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Notes to Accounts of NTPC Ltd.

Mar 31, 2016

1. Revenue from operations (gross)

a) The CERC notified the Tariff Regulations, 2014 in February 2014 (Regulations, 2014). Pending issue of provisional/final tariff orders w.e.f. 1st April 2014 for all the stations, beneficiaries are billed in accordance with the tariff approved and applicable as on 31st March 2014 as provided in the Regulations 2014. The energy charges in respect of the coal based stations are provisionally billed based on the GCV ''as received'' measured after the secondary crusher. The amount provisionally billed for the year ended 31st March 2016 is Rs. 69,950.05 crore (previous year Rs. 73,703.99 crore).

b) The Company has filed a writ petition before the Hon''ble Delhi High Court contesting certain provisions of the Tariff Regulations, 2014. On directions from the Hon''ble High Court on the issue of point of sampling for measurement of GCV of coal ''as received'', CERC has issued an order dated 25th January 2016 (subject to final decision of the Hon''ble High Court) that samples for measurement of coal ''as received'' basis should be collected from loaded wagons at the generating stations. Company has filed a review petition in respect of this CERC order on 1st March 2016 and the matter is still sub-judice.

Pending disposal of the review petition and issue of provisional/final tariff orders under Regulations, 2014 by the CERC, Sales have been provisionally recognized at Rs. 71,546.92 crore (previous year Rs. 73,133.81 crore) on the basis of said Regulations, wherein energy charges included in sales, in respect of the coal based stations have been recognized based on the GCV ''as received'' measured after secondary crusher which is generally within the station and at a distance less than one KM from the unloading point of the wagons.

Further, vide order dated 19th February 2016 in respect of a petition filed by a beneficiary, CERC issued directions that the grade slippage between the loading point at the mines'' end and unloading point at the generating stations is to be passed on through tariff to the beneficiaries. In the meantime, in compliance to the CERC directions issued vide said order dated 19th February 2016, efforts are being made to explore the mechanism for measurement of GCV of coal ''as received'', from the loaded wagons at the generating stations.

In the absence of suitable measurement mechanism of comparable GCV, the financial impact, if any, of the difference between the GCV ''as received'' measured after collection of samples from loaded wagons at the generating stations and that of GCV ''as received'' measured after secondary crusher, cannot be quantified and considering the distance between both the measuring points the difference will not be material.

c) Sales for the year ended 31st March 2016 include Rs. 50.74 crore (previous year Rs. 679.62 crore) pertaining to previous years recognized based on the orders issued by the CERC/Appellate Tribunal for Electricity (APTEL).

d) Sales for the year ended 31st March 2016 include (-) Rs. 1,693.65 crore (previous year (-) Rs. 1,399.42 crore) on account of income-tax payable to the beneficiaries as per Regulations, 2004. Sales for the year ended 31st March 2016 also include Rs. 28.12 crore (previous year Rs. 113.96 crore) on account of deferred tax materialized which is recoverable from beneficiaries as per Regulations, 2014.

e) Electricity duty on energy sales amounting to Rs. 729.20 crore (previous year Rs. 669.64 crore) has been reduced from sales in the Statement of Profit and Loss.

f) Revenue from operations include Rs. 81.82 crore (previous year Rs. 86.21 crore) towards energy internally consumed, valued at variable cost of generation and the corresponding amount is included in power charges in Note 26.

g) CERC Regulations provides that where after the truing-up, the tariff recovered is less/more than the tariff approved by the Commission, the generating Company shall recover/pay from/to the beneficiaries the under/over recovered amount along-with simple interest. Accordingly, the interest recoverable from the beneficiaries amounting to Rs. 221.29 crore (previous year Rs. 332.82 crore) has been accounted as ''Interest from beneficiaries''. Further, the amount payable to the beneficiaries has been accounted as ''Interest to beneficiaries'' in Note 26.

h) One of the power stations of the Company, having three units of 95 MW each and two units of 210 MW each, was issued consent to operate (Renewal) order by Delhi Pollution Control Committee (DPCC) on 2nd January 2014 which was valid till 31st January 2018 with a condition that particulate level omission level shall not exceed 150 mg/ Nm3. During the year, in a volte face on 8th July 2015 DPCC issued a Show Cause Notice to the station as to why four units out of five units of plant ought not to be closed down for failing to bring down its particulate level emission level below 50 mg/ Nm3. Further, vide order dated 31st December 2015, DPCC directed four units out of five units of plant shall not operate. Further, vide order dated 21st March 2016, DPCC allowed operation of two units of 210 MW subject to meeting the SPM of 50 mg/Nm3. Company''s petition to direct beneficiaries for payment of fixed charges from 31st December 2015 under change in law is pending disposal before the CERC. Pending disposal of the petition, capacity charges of Rs. 27.88 crore have not been recognised for the period, these units were not allowed to operate.

2. Previous year figures have been regrouped /rearranged wherever considered necessary.

3. Amount in the financial statements are presented in Rs. crore (upto two decimals) except for per share data and as other- wise stated. Certain amounts, which do not appear due to rounding off, are disclosed separately.

4. a) The Company has a system of obtaining periodic confirmation of balances from banks and other parties. There are no unconfirmed balances in respect of bank accounts and borrowings from banks & financial institutions. With regard to receivables for sale of energy, the Company sends demand intimations to the beneficiaries with details of amount paid and balance outstanding which can be said to be automatically confirmed on receipt of subsequent payment from such beneficiaries. In addition, reconciliation with beneficiaries and other customers is generally done on quarterly basis. So far as trade/other payables and loans and advances are concerned, the balance confirmation letters with the negative assertion as referred in the Standard on Auditing (SA) 505 (Revised) ''External Confirmations'', were sent to the parties. Some of such balances are subject to confirmation/reconciliation. Adjustments, if any will be accounted for on confirmation/reconciliation of the same, which in the opinion of the management will not have a material impact.

b) In the opinion of the management, the value of assets, other than fixed assets and non-current investments, 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. The levy of transit fee/entry tax on supplies of fuel to some of the power stations has been paid under protest as the matters are subjudice at various courts. In case the Company gets refund/demand from fuel suppliers/tax authorities on settlement of these cases, the same will be passed on to respective beneficiaries.

6. The environmental clearance ("clearance") granted by the Ministry of Environment and Forest, Government of India (MoEF) for one of the Company''s ongoing project was challenged before the National Green Tribunal (NGT). The NGT disposed the appeal, inter alia, directing that the order of clearance be remanded to the MoEF to pass an order granting or declining clearance to the project proponent afresh in accordance with the law and the judgment of the NGT and for referring the matter to the Expert Appraisal Committee ("Committee") for its re-scrutiny, which shall complete the process within six months from the date of NGT order. NGT also directed that the environmental clearance shall be kept in abeyance and the Company shall maintain status quo in relation to the project during the period of review by the Committee or till fresh order is passed by the MoEF, whichever is earlier. The Company filed an appeal challenging the NGT order before the Hon''ble Supreme Court of India which stayed the order of the NGT and the matter is sub-judice. Aggregate cost incurred on the project upto 31st March 2016 is Rs. 11,774.77 crore (previous year Rs. 8,732.44 crore). Management is confident that the approval for proceeding with the project shall be granted, hence no provision is considered necessary.

7. The Company is executing a hydro power project in the state of Uttrakhand, where all the clearances were accorded. A case was filed in Hon''ble Supreme Court of India after the natural disaster in Uttrakhand in June 2013 to review whether the various existing and ongoing hydro projects have contributed to environmental degradation. Hon''ble Supreme Court of India on 7th May 2014, ordered that no further construction shall be undertaken in the projects under consideration until further orders, which included the said hydro project of the Company. In the proceedings, Hon''ble Supreme Court is examining to allow few projects which have all clearances which includes the project of the Company where the work has been stopped. Aggregate cost incurred on the project up to 31st March 2016 is Rs. 157.31 crore (previous year Rs. 154.57 crore). Management is confident that the approval for proceeding with the project shall be granted, hence no provision is considered necessary.

8. Disclosure as per Accounting Standard - 1 on ''Disclosure of Accounting Policies''

During the year, following changes in accounting policies have been made:

a) For more appropriate presentation of the financial statements, the accounting policy relating to capital expenditure on assets not owned by Company has been discontinued with retrospective effect. Based on the guidance available in AS 10 notified by MCA on 30th March 2016 such expenditure on assets not owned by the Company have been capitalised retrospectively as part of the cost of project. As a result, cost amortized till 31st March 2015 amounting to Rs. 75.36 crore as per earlier policy has been written back as prior period adjustments and depreciation has been recalculated retrospectively following the rates and methodology notified by the CERC Tariff Regulations. Due to this change, prior period depreciation (net) till 31st March 2015 is (-) Rs. 53.41 crore, depreciation for the year is lower by Rs. 10.08 crore, profit for the year and fixed assets as at 31st March 2016 are higher by Rs. 63.49 crore. Refer Note 12 i).

b) Consequent to adoption of the guidance note on Rate Regulated Activities issued by the ICAI, Policy no. G has been inserted. Detailed disclosure in this regard has been made in Note 48.

c) Considering the adoption of new policy no. G, policy no. N.4 has been modified by replacing the word ''Deferred foreign currency fluctuation asset/liability'' with ''Regulatory asset/liability''.

d) Policy no. O.2.4 related to charging off of the items of prepaid & prior period expenses/income to the natural head of accounts has been modified by increasing the threshold limit from Rs. 1 lakh to Rs. 5 lakh. Consequently, Short term loans & advances (Note 20) are lower by Rs. 0.79 crore, Generation, administration and other expenses are higher by Rs. 4.19 crore (Note 26), Prior period items (Net) (Note 27) is lower by Rs. 3.40 crore and profit for the year is lower by Rs. 0.79 crore.

e) Policy N. 1 & O.1.9 related to income recognition & amortization of machinery spares has been modified for better disclosures.

There is no impact on the accounts due to the changes at sl.no. (b) (c) & (e) above.

9. Disclosure as per Accounting Standard - 5 on ''Net Profit or Loss for the Period'' - Change in accounting estimate

The Company has reviewed and revised the estimated useful life of certain assets as mentioned in accounting policy no. O 1.3, based on technical evaluation. These assets were earlier depreciated as per CERC Regulations as mentioned in accounting policy no. O 1.1. Consequently, with prospectively application, profit for the year ended 31st March 2016 is lower by Rs. 27.43 crore, fixed assets as at 31st March 2016 are lower by Rs. 28.93 crore and capital work-in-progress as at 31st March 2016 are higher byRs. 1.50 crore. (Refer Note 1, Policy no. O.1.3).

10. Disclosure as per Accounting Standard - 11 on ''Effects of Changes in Foreign Exchange Rates''

The effect of foreign exchange fluctuation during the year is as under:

i) The amount of exchange differences (net) debited to the Statement of Profit & Loss is Rs. 22.55 crore (previous year credit of Rs. 15.32 crore).

ii) The amount of exchange differences (net) debited to the carrying amount of fixed assets is Rs. 1,956.61 crore (previous year Rs. 345.96 crore).

11. Disclosure as per Accounting Standard - 15 on ''Employee Benefits'' General description of various employee benefit schemes are as under:

1. Defined Contribution Plans

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. Contribution to family pension scheme is paid to the appropriate authorities. The contribution of Rs. 242.60 crore (previous year Rs. 236.48 crore) to the trust for the year is recognised as expense and is charged to the Statement of Profit and Loss. 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. As per report of the actuary, overall interest earnings and cumulative surplus is more than the statutory interest payment requirement. Hence, no further provision is considered necessary. The details of fair value of plan assets and obligitions are as under:

B. Pension

The defined contribution pension scheme of the Company for its employees which is effective from 1st January 2007, is administered through a separate trust. The obligation of the Company is to contribute to the trust to the extent of amount not exceeding 30% of basic pay and dearness allowance less employer''s contribution towards provident fund, gratuity, post retirement medical facility (PRMF) or any other retirement benefits. The contribution of Rs. 223.24 crore (previous year Rs. 225.39 crore) to the funds for the year is recognized as an expense and charged to the Statement of Profit and Loss.

2. Defined Benefit Plans

A. Gratuity & Pension

(a) The Company has a defined benefit gratuity plan. Every employee who has rendered continuous service of five years or more is entitled to 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.

(b) The Company has pension schemes at two of its stations in respect of employees taken over from erstwhile state government power utilities.

The existing schemes stated at (a) and at one of the power stations at (b) above are funded by the Company and are managed by separate trusts. The liability for gratuity and the pension schemes as above is recognised on the basis of actuarial valuation. Based on acturial valuation, best estimate of the contribution towards gratuity/pension for the next financial year is Rs. 19.68 crore.

B. Post-Retirement Medical Facility (PRMF)

The Company has Post-Retirement Medical Facility (PRMF), under which the retired employees and their spouses 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 annually on the basis of actuarial valuation. During the year, a trust has been constituted for its employees superannuated on or after 1st January 2007, for the sole purpose of providing post retirement medical benefit to them. The liability as at 31st March 2016 ascertained as per actuarial valuation amounting to Rs. 890.00 crore has been funded to the trust by actual payment.

C. Terminal Benefits

Terminal benefits include baggage allowance for settlement at home town for employees & dependents and farewell gift to the superannuating employees. Further, the Company also provides for pension in respect of employees taken over from ertwhile State Government Power Utility at another station refered at 2.A.(b) above. Liability for the same is recognised based on acturial valuation.

D. 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. Earned leave is en-cashable while in service. Half-pay leaves (HPL) are en-cashable only on separation beyond the age of 50 years up to the maximum of 300 days. However, total number of leave that can be encashed on superannuation shall be restricted to 300 days and no commutation of half-pay leave shall be permissible. The liability for the same is recognised on the basis of actuarial valuation.

The above mentioned schemes (C and D) are unfunded and are recognised on the basis of actuarial valuation.

The summarised position of various defined benefits recognised in the Statement of Profit and Loss, Balance Sheet is as under:

12. Disclosure as per Accounting Standard - 16 on ''Borrowing Costs'' Borrowing costs capitalised during the year are Rs. 3,442.62 crore (previous year Rs. 2,969.11 crore).

13 Disclosure as per Accounting Standard - 17 on ''Segment Reporting'' Segment information:

(a) Business segments

The Company''s principal business is generation and sale of bulk power to State Power Utilities. Other business includes providing consultancy, project management and supervision, oil and gas exploration and coal mining.

(b) Segment revenue and expense

Revenue directly attributable to the segments is considered as ''Segment Revenue''. Expenses directly attributable to the segments and common expenses allocated on a reasonable basis are considered as ''Segment Expenses''.

(c) Segment assets and liabilities

Segment assets include all operating assets in respective segments comprising of net fixed assets and current assets, loans and advances. Capital work-in-progress and capital advances are included in unallocated corporate and other assets. Segment liabilities include operating liabilities and provisions.

14. Disclosure as per Accounting Standard - 18 on ''Related Party Disclosures''

a) Related parties:

i) Joint ventures:

Utility Powertech Ltd., NTPC-Alstom Power Services Private Ltd., BF-NTPC Energy Systems Ltd., National Power Exchange Ltd., Pan-Asian Renewables Private Ltd., Trincomalee Power Company Ltd. and Bangladesh-India Friendship Power Company Private Ltd.

ii) Key Managerial Personnel (KMP):

Shri Gurdeep Singh Chairman and Managing Director1

Shri Arup Roy Choudhury Chairman and Managing Director2

Shri I.J. Kapoor Director (Commercial)3

Shri A.KJha Director (Technical)4

Shri U.P.Pani Director (Human Resources)5

Shri S.C.Pandey Director (Projects)

Shri K.Biswal Director (Finance)

Shri K.K.Sharma Director (Operations)

Shri A.K.Rastogi Company Secretary

1. W.e.f. 4th February 2016 2. Upto 31st August 2015 3. Upto 20th August 2015

4. Acted as Chairman and Managing Director for the period from 1st September 2015 to 3rd February 2016

5. Holding additional charge of Director (Commercial) w.e.f 2nd September 2015 iii) Others:

NTPC Education and Research Society

15. Disclosure as per Accounting Standard - 26 on ''Intangible Assets''

Research expenditure charged to revenue during the year is Rs. 108.00 crore (previous year Rs. 97.56 crore).

