58 crore and Rs. 291.56 crore
towards Loss of Assets and Business Interruption Loss respectively, in
respect of Dhauliganga Power Station, where generation was shut down
due to fash foods during June,2013. Till date, interim payment of Rs.
70.10 crore towards loss of assets and Rs. 99.99 crore towards Business
Interruption loss has been received. Loss beyond excess clause, if any,
to be borne by the company shall be determined after receipt of the
fnal survey report and impact thereof shall be accounted for
accordingly.
13. On 20th November 2014, accidental fre broke out in the transformer
cavern of Uri-II Power Station (240 MW) causing major damages to
Electro & Mechanical Equipments and Civil Structures in power house
area, resulting in stoppage of generation. Assets of the power station
and business interruption loss are covered under mega insurance policy.
However, losses upto excess clause as well as beyond the provisions of
the insurance policy amounting to Rs. 28.26 crore have been accounted for
on estimated basis. Further losses, if any, to be borne by the company
shall be determined after receipt of the fnal survey report and impact
thereof shall be accounted for accordingly. Restoration work for
resumption of generation by the Power Station are underway.
14. The disclosure under Accounting Standard  7 on Construction
Contracts are as under:
(Rs. in crore)
Sl. Particulars 31.03.2015 31.03.2014
1. Aggregate amount of costs incurred
and recognised profts (less 409.32 415.65
recognised losses) on contracts in
progress upto reporting date.
2. Amount of advances received. 411.55 422.01
3. Amount of retention. Nil Nil
4. The gross amount due from customers
for contract works as an asset. Nil 8.82
5. The gross amount due to customers
for contract works as a liability. Nil 6.30
15. The effect of foreign exchange fuctuation during the year is as
under:
(Rs. in crore)
For the year
ended For the year
ended
31.03.201 5 31.03.2014
(i) Amount charged to Statement of
Proft & Loss excluding
depreciation (20.50) 0.60
(as FERV)
(ii) Amount charged to Statement of
Proft & Loss excluding
depreciation - 29.65
(as Borrowing Cost)*
(iii) Amount charged to Expenditure
During Construction (as FERV) 0.63 14.19
(iv) Amount charged to Capital
work-in-progress (as FERV) 1.28 (0.02)
(v) Amount adjusted by addition to
the carrying amount of fxed
assets 215.94 -
* There is however no impact on proftability of the Company, as the
impact of change in foreign exchange rates is recoverable from
benefciaries in terms of prevailing CERC (terms & conditions of tariff)
Regulations. The exchange rate variation for the year is transferred to
deferred foreign currency fuctuation assets (recoverable from
benefciaries) as per opinion of EAC of ICAI.
16. Disclosure as required by Accounting Standard-15 on ''Employee
Benefts'': General description of various employee beneft schemes are as
under:
A. Provident Fund
The Company pays fxed contribution to Provident Fund at predetermined
rates to a separate trust, which invests the funds in permitted
securities. The contribution to the fund for the year is recognised as
expense and is charged to the Statement of Proft & Loss/expenditure
during construction. The obligation of the Company is to make fxed
contribution and to ensure a minimum rate of return to the members as
specifed by GoI.
B. Social Security Scheme
The Company has a Social Security Scheme in lieu of compassionate
appointment. The Company also makes a matching contribution per month
per employee and such contribution is to be made for 8 years to build
up corpus from the date the scheme is in operation i.e. 01.06.2007. The
scheme has been created to take care of and helping bereaved families
in the event of death or permanent total disability of its employee.
C. Employees Defined Contribution Superannuation Scheme
The Company has an employee defned contribution superannuation scheme
for providing pension benefts to employees. As per the scheme, each
employee contributes @ 5% of Basic Pay & Dearness Allowance. The
company contributes to the extent of balance available after deducting
employers'' contribution to Provident Fund, contribution to Gratuity
trust and REHS, from the amount worked out @ 30% of the Basic Pay & DA.
The Scheme is managed by Life Insurance Corporation of India.
D. Gratuity
The Company has a defned beneft gratuity plan. Every employee who has
rendered continuous service of fve years or more is entitled to get
gratuity at 15 days salary (15/26 X last drawn basic salary plus
dearness allowance) for each completed year of service subject to a
maximum of Rs. 0.10 crore, on superannuation, resignation, termination,
disablement or on death. The plan is being managed by a separate Trust
created for the purpose and obligation of the company is to make
contribution to the Trust based on actuarial valuation.
E. Leave
The Company provides for earned leave and half-pay leave to the
employees which accrue annually @ 30 days and 20 days respectively. The
maximum ceiling of encashment of earned leave is limited to 300 days.
However, any shortfall in the maximum limit of 300 days in earned leave
on superannuation shall be regulated as per the clarifcation issued by
the Department of Public Enterprises (DPE), Government of India. The
liability for the same is recognised on the basis of actuarial
valuation.
F. Retired Employee Health Scheme (REHS)
The Company has a Retired Employee Health Scheme, under which retired
employee and spouse of retiree, spouse and eligible dependent children
of deceased employees are provided medical facilities in the Company
hospitals / empanelled hospitals. They can also avail treatment as
Out-Patient subject to a ceiling fxed by the Company. The liability for
the same is recognised on the basis of actuarial valuation.
G. Allowance on Retirement / Death
Actual cost of shifting from place of duty at which employee is posted
at the time of retirement to any other place where he / she may like to
settle after retirement is paid as per the rules of the Company. In
case of death, family of deceased employee can also avail this
facility. The liability for the same is recognised on the basis of
actuarial valuation.
H. Memento to employees on attaining the age of superannuation.
The Company has a policy of providing Memento valuing Rs. 5000/- to
employee on superannuation. The liability for the same is recognised on
the basis of actuarial valuation.
Schemes described as above at A, B, C & D are funded and rest are
unfunded.
Summary of various defned benefts as on 31.03.2015 is as under:
Note: { } contains previous year''s fgures.
Liabilities as on 31.03.2015 on account of Baggage Allowance on
retirement & Memento are Rs. 4.95 crore & Rs. 2.75 crore (Previous year Rs.
5.04 crore & Rs. 2.96 crore) respectively.
17. a) Electricity generation is the principal business activity of
the Company. Other operations viz., Contracts, Project Management and
Consultancy works do not form a reportable segment as per the
Accounting Standard-17 on ''Segment Reporting''.
b) The Company is having a single geographical segment as all its Power
Stations are located within the Country.
18. In compliance of Accounting Standard-18 on ''Related Party
Disclosures'', the required information is as under: -
a) Related Parties
(i) Joint Venture Companies
National Power Exchange Ltd. (The Company is under liquidation).
(ii) Key Management Personnel
Shri R.S.T.Sai Assumed additional charge of the post of CMD w.e.f.
08.06.2014 in addition to his own
duties as CMD,THDC India Ltd.
Shri G. Sai Prasad Former Joint Secretary, Ministry of Power. Held
additional charge of CMD of the Company
from 24.07.2012 to 07.06.2014. Ceased to be a director on the Board
w.e.f. 08.06.2014.
Shri D. P. Bhargava Director (Technical).
Shri R. S. Mina Director (Personnel). Additional charge of Director
(Finance) from 15.09.2014 to
26.05.2015.
Shri Jayant Kumar Director (Finance) w.e.f. 26.05.2015.
Shri Vijay Gupta Company Secretary.
Shri A. B. L.Srivastava Director (Finance) up to 15.09.2014.
Shri J. K. Sharma Director (Projects) up to 11.03.2015.
Remuneration to key management personnel (excluding CMD) for the
current year is Rs. 2.21crore (corresponding previous year Rs. 2.08 crore).
b) Transaction carried out with the related parties as at a(i) above -
Nil.
14. Disclosure relating to creation of Rate Regulated Assets &
recognition of Rate Regulated Income as per the ''Guidance Note on
Accounting for Rate Regulated Activities'' issued by the Institute of
Chartered Accountants of India (ICAI) :
The company is engaged in construction & operation of hydro electric
power projects. The price (tariff) to be charged by the company for
electricity sold to its customers, is determined by Central Electricity
Regulatory Commission (CERC) under applicable CERC (terms & conditions
of tariff) Regulations. The said price (tariff) is based on allowable
costs like interest costs, depreciation, operation & maintenance
including a stipulated return. This form of rate regulation is known as
cost-of-service regulations. The basic objective of such regulations is
to give the entity the opportunity to recover its costs of providing
the good or service plus a fair return.
For the purpose, the company is required to make an application to CERC
based on capital expenditure incurred duly certifed by the Auditors or
already admitted by CERC or projected to be incurred upto date of
commercial operation and additional capital expenditure duly certifed
by the Auditor or projected to be incurred during tariff year. The
tariff determined by CERC is recovered from the customers
(benefciaries) on whom the same is binding.
The above rate regulation does result into creation of right (asset) or
an obligation (liability) as envisaged in the accounting framework
which is not the case in other industries. The ICAI has issued a
Guidance Note on accounting for Rate Regulated Activities, which is
applicable to entities that provide goods or services whose prices are
subject to cost-of-service regulations and the tariff determined by the
regulator is binding on the customers (benefciaries). As per guidance
note, a regulatory asset is recognised when it is probable (a
reasonable assurance) that the future economic benefts associated with
it will fow to the entity as a result of the actual or expected actions
of the regulator under applicable regulatory framework and the amount
can be measured reliably.
As explained above, all operating activities of the Company are subject
to cost-of-service regulations as it meets the criteria set out in the
guidance note hence it is applicable to the Company. Though the
Guidance Note is effective from 01.04.2015, the Company has opted to
adopt it from the Financial Year 2014-15, since earlier adoption is
permitted.
The guidance note also provides that in some cases, a regulator permits
an entity to include in the rate base, as part of the cost of
self-constructed (tangible) fxed assets or internally generated
intangible assets, amounts that would otherwise be recognised as
expense in the statement of proft and loss in accordance with
Accounting Standards. After the construction is completed, the
resulting cost is the basis for depreciation or amortisation and
unrecovered investment for rate determination. A regulatory asset is
to be recognised by the entity in respect of such costs since the same
is recoverable from the customers (benefciaries) in future through
tariffs.
As stated in para 10 above, the borrowing cost of Rs. 406.83 crore (up to
previous year Rs. 766.90 crore) and administration and other cost of Rs.
