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Notes to Accounts of SJVN Ltd.

Mar 31, 2023

i) Credit risk

Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities including deposits with banks and financial institutions.

ii) Liquidity risk.

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses.

iii) Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise three types of risk: currency rate risk, interest rate risk and other price risks. Financial instruments affected by market risk include loans and borrowings, deposits, investments. Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. This is based on the financial assets and financial liabilities held as at 31st March, 2023 and 31st March, 2022.

The company operates mainly in regulated environment. Tariff hydro power stations of the company is fixed by the Central Electricity Regulatory Commission (CERC) through Annual Fixed Charges (AFC) comprising the following five components: 1. Return on Equity (RoE), 2. Depreciation, 3. Interest on Loans, 4. Operation & Maintenance Expenses and 5. Interest on Working Capital Loans. In addition to the above, Foreign Currency Exchange Variation and Taxes are also recoverable from Beneficiaries in terms of the Tariff Regulations. Hence variation in interest rate, currency exchange rate variations and other price risk variations are recoverable from tariff and do not impact the profitability of the company.

The company''s risk management is carried out as per policies approved by Board of Directors from time to time.

(A) Credit Risk

The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and other financial instruments.

a) Trade Receivables

The Company extends credit to customers in normal course of business. The Company monitors the payment track record of the customers. Outstanding customer receivables are regularly monitored. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are mainly state government authorities and operate in largely independent markets.

CERC tariff regulations 2019-24 allows the Company to raise bills on beneficiaries for late-payment surcharge which adequately compensates the Company for time value of money arising due to delay in payment. Further, the fact that beneficiaries are primarily State Governments/ State Discoms and considering the historical credit loss experience for trade receivables, the Company does not envisage either impairment in the value of receivables from beneficiaries or loss due to time value of money due to delay in realization of trade receivables.

b) Financial assets at amortised cost

Employee Loans: The Company has given loans to employees at concessional rates as per the Company''s policy which have been measured at amortised cost at Balance Sheet date. The recovery of the loan is on fixed instalment basis from the monthly salary of the employees. Management has assessed the past data and does not envisage any probability of default on these loans.

c) Financial instruments and cash deposits

The Company considers factors such as track record, size/networth of the institution/bank, market reputation and service standards and limits and policies as approved by the board of directors to select the banks with which balances and deposits are maintained. The Company invests surplus cash in short term deposits with scheduled Banks.

B) Liquidity Risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due.

The Company''s objective is to maintain optimum levels of liquidity at all times to meet its cash and collateral requirements. The Company relies on a mix of borrowings, capital infusion and excess operating cash flows to meet its need for funds. The current committed lines of credit and internal accruals are sufficient to meet its short to medium term expansion needs. The Company monitors rolling forecasts of its liquidity requirements to ensure that it has sufficient cash to meet capital expenditure and operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.

(C) Market Risk:

The sensitivity analysis excludes the impact of movements in market variables on the carrying value of post-employment benefit obligations provisions and on the non-financial assets and liabilities. The sensitivity of the relevant Statement of Profit and Loss item is the effect of the assumed changes in the respective market risks. The Company''s activities expose it to a variety of financial risks, including the effects of changes in interest rates.

(i) Interest rate risk and sensitivity

The Comapny''s exposure to the risk of changes in market interest rates relates primarily to the Company''s long term debt obligations with floating interest rates and any changes in the interest rates environment may impact future cost of borrowing.

2.41 Disclosure as per Ind AS 1 âPresentation of financial statements

a) Changes in significant accounting policies:

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

i) Policy no. 1.21 âDepreciation and amortizationâ has been modified during the year. The impact of the same has resulted in decrease in depreciation expense by '' 1851 lakh and increase in net block of Property , plant and equipment (PPE) by the same amount.

b) Reclassification and comparative figures

Certain reclassifications have been made to the comparative period''s financial statements to enhance comparability with the current year''s financial statements.

b) In pursuance to section 115 BAA of the Income Tax Act, 1961 announced by Govt. Of India through Taxation Laws (Amendment) Act, 2019, the company has an option for a lower tax rate by foregoing certain exemptions/deductions. The company has not opted for this option as the company has sufficient MAT credit available to it in the future and continues to recognise the taxes on income as per the earlier provisions. 2.43 Disclosure under the provisions of IND-AS 19 âEmployee Benefitsâ:-

a) Defined Contribution plans:

(i) Pension:

The company has Defined Contribution Pension Scheme and is contributing to the National Pension System(NPS). The liability for the same is recognized on accrual basis.

b) Defined benefit plans:

(i) Employers contribution to Provident Fund:

The Company pays fixed contribution to Provident Fund at predetermined rates to a separate trust, which invests the fund in permitted securities. The obligation of the company is limited to such fixed contribution and to ensure a minimum rate of return to the members as specified by GOI. The liability for the same is recognized on the basis of actuarial valuation. EPFO has not yet notified the interest rate on the employees provident fund for the F.Y. 2022-23. Pending notification of the rate by the Government, actuarial valuation has been carried out considering the provisional interest rate of 8.15% recommended by Ministry of Labour. However, actual obligation, if any shall be ascertained and paid to the trust after the notification of the rate by EPFO. Further, contribution to employee pension scheme has been paid to the appropriate authorities.

(viii) Risk exposure

Valuations are based on certain assumptions, which are dynamic in nature and vary over time. As such company is exposed to various risks as follow-

A) Salary Increases- Actual salary increases will increase the Plan''s liability. Increase in salary increase rate assumption in future valuations will also increase the liability.

B) Medical cost increase- Increase in actual medical cost per retiree will increase the plans liability. Increase in medical cost per retiree rate assumption will also increase the liability.

C) Investment Risk - If Plan is funded then assets liabilities mismatch & actual investment return on assets lower than the discount rate assumed at the last valuation date can impact the liability.

D) Discount Rate : Reduction in discount rate in subsequent valuations can increase the plan''s liability

E) Mortality & disability - Actual deaths & disability cases proving lower or higher than assumed in the valuation can impact the liabilities.

F) Withdrawals - Actual withdrawals proving higher or lower than assumed withdrawals and change of withdrawal rates at subsequent valuations can impact Plan''s liability.

c) Other Long Term Employee Benefit Plans

The company provides for earned leave benefit and half pay leave to the employees of the company which accrue annually at 30 days and 20 days respectively. Earned leave (EL) and Half pay leave (HPL) are en-cashable subject to limits and other conditions specified for the same. The scheme is un-funded and liability for the same is recognised on the basis of actuarial valuations. During the year, provision amounting to '' 1827 Lakh has been made on the basis of actuarial valuation at the year end and debited to statement of profit and loss (P.Y.: '' 1648 Lakh).

Terms and conditions of transactions with related parties

a) Transactions with the related parties are made on normal commercial terms and conditions and at arm''s length price.

b) Consultancy services provided by the company to subsidiary company is generally on nomination basis.

c) The Company is seconding its personnel to subsidiary and joint venture companies as per terms and conditions agreed between the companies, which are similar to those applicable for secondment of employees to other companies and institutions. The cost incurred by the Company towards superannuation and employee benefits are recovered from these companies.

d) Outstanding balances of subsidiary and joint venture companies at the year-end are unsecured and settlement occurs through banking transaction. The Company has not recorded any impairment of receivables relating to amounts owed by related parties. This assessment is undertaken in each financial year through examining the financial position of the related party and the market in which the related party operates.

*Consequent upon the approval of Shareholders of Kholongchhu Hydro Energy Limited (KHEL) in 5th Extra ordinary Meeting (EGM) held on December 30,2022, SJVN had transferred all its entire shareholding in KHEL to Druk Green Power Corporation (DGPC) Bhutan against payment of equity contribution of SJVN in KHEL along with interest @ 9% per annum with monthly compounding till the date of payment to SJVN. The amount received on transfer of share in excess of cost of shares has been shown under other income note no. 2.33

1. Equity investments in subsidiary and joint venture companies are measured at cost as per the provisions of Ind AS 27 on âSeparate financial statements''.

2. The Company has 26% interest in Cross Border Power Transmission Company Limited. The company is domiciled in India and is incorporated under the provisions of the Companies Act applicable in India. The Company is principally engaged in establishment, operation & maintenance and transfer of Indian Portion of Indo-Nepal Cross Border Transmission Line from Muzaffarpur to Dhalkebar.

a) Provision for Performance Related Pay

Short-term Provision has been recognised in the accounts towards Performance Related Pay/ incentive to employees on the basis of management estimates as per company''s rules in this regard which are based on the guidelines of the Department of Public Enterprises, Government of India

b) Provision for Interest on Arbitration Awards

This includes provisions created on the basis of arbitration/court award as to probable outflow in respect of interest on contractors claims against which arbitration award/Court decision have been received and which have been further challenged in a Court of Law. Utilization/ outflow of the provision is to be made on the outcome of the case

c) Provision-Others

This includes mainly provision made towards expenditure on Local Area Development Authority in respect of Rampur Hydro Power Station.

d) In respect of provision for cases under litigation, outflow of economic benefits is dependent upon the final outcome of such cases.

e) In all these cases, outflow of economic benefits is expected within next one year.

B. Contingent Liabilities:-

a) Claims against the Company not acknowledged as debts in respect of:		(f Lakh)
Particulars	As at 31.03.2023	As at 31.03.2022
Capital Works	56550	67076
Land Compensation	2506	2506
Disputed Income Tax Demand including TDS	2545	1048
Guarantees	141639	19500
Others	25989	24904
Total	229229	115034

(i) Capital works

Contractors have lodged claims aggregating to '' 59391 Lakh (P.Y.: '' 67902 Lakh) against the Company on account of rate & quantity deviation, cost relating to extension of time and idling charges due to stoppage of work/delays in handing over the site etc.The company has created a provision of '' 2841 lakh ( P.Y.: '' 826 lakh) against these claims. These claims are being contested by the company as being not admissible in terms of provisions of the respective contracts or are laying at arbitration tribunal/other forums/under examination with the Company.

(ii) Land Compensation cases

In respect of land acquired for the projects, some of the land oustees have filed claims for higher compensation amounting to '' 2506 Lakh (P.Y.: '' 2506 Lakh) before various authorities/courts. Company has shown the same as contingent liability as possibility of any outflow in settlement of these claims is considered as remote.

(iii) Disputed Income Tax Demand including TDS

The Income Tax Department had raised a demand of '' 2861 lakh for various assessment years. The company is contesting the cases & filed appeals with CIT (Appeals) and has accordingly deposited '' 366 lakh towards disputed income tax demand. There is also a contingent liability amounting to '' 50 Lakh towards TDS related demands.

(iv) Guarantees

During the previous year the company has given a corporate guarantee for a loan drawn by SAPDC, a subsidiary company. Amount outstanding as on 31.03.2023 amounting to '' 141639 lakh has been shown as contingent liability.

(v) Others

Other Contingent liability is mainly in respect of bills discounted with banks against trade receivables amounting to '' 25989 lakh (P.Y.: '' 24904 lakh). In case of any claim on the Company from the banks in this regard, entire amount shall be recoverable from the beneficiaries along with surcharge.

b) The Company has commitments of '' 479726 Lakh (P.Y.: '' 109726 Lakh) towards further investment in the subsidiary companies as at 31 March 2023.

c) The Company has commitments of '' 689 Lakh (P.Y.: '' 35957 Lakh) towards further investment in the joint venture entities as at 31 March 2023.

d) Company''s commitment in respect of lease agreements has been disclosed in Note no.2.54

2.51 Disclosure as per Ind AS 108 âOperating Segmentsâ

a) Operating Segments are defined as components of an enterprise for which financial information is available that is evaluated regularly by the Management in deciding how to allocate resources and assessing performance.

b) Electricity generation is the principal business activity of the Company. Other operations viz., Contracts, Project Management and Consultancy works do not form a reportable segment as per the Ind AS - 108 on âSegment Reporting''.

c) The Company is having a single geographical segment as all its Power Stations are located within the Country.

2.52 Disclosure relating to creation of Regulatory Deferral Accounts as per Ind AS 114:

a) 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 which provides extensive guidance on the principles and methodologies for determination of the tariff for the purpose of sale of electricity. 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.

b) As per the CERC Tariff regulations any gain or loss on account of exchange rate variation during the construction period shall form part of the capital cost till the declaration of commercial operation date. Exchange differences arising from settlement/translation of monetary item denominated in foreign currency to the extent recoverable from or payable to beneficiaries in subsequent periods as per CERC Tariff Regulations are recognized on an undiscounted basis as regulatory deferral account debit/credit balance by credit/debit to movements in regulatory deferral account balances and adjusted from the year in which the same becomes recoverable from or payable to the beneficiaries.

c) Pay revision of employees of CPSUs has revised from 1st January, 2017. The impact of actual increase in employee cost on account of wage revision of operational power stations is recoverable from beneficiaries in future throughTariff.

d) Interest charged to profit & loss account on account of arbitration awards in respect of hydro plants is included in regulatory deferral account debit balance as the same is recoverable from beneficiaries through tariff in future.

e) Risks associated with future recovery/reversal of regulatory deferral account balances:

i) Demand risk due to changes in consumer attitudes, the availability of alternative sources of supply.

ii) Regulatory risk on account of changes in regulations and submission or approval of rate-setting application or the entity''s assessment of the expected future regulatory actions.

iii) Other market risks, if any.

The Company expects to recover the carrying amount of regulatory deferral account debit balance over the life of the projects.

2.53 Disclosure as per Ind AS 115,â Revenue from contract with customersâ

I) Nature of goods and services

The revenue of the Company comprises of income from energy sales and consultancy services. The following is a description of the principal activities:

a) Revenue from energy sales

The major revenue of the Company comes from energy sales. The Company sells electricity to bulk customers, mainly electricity utilities owned by State Governments as well as private discoms operating in States. Sale of electricity is generally made pursuant to long-term Power Purchase Agreements(PPAs) entered into with the beneficiaries.