16. Disclosure as per Accounting Standard - 28 on ''Impairment of Assets''

As required by Accounting Standard (AS) 28 ''Impairment of Assets'', an assessment of impairment of assets was carried out and based on such assessment, the Company has accounted an impairment loss of Rs. 4.48 crore (previous year Nil) which has been recognised in ''Depreciation/Amortisation and Impairment expense'' in the Statement of Profit and Loss in respect of assets falling under ''Generation Segment''. Also refer Note 12(m) in this regard. Further, the amount of impairment loss is not material considering the size of the company, hence other disclosures required by the AS 28 are not applicable to the Company.

17. Guidance Note (GN) on Rate Regulated Activities issued by the ICAI is applicable mandatorily from the financial year 2015-16.

The Company is mainly engaged in generation and sale of electricity. The price to be charged by the Company for electricity sold to its customers is determined by the CERC through tariff regulations. The tariff is based on allowable costs like interest, depreciation, operation & maintenance expenses, etc. with a stipulated return. This form of rate regulation is known as cost-of-service regulations which provide the Company to recover its costs of providing the goods or services plus a fair return. The Company has applied the GN in preparation of financial statements for the year, considering the provisions of Tariff Regulations issued by the CERC.

As per the CERC Tariff Regulations, any gain or loss on account of exchange risk variation during the construction period shall form part of the capital cost from declaration of Commercial Operation Date (COD) to be considered for calculation of tariff. CERC during the past period in tariff orders for various stations has allowed exchange differences incurred during the construction period in the capital cost. Accordingly, exchange difference arising during the construction period is within the scope of the GN.

In view of the above, exchange differences arising from settlement/translation of monetary item denominated in foreign currency (other than long term) to the extent recoverable from or payable to the beneficiaries in subsequent periods as per CERC Tariff Regulations are recognized as ''Regulatory asset/liability'' by credit/debit to ''Regulatory income/expense'' during construction period and adjusted from the year in which the same becomes recoverable from or payable to the beneficiaries.

18. Contingent Liabilities:

a) Claims against the company not acknowledged as debts in respect of:

(i) Capital works

Some of the contractors for supply and installation of equipments and execution of works at our projects have lodged claims on the Company for Rs. 8,768.55 crore (previous year Rs. 7,660.88 crore) seeking enhancement of the contract price, revision of work schedule with price escalation, compensation for the extended period of work, idle charges etc. These claims are being contested by the Company as being not admissible in terms of the provisions of the respective contracts.

The Company is pursuing various options under the dispute resolution mechanism available in the contracts for settlement of these claims. It is not practicable to make a realistic estimate of the outflow of resources if any, for settlement of such claims pending resolution.

(ii) Land compensation cases

In respect of land acquired for the projects, the erstwhile land owners have claimed higher compensation before various authorities/courts which are yet to be settled. Against such cases, contingent liability of Rs. 332.34 crore (previous year Rs. 312.37 crore) has been estimated.

(iii) Fuel suppliers

Pending resolution of the issues with fuel companies, an amount of Rs. 2,179.93 crore (previous year Rs. 567.22 crore) towards surface transportation charges, customs duty on service margin on imported coal, grade slippage pursuant to third party sampling etc. has been estimated by the Company as contingent liability

(iv) Others

In respect of claims made by various State/Central Government departments/Authorities towards building permission fee, penalty on diversion of agricultural land to non-agricultural use, non agricultural land assessment tax, water royalty etc. and by others, contingent liability of Rs. 312.94 crore (previous year Rs. 896.34 crore) has been estimated.

(v) Possible reimbursement

The contingent liabilities referred to in (i) above, include an amount of Rs. 1,298.80 crore (previous year Rs. 1,172.56 crore) relating to the hydro power project stated in Note 15 A (b) - Other non current assets, for which Company envisages possible reimbursement from GOI in full. In respect of balance claims included in (i) and in respect of the claims mentioned at (ii) above, payments, if any, by the company on settlement of the claims would be eligible for inclusion in the capital cost for the purpose of determination of tariff as per CERC Regulations subject to prudence check by the CERC. In case of (iii), the estimated possible reimbursement by way of recovery through tariff as per Regulations is Rs. 2,051.77 crore (previous year Rs. 423.36 crore).

b) Disputed tax matters

Disputed income tax/Sales tax/Excise and other tax matters pending before various Appellate Authorities amount to Rs. 7,499.37 crore (previous year Rs. 4,161.87 crore). Many of these matters were disposed off in favour of the Company but are disputed before higher authorities by the concerned departments. In respect of disputed cases, the Company estimate possible reimbursement of Rs. 3,602.24 crore (previous year Rs. 1,508.46 crore).

c) Others

Other contingent liabilities amount to Rs. 164.55 crore (previous year Rs. 309.36 crore).

Some of the beneficiaries have filed appeals against the tariff orders of the CERC. The amount of contingent liability in this regard is not ascertainable.

19. Capital and other commitments

a) Estimated amount of contracts remaining to be executed on capital account and not provided for as at 31st March 2016 is Rs. 55,449.01 crore (previous year Rs. 58,398.91 crore).

b) In respect of investments of Rs. 1,910.35 crore (previous year Rs. 1,822.61 crore) in subsidiary Companies, the Company has restrictions for their disposal as at 31st March 2016 as under:

c) In respect of investments of Rs. 1,800.08 crore (previous year Rs. 1,693.88 crore) in the joint venture entities, the Company has restrictions for their disposal as at 31st March 2016 as under:

d) The Company has commitments of Rs. 3,258.51 crore (previous year Rs. 3,638.40 crore) towards further investment in the joint venture entities as at 31st March 2016.

e) The Company has commitments of Rs. 1,145.14 crore (previous year Rs. 131.82 crore) towards further investment in the subsidiary companies as at 31st March 2016.

f) The Company has commitments of bank guarantee of 0.50 % of total contract price to be undertaken by NTPC-BHEL Power Projects Private Ltd. limited to a cumulative amount of Rs. 75.00 crore (previous year Rs. 75.00 crore).

g) Company''s commitment towards the minimum work programme in respect of oil exploration activity of Cambay Block (100% owned by the company) is Rs. 35.94 crore (USD 5.42 million) (previous year Rs. 140.27 crore, USD 22.41 million).

h) Company''s commitment towards the minimum work programme in respect of oil exploration activities of joint venture operations has been disclosed in Note 45 (b).

i) Company''s commitment in respect lease agreements has been disclosed in Note 43.

20. Corporate Social Responsibility Expenses (CSR)

As per Section 135 of the Companies Act, 2013 read with guidelines issued by DPE, the Company is required to spend, in every financial year, at least two per cent of the average net profits of the Company made during the three immediately preceding financial years in accordance with its CSR Policy. The details of CSR expenses for the year are as under:


Mar 31, 2015

I) Unsecured foreign currency loans (guaranteed by GOI) - Others carry fixed rate of interest ranging from 1.80% p.a. to 2.30% p.a. and are repayable in 23 to 32 semi annual installments as of 31st March 2015.

ii) Unsecured foreign currency loans – Banks include loans of Rs. 642.54 crore (previous year Rs. 589.81 crore) which carry fixed rate of interest of 1.88% p.a. to 4.31% p.a. and loans of Rs. 8,001.83 crore (previous year Rs. 5,958.83 crore) which carry floating rate of interest linked to 6M LIBOR. These loans are repayable in 2 to 24 semiannual installments as of 31st March 2015, commencing after moratorium period if any, as per the terms of the respective loan agreements.

iii) Unsecured foreign currency loans – Others include loans of Rs. 2,516.58 crore (previous year Rs. 1,424.92 crore) which carry fixed rate of interest ranging from 1.88% p.a. to 4.31% p.a and loans of Rs. 705.00 crore (previous year Rs. 995.63 crore) which carry floating rate of interest linked to 6M LIBOR/6M EURIBOR. These loans are repayable in 4 to 22 semiannual installments as of 31st March 2015, commencing after moratorium period if any, as per the terms of the respective loan agreements.

iv) Unsecured rupee term loans carry interest rate ranging from 7.00 % p.a. to 12.40 % p.a. with monthly/half-yearly rests. These loans are repayable in quarterly/half-yearly/yearly installments as per the terms of the respective loan agreements. The repayment period extends from a period of seven to ten years after a moratorium period of six months to six years.

b) The finance lease obligations are repayable in installments as per the terms of the lease agreement over a period of seven years.

c) There has been no default in repayment of any of the loans or interest thereon as at the end of the year.

d) During the year, the Company out of free reserves issued one 8.49% secured non-cumulative non-convertible redeemable taxable fully paid-up debenture of Rs. 12.50 by way of bonus for each fully paid-up equity share of par value of Rs. 10/- amounting to Rs. 10,306.83 crore. Refer Note 3 (c). An amount of Rs. 5,650.00 crore has been utilized till 31st March 2015 for the purpose mentioned in the Scheme of Arrangement.

e) The non current portion of fixed deposits has been repaid during the year in compliance to the provisions of the Companies Act, 2013.

Details of securities

I Secured by (I) English mortgage, on first pari-passu charge basis, of the office premises of the Company at Mumbai and (II) Equitable mortgage, by way of first charge, by deposit of title deeds of the immovable properties pertaining to National Capital Power Station.

II Secured by (I) English mortgage, on first pari-passu charge basis, of the office premises of the Company at Mumbai and (II) Hypothecation of all the present and future movable assets (excluding receivables) of Singrauli Super Thermal Power Station, Anta Gas Power Station, Auraiya Gas Power Station, Barh Super Thermal Power Project, Farakka Super Thermal Power Station, Kahalgaon Super Thermal Power Station, Koldam Hydel Power Project, Simhadri Super Thermal Power Project, Sipat Super Thermal Power Project, Talcher Thermal Power Station, Talcher Super Thermal Power Project, Tanda Thermal Power Station, Vindhyachal Super Thermal Power Station, National Capital Power Station, Dadri Gas Power Station, Feroze Gandhi Unchahar Power Station and Tapovan-Vishnugad Hydro Power Project as first charge, ranking pari-passu with charge, if any, already created in favour of the Company's Bankers on such movable assets hypothecated to them for working capital requirement.

III Secured by (I) English mortgage, on first pari passu charge basis, of the office premises of the Company at Mumbai and (II) Equitable mortgage of the immovable properties, on first pari-passu charge basis, pertaining to Sipat Super Thermal Power Project by extension of charge already created.

IV Secured by (I) English mortgage, on first pari-passu charge basis, of the office premises of the Company at Mumbai and (II) Equitable mortgage, by way of first charge, by deposit of the title deeds of the immovable properties pertaining to Sipat Super Thermal Power Project.

V Secured by (I) English mortgage, on first pari-passu charge basis, of the office premises of the Company at Mumbai, (II) Hypothecation of all the present and future movable assets (excluding receivables) of Barh Super Thermal Power Project on first pari-passu charge basis, ranking pari passu with charge already created in favour of Trustee for other Series of Bonds and (III) Equitable mortgage of the immovable properties, on first pari-passu charge basis, pertaining to Ramagundam Super Thermal Power Station by extension of charge already created.

VI Secured by (I) English mortgage, on first pari-passu charge basis, of the office premises of the Company at Mumbai and (II) Equitable mortgage, by way of first charge, by deposit of title deeds of the immovable properties pertaining to Ramagundam Super Thermal Power Station.

VII Secured by (I) English mortgage, on first pari-passu charge basis, of the office premises of the Company at Mumbai, (II) Equitable mortgage of the immovable properties, on first pari-passu charge basis, pertaining to National Capital Power Station by extension of charge already created.

VIII Secured by (I) English mortgage, on first pari-passu charge basis, of the office premises of the Company at Mumbai, (II) Hypothecation of all the present and future movable assets (excluding receivables) of Singrauli Super Thermal Power Station, Anta Gas Power Station, Auraiya Gas Power Station, Barh Super Thermal Power Project, Farakka Super Thermal Power Station, Kahalgaon Super Thermal Power Station, Koldam Hydel Power Project, Simhadri Super Thermal Power Project, Sipat Super Thermal Power Project, Talcher Thermal Power Station, Talcher Super Thermal Power Project, Tanda Thermal Power Station, Vindhyachal Super Thermal Power Station, National Capital Power Station, Dadri Gas Power Station, Feroze Gandhi Unchahar Power Station and Tapovan-Vishnugad Hydro Power Project as first charge, ranking pari-passu with charge, if any, already created in favour of the Company's Bankers on such movable assets hypothecated to them for working capital requirement and (III) Equitable mortgage of the immovable properties, on first pari-passu charge basis, pertaining to Singrauli Super Thermal Power Station by extension of charge already created.

IX Secured by English mortgage of the immovable properties pertaining to Solapur Super Thermal Power Project on first charge basis.

X Secured by Equitable mortgage of the immovable properties pertaining to Barh Super Thermal Power Project on first charge basis.

XI Security cover mentioned at sl. no. I to X is above 100% of the debt securities outstanding.

a) The net decrease during the year in the deferred tax liability of Rs. 70.65 crore (previous year increase of Rs. 136.31 crore) has been credited to the Statement of Profit and Loss. Further, an amount of Rs. 1.89 crore has been credited to general reserve during the year 2014-15, refer Note 3 d).

b) Deferred tax assets and deferred tax liabilities have been offset as they relate to the same governing laws.

c) CERC Regulations, 2014 provide for recovery of deferred tax liability as on 31st March 2009 from the beneficiaries. Accordingly, deferred tax liability as on 31st March 2009 is recoverable on materialisation from the beneficiaries. For the period commencing from 1st April 2014, Regulations, 2014 provide for grossing up of the return on equity based on effective tax rate for the financial year based on the actual tax paid during the year on the generation income. Deferred asset for deferred tax liability for the year will be reversed in future years when the related deferred tax liability forms a part of current tax.

a) Disclosure with respect to micro and small enterprises as required by the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) is made in Note 50.

b) In line with accounting policy no.M.4 (Note 1), deferred foreign currency fluctuation liability to the extent of Rs. 106.07 crore (previous year Rs. 16.07 crore) has been created during the year.

c) Other liabilities - Others include deposits received from contractors, customers and other parties.

a) Details in respect of rate of interest and terms of repayment of current maturities of secured and unsecured long term borrowings indicated above are disclosed in Note 5.

b) Unpaid dividends, matured deposits, bonds and interest include the amounts which have either not been claimed by the investors/ holders of the equity shares/bonds/fixed deposits or are on hold pending legal formalities etc. Out of the above, the amount required to be transferred to Investor Education and Protection Fund has been transferred.

c) Payable for capital expenditure includes liabilities of Rs. 142.92 crore (previous year Rs. 165.11 crore) towards an equipment supplier pending evaluation of performance and guarantee test results of steam/turbine generators at some of the stations. Pending settlement, liquidated damages recoverable for shortfall in performance of these equipments, if any, have not been recognised.

d) The Company had obtained exemption from the Ministry of Corporate Affairs (MCA), GOI in respect of applicability of Section 58A of Companies Act,1956 in respect of public deposits, for the employees rehabilitation scheme deposits obtained from dependants of employees who die or suffer permanent total disability. Consequent upon enactment of the Companies Act, 2013, the Company has applied to the MCA for continuation of above exemption, which is still awaited. The Company has been advised that the exemption earlier granted shall hold good.

e) Other payables - Others include amount payable to hospitals, retired employees, parties for stale cheques etc.

a) Disclosures required by AS 15 'Employee Benefits' is made in Note 39.

b) Disclosure required by AS 29 'Provisions, Contingent Liabilities and Contingent Assets' is made in Note 48.