115.12 crore (up to previous year Rs. 341.54 crore) incurred on
''Subansiri Lower Project'', wherein the active construction is
interrupted since 16.12.2011, have been charged to the Statement of
Proft & Loss in compliance of provision of Accounting Standard 10,
Accounting for fxed asset & Accounting Standard-16, Borrowing Cost as
notifed under the Companies Act, 2013. However such expenditure is
permitted under CERC (Terms and Conditions of Tariff) Regulations, 2014
to be recovered through future tariffs.
In pursuance of the above, the company has created regulatory assets
and has recognized corresponding regulatory income for the Financial
Year 2014-15/credit to the opening balance of surplus against the
amount pertaining to the period 16.12.2011 to 31.03.2014 using
transition provision as per the ibid Guidance Note as below:
* by corresponding credit to opening balance of Surplus by Rs. 876.10
crore (Rs. 1108.44 crore less provision for Income Tax for Rs. 232.34
crore) [refer- Note No.3-Reserves and Surplus].
** by corresponding credit to current year''s proft through "Regulatory
Income".
15. Disclosure related to Corporate Social Responsibility (CSR) (refer
Note No.22)
(i) The breakup of CSR expenditure under various heads of expenses
incurred during FY 2014-15 is as below:-
(ii) Other disclosures:-
(a) Board of Directors has allocated total budget of Rs. 65.57 crore for
FY 2014-15 which consisted of Rs. 47.65 crore based on 2% of average net
proft of preceding three fnancial years in terms of Section 135 of
Companies Act 2013 and Rs. 17.92 crore out of unspent amount upto FY
2013-14.
(b) Details of expenditure incurred during FY 2014-15 in cash and yet
to be paid in cash along with the nature of expenditure (capital or
revenue nature) is as under:-
Mar 31, 2014
NOTE NO. 1 OTHER EXPLANATORY NOTES TO ACCOUNTS
1. Disclosure relating to Contingent Liabilities:-
a) Claims against the Company not acknowledged as debts in respect of:
(i) Capital works
Contractors have lodged claims aggregating to Rs. 8,752.57 crore
(previous year Rs.10,106.82 crore) against the Company on account of rate
& quantity deviation, cost relating to extension of time and idling
charges due to stoppage of work/ delays in handing over the site etc.
These claims are being contested by the company as being not admissible
in terms of provisions of the respective contracts or are lying at
arbitration tribunal/other forums/under examination with the Company.
It includes Rs. 761.66 crore (previous year Rs. 323.70 crore) towards
arbitration awards including updated interest thereon against the
Company, which has been challenged in the Court of Law. However, out of
these claims, the management has assessed and has made consequential
provision of Rs.154.56 crore being probable outflow and Rs. 8,598.01 crore
has been considered as contingent liability in respect of which either
the possibility of outflow is not there or a reliable estimate of
probable outflow cannot be made.
(ii) Land Compensation cases
In respect of land acquired for the projects, some of the land losers
have fi led claims for higher compensation amounting to Rs. 40.28 crore
(previous year Rs. 38.37 crore) before various authorities/courts.
Pending settlement, the Company has assessed and provided an amount of
Rs. 28.63 crore being probable outflow. In respect of rest of the
claims, outflow of resources is considered as not probable.
(iii) Disputed Tax Demands
Disputed Income Tax/Sales Tax/Service Tax matters pending before
various appellate authorities amount to Rs. 337.51 crore (previous year Rs.
331.42 crore), in respect of which no outflow of resources is
considered probable. Pending their settlement, Company has assessed and
provided an amount of Rs. 7.78 crore being probable outflow. In respect
of rest of the claims, outflow of resources is considered as not
probable.
(iv) Others
Other contingent liabilities amount to Rs. 417.47 crore (previous year Rs.
128.53 crore). These claims are pending before various forums, in
respect of which no outflow of resources is considered probable.
(b) The above contingent liabilities do not include contingent
liabilities on account of pending cases in respect of service matters &
others where the amount cannot be quantifi ed.
(c) It is not practicable to ascertain and disclose the uncertainties
relating to outflow in respect of contingent liabilities.
(d) There is possibility of reimbursement to the company of Rs. 52.24
Crore (previous year Rs. 40.71 crore) towards above contingent
liabilities.
(e) An amount of Rs.10.86 crore (previous year Rs. 22.31 crore) stands paid
towards above contingent liabilities to contest the cases and is being
shown as Current Assets.
2. Estimated amount of contracts remaining to be executed on capital
account and not provided for is Rs. 3,473.95 Crore (Previous year Rs.
3,958.36 Crore).
3. Consequent upon commissioning of Chamera-III Power Station, some
seepage was noticed during the year 2012-13 in hill slopes thereby
affecting the houses & fields of local habitats of nearby village. A
proposal to acquire the affected land is under consideration of
management for which compensation is estimated at Rs.13.76 crore. Further
the cost of rectification of seepage is yet to be ascertained.
4. Pending approval of competent authority, provisional payments /
provisions made towards executed quantities of works of some of the
items beyond the approved quantities as also for extra items totalling
to Rs. 38.61 Crore (Previous year Rs.177.81 Crore) are included in Capital
Work-in-Progress/Fixed Asset.
5. a) Balances shown under material issued to contractors, claims
recoverable including insurance claims, advances for Capital
expenditure, Sundry Debtors, Advances to Contractors, Sundry Creditors
and Deposits/Earnest money from contractors are subject to
reconciliation/ confirmation and respective consequential adjustments.
Claims recoverable also include claims in respect of projects handed
over or decided to be handed over to other agencies in terms of
Government of India directives.
b) In the opinion of the management, the value of current assets, loans
and advances on realisation in the ordinary course of business, will
not be less than the value at which these are stated in the Balance
Sheet.
6. Company issued Secured, Redeemable, Non-Convertible Tax Free Bonds
amounting to Rs. 1,000 Crore during the year with varying tenors. The
issue opened on 18.10.2013 and closed on 23.10.2013.The allotment was
completed on 02.11.2013 and the security got listed on the stock
exchanges on 07.11.2013. Issue proceeds have been utilized for the
purpose mentioned in the offer document.
7. Buy-back of 1,230,074,277 equity shares of Rs.10/- each (being 10% of
the pre buy-back paid up equity shares) at a price of Rs.19.25 per share
from the existing shareholders/ beneficial owners on proportionate
basis has been done through Tender Offer Process. Post buy-back, the
number of equity share of the company has been reduced to
1,107,06,68,496 from 1,230,07,42,773 and an amount of Rs.1,230.07 Crore
equal to face value of the shares bought back has been transferred to
Capital Redemption Reserve Account.
8. Tawang HE Project has given capital advance of Rs.1.24 Crore to State
Compensatory Afforestation Fund Management & Planning Authority towards
bio-diversity study to be conducted through North Eastern Hill
University (NEHU) for all proposed hydroelectric projects in Tawang
Basin. On receipt of expenditure statement, the above advance shall be
adjusted and recoverability from Government of Arunachal Pradesh (GoAP)
towards expenditure pertaining to projects other than those undertaken
by NHPC would be known. Further, the reimbursement towards expenditure
pertaining to projects other than those undertaken by NHPC is
receivable as and when other projects come-up for construction.
9. The Forest Advisory Committee (FAC) of the Ministry of Environment
& Forest (MoEF) in its meeting held on 12.07.2013 has recommended for
rejection of forest clearance in respect of Dibang Multipurpose
Project. However on a review request, the Cabinet Committee on
Investment (CCI) in its meeting held on 09.12.2013 has decided that
MoEF, the competent authority, may grant the requisite clearance for
diversion of forest land expeditiously. Accordingly, revised proposal
was submitted to MoEF. Although FAC in its meeting held on
29/30.04.2014 has reiterated and recommended rejection of proposal yet
MoEF has asked for additional information from the Company for
reconsideration of the Project. Pending final clearance, a sum of
Rs.149.04 Crore incurred on the Project is being carried forward as
Capital Work in Progress.
10. Construction activities at site of Subansiri Lower Project have
been interrupted w.e.f. 16.12.2011 due to protest of anti dam
activists, however substantial technical and administrative work is
continuing. Although construction activities at site are expected to be
resumed shortly since the matter is being pursued at the level of
Government of India, yet in line with the opinion of Expert Advisory
Committee (EAC) of the Institute of Chartered Accountants of India
(ICAI), the borrowing cost of Rs.766.90 crore (including previous year
amount of Rs. 386.88 crore) and administration and other cost of Rs. 341.54
crore (including previous year fi gure of Rs.139.69 crores) have been
charged to the Statement of profit & Loss during the year.
11. Construction activities at Teesta Low Dam-IV Project are
progressing at a slow pace w.e.f. 20.03.2013 due to stoppage of work by
one of the contractors to whom notice for recovery of the possession of
site at risk & cost of contractor have been issued. Under such facts
and circumstances, borrowing costs of Rs. 91.35 crore and administration
and other cost of Rs. 67.91 crores have been charged to Statement of
profit & Loss during the year.
12. Due to cloud burst and unprecedented high fl ood in Uttarakhand in
the early hours of June 17, 2013, water entered into Dhauliganga Power
Station (280 MW) and submerged all the system resulting into stoppage
of generation from the plant and damage to Generating Plant and
Machinery and various ancillary structures of the power station. The
Assets of the power station and Loss of Generation are covered under
Mega Insurance Policy. However, loss beyond excess clause, if any, to
be borne by the Company shall be determined after receipt of the Final
Survey Report and impact thereof shall be accounted for accordingly.
Further, Unit No. 4 & 3 of the power station has been test synchronised
with the grid on 30.04.2014 and 01.05.2014 respectively. Northern
Region Load Despatch Centre (NRLDC) has approved the Injection Schedule
for Unit No. 4 & 3 w.e.f. 03.05.2014 & 06.05.2014 respectively.
Pending final settlement, on-account payments of Rs. 35 Crore and Rs.
99.99 Crore have been received from the Insurance Company till date
against claim for material damage and business interruption
respectively.
13. Kotlibhel-1A project is one of the 24 hydro-electric projects
located in the State of Uttarakhand which is covered by the order dated
13.08.2013 of Hon''ble Supreme Court of India directing MoEF not to
grant these projects environmental/forest clearance until further order
and to examine the significant impact on the bio-diversity of
Alaknanda & Bhagirathi river basin. Pending adjudication about the fate
of this project, the expenditure incurred upto the date of the above
order amounting to Rs.126.37 Crore has been kept under capital work in
progress. However, subsequent expenditure incurred on this project has
been provided for.