IV) Contract balances

Contract assets are recognised when there is excess of revenue recognised over billings on contracts. Contract assets are transferred to unbilled revenue when there is unconditional right to receive cash, and only passage of time is required , as per contractual terms. The contract liabilities primarily relate to the advance consideration received from the customers which are referred as âadvances from customersâ.

The following table provides information about trade receivables, unbilled revenue, amount receivable for late payment surcharge and advances from customers:

V) Transaction price allocated to the remaining performance obligations Performance obligations related to sale of energy:

Revenue from sale of energy is accounted for based on tariff rates approved by the CERC (except items indicated as provisional) as modified by the orders of Appellate Tribunal for Electricity to the extent applicable. In case of power stations, where the tariff rates are yet to be approved/ items indicated provisional by the CERC in their orders, provisional rates are adopted considering the applicable CERC Tariff Regulations. Revenue from sale of energy is recognised once the electricity has been delivered to the beneficiaries. Beneficiaries are billed on a periodic and regular basis. Therefore, transaction price to be allocated to remaining performance obligations cannot be determined reliably for the entire duration of the contract.

Performance obligations related to Consultancy and sale of energy through trading:

For consultancy, transaction price for remaining performance obligations amounts to '' 763 Lakh ( P.Y.: '' 1731 Lakh) which shall be received over the contract period in proportion of the services provided by the Company.

VI) Practical expedients applied as per Ind AS 115:

a) The company has not disclosed information about remaining performance obligations that have original expected duration of one year or less and where the revenue recognised corresponds directly with the value to the customer of the entity''s performance completed to date.

b) The company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the company has not adjusted any of the transaction prices for the time value of money.

VII) The Company has not incurred any incremental costs of obtaining contracts with a customer and therefore, not recognised an asset for such costs.

2.54 Disclosures as per Ind AS 116 âLeasesâ

1. The Company has adopted Ind AS 116-Leases effective 1st April, 2019, using the modified retrospective method. On the date of initial application, the lease liability has been measured at the present value of the remaining lease payments and right of use assets has been recognised at an amount equal to the lease liabilities.

2. Practical expedients applied as per Ind AS 116

a) Applied a single discount rate to a portfolio of leases of similar assets in similar economic environment with a similar end date.

b) Applied the exemption not to recognize ROU assets and liabilities for leases with less than 12 months of lease term on the date of initial application.

c) Used hindsight when determining the lease term if the contract contains options to extend or terminate the lease.

3. The incremental borrowing rate has been applied to discount the lease liabilities.

3. To Firms/companies in which directors are interested : Nil (P.Y.: Nil)

B. Investment by the loanee (as detailed above) in shares of SJVN : Nil

2.57 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 energy sales, 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/emails with the negative assertion as referred in the Standard on Auditing (SA) 505 (Revised) âExternal 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.

2.62 Disclosure related to Corporate Social Responsibility (CSR)

As per the Companies Act, 2013, the company is required to spend at least two per cent of the average net profits of the company made during the three immediately preceding financial years, in pursuance of its Corporate Social Responsibility Policy. During the year an amount of '' 3300 lakh [(2% of Average Profit Before Tax of immediately previous three years (P.Y '' 3947 lakh, 2% of Average Profit Before Tax of immediately previous three years)] to be spent on CSR during the year. The company has paid an amount of '' 6023 lakh (P.Y: '' 5075 lakh) to the CSR trust formed to manage the CSR activities which has been booked to CSR expenses as per Accounting Policy.

2.64 Govt. of Himachal Pradesh vide it''s notification dated 16.02.2023 has imposed water cess on the generation of electricity in Himachal Pradesh. Company has two operational projects of 1912 MW in Himachal Pradesh. However, Govt. of India, Ministry of Power vide it''s letter dated 25.04.2023 has termed this as illegal and unconstitutional and advised the States not to levy any taxes/duties contrary to constitutional provisions. CPSE''s have also been advised not to make payment of such taxes and challenge the same in the courts. As a precautionary measure the company has filed a writ petition against the said notification in the Hon''ble High Court of Himachal Pradesh.

2.65 Board of Directors have authorised Director (Finance) and Company Secretary to rectify the errors and carry out modifications, if any.

Mar 31, 2022

B) FAIR VALUATION MEASUREMENT

(i) Fair Value Hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair value are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the company has to classify its financial instruments into the three levels prescribed under the accounting standards.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments and traded bonds that have quoted price. The fair value of all equity instruments including bonds which are traded in the recognised Stock Exchange and money markets are valued using the closing prices as at the reporting date.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. This includes security deposits/ retention money and loans at below market rates of interest.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

(ii) Valuation techniques and process used to determine fair values

"The group values financial assets or financial liabilities using the best and most relevant data available. Specific valuation techniques used to determine fair value of financial instruments includes:

-Use of Quoted market price or dealer quotes for similar instruments.

- Fair value of remaining financial instruments is determined using discounted cash flow analysis.

The group has a team that performs the valuation of financial assets and liabilities required for financial reporting purpose.

(2) Financial Risk Management Financial risk factors

The groupâs principal financial liabilities comprise borrowings, trade and other payables. The main purpose of these financial liabilities is to manage finances for the groupâs operations. The group has loan and other receivables, trade and other receivables, investments and cash and short-term deposits that arise directly from its operations. The groupâs activities expose it to a variety of financial risks:

i) Credit risk

Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The group is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities including deposits with banks and financial institutions.

ii) Liquidity risk

Liquidity risk is the risk that the group may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses.

iii) Market risk

The group operates mainly in regulated environment. Tariff hydro power stations of the group is fixed by the Central Electricity Regulatory Commission (CERC) through Annual Fixed Charges (AFC) comprising the following five components: 1. Return on Equity (RoE), 2. Depreciation, 3. Interest on Loans, 4. Operation & Maintenance Expenses and 5. Interest on Working Capital Loans. In addition to the above, Foreign Currency Exchange Variation and Taxes are also recoverable from Beneficiaries in terms of the Tariff Regulations. Hence variation in interest rate, currency exchange rate variations and other price risk variations are recoverable from tariff and do not impact the profitability of the group.

The groupâs risk management is carried out as per policies approved by Board of Directors from time to time.

(A) Credit Risk

The group is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and other financial instruments.

a) Trade Receivables

"The group extends credit to customers in normal course of business. The group monitors the payment track record of the customers. Outstanding customer receivables are regularly monitored. The group evaluates the concentration of risk with respect to trade receivables as low, as its customers are mainly state government authorities and operate in largely independent markets.

CERC tariff regulations 2019-24 allows the group to raise bills on beneficiaries for late-payment surcharge which adequately compensates the group for time value of money arising due to delay in payment. Further, the fact that beneficiaries are primarily State Governments/ State Discoms and considering the historical credit loss experience for trade receivables, the group does not envisage either impairment in the value of receivables from beneficiaries or loss due to time value of money due to delay in realization of trade receivables.

b) Financial assets at amortised cost

Employee Loans: The group has given loans to employees at concessional rates as per the groupâs policy which have been measured at amortised cost at Balance Sheet date. The recovery of the loan is on fixed instalment basis from the monthly salary of the employees. Management has assessed the past data and does not envisage any probability of default on these loans.

c) Financial instruments and cash deposits

The group considers factors such as track record, size/networth of the institution/bank, market reputation and service standards and limits and policies as approved by the board of directors to select the banks with which balances and deposits are maintained. The group invests surplus cash in short term deposits with scheduled Banks.

(B) Liquidity Risk

The groupâs objective is to maintain optimum levels of liquidity at all times to meet its cash and collateral requirements. The group relies on a mix of borrowings, capital infusion and excess operating cash flows to meet its need for funds. The current committed lines of credit and internal accruals are sufficient to meet its short to medium term expansion needs. The group monitors rolling forecasts of its liquidity requirements to ensure that it has sufficient cash to meet capital expenditure and operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the group does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.

(ii) Maturities of Financial Liabilities:

The table below provides undiscounted cash flows towards groupâs financial liabilities into relevant maturity based on the remaining period at the balance sheet to the contractual maturity date. Balance due within 1 year is equal to their carrying balances as the impact of discounting is not significant. (refer Note 2.22, 2.23, 2.24,2.27, 2.28 and 2.29, 2.30 & 2.31 of balance sheet)

The sensitivity analysis excludes the impact of movements in market variables on the carrying value of post-employment benefit obligations provisions and on the non-financial assets and liabilities. The sensitivity of the relevant Statement of Profit and Loss item is the effect of the assumed changes in the respective market risks. The groupâs activities expose it to a variety of financial risks, including the effects of changes in interest rates.

(i) Interest rate risk and sensitivity

The Groupâs exposure to the risk of changes in market interest rates relates primarily to the groupâs long term debt obligations with floating interest rates and any changes in the interest rates environment may impact future cost of borrowing. Group does not have fixed rate borrowings.

The above foreign currency risk exposure is for foreign currency loans taken for construction of Rampur Hydro Power Station from World Bank. As per accounting policy of the group transactions in foreign currency are initially recorded at exchange rate prevailing on the date of transaction. At each Balance Sheet date, monetary items denominated in foreign currency are translated at the exchange rates prevailing on that date. Non-monetary items denominated in foreign currency are reported at the exchange rate prevailing at the date of transaction.

Exchange differences arising on translation or settlement of monetary items are recognised in the statement of profit and loss in the year in which it arises with the exception that exchange differences on long term monetary items related to acquisition of fixed assets entered up to March 31,2016 are adjusted to carrying cost of fixed assets.

The group has elected to avail the exemption available under IND AS 101, with regard to continuation of policy for accounting of exchange differences arising from translation of long term foreign currency monetary liabilities. However, there is no impact on the Profit & Loss of the group due to change in foreign currency rates as the same is the pass through item to the beneficiaries as per CERC guidelines applicable to the period 2019-24.

(3) Capital Management

(a) Capital Risk Management

The group manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The primary objective of the groupâs capital management is to maximize the shareholder value. The groupâs primary objective when managing capital is to ensure that it maintains an efficient capital structure and healthy capital ratios and safeguard the groupâs ability to continue as a going concern in order to support its business and provide maximum returns for shareholders. The group also proposes to maintain an optimal capital structure to reduce the cost of capital. No changes were made in the objectives, policies or processes during the year ended 31 st March, 2022.

The group monitors capital using Debt Equity ratio, which is net debt divided by total capital. The Debt Equity ratio are as follows:

Note: For the purpose of the groupâs capital management, capital includes issued capital, share premium and all other equity reserves. Net debt includes, interest bearing loans and borrowings, trade and other payables less cash and short term deposits.

(b) Loan Covenents:

Under the terms of the major borrowing facilities, the group is required to comply with the following financial covenants:-

1. group shall maintain credit rating AA and if rating comes down, rate of interest shall be increased by 65 basis point for each notch below AA rating in accordance with the applicable rates.

2. Debt to net worth should not exceed 2:1.

Other Explanatory Notes to Accounts 2.42 Basis of Preparation

These consolidated financial statements are prepared in compliance with the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 and subsequent amendments thereto, the Companies Act, 2013 (to the extent notified and applicable and the provisions of the Electricity Act, 2003 to the extent applicable.

Group information

The Holding Company

SJVN Ltd. is the holding company of the group.

Entities in which Group has Joint arrangement / Significant Influence :

1. The group has 50% interest in Kholongchhu Hydro Energy Limited.

2. The group has 26% interest in Cross Border Power Transmission Company Limited.

2.43 Disclosure as per Ind AS 1 âPresentation of financial statementsâ

a) Changes in significant accounting policies:

During the year, following changes to the accounting policies have been made: i. Policy no. 1.5 âNon-current Assets Held for Saleâ has been introduced during the year. The impact of the same has resulted in decrease in net block of Property , plant and equipment (PPE) by '' 1607 lakh and increase in Assets held-for-sale by the same amount.

b) Reclassification and comparative figures

Certain reclassifications have been made to the comparative periodâs financial statements to enhance comparability with the current yearâs financial statements.

b) In pursuance to section 115 BAA of the Income Tax Act, 1961 announced by Govt. Of India through Taxation Laws (Amendment) Act, 2019, the holding company has an option for a lower tax rate by foregoing certain exemptions/deductions. The holding company has not opted for this option as the company has sufficient MAT credit available to it in the future and continues to recognise the taxes on income as per the earlier provisions.

2.45 Disclosure under the provisions of IND-AS 19 âEmployee Benefitsâ:-

a) Defined Contribution plans:

(i) Pension:

The Group has Defined Contribution Pension Scheme. The liability for the same is recognized on accrual basis. From the F.Y. 2021-22 the Group has migrated to National Pension System(NPS).

b) Defined benefit plans:

(i) Employers contribution to Provident Fund:

The Group pays fixed contribution to Provident Fund at predetermined rates to a separate trust, which invests the fund in permitted securities. The obligation of the Group is limited to such fixed contribution and to ensure a minimum rate of return to the members as specified by GOI. The liability for the same is recognized on the basis of actuarial valuation. EPFO has not yet notified the interest rate on the employees provident fund for the F.Y. 2021-22. Pending notification of the rate by the Government, actuarial valuation has been carried out considering the provisional interest rate of 8.10% recommended by Ministry of Labour. However, actual obligation, if any shall be ascertained and paid to the trust after the notification of the rate by EPFO. Further, contribution to employee pension scheme has been paid to the appropriate authorities.

* Out of the above an amount of '' 302 Lakh (P.Y.: '' 529 Lakh) has been transferred to expenditure attributable to construction period.

As per the provisions of the Employeesâ Provident Funds and Miscellaneous Provisions Act, 1952, the Group has no right to the benefits either in the form of refund from the plan or lower future contribution to the plan towards the net surplus of '' 279 Lakh (P.Y.: '' 1676 Lakh) determined through actuarial valuation. Accordingly, Group has not recognised the surplus as an asset, and the actuarial gains in âOther Comprehensive Incomeâ, as these pertain to the Provident Fund T rust and not to the Group.