c) The Company aggrieved over many of the issues as considered by the CERC in the tariff orders for its stations for the period 2004-09 had filed appeals with the Appellate Tribunal for Electricity (APTEL). The APTEL disposed off the appeals favourably directing the CERC to revise the tariff orders as per directions and methodology given. Some of the issues decided in favour of the Company by the APTEL were challenged by the CERC in the Hon'ble Supreme Court of India. Subsequently, the CERC has issued revised tariff orders for all the stations except one for the period 2004-09, considering the judgment of APTEL subject to disposal of appeals pending before the Hon'ble Supreme Court of India. Towards the above and other anticipated tariff adjustments, provision Of Rs. 148.10 crore (previous year Rs. 121.32 crore) has been made during the year and in respect of some of the stations, an amount of Rs. 180.16 crore ( previous year Rs. 162.56 crore) has been written back.

d) Provision for others comprise Rs. 58.64 crore (previous year Rs. 53.64 crore) towards cost of unfinished minimum work programme demanded by the Ministry of Petroleum and Natural Gas (MoP&NG) including interest thereon in relation to block AA-ONN-2003/2 [Refer Note 46 (b) (ii)],Rs. 440.35 crore (previous year Rs. 378.52 crore) towards provision for litigation cases and Rs. 6.03 crore (previous year Rs. 6.17 crore) towards provision for shortage in fixed assets pending investigation.

a) The conveyancing of the title to 9,701 acres of freehold land of value Rs. 1,963.33 crore (previous year 10,806 acres of value Rs. 2,401.12 crore), buildings & structures of value Rs. 50.43 crore (previous year Rs. 50.32 crore) and also execution of lease agreements for 13,844 acres of land of value Rs. 1,718.54 crore (previous year 11,039 acres, value Rs. 737.70 crore) in favour of the Company are awaiting completion of legal formalities.

b) Leasehold land includes 2,748 acres valuing Rs. 606.83 crore (previous year 818 acres valuing Rs. 29.67 crore) acquired on perpetual lease and accordingly not amortised.

c) Land does not include value of 33 acres (previous year 33 acres) of land in possession of the Company. This will be accounted for on settlement of the price thereof by the State Government Authorities.

d) Land includes 1,302 acres of value Rs. 72.51 crore (previous year 1,523 acres of valueRs. 173.82 crore) not in possession of the Company. The Company is taking appropriate steps for repossession of the same.

e) Land includes an amount of Rs. 179.65 crore (previous yearRs. 168.41 crore) deposited with various authorities in respect of land in possession which is subject to adjustment on final determination of price.

f) Possession of land measuring 98 acres (previous year 98 acres) consisting of 79 acres of freehold land (previous year 79 acres) and 19 acres of lease hold land (previous year 19 acres) of valueRs. 0.21 crore (previous yearRs. 0.21 crore) was transferred to Uttar Pradesh Rajya Vidyut Utpadan Nigam Ltd. (erstwhile UPSEB) for a consideration ofRs. 0.21 crore. Pending approval for transfer of the said land, the area and value of this land has been included in the total land of the Company. The consideration received from erstwhile UPSEB is disclosed under Note -10 - 'Other Current Liabilities' - as other liabilities.

g) Ministry of Power, Government of India vide its notification no. 2/38/99-BTPS (Volume VII) dated 22nd September 2006 transferred land of a power station to the Company on operating lease of 50 years. Lease rent for the year amounting toRs. 6.24 crore (previous yearRs. 6.24 crore) has been charged to the Statement of Profit and Loss.

h) The Company has received an opinion from the EAC of the ICAI on accounting treatment of capital expenditure on assets not owned by the Company wherein it was opined that such expenditure are to be charged to the Statement of Profit and Loss as and when incurred. The Company has represented that such expenditure being essential for setting up of a project, the same be accounted in line with the existing accounting practice and sought a review. During the year, ICAI has issued an exposure draft of AS-10 'Property, Plant & Equipment' which would replace the existing AS-10 'Accounting for Fixed Assets'. Para 9 of the said exposure draft and explanation thereto provides for capitalisation of such expenditure along-with the project cost. The final AS-10 'Property, Plant & Equipment' is yet to be issued by the Ministry of Corporate Affairs (MCA), GOI. Pending receipt of communication from the ICAI regarding the review of opinion & notification of the Revised AS-10 by the MCA, the Company continues to account for the said expenditure as per accounting policy no. E.4.

i) Assets under 5 KM scheme of the GOI represent expenditure on electrification of villages within 5 KM periphery of the generation plants of the Company in terms of Ministry of Power (MOP), Government of India scheme.

j) From the accounting periods commencing on or after 7th December 2006, the Company adjusts exchange differences arising on translation/settlement of long-term foreign currency monetary items relating to the acquisition of a depreciable asset to the cost of asset and depreciates the same over the remaining life of the asset.

a) Construction stores are net of provision for shortages pending investigation amounting to Rs. 4.69 crore (previous year Rs. 0.27 crore).

b) Pre-commissioning expenses for the year amount to Rs. 292.74 crore (previous year Rs. 346.09 crore) and after adjustment of pre- commissioning sales of Rs. 50.04 crore (previous yearRs. 29.06 crore) resulted in net pre-commissioning expenditure of Rs. 242.70 crore (previous year Rs. 317.03 crore).

c) Additions to the development of coal mines includes expenditure during construction period (net) of Rs. 153.90 crore (previous year Rs. 260.37 crore).

d) Assets under 5 KM scheme of the GOI represent expenditure on electrification of villages within 5 KM periphery of the generation plants of the Company in terms of Ministry of Power (MOP), Government of India scheme.

a) Investments have been valued as per the accounting policy no.K (Note 1).

b) The Board of Directors of NTPC Limited in its meeting held on 27th January 2012 accorded in principle approval for withdrawal from International Coal Ventures Private Ltd. (a Joint Venture of the Company). Approval of the GoI for the same is awaited, subsequent to which, the process of withdrawal shall commence. No provision towards the diminution other than temporary in the value of investment in International Coal Ventures Private Ltd. is required to be made.

c) The Board of Directors of NTPC Limited in its meeting held on 7th November 2012 has accorded in principle approval for withdrawal from National Power Exchange Ltd. (NPEX) (a Joint Venture of the Company). In the meeting of Group of Promoters (GOP) held on 21st March 2014, GOP recommended for voluntary winding up of NPEX and the same has been adopted by the Board of NPEX in its meeting held on 21st March 2014. Winding up of the Company is underway. Pending winding-up, provision ofRs. 1.06 crore (previous yearRs. 1.06 crore) towards the diminution other than temporary in the value of investment in NPEX has been made.

d) The Board of Directors of NTPC Limited in its meeting held on 19th June 2014 has accorded in principle approval for withdrawal from BF-NTPC Energy Systems Ltd. (a joint venture of the Company). Pending withdrawl, provision of Rs. 3.35 crore (previous year Nil) towards the diminution other than temporary in the value of investment in BF-NTPC Energy Systems Ltd. has been made.

e) The Board of Directors of NTPC Limited in its meeting held on 31st October 2014 approved the proposal for voluntary winding up of Pan-Asian Renewables Private Ltd. (a Joint Venture of the Company). Accordingly, a liquidator has been appointed for dissolution of the Company. The liquidation process is underway. Pending winding-up, provision of Rs. 1.28 crore (previous year Nil) towards the diminution other than temporary in the value of investment in Pan-Asian Renewables Private Ltd. has been made.

f) M/s Ratnagiri Gas & Power Private Ltd (RGPPL), a joint venture of the company, has accumulated losses of Rs. 2,463.35 crore as at 31st March, 2015 as per unaudited accounts. This includes Rs. 1,904.34 crore due to postponement of revenue recognition on conservative basis for the years 2013-14 and 2014-15 in view of disputes raised by its beneficiary though these disputes have already been decided in favour of the RGPPL by the CERC and the APTEL. Keeping in view the ongoing efforts for revival of RGPPL, no provision has been made in respect of the Company's investment of Rs. 974.30 crore (previous year Rs. 974.30 crore) in RGPPL as the diminution in the value is considered as temporary.

g) The Board of Directors of NTPC Limited in its meeting held on 25th March 2015 has accorded in principle approval for withdrawal from NTPC SCCL Global Ventures Pvt. Ltd. (a Joint Venture of the Company). No provision towards the diminution other than temporary in the value of investment in NTPC SCCL Global Ventures Pvt. Ltd. is required to be made.

h) Restrictions for the disposal of investments held by the Company and commitments towards certain Subsidiary & Joint Venture entities are disclosed in Note 53 b) to 53 f).

a) In line with the accounting policy on advance against depreciation, excess of depreciation charged in the books over the depreciation recovered in tariff, amounting toRs. 208.32 crore upto 31st March 2014 has been recognised as prior period sales.

b) During the year, the EAC of the ICAI has opined, on a reference by the Company, that interest paid/payable on land compensation till final award of the Court should be considered as a component of purchase/acquisition price of land since such interest is the result of the process of acquisition of land as per the Act. Any interest beyond the final award of the court should be treated as revenue expenditure and charged to the Statement of Profit and Loss. Accordingly, interest on land compensation amounting toRs. 132.86 crore charged to Statement of Profit & Loss in previous years has been reversed and treated as cost of land by credit to prior period interest.

1. Previous year figures have been regrouped /rearranged wherever considered necessary.

2. Amount in the financial statements are presented inRs. crore (upto two decimals) except for per share data and as other-wise stated. Certain amounts, which do not appear due to rounding off, are disclosed separately.

3. a) Some of the balances of trade/other payables and loans and advances are subject to confirmation/reconciliation. Adjustments, if any will be accounted for on confirmation/reconciliation of the same, which in the opinion of the management will not have a material impact.

b) In the opinion of the management, the value of assets, other than fixed assets and non-current investments, on realisation in the ordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.

4. In accordance with the principles approved by the Board of Directors of the Company, the dispute with coal suppliers on account of GCV has been settled. Accordingly, against the total disputed billed amount of Rs. 2,578.74 crore (previous year Rs. 4,102.87 crore) as at 31st March 2014, during the year the Company has paid Rs. 1,773.51 crore and provided Rs. 25.48 crore and the remaining amount of Rs. 779.75 crore is settled. Sales corresponding to energy charges recoverable for the amounts paid/provided as above have been recognized on settlement.

5. The levy of transit fee/entry tax on supplies of fuel to some of the power stations has been paid under protest as the matters are subjudice at various courts. In case the Company gets refund/demand from fuel suppliers/tax authorities on settlement of these cases, the same will be passed on to respective beneficiaries.

6. The environmental clearance ("clearance") granted by the Ministry of Environment and Forest, Government of India (MoEF) for one of the Company's project was challenged before the National Green Tribunal (NGT). The NGT disposed the appeal, inter alia, directing that the order of clearance be remanded to the MoEF to pass an order granting or declining clearance to the project proponent afresh in accordance with the law and the judgment of the NGT and for referring the matter to the Expert Appraisal Committee ("Committee") for its re-scrutiny, which shall complete the process within six months from the date of NGT order. NGT also directed that the environmental clearance shall be kept in abeyance and the Company shall maintain status quo in relation to the project during the period of review by the Committee or till fresh order is passed by the MoEF, whichever is earlier. The Company filed an appeal challenging the NGT order before the Hon'ble Supreme Court of India which stayed the order of the NGT and the matter is sub-judice. Aggregate cost incurred on the project upto 31st March 2015 is Rs. 8,732.44 crore (previous year Rs. 4,455.73 crore). Management is confident that the approval for proceeding with the project shall be granted, hence no provision is considered necessary.

7. The Company is executing a hydro power project in the state of Uttrakhand, where all the clearances were accorded. A case was filed in Hon'ble Supreme Court of India after the natural disaster in Uttrakhand in June 2013 to review whether the various existing and ongoing hydro projects have contributed to environmental degradation. Hon'ble Supreme Court of India on 7th May 2014, ordered that no further construction shall be undertaken in the projects under consideration until further orders, which included the hydro project of the Company. In the proceedings, Hon'ble Supreme Court is examining to allow few projects which have all clearances which includes the project of the Company where the work has been stopped. Aggregate cost incurred on the project up to 31st March 2015 isRs. 154.57 crore (previous yearRs. 145.46 crore). Management is confident that the approval for proceeding with the project shall be granted, hence no provision is considered necessary.

8. Disclosure as per Accounting Standard - 1 on 'Disclosure of Accounting Policies' During the year, following changes in accounting policies have been made:

a) Policy A 'Basis of preparation' has been modified considering the provisions of the Companies Act, 2013.

b) The Company has revised the accounting policy nos. N.1.1, N.1.2 & N.1.3 regarding depreciation in alignment with Schedule-II to the Companies Act, 2013 which has become applicable from 1st April 2014. Consequently, profit for the year ended 31st March 2015 is lower by Rs. 14.97 crore and fixed assets as at 31st March 2015 are lower byRs. 20.44 crore. Further, an amount of Rs. 3.58 crore (net of deferred tax Of Rs. 1.89 crore) has been recognized in the opening balance of the retained earnings where the remaining useful life of such assets is Nil as at 1st April 2014 in line with the provisions of Schedule-II to the Companies Act, 2013.

c) Policy N.1.11 regarding depreciation on leasehold land and buildings has been modified to cover all the tariff regulations of CERC viz. for thermal, hydro and renewable energy sources.

d) Policy S 'Segment reporting' has been added for improved disclosures.

There is no impact on the accounts due to the changes at sl.no. (a) (c), & (d) above.

9. Disclosure as per Accounting Standard - 11 on 'Effects of Changes in Foreign Exchange Rates' The effect of foreign exchange fluctuation during the year is as under:

i) The amount of exchange differences (net) credited to the Statement of Profit & Loss is Rs. 15.32 crore (previous year debit of Rs. 14.52 crore). ii) The amount of exchange differences (net) debited to the carrying amount of fixed assets isRs. 345.96 crore (previous year Rs. 1,850.39 crore).

10. Disclosure as per Accounting Standard - 12 on 'Accounting for Government Grants' Revenue grants recognised during the year is Rs. Nil (previous year Rs. 0.93 crore).

B. Pension

The defined contribution pension scheme of the Company for its employees which is effective from 1st January 2007, is administered through a separate trust. The obligation of the Company is to contribute to the trust to the extent of amount not exceeding 30% of basic pay and dearness allowance less employer's contribution towards provident fund, gratuity, post retirement medical facility (PRMF) or any other retirement benefits. The contribution of Rs. 225.39 crore (previous year Rs. 641.03 crore including Rs. 346.56 crore for the periods from 1st January 2007 to 31st March 2013) to the funds for the year is recognized as an expense and charged to the Statement of Profit and Loss.

2. Defined Benefit Plans

A. Gratuity & Pension

a) The Company has a defined benefit gratuity plan. Every employee who has rendered continuous service of five years or more is entitled to 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 ofRs. 0.10 crore on superannuation, resignation, termination, disablement or on death.

b) The Company has pension schemes at two of its stations in respect of employees taken over from erstwhile state government power utilities. The existing schemes stated at (a) and at one of the power stations at (b) above are funded by the Company and are managed by separate trusts. The liability for gratuity and the pension schemes as above is recognised on the basis of actuarial valuation. The Company's best estimate of the contribution towards gratuity/pension for the financial year 2015-16 is Rs. 28.64 crore.

B. Post-Retirement Medical Facility (PRMF)

The Company has Post-Retirement Medical Facility (PRMF), under which the retired employee and his / her 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. The liability for the same is recognised on the basis of actuarial valuation.

C. Terminal Benefits

Terminal benefits include baggage allowance for settlement at home town for employees & dependents and farewell gift to the superannuating employees. Further, the Company also provides for pension in respect of employees taken over from erstwhile State Government Power Utility at another station refered at 2.A.(b) above. Liability for the same is recognised based on acturial valuation.

D. 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. Earned leave is en-cashable while in service. Half-pay leaves (HPL) are en-cashable only on separation beyond the age of 50 years up to the maximum of 240 days. However, total amount of leave that can be encashed on superannuation shall be restricted to 300 days and no commutation of half-pay leave shall be permissible. The liability for the same is recognised on the basis of actuarial valuation.

The above mentioned schemes (B, C and D) are unfunded and are recognised on the basis of actuarial valuation.