14. Board of Directors in its meeting held on 20.03.2014 discussed
that the viability of Bursar HE Project is dependent upon financial
support from Govt. of India and Govt. of Jammu & Kashmir. It was
accordingly decided to approach Ministry of Power (MoP) for seeking
commitment from Govt. of India and Govt. of J&K for financial
assistance to make the project viable. It was confi rmed by the Board
that if the project is not found viable, the expenses incurred on the
project will have to be written off. Subsequently, a meeting was held
in MoP on 23.05.2014 in which representative of Ministry of Water
Resources (MoWR) and Govt of Jammu & Kashmir were also present and
decided to re-submit the proposal to MoP for further taking up the
matter with MoWR. It has also been indicated that MoWR would reconsider
the proposal for providing funds for preparation of DPR of Bursar HE
Project considering it as a National Project. In line with the
resolution of the Board, the preliminary investigations of the project
are continued and the expenses of Rs.154.64 crore incurred thereon are
being carried forward as Capital Work in Progress.
15. Capital expenditure on assets where neither the land nor the asset
is owned by the company was being reflected as a distinct item in
capital work-in-progress till the period of completion and thereafter
in the fixed assets to be amortised over a period of five years from
the year in which the first unit of project concerned comes into
commercial operation, in accordance with erstwhile accounting policy
nos. 2.3 & 5.8 on the issue upto financial year 2012-13. However,
during current financial year, the Company has introduced a new
accounting policy no. 4.4 on the issue, by virtue of which capital
expenditure incurred during construction of project for creation of
facilities, over which the company does not have control but the
creation of which is essential principally for construction of the
project, is charged to ''expenditure during construction''. Accordingly,
the following accounting policies have been introduced/ modifi ed/
deleted during the year ended 31.03.2014:
16. During the current year, Company has received opinion from EAC of
ICAI on applicability & disclosure under Accounting Standard  7 on
Construction Contracts in respect of Rural Electrification and Rural
Road Projects. As per said opinion, disclosure in respect of such works
may be given in respect of agency fee/service charges only as that is
considered as the revenue of the Company. In view of above, disclosure
in respect of previous year has also been revised. The relevant
disclosure are as follows:
* There is however no impact on profitability of the Company, as the
impact of change in foreign exchange rates is recoverable from benefi
ciaries in terms of prevailing CERC (terms & conditions of tariff)
Regulations. The exchange rate variation for the year is transferred to
deferred foreign currency fl uctuation assets (recoverable from benefi
ciaries) as per opinion of EAC of ICAI.
17. Disclosure as required by Accounting Standard-15 on ''Employee
Benefits'': a) General description of various employee benefit schemes
are as under: defined Contribution Schemes
A. Provident Fund
The Company pays fixed contribution to Provident Fund at predetermined
rates to a separate trust, which invests the funds in permitted
securities. The contribution to the fund for the period is recognised
as expense and is charged to the Statement of profit &
Loss/expenditure during construction. The obligation of the Company is
to make fixed contribution and to ensure a minimum rate of return to
the members as specifi ed by GoI.
B. Social Security Scheme
The Company has a Social Security Scheme in lieu of compassionate
appointment. The Company also makes a matching contribution per month
per employee and such contribution is to be made for 8 years to build
up corpus from the date the scheme is in operation i.e. 01.06.2007. The
scheme has been created to take care of and helping bereaved families
in the event of death or permanent total disability of its employee.
C. Employees Defined Contribution Superannuation Scheme
The Company has an employee defined contribution superannuation scheme
for providing pension benefits to employees. As per the scheme, each
employee contributes @ 5% of Basic Pay & Dearness Allowance. The
company contributes to the extent of balance available after deducting
employers'' contribution to Provident Fund, contribution to Gratuity
trust and REHS, from the amount worked out @ 30% of the Basic Pay & DA.
The Scheme is managed by Life Insurance Corporation of India.
Defined Benefits Schemes
D. Gratuity
The Company has a defined benefit gratuity plan. Every employee who
has rendered continuous service of five years or more is entitled to
get gratuity at 15 days salary (15/26 X last drawn basic salary plus
dearness allowance) for each completed year of service subject to a
maximum of Rs. 0.10 Crore, on superannuation, resignation, termination,
disablement or on death. The plan is being managed by a separate Trust
created for the purpose and obligation of the company is to make
contribution to the Trust based on actuarial valuation.
E. Leave
The Company provides for earned leave and half-pay leave to the
employees which accrue annually @ 30 days and 20 days respectively. The
maximum ceiling of encashment of earned leave is limited to 300 days.
However, any shortfall in the maximum limit of 300 days in earned leave
on superannuation shall be regulated as per the clarifi cation issued
by the Department of Public Enterprises (DPE), Government of India. The
liability for the same is recognised on the basis of actuarial
valuation.
F. Retired Employee Health Scheme (REHS)
The Company has a Retired Employee Health Scheme, under which retired
employee and spouse of retiree, spouse and eligible dependent children
of deceased employees are provided medical facilities in the Company
hospitals / empanelled hospitals. They can also avail treatment as
Out-Patient subject to a ceiling fixed by the Company. The liability
for the same is recognised on the basis of actuarial valuation.
G. Allowance on Retirement / Death
Actual cost of shifting from place of duty at which employee is posted
at the time of retirement to any other place where he / she may like to
settle after retirement is paid as per the rules of the Company. In
case of death, family of deceased employee can also avail this
facility. The liability for the same is recognised on the basis of
actuarial valuation.
H. Memento to employees on attaining the age of superannuation.
The Company has a policy of providing Memento valuing Rs. 5000/- to
employee on superannuation. The liability for the same is recognised on
the basis of actuarial valuation.
Schemes described as above at A, B, C & D are funded and rest are
unfunded.
17. a) Electricity generation is the principal business activity of
the Company. Other operations viz., Contracts, Project Management and
Consultancy works do not form a reportable segment as per the
Accounting Standard-17 on ''Segment Reporting''.
b) The Company is having a single geographical segment as all its Power
Stations are located within the Country.
18. In compliance of Accounting Standard-18 on ''Related Party
Disclosures'', the required information is as under: -
a) Related Parties
(i) Joint Venture Companies
National Power Exchange Ltd.
(ii) Key Management Personnel
Shri G. Sai Prasad
Joint Secretary, Ministry of Power, Government of India. Assigned
additional charge of CMD of the Company w.e.f. 24.07.2012.
Shri A. B. L. Srivastava Director (Finance).
Shri D. P. Bhargava Director (Technical)
Shri J. K. Sharma Director (Projects)
Shri R. S. Mina Director (Personnel)
Remuneration to key management personnel (excluding CMD) for the
current year is Rs. 2.08 Crore (Previous year Rs. 3.01 Crore).
b) Transaction carried out with the related parties at a(i) above -
Nil.
19. a) Interest in Joint Ventures:
* The Company has decided to come out of this joint venture.
** Company is joint venture entity of NHPC, Jammu & Kashmir State Power
Development Corporation (JKSPDC) and PTC India Ltd. with equity
participation of 49:49:02. During last year, due to less than
proportionate contribution by other joint venture partners,
proportionate holding of NHPC in the said entity had increased from 49%
to 82%. As such, said entity was considered as subsidiary instead of
joint venture as at 31.03.2013. However during current year, other
partners have also brought in their proportionate share and the said
entity has been considered as joint venture of NHPC.
20. The Management is of the opinion that no case of impairment of
assets exists under the provision of Accounting Standard-28 on
''Impairment of Assets'' as at 31st March 2014.
21. Opening balances/corresponding figures for previous year have
been re-grouped/re-arranged/re-cast, wherever necessary.
22. Subsequent to the approval of accounts for the year ended 31st
March 2014 by the Board of Directors on 30th May, 2014, the board of
Directors have recommended a dividend @ Rs. 0.30 per share (subject to
rounding off to nearest Rupee in terms of Rule 23 of Companies (Central
Government''s) General Rules & Forms, 1956) in the meeting held on
07.07.2014. Accordingly the company has made a provision for dividend
and dividend distribution tax thereon amounting to Rs. 332.12 Crore and Rs.
56.44 crore respectively. The accounts approved earlier by the Board
of Directors have been revised to that extent.
Mar 31, 2013
1. a) Contingent Liabilities as on:- (Rs.in Crore)
Description Opening
Balance Closing
Balance
01/04/2012 31/03/2013
Claims against the Company not acknowledged
as debts in respect of
-Capital Works
-Land Compensation Cases 7615.68 10322.99
-Others 28.18 38.37
-Disputed Income Tax Demand 10.57 24.93
-Disputed Sales Tax Demand 264.01 277.27
-Disputed Service Tax Demand 29.22 29.22
-Others 116.29 128.53
Total 8063.95 10821.31
b) The above contingent liabilities do not include contingent
liabilities on account of pending cases in respect of service matters &
others where the amount cannot be quantified.
c) Contingent liabilities towards capital works include claims of
contractors regarding rate & quantity deviation, cost relating to
extension of time and idling charges due to stoppage of work / delays
in handing over the site etc. These claims are being contested by the
company as being not admissible in terms of provisions of the
respective contracts or are lying at Arbitration tribunal/other forums.
The above also includes claims of contractors which are under scrutiny
at various levels of Management but yet to achieve finality.
d) The Contingent liabilities under the head "Capital Works" includes
Rs.323.70 Crore (previous year Rs.347.85 Crore), towards arbitration
awards received against the company as outflow is not considered
probable in respect of these awards since the same stands challenged in
the court of law.
e) It is not practicable to disclose the uncertainties relating to any
outflow.
f) There is a possibility of reimbursement to the Company ofRs.40.71
Crore (Previous year Rs.45.17 Crore) towards above contingent
liabilities.
g) An amount of Rs.22.31 Crore (Previous year Rs.10.06 Crore) stands
paid towards above contingent liabilities to contest the cases and is
being shown as Current Assets.
2. Estimated amount of contracts remaining to be executed on capital
account and not provided for Rs.3958.36 Crore (Previous year Rs.5335.27
crore).