(iii) Post retirement medical scheme:

The Group has a Post retirement medical scheme, under which retired employee, spouse and eligible parents of retired employee are provided medical facilities in the Group hospitals/empanelled hospitals/other hospitals. They can also avail treatment as Out-Patient subject to rules and regulations made by the Group. The scheme is being managed by a separate trust created for the purpose and obligation of the Group is to make contribution to the trust based on actuarial valuation. The liability towards the same is recognised on the basis of actuarial valuation.

(viii) Risk exposure

Valuations are based on certain assumptions, which are dynamic in nature and vary over time. As such Group is exposed to various risks as follow -

A) Salary Increases- Actual salary increases will increase the Planâs liability. Increase in salary increase rate assumption in future valuations will also increase the liability.

B) Medical cost increase- Increase in actual medical cost per retiree will increase the plans liability. Increase in medical cost per retiree rate assumption will also increase the liability.

C) Investment Risk - If Plan is funded then assets liabilities mismatch & actual investment return on assets lower than the discount rate assumed at the last valuation date can impact the liability.

D) Discount Rate : Reduction in discount rate in subsequent valuations can increase the planâs liability.

E) Mortality & disability - Actual deaths & disability cases proving lower or higher than assumed in the valuation can impact the liabilities.

F) Withdrawals - Actual withdrawals proving higher or lower than assumed withdrawals and change of withdrawal rates at subsequent valuations can impact Planâs liability.

c) Other Long Term Employee Benefit Plans

The Group provides for earned leave benefit and half pay leave to the employees of the Group which accrue annually at 30 days and 20 days respectively. Earned leave (EL) and Half pay leave (HPL) are en-cashable subject to limits and other conditions specified for the same. The scheme is un-funded and liability for the same is recognised on the basis of actuarial valuations. During the year, provision amounting to '' 1648 Lakh has been made on the basis of actuarial valuation at the year end and debited to statement of profit and loss (P.Y.: '' 1534 Lakh).

iv) Entities under the control of same government:

The Holding company is a Central Public Sector Undertaking (CPSU) controlled by Central Government by holding majority of the shares. Government of Himachal Pradesh also holds more than 25% shares in the company (Note No.2.20).Pursuant to paragraph 25 and 26 of Ind AS 24, entities over which the same government has control or joint control of, or significant influence, then the reporting entity and other entities shall be regarded as related parties. Transactions with these parties are carried out at market terms at arm length basis. The Group has applied the exemption available for government related entities and have made limited disclosures in the financial statements. Such entities with which the Group has significant transactions include but not limited to BHEL Ltd., Indian Oil Corporation Ltd., NBCC Limited.

Terms and conditions of transactions with related parties

a) T ransactions with the related parties are made on normal commercial terms and conditions and at armâs length price.

b) The Group is seconding its personnel to joint venture companies as per terms and conditions agreed between the companies, which are similar to those applicable for secondment of employees to other companies and institutions. The cost incurred by the Group towards superannuation and employee benefits are recovered from these companies.

c) Outstanding balances of subsidiary and joint venture companies at the year-end are unsecured and settlement occurs through banking transaction. The Group has not recorded any impairment of receivables relating to amounts owed by related parties. This assessment is undertaken in each financial year through examining the financial position of the related party and the market in which the related party operates.

a) Provision for Performance Related Pay

Short-term Provision has been recognised in the accounts towards Performance Related Pay/ incentive to employees on the basis of management estimates as per Groupâs rules in this regard which are based on the guidelines of the Department of Public Enterprises, Government of India

b) Provision for Interest on Arbitration Awards

This includes provisions created on the basis of arbitration/court award as to probable outflow in respect of interest on contractors claims against which arbitration award/Court decision have been received and which have been further challenged in a Court of Law. Utilization/outflow of the provision is to be made on the outcome of the case

c) Provision-Others

This includes mainly provision made towards expenditure on Local Area Development Authority in respect of Rampur Hydro Power Station.

d) In respect of provision for cases under litigation, outflow of economic benefits is dependent upon the final outcome of such cases.

e) In all these cases, outflow of economic benefits is expected within next one year.

(i) Capital works

Contractors have lodged claims aggregating to '' 67902 Lakh (P.Y.: '' 96866 Lakh) against the Group on account of rate & quantity deviation, cost relating to extension of time and idling charges due to stoppage of work/delays in handing over the site etc. These claims are being contested by the Group as being not admissible in terms of provisions of the respective contracts or are laying at arbitration tribunal/other forums/under examination with the Group.

(ii) Land Compensation cases

In respect of land acquired for the projects, some of the land oustees have filed claims for higher compensation amounting to '' 2506 Lakh (P.Y.: '' 2506 Lakh) before various authorities/courts. Group has shown the same as contingent liability as possibility of any outflow in settlement of these claims is considered as remote.

(iii) Disputed Income Tax Demand

During the previous year Income Tax Department had raised a demand of ''1246 lakh for A.Y 2018-19. The Group is contesting the case & filed an appeal with CIT (Appeals) and has accordingly deposited ''249 lakh towards disputed income tax demand during the year. There is also a contingent liability amounting to '' 51 Lakh towards TDS related demands.

(iv) Guarantees

Group has provided guarantee to custom department of Nepal and guarantee for margin money on behalf of contractor for acceleration of works at SAPDC,Nepal.

(v) Others

(a) CERC Tariff Regulations and PPA/MoU signed with power purchasers provide for levy of Late Payment Surcharge by generating company in case of delay in payment by beneficiaries beyond specified number of days from the date of presentation of bill. However, in view of significant uncertainties in the ultimate collection from some of the beneficiaries against partial bills as estimated by the management, an amount of '' 1941 lakh as on 31 March 2022 (P.Y.: '' 1705 lakh) has not been recognised.

(b) The company has filed a review petition with CERC against the tariff order of RHPS For the period 2014-19. The additional revenue likely to accrue on account of tariff revision which has not been recognised due to significant uncertainty of approval has been shown as contingent assets

(c) Amount recoverable from contractors is on account of delay in execution of EPC contract in respect of Sadla wind power project. This also includes compensation for generation loss due to non achievement of design energy in respect of renewable power projects.

(d) Interest recoverable from contractors is on account of the principal amount of the claim filed by the Group before the Honâble High Court of Himachal Pradesh against contractors of Rampur Hydro Power Station in respect of hydro allowance.

The group has entered into agreement with Forest Department, National Park and Wildlife Conservation Department, Ministry of Forest and Soil Conservation, Government of Nepal, on 23rd August 2017 and 06th February 2018. As per the agreements, a total of 123.218 hectare of forest land has been leased for project construction by Government of Nepal. Out of this 123.218 hectare, 79.04 hectare lies in 9 community forests of District Forest area while remaining 44.178 hectare lies in 8 community forests of Makalu Barun National Park area. The group should plant 8272 numbers of plants within a said land area of 123.18 hectares. The cost of such plantation cannot be estimated reliably as on date.

b) The Group has commitments of '' 35957 Lakh (P.Y.: '' 40957 Lakh) towards further investment in the joint venture entities as at 31 March 2022.

c) Groupâs commitment in respect of lease agreements has been disclosed in Note no. 2.56.

2.52 Disclosure as per Ind AS 108 âOperating Segmentsâ

b) Electricity generation is the principal business activity of the Group. Other operations viz. Contracts, Project Management and Consultancy works do not form a reportable segment as per the Ind AS-108 on âSegment Reportingâ.

c) The group is having a single geographical segment as all its power stations are located within the country.

2.54 Disclosure relating to creation of Regulatory Deferral Accounts as per Ind AS 114:

a) The Group is mainly engaged in generation and sale of electricity. The price to be charged by the Group for electricity sold to its customers is determined by the CERC which provides extensive guidance on the principles and methodologies for determination of the tariff for the purpose of sale of electricity. 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 Group to recover its costs of providing the goods or services plus a fair return.

c) Pay revision of employees of CPSUs has revised from 1st January, 2017. CERC Tariff regulations 2014-19 provides that the impact of actual increase in employee cost on account of wage revision of operational power stations is recoverable from beneficiaries in future throughTariff. Accordingly, additional expenditure on employee benefit due to pay revision upto 31.03.2019 to the extent charged to the Statement of Profit & Loss or to the Other Comprehensive Income and recoverable from beneficiaries in subsequent periods as per Tariff Regulations are being recognized as Regulatory Deferral Account Balances.

d) During the previous year, Group had received an arbitration award pertaining to Nathpa Jhakri Hydro Power Station (NJHPS). Accordingly the principal amount of award including interest during construction period has been capitalized and interest thereafter has been charged to the

statement of profit and loss. The interest charged to profit & loss account has been included in regulatory deferral account debit balance as the same is recoverable from beneficiaries through tariff in future. The Group has filed an appeal before the Honâble High Court of Delhi against the award.

e) Risks associated with future recovery/reversal of regulatory deferral account balances:

i) Demand risk due to changes in consumer attitudes, the availability of alternative sources of supply.

ii) Regulatory risk on account of changes in regulations and submission or approval of rate-setting application or the entityâs assessment of the expected future regulatory actions.

The Group expects to recover the carrying amount of regulatory deferral account debit balance over the life of the projects.

2.55 Disclosure as per Ind AS 115,â Revenue from contract with customersâ

I. Nature of goods and services

The revenue of the Group comprises of income from energy sales and consultancy services. The following is a description of the principal activities: a) Revenue from energy sales

The major revenue of the Group comes from energy sales. The Group sells electricity to bulk customers, mainly electricity utilities owned by State Governments as well as private discoms operating in States. Sale of electricity is generally made pursuant to long-term Power Purchase Agreements(PPAs) entered into with the beneficiaries.

IV. Contract balances

V. Transaction price allocated to the remaining performance obligations

Performance obligations related to sale of energy:

Revenue from sale of energy is accounted for based on tariff rates approved by the CERC (except items indicated as provisional) as modified by the orders of Appellate Tribunal for Electricity to the extent applicable. In case of power stations, where the tariff rates are yet to be approved/items indicated provisional by the CERC in their orders, provisional rates are adopted considering the applicable CERC Tariff Regulations. Revenue from sale of energy is recognised once the electricity has been delivered to the beneficiaries. Beneficiaries are billed on a periodic and regular basis. Therefore, transaction price to be allocated to remaining performance obligations cannot be determined reliably for the entire duration of the contract.

Performance obligations related to Consultancy:

For consultancy, there is no remaining performance obligations which shall be received over the contract period in proportion of the services provided by the Group .

VI. Practical expedients applied as per Ind AS 115:

a) The Group has not disclosed information about remaining performance obligations that have original expected duration of one year or less and where the revenue recognised corresponds directly with the value to the customer of the entityâs performance completed to date.

b) The Group does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Group has not adjusted any of the transaction prices for the time value of money.

VII. The Group has not incurred any incremental costs of obtaining contracts with a customer and therefore, not recognised an asset for such costs.

2.56 Disclosures as per Ind AS 116 âLeasesâ

1. The Group has adopted Ind AS 116-Leases effective 1st April, 2019, using the modified retrospective method. On the date of initial application, the lease liability has been measured at the present value of the remaining lease payments and right of use assets has been recognised at an amount equal to the lease liabilities.

2. Practical expedients applied as per Ind AS 116

a) Applied a single discount rate to a portfolio of leases of similar assets in similar economic environment with a similar end date.

b) Applied the exemption not to recognize ROU assets and liabilities for leases with less than 12 months of lease term on the date of initial application.

c) Used hindsight when determining the lease term if the contract contains options to extend or terminate the lease.

2.59 The Group 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 energy sales, the Group 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/emails with the negative assertion as referred in the Standard on Auditing (SA) 505 (Revised) âExternal Confirmationsâ, 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.

2.64 Disclosure related to Corporate Social Responsibility (CSR)

As per the Companies Act, 2013, the Group is required to spend at least two per cent of the average net profits of the Group made during the three immediately preceding financial years, in pursuance of its Corporate Social Responsibility Policy. During the year an amount of '' 3947 lakh [(2% of Average Profit Before Tax of immediately previous three years (P.Y '' 3600 lakh, 2% of Average Profit Before Tax of immediately previous three years)] to be spent on CSR during the year. The Group has paid an amount of '' 5075 lakh (P.Y: '' 5350 lakh) to the CSR trust formed to manage the CSR activities which has been booked to CSR expenses as per Accounting Policy .

* The Group has raised short term and long term borrowings during the year to finance the capex and working capital requirements.

# In the previous year Late payment surcharge from beneficiaries was recognised after amended Regulation 59 of CERC Regulations,2019. Accordingly profit for previous year was comparatively higher.

2.67 Group is mainly engaged in the business of generation of electricity and the tariff of power generation are regulated in terms of CERC Tariff Regulations. Due to the various steps taken by the group, there has been no significant impact of the COVID-19 on the generation of electricity / construction activities undertaken by the group.

2.68 Board of Directors have authorised Director (Finance) and Company Secretary to rectify the errors and carry out modifications, if any.

Mar 31, 2021

i) Credit risk

ii) Liquidity risk.

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses.

iii) Market risk

The company operates in regulated environment. Tariff of the company is fixed by the Central Electricity Regulatory Commission (CERC) through Annual Fixed Charges (AFC) comprising the following five components: 1. Return on Equity (RoE), 2. Depreciation, 3. Interest on Loans, 4. Operation & Maintenance Expenses and 5. Interest on Working Capital Loans. In addition to the above, Foreign Currency Exchange Variation and Taxes are also recoverable from Beneficiaries in terms of the Tariff Regulations. Hence variation in interest rate, currency exchange rate variations and other price risk variations are recoverable from tariff and do not impact the profitability of the company.

The company''s risk management is carried out as per policies approved by Board of Directors from time to time.