The summarised position of various defined benefits recognised in the Statement of Profit and Loss, Balance Sheet is as under:

(Figures given in { } are for previous year)

10. Disclosure as per Accounting Standard - 16 on 'Borrowing Costs'

Borrowing costs capitalised during the year are Rs. 2,969.11 crore (previous year Rs. 2,543.96 crore).

11. Disclosure as per Accounting Standard - 17 on 'Segment Reporting' Segment information:

a) Business segments

The Company's principal business is generation and sale of bulk power to State Power Utilities. Other business includes providing consultancy, project management and supervision, oil and gas exploration and coal mining.

b) Segment revenue and expense

Revenue directly attributable to the segments is considered as 'Segment Revenue'. Expenses directly attributable to the segments and common expenses allocated on a reasonable basis are considered as 'Segment Expenses'.

c) Segment assets and liabilities

Segment assets include all operating assets in respective segments comprising of net fixed assets and current assets, loans and advances. Capital work- in-progress and capital advances are included in unallocated corporate and other assets. Segment liabilities include operating liabilities and provisions.

12. Disclosure as per Accounting Standard - 19 on 'Leases' a) Finance leases

(i) During previous years, the Company took on lease certain vehicles and had option to purchase them as per the terms of the lease agreements. As at 31st March 2015, there are no vehicles on lease.

(ii) The Company has entered into an agreement for coal movement through inland waterways transport. As per the agreement, the operator shall design, build, operate and maintain the unloading infrastructure and material handling system ("facility"), and transfer the same to the Company after expiry of 7 years atRs. 1/-. The facility shall be constructed in two phases of which Phase I has been completed and is under operation. Fair value of the entire facility isRs. 90 crore and the assets and liability in respect of Phase-I have been recognised atRs. 60 crore based on technical assessment. The minimum lease payments shall start on completion of Phase-II of the facility. Amounts payable for the coal transported through Phase-I of the facility are disclosed as contingent rent.

b) Operating leases

The Company's other significant leasing arrangements are in respect of operating leases of premises for residential use of employees, offices and guest houses/transit camps for a period of one to two years. These leasing arrangements are usually renewable on mutually agreed terms but are not non- cancellable. Note 24 - Employee benefits expense includes Rs. 42.83 crore (previous year Rs. 65.85 crore) towards lease payments (net of recoveries) in respect of premises for residential use of employees. Lease payments in respect of premises for offices and guest house/transit camps are included under 'Rent' in Note 26 – 'Generation, administration and other expenses'. Further, the Company has taken a helicopter on wet lease basis for a period of eleven years and the amount of lease charges is included in 'Hire charges of helicopter/aircraft' in Note 26.

13. Disclosure as per Accounting Standard - 26 on 'Intangible Assets' Research expenditure charged to revenue during the year is Rs. 97.56 crore (previous yearRs. 98.52 crore).

14. Disclosure as per Accounting Standard - 28 on 'Impairment of Assets'

As required by Accounting Standard (AS) 28 'Impairment of Assets', an assessment of impairment of assets was carried out and based on such assessment, there has been no impairment loss during the year.

15. Contingent Liabilities:

a) Claims against the company not acknowledged as debts in respect of :

(i) Capital Works

Some of the contractors for supply and installation of equipments and execution of works at our projects have lodged claims on the Company for Rs. 7,660.88 crore (previous year Rs. 4,134.85 crore) seeking enhancement of the contract price, revision of work schedule with price escalation, compensation for the extended period of work, idle charges etc. These claims are being contested by the Company as being not admissible in terms of the provisions of the respective contracts.

The Company is pursuing various options under the dispute resolution mechanism available in the contracts for settlement of these claims. It is not practicable to make a realistic estimate of the outflow of resources if any, for settlement of such claims pending resolution.

(ii) Land compensation cases

In respect of land acquired for the projects, the erstwhile land owners have claimed higher compensation before various authorities/courts which are yet to be settled. Against such cases, contingent liability of Rs. 312.37 crore (previous yearRs. 393.40 crore) has been estimated.

(iii) Fuel Suppliers

Pending resolution of the issues with fuel companies, an amount of Rs. 567.22 crore (previous year Rs. 647.33 crore) towards surface transportation charges, customs duty on service margin on imported coal, etc. has been estimated by the Company as contingent liability.

(iv) Others

In respect of claims made by various State/Central Government departments/Authorities towards building permission fee, penalty on diversion of agricultural land to non-agricultural use, non agricultural land assessment tax, water royalty etc. and by others, contingent liability of Rs. 896.34 crore (previous year Rs. 1,088.23 crore) has been estimated.

(v) Possible Reimbursement

The contingent liabilities referred to in (i) above, include an amount Of Rs. 1,172.56 crore (previous year Rs. 994.83 crore) relating to the hydro power project stated in Note 15 A (b) - Other non current assets, for which Company envisages possible reimbursement from GOI in full. In respect of balance claims included in (i) and in respect of the claims mentioned at (ii) above, payments, if any, by the company on settlement of the claims would be eligible for inclusion in the capital cost for the purpose of determination of tariff as per CERC Regulations subject to prudence check by the CERC. In case of (iii), the estimated possible reimbursement by way of recovery through tariff as per Regulations is Rs. 423.36 crore (previous yearRs. 637.82 crore).

b) Disputed Tax Matters

Disputed income tax/Sales tax/Excise and other tax matters pending before various Appellate Authorities amount to Rs. 4,161.87 crore (previous year Rs. 1,907.49 crore). Many of these matters were disposed off in favour of the Company but are disputed before higher authorities by the concerned departments. In respect of disputed cases, the company estimate possible reimbursement of Rs. 1,508.46 crore (previous year Rs. 390.37 crore).

c) Others

Other contingent liabilities amount to Rs. 309.36 crore (previous Year Rs. 363.49 crore).

Some of the beneficiaries have filed appeals against the tariff orders of the CERC. The amount of contingent liability in this regard is not ascertainable.


Mar 31, 2014

1. Share capital

a) During the year, the Company has not issued or bought back any shares.

b) The Company has only one class of equity shares having a par value Rs. 10/- per share. The holders of the equity shares are entitled to receive dividends as declared from time to time and are entitled to voting rights proportionate to their share holding at the meetings of shareholders.

c) During the year ended 31st March 2014, the amount of per share dividend recognised as distribution to equity share holders is Rs. 5.75 (previous year Rs. 4.50 and special dividend of Rs. 1.25).

2. Previous year fi gures have been regrouped /rearranged wherever considered necessary.

3. Amount in the financial statements are presented in Rs. crore (upto two decimals) except for per share data and as other-wise stated. Certain amounts, which do not appear due to rounding off, are disclosed separately.

4. a) Some of the balances of trade/other payables and loans and advances are subject to confirmation/reconciliation. Adjustments, if any will be accounted for on confirmation/reconciliation of the same, which in the opinion of the management will not have a material impact.

b) In the opinion of the management, the value of assets, other than fi xed assets and non-current investments, 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. Due to variation in the Gross Calorifi c Value (GCV) of coal supplied by coal companies and received at power stations, the Company w.e.f. October/November 2012 released payments on the basis of GCV measured at station end and the difference between the amount billed by the coal companies and the amounts admitted by the Company ("disputed billed amount") were disclosed as contingent liability with corresponding possible reimbursements from the beneficiaries. The issue was taken up with the coal companies directly and through the Ministry of Power and Ministry of Coal, Govt. of India for resolution. This resulted in incorporation of a provision for "Third party sample collection, preparation, testing and analysis" at the loading end in place of joint sampling in the Coal Supply Agreement (CSA), 2012 and amendment to CSA, 2009 which have since been signed with subsidiaries of Coal India Ltd (CIL).

Based on the advice of Government of India, Board of Directors approved the modalities for extrapolation of the third party sample analysis results for the three month period starting October/November 2013 to the supplies during the past period from October/November 2012 till start of third party sampling. On this basis, settlement with some of the CIL subsidiaries has been reached and matter has been taken up with other CIL subsidiaries for early resolution. Following the principles approved by the Board, against the disputed billed amount of Rs. 4,102.87 crore, during the year the Company paid Rs. 1,438.69 crore and provided Rs. 1,440.39 crore. In respect of the balance disputed billed amount of Rs. 1,223.79 crore as at 31st March 2014, taking into account settlements already reached with some of the CIL subsidiaries, an amount of Rs. 1,055.14 crore (previous year Rs. 2,531.10 crore) has been estimated as contingent liability with corresponding possible reimbursements from the beneficiaries {Refer Note 52 (a)(iii)} and remaining amount of Rs.168.65 crore is considered as settled. Sales corresponding to variable charges recoverable for the amounts paid/provided as above have been recognized.

6. The levy of transit fee/entry tax on supplies of fuel to some of the power stations has been paid under protest as the matters are subjudice at various courts. In case the Company gets refund/demand from fuel suppliers/tax authorities on settlement of these cases, the same will be passed on to respective beneficiaries.

7. The environmental clearance ("clearance") granted by the Ministry of Environment and Forest, Government of India (MoEF) for one of the Companys project was challenged before the National Green Tribunal (NGT). The NGT disposed the appeal, inter alia, directing that the order of clearance be remanded to the MOEF to pass an order granting or declining clearance to the project proponent afresh in accordance with the law and the judgment of the NGT and for referring the matter to the Expert Appraisal Committee ("Committee") for its re-scrutiny, which shall complete the process within six months from the date of NGT order. NGT also directed that the environmental clearance shall be kept in abeyance and the Company shall maintain status quo in relation to the project during the period of review by the Committee or till fresh order is passed by the MoEF, whichever is earlier. The Company filed an appeal challenging the NGT order before the Honble Supreme Court of India which stayed the order of the NGT and the matter is sub-judice. Aggregate cost incurred on the project upto 31st March 2014 is Rs. 4,455.73 crore (previous year Rs. 1,691.63 crore).

8. Disclosure as per Accounting Standard - 1 on Disclosure of Accounting Policies During the year, following changes in accounting policies have been made:

a) Policy A "Basis of Preparation" has been amended to refl ect that the financial statements have been prepared inter alia, in accordance with General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs and the Companies Act, 2013 (to the extent notifi ed and applicable).

b) Accounting of capital expenditure on assets not owned by the company for community development is disclosed in accounting policy D.4 instead of in M.a.10 for better presentation.

c) Consequent to the revised guidance note on Accounting for Oil & Gas Producing Activities issued by ICAI becoming effective from 1st April 2013, the policy to charge off exploratory wells-in-progress which have been found dry or not planned to be developed after two years from the date of completion of drilling has been modifi ed and henceforth, such expenditure shall be charged off as and when the wells are determined to be dry/abandoned.

d) Policy M.a.11 has been modifi ed to state that leasehold land and buildings relating to generation of electricity business are fully amortised over the lease period or life of the related plant whichever is lower, to cover both hydro and thermal power plants.

e) Policy H.5 and L.5 regarding accounting of derivative contracts and recovery of cost of hedging from the beneficiaries have been added consequent upon entering into derivative transactions for hedging as per the exchange risk management policy in the current year.

f) In Policy N.1, contribution to pension fund has been included as an employee benefit following the implementation of a contributory pension scheme in the Company in the current year.

g) Policy S "Taxes on Income" has been added for improved disclosures. There is no impact on the accounts due to the above changes.

9. Disclosure as per Accounting Standard - 11 on Effects of Changes in Foreign Exchange Rates The effect of foreign exchange fl uctuation during the year is as under:

i) The amount of exchange differences (net) debited to the statement of profit & loss is Rs. 14.52 crore (previous year Rs. 3.56 crore).

ii) The amount of exchange differences (net) debited to the carrying amount of fixed assets is Rs. 1,850.39 crore (previous year Rs. 1,056.01 crore).

10. Disclosure as per Accounting Standard - 12 on Accounting for Government Grants Revenue grants recognised during the year is Rs. 0.93 crore (previous year Rs. 0.39 crore).

11. Disclosure as per Accounting Standard - 14 on Accounting for Amalgamation

Ministry of Corporate Affairs (MCA) has accorded approval for the Scheme of Amalgamation of NTPC Hydro Ltd. (NHL), a wholly owned subsidiary of NTPC Ltd. engaged in the business of setting up small hydro power projects, with NTPC Ltd. effective from 18th December 2013. As per the Scheme and order of MCA, all assets and liabilities of NHL have been transferred to and vested in the Company w.e.f 1st April 2013. The Company followed Pooling of Interests Method to refl ect the amalgamation. Consequent to the amalgamation, the shares of NHL held by the Company were cancelled and all assets and liabilities of NHL became the assets and liabilities of the Company. Since NHL was a wholly owned subsidiary of the Company, no issue of shares or payment towards purchase consideration was made and no goodwill or capital reserve was recognised on amalgamation.

12. Disclosure as per Accounting Standard - 15 on Employee Benefits

General description of various 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. Contribution to family pension scheme is paid to the appropriate authorities. The contribution of Rs. 235.63 crore (previous year Rs. 210.07 crore) to the funds for the year is recognised as expense and is charged to the Statement of profit and Loss. The obligation of the Company is to make such fixed contribution and to ensure a minimum rate of return to the members as specifi ed by GOI. As per report of the actuary, overall interest earnings and cumulative surplus is more than the statutory interest payment requirement. Hence, no further provision is considered necessary. The details of fair value of plan assets and obligitions are as under:

B. Gratuity & Pension

(a) The Company has a defi ned benefit gratuity plan. Every employee who has rendered continuous service of fi ve 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.

(b) The Company has pension schemes at two of its stations in respect of employees taken over from erstwhile state government power utilities.

The existing schemes stated at (a) and at one of the power stations at (b) above are funded by the Company and are managed by separate trusts. The liability for gratuity and the pension schemes as above is recognised on the basis of actuarial valuation. The Companys best estimate of the contribution towards gratuity/pension for the fi nancial year 2014-15 is Rs. 44.90 crore.

(c) During the year, a defi ned contribution pension scheme of the Company has been implemented effective from 1st January 2007, for its employees. The scheme is administered through a separate trust. The obligation of the Company is to contribute to the trust to the extent of amount not exceeding 30% of Basic Pay and dearness allowance less employers contribution towards provident fund, gratuity, PRMF or any other retirement benefits.

C. Post-Retirement Medical Facility (PRMF)

The Company has Post-Retirement Medical Facility (PRMF), under which a retired employee and his / her 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. The liability for the same is recognised on the basis of actuarial valuation.

D. Terminal Benefits

Terminal benefits include baggage allowance for settlement at home town for employees & dependents and farewell gift to the superannuating employees. Further, the Company also provides for pension in respect of employees taken over from erstwhile State Government Power Utility at another station referred at B (b) above. Liability for the same is recognised based on acturial valuation.

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. Earned leave is en-cashable while in service. Half-pay leaves (HPL) are en-cashable only on separation beyond the age of 50 years up to the maximum of 240 days (HPL). However, total amount of leave that can be encashed on superannuation shall be restricted to 300 days and no commutation of half-pay leave shall be permissible. The liability for the same is recognised on the basis of actuarial valuation.

The above mentioned schemes (C, D and E) are unfunded and are recognised on the basis of actuarial valuation.

G. Actual return on plan assets Rs. 114.66 crore (previous year Rs. 102.20 crore).

H. Other Employee Benefits

Provision for long service award and family economic rehabilitation scheme amounting to Rs. 3.45 crore (previous year Rs. 3.36 crore) for the year have been made on the basis of actuarial valuation at the year end and debited to the statement of profit & loss.

The estimates of future salary increases considered in actuarial valuation, take account of infl ation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. Further, the expected return on plan assets is determined considering several applicable factors mainly the composition of plan assets held, assessed risk of asset management and historical returns from plan assets.

13. Disclosure as per Accounting Standard - 16 on Borrowing Costs

Borrowing costs capitalised during the year are Rs. 2,543.96 crore (previous year Rs. 2,148.14 crore).