3. Consequent upon commissioning of Chamera-lll Power Station, some
seepage has been noticed in hill slopes thereby affecting the houses &
fields of local habitants ofthe nearby village. A proposal to acquire
the affected land is under consideration of management for which
compensation is estimated at Rs.8.40 crore. Further the cost of
rectification ofseepage is yet to be ascertained.
4. Pending approval of the competent authority, provisional payments /
provisions made towards executed quantities of some of the items beyond
the approved quantities as also for extra items totalling to Rs.177.81
Crore (Previous year Rs.241.16 Crore), are included in Capital
Work-in-Progress/Fixed Asset.
5. a) Balances shown under material issued to contractors, claims
recoverable including insurance claims, advances for Capital
expenditure, Sundry Debtors, Advances to Contractors, Sundry Creditors
and Deposits/Earnest money from contractors are subject to
reconciliation/ confirmation and respective consequential adjustments.
Claims recoverable also include claims in respect of projects handed
over or decided to be handed over to other agencies in terms of
Government of India directives.
b) In the opinion of the management, the value of current assets, loans
and advances on realisation in the ordinary course of business, will
not be less than the value at which these are stated in the Balance
Sheet.
6. During F.Y 2010-11 Company had received an opinion from the Expert
Advisory Committee ofthe Institute of Chartered Accountants of India
(EAC of ICAI), according to which the expenditure incurred for creation
of assets not within the control of company should be charged to
Statement of Profit & Loss in the year of incurrence itself, consequent
upon withdrawal of Guidance Note on Expenditure During Construction.
The Company has represented to the EAC of ICAI in earlier year that
such expenditure, being essential for setting up of a hydro project,
should be allowed to be capitalised. The Company is further of the view
that capitalization of such expenditure is supported by Exposure Draft
on Limited Revision to AS-10 and Guidance Note on Rate Regulated Entity
issued by ICAI. Pending receipt of further opinion from the EAC,
notification of limited revision to AS-10 and announcement regarding
implementation of guidance note on rate regulated entity, the
accounting treatment as per existing accounting practices / policies
has been continued.
In view of above Rs.37.42 Crore (Previous year Rs.25.54 Crore) (WDV)
and Rs.103.58 Crore (Previous year Rs.106.66 Crore) are appearing under
the Tangible Asset (Note No.11.1) and Capital work in progress (Note
No. 12) respectively towards creation/construction of such assets. In
addition, a sum of Rs.123.25 Crore (Previous year Rs.117.81 Crore)
incurred after withdrawal of guidance note on capitalisation of EDC is
also appearing in Expenditure during Construction under Capital work in
progress (Note No. 12).
7. Construction activities at site of Subansiri Lower Project have
been interrupted w.e.f 16.12.2011 due to protest of anti dam activists,
however substantial technical and administrative work is continuing. As
such administration and other general overheads including borrowing
cost directly attributable to Project has continued to be capitalised.
The construction activities at site are expected to be resumed shortly
since the matter is being pursued at the level of Government of India.
8. Disclosure as required by Accounting Standard (AS) 15:
General description of various employee benefit schemes are as under:
Defined Contribution Schemes
A. Provident Fund
The Company pays fixed contribution to Provident Fund at predetermined
rates to a separate trust, which invests the funds in permitted
securities. The contribution to the fund for the period is recognised
as expense and is charged to the Statement of Profit & Loss/expenditure
during construction. The obligation of the Company is to make fixed
contribution and to ensure a minimum rate of return to the members as
specified by Gol.
B. Social Security Scheme
The Company has a Social Security Scheme in lieu of compassionate
appointment, subject to the condition that the scheme will be withdrawn
on introduction of pension scheme. However the proposal for
continuation of scheme is under consideration of the Management. As per
scheme, employees make monthly contribution at prescribed rates. The
Company also makes a matching contribution per month per employee and
such contribution is to be made for 8 years to build up corpus from the
date the scheme is in operation i.e. 01.06.2007. The scheme has been
created to take care of and helping bereaved families in the event of
death or permanent total disability of its employee.
C. Employees Defined Contribution Superannuation Scheme
The Company has an employee defined contribution superannuation scheme
for providing pension benefits to employees. As per the scheme, each
employee contributes @ 5% of Basic Pay & Dearness Allowance. The
company contributes to the extent of balance available after deducting
employers'' contribution to Provident Fund, contribution to Gratuity
trust and REHS, from the amount worked out @ 30% of the Basic Pay & DA.
The Scheme is managed by Life Insurance Corporation of India.
Defined Benefits Schemes
D. Gratuity
The Company has a defined benefit gratuity plan. Every employee who has
rendered continuous service of five years or more is entitled to get
gratuity at 15 days salary (15/26 X last drawn basic salary plus
dearness allowance) for each completed year of service subject to a
maximum of Rs.0.10 Crore, on superannuation, resignation, termination,
disablement or on death. The plan is being managed by a separate Trust
created for the purpose and obligation of the company is to make
contribution to the Trust based on actuarial valuation.
E. Leave
The Company provides for earned leave and half-pay leave to the
employees which accrue annually @ 30 days and 20 days respectively. The
maximum ceiling of encashment of earned leave is limited to 300 days.
However, any shortfall in the maximum limit of 300 days in earned leave
on superannuation shall be regulated as per the clarification issued by
the Department of Public Enterprises (DPE), Government of India. The
liability for the same is recognised on the basis of actuarial
valuation.
F. Retired Employee Health Scheme (REHS)
The Company has a Retired Employee Health Scheme, under which retired
employee and spouse of retiree, spouse and eligible dependent children
of deceased employees are provided medical facilities in the Company
hospitals / empanelled hospitals. They can also avail treatment as
Out-Patient subject to a ceiling fixed by the Company.
G. Allowance on Retirement / Death
Actual cost of shifting from place of duty at which employee is posted
at the time of retirement to any other place where he / she may like to
settle after retirement is paid as per the rules of the Company. In
case of death, family of deceased employee can also avail this
facility.
H. Memento to employees on attaining the age of superannuation.
The Company has a policy of providing Memento valuing Rs.5000/- to
employee on superannuation.
Schemes described as above atA,B,C&D are funded and rest are un-funded.
Summary of various defined benefits ason 31.03.2013 is as under:-
9. a) Electricity generation is the principal business activity of
the Company. Other operations viz., Contracts, Project Management and
Consultancy works do not form a reportable segment as per the
Accounting Standard - 17 on Segment Reporting notified under the
Companies Accounting Standard Rules, 2006.
b) The Company is having a single geographical segment as all its Power
Stations are located within the country.
10. In compliance of Accounting Standard - 18 on related party
disclosures notified under the Companies Accounting Standard Rules,
2006, the required information is given as under: -
a) Related Parties
(i) Joint Venture Companies
National Power Exchange Ltd.
(ii) Key Management Personnel
Shri G. Sai Prasad Joint Secretary (Hydro), Ministry of Power,
Government of India. Assigned additional charge of
CMD of the Company w.e.f. 24.07.2012.
Shri A. B. L.Srivastava Director (Finance). Additional charge of CMD
upto 23.07.2012.
Shri D. P. Bhargava Director (Technical)
Shri J. K. Sharma Director (Projects)
Shri R. S. Mina Director (Personnel)
Remuneration to key management personnel is Rs.3.01 Crore (Previous
year Rs.1.08 Crore), which is inclusive of arrears of Rs.1.59 Crore to
existing as well as retired directors.
b) Transaction carried out with the related parties at a(i) above -
Nil.
11. EarningsPerShare:-
The elements considered for calculation of Earnings Per Share (Basic
and Diluted) are as under:
12. The Management is of the opinion that no case of impairment of
assets exists under the provision of Accounting Standard (AS) - 28 on
Impairment ofAssets as at 31st March 2013.
13. Opening balances/ Corresponding figures for previous year have been
regrouped/re-arranged/re-cast wherever necessary.
Mar 31, 2012
In addition to above ornamental changes, earlier Significant Accounting
Policy No. 2.6 on Grant-in-aids and 7.4 on valuation of stores at site
on engineering estimate basis, being redundant, has been deleted during
the current year, having no financial impact.
1. The company has reviewed its methodology of allocation of Corporate
Office, Regional Office and administration & general overhead expenses
of construction projects and changes have been carried out during the
current year. This has resulted in additional charge of Rs. 29.97 Crore
in the current year.
2. Disclosure as required by Accounting Standard (AS) 15:
General description of various defined employee benefit schemes are as
under:
A. Provident Fund
Company pays fixed contribution to Provident Fund at predetermined
rates to a separate trust, which invests the funds in permitted
securities. The contribution to the fund for the period is recognised
as expense and is charged to the profit & loss account/expenditure
during construction .The obligation of the Company is to make such
fixed contribution and to ensure a minimum rate of return to the
members as specified by GOI.
B. Gratuity
The Company has a defined benefit gratuity plan. Every employee who has
rendered continuous service of five years or more is entitled to get
gratuity at 15 days salary (15/26 X last drawn basic salary plus
dearness allowance) for each completed year of service subject to a
maximum of Rs.0.10 Crore, on superannuation, resignation, termination,
disablement or on death. The liability for the same is recognised on
the basis of actuarial valuation.
C. Retired Employee Health Scheme
The Company has a Retired Employee Health Scheme, under which retired
employee and spouse of retiree, spouse and dependent children of
deceased employees are provided medical facilities in the Company
hospitals / empanelled hospitals. They can also avail treatment as
Out-Patient subject to a ceiling fixed by the Company.
D. Allowance on Retirement / Death
Actual cost of shifting from place of duty at which employee is posted
at the time of retirement to any other place where he / she may like to
settle after retirement is paid as per the rules of the corporation. In
case of death, family of deceased employee can also avail this
facility.
E. Leave
The Company provides for earned leave benefit (including compensated
absences) and half-pay leave to the employees of the Company which
accrue annually at 30 days and 20 days respectively. 75 % of the earned
leave is en-cashable while in service and a maximum of 300 days on
superannuation. Half-pay leave is en-cashable only on superannuation up
to the maximum of 240 days as per the rules of the Company. The
liability for the same is recognised on the basis of actuarial
valuation.
F. Social Security Scheme
NHPC has a Social Security Scheme in lieu of compensate appointment
subject to the condition that the scheme will be withdrawn on
introduction of pension scheme. Corporation makes a matching
contribution per month per employee and such contribution is to be made
for 8 years to build up corpus. The scheme is in operation since
01.06.2007. The scheme has been created to take care of and helping
brieved families in event of death of its employee or permanent total
disability.