(A) Credit Risk

The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and other financial instruments.

a) Trade Receivables

CERC tariff regulations 2014-19 allows the Company to raise bills on beneficiaries for late-payment surcharge which adequately compensates the Company for time value of money arising due to delay in payment. Further, the fact that beneficiaries are primarily State Governments/ State Discoms and considering the historical credit loss experience for trade receivables, the Company does not envisage either impairment in the value of receivables from beneficiaries or loss due to time value of money due to delay in realization of trade receivables.

b) Financial assets at amortised cost

c) Financial instruments and cash deposits

(B) Liquidity Risk

(i) Interest rate risk and sensitivity

The above foreign currency risk exposure is for foreign currency loans taken for construction of Rampur Hydro Power Station from World Bank. As per accounting policy of the company transactions in foreign currency are initially recorded at exchange rate prevailing on the date of transaction. At each Balance Sheet date, monetary items denominated in foreign currency are translated at the exchange rates prevailing on that date. Non-monetary items denominated in foreign currency are reported at the exchange rate prevailing at the date of transaction. ii. Exchange differences arising on translation or settlement of monetary items are recognised in the statement of profit and loss in the year in which it arises with the exception that exchange differences on long term monetary items related to acquisition of fixed assets entered up to March 31, 2016 are adjusted to carrying cost of fixed assets.

The Company has elected to avail the exemption available under IND AS 101, with regard to continuation of policy for accounting of exchange differences arising from translation of long term foreign currency monetary liabilities. However, there is no impact on the Profit & Loss of the company due to change in foreign currency rartes as the same is the pass through item to the beneficiaries as per CERC guidlines applicable to the period 2014-19.

(3) Capital Management(a) Capital Risk Management

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The primary objective of the Company''s capital management is to maximize the shareholder value. The Company''s primary objective when managing capital is to ensure that it maintains an efficient capital structure and healthy capital ratios and safeguard the Company''s ability to continue as a going concern in order to support its business and provide maximum returns for shareholders. The Company also proposes to maintain an optimal capital structure to reduce the cost of capital. No changes were made in the objectives, policies or processes during the year ended 31^st March, 2021.

Note: For the purpose of the Company''s capital management, capital includes issued capital, share premium and all other equity reserves. Net debt includes, interest bearing loans and borrowings, trade and other payables less cash and short term deposits.

(b) Loan Covenents:

Under the terms of the major borrowing facilities, the company is required to comply with the following financial covenents:-

1. Company shall maintain credit rating AA and if rating comes down, rate of interest shall be increased by 65 basis point for each notch below AA rating in accordance with the applicable rates.

2. Debt to net worth should not exceed 2:1.

During the year the company has complied with the above loan covenants.

a) Changes in significant accounting policies:

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

i. Policy no. 1.21 ''Income Taxes'' has been modified during the current financial year. Impact of the same has been disclosed in note no 2.41 & 2.42.

ii. Certain changes/additions have been made in the policy number 1.1,1.4,1.12, 1.13, 1.16, 1.18, 1.19, 1.20 & 1.24 for improved disclosure. However, there is no impact on the financial statements due to these changes.

2.41 Disclosure as per Ind AS 8 - âAccounting Policies, Changes in Accounting Estimates and Errors''

(A) Restatement for the year ended 31^st March 2020 and as at 1^st April 2019

In accordance with Ind AS 8, ''Accounting Policies, Changes in Accounting Estimates and Errors'' and Ind AS 1, ''Presentation of Financial Statements'', the Company has retrospectively restated its Balance Sheet as at 31^st March 2020 and 1^st April 2019 (beginning of the preceding period) and Statement of Profit and Loss and Statement of Cash Flows for the year ended 31^st March 2020 for the reasons as stated in the notes below.

c) During the F.Y. 2019-20 company opted for Vivad se Vishwas scheme for the settlement of the cases pending as on 31.01.2020. Accounting adjustment related to the scheme was carried out during the financial year 2019-20. The procedural formalities relating to the scheme have been completed during the year.

d) During the year, for the first time the Company recognized cumulative MAT credit entitlement available to the Company as on 01.04.2019 amounting to '' 36564 Lakh, as the same is likely to give future economic benefits in the form of availability of set off against future income tax liability.

2.43 Disclosure under the provisions of IND-AS 19 âEmployee Benefitsâ:-a) Defined Contribution plans:(i) Pension:

The company has Defined Contribution Pension Scheme as approved by Ministry of Power (MOP). The liability for the same is recognized on accrual basis. The scheme is funded by company and managed by separate trust created for this purpose. However, from the F.Y. 2021-22 the company has migrated to National Pension System (NPS).

b) Defined benefit plans:(i) Employers contribution to Provident Fund:

The Company pays fixed contribution to Provident Fund at predetermined rates to a separate trust, which invests the fund in permitted securities. The obligation of the company is limited to such fixed contribution and to ensure a minimum rate of return to the members as specified by GOI. The liability for the same is recognized on the basis of actuarial valuation. EPFO has not yet notified the interest rate on the employees provident fund for the F.Y. 2020-21. Pending notification of the rate by the Government, actuarial valuation has been carried out considering the provisional interest rate of 8.5% recommended by Ministry of Labour. However, actual obligation, if any shall be ascertained and paid to the trust after the notification of the rate by EPFO. Further, contribution to employee pension scheme has been paid to the appropriate authorities.

Based on the actuarial valuation obtained in this respect, the following table sets out the status of the provident fund plan as at balance sheet date:

(viii) Risk exposure

Valuations are based on certain assumptions, which are dynamic in nature and vary over time. As such company is exposed to various risks as follow -

A) Salary Increases- Actual salary increases will increase the Plan''s liability. Increase in salary increase rate assumption in future valuations will also increase the liability.

B) Medical cost increase- Increase in actual medical cost per retiree will increase the plans liability. Increase in medical cost per retiree rate assumption will also increase the liability.

C) Investment Risk - If Plan is funded then assets liabilities mismatch & actual investment return on assets lower than the discount rate assumed at the last valuation date can impact the liability.

D) Discount Rate : Reduction in discount rate in subsequent valuations can increase the plan''s liability.

E) Mortality & disability - Actual deaths & disability cases proving lower or higher than assumed in the valuation can impact the liabilities.

F) Withdrawals - Actual withdrawals proving higher or lower than assumed withdrawals and change of withdrawal rates at subsequent valuations can impact Plan''s liability.

iv) Entities under the control of same government:

The company is a Central Public Sector Undertaking (CPSU) controlled by Central Government by holding majority of the shares. Government of Himachal Pradesh also holds more than 25% shares in the company (Note No.2.18 ).Pursuant to paragraph 25 and 26 of Ind AS 24, entities over which the same government has control or joint control of , or significant influence, then the reporting entity and other entities shall be regarded as related parties. Transactions with these parties are carried out at market terms at arm length basis. The Company has applied the exemption available for government related entities and have made limited disclosures in the financial statements. Such entities with which the Company has significant transactions include but not limited to BHEL Ltd., Indian Oil Corporation Ltd., NBCC Limited.

a) Transactions with the related parties are made on normal commercial terms and conditions and at arm''s length price.

b) Consultancy services provided by the company to subsidiary company is generally on nomination basis.

(i) Capital works

Contractors have lodged claims aggregating to '' 96852 Lakh (P.Y.: '' 62342 Lakh) against the Company on account of rate & quantity deviation, cost relating to extension of time and idling charges due to stoppage of work/delays in handing over the site etc. These claims are being contested by the company as being not admissible in terms of provisions of the respective contracts or are laying at arbitration tribunal/other forums/under examination with the Company.

(ii) Land Compensation cases

In respect of land acquired for the projects, some of the land oustees have filed claims for higher compensation amounting to '' 2506 Lakh (P.Y.: ''2753 Lakh) before various authorities/courts. Company has shown the same as contingent liability as possibility of any outflow in settlement of these claims is considered as remote.

(iii) Disputed Income Tax Demand

During the year Income Tax Department has raised a demand of '' 1246 lakh (P.Y.: Nil) for A.Y 2018-19. The company is contesting the case & filed an appeal with CIT (Appeals).

(iv) Others

Other Contingent liability is mainly in respect of bills discounted with banks against trade receivables amounting to '' 20107 (P.Y.: '' 15000 lakh). In case of any claim on the Company from the banks in this regard, entire amount shall be recoverable from the beneficiaries along with surcharge.

(a) CERC Tariff Regulations and PPA/MoU signed with power purchasers provide for levy of Late Payment Surcharge by generating company in case of delay in payment by beneficiaries beyond specified number of days from the date of presentation of bill. However, in view of significant uncertainties in the ultimate collection from some of the beneficiaries against partial bills as estimated by the management, an amount of ''1705 lakh as on 31 March 2021 (P.Y.: ''60951 lakh) has not been recognised.

(b) The company has filed a truing up petition with CERC in respect of Nathpa Jhakri Hydro Power Station for the period 2014-19. Tariff orders for 2019-24 in respect of hydro power stations are also pending. The additional revenue likely to accrue on account of tariff revision which has not been recognised due to significant uncertainty of approval has been shown as contingent assets

(d) Interest recoverable from contractors is on account of the principal amount of the claim filed by the company before the Hon''ble High Court of Himachal Pradesh against contractors of Rampur Hydro Power Station in respect of hydro allowance.

b) The Company has commitments of '' 100487 Lakh (PY. '' 283487 Lakh) towards further investment in the subsidiary companies as at 31 March 2021.

c) The Company has commitments of '' 40957 Lakh (PY. '' 43347 Lakh) towards further investment in the joint venture entities as at 31 March 2021.

d) Company''s commitment in respect of lease agreements has been disclosed in Note no. 2.54.

2.51 Disclosure as per Ind AS 108 âOperating Segments''

c) The Company is having a single geographical segment as all its Power Stations are located within the Country.

2.52 Disclosure relating to creation of Regulatory Deferral Accounts as per Ind AS 114:

c) Pay revision of employees of CPSUs has revised from 1st January, 2017. CERC Tariff regulations 2014-19 provides that the impact of actual increase in employee cost on account of wage revision of operational power stations is recoverable from beneficiaries in future through Tariff. Accordingly, additional expenditure on employee benefit due to pay revision to the extent charged to the Statement of Profit & Loss or to the Other Comprehensive Income and recoverable from beneficiaries in subsequent periods as per Tariff Regulations are being recognized as Regulatory Deferral Account Balances.

d) During the year, company has received an arbitration award pertaining to Nathpa Jhakri Hydro Power Station (NJHPS). Accordingly the principal amount of award including interest during construction period has been capitalized and interest thereafter has been charged to the statement of profit and loss. The interest charged to profit & loss account has been included in regulatory deferral account debit balance as the same is recoverable from beneficiaries through tariff in future. The company has filed an appeal before the Hon''ble High Court of Delhi against the award.

e) Risks associated with future recovery/reversal of regulatory deferral account balances:

i) Demand risk due to changes in consumer attitudes, the availability of alternative sources of supply.

ii) Regulatory risk on account of changes in regulations and submission or approval of rate-setting application or the entity''s assessment of the expected future regulatory actions.

2.53 Disclosure as per Ind AS 115,â Revenue from contract with customersâI. Nature of goods and services

The revenue of the Company comprises of income from energy sales and consultancy services. The following is a description of the principal activities:

a) Revenue from energy sales

The major revenue of the Company comes from energy sales. The Company sells electricity to bulk customers, mainly electricity utilities owned

V Transaction price allocated to the remaining performance obligations Performance obligations related to sale of energy:

Regulations. Revenue from sale of energy is recognised once the electricity has been delivered to the beneficiaries. Beneficiaries are billed on a periodic and regular basis. Therefore, transaction price to be allocated to remaining performance obligations cannot be determined reliably for the entire duration of the contract.

Performance obligations related to Consultancy:

For consultancy, transaction price for remaining performance obligations amounts to ''2288 Lakh ( P.Y. '' 2744 Lakh) which shall be received over the contract period in proportion of the services provided by the Company.

VI. Practical expedients applied as per Ind AS 115:

VII. The Company has not incurred any incremental costs of obtaining contracts with a customer and therefore, not recognised an asset for such costs.

2.54 Disclosures as per Ind AS 116 âLeases''

1. The Company has adopted Ind AS 116-Leases effective 1^st April, 2019, using the modified retrospective method. On the date of initial application, the lease liability has been measured at the present value of the remaining lease payments and right of use assets has been recognised at an amount equal to the lease liabilities.

2. Practical expedients applied as per Ind AS 116

a) Applied a single discount rate to a portfolio of leases of similar assets in similar economic environment with a similar end date.

b) Applied the exemption not to recognize ROU assets and liabilities for leases with less than 12 months of lease term on the date of initial application.

c) Used hindsight when determining the lease term if the contract contains options to extend or terminate the lease.

3. The incremental borrowing rate has been applied to discount the lease liabilities.

3. To Firms/companies in which directors are interested : Nil (P.Y.: Nil)

B. Investment by the loanee (as detailed above) in shares of SJVN : Nil

2.57 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 energy sales, 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/ emails 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.

2.63 The Company is mainly engaged in the business of generation of electricity and the tariffs for the power generation are regulated in terms of the CERC Tariff Regulations. Due to the various steps taken by the Company, there has been no significant impact of the pandemic on the generation of electricity / construction activities undertaken by the Company.

In line with the directions of GOI, the Company has given a one-time rebate of '' 5782 lakh to the DISCOMs and Power Departments of States/ Union Territories. Accordingly rebate amounting to '' 5173 lakh (P.Y.: '' 609 lakh) has been recognised as an exceptional item

Based on assessment of the management, no material impact of COVID-19 on the financial performance inter alia including the carrying value of various current and non-current assets or on the going concern assumptions of the company is expected to arise. The impact assessment of COVID-19 is a continuing process given the uncertainties associated with its nature and duration. The company will continue to monitor any material changes to future economic conditions and the same will be taken into consideration on materialisation.

2.64 Board of Directors have authorised Director (Finance) and Company Secretary to rectify the errors and carry out modifications, if any.