14. Disclosure as per Accounting Standard - 17 on Segment Reporting Segment information:

a) Business segments

The Companys principal business is generation and sale of bulk power to State Power Utilities. Other business includes providing consultancy, project management and supervision, oil and gas exploration and coal mining.

b) Segment revenue and expense

Revenue directly attributable to the segments is considered as Segment Revenue. Expenses directly attributable to the segments and common expenses allocated on a reasonable basis are considered as Segment Expenses.

c) Segment assets and liabilities

Segment assets include all operating assets in respective segments comprising of net fixed assets and current assets, loans and advances. Construction work-in-progress, construction stores and advances are included in unallocated corporate and other assets. Segment liabilities include operating liabilities and provisions.

15. Disclosure as per Accounting Standard - 18 on Related Party Disclosures

a) Related parties:

i) Joint ventures:

Utility Powertech Ltd., NTPC-Alstom Power Services Private Ltd., BF-NTPC Energy Systems Ltd., National Power Exchange Ltd., Pan-Asian Renewables Private Ltd., Trincomalee Power Company Ltd. and Bangladesh - India Friendship Power Company Private Ltd.

ii) Key Management Personnel:

Shri Arup Roy Choudhury Chairman and Managing Director

Shri I.J. Kapoor Director (Commercial)

Shri N.N. Misra Director (Operations)

Shri A.K. Jha Director (Technical)

Shri U.P. Pani Director (Human Resources)

Shri S.C. Pandey Director (Projects)1

Shri K. Biswal Director (Finance) 2

Shri A.K. Singhal Director (Finance) 3

Shri B.P. Singh Director (Projects) 4

1. W.e.f. 1st October 2013 2. W.e.f. 9th December 2013

3. Up to 8th October 2013

4. Superannuated on 30th September 2013

16. Disclosure as per Accounting Standard - 26 on Intangible Assets

Research expenditure charged to revenue during the year is Rs. 98.52 crore (previous year Rs. 91.85 crore).

17. Disclosure as per Accounting Standard - 28 on Impairment of Assets

As required by Accounting Standard (AS) 28 Impairment of Assets notifi ed under the Companies (Accounting Standards) Rules, 2006, an assessment of impairment of assets was carried out and based on such assessment, there has been no impairment loss during the year.

18. Contingent Liabilities:

a) Claims against the company not acknowledged as debts in respect of:

(i) Capital Works

Some of the contractors for supply and installation of equipments and execution of works at our projects have lodged claims on the Company for Rs. 4,134.85 crore (previous year Rs. 3,966.11 crore) seeking enhancement of the contract price, revision of work schedule with price escalation, compensation for the extended period of work, idle charges etc. These claims are being contested by the Company as being not admissible in terms of the provisions of the respective contracts.

The Company is pursuing various options under the dispute resolution mechanism available in the contracts for settlement of these claims. It is not practicable to make a realistic estimate of the outfl ow of resources if any, for settlement of such claims pending resolution.

(ii) Land compensation cases

In respect of land acquired for the projects, the erstwhile land owners have claimed higher compensation before various authorities/ courts which are yet to be settled. Against such cases, contingent liability of Rs. 393.40 crore (previous year Rs. 747.54 crore) has been estimated.

(iii) Fuel Suppliers

Pending resolution of the issues with coal companies as disclosed in Note 32, the difference between the amount billed by the coal companies and the payment released by the company amounts to Rs. 1,055.14 crore (previous year Rs. 2,531.10 crore).

Further, an amount of Rs. 647.33 crore (previous year Rs. 368.67 crore) towards surface transportation charges, customs duty on service margin on imported coal etc. has been disputed by the Company.

(iv) Others

In respect of claims made by various State/Central Government departments/Authorities towards building permission fee, penalty on diversion of agricultural land to non-agricultural use, nala tax, water royalty etc. and by others, contingent liability of Rs. 1,088.23 crore (previous year Rs. 862.81 crore) has been estimated.

(v) Possible Reimbursement

The contingent liabilities referred to in (i) above, include an amount of Rs. 994.83 crore (previous year Rs. 961.24 crore) relating to the hydro power project stated in Note 15 A (b) - Other non current assets, for which Company envisages possible reimbursement from GOI in full. In respect of balance claims included in (i) and in respect of the claims mentioned at (ii) above, payments, if any, by the company on settlement of the claims would be eligible for inclusion in the capital cost for the purpose of determination of tariff as per CERC Regulations subject to prudence check by the CERC. In case of (iii), the estimated possible reimbursement is by way of recovery through tariff as per Regulations, 2009 is Rs. 1,694.00 crore (previous year Rs. 2,792.06 crore).

b) Disputed Income Tax/Sales Tax/Excise Matters

Disputed Income Tax/Sales Tax/Excise matters pending before various Appellate Authorities amount to Rs. 1,907.49 crore (previous year Rs. 1,547.61 crore). Many of these matters were disposed off in favour of the Company but are disputed before higher authorities by the concerned departments. In such cases, the company estimate possible reimbursement of Rs. 390.37 crore (previous year Rs. 365.19 crore).

c) Others

Other contingent liabilities amount to Rs. 363.49 crore (previous year Rs. 251.26 crore).

Some of the beneficiaries have filed appeals against the tariff orders of the CERC. The amount of contingent liability in this regard is not ascertainable.

19. Capital and other commitments

a) Estimated amount of contracts remaining to be executed on capital account and not provided for as at 31st March 2014 is Rs. 63,534.19 crore (previous year Rs. 48,905.56 crore).


Mar 31, 2013

1. Previous year figures have been regrouped /rearranged wherever considered necessary.

2. Amount in the financial statements are presented in Rs. crore (upto two decimals) except for per share data and as other-wise stated. Certain amounts, which do not appear due to rounding off, are disclosed separately.

3. a) Some of the balances of trade/other payables and loans and advances are subject to confirmation/reconciliation. Adjustments, if any will be accounted foron confirmation/reconciliation ofthe same, which in the opinion of the managementwill not have a material impact,

b) In the opinion of the management, the value of assets, other than fixed assets and non-current investments, on realisation in the ordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.

4. Government of India, Ministry of Power vide its letters F.No.6/1/2007-Fin.(Vol.VIII) dated 5th February 2013 and 29th March 2013 directed Government of National Capital Territory of Delhi (GNCTD) to release payment towards settlement of dues of erstwhile Delhi Electric Supply Undertaking (DESU) amounting to Rs. 835.97 crore as principal and Rs. 1,684.11 crore as interest to the company. Consequently, provision for doubtful debt ofRs. 835.97 crore has been written back (Note 22) and interest ofRs. 1,684.11 crore has been recognised as an exceptional item in the Statement of Profit and Loss during the year.

5. Vide gazette notification F no.22021/1/2008-CRC/ll dated 30.12.2011 issued by Ministry of Coal (MoC), grading and pricing of non-coking coal was migrated from Useful Heat Value (UHV) to Gross Calorific Value (GCV) based system w.e.f. 1st January 2012. The Coal Supply Agreements (CSAs) entered into by the Company were required to be amended to incorporate acceptable procedures for sample collection, preparation, testing and analysis, to facilitate such migration, which are still pending. The Companys Board of Directors approved payments to the coal companies based on the GCV based pricing system, and directed to frame modalities for implementation of GCV based grading system. Accordingly, modalities were framed to effect joint sampling and testing of coal at mine end/station end and future payments to coal companies. The above modalities were communicated to the coal companies w.e.f. October/ November 2012, thereafter the Company released payments on the basis of GCV measured at station end following the implementation of the said modalities since variation in the GCV of coal supplied and received at power stations was noticed. The Company regularly informed coal companies about this variation which has not been accepted by them. The issue has been taken up with the coal companies directly and through the MoP and MoC, GOI for resolution. Pending resolution of the issue, difference between the amount billed by the coal companies and the amounts admitted by the company is disclosed as contingent liability with corresponding possible reimbursements from the beneficiaries (Refer Note-50).

6. The levy of transit fee/entry tax on supplies of fuel to some of the power stations has been paid under protest as the matters are subjudice at various courts. In case the Company gets refund/demand from fuel suppliers/tax authorities on settlement of these cases, the same will be passed on to respective beneficiaries.

7. Disclosure as per Accounting Standard - 5 Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies

i) Ministry of Corporate Affairs, Government of India through Circular no. 25/2012 dated 9th August 2012 has clarified that para 6 of Accounting Standard (AS) 11 and para 4 (e) of AS 16 shall not apply to a Company which is applying para 46-A of AS 11. Accordingly, Company has modifed the related accounting policies. Consequently, exchange differences arising on settlement/translation of foreign currency loans to the extent regarded as an adjustment to interest costs as per para 4 (e) of AS 16 and hitherto charged to Statement of Profit and Loss, have now been adjusted in the cost of related assets. As a result, profit for the year ended 31st March 2013 is higher by Rs. 14.80 crore, fixed assets are higher by Rs. 173.56 crore and Deferred Income from Foreign Currency Fluctuation is higher by Rs. 158.76 crore.

ii) During the year, the Company reviewed its policy for accounting of carpet coal which was hitherto charged to the Statement of Profit and Loss and capitalised the cost of carpet coal with the coal handling plant. Consequently, tangible assets and profit for the year are higher by Rs. 20.36 crore.

iii) During the year, the Company has reviewed and modifed the accounting policy related to amortisation of other intangible assets to bring more clarity. However, this does not have any impact on accounts fortheyear.

8. Disclosure as per Accounting Standard - 11 on Effects of Changes in Foreign Exchange Rates

The effect of foreign exchange fluctuation during the year is as under:

i) The amount of exchange differences (net) debited to the statement of profit & loss isRs. 3.56 crore (previous yearRs. 19.66 crore).

ii) The amount of exchange differences (net) debited to the carrying amount of fixed assets isRs. 1,056.01 crore (previous yearRs. 1,661.21 crore).

9. Disclosure as per Accounting Standard - 12 on Accounting for Government Grants

Revenue grants recognised during the year isRs. 0.39 crore (previous yearRs. 0.24 crore).

10. Disclosure as per Accounting Standard - 15 on Employee Benefits

General description ofvarious 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. Contribution to family pension scheme is paid to the appropriate authorities. The contribution ofRs. 192.88 crore (previous yearRs. 173.46 crore) to the funds for the year is recognised as expense and is charged to the statement of profit and loss. 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. As per report ofthe actuary, overall interest earnings and cumulative surplus is more than the statutory interest payment requirement. Hence, no further provision is considered necessary. The details offairvalue of plan assets and obligitions are as under:

B. Gratuity & Pension

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 ofRs. 0.10 crore on superannuation, resignation, termination, disablement or on death.

The Company has a scheme of pension at one of the stations in respect of employees taken over from erstwhile state government power utility. In respect of other employees of the Company, pension scheme is yet to be implemented as stated in Note 11.

The existing schemes are funded by the Company and are managed by separate trusts. The liability for the same is recognised on the basis of actuarial valuation.

C. Post-Retirement Medical Facility (PRMF)

The Company has Post-Retirement Medical Facility (PRMF), under which a retired employee and his / her 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. The liability for the same is recognised on the basis of actuarial valuation.

D. Terminal Benefits

Terminal benefits include settlement at home town for employees & dependents and farewell gift to the superannuating employees. Further, the Company also provides for pension in respect of employees taken over from erstwhile State Government Power Utility at another station. The liability for the same is recognised on the basis of actuarial valuation.

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. 73.33 % of the earned leave is en-cashable while in service, and upto a maximum of 300 days on separation. Half-pay leave is en-cashable only on separation beyond the age of 50 years up to the maximum of 240 days (HPL). However, total amount of leave that can be encashed on superannuation shall be restricted to 300 days and no commutation of half-pay leave shall be permissible. The liability for the same is recognised on the basis of actuarial valuation.

The above mentioned schemes (C, D and E) are unfunded and are recognised on the basis of actuarial valuation.

The summarised position ofvarious defined benefits recognised in the statement of profit and loss, balance sheet are as under:

(Figures given in {) are for previous year)

G. Actual return on plan assetsRs. 102.20 crore (previous yearRs. 94.63 crore).

H. Other Employee Benefits

Provision for long service award and family economic rehabilitation scheme amounting to Rs. 3.36 crore (previous yearRs. 4.85 crore) for the year have been made on the basis of actuarial valuation at the year end and debited to the statement of profit & loss.

I. Actuarial Assumptions

Principal assumptions used for actuarial valuation fortheyear ended are:

The estimates of future salary increases considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. Further, the expected return on plan assets is determined considering several applicable factors mainly the composition of plan assets held, assessed risk of asset management and historical returns from plan assets.

J. The Companys bestestimate ofthe contribution towardsgratuity/pension forthe financial year2013-14 isRs. 44.81 crore.

11. Disclosure as per Accounting Standard - 16 on Borrowing Costs

Borrowing costs capitalised during the year are Rs. 2,148.14 crore (previous yearRs. 2,342.21 crore).

12. Disclosure as per Accounting Standard - 17 on Segment Reporting

Segment information:

a) Business segments

The Companys principal business is generation and sale of bulk powerto State Power Utilities. Other business includes providing consultancy, project management and supervision, oil and gas exploration and coal mining.

b) Segment revenue and expense

Revenue directly attributable to the segments is considered as Segment Revenue. Expenses directly attributable to the segments and common expenses allocated on a reasonable basis are considered as Segment Expenses.

c) Segment assets and liabilities

Segment assets include all operating assets in respective segments comprising of net fixed assets and current assets, loans and advances. Construction work-in-progress, construction stores and advances are included in unallocated corporate and other assets. Segment liabilities include operating liabilities and provisions.

13. Disclosure as per Accounting Standard - 18 on Related Party Disclosures

a) Related parties:

i) Joint ventures:

Utility Powertech Ltd., NTPC-Alstom Power Services Private Ltd., BF-NTPC Energy Systems Ltd., Pan-Asian Renewables Private Ltd., Trincomalee Power Company Ltd. and Bangladesh -India Friendship Power Company Private Ltd.

ii) Key Management Personnel:

Shri Arup Roy Choudhury Chairman and Managing Director

Shri A.K. Singhal Director (Finance)

Shri I.J. Kapoor Director (Commercial)

Shri.B.P.Singh Director (Projects)

Shri D.K. Jain Director (Technical)1

Shri S.P.Singh Director (Human Resources)2

Shri N.N.Mishra Director (Operations)

Shri A.K.Jha Director (Technical)3

Shri U.P.Pani Director (Human Resources)4

1. Superannuated on 30th June 2012 2. Superannuated on 28th February 2013 3. W.e.f. 1st July 2012

4. W.e.f. 1st March 2013

14. Disclosure as per Accounting Standard - 26 on Intangible Assets

Research expenditure charged to revenue during the year is Rs. 91.85 crore (previous year Rs. 29.89 crore).

15. Disclosure as per Accounting Standard - 28 on Impairment of Assets

As required by Accounting Standard (AS) 28 Impairment of Assets notified under the Companies (Accounting Standards) Rules, 2006, the Company has carried out the assessment of impairment of assets. Based on such assessment, there has been no impairment loss during the year.

16. Contingent Liabilities:

a) Claims against the company not acknowledged as debts in respect of:

(i) Capital Works

Some of the contractors for supply and installation of equipments and execution of works at our projects have lodged claims on the Company forRs. 3,966.11 crore (previous yearRs. 4,427.27 crore) seeking enhancement of the contract price, revision of work schedule with price escalation, compensation for the extended period of work, idle charges etc. These claims are being contested by the Company as being not admissible in terms of the provisions of the respective contracts.

The Company is pursuing various options under the dispute resolution mechanism available in the contracts for settlement of these claims. It is not practicable to make a realistic estimate of the outflow of resources if any, for settlement of such claims pending resolution.

(ii) Land compensation cases

In respect of land acquired for the projects, the land losers have claimed higher compensation before various authorities/courts which areyetto be settled. In such cases, contingent liability ofRs. 747.54 crore (previousyearRs. 1,173.58 crore) has been estimated.

(iii) Fuel Suppliers

Pending resolution ofthe issues with coal companies as disclosed in Note 33, payments and accounting of coal are being made based on GCV ascertained at station end. The difference between the amount billed by the coal companies and the payment released by the company amounts to Rs. 2,531.10 crore (previous yearRs. Nil).