G. Memento to employees retired on attaining the age of superannuation
and settlement allowance to such employees.
NHPC has a policy of providing Memento valuing Rs.5000/- to employee
retiring on superannuation.
The above mentioned schemes (B, C, D, E & G) are unfunded and are
recognised on the basis of actuarial valuation. Schemes A and F are
Defined contribution benefits.
Summary of various defined benefits as on 31.03.2012 is as under:-
Table 1:-Key Actuarial assumption for Actuarial Valuation as at:
Note: { } contains previous year's figures.
Liabilities as on 31.03.2012 on account of Baggage Allowance on
retirement & Memento are Rs. 0.28 Crore & Rs. 0.01 Crore (Previous year
Rs.0.32 Crore & Rs. NIL) respectively.
3. a) Electricity generation is the principal business activity of the
Corporation. Other operations viz., Contracts, Project Management and
Consultancy works do not form a reportable segment as per the
Accounting Standard - 17 on Segment Reporting notified by The Companies
Accounting Standard Rules, 2006.
b) The Corporation has power stations located within the country and
therefore, geographical segments are inapplicable.
4. The Management is of the opinion that no case of impairment of
assets exists under the provision of Accounting Standard (AS) Ã 28 on
Impairment of Assets as at 31st March 2012.
5. Financial Statements for the year have been prepared following the
provisions of Schedule VI of the Companies Act, 1956 as revised by
Government of India vide notification no. S. O. 447 (E) dated
28.02.2011 read with notification no. F. No. 2/6/2008-CL-V dated
30.03.2011. As such, Corresponding figures for year / Opening balances
have been regrouped/re-arranged/re-cast wherever necessary to comply
with requirements Revised Schedule VI.
Mar 31, 2011
1. a) Contingent Liabilities as on: -
(Rs. in Crore)
Description Opening Balance Closing Balance
01/04/2010 31/03/2011
Claims against the Company not
acknowledged as debts in respect of
- Capital Works 4452.69 5112.64
- Land Compensation Cases 82.82 71.97
- Others
- Disputed Income Tax Demand 0.09 10.99
- Disputed Sales Tax Demand 2099.20 2244.45
- Others 288.96 149.44
Total 6923.76 7589.49
b) The above contingent liabilities do not include contingent
liabilities on account of pending cases in respect of service matters &
others where the amount cannot be quantified.
c) It is not practicable to disclose the uncertainties relating to any
outflow.
d) There is a possibility of reimbursement to Corporation, of Rs.42.39
Crore (Previous year Rs.41.96 Crore) towards above contingent
liabilities.
2. Estimated amount of contracts remaining to be executed on capital
account and not provided for Rs.6286.47 Crore (Previous year Rs.8265.86
crore)
3. The company made initial public offering (IPO) during last
financial year i. e. in 2009-10. Out of the IPO proceeds, a sum of
Rs.1592.59 Crore has been utilised up to 31.03.2011 for re-coupment of
capital expenditure already incurred from internal accruals on the
projects specified for utilisation, Rs.2300 Crore has been invested as
per extant investment policy of the company, Rs.38.71 Crore recouped for
meeting IPO expenditure and balance of Rs.94.40 Crore is lying in bank
account under Corporate Liquidity Term Deposit (CLTD).
4. a) Title deeds/title in respect of Land of some Projects/Units
amounting to Rs.60.60Crore (Previous year Rs.56.89 crore), covering an area
of 2192.36 hectare (Previous year 1864.13 hectare), are yet to be
executed/passed. Expenses on stamp duty etc. relating to registration
thereof will be accounted for as and when incurred.
b) Land does not include the land taken from Sashatra Seema Bal (SSB)
for Subansiri Upper Project on lease for a period of 99 years @
notional rent of Rs.1/- per annum.
5. a) Central Electricity Regulatory Commission (CERC) has notified by
Regulations the terms and conditions for determination of tariff
applicable with effect from 1st April 2009 for a period of five years
vide notification dated 19.01.2009. The petitions for all 12 power
stations have since been filed and tariff for 3 power stations already
stands approved.
The said regulations inter-alia provides that for the purpose of filing
petitions, Return on Equity (ROE, a component of tariff) is to be
grossed up using applicable income tax rate for the financial Year
2008-09 and difference in ROE, if any, that may arise due to change in
income tax rate during the tariff period 2009-14, is to be claimed in
2014-15. However, keeping in view the provisions of Accounting Standard
9 on Revenue Recognition, tariff has been recomputed based on the
principle enunciated in the aforesaid regulation by grossing up the ROE
with applicable income tax rate for the financial year 2010-11 and
sales have been provisionally recognized at Rs.3852.86 Crore, which
includes Rs.391.77 Crore towards grossing up of ROE with applicable tax
rates of 2010-11 viz-a-viz tax rates of 2008-09, (Previous year
Rs.3306.63 Crore) also taking into consideration the principle of
conservatism.
The ibid regulation also provides that pending determination of tariff,
the company is to provisionally bill the beneficiary at tariff approved
by the CERC as applicable as on 31st March 2009. The amount
provisionally billed comes to Rs.3261.42 Crore (Previous year Rs.2901.49
Crore). Accordingly, unbilled sale for the current year comes to
Rs.591.44Crore (Previous year Rs.405.14 Crore).
b) Sales of Rs.592.44 crore included in Prior Period Adjustment (Schedule
21) represent the difference due to grossing up of ROE at normal income
tax instead of MAT rate, which was considered for grossing up in
2009-10 and other tax adjustments relating to the beneficiary States.
6. Pending approval of the competent authority, provisional payments
made towards executed quantities of some of the items beyond approved
quantities as also for extra items, are included in Capital
Work-in-Progress/Fixed Asset.
7. Capital work in progress includes Rs.648.78 Crore as at 1st April
2010 and Rs.161.25 Crore during the year totalling to Rs.810.03 Crore as at
31.03.2011 on account of Survey & Investigation expenses and
Administration & other general overhead expenses of Construction
Projects. Similarly Capital Work in Progress includes Rs.172.35 crore on
account of Administration & other general overhead expenses of
Corporate Office & Regional Offices allocated to these projects during
the year. This accounting treatment is being followed consistently in
line with the Significant Accounting Policy No.4.1 and 4.3 as such
expenditure forms part of Capital cost of the project.
8. a) Balances shown under Material issued to contractors, claims
recoverable including insurance claims, advance for Capital
Expenditure, Sundry Debtors, Advances to Contractors, Sundry Creditors
and Deposits/Earnest money from contractors are subject to
reconciliation/ confirmation and respective consequential adjustments.
Claims recoverable also include claims in respect of projects handed
over or decided to be handed over to other agencies in terms of
Government of India Directives.
b) In the opinion of the management, the value of current assets, loans
and advances on realisation in the ordinary course of business, will
not be less than the value at which these are stated in the Balance
Sheet.
c) Since the issue of payment of incentive to M/s Delhi Transco Limited
has not been resolved, Rs.32.97 Crore is continuing under "Other current
Assets" (Schedule-9) as well as under "Other Liabilities"
(Schedule-10).
d) Debtors include an amount of Rs.120.81 Crore, being recoverable from
M/s Delhi Transco Limited (erstwhile DESU) pertaining to period prior
to financial Year 1996-97. The case for recovery of the same has been
taken up through Ministry of Power with Ministry of Finance, Govt. of
India. However, a provision for entire amount has been made in the
books during 2008-09 as an abundant precaution.
9. a) Siang Basin, Subansiri Basin & Dibang Multipurpose Projects were
taken over from Brahmputra Board. Pending settlement of account with
Brahmputra Board, assets and liabilities have been booked to the extent
of amounts incurred by the Corporation on these projects. Of the Siang
Basin Projects, Siang Lower & Siyom HE Projects have since been handed
over to private developer and liability arising out of settlement of
accounts with Brahmputra Board towards these projects is recoverable
from respective private developer. Upper Siang HE project, a project of
Siang basin, has since been allotted to other agency for preparation of
Pre-feasibility report and as such expenditure incurred on this project
till 31.03.2011 amounting to Rs.37.06 Crore has been provided in the
books as abundant precaution.
b) Pakal Dul, Kiru & Kwar HE Projects are to be executed through Joint
Venture Company with participation from state Government. Pending
formation of Joint Venture Company, expenditure amounting to Rs.145.71
Crore & Rs.61.67 Crore respectively incurred by NHPC on these projects up
to 31.03.2011 is appearing under Capital Work-in-Progress.
10. Govt. of Arunachal Pradesh had shown their inclination to hand
over Subansiri Upper & Subansiri Middle projects to Independent Power
Producer (IPP), on which NHPC had solicited the intervention of Govt.
of India. As directed by GoI, Subansiri Middle Project has since been
decided to be handed over to M/s Jindal Power Ltd. (JPL) for which an
amount of Rs.105.21 Crore has been received by NHPC from M/s JPL. Pending
handing over the project to M/s JPL, the amount received from M/s JPL
has been adjusted to the extent of amount spent by NHPC towards capital
work in progress and for creation of fixed asset of Subansiri Middle
Project and the balance is being shown under the head "Other
Liabilities" in Schedule 10-"Current Liabilities & Provisions". As
regard to Subansiri Upper Project, decision of GOI is still awaited and
pending decision, capital expenditure amounting to Rs.0.61 Crore incurred
on this project for the year ended 31.03.2011 has been charged to
Profit & Loss Account as an abundant precaution, which is in addition
to the provision of Rs.19.35 Crore, already existed as at 31.03.2010
towards expenditure incurred on this project during 20.04.2004 to
31.03.2010, the period in which this project was under suspension.
11. CERC while notifying tariff regulation for the period 2009-14 vide
notification dated 19.01.2009 has revised the rates of depreciation and
has also provided the methodology for computing the depreciation. As
per ibid tariff regulation, depreciation is to be calculated at
specified depreciation rates till 31st March of the year closing after
a period of 12 years from the date of commercial operation of an
operating unit and thereafter amortisation of residual depreciable
value of the assets over the remaining useful life of operating unit,
life of the unit being considered 35 years from the date of commercial
operation.