Mar 31, 2018

I. Company Information and Significant Accounting Policies

A. Reporting Entity

SJVN Limited (the âCompanyâ) is a Company domiciled in India and limited by shares (CIN: L40101HP1988GOI008409). The address of the companyâs registered office is Shakti Sadan, Shanan, Shimla-171006 (H.P.). Electricity generation is the principal business activity of the company. The company is also engaged in the business of providing consultancy.

CERC vide its Order dated 18.05.2017 has provisionally determined the Annual Fixed Charges (AFC) at Rs.136883 lakh for the year 2017-18 as compared to Rs.165684 lakh for the year 2016-17 in respect of Nathpa Jhakri Hydro Power Station (NJHPS). The reduction in AFC is mainly due to reduction in depreciation as per the CERC regulations which provide that, âthe depreciable value as on 31^st March of the year closing after a period of 12 years from the effective date of commercial operation of the station shall be spread over the balance useful life of the assets.â Sales/billing to the beneficiaries have been made in accordance with the aforesaid Order.

CERC vide its order dated 27.01.2015 have provisionally determined the tariff of Rampur Hydro Power Station (RHPS) for the period 2014-16. Further, CERC vide its order dated 15.02.2017 has directed that the interim tariff granted by order dated 27.01.2015 in respect of RHPS shall continue to be in force till the tariff of the generation station for the period 2014-19 is determined. The sales/billing to the beneficiaries have been made in accordance with the above order.

During the year, the Company has regulated the power of BYPL (P.Y: BYPL and J&K ) after this company failed to pay outstanding dues and sold the power allocated to this company through PTC as per CERC(Regulations of Power Supply) Regulations,2010. Accordingly 166.17 MUs (P.Y: 175.250 MUs) of power was sold through PTC amounting to Rs.5331/- lakh (P.Y: Rs.4322/- lakh) and included in Energy Sales. An amount of Rs.3009 /-lakh (P.Y. : Rs.1497/- lakh) excess realised as compared to regulated energy charges has been adjusted as Margin from trade receivables and Sales after adjusting the expenses of Rs.369/- lakh (P.Y: Rs.357/- lakh) on Sale through PTC.

B) FAIR VALUATION MEASUREMENT

(i) Fair Value Hierarchy

(ii) Valuation techniques and process used to determine fair values

The Company values financial assets or financial liabilities using the best and most relevant data available. Specific valuation techniques used to determine fair value of financial instruments includes:

- Use of Quoted market price or dealer quotes for similar intruments.

- Fair value of remaining financial instruments is determined using discounted cash flow analysis.

The company has a team that performs the valuation of financial assets and liabilities required for financial reporting purpose .

Note:

1. The Carrying amount of current investments, Trade and other receivables, Cash and cash equivalents, Short-term loans and advances, Short term borrowings, Trade payables and other current financial liabilitties are considered to be the same as their fair values, due to their short term nature.

2. For financial assets and financial liabilites measured at fair value, the carrying amounts are equal to the fair value.

(2) Financial Risk Management

Financial risk factors

The Companyâs principal financial liabilities comprise borrowings, trade and other payables. The main purpose of these financial liabilities is to manage finances for the Companyâs operations. The Company has loan and other receivables, trade and other receivables, investments and cash and short-term deposits that arise directly from its operations. The Companyâs activities expose it to a variety of financial risks:

i) Credit risk

ii) Liquidity risk.

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses.

iii) Market risk

The companyâs risk management is carried out as per policies approved by Board of Directors from time to time.

(A) Credit Risk

The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and other financial instruments.

a) Trade Receivables

b) Financial assets at amortised cost

Employee Loans: The Company has given loans to employees at concessional rates as per the Companyâs policy which have been measured at amortised cost at Balance Sheet date. The recovery of the loan is on fixed installment basis from the monthly salary of the employees. Management has assessed the past data and does not envisage any probability of default on these loans.

c) Financial instruments and cash deposits

(B) Liquidity Risk

The Companyâs objective is to maintain optimum levels of liquidity at all times to meet its cash and collateral requirements. The Company relies on a mix of borrowings, capital infusion and excess operating cash flows to meet its need for funds. The current committed lines of credit and internal accruals are sufficient to meet its short to medium term expansion needs. The Company monitors rolling forecasts of its liquidity requirements to ensure that it has sufficient cash to meet capital expenditure and operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.

Maturities of Financial Liabilities:

The table below provides undiscounted cash flows towards companyâs financial liabilities into relevant maturity based on the remaining period at the balance sheet to the contractual maturity date. Balance due within 1 year is equal to their carrying balances as the impact of discounting is not significant. (refer Note 2.23, 2.24, 2.27 and 2.28 of balance sheet)

The sensitivity analysis excludes the impact of movements in market variables on the carrying value of post-employment benefit obligations provisions and on the non-financial assets and liabilities. The sensitivity of the relevant Statement of Profit and Loss item is the effect of the assumed changes in the respective market risks. The Companyâs activities expose it to a variety of financial risks, including the effects of changes in interest rates.

(i) Interest rate risk and sensitivity

The Comapnyâs exposure to the risk of changes in market interest rates relates primarily to the Companyâs long term debt obligations with floating interest rates and any changes in the interest rates environment may impact future cost of borrowing. Company does not have fixed rate borrowings.

(ii) Price Risk:

(a) Exposure

The company has no exposure to price risk as there is no investment in equity shares which are listed in recognised stock exchange and are publicly traded in the stock exchanges.

(iii) Foreign Currency Risk

The company is compensated for variability in forign currency exchange rate through recovery by way of tariff adjustments under the CERC Tariff Regulations.

(a) Foreign Currency Risk Exposure:

The companyâs exposure to foreign currency risk at the end of the reporting period expressed in INR are as follows :

The Company has elected to avail the exemption available under IND AS 101, with regard to continuation of policy for accounting of exchange differences arising from translation of long term foreign currency monetary liabilities. However, there is no impact on the Profit & Loss of the company due to change in foreign currency rates as the same is the pass through item to the beneficiaries as per CERC guidlines applicable to the period 2014-19.

(3) Capital Management

(a) Capital Risk Management

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The primary objective of the Companyâs capital management is to maximize the shareholder value. The Companyâs primary objective when managing capital is to ensure that it maintains an efficient capital structure and healthy capital ratios and safeguard the Companyâs ability to continue as a going concern in order to support its business and provide maximum returns for shareholders. The Company also proposes to maintain an optimal capital structure to reduce the cost of capital. No changes were made in the objectives, policies or processes during the year ended 31st March, 2018.

The Company monitors capital using Debt Equity ratio, which is net debt divided by total capital. The Debt Equity ratio are as follows:

Note: For the purpose of the Companyâs capital management, capital includes issued capital, share premium and all other equity reserves. Net debt includes, interest bearing loans and borrowings, trade and other payables less cash and short term deposits.

(b) Loan Covenents:

Under the terms of the major borrowing facilities, the company is required to comply with the following financial covenents:-

1. Company shall maintain credit rating AA and if rating comes down, rate of interest shall be increased by 65 basis point for each notch below AA rating in accordance with the applicable rates.

2. Debt to net worth should not exceed 2:1.

During the year the company has complied with the above loan covenants.

i. The above foreign currency risk exposure is for foreign currency loans taken for construction of Rampur Hydro Power Station from World Bank. As per accountig policy of the company transactions in foreign currency are initially recorded at exchange rate prevailing on the date of transaction. At each Balance Sheet date, monetary items denominated in foreign currency are translated at the exchange rates prevailing on that date. Non-monetary items denominated in foreign currency are reported at the exchange rate prevailing at the date of transaction.

ii. Exchange differences arising on translation or settlement of monetary items are recognised in the statement of profit and loss in the year in which it arises with the exception that exchange differences on long term monetary items related to acquisition of fixed assets entered up to March 31, 2016 are adjusted to carrying cost of fixed assets.

2.1 Contingent Liabilities:-

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

* During the year disputed service tax demand has been vacated by Excise and Customs department.

(i) Capital works

Contractors have lodged claims aggregating to Rs.37715 Lakh (previous year Rs.27607 Lakh) against the Company on account of rate & quantity deviation, cost relating to extension of time and idling charges due to stoppage of work/delays in handing over the site etc. These claims are being contested by the company as being not admissible in terms of provisions of the respective contracts or are laying at arbitration tribunal/ other forums/under examination with the Company.

(ii) Land Compensation cases

In respect of land acquired for the projects, some of the land losers have filed claims for higher compensation amounting to Rs.1787 Lakh (previous year Rs.1791 Lakh) before various authorities/courts. Company has shown the same as contingent liability as possibility of any outflow in settlement of these claims is considered as remote.

(iii) Others

Claims on account of other miscellaneous matters is amounting to Rs.165 lakh (previous year Rs.165 lakh) mainly on account of notice served by H.P Govt. under Himachal Pradesh Public Premises and Land (Eviction and Rent Recovery) Act, 1971. Writ petition in respect of above mentioned case was admitted by Honâble High court and is pending for hearing.

(a) The above is summarized as below:

(b) The above contingent liabilities do not include contingent liabilities on account of pending cases in respect of service matters & others where the amount cannot be quantified.

(c) It is not practicable to ascertain and disclose the uncertainties relating to outflow in respect of contingent liabilities.

(d) The companyâs management does not expect that the above claims/obligations (including under litigation), when ultimately concluded and determined, will have a material and adverse effect on the companyâs results of operations or financial condition.

2.2 On 14.02.2018, an earth fault followed by over current took place in the 3.3 MVA 11kV HT incomer & Y-Phase of 6.25MVA 11/66 kV transformer at 66 kV switchyard of Charanka Solar Power Project. This resulted into fire in HT panel & transformer and shut down of the whole plant till 24.04.2018. As per condition of the contract, a fire policy has been taken by the contractor, who is responsible for preparing and conducting all and any claim made under the said policy.

2.3 Balances of trade receivables, advances, deposits, trade payables, are reconciled periodically. However, as on 31.03.2018 out of Rs.74354 lakh trade receivables, deposits, material lying with third parties etc an amount of Rs.67676 lakh has been confirmed and balance amount of lakh Rs.6678 lakh are subject to confirmation and consequential adjustment. Further trade payables amounting to Rs.2545 lakh which includes provisions/estimated liabilities are yet to be confirmed, which in the opinion of the management will not have a material impact.

* There is however no impact on profitability of the Company, as the impact of change in foreign exchange rates is recoverable from beneficiaries in terms of prevailing CERC (Terms &Conditions of tariff) Regulations.

2.4 Disclosure under the provisions of IND-AS-19 âEmployee Benefitsâ:-

General description of various defined employee benefits are as under:

a) Defined Contribution plans:

(i) Pension:

b) Defined benefit plans:

(i) Employers contribution to Provident Fund:

(ii) Gratuity:

The Company has a defined benefit Gratuity Plan, which is regulated as per the provisions of Payment of Gratuity Act, 1972. The scheme is funded by the company and is managed by a separate trust. The liability for the same is recognized on the basis of actuarial valuation.

(iii) Leave encashment:

The Company has a defined benefit leave encashment plan for its Employees. Under this plan they are entitled to encashment of earned leaves and medical leaves subject to limits and other conditions specified for the same. The liability towards leave encashment is recognised on the basis of actuarial valuation.

(iv) Retired Employee Health Scheme:

The Company has a Retired Employee Health Scheme, under which retired employee, spouse and eligible parents of retired employee 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 scheme is being managed by a separate trust created during the year for the purpose and obligation of the company is to make contribution to the trust based on actuarial valuation. The liability towards the same is recognised on the basis of actuarial valuation.

(v) Baggage Allowance:

Actual cost of shifting from place of duty at which employee is posted at the time of retirement to any other place where he / she may like to settle after retirement is paid as per the rules of the Company. The liability towards the same is recognised on the basis of actuarial valuation.

(vi) Service Reward on Retirement:

Gift at the time of retirement is given to the employee as per the rules of the Company. The liability towards the same is recognised on the basis of actuarial valuation.

IX. Risk exposure

Valuations are based on certain assumptions, which are dynamic in nature and vary over time. As such company is exposed to various risks as follow -

A) Salary Increases- Actual salary increases will increase the Planâs liability. Increase in salary increase rate assumption in future valuations will also increase the liability.

B) Medical cost increase- Increase in actual medical cost per retiree will increase the plans liability. Increase in medical cost per retiree rate assumption will also increase the liability.

C) Investment Risk - If Plan is funded then assets liabilities mismatch & actual investment return on assets lower than the discount rate assumed at the last valuation date can impact the liability.

D) Discount Rate : Reduction in discount rate in subsequent valuations can increase the planâs liability.

E) Mortality & disability - Actual deaths & disability cases proving lower or higher than assumed in the valuation can impact the liabilities.

F) Withdrawals - Actual withdrawals proving higher or lower than assumed withdrawals and change of withdrawal rates at subsequent valuations can impact Planâs liability.

2.5 Segment information:

c) The Company is having a single geographical segment as all its Power Stations are located within the Country.

d) Information about major customers:

2.6 Information on âRelated Party Disclosuresâas per Ind AS 24 is provided as under:

a) List of Related Parties -

i) Directors & Key Management Personnel:

Note: Loan/Recoverable from/to subsidiaries/JVs is Rs.24666 Lakh (Previous Year Rs.17691 Lakh). Loan from Key Management Personnel (KMP), their relatives & enterprise over which KMPs have significant influence is Rs. NIL (Previous Year NIL)

Terms & conditions:

1) Loans to KMPs include House Building Advance and Education Loan. These advances are interest bearing at concessional rates as per policy of the Company.

2) Management/Consultancy services provided to subsidiaries/Joint Ventures and other transactions were on normal commercial terms and conditions at market rates.

Whole time Directors are allowed the use of staff cars including for private journeys on payment in accordance with DPE guidelines.