Further, an amount ofRs. 367.73 crore (previous yearRs. 400.63 crore) towards surface transportation charges, customs duty on service margin on imported coal etc. has been disputed bythe Company.

(iv) Others

In respect of claims made by various State/Central Government departments/Authorities towards building permission fee, penalty on diversion of agricultural land to non-agricultural use, nala tax, water royalty etc. and by others, contingent liability ofRs. 862.81 crore (previous yearRs. 877.47 crore) has been estimated.

(v) Possible Reimbursement

The contingent liabilities referred to in (i) above, include an amount ofRs. 961.24 crore (previous yearRs. 1,769.70 crore) relating to the hydro power project stated in Note 21 b) - Other current assets, for which Company envisages possible reimbursement from GOI in full. In respect of balance claims included in (i) and in respect of the claims mentioned at (ii) above, payments, if any, bythe company on settlement of the claims would be eligible for inclusion in the capital cost for the purpose of determination of tariff as per CERC Regulations subject to prudence check by the CERC. In case of (iii), the estimated possible reimbursement is by way of recovery through tariff as per Regulations, 2009 isRs. 2,792.06 crore (previous yearRs. 283.45 crore).

b) Disputed Income Tax/Sales Tax/Excise Matters

Disputed Income Tax/Sales Tax/Excise matters pending before various Appellate Authorities amount to Rs. 1,547.61 crore (previous yearRs. 3,038.63 crore). Many of these matters were disposed off in favour of the Company but are disputed before higher authorities by the concerned departments. In such cases, the company estimate possible reimbursement ofRs. 365.19 crore (previous yearRs. 2,111.54 crore).

c) Others

Other contingent liabilities amount to Rs. 252.20 crore (previous yearRs. 316.93 crore).

Some of the beneficiaries have filed appeals against the tariff orders of the CERC. The amount of contingent liability in this regard is not ascertainable.

17. Capital and other commitments

a) Estimated amount of contracts remaining to be executed on capital account and not provided for as at 31st March 2013 isRs. 48,905.56 crore (previous yearRs. 29,563.89 crore).

b) In respect of investments ofRs. 3,850.15 crore (previous yearRs. 2,895.97 crore) in the joint venture entities, the Company has restrictions for their disposal ranging from two years to fifteen years from the date of incorporation/allottment of shares/commercial operation ofthe projects as the case may be.

c) In respect of investments ofRs. 892.26 crore (previous yearRs. 866.61 crore) in the subsidiary Companies, the Company has restrictions for their disposal for five years from the date of commercial operation of the respective project.

d) As at 31st March 2013, the Company has commitments ofRs. 4,041.86 crore (previous yearRs. 3,236.96 crore) towards further investment in thejointventure entities.

e) As at 31st March 2013, the Company has commitments ofRs. 1,393.67 crore (previous yearRs. 1,419.32 crore) towards further investment in the subsidiary companies.

f) Companys commitment towards the minimum work programme in respect of oil exploration activity of Cambay Block (100% owned by the company) isRs. 183.45 crore (USD 33.73 million) (previousyearRs. 182.84 crore, USD 35.41 million).

g) Companys comittment towards the minimum work programme in respect oil exploration activities of joint venture operations has been disclosed in Note-45.

h) Companys commitment in respect of further commitments relating to lease agreements has been disclosed in Note - 42.


Mar 31, 2012

1. The financial statements for the year ended 31st March 2011 were prepared as per then applicable, Schedule VI to the Companies Act, 1956. Consequent to the Notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended 31st March 2012 are prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this years classifi cation. The adoption of revised Schedule VI for previous year figures does not impact recognition and measurement principles followed for preparation of financial statements.

2. Amount in the financial statements are presented in Rs. crore (upto two decimals) except for per share data and as other-wise stated. Certain amounts, which do not appear due to rounding off, are incorporated separately.

3. a) Certain loans & advances and creditors in so far as these have since not been realised/discharged or adjusted are subject to confi rmation/ reconciliation and consequential adjustment, which in the opinion of the management is not material.

b) In the opinion of the management, the value of assets, other than fi xed assets and non-current investments, on realisation in the ordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.

4. The coal price Notification No 222021 /1/ 2008-CRC-UU dated 31.12.2011 issued by Ministry of Coal (MoC) proposed migration from Useful Heat Value (UHV) to Gross Calorifi c Value (GCV) based pricing of coal, and also increased the coal prices. This was superseded by Notification dated 31.01.2012, partially rolling back the increase in coal prices. Various stakeholders including power utilities and MOP have expressed concern on the switchover from existing UHV to GCV based pricing of coal, without having put in place the prerequisite technical and legal framework. The issue is under deliberation at MOP and Central Electricity Authority with MoC for an early resolution.

Pending resolution of the issues, stations are continuing to make payment and accounting of coal as per the pre-migrated system of UHV based pricing of coal and the difference between the amounts billed by the coal companies and the payments made/accounted for has been shown as contingent liability. Since fuel cost is a pass through component of tariff, the revision of price will not have any adverse impact on the profits of the Company.

5. The levy of transit fee/entry tax/VAT on supplies of fuel to some of the power stations has been paid under protest as the matters are subjudice at various courts. Probable demand for the period upto January 2012 has been included under contingent liabilities. In case the Company gets refund / demand from fuel suppliers/tax authorities on settlement of these cases, the same will be passed on to respective benefi ciaries.

6. Disclosure as per Accounting Standard - 9 on Revenue Recognition

Due to uncertainty of realisation in the absence of sanction by the GOI, the Companys share of net annual profits of one of the stations taken over by the Company in June 2006 for the period 1st April 1986 to 31st May 2006 amounting to Rs. 115.58 crore (previous year Rs. 115.58 crore) being balance receivable in terms of the management contract with the GOI has not been recognised.

7. Disclosure as per Accounting Standard - 11 on Effects of Changes in Foreign Exchange Rates The effect of foreign exchange fl uctuation during the year is as under:

i) The amount of exchange differences (net) debited to the statement of profit & loss is Rs. 19.66 crore (previous year Rs. 6.50 crore).

ii) The amount of exchange differences (net) debited to the carrying amount of fixed assets is Rs. 1,661.21 crore (previous year Rs. 168.29 crore).

8. Disclosure as per Accounting Standard - 12 on Accounting for Government Grants Revenue grants recognised during the year is Rs. 0.24 crore (previous year Rs. 0.43 crore).

9. Disclosure as per Accounting Standard - 15 on Employee Benefits General description of various defi ned 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. Contribution to family pension scheme is paid to the appropriate authorities. The contribution of Rs. 173.46 crore (previous year Rs. 191.19 crore) to the funds for the year is recognised as expense and is charged to the statement of profit and loss. The obligation of the Company is to make such fixed contribution and to ensure a minimum rate of return to the members as specifi ed by GOI. As per report of the actuary, overall interest earnings and cumulative surplus is more than the statutory interest payment requirement. Hence no further provision is considered necessary.

B. Gratuity & Pension

The Company has a defi ned 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 Company has a scheme of pension at one of the stations in respect of employees taken over from erstwhile state government power utility. In respect of other employees of the Company, pension scheme is yet to be implemented as stated in Note 11 b) above.

The existing schemes are funded by the Company and are managed by separate trusts. The liability for the same is recognised on the basis of actuarial valuation.

C. Post-Retirement Medical Facility (PRMF)

The Company has Post-Retirement Medical Facility (PRMF), 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. The liability for the same is recognised on the basis of actuarial valuation.

D. Terminal Benefits

Terminal benefits include settlement at home town for employees & dependents and farewell gift to the superannuating employees. Further, the Company also provides for pension in respect of employees taken over from erstwhile State Government Power Utility at another station. The liability for the same is recognised on the basis of actuarial valuation.

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. 73.33 % of the earned leave is en-cashable while in service, and upto a maximum of 300 days on separation. Half-pay leave is en-cashable only on separation beyond the age of 50 years up to the maximum of 240 days (HPL) as per the rules of the Company. The liability for the same is recognised on the basis of actuarial valuation.

The above mentioned schemes (C, D and E) are unfunded and are recognised on the basis of actuarial valuation.

The summarised position of various defi ned benefits recognised in the statement of profit and loss, balance sheet are as under:

G. Actual return on plan assets Rs. 94.63 crore (previous year Rs. 83.89 crore).

H. Other Employee Benefits

Provision for long service award and family economic rehabilitation scheme amounting to Rs. 4.85 crore (previous year Rs. 2.76 crore) for the year have been made on the basis of actuarial valuation at the year end and debited to the statement of profit & loss.

The estimates of future salary increases considered in actuarial valuation, take account of infl ation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. Further, the expected return on plan assets is determined considering several applicable factors mainly the composition of plan assets held, assessed risk of asset management and historical returns from plan assets.

J. The Companys best estimate of the contribution towards gratuity/pension for the financial year 2012-13 is Rs. 68.59 crore.

10. Disclosure as per Accounting Standard - 16 on Borrowing Costs

Borrowing costs capitalised during the year are Rs. 2,342.21 crore (previous year Rs. 1,743.61 crore).

11. Disclosure as per Accounting Standard - 17 on Segment Reporting

Segment information:

a) Business segments

The Companys principal business is generation and sale of bulk power to State Power Utilities. Other business includes providing consultancy, project management and supervision, oil and gas exploration and coal mining.

b) Segment revenue and expense

Revenue directly attributable to the segments is considered as Segment Revenue. Expenses directly attributable to the segments and common expenses allocated on a reasonable basis are considered as Segment Expenses.

c) Segment assets and liabilities

Segment assets include all operating assets in respective segments comprising of net fixed assets and current assets, loans and advances. Construction work-in-progress, construction stores and advances are included in unallocated corporate and other assets. Segment liabilities include operating liabilities and provisions.

12. Disclosure as per Accounting Standard - 26 on Intangible Assets

Research expenditure charged to revenue during the year is Rs. 29.89 crore (previous year Rs. 28.30 crore).

b) Joint venture operations:

i) The Company along-with some public sector undertakings has entered into Production Sharing Contracts (PSCs) with GOI for three exploration blocks namely KG- OSN-2009/1, KG-OSN-2009/4 and AN-DWN-2009/13 under VIII round of New Exploration Licensing Policy (NELP VIII) with 10% participating interest (PI) in each of the blocks.

Based on the un-audited statement of the accounts for the above blocks forwarded by M/s Oil & Natural Gas Corporation Ltd., the operator, the Companys share in respect of assets and liabilities as at 31st March 2012 and expenditure for the year are given below:

ii) Exploration activities in the block AA-ONN-2003/2 were abandoned due to unforeseen geological conditions & withdrawal of the operator. Attempts to reconstitute the consortium to accomplish the residual exploratory activities did not yield result. In the meanwhile, MoP&NG demanded from the Company the cost of unfi nished minimum work programme of US$ 7.516 million. During the year, provision of Rs. 41.19 crore along-with interest has been made. The Company has sought waiver of the claim citing force majeure conditions at site leading to discontinuation of exploratory activities.

13. Disclosure as per Accounting Standard - 28 on Impairment of Assets

As required by Accounting Standard (AS) 28 Impairment of Assets notified under the Companies (Accounting Standards) Rules, 2006, the Company has carried out the assessment of impairment of assets. Based on such assessment, there has been no impairment loss during the year.

14. Contingent Liabilities:

a) Claims against the company not acknowledged as debts in respect of:

(i) Capital Works

Some of the contractors for supply and installation of equipments and execution of works at our projects have lodged claims on the Company for Rs. 4,417.04 crore (previous year Rs. 3,485.85 crore) seeking enhancement of the contract price, revision of work schedule with price escalation, compensation for the extended period of work, idle charges etc. These claims are being contested by the Company as being not admissible in terms of the provisions of the respective contracts.

The Company is pursuing various options under the dispute resolution mechanism available in the contracts for settlement of these claims. It is not practicable to make a realistic estimate of the outfl ow of resources if any, for settlement of such claims pending resolution.

(ii) Land compensation cases

In respect of land acquired for the projects, the land losers have claimed higher compensation before various authorities/courts which are yet to be settled. In such cases, contingent liability of Rs. 1,173.58 crore (previous year Rs. 1,851.08 crore) has been estimated.

(iii) Fuel Suppliers

Pending resolution of the issues disclosed in Note 32, payments and accounting of coal are being made as per the pre-migrated system of UHV based pricing of coal. The difference between the billing by the coal companies on the revised GCV based price and payment released on pre-revised UHV based price amounts to Rs. 399.39 crore (previous year Rs. Nil).

Further, an amount of Rs. 399.42 crore (previous year Rs. 182.22 crore) towards surface transportation charges, customs duty on service margin on imported coal etc. has been disputed by the Company.

(iv) Others

In respect of claims made by various State/Central Government departments/Authorities towards building permission fees, penalty on diversion of agricultural land to non-agricultural use, nala tax, water royalty etc. and by others, contingent liability of Rs. 877.47 crore (previous year Rs. 1,064.40 crore) has been estimated.

(v) Possible Reimbursement

The contingent liabilities referred to in (i) above, include an amount of Rs. 1,769.70 crore (previous year Rs. 1,495.35 crore) relating to the hydro power project stated in Note 21 b) - Other current assets, for which Company envisages possible reimbursement from GOI in full. In respect of balance claims included in (i) and in respect of the claims mentioned at (ii) above, payments, if any, by the company on settlement of the claims would be eligible for inclusion in the capital cost for the purpose of determination of tariff as per CERC Regulations subject to prudence check by the CERC. In case of (iii) & (iv), the estimated possible reimbursement is by way of recovery through tariff as per Regulations, 2009 and others is Rs. 676.32 crore (previous year Rs. 146.97 crore).

b) Disputed Income Tax/Sales Tax/Excise Matters

Disputed Income Tax/Sales Tax/Excise matters pending before various Appellate Authorities amount to Rs. 3,038.63 crore (previous year Rs. 2,465.26 crore). Many of these matters were disposed off in favour of the Company but are disputed before higher authorities by the concerned departments. In such cases, the company estimate possible reimbursement of Rs. 2,111.54 crore (previous year Rs. 1,793.36 crore).

c) Others

Other contingent liabilities amount to Rs. 327.20 crore (previous year Rs. 398.74 crore).

Some of the benefi ciaries have filed appeals against the tariff orders of the CERC. The amount of contingent liability in this regard is not ascertainable.

15. Capital and other commitments

a) Estimated amount of contracts remaining to be executed on capital account and not provided for as at 31st March 2012 is Rs. 29,563.89 crore (previous year Rs. 23,779.74 crore).

b) In respect of investments of Rs. 2,895.97 crore (previous year Rs. 2,440.72 crore) in the joint venture entities, the Company has restrictions for their disposal ranging from two years to twelve years from the date of incorporation/allottment of shares/commercial operation of the projects as the case may be.

c) In respect of investments of Rs. 866.61 crore (previous year Rs. 731.34 crore) in the subsidiary Companies, the Company has restrictions for their disposal for five years from the date of commercial operation of the respective project.

d) As at 31st March 2012, the Company has commitments of Rs. 3,236.96 crore (previous year Rs. 2,340.91 crore) towards further investment in the joint venture entities.

e) As at 31st March 2012, the Company has commitments of Rs. 1,419.32 crore (previous year Rs. 1,561.68 crore) towards further investment in the subsidiary companies.

f) Companys comittment towards the minimum work programme in respect oil exploration activities of joint venture operations has been disclosed in Note 44 b).

g) Companys commitment in respect of further commitments relating to lease agreements has been disclosed in Note 41.