The Company had however provided depreciation in financial year
2009-10, following the rate notified by CERC even in respect of assets
of Operating Units, which have completed 12 years as at 31.03.2009.
During the year ended 31.03.2011, Company has recomputed its
depreciation charge w.e.f. 01.04.2009 in compliance of opinion of the
Office of C&AG of India that depreciation is to be provided following
the rates of depreciation as well as methodology notified by CERC.
Accordingly, the depreciation charge for the financial year 2009-10 and
for the year ended 31.03.2011 has reduced by Rs.96.27 Crore (adjusted as
prior period item) and Rs.191.97 Crore respectively. In view of forgoing,
the Significant Accounting Policies on 'Depreciation and Amortisation'
(Significant Accounting Policy No.5.2.1 to 5.2.4, 5.7, 5.9) and
`Machinery Spares' (Significant Accounting Policy No. 3.1(a)) have been
suitably reworded to disclose the fact of "rate of depreciation as well
as methodology" wherever required.
12. During the year Company has received the opinion from the Expert
Advisory Committee of the Institute of Chartered Accountants of India
(EAC of ICAI) and as per opinion of EAC, expenditure incurred for
creation of assets not within the control of company should be charged
to profit & loss account in the year of incurrence itself. The Company
has represented to the EAC of ICAI that such expenditure, being
essential for setting up of a hydro project, should be allowed to be
capitalised. Pending receipt of further opinion / communication from
the EAC, the accounting treatment as per existing accounting practices
/ policies has been continued.
13. In pursuance of the J&K Water Resources (Regulation & Management)
Act, 2010, Govt of J&K has levied cess on use of water by power
stations in the state of J&K with effect from 10.11.2010, which has
since been challenged in J&K High Court. A petition has also been filed
with CERC for allowing reimbursement of the said cess being a new levy.
However, as an abundant precaution, a provision of Rs.138.87 Crore has
been made in the books of accounts.
14. Pending final settlement of arrears of pay revision of Employees
w.e.f 01.01.2007, a further provision of Rs.199.69 Crore has been made in
the books for the year ended 31.03.2011 on reasonable estimate basis.
In addition to this, an amount of Rs.89.11 Crore towards Performance
Related Pay Scheme in terms of DPE guidelines, pending approval of the
scheme by Board, has also been provided.
15. Disclosure as required by Accounting Standard (AS) 15:
General description of various defined employee benefit schemes are as
under:
A. Provident Fund
Company pays fixed contribution to Provident Fund at predetermined
rates to a separate trust, which invests the funds in permitted
securities. The contribution to the fund for the period is recognised
as expense and is charged to the profit & loss account .The obligation
of the Company is to make such fixed contribution and to ensure a
minimum rate of return to the members as specified by GOI.
B. Gratuity
The Company has a defined benefit gratuity plan. Every employee who has
rendered continuous service of five years or more is entitled to get
gratuity at 15 days salary (15/26 X last drawn basic salary plus
dearness allowance) for each completed year of service subject to a
maximum of Rs. 0.10 Crore, on superannuation, resignation, termination,
disablement or on death. The liability for the same is recognised on
the basis of actuarial valuation.
C. Retired Employee Health Scheme
The Company has a Retired Employee Health Scheme, under which retired
employee and the spouse are provided medical facilities in the Company
hospitals / empanelled hospitals. They can also avail treatment as
Out-Patient subject to a ceiling fixed by the Company.
D. Allowance on Retirement / Death
Actual cost of shifting from place of duty at which employee is posted
at the time of retirement to any other place where he / she may like to
settle after retirement is paid as per the rules of the corporation. In
case of death, family of deceased employee can also avail this
facility.
E. Leave
The Company provides for earned leave benefit (including compensated
absences) and half-pay leave to the employees of the Company which
accrue annually at 30 days and 20 days respectively. 75 % of the earned
leave is en-cashable while in service and a maximum of 300 days on
superannuation. Half-pay leave is en-cashable only on superannuation up
to the maximum of 240 days as per the rules of the Company. The
liability for the same is recognised on the basis of actuarial
valuation.
F. Social Security Scheme
NHPC has a Social Security Scheme in lieu of compensate appointment
subject to the condition that the scheme will be withdrawn on
introduction of pension scheme. Corporation makes a matching
contribution per month per employee and such contribution is to be made
for 8 years to build up corpus. The scheme is in operation since
01.06.2007. The scheme has been created to take care of and helping
brieved families in event of death of its employee or permanent total
disability.
The above mentioned schemes (B, C, D and E) are unfunded and are
recognised on the basis of actuarial valuation. Schemes A and F are
Defined contribution benefits.
16. a) Electricity generation is the principal business activity of the
Corporation. Other operations viz., Contracts, Project Management and
Consultancy works do not form a reportable segment as per the
Accounting Standard - 17 on Segment Reporting issued by the Institute
of Chartered Accountants of India.
b) The Corporation has power stations located within the country and
therefore, geographical segments are inapplicable.
17. In compliance of Accounting Standard à 18 on related party
disclosures issued by the Institute of Chartered Accountants of India,
the required information is given as under: -
a) Related Parties
(i) Joint Venture Companies
National Power Exchange Ltd.
(ii) Key Management Personnel
Shri S. K. Garg CMD (retired on attaining the age of superannuation
w.e.f. 31.12.2010)
Shri A. B. L.Srivastava Director (Finance) with additional Charge of
CMD w.e.f. 01.01.2011.
Shri D. P. Bhargava Director (Technical)
Shri J. K. Sharma Director (Projects)
Shri R. S. Mina Director (Personnel)
18. The Company's significant leasing arrangements are in respect of
operating leases of premises for residential use of employees, offices,
guesthouses & transit camps. These leasing arrangements, which are not
non-cancellable, are usually renewable on mutually agreeable terms. The
Schedule of Employees remuneration and benefits includes Rs.26.48 Crore
(Previous year Rs. 14.40 Crore) towards lease payments, net of
recoveries, in respect of premises for residential use of employees.
Lease payments in respect of premises for offices, guest house &
transit camps are shown as Rent / Hiring charges under Schedule of
Generation, Administration and other expenses.
19. The Management is of the opinion that no case of impairment of
assets exists under the provision of Accounting Standard (AS)-28 on
Impairment of assets as at 31st March 2011.
20. (a) Cash & Cash equivalents include an amount of Rs.57.39 Crore
(Previous year Rs.14.34 Crore) towards margin money kept with banks for
opening Letter of Credit or similar facility, which is not available
for use as on 31.03.2011.
(b) Cash & cash equivalents include Rs.486.44 Crore, held for Rural Road
and Rural Electrification works being executed by Corporation on behalf
of other agencies and are not freely available for the business of the
Corporation. Similarly "Loans & Advances" under Schedule 9 include
Rs.49.40 Crore given as Advance to Contractors & Suppliers in respect of
these works.
21. Previous year figures / Opening balances have been
regrouped/re-arranged/re-cast wherever necessary.
22. Subsequent to the approval of accounts for the year ended 31st
March 2011 by the Board of directors on 27th May, 2011, the members of
the Board has recommended dividend @ Rs.0.60/- per share (subject to
rounding off to nearest Rupee in terms of Rule 23 of Companies (Central
Government's) General Rules & Forms, 1956) on the paid up equity
capital of the Company (as per Balance Sheet as at 31st March 2011) for
the year ended as at 31st March 2011 in the meeting held on 30.06.2011.
Accordingly the Company has reopened and revised its earlier finalized
audited accounts for the year ended 31st March 2011 and a provision for
dividend amounting to Rs.738.04 Crore (subject to rounding off) @6% on
the paid up equity capital amounting to Rs.12300.74 Crore (divided into
1230,07,42,773 equity shares of Rs.10/- each fully paid up) and dividend
distribution tax thereon, has been made.
Mar 31, 2010
1. a) Contingent Liabilities as on: -
(Rs. in Crore)
Description Opening Closing
Balance Balance
01/04/2009 31/03/2010
Claims against the Company not acknowledged
as debts in respect of
- Capital Works 3870.55 4452.69
-Land Compensation Cases 94.61 82.82
-Others
-Disputed Income Tax Demand 0.09 --
-Disputed Sales Tax Demand 2062.41 2099.20
-Others 409.06 288.96
Total 6436.63 6923.76
b) The above contingent liabilities do not include contingent
liabilities on account of pending cases in respect of service matters &
others where the amount cannot be quantified.
c) The amount of claims where arbitration /court awards have been
received but are under examination in the company are continuing as
contingent liability and no provision has been created in the books.
d) It is not practicable to disclose the uncertainties relating to any
outflow.
e) There is a possibility of reimbursement to Corporation, of Rs. 41.96
Crore (Previous year Rs. 31.58 Crore) towards above contingent
liabilities.
2. Estimated amount of contracts remaining to be executed on capital
account and not provided for Rs. 8265.86 Crore (Previous year Rs. 9709.30
crore).
3. a) During the year ended 31.03.2010, the company made initial
public offering (IPO) of 167,73,74,015 Shares of Rs. 10/- each for cash
at a price of Rs. 36/- per share including premium of Rs. 26/- per share
consisting of fresh issue of 111,82,49,343 equity shares by the company
including reservation of 4,19,34,350 equity shares for its employees
and offer for sale of 55,91,24,672 equity shares by the President of
India acting through Ministry of Power, Government of India aggregating
to Rs. 6038.55 Crore including premium. The Company retained Rs. 4025.70
Crore as its share proceeds including share premium of Rs. 2907.45 Crore
and sale proceeds of the equity of Government of India amounting to Rs.
2012.85 Crore was paid to the Ministry of Power, Government of India.
Out of the proceeds, a sum of Rs. 616.06 Crore has been utilised during
the year ended 31.03.2010 for re-coupment of capital Expenditure
already incurred from internal accruals on the projects specified for
utilisation, Rs. 3288 Crore has been invested as per eRs.tant investment
policy of the company, Rs. 50 Crore recouped provisionally for meeting
IPO Expenditure and balance of Rs. 71.64 Crore is lying in bank account
under Corporate Liquidity Term Deposit (CLTD).
b) An amount of Rs. 49.07 Crore has been incurred as Share Issue expenses
for IPO, which includes Rs. 10.36 Crore as Government of Indias share,
being the selling share holder. Rs. 10.34 Crore has since been recovered
from Government of India. NHPCs share of expenses has been adjusted
against the Share Premium Account (Schedule 2) in terms of Section 78
of the Companies Act, 1956.