2.7 Interest in Other Entities:

a) Subsidiaries

The groupâs subsidiaries as at 31^st March, 2018 are set out below. The equity share capital of these companies is held directly by the Company. The country of incorporation or registration is also their principal place of business.

b) Interest in joint ventures

The groupâs interest in joint ventures as at 31^st March, 2018 are set out below which in the opinion of the management, are material to the group. The entities listed below have share capital consisting solely of equity shares, which are held directly by the Company. The country of incorporation or registration is also their principal place of business and the proportion of ownership interest is the same as the proportion of voting rights held.

1. The company has 50% interest in Kholongchhu Hydro Energy Limited, which is a joint venture with Druk Green Power Corporation Limited of Bhutan. The joint venture is involved in the construction and operation of Kholongchhu Hydro Power Project in Bhutan.

2.8 Disclosure Regarding Embedded Lease:

The Company has entered into arrangement with

i) Maharashtra State Electricity Board (MSEB) for sale of wind power from Khirvire Wind power station for a period of 13 years. Under the agreements, the MSEB is obliged to purchase the output at fixed per unit price.

ii) Gujarat Urja Vikas Nigam Limited (GUVNL) for sale of Solar power from Charanka Solar Park for a period of 25 years .

iii) Gujarat Urja Vikas Nigam Limited (GUVNL)) for sale of wind power from Sadla Wind Power Project for a period of 25 years.

Accordingly, the Company has classified the Power Station as Operating Leases as per Appendix-C to Ind AS 17- Leases.

Revenue from operation under note no. 2.31 includes an amount of Rs.3440 Lakh (P.Y Rs.2120 lakh) from sale of power from these plant.

Future minimum rental receivable under non-cancellable operating leases as on 31.03.2018 are as follows.

2.9 Disclosure related to Corporate Social Responsibility (CSR)

As per the Companies Act, 2013, the company is required to spend at least two per cent of the average net profits of the company made during the three immediately preceding financial years, in pursuance of its Corporate Social Responsibility Policy. During the year an amount of Rs.3750 lakh [(2% of Average Profit Before Tax of immediately previous three years (P.Y Rs.3394 lakh, 2% of Average Profit Before Tax of immediately previous three years)] to be spent on CSR during the year and the same has been booked to CSR expenses as per Accounting Policy. The Company has paid an amount of Rs.3750 lakh (P.Y: Rs.3394 lakh) to the CSR trust formed to manage the CSR activities.

2.10 CERC (Terms & Conditions of Tariff) Regulations provide for levy of late payment surcharge by generating company in case of delay in payment by beneficiaries beyond 60 days from the date of presentation of bill. An amount of Rs.55007 Lakh (P.Y.: Rs.48434 Lakh) is due but not recognised on account of surcharge till 31.03.2018 due to significant uncertainties in the timing of its collection from the customers.

2.11 Disclosure relating to creation of Regulatory Deferral Accounts as per Ind AS 114:

c) Pay revision of employees of CPSUs is due from 1^st January, 2017. Accordingly, Impact of proposed revision of pay includes expenses recognized in the Statement of Profit & Loss and other comprehensive income (OCI) for enhancement in pay and allowances.

CERC Tariff regulations 2014

19 provides that the impact of actual increase in employee cost on account of wage revision of operational power stations is recoverable from beneficiaries in future throughTariff. Accordingly, additional expenditure on employee benefit due to pay revision to the extent charged to the Statement of Profit & Loss or to the Other Comprehensive Income and recoverable from beneficiaries in subsequent periods as per Tariff Regulations are being recognized as Regulatory Deferral Account Balances.

The company has created regulatory assets and recognized corresponding regulatory income upto period ended 31.03.2018 as under:

2.12 Opening balances/corresponding figures for previous year/period have been re-grouped/re- arranged, wherever necessary.

Mar 31, 2017

# Lease deed for leasehold land measuring 39-88-05 hectare ( P.Y.: Nil) is yet to be executed.

## Possession of freehold land measuring 0-05-22 hectare (P.Y.: 0-05-22 hectare) is still to be handed over to the Company.

$ Title deeds/ title in respect of buildings costing Rs,15 lakh (P.Y.: Rs,15 lakh) are yet to be executed passed in favour of the company. Expenses on stamp duty etc. shall be accounted for on registration.

$ Buildings include Nil (P.Y: Rs,127 lakh) being damaged assets for which provision has been made.

* Generating Plant & Machinery includes assets under operating lease having net block of Rs,23398 lakh (P.Y.: Rs,25075 lakh and Rs,26947 lakh as on 01.04.2015), the disclosure of arrangement of lease and terms have been made in note 2.49.

** Capital Assets not owned by Company are on account of enabling assets used for construction of project which have been fully depreciated in the previous years.

,Includes an amount of Rs,1144 lakh (P.Y.: Rs,1144 lakh) paid to Govt of Himachal Pradesh (GoHP) during F.Y. 2014-15 towards lease rent for diverted forest land of RHPS which has been protested by the company and included in amount recoverable from Government Departments. As per letter no F.NO II-79/2005-FC dated 01.06.2006 and F.NO II-306/2014-FC dated 08.08.2014 of Ministry of Environment and Forest (FC Division) GOI, no fresh conditions can be imposed by the States without the prior approval of the Central Government subsequent to the approval granted by the Central Government under the Forest (Conservation) Act 1980. As no fresh condition imposed by the Central Government to charge the lease amount and execute the lease deed, the amount has been shown under Other Advances.

The Company has only one class of equity shares having par value of 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 shareholding at the meeting of shareholders.

During the year, the Company has paid interim dividend @ Rs,2.25 (P.Y.: Rs,0.63) and final dividend for the year 2015-16 @ Rs,0.47 (P.Y.: Rs,0.42) per equity share of par value Rs,10/- each. The Board of Directors of the company have proposed final dividend for the year 2016-17 @ Rs,0.50 (P.Y.: Rs,0.47) per equity share of par value Rs,10/- each amounting to Rs,20683 lakh (P.Y.: Rs,19442 lakh).

(2) Financial Risk Management Financial risk factors

The Company''s principal financial liabilities comprise borrowings, trade and other payables. The main purpose of these financial liabilities is to manage finances for the Company''s operations. The Company has loan and other receivables, trade and other receivables, investments and cash and short-term deposits that arise directly from its operations. The Company''s activities expose it to a variety of financial risks:

i) Credit risk

ii) Liquidity risk.

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses.

iii) Market risk

The company''s risk management is carried out as per policies approved by Board of Directors from time to time.

(A) Credit Risk

The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and other financial instruments.

a) Trade Receivables

CERC tariff regulations 2014-19 allows the Company to raise bills on beneficiaries for late-payment surcharge @ 1.5% percent per month. Considering the fact that the average return on short-term investments of the Company as on 31.03.2017 is 7.01% p.a., the interest recovered by way of surcharge adequately compensates the Company for time value of money arising due to delay in payment. Further, the fact that beneficiaries are primarily State Governments/ State Discoms and considering the historical credit loss experience for trade receivables, the Company does not envisage either impairment in the value of receivables from beneficiaries or loss due to time value of money due to delay in realization of trade receivables.

b) Financial assets at amortized cost

Employee Loans: The Company has given loans to employees at concessional rates as per the Company''s policy which have been measured at amortized cost at Balance Sheet date. The recovery of the loan is on fixed installment basis from the monthly salary of the employees. Management has assessed the past data and does not envisage any probability of default on these loans.

c) Financial instruments and cash deposits

The Company considers factors such as track record, size/ net worth of the institution/bank, market reputation and service standards and limits and policies as approved by the board of directors to select the banks with which balances and deposits are maintained. The Company invests surplus cash in short term deposits with scheduled Banks.

(B) Liquidity Risk

The Company''s objective is to maintain optimum levels of liquidity at all times to meet its cash and collateral requirements. The Company relies on a mix of borrowings, capital infusion and excess operating cash flows to meet its need for funds. The current committed lines of credit are sufficient to meet its short to medium term expansion needs. The Company monitors rolling forecasts of its liquidity requirements to ensure that it has sufficient cash to meet capital expenditure and operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.

Maturities of Financial Liabilities:

The table below provides undiscounted cash flows towards company''s financial liabilities into relevant maturity based on the remaining period at the Balance Sheet date to the contractual maturity date. Balance due within 1 year is equal to their carrying balances as the impact of discounting is not significant. (refer Note 2.22, 2.26 and 2.27 of Balance Sheet)

(C) Market Risk:

(i) Interest rate risk and sensitivity

The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s long term debt obligations with floating interest rates and any changes in the interest rates environment may impact future cost of borrowing. Company does not have fixed rate borrowings and accordingly not subject to interest rate risk as defined in the IND AS 107.

Interest Rate Sensitivity Analysis

Profit or loss is sensitive to higher/lower interest expense from borrowings as a result of change in interest rates. With all other variables held constant, the following table demonstrates the impact of borrowing cost on floating rate portion of loans and borrowings.

(ii) Price Risk:

(a) Exposure

The company has no exposure to price risk as there is no investment in equity shares which are listed in recognized stock exchange and are publicly traded in the stock exchanges.

(iii) Foreign Currency Risk

(a) Foreign Currency Risk Exposure:

The company''s exposure to foreign currency risk at the end of the reporting period expressed in INR are as follows :

i. The above foreign currency risk exposure is for foreign currency loans taken for construction of Rampur Hydro Power Station from World Bank. As per accounting policy of the company, transactions in foreign currency are initially recorded at exchange rate prevailing on the date of transaction. At each Balance Sheet date, monetary items denominated in foreign currency are translated at the exchange rates prevailing on that date. Non-monetary items denominated in foreign currency are reported at the exchange rate prevailing at the date of transaction.

ii. Exchange differences arising on translation or settlement of monetary items are recognized in the statement of profit and loss in the year in which it arises with the exception that exchange differences on long term monetary items related to acquisition of fixed assets entered up to March 31, 2016 are adjusted to carrying cost of fixed assets.

The Company has elected to avail the exemption available under IND AS 101, with regard to continuation of policy for accounting of exchange differences arising from translation of long term foreign currency monetary liabilities. However, there is no impact on the Profit & Loss of the company due to change in foreign currency rates as the same is the pass through item to the beneficiaries as per CERC guidelines applicable to the period 2014-19.

(3) Capital Management

(a) Capital Risk Management

(b) Loan Covenants:

Under the terms of the major borrowing facilities, the company is required to comply with the following financial covenants:-

1. Company shall maintain credit rating AA and if rating comes down, rate of interest shall be increased by 65 basis point for each notch below AA rating in accordance with the applicable rates.

2. Debt to net worth should not exceed 2:1.

During the year the company has complied with the above loan covenants.

Note No. 2.36 :First Time adoption of IND AS

Transition from IGAAP to IND AS

The Company has adopted IND AS for the financial year beginning on April 1, 2016 with April 1, 2015 as the date of transition. These are the Company''s first annual financial statements prepared complying in all material respects with the accounting standards notified under the Companies (Indian Accounting Standards) Rules, 2015, the Companies Act, 2013 and the provisions of the Electricity Act, 2003 to the extent applicable.

For periods up to and including the year ended 31 March, 2016, the Company prepared its financial statements in accordance with IGAAP, including accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended).

Accordingly, the Company has prepared IND AS compliant financial statements for period ending on 31st March, 2017. In preparing these financial statements, the Company has prepared opening IND AS balance sheet as at 1 April, 2015 the Company''s date of transition to Ind-AS in accordance with requirement of IND AS 101, First time adoption of Indian Accounting Standards. The principal adjustments made by the Company in restating its IGAAP financial statements, including the balance sheet as at 1 April 2015 and the financial statements as at and for the year ended 31 March 2016 are quantified and explained in detail as Annexure I &II to this Note . However the basic approach adopted is again summarized hereunder:

i) All assets and liabilities have been classified into financial assets/liabilities and non-financial assets/liabilities.

ii) All non-current financial assets/liabilities at below market rate of interest or zero interest and outstanding as on 01.04.2015 have been measured at fair value.

- Loans to employee such as house building advance, car advance, computer advance and scooter advance which are below market interest rate have been fair valued using discounted cash flow method. The interest rate used for valuing the above advances for income tax purpose (level 3 input) have been used as discount rate.

iii) In accordance with IND AS 101, the resulting adjustments are considered as arising from events and transactions entered before date of transition and recognized directly in the retained earnings at the date of transition to IND AS.

iv) The estimates as at 1 April 2015 and at 31 March 2016 are consistent with those made for the same dates in accordance with IGAAP.

v) IND AS 101 also allows to first time adopter certain exemptions from the retrospective application of certain requirements under IND AS. Accordingly, the company has availed the following exemptions as per IND AS 101:

i) Optional exemptions:

a) Deemed Cost for Property, Plant & Equipment:

Property, Plant and Equipment up to March 31, 2015 were carried in the balance sheet in accordance with Indian GAAP. The Company has elected to avail the exemption granted by IND AS 101, "First time adoption of IND ASs" to regard those amounts as deemed cost at the date of the transition to IND AS (i.e. as on April 1, 2015).

Under the previous GAAP, as per AS 11, the effect of changes in foreign exchange rates, provided an alternate accounting treatment to Companies with respect to exchange differences arising on restatement of long-term foreign currency monetary items. Exchange differences on account of depreciable assets could be added/deducted from the cost of depreciable asset, which would then be depreciated over the balance life of the asset. Ind AS 101 allows an exemption for the first time adopter to continue the above accounting treatment in respect of the long term foreign currency monetary items recognized in the financial statements for the period ended immediately before the beginning of the first Ind AS financial reporting period.

b) Designation & Fair value measurement of financial assets or financial liabilities at initial recognition: Ind AS 101 allows an entity to designate investment in equity instruments at FVTOCI on the basis of the facts and circumstances that exist at the date of transition to Ind AS. In addition, the exemption permits prospective application of requirements of IND AS 109 to transactions entered into on or after date of transition. Company has not retrospectively applied the amortized cost method for outstanding borrowings as on 01.04.2015 as it is impracticable to apply the same in line with para B8C of Ind AS 101. The impact of which is immaterial.

c) Investment in Subsidiaries and joint ventures: The Company has decided to avail the exemption with regard to measuring the investment in subsidiaries and joint venture as at date of transition at deemed cost which is previous GAAP carrying amount at that date.

d) Leases: Appendix C to Ind AS 17- Leases requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, the assessment should be carried out at the inception of the contract or arrangement. Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS, except where the effect is expected to be not material. The Company has elected to apply this exemption for such arrangements/contracts.

ii) Mandatory exemptions:

a) Estimates: An entity''s estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with the previous GAAP, unless there is objective evidence that those estimates were in error.