Mar 31, 2011

1. a) The conveyance of title for 11,043 acres of freehold land of valueRs. 538.18 crore (previous year 10,884 acres of valueRs. 507.11 crore) and buildings & structures valued at Rs. 135.58 crore (previous year Rs. 149.05 crore), as also execution of lease agreements for 8,995 acres of land of value Rs. 252.51 crore (previous year 8,958 acres, value Rs. 244.72 crore) in favour of the Company are awaiting completion of legal formalities.

b) Leasehold land includes 819 acres valuing Rs. 29.67 crore (previous year 30 acres valuing Rs.0.05 crore) acquired on perpetual lease and accordingly not amortised.

c) Land does not include cost of 1,181 acres (previous year 1,181 acres) of land in possession of the Company. This will be accounted for on settlement of the price thereof by the State Government Authorities.

d) Land includes 1,245 acres of valueRs. 15.03 crore (previous year 1,247 acres of valueRs. 15.09 crore) not in possession of the Company. The Company is taking appropriate steps for repossession of the same.

e) Land includes an amount of Rs. 118.74 crore (previous year Rs. 115.27 crore) deposited with various authorities in respect of land in possession which is subject to adjustment on final determination of price.

f) Possession of land measuring 98 acres (previous year 98 acres) consisting of 79 acres of free-hold land (previous year 79 acres) and 19 acres of lease hold land (previous year 19 acres) of value Rs. 0.21 crore (previous year Rs. 0.21 crore) was transferred to Uttar Pradesh Rajya Vidyut Utpadan Nigam Ltd. (UPRVUNL) for a consideration of Rs. 0.21 crore. Pending approval for transfer of the said land, the area and value of this land has been included in the total land of the Company. The consideration received from UPRVUNL is disclosed under 'Other Liabilities' in Schedule -15 -'Current Liabilities'.

g) The cost of right of use of land for laying pipelines amounting to Rs. 6.46 crore (previous year Rs. 5.76 crore) is included under intangible assets. The right of use, other than perpetual in nature, are amortised over the period of legal right to use as per the rates and methodology notified by CERC Tariff Regulations, 2009 (Regulations, 2009).

h) Cost of acquisition of the right to draw water amounting toRs. 199.52 crore (previous yearRs. 8.41 crore) is included under intangible assets - Right of Use - Others. The right to draw water is amortized considering the life period of 25 years as per the rates and methodology notified by Regulations, 2009.

i) Ministry of Power, Government of India vide its notification no. 2/38/99-BTPS (Volume VII) dated 22nd September 2006 transferred land of a power station to the Company on operating lease of 50 year. Lease rent for the year amounting to Rs. 6.13 crore (previous year Rs. 6.08 crore) has been charged to the statement of Profit & Loss Account.

2 a) The Central Electricity Regulatory Commission (CERC) notified the Regulations, 2009 in January 2009, containing inter-alia the terms and conditions for determination of tariff applicable for a period of five years with effect from 1st April 2009. Pending determination of station-wise tariff by the CERC, sales have been provisionally recognized atRs. 48,935.31 crore (previous year Rs. 44,473.93 crore) for the year ended 31st March 2011 on the basis of principles enunciated in the said Regulations on the capital cost considering the orders of Appellate Tribunal for Electricity (APTEL) for the tariff period 2004-2009 including as referred to in para 2 (d).

Regulations, 2009 provide that pending determination of tariff by the CERC, the Company has to provisionally bill the beneficiaries at the tariff applicable as on 31st March 2009 approved by the CERC. The amount provisionally billed for the year ended 31st March 2011 on this basis isRs. 47,519.21 crore (previous yearRs. 43,765.13 crore).

b) For the units commissioned subsequent to 1st April 2009, pending the determination of tariff by CERC, sales ofRs. 4,528.39 crore (previous year Rs. 1,735.40 crore) have been provisionally recognised on the basis of principles enunciated in the Regulations, 2009. The amount provisionally billed for such units isRs. 4,416.12 crore (previous year Rs. 1,536.50 crore).

c) Sales of Rs. 800.87 crore (previous year Rs. 119.33 crore) pertaining to previous years have been recognized based on the orders issued bytheCERC/APTEL.

d) In respect of stations/units where the CERC had issued tariff orders applicable from 1st April 2004 to 31st March 2009, the Company aggrieved over many of the issues as considered by the CERC in the tariff orders, filed appeals with the APTEL. The APTEL disposed off the appeals favourably directing the CERC to revise the tariff orders as per the directions and methodology given. The CERC filed appeals with the Hon'ble Supreme Court of India on some of the issues decided in favour of the Company by the APTEL. The decision of Hon'ble Supreme Court is awaited. The Company had submitted that it would not press for determination of the tariff by the CERC as per APTEL orders pending disposal of the appeals by the Hon'ble Supreme Court.

Considering expert legal opinions obtained that it is reasonable to expect ultimate collection, the sales for the tariff period 2004-2009 were recognised in earlier years based on provisional tariff worked out by the Company as per the directions and methodology given by the APTEL. As accountal of sales is subject to the decision of the Hon'ble Supreme Court of India, pending decision of the Hon'ble Supreme Court of India, a sum ofRs. 1,262.86 crore included in debtors has been fully provided for during the year. Effect, if any, will be given in the financial statements upon disposal of the appeals.

e) Consequent to issue of additional capitalisation orders by the CERC, advance against depreciation required to meet the shortfall in the component of depreciation to be charged in future years has been reassessed and the excess determined amounting to Rs. 79.75 crore has been recognised as sales.

f) During the year, the CERC has issued tariff orders in respect of some of the stations in compliance with the judgement of APTEL mentioned at para d) above, and the beneficiaries were billed accordingly. Since the orders of CERC include those issues which have been challenged by them before Hon'ble Supreme Court, and are pending disposal, the impact thereof amounting toRs. 252.22 crore has been accounted as Advance from customers' in the Schedule-15 - 'Current Liabilities'.

3. a) Sundry Debtors - Other debts (schedule 11) includes Rs. 2,698.86 crore (previous year Rs. 1,001.15 crore) towards revenue accounted in accordance with the accounting policy no. 12.1 which is yet to be billed.

b) CERC has issued a draft notification dated 3rd September 2010 which inter-alia provides for upfront truing up of un discharged liabilities with regard to capital cost admitted by CERC before 1st April 2009. In anticipation of final notification an estimated amount of Rs. 263.59 crore has been provided for towards tariff adjustment.

4. Due to uncertainty of realisation in the absence of sanction by the Government of India (GOI), the Company's share of net annual profits of one of the stations taken over by the Company in June 2006 for the period 1st April 1986 to 31st May 2006 amounting to Rs. 115.58 crore (previous yearRs. 115.58 crore) being balance receivable in terms of the management contract with the GOI has not been recognised.

5. In terms of guidelines of Department of Public Enterprises (DPE), Government of India (GOI), issued vide OM:2(70)/08-DPE(WC)-GL-XIV/08 dated 26.11.2008 and OM:2(70)/08-DPE(WC)-GL-VII/09 dated 02.04.2009, the Company formulated a defined contribution pension scheme and sent to Ministry of Power (MOP) for their approval. Pending approval of MOP, an amount ofRs. 94.56 crore during the year and cumulatively Rs. 468.78 crore has been provided up to 31st March 2011.

6. The amount reimbursable to GOI in terms of Public Notice No.38 dated 5th November, 1999 and Public Notice No.42 dated 10th October, 2002 towards cash equivalent of the relevant deemed export benefits paid by GOI to the contractors for one of the stations amounted to Rs. 276.80 crore (previous year Rs. 276.80 crore) out of which f 269.70 crore (previous year Rs. 269.70 crore) has been deposited with the GOI and liability for the balance amount of Rs. 7.17 crore (previous year Rs. 7.17 crore) has been provided for. No interest has been provided on the reimbursable amounts as there is no stipulation for payment of interest in the public notices cited above.

7. As per the direction of MOP, a memorandum of understanding was signed between the Company, Gujarat Power Corporation Ltd. (GPCL) and Gujarat Electricity Board (GEB) on 20th February 2004 to set up Pipavav Power Project. The Company disassociated from the Pipavav Power Project, a wholly owned subsidiary of the Company, on 24th May 2007 after obtaining approval from the MOP. MOP, Government of India, conveyed its approval vide Presidential Directive No. 5/5/2004-TH-ll dated 3rd July 2009 for winding-up of the Pipavav Power Development Company Ltd. (PPDCL). The Board of Directors of NTPC Ltd. have also given consent for winding up of the PPDCL.

MOP vide Presidential Directive No. 5/5/2004-TH-ll dated 15th April 2010 conveyed the approval of GOI to permit NTPC for winding up of PPDCL, through striking off the name under Section 560 of the Companies Act, 1956. Registrar of Companies, National Capital Territory of Delhi and Haryana (ROC) has conveyed the name of the PPDCL has been struck-off from the Register of Companies vide their letter dated 28th January 2011.

Accordingly, investment in the PPDCL amounting toRs. 0.37 crore was set off in full against the amount received from GPCL in the earlier years in this regard.

8. The Government of Madhya Pradesh had notified levy of Madhya Pradesh Grameen Avsanrachana Tatha SadakVikas Adhiniyam (MPGATSVA) tax on coal with effect from September 2005. The tax was challenged by the coal supplier before the Hon'bleJabalpur High Court which stayed its collection in April 2006. Hon'bleJabalpur High Court by its order dated 3rd February 2011 has vacated the interim order of April 2006.

The Central Government issued notification no. GSR 322(E) dated 1i Aug 2007, on royalty which provide for adjustment of cess and tax specific to coal bearing lands so as to limit the overall revenue to the royalty.

Various Special Leave Petitions (SLPs) were preferred in the Hon'ble Supreme Court against the levy by the aggrieved parties where-after the Hon'ble Supreme Court passed an interim order staying the coercive collection of the tax. During the year, Hon'ble Supreme Court heard various SLPs and ordered the assessees to file returns and subsequently in 6th December 2010 ordered the assessees to pay the taxes without prejudice to their rights in the pending appeals.

Subsequent to the vacation of the stay, Northern Coal Fields Ltd, filed SLP in the Hon'ble Supreme Court, which was disposed off on 21.4.2011 in terms of its' earlier order dated 6th Dec 2010. In view of this, liability towards MPGATSVA tax for the period from September 2005 to July 2007 amounting toRs. 255.82 crore has been provided for during the year with consequent recognition in sales.

9. As a result of issuance of the New Coal Distribution Policy (NCDP) by Ministry of Coal in October 2007, the Company and Coal India Ltd (CIL) renegotiated the Model Coal Supply Agreement (CSA) and Model CSA was signed between the Company & CIL on 29th May 2009. Based on the Model CSA, coal supply agreements have been signed with the various subsidiary companies of CIL by all excepting three of the coal based stations of the Company. The CSAs are valid for a period of 20 years with a provision for review after every 5 years.

10. The Company challenged the levy of transit fee/entry tax on supplies of coal to some of its power stations and has paid under protest such transit fee/entry tax to Coal Companies/Sales Tax Authorities. Further, in line with the agreement with GAIL India Ltd., the Company has also paid entry tax and sales tax on transmission charges in respect of gas supplies made to various stations in the state of Uttar Pradesh. GAIL India Ltd. has paid such taxes to the appropriate authorities under protest and filed a petition before the Hon'ble High Court of Allahabad challenging the applicability of relevant Act. in case the Company gets refund from Coal Companies/Sales Tax Authorities/GAIL India Ltd. on settlement of these cases, the same will be passed on to respective beneficiaries.

11. MOP, GOI vide letter dated 24.12.2010 has communicated the discontinuation of one of the Hydro Power Projects of the Company in the State of Uttarakhand. Subsequently, the Company has issued Letter of Frustration to the suppliers/vendors of the project.

MOP has sought details of expenditure incurred, committed costs, anticipated expenditure on safety and stabilization measures, other recurring site expenses and interest costs, as well as claims of various packages of contractors/vendors. Management expects that the total cost incurred, anticipated expenditure on safety and stabilization measures, other recurring site expenses and interest costs as well as claims of various packages of contractors/vendors for this project will be compensated in full. Hence, cost incurred on the project up to 31.03.2011 amounting to Rs. 748.82 crore has been accounted as recoverable from GOI and disclosed under 'Claims Recoverable' in 'Loans and Advances' (Schedule -14).

12. Issues related to the evaluation of performance and guarantee test results of steam/turbine generators at some of the stations are under discussion with the equipment supplier. Pending settlement, liquidated damages for shortfall in performance of these equipments have not been recognised.

13. The Company is executing a thermal power project in respect of which possession certificates for 1,489 acres (previous year 1,489 acres) of land has been handed over to the Company and all statutory and environment clearances for the project have been received. Subsequently, a high power committee has been constituted as per the directions of GOI to explore alternate location of the project since present location is stated to be a coal bearing area. Aggregate cost incurred up to 31st March 2011 Rs. 190.19 crore (previous year Rs. 183.10 crore) is included in 'Fixed Assets' (Schedules 6, 7 and 8). Management is confident of recovery of cost incurred, hence no provision is considered necessary.

14. During the year the Company has received an opinion from the Expert Advisory Committee of the Institute of Chartered Accountants of India on accounting treatment of capital expenditure on assets not owned by the Company wherein it was opined that such expenditure are to be charged to the statement of Profit & Loss Account as and when incurred. The Company has represented that such expenditure being essential for setting up of a project, the same be accounted in line with the existing accounting practice and sought a review. Pending receipt of communication regarding the review, existing treatment has been continued as per existing accounting policy.

15. a) Certain loans & advances and creditors in so far as these have since not been realised/discharged or adjusted are subject to confirmation/ reconciliation and consequential adjustment, if any.

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.

16. Effect of changes in Accounting Policies:

During the year, the Office of the Comptroller & Auditor General of India has expressed an opinion that power sector companies shall be governed by the rates of depreciation notified by the CERC for providing depreciation in respect of generating assets in the accounts instead of the rates as per the Companies Act, 1956. Accordingly, the Company revised its accounting policies relating to charging of depreciation w.e.f 1st April 2009 considering the rates and methodology notified by the CERC for determination of tariff through Regulations, 2009. In case of certain assets, the Company has continued to charge higher depreciation based on technical assessment of useful life of those assets. Consequent to this change, prior period depreciation written back is f 1,116.50 crore, depreciation for the year is lower by Rs. 279.62 crore. As a result, fixed assets and profit before tax for the year is higher by f 1,396.12 crore.

Due to the above change, the amount of advance against depreciation (AAD) required to meet the shortfall in the component of depreciation in revenue over the depreciation to be charged off in future years has been reassessed by the Company station-wise as at 1st April 2009 and the excess determined, amounting to Rs. 727.49 crore has been recognised as prior period sales.

Further, the amount recoverable from the beneficiaries on account of deferred tax materialised for the financial year 2009-10 has been reassessed and excess amount ofRs. 212.67 crore is reversed as'Prior Period Sales'with equivalent reduction in provision for tax of earlier years in the Profit and Loss Account.

Further, due to the above change, deferred tax liability (net) and deferred tax recoverable from the beneficiaries as at 31i March 2010 amounting to Rs. 3,049.41 crore and Rs. 2,840.16 crore respectively have been reviewed and restated to Rs. 4,415.19 crore and Rs. 3,809.69 crore respectively. As a result, deferred tax liability as at 31.03.2010 has increased by Rs. 1,365.78 crore out of which Rs. 969.53 crore is recoverable from the beneficiaries as per Regulation 39 of Regulations, 2009 and net increase is included in the 'Provision for Deferred tax - Earlier years' in the Profit and Loss Account.

17. Revenue grants recognised during the year is Rs. 0.43 crore (previous year Rs. 1.71 crore).

18. Disclosure as per 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. Contribution to family pension scheme is paid to the appropriate authorities. The contribution of f 191.19 crore (previous year Rs. 159.70 crore) to the funds for the year 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. As per report of the actuary, overall interest earnings and cumulative surplus is more than the statutory interest payment requirement. Hence no further provision is considered necessary.

B. Gratuity & Pension

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 ofRs. 0.10 crore on superannuation, resignation, termination, disablement or on death.

The Company has a scheme of pension at one of the stations in respect of employees taken over from erstwhile State Government Power Utility. In respect of other employees of the Company, pension scheme is yet to be implemented as stated in Note no. 5 above.

The existing schemes are funded by the Company and are managed by separate trusts. The liability for the same is recognised on the basis of actuarial valuation.

C. Post-Retirement Medical Facility (PRMF)

The Company has Post-Retirement Medical Facility (PRMF), 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. The liability for the same is recognised on the basis of actuarial valuation.