4. a) Title deeds/title in respect of Land of some Projects/Units
amounting to Rs. 56.89 Crore (Previous year Rs. 92.69 Crore), covering an
area of 1864.13 hectare (Previous year 2046.46 hectare), are yet to be
executed/passed. expenses on stamp duty etc. relating to registration
thereof will be accounted for as and when incurred.
b) Land does not include the land taken from Sashatra Seema Bal (SSB)
for Subansiri Upper Project on lease for a period of 99 years @
notional rent of Re.1/- per annum.
5. a) Central Electricity Regulatory Commission (CERC) has notified by
Regulations the terms and conditions for determination of tariff
applicable with effect from 1st April 2009 for a period of five years
vide notification dated 19.01.2009.
The company has filed tariff petitions up to 31.03.2010 with CERC for
determination of tariff for the period 2009-14 in respect of 10 out of
11 power stations. Pending determination of station wise tariff as per
aforesaid notification, sales for the current year have been
provisionally recognised at Rs. 3306.63 Crore on the basis of the
principles enunciated in the said notification. The principle of
conservatism has also been kept in view, as the tariff petitions are
subject to prudence check by CERC.
The aforesaid CERC notification provides that pending determination of
tariff by the CERC, the Company has to provisionally bill the
beneficiaries at the tariff approved by the CERC as applicable as on
31st March 2009. The amount provisionally worked out for billing for
the year ended 31st March 2010 on this basis is Rs. 2901.49 Crore, which
also includes Rs. 194.28 Crore towards Income Tax recoverable.
b) Net Sales for the current year include Rs. 816.51 Crore (excluding
income Tax of Rs. 27.63 Crore) towards earlier year sales arising because
of finalisation and revision of tariff in respect of Power Stations.
6. Pending approval of the competent authority, provisional payments
made towards executed quantities of some of the items beyond approved
quantities as also for eRs.tra items, are included in Capital
Work-in-Progress/FiRs.ed Asset.
7. a) Balances shown under Material issued to contractors, claims
recoverable including insurance claims, advance for Capital
Expenditure, Sundry Debtors, Advances to Contractors, Sundry Creditors
and Deposits/Earnest money from contractors are subject to
reconciliation/ confirmation and respective consequential adjustments.
Claims recoverable also include claims in respect of projects handed
over or decided to be handed over to other agencies in terms of
Government of India Directives.
b) In the opinion of the management, the value of current assets, loans
and advances on realisation in the ordinary course of business, will
not be less than the value at which these are stated in the Balance
Sheet.
c) Since the issue of payment of incentive to M/s Delhi Transco Limited
has not been resolved, Rs. 32.97 Crore is continuing under "Other current
Assets" (Schedule-9) as well as under "Other Liabilities"
(Schedule-10).
d) Debtors include an amount of Rs. 120.81 Crore, being recoverable from
M/s Delhi Transco Limited (erstwhile DESU) pertaining to period prior
to Financial Year 1996-97. The case for recovery of the same has been
taken up through Ministry of Power with Ministry of Finance, Govt. of
India. However, a provision for entire amount has been made in the
books during 2008-09 as an abundant precaution.
8. a) Siang Basin, Subansiri Basin & Dibang Multipurpose Projects were
taken over from Brahmputra Board. Pending settlement of account with
Brahmputra Board, assets and liabilities have been booked to the extent
of amounts incurred by the Corporation on these projects. Of the Siang
Basin Projects, Siang Lower & Siyom HE Projects have since been handed
over to private developer and liability arising out of settlement of
accounts with Brahmputra Board towards these projects is recoverable
from respective private developer. Upper Siang HE project, a project of
Siang Basin, has since been allotted to other agency for preparation of
Pre- feasibility report and as such Expenditure incurred on this
project till 31.03.2010 amounting to Rs. 37.06 Crore has been provided in
the books as abundant precaution.
b) Pakal Dul, Kiru & Kwar HE Projects are to be executed through Joint
Venture Company with participation from State Government. Pending
formation of Joint Venture Company, Expenditure amounting to Rs. 121.87
Crore & Rs. 42.61 Crore respectively incurred by NHPC on these projects
upto 31.03.2010 is appearing under Capital Work-in-Progress.
9. a) Govt. of Arunachal Pradesh has shown their inclination to hand
over Subansiri Upper & Subansiri Middle projects to Independent Power
Producer (IPP), on which NHPC has solicited the intervention of Govt.
of India. Pending final decision for eRs.ecution of these projects,
capital Expenditure amounting to Rs. 2.15 Crore and Rs. 0.72 Crore incurred
on these projects for current financial year has been charged to Profit
& Loss Account as an abundant precaution, which is in addition to the
provision of Rs. 32.03 Crore, already created till last year towards
Expenditure incurred on these projects during from 20.04.2004 to
31.03.2009, the period in which these projects were under suspension
due to Supreme Court Injunction.
b) Pursuant to the order of Govt. of Uttarakhand (GoUK)/ Govt. of
India, Corporation has decided to hand over Lakhawar Vyasi Project to
Uttrakhand Jal Vidyut Nigam Ltd. (UJVNL). UJVNL has paid Rs. 73.07 Crore,
being the reimbursement of Expenditure (including cost of capital &
overheads / supervision charges) incurred by NHPC towards the creation
of assets/CWIP of the project till 31.03.2009. Pending handing over of
the project, the aforesaid amount has been adjusted to the extent of
Expenditure incurred by NHPC till said date and balance is appearing as
"Other Liabilities" in Schedule 10 - Current Liabilities & Provisions.
Further an amount of Rs. 5.88 Crore, being the Expenditure incurred by
NHPC on this project during 2009-10 has been provided as an abundant
precaution as the date beyond 31.03.2009, up to which Expenditure is
reimbursable from UJVNL is yet to be decided.
10. Pending implementation of wage revision of Employees w.e.f
01.01.2007, a provision of Rs. 291.93 Crore (previous year Rs. 202.36
Crore) has been made in the books for current year on reasonable
estimate basis.
11. a) Corporation has taken Industrial All Risk (IAR) Insurance Policy
w.e.f. 31.07.2009 in lieu of Self Insurance Policy. Accordingly, Self
Insurance Reserve for the current year as per Significant Accounting
Policy No. 11 (Schedule 23) has been created only up to 30.07.2009 on
proportionate basis on the value of Gross Block as at 30.06.2009.
12. Disclosure as required by Accounting Standard (AS) 15:
General description of various defined employee benefit schemes are as
under:
A. Provident Fund
Company pays fiRs.ed contribution to Provident Fund at predetermined
rates to a separate trust, which invests the funds in permitted
securities. The contribution to the fund for the period is recognised
as eRs.pense and is charged to the profit & loss account. The obligation
of the Company is to make such fiRs.ed contribution and to ensure a
minimum rate of return to the members as specified by GOI.
B. Gratuity
The Company has a defined benefit gratuity plan. Every employee who has
rendered continuous service of five years or more is entitled to get
gratuity at 15 days salary (15/26 Rs. last drawn basic salary plus
dearness allowance) for each completed year of service subject to a
maximum of Rs. 0.035 Crore, on superannuation, resignation, termination,
disablement or on death. The liability for the same is recognised on
the basis of actuarial valuation considering the maximum limit as Rs.
0.10 crore.
C. Retired Employee Health Scheme
The Company has a Retired Employee Health Scheme, under which retired
employee and the spouse are provided medical facilities in the Company
hospitals / empanelled hospitals. They can also avail treatment as
Out-Patient subject to a ceiling fiRs.ed by the Company.
D. Allowance on Retirement / Death
Actual cost of shifting from place of duty at which employee is posted
at the time of retirement to any other place where he / she may like to
settle after retirement is paid as per the rules of the corporation. In
case of death, family of deceased employee can also avail this
facility.
E. Leave
The Company provides for earned leave benefit (including compensated
absences) and half-pay leave to the employees of the Company which
accrue annually at 30 days and 20 days respectively. 75 % of the earned
leave is en-cashable while in service and a maximum of 300 days on
superannuation. Half-pay leave is en-cashable only on superannuation up
to the maximum of 240 days as per the rules of the Company. The
liability for the same is recognised on the basis of actuarial
valuation.
F. LTC
Employees are entitled to avail LTC in a block of 2 years. Liability
for LTC as at 31.03.2010 is provided on the basis of actuarial
valuation. The above mentioned schemes (B, C, D, E and F) are unfunded
and are recognised on the basis of actuarial valuation.
13. a) Electricity generation is the principal business activity of
the Corporation. Other operations viz., Contracts, Project Management
and Consultancy works do not form a reportable segment as per the
Accounting Standard - 17 on Segment Reporting issued by the Institute
of Chartered Accountants of India. b) The Corporation has power
stations located within the country and therefore, geographical
segments are inapplicable.
14. In compliance of Accounting Standard - 18 on related party
disclosures issued by the Institute of Chartered Accountants of India,
the required information is given as under: -
a) Related Parties
(i) Joint Venture Companies
National Power exchange Ltd.
(ii) Key Management Personnel
Shri S.K. Garg Chairman & Managing Director
Shri A. B. L. Srivastava Director (Finance)
Shri D. P. Bhargava Director (Technical)
Shri J. K. Sharma Director (Projects) - assumed office w.e.f.
10.04.2009
Shri R. S. Mina Director (Personnel) - assumed office w.e.f. 28.04.2009
15. The Companys significant leasing arrangements are in respect of
operating leases of premises for residential use of employees, offices,
guesthouses & transit camps. These leasing arrangements, which are not
non-cancellable, are usually renewable on mutually agreeable terms. The
Schedule of Employees remuneration and benefits includes Rs. 14.40 Crore
(Previous year Rs. 12.59 Crore) towards lease payments, net of
recoveries, in respect of premises for residential use of employees.
Lease payments in respect of premises for offices, guest house &
transit camps are shown as Rent / Hiring charges under Schedule of
Generation, Administration and other expenses.
16. The Management is of the opinion that no case of impairment of
assets exists under the provision of Accounting Standard (AS)-28 on
Impairment of assets as at 31st March 2010.
17. (a) Cash & Cash equivalents include an amount of Rs. 14.34 Crore
(Previous year Rs. Nil) towards margin money kept with banks for opening
Letter of Credit or similar facility, which is not available for use as
on 31.03.2010.