Ind AS estimates as at 1st April 2015 are consistent with the estimates as at the same date made in conformity with previous GAAP.

(iv) Others

Claims on account of other miscellaneous matters amounting to Rs,165 lakh (previous year Rs,165 lakh and as at 01.04.2015 Rs,165 lakh) mainly on account of notice served by H.P Govt under Himachal Pradesh Public Premises and Land (Eviction and Rent Recovery ) Act, 1971. Writ petition in respect of aforementioned case was admitted by Hon''ble High Court and is pending for hearing .

(i) Capital works

Contractors have lodged claims aggregating to Rs,27607 Lakh (previous year Rs,32241 Lakh and as at 01.04.2015 Rs,34063 Lakh) against the Company on account of rate & quantity deviation, cost relating to extension of time and idling charges due to stoppage of work/delays in handing over the site etc. These claims are being contested by the company as being not admissible in terms of provisions of the respective contracts or are lying at arbitration tribunal/other forums/under examination with the Company. As the amounts recommended by the Dispute Review Boards (DRBs)/Additional Dispute Review Boards (ADRBs) are much less than the amounts claimed by the contractors, the claims on account of further interest and escalation, if any, have not been considered.

(ii) Land Compensation cases

In respect of land acquired for the projects, some of the land losers have filed claims for higher compensation amounting to Rs,1791 Lakh (previous year Rs,6193 Lakh and as at 01.04.2015 Rs,6193 Lakh) before various authorities/courts. Company has shown the same as contingent liability as possibility of any outflow in settlement of these claims is considered as remote.

(iii) Disputed Service tax Demand

Disputed Service Tax demand amounting Rs,1333 Lakh was raised during F.Y. 2008-09 on account of foreign currency payments made to suppliers for supply of material and services for construction of Nathpa Jhakri Hydro Power Station .Out of above an amount of Rs,97 Lakh was deposited in F.Y 2008-09 on service portion and the balance amount was contested as the service tax was not applicable on supply of material. No further communication was received from service tax department since then on the issue. However, in absence of formal withdrawal of demand by service tax department, an amount of Rs,1236 lakh is being disclosed as contingent liability.

(b) The above contingent liabilities do not include contingent liabilities on account of pending cases in respect of service matters & others where the amount cannot be quantified.

(c) It is not practicable to ascertain and disclose the uncertainties relating to outflow in respect of contingent liabilities.

(d) The company''s management does not expect that the above claims/obligations (including under litigation), when ultimately concluded and determined, will have a material and adverse effect on the company''s results of operations or financial condition.

2. Balances of trade receivables, advances, deposits, trade payables, are reconciled periodically. However, as on 31.03.2017 out of Rs,98875 lakh trade receivables, deposits, material lying with third parties etc. an amount of Rs,91673 lakh has been confirmed and balance amount of Rs,7202 lakh are subject to confirmation and consequential adjustment. Further trade payables amounting to Rs,2704 lakh which includes provisions/estimated liabilities are yet to be confirmed, which in the opinion of the management will not have a material impact.

3. Disclosure under the provisions of IND-AS-19 ''Employee Benefits'':-

General description of various defined employee benefits are as under:

a) Defined Contribution plans:

(i) Pension:

b) Defined benefit plans:

(i) Employers contribution to Provident Fund:

The Company pays fixed contribution to Provident Fund at predetermined rates to a separate trust, which invests the fund in permitted securities. The contribution of Rs,1306 lakh (Previous Year: Rs,1086 lakh) and Rs,96 lakh (Previous Year: Rs,182 lakh) is recognized as expense and charged to the Statement of Profit and Loss and Expenditure attributable to Construction respectively. The obligation of the company is limited to such fixed contribution and to ensure a minimum rate of return to the members as specified by GOI.

Value of Obligation including interest payable to employees as on 31.03.2017 is Rs,35274 lakh (P.Y.: Rs,30773 lakh) whereas value of plan assets is Rs,35627 lakh (P.Y.: Rs,31131 lakh). Since the value of plan assets is comparatively higher as compared to value of obligation, there is no additional liability to the company as on balance sheet date.

(ii) Gratuity:

The Company has a defined benefit Gratuity Plan, which is regulated as per the provisions of Payment of Gratuity Act,

1972. The scheme is funded by the company and is managed by a separate trust. The liability for the same is recognized on the basis of actuarial valuation.

(iii) Leave encashment:

(iv) Retired Employee Health Scheme:

(v) Baggage Allowance:

(vi) Service Reward on Retirement:

Gift at the time of retirement is given to the employee as per the rules of the Company. The liability towards the same has been provided on the basis of actuarial valuation.

4. Segment information:

c) The Company is having a single geographical segment as all its Power Stations are located within the Country.

5. Information on ''Related Party Disclosures'' as per Ind AS 24 is provided as under:

a) List of Related Parties -

i) Directors & Key Management Personnel:

Note: Loan/ Recoverable from/to subsidiaries/JVs is Rs,17691 Lakh (Previous Year Rs,9389 Lakh). Loan from Key Management Personnel (KMP), their relatives & enterprise over which KMPs have significant influence is NIL (Previous Year NIL)

Terms & conditions:

1) Loans to KMPs include short-term advances like multipurpose advance and long-term advances like House Building Advance, Car Advance and Computer Advance. While short-term advances are interest-free, long term advances are interest bearing at concessional rates as per policy of the Company.

2) Management/Consultancy services provided to subsidiaries/Joint Ventures and other transactions were on normal commercial terms and conditions at market rates.

6. Remuneration to Directors & Key Managerial Personnel

Whole time Directors are allowed the use of staff cars including for private journeys on payment in accordance with DPE guidelines.

7. Interest in Other Entities:

a) Subsidiaries

The company''s subsidiaries as at 31st March, 2017 are set out below. The equity share capital of these companies is held directly by the company. The country of incorporation or registration is also their principal place of business.

b) Interest in joint ventures

The company''s interest in joint ventures as at 31st March, 2017 are set out below which in the opinion of the management, are material to the company. The entities listed below have share capital consisting solely of equity shares, which are held directly by the company. The country of incorporation or registration is also their principal place of business and the proportion of ownership interest is the same as the proportion of voting rights held.

* Unlisted entity- no quoted price available

c) Individually Immaterial joint venture

In addition to the interest in joint ventures disclosed above, the company has interest in Bengal Birbhum Coalfields Limited to the tune of 7.7% which in the opinion of the management is not material. The financial statements of Bengal Birghum Coalfields Limited is not available and hence not considered in consolidation.

8.Earnings Per Share:-

Calculation of Earnings Per Share (Basic and Diluted) is as under:

9. Impairment of Assets-

Ind AS 36, in the opinion of the management there is no indication of any significant impairment of assets during the year.

10. Disclosure Regarding Embedded Lease:

The Company has entered into arrangement with Maharashtra State Electricity Board (MSEB) for sale of wind power from Khirvire Wind power station for a period of 15 years. Under the agreement, the MSEB is obliged to purchase the output at fixed per unit price. Accordingly, the Company has classified the Power Station as Operating Leases as per Appendix-C to Ind AS 17- Leases.

Revenue from operation under note no. 2.29 includes an amount of Rs,2120 Lakh (P.Y.: Rs,3054 lakh) from sale of power from this plant.

11. Disclosure related to Corporate Social Responsibility (CSR) As per the Companies Act, 2013, the company is required to spend at least two percent of the average net profits of the company made during the three immediately preceding financial years, in pursuance of its Corporate Social Responsibility Policy. During the year an amount of Rs,3394 lakh [(2% of Average Profit Before Tax of immediately previous three years (P.Y.: Rs,3047 lakh, 2% of Average Profit Before Tax of immediately previous three years)] to be spent on CSR during the year and the same has been booked to CSR expenses as per Accounting Policy. The Company has paid an amount of Rs,3394 lakh (P.Y: Rs,3047 lakh) to the CSR trust formed to manage the CSR activities.

12. Corporate office building at Shimla has been capitalized by Rs,13436 Lakh during the year under various heads of Property, Plant and Equipment on provisional basis pending receipt/settlement of final bill from the contractor/agency. Adjustment if any will be made on receipt/payment of final bill. The impact of same will not be material.

13. CERC (Terms & Conditions of Tariff) Regulations provide for levy of late payment surcharge by generating company in case of delay in payment by beneficiaries beyond 60 days from the date of presentation of bill. An amount of Rs,48434 Lakh (P.Y.: Rs,35769 Lakh) is due but not recognized on account of surcharge till 31.03.2017 due to significant uncertainties in the timing of its collection from the customers.

14. (a) The Institute of Chartered Accountants of India (ICAI) has issued a ''Guidance Note on Accounting for Rate Regulated Activities'' which is applicable w.e.f. 1st April,

2015 to entities that provide goods or services whose prices are subject to cost of service regulations and the Tariff determined by the regulator is binding on the customers (beneficiaries). Since, the company is primarily engaged in the business of generation and sale of power which is subject to cost of service regulation as it meets the criteria set out in the guidance note; hence it is applicable to the company. Consequently, exchange differences arising from settlement/translation of monetary items denominated in foreign currency, to the extent recoverable from or payable to the beneficiaries in subsequent periods as per CERC Tariff Regulations, which were hitherto accounted as deferred foreign currency asset/liability in line with an opinion of the Expert Advisory Committee of the ICAI, are accounted as ''Regulatory asset/liability'' and adjusted from the year in which the same becomes recoverable from or payable to the beneficiaries through regulatory income/expense

With effect from FY 2016-17, such rate regulated items are to be accounted for as per Ind AS 114- ''Regulatory Deferral Accounts.'' Ind AS 114 allows an entity to continue to apply previous GAAP accounting policies for the recognition, measurement, impairment and derecognition of regulatory deferral account balances. For this purpose, Guidance Note of the ICAI on ''Accounting for Rate Regulated Activities'' shall be considered to be the previous GAAP.

Accordingly, the company has continued with the accounting policy for regulatory deferral account balances in its first Ind AS financial statements.

b) Disclosure relating to creation of Regulatory Deferral Accounts as per Ind AS 114:

The company has created regulatory assets and recognized corresponding regulatory income up to period ended 31.03.2017 as under:

15.Opening balances/corresponding figures for previous year/period have been re-grouped/re-arranged, wherever necessary.

Mar 31, 2015

1. The amounts in Financial Statements are presented in Indian Rupees and all figures have been rounded off to the nearest rupees lakh except when otherwise stated. The previous year figures have also been reclassified/regrouped/rearranged wherever necessary to conform to this year''s classification.

2. The Company has only one class of equity shares having par value of 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 shareholding at the meeting of shareholders. During the year, the Company has paid interim dividend @ Rs. 0.63 (PY Nil) per equity share of par value Rs. 10/- each. Further, the Company has proposed final dividend for the year 2014-15 @ Rs. 0.42 (PY Rs. 0.98) per equity share of par value Rs. 10/- each. Thus, the total dividend (including interim dividend) for the financial year 2014-15 is Rs. 1.05 (PY Rs. 0.98) per equity share of par value Rs. 10/- each.

3. The Central Electricity Regulatory Commission (CERC) vide notification dated 21.02.2014 has notified the Tariff Regulations, 2014 containing inter-alia the terms & conditions for determination of tariff, applicable for a period of five years with effect from 01.04.2014. Pending approval of tariff by CERC in respect of Nathpa Jhakri Hydro Power Station (NJHPS), sales/billing to the beneficiaries have been made in accordance with the tariff approved & applicable as on 31.03.2014 as provided in Tariff Regulations, 2014.

4. Further, for the purpose of recognition of sales, return on equity(one of the component of the Tariff) has been grossed up using the Minimum Alternate Tax (MAT) rate for the F.Y. 2014-15.

5. The Normative Plant Availability Factor (NAPF) has been increased from 82% to 90% w.e.f. 01.04.2014 in respect of NJHPS vide tariff notification applicable for the period 2014-19 .

6. CERC, vide its order dated 20.06.2014, has provisionally approved the tariff for NJHPS for the period 2009-14 considering provisional capital cost of Rs. 852870 lakh. Accordingly, sales includes an amount of Rs. 57125 lakh (P.Y: Nil) on account of arrear for the period 2009-14. However, the arrear billing due from Government of Himachal Pradesh (GoHP) is being contested by them in Hon''ble High Court of Himachal Pradesh.

7. During the year, the Company has regulated the power of BYPL (P.Y: BYPL ) after this company failed to pay outstanding dues and sold the power allocated to this Company through PTC as per CERC(Regulations of Power Supply) Regulations,2010. Accordingly 156.278 MUs (P.Y: 44.652 MUs) of power was sold through PTC amounting to Rs. 5550 lakh (P.Y: Rs. 1323 lakh ) and included in Energy Sales. An amount of Rs. 3066 lakh (P.Y. : Rs. 770 lakh ) excess realised as compared to regulated energy charges has been adjusted as Margin from Debtors and Sales after adjusting the expenses of Rs. 297 lakh (P.Y: Rs. 83 lakh ) on Sale through PTC.

8. CERC vide its order dated 27.01.2015 have provisionally determined the capital cost of Rampur Hydro Power Station (RHPS) at Rs. 310960 lakh which was commissioned during the year whereby tariff for the period 2014-16 has been determined considering Normative Plant Availability Factor (NAPF) of 82%. Accordingly, the sales inludes an amount of Rs. 39232 lakh (P.Y.: Nil) from sales of energy generated from RHPS.