D. Terminal Benefits

Terminal benefits include settlement at home town for employees & dependents and farewell gift to the superannuating employees. Further, the Company also provides for pension in respect of employees taken over from erstwhile State Government Power Utility at another station. The liability for the same is recognised on the basis of actuarial valuation.

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. 73.33 % of the earned leave is en-cashable while in service, and upto a maximum of 300 days on separation. Half-pay leave is en-cashable only on separation beyond the age of 50 years 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.

The above mentioned schemes (C, D and E) are unfunded and are recognised on the basis of actuarial valuation.

The summarised position of various defined benefits recognised in the profit and loss account, balance sheet are as under:

(Figures given in {) are for previous year)

F. Other Employee Benefits

Provision for Long Service Award and Family Economic Rehabilitation Scheme amounting to Rs. 2.76 crore (previous year credit of Rs. 3.42 crore) for the year have been made on the basis of actuarial valuation at the year end and debited to the Profit & Loss Account.

19. The effect of foreign exchange fluctuation during the year is as under:

i) The amount of exchange differences (net) debited to the Profit & Loss Account is Rs. 6.50 crore (previous year credit of Rs. 18.91 crore).

ii) The amount of exchange differences (net) debited to the carrying amount of fixed assets and Capital work-in-progress is Rs. 168.29 crore {previous year credit of Rs. 1,181.54 crore).

20. Borrowing costs capitalised during the year isRs. 1,743.61 crore (previous year Rs. 1,480.40 crore).

21. Segment information:

a) Business Segments:

The Company's principal business is generation and sale of bulk power to State Power Utilities. Other business includes providing consultancy, project management and supervision, oil and gas exploration and coal mining.

b) Segment Revenue and Expense

Revenue directly attributable to the segments is considered as Segment Revenue. Expenses directly attributable to the segments and common expenses allocated on a reasonable basis are considered as Segment Expenses.

c) Segment Assets and Liabilities

Segment assets include all operating assets in respective segments comprising of net fixed assets and current assets, loans and advances. Construction work-in-progress, construction stores and advances are included in unallocated corporate and other assets. Segment liabilities include operating liabilities and provisions.

22. Related Party Disclosures:

a) Related parties:

i) Joint ventures:

Utility Powertech Ltd., NTPC-Alstom Power Services Private Ltd., BF-NTPC Energy Systems Ltd. ii) Key Management Personnel:

Shri Arup Roy Choudhury1 Chairman and Managing Director

Shri R.S. Sharma2 Chairman and Managing Director

Shri Chandan Roy3 Director (Operations)

Shri A.K. Singhal Director (Finance)

Shri R.C. Shrivastav4 Director (Human Resources)

Shri I.J. Kapoor Director (Commercial)

Shri.B.P.Singh Director (Projects)

Shri D.K.Jain5 Director (Technical)

Shri S.P.Singh6 Director (Human Resources)

Shri N.N.Misra7 Director (Operations)

1. W.e.f. 1a September 2010 2. Superannuated on 31st August 2010 3. Superannuated on 31a July 2010 4. Superannuated on 30th June 2010 5.W.e.f. 13thMay2010 6.W.e.f. 16thOctober2010 7.W.e.f. 19thOctober2010.

26. Research and development expenditure charged to revenue during the year is Rs. 28.30 crore (previous year Rs. 20.56 crore).

28. As required by Accounting Standard (AS) 28 'Impairment of Assets' notified under the Companies (Accounting Standards) Rules, 2006, the Company has carried out the assessment of impairment of assets. Based on such assessment, there has been no impairment loss during the year.

30. The pre-commissioning expenses during the year amounting to Rs. 112.75 crore (previous year Rs. 145.88 crore) have been included in Fixed Assets/Capital work-in-progress after adjustment of pre-commissioning sales of Rs. 34.96 crore (previous year Rs. 96.10 crore) resulting in a net pre-commissioning expenditure of Rs. 77.79 crore (previous year Rs. 49.78 crore).

35. Estimated amount of contracts remaining to be executed on capital account and not provided for as at 31st March 2011 is Rs. 23,779.74 crore (previous year Rs. 30,534.58 crore).

36. Contingent Liabilities:

1. Claims against the Company not acknowledged as debts in respect of:

(i) Capital Works

Some of the contractors for supply and installation of equipments and execution of works at our projects have lodged claims on the Company for Rs. 3,485.85 crore (previous year Rs. 3,879.77 crore) seeking enhancement of the contract price, revision of work schedule with price escalation, compensation for the extended period of work, idle charges etc. These claims are being contested by the Company as being not admissible in terms of the provisions of the respective contracts.

The company is pursuing various options under the dispute resolution mechanism available in the contract for settlement of these claims. It is not practicable to make a realistic estimate of the outflow of resources if any, for settlement of such claims pending resolution.

(ii) Land compensation cases

In respect of land acquired for the projects, the land losers have claimed higher compensation before various authorities/courts which are yet to be settled. In such cases, contingent liability of Rs. 1,851.08 crore (previous year Rs. 1,786.25 crore) has been estimated.

(iii) Others

In respect of claims made by various State/Central Government departments/Authorities towards building permission fees, penalty on diversion of agricultural land to non-agricultural use, Nala tax, Water royalty etc. and by others, contingent liability ofRs. 1,246.62 crore (previous year Rs. 1,248.78 crore) has been estimated.

The contingent liabilities referred to in (i) above, includes an amount of Rs. 1,495.35 crore relating to the hydro power project stated in Note no. 11 above, for which Company envisages possible reimbursement from GOI in full. In respect of balance claims included in (i) and in respect of the claims mentioned at (ii) above, payments, if any, by the company on settlement of the claims would be eligible for inclusion in the capital cost for the purpose of determination of tariff as perCERC Regulations subject to prudence check by the CERC. In case of (iii), the estimated possible reimbursement is Rs. 146.97 crore (previous year Rs. 428.90 crore).

2. Disputed Income Tax/Sales Tax/Excise Matters

Disputed Income Tax/Sales Tax/Excise matters are pending before various Appellate Authorities amounting to Rs. 2,465.26 crore (previous year Rs. 2,292.41 crore) are disputed by the Company and contested before various Appellate Authorities. Many of these matters are disposed off in favour of the Company but are disputed before higher authorities by the concerned departments. In such cases, the company estimated possible reimbursement of Rs. 1,793.36 crore (previous year Rs. 1,793.36 crore)

3. Others

Other contingent liabilities amounts to Rs. 398.74 crore (previous year Rs. 266.14 crore)

Some of the beneficiaries have filed appeals against the tariff orders of the CERC. The amount of contingent liability in this regard is not ascertainable.

39. Figures have been rounded off to nearest rupees in crores up to two decimals.

40. Previous year figures have been regrouped /rearranged wherever considered necessary.


Mar 31, 2000

CONTINGENT LIABILITIES Rs. in Lakhs

As at 31st As at 31st March 2000 March 1999

Claims against the Company not acknowledged as debts 185780.90 263308.16

Disputed Sales Tax demand 3704.95 2636.29

Disputed Excise demand 85.00 85.00

Others 24690.60 256.15

214261.45 266285.60

1. a) The land owned by the Company has been classified into freehold and leasehold to the extent possible based on available documentation and the balance has been shown as unclassified. The value of land includes land allotted to Project Affected People.

b) i) The conveyancing of the title to 15673 acres of freehold land ( Value Rs.16627.04 lakh) and execution of lease agreements for 5186 acres (Value Rs. 2106.94 lakh) in favour of the Company are awaiting completion of legal formalities.

ii) The value of land shown in the books does not include cost of 1183 acres (Previous year 1183 acres) of land in possession of the Company. This will be accounted for on settlement of the price thereof by the State Governments Authorities.

c) Pending execution of lease/transfer deeds in respect of land and buildings valuing Rs.5802.65 lakh (Previous year Rs.2412.04 lakh), the cost thereof is being amortised provisionally, considering the lease period as 30 years against 50 years considered earlier.

2. Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs.426323.13 lakh (Previous year Rs.294987.18 lakh).

3. a) Balances shown under advances, debtors, creditors and material in transit/under inspection/lying with contractors/ fabricators and material issued on loan in so far as these have not been since realised/ discharged or adjusted are subject to confirmation/ reconciliation and consequential adjustment, if any.

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.

4. Provision has not been made for sales tax on works contracts and material issued to contractors on account of the fact that appeals are pending and amounts are not ascertainable.

5. The matter of levy of electricity duty by the Government of Andhra Pradesh on supplies to State Electricity Boards (SEBs) outside their state is sub-judice, being with the Supreme Court on appeal by the said State Government against the decision of Andhra Pradesh High Court. Should the duty become payable, the liability on this account would be Rs. 53431.88 lakh (Previous year Rs. 47015.81 lakh). Appeals against similar demands raised by the Bihar Government upto 31st March 2000 for Rs. 10056.31 lakh (Previous year Rs. 7129.93 lakh) and by the Government of Madhya Pradesh upto September 1995 for Rs. 27401.60 lakh are pending before the High Court of the respective States. No provision is considered necessary in all these cases as should the liability crystalise, the Company can bill and recover the same from the SEBs outside these States.

6. a) Existing tariff notifications for Singrauli Super Thermal Power Station (STPS), Korba

STPS, Ramagundam STPS, Vindhyachal STPS and Rihand STPS were valid upto 31st October 1997, Unchahar TPS, Anta Gas Based Combined Cycle Power Plant (GBCCPP) & Auraiya GBCCPP upto 31st March 1997, National Capital Thermal Power Project and Kawas GBCCPP upto 31st March 1998, Dadri GBCCPP up to 31st March 1999. These notifications have a provision that same tariff shall continue on adhoc basis till revised by way of further notification. Accordingly, sales have been accounted for based on the provisions in the existing tariff notifications as notified as per Electricity (Supply) Act, 1948 by the Government of India for these power stations. However, in case of the stations where fixed charges portion of the tariff is likely to be lower than the existing one, provision for tariff adjustment amounting to Rs. 37803.98 lakh has been made.

b) Pending final approval of tariff by Central Electricity Regulatory Commission (CERC), sales in case of Kayamkulam Combined Cycle Power Plant, Faridabad Gas Based Combined Cycle Power Project and Unchahar Thermal Power Station -II have been accounted for based on provisional tariff subject to retrospective adjustment.

c) Pending approval/notification incentive has been accounted for on the basis of actual generation with effect from 1st April 1998 whereas disincentive has been accounted for on the basis of actual generation and deemed generation.

d) Supplementary bills for revision of tariff for foreign exchange rate variation and additional capital expenditure are accounted for in the year, the revision of tariff is notified by the Government of India.

e) The Monthly Operating Pattern Adjustment has been accounted for as per the Government of India tariff notifications / agreement with beneficiaries for gas based stations. The same is subject to final certifications for open cycle generation by Regional Electricity Boards / State Load Dispatch Centres.

f) Tariff for the period prior to commercial operation of the first unit of Unchahar Thermal Power Station Stage-II and Vindhyachal Super Thermal Power Station Stage-II has been accounted for on the basis of variable charges notified by the Government of India along with fuel price adjustment for Stage-1 of these stations and provisional variable charges approved by CERC for GT-I in case of Kayamkulam Combined Cycle Power Project. In case of Faridabad Gas Based Combined Cycle Power Project it has been accounted for in accordance with CERC orders. Tariff for pre-commercial operation periods in case of subsequent units has been accounted at provisional rates.

7. In compliance to the conditions laid down by Andhra Bank Financial Services Limited (ABFSL - a wholly owned subsidiary of Andhra Bank), for subscription to 17 % Taxable Bonds of the Company on private placement basis, the Company had kept Rs. 25 crore as Inter Corporate Deposit with ABFSL for a period of six months. The Company has recovered the total amount of deposit including interest at contracted rate and partly the interest for post maturity period of deposit by adjustment of amount payable to ABFSL towards redemption proceeds of NTPC Bonds. The remaining amount of interest for post maturity period will be accounted for on receipt. A civil suit filed by the Company against ABFSL in this regard in the High Court of Delhi is still pending for decision.

8. As per the tariff notifications issued by the Government of India, the incidence of income tax on the income from generation of electricity is recoverable from customers. The amount of Rs. 134550.00 lakh (Previous year Rs. 127854.00 lakh) recoverable from the customers for the year 1999-2000 is included in sundry debtors account. The provision for taxation shown in the profit & loss account is net after the deduction of the income tax recoverable from customers as per the details below mentioned:

9.a) The Company has acquired the ownership of the Tanda Power Station (440 MW) of UP State Electricity Board (UPSEB) with effect from 14th Jan, 2000 for a total consideration of Rs. 1000 crore in accordance with the Uttar Pradesh Electricity Reforms (Transfer of Tanda Generation Undertaking ) Scheme, 2000 framed under the Uttar Pradesh Electricity Reforms Act, 1999, by part adjustment of the amount due from UPSEB to the Company. The fixed and current assets taken over have been classified and accounted for on the basis of value apportioned by an independent valuer.

As per the notification, the assets of the Power Station have been handed over free from all encumbrances. However, the charge created by UPSEB in favour of Life Insurance Corporation (LIC) before the assets were taken over is still to be vacated by LIC.

b) The Company has taken over the Koldam Hydro Electric Power Project from Himachal Pradesh State Electricity Board (HPSEB) as per the agreement with the Government of Himachal Pradesh and HPSEB for a total consideration of Rs.925.25 lakh subject to expenditure certification by Accountant General, Himachal Pradesh. Out of the said amount, expenditure including the assets taken over upto 31st March 2000 for Rs.860.43 lakh have been accounted for and adjusted against the outstanding dues from HPSEB.

10. The effect of foreign exchange fluctuation during the year is as under :

i) The amount of exchange difference (net) credited to the Profit & Loss Account is Rs.51.18 lakh (Previous year debit of Rs. 686.49 lakh).

ii) The amount of exchange difference adjusted by way of addition to the carrying amount of fixed assets and capital work-in-progress is Rs.37417.68 lakh (Previous year Rs.44723.23 lakh).

11. The salary and wages of the employees of the Company are due for revision with effect from 1st January, 1997. While the revision of the salaries for employees in Executive category has been announced on 6th July 2000. the revision of the salaries and wages of the other categories is still pending. The liability on account of revision of the salaries & wages of all the categories of the employees has been estimated and provided for in the books of accounts for the year 1999-2000 for Rs. 20906.13 lakh (Previous year Rs. 9275.38 lakh). Cumulative amount provided for upto 31st March 2000 is Rs. 39377.42 lakh (Previous year Rs. 18471.29 lakh).

12. During the year, the Company has changed certain accounting policies. The consequential impact of the same on the accounts for the year is as under.-

a) Pending approval/notification incentive has been accounted for on the basis of actual generation in place of aggregate of actual and deemed generation with effect from 1st April 1998, which has resulted in decrease in profit for the year by Rs. 22367.38 lakh.

b) Plant and machinery and items of scientific appliances, costing either Rs. 5000 or less were hitherto charged off. The same are now being capitalised and fully depreciated in the following year. The change in the policy has resulted in increase in profit for the year by Rs.3.87 lakh.

c) Wherever lease period has not been notified, land and buildings have been amortised considering lease period as 30 years as against 50 years in the previous years, which has resulted in decrease in profit for the year by Rs.446.28 lakh.

d) Interest to be capitalised was hitherto being worked out on the basis of approved debt- equity ratio of a project/station. The same is now being calculated on the basis of actual availment of loan. The change in the policy has resulted in increase in profit for the year byRs.238.861akh.

e) Pre-paid/prior period items, which were hitherto accounted for upto Rs. 5000/- to the natural head of account are now accounted upto Rs. 100000 in natural heads. The change in the policy has resulted in decrease in profit for the year by Rs.51.07 lakh.

f) The cost of internal electrification in buildings hitherto being depreciated at the rates applicable to buildings is now being worked out on the basis of notified rates under the Electricity (Supply) Act, 1948. The change has resulted in decrease in profit in the year byRs.2144.161akh.

13. Previous years figures have been regrouped/rearranged wherever necessary.



 
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