(b) Cash & cash equivalents include Rs. 488.41 Crore, held for Rural Road
and Rural Electrification works being executed by Corporation on behalf
of other agencies and are not freely available for the business of the
Corporation. Similarly "Loans & Advances" under Schedule 9 include Rs.
93.58 Crore given as Advance to Contractors & Suppliers in respect of
these works.
18. Previous years figures/opening balances have been
regrouped/re-arranged/re-cast wherever necessary.
Mar 31, 2009
1. a) Contingent Liabilities as on: -
(Rupees in Crore)
Description Opening Balance Closing Balance
01/04/2008 31/03/2009
Claims against the Company not
acknowledged as debts in respect of
- Capital Works 3193.93 3870.55
- Land Compensation Cases 84.48 94.61
- Others
Disputed Sales Tax Demand 2045.53 2062.41
Others 340.02 409.06
Total 5663.96 6436.63
b) The above contingent liabilities do not include contingent
liabilities on account of pending cases in respect of service matters &
others where the amount cannot be quantified.
c) The amount of claims where arbitration /court awards have been
received but are under examination in the company are continuing as
contingent liability and no provision has been created in the books.
d) It is not practicable to disclose the uncertainties relating to any
outflow.
e) There is a possibility of reimbursement to Corporation, of Rs.31.58
Crore (Previous year Rs. 0.03 Crore) towards above contingent
liabilities.
2. Estimated amount of contracts remaining to be executed on capital
account and not provided for Rs.9709.30 Crore (Previous year Rs.
8454.03 crore).
3. a) Title deeds/title in respect of Land of some Projects/Units
amounting to Rs.92.69 Crore (Previous year Rs. 52.10 crore), covering
an area of 2046.46 hectare (Previous year 2080.40 hectare), are yet to
be executed/passed. Expenses on stamp duty etc. relating to
registration thereof will be accounted for as and when incurred.
b) Land does not include the land taken from Sashatra Seema Bal (SSB)
on lease for a period of 99 years @ notional rent of Rs.1/- per annum.
c) Land measuring 722 Kanal & 18 marlas and structure created thereon
in respect of Salal Power Station, though in possession of J&K Govt.,
is appearing in respective fixed assets heads.
4. Pending approval of the competent authority, provisional payments
made towards executed quantities of some of the items beyond approved
quantities as also for extra items, are included in Capital
Work-in-Progress/ Fixed Asset.
5. a) Sales for current year include Rs.(-)6.75 Crore towards income
tax, billing of which is yet to be done.
b) Sales in respect of Dulhasti & Teesta-V Power Stations have been
accounted for based on provisional tariff notified by Central
Electricity Regulatory Commission (CERC).
6. a) Balances shown under Material issued to contractors, claims
recoverable including insurance claims, advance for Capital
Expenditure, Sundry Debtors, Advances to Contractors, Sundry Creditors
and Deposits/ Earnest money from contractors are subject to
reconciliation/ confirmation and respective consequential adjustments.
Claims recoverable also include claims in respect of projects handed
over or decided to be handed over to other agencies in terms of
Government of India Directives.
b) ÃLoans & Advancesà under Schedule 9 include Rs.244.44 Crore given as
Advance to Contractors & Suppliers in respect of Contracts, Project
Management and Consultancy Works being executed by Corporation on
behalf of other agencies.
c) In the opinion of the management, the value of current assets, loans
and advances on realisation in the ordinary course of business, will
not be less than the value at which these are stated in the Balance
Sheet.
d) Since the issue of payment of incentive to M/s Delhi Transco Limited
has not been resolved, Rs.32.97 Crore is continuing under ÃOther
current Assetsà (Schedule-9) as well as under ÃOther LiabilitiesÃ
(Schedule-10)
7. a) Siang Basin, Subansiri Basin & Dibang Multipurpose Projects were
taken over from Brahmaputra Board.
Pending settlement of account with Brahmaputra Board, assets and
liabilities have been booked to the extent of amounts incurred by the
Corporation on these projects. Of the Siang Basin Projects, Siang Lower
& Siyom HE Projects have since been handed over to private developer
and liability arising out of settlement of accounts with Brahmaputra
Board towards Siang Lower & Siyom projects is recoverable from
respective private developer. Upper Siang HE project, a project of
Siang Basin, has since been allotted to other agency for preparation of
Pre-feasibility report and as such expenditure incurred on this project
till 31.03.2009 amounting to Rs.37.06 Crore has been provided in the
books as abundant precaution.
b) Profit on Transfer of Project under Ã(ii) Other Incomeà in Schedule
14 pertains to transfer of Lower Siang Project, which has been handed
over to private developer as referred to in 7(a) above.
c) Out of Rs. 84.89 Crore, as demanded by JKSPDC for projects taken
over by Corporation from J&KPDC, Rs.26 crore has been paid by
Corporation against accountal of Rs.33.66 Crore against total demand
and Rs.51.23 Crore is appearing under contingent liability, which shall
be accounted for in the books on reconciliation of assets of projects
thus taken over with accounts submitted by them. The Corporation is
also having a claim of Rs.37.55 Crore against JKSPDC in respect of
projects handed over or decided to be handed over to JKSPDC.
d) Pakal Dul & Loktak Down Stream HE Projects are to be executed
through Joint Venture Companies with participation from State
Government. Pending formation of Joint Venture Companies, expenditure
amounting to Rs.101.03 Crore & Rs. 30.99 Crore respectively incurred by
NHPC on these two projects upto 31.03.2009 is appearing under Capital
Work-in-Progress. Similarly Kiru & Kawar HE Projects, entrusted to
Corporation for preparation of DPR, are also to be executed through
Joint Venture Company. Pending formation of Joint Venture Company,
expenditure of Rs.28.49 Crore incurred by Corporation on these Projects
is appearing under Capital Work-in-Progress.
8. Project work at Subansiri Upper & Subansiri Middle is under
suspension due to the HonÃable Supreme Court order dated 19.04.2004 in
Interlocutory Applications (IAs) 966 & 1012, restraining the
construction of dam upstream of Subansiri River. Pending disposal of
said IAs, capital expenditure of Rs.40.35 crore & Rs.34.78 Crore
respectively is appearing under Capital Work In progress and as
abundant precaution expenditure incurred towards Survey & Investigation
including expenditure during construction on these projects from
20.04.2004 to 31.03.2009 has been provided in the books in current
year.
9. Ministry of Power, Govt. of India (GOI) vide its order No.
16/47/2001/-DO (NHPC) dated 08.01.2007 and order No. even dated
08.03.2007 respectively granted approval for Initial Public Offering
(IPO) of 10% of paid up Share Capital and to offload 5% of GOI share in
the Corporation. The eligible issue expenses will be shared between
NHPC & Govt. of India, being the selling shareholder. The expenses
pertaining to NHPC will be adjusted from the premium proceeds of the
issue.
10. Pending implementation of wage revision of Employees w.e.f
01.01.2007, a provision of Rs.202.36 Crore has been made in the books
for current year on reasonable estimate basis.
11. The depreciation on Fixed Assets is charged as per Significant
Accounting Policy No.5 (Schedule 23) of the Corporation. Ministry of
Power (MOP) has already notified tariff policy which provides that
rates of depreciation as notified by the Central Electricity Regulatory
Commission (CERC) would be applicable for the purpose of tariff as well
as accounting. The revised rates of depreciation as notified by CERC
have been made applicable w.e.f. 01.04.2009. Accordingly, the rates
notified under present tariff norms have been considered for charging
depreciation for the year. The depreciation for the year as per rates
prescribed under schedule XIV of the Companies Act, 1956 works out to
Rs.390.08 crore more than that worked out as per CERC rates (previous
year Rs.338.39 crore). However, the Management considers the
depreciation provided in the books as appropriate and adequate keeping
in view matching concept of Accounting.
12. a) Electricity generation is the principal business activity of
the Corporation. Other operations viz., Contracts, Project Management
and Consultancy Works do not form a reportable segment as per the
Accounting Standard - 17 on Segment Reporting issued by the Institute
of Chartered Accountants of India.
b) The Corporation has Power Stations located within the country and
therefore, geographical segments are inapplicable.
13. In compliance of Accounting Standard à 18 on related party
disclosures issued by the Institute of Chartered
Accountants of India, the required information is given as under :- a)
Whole time Directors:
Shri S. K. Garg Chairman & Managing Director
Shri A. B. L. Srivastava Director (Finance)
Shri D. P. Bhargava Director (Technical)- assumed office
w. e. f. 26.03.2009
Shri J. K. Sharma Director (Projects)- assumed office
w.e.f. 10.04.2009
Shri R. S. Mina Director (Personnel)- assumed office
w.e.f. 28.04.2009
Shri S. K. Chaturvedi Director (Personnel)- relieved
w.e.f. 31.07.2008
Shri S. P. Sen Director (Technical) - relieved
w.e.f. 08.05.2008
Shri S. K. Dodeja Director (Projects) - superannuated
on 31.07.2008
14. The CompanyÃs significant leasing arrangements are in respect of
operating leases of premises for residential use of employees, offices,
guesthouses & transit camps. These leasing arrangements, which are not
non- cancellable, are usually renewable on mutually agreeable terms.
The Schedule of Employees remuneration and benefits include Rs.12.59
Crore (Previous year Rs.10.41 Crore) towards lease payments, net of
recoveries, in respect of premises for residential use of employees.
Lease payments in respect of premises for offices, guest house &
transit camps are shown as Rent / Hiring charges under Schedule of
Generation, Administration and other expenses.
15. The Management is of the opinion that no case of impairment of
assets exists under the provision of Accounting Standard (AS)-28 on
Impairment of assets as at 31st March, 2009.
16. (a) Cash & Cash equivalents include an amount of Rs. NIL (Previous
year Rs.15.57 Crore) towards margin money kept with banks for opening
Letter of Credit or similar facility, which is not available for use as
on 31.03.2009.
(b) Cash & cash equivalents include Rs.382.28 Crore, held on behalf of
other agencies for execution of Contract, Project Management and
Consultancy Works on behalf of such agencies and are not freely
available for the business of the Corporation.
17. Previous yearÃs figures/opening balances have been
regrouped/re-arranged/re-cast wherever necessary.