9. Sales include an amount of Rs. 2348 lakh (P.Y: Rs. 193 lakh) from sale of energy generated from wind power project.

3. Contingent Liabilities:

a. Claims against the Company not acknowledged as debt : (Rs. Lakh)

Particulars As at As at 31.03.2015 31.03.2014

Capital Works * 32008 37623

Land Compensation 6193 4793

Disputed Service Tax Demand 1236 1236

Others 165 16

Total 39602 43668

a. Includes Rs. 18984 lakh (Previous Year: Rs. 18984 lakh) representing the amount of basic claims by the contractors of NJHPS. As the amounts recommended by the Dispute Review Boards (DRBs)/Additional Dispute Review Boards (ADRBs) are much less than the amounts claimed by the contractors, the claims on account of further interest and escalation, if any, have not been considered.

b. The above contingent liabilities do not include claims against pending cases in respect of service matters and others where the amount cannot be quantified.

c. It is not practicable to work out the outflow and possibilities of any reimbursement.

1. Capital Commitments:

Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for is Rs. 20651 lakh (Previous Year: Rs. 35825 lakh).

2. Other Commitments:

The amount of commitments on account of plant repair and supply of related spares/ components (net of advances) and other commitments not provided for is Rs. 2188 lakh (Previous Year: Rs. 2364 Lakh).

4. Consequent to CWC letter No. 22/1/2014/ HCD(NW&S)-1314 -1319 dated 11th March, 2015 and Principal Secretary (MPP & Power) to the Govt. of Himachal Pradesh letter No. MPP-(F)2-22/2009-I dated 12th March, 2015 regarding exploring the possibility of executing the Luhri Project as multi stage project instead of single stage project, company has decided to review the entire layout planning of the Luhri Hydroelectric Project (LHEP) from a single stage project to multi stage project. It is decided to review the expenditure incurred on LHEP and charge the same to revenue after detailed examination. Accordingly, an amount of Rs. 13228 lakh considered redundant and not likely to be used for LHEP Stage-1 has been charged to Statement of Profit and Loss.

5. 412 MW Rampur hydro power station (RHPS) was fully commissioned during the year and started commercial generation. Accordingly, post commissioning employees and other administrative expenditure of RHPS along with corporate allocation have been charged to Statement of Profit and Loss.

6. Balances of trade receivables, advances, deposits, trade payables, material in transit/material lying with third parties are reconciled periodically. However, as on 31.03.2015, out of Rs. 178120 lakh trade receivables, deposits, material in transit, material lying with third parties etc., an amount of Rs. 168601 lakh has been confirmed and balance amount of Rs. 9519 lakh are subject to confirmation and consequential adjustments. Further, trade payable amounting to Rs. 1464 lakh, which includes provisions/estimated liabilities are yet to be confirmed, which in the opinion of the management will not have any material impact.

7. In the opinion of the management, the value of all the assets other than Fixed Assets and Non-current Investments, have a realizable value in the ordinary course of business which is not less than the value at which these are stated in the Balance Sheet.

8. Disclosure under the provisions of Accounting Standard (AS)-15 ''Employee Benefits'':-

General description of various defined employee benefits are as under:

a) Defined Contribution plans:

(i) Employers contribution to Provident Fund:

The Company pays fixed contribution to Provident Fund at predetermined rates to a separate trust, which invests the fund in permitted securities. The contribution of Rs. 905 lakh (Previous Year: Rs. 514 lakh) and Rs. 298 lakh (Previous Year: Rs. 484 lakh) is recognized as expense and charged to the Statement of Profit and Loss and Expenditure During Construction (EDC) respectively. The obligation of the company is limited to such fixed contribution and to ensure a minimum rate of return to the members as specified by GOI.

(ii) Pension:

The company has Defined Contribution Pension Scheme as approved by Ministry of Power (MOP). The liability for the same is recognized on accrual basis. The scheme is funded by company and managed by separate trust created for this purpose.

b) Defined benefit plans:

(i) Gratuity:

The Company has a defined benefit gratuity plan, which is regulated as per the provisions of Payment of Gratuity Act, 1972. The scheme is funded by the company and is managed by a separate trust. The liability for the same is recognized on the basis of actuarial valuation.

(ii) Leave encashment:

The Company has a defined benefit leave encashment plan for its Employees. Under this plan they are entitled to encashment of earned leaves and medical leaves subject to limits and other conditions specified for the same. The liability towards leave encashment has been provided on the basis of actuarial valuation.

(iii) Retired Employee Health Scheme:

The Company has a Retired Employee Health Scheme, under which retired employee and the spouse are provided medical facilities in the Company hospitals/empanelled hospitals. They can also avail treatment as Out-Patient subject to a ceiling fixed by the Company. The liability towards the same has been provided on the basis of actuarial valuation.

(iv) Baggage Allowance:

Actual cost of shifting from place of duty at which employee is posted at the time of retirement to any other place where he / she may like to settle after retirement is paid as per the rules of the Company. The liability towards the same has been provided on the basis of actuarial valuation.

(v) Service Reward on Retirement:

Gift at the time of retirement is given to the employee as per the rules of the Company. The liability towards the same has been provided on the basis of actuarial valuation..

9. Disclosure as per Accounting Standard-16 on Borrowing Costs:

Borrowing Costs capitalized during the year are Rs. 1149 lakh (P.Y Rs. 2427 lakh)

10. Segment reporting:

As the company is primarily engaged in only one segment viz. ''Generation and sale of power'', there are no reportable segments as per Accounting Standard - 17.

11. Related Party Disclosures:

''Related party disclosures'' as required by Accounting Standard (AS) - 18 is given as under:-

a) List of Related Parties -

12. The Company''s significant leasing arrangements are in respect of operating leases of premises for residential use of employees, offices, guest houses & transit camps. These leasing arrangements, which are not non-cancellable, are usually renewable by mutual consent on mutually agreeable terms. The Schedule of Employee Benefits Expense include Rs. 647 lakh (Previous Year: Rs. 611 lakh) towards lease payments, net of recoveries, in respect of premises for residential use of employees. Lease payments in respect of premises for offices, guest houses & transit camps are shown as Rent under other expenses / Expenditure during Construction (EDC).

13. Impairment of Assets - Accounting Standard - 28

In the opinion of the management, there is no indication of any significant impairment of assets during the year.

14. As per the Companies Act, 2013, the company is required to spend at least two per cent of the average net profits of the company made during the three immediately preceding financial years, in pursuance of its Corporate Social Responsibility Policy. During the year an amount of Rs. 2579 lakh [(2% of Average Profit Before Tax of three immediately previous three years (PY Rs. 1368 lakh, 1.3% of PAT of previous year)] to be spent on CSR during the year and the same has been booked to CSR expenses as per Accounting Policy 1.14(d). The Company has transferred an amount of Rs. 2579 lakh (P.Y Rs. 1368 lakh) to the CSR trust formed to manage the CSR activities...

Mar 31, 2014

1.The amounts in Financial Statements are presented in Indian Rupees and all figures have been rounded off to the nearest rupees lakh except when otherwise stated.The previous year figures have also been reclassified/regrouped/rearranged wherever necessary to conform to this year''s classification.

2.1 Share Capital

The Company has only one class of equity shares having par value of 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 shareholding at the meeting of shareholders.

During the year ended 31st March 2014, the amount of per share dividend recognized as distribution to equity share holders was Rs. 0.98 (previous year Rs. 0.96)

2.20 OTHER CURRENT ASSETS

Unbilled Revenue amounting to Rs. 43137 lakh (P.Y:Rs. 30901 lakh) is on account of difference due to recognition of Sales on the basis of principles enumerated in the Tariff Regulations 2009 applicable for the period 2009-14 as compared to provisional billing to beneficiaries as per the tariff applicable as on 31.03.2009 approved by the CERC.

Unbilled Revenue also includes an amount of Rs. 193 lakh (P.Y: Nil ) on account of sale of energy from wind power which is not billed as PPA is yet to be entered.

2.21 Revenue from Operations

The Central Electricity Regulatory Commission (CERC) vide notification dated 19.01.2009 has notified the Tariff Regulations, 2009 containing inter-alia the terms & conditions for determination of tariff, applicable for a period of five years with effect from 01.04.2009. Pending final determination of tariff by the CERC in respect of Nathpa Jhakri Hydro Power Station (NJHPS), the sales for the year have been provisionally recognized at Rs.183087 lakh (Previous Year: Rs.171472 lakh) on the basis of principles enumerated in the said regulations, on the capital cost allowed by CERC for determining tariff for the year 2008-09.

The Tariff 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 31.03.2009 on capital cost of Rs.799080 lakh, approved by the CERC. The amount provisionally billed for the year 2013-14 on this basis is Rs.171769 lakh (including billing of tax recovery) (Previous Year: Rs.164023 lakh).

During the year, the Company has regulated the power of BYPL (P.Y: UPPCL,BRPL and BYPL) after these companies failed to pay outstanding dues and sold the power allocated to these Companies through PTC as per CERC(Regulations of Power Supply) Regulations, 2010. Accordingly 44.652 MUs (P.Y: 82.522 MUs) of power was sold through PTC amounting to Rs. 1323 lakh (P.Y: Rs. 2444 lakh ) and included in Energy Sales. An amount of Rs. 770 lakh (P.Y. : Rs. 1306 lakh ) excess realised as compared to regulated energy charges has been adjusted as Margin from Debtors and Sales after adjusting the expenses of Rs. 83 lakh (P.Y: Rs. 184 lakh ) on Sale through PTC.

Sales include an amount of Rs. 1807 lakh(P.Y: Nil) on account of recovery of additional cost due to pay/wage revision allowed by CERC vide it''s order dated 08/10/2013 to be billed in twelve equal installments. Accordingly an amount of Rs. 1054 lakh has been billed upto 31/03/2014 . However, one of the beneficiaries has filed an appeal in Tribunal against the order.

Sales include an amount of Rs. 193 lakh (P.Y: Nil) from sale of energy generated from wind power project which was partially commissioned during the year .

Maharashtra Electricity Regulatory Commission (MERC) has revised the tariff of wind energy for wind zone 1 for F.Y 2013-14 to Rs. 5.81 per unit from the earlier rate of Rs. 5.67 per unit for sale of energy to Maharashtra State Electricity Distribution Company Limited (MSEDCL) and accordingly sales has been booked at the per unit sale price of Rs. 5.81 However , MSEDCL has filed review petion with MERC against the revision of the rates.

Further CERC Vide notification No.-L-7/145(160)/2012-CERC dated 31.12.2012 has revised the Return on Equity (ROE) from 15.5% to 16.5% in respect of run of river generating station with pondage. Accordingly, an amount of Rs. 918 lakh (P.Y: Nil) recoverable for the period from 01/01/2013 to 31/03/2013 has been shown as prior period sales .

2.29 Contingent Liabilities:

a. Claims against the Company not acknowledged as debt : (Rs. Lakh)

Particulars As at As at 31.03.2014 31.03.2013

Capital Works * 37623 34286

Land Compensation 4793 5254

Disputed Service Tax Demand 1236 1236

Others 16 245

Total 43668 41021

* This includes Rs.18984 lakh (Previous Year: Rs.18984 lakh) representing the amount of basic claims by the contractors of NJHPS. As the amounts recommended by the Dispute Review Boards (DRBs)/Additional Dispute Review Boards (ADRBs) are much less than the amounts claimed by the contractors, the claims on account of further interest and escalation, if any, have not been considered.

b. The above contingent liabilities do not include claims against pending cases in respect of service matters and others where the amount cannot be quantified.

c. It is not practicable to work out the outflow and possibilities of any reimbursement.

2.30 1. Capital Commitments:

Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for is Rs.35825 lakh (Previous Year: Rs. 96561 lakh).

2. Other Commitments:

The amount of commitments on account of plant repair and supply of related spares/ components (net of advances) and other commitments not provided for is Rs.2364 lakh (Previous Year: Rs.2666 Lakh).

2.31 As per the agreement between Govt. of Himachal Pradesh (GoHP) and the company, Luhri Hydroelectric Project shall be executed by a SPV with the shareholding of GoHP and the company. A proposal for execution of this project by the company itself is under consideration. Pending decision on this matter/formation of SPV, total expenditure of Rs.13125 lakh (Previous Year: Rs.11493 lakh) has been incurred on survey and investigation of the project up to 31.03.2014, which includes fixed assets Rs.434 lakh (Previous Year: Rs.439 lakh) and capital work in progress Rs.12691 lakh (Previous Year: Rs.11054 lakh).

2.32 The project cost of Rampur Hydro Electric Project (RHEP), which is under construction, has been recommended by Central Electricity Authority (CEA) for approval of Ministry of Power (MOP) from Rs.204705 lakh (March 2006 Price Level) to Rs.328828 lakh (March 2012 Price Level). The three units of Rampur Hydro Power Project were synchronized with the Grid during the year ending 31.03.2014. Sale of infirm power during trial run amounting to Rs. 1 lakh (Previous Year: Nil) is adjusted from Capital Work in Progress. The commercial production from these units have commenced from the F.Y 2014-15.

2.33 During the year 45.05 M.W of Wind Power Project comprising of 53 no. of WEG.s out of total installed capacity of 47.6 M.W comprising of 56 WEG''s were commissioned in the State of Maharashtra. The cost of these 53 No''s WEG''s has been capitalized proportionately amounting to Rs. 27428 lakhs. The generation/sales from these units amounting to Rs. 193 lakhs has been booked to sales in note no. 2.21.

2.34 Balances of trade receivables, advances, deposits, trade payables, material in transit/material lying with third parties are reconciled periodically. However, as on 31.03.2014 some of the balances shown under trade receivables, advances, deposits, trade payables, material in transit/material lying with third parties are subject to confirmation, reconciliation and consequential adjustment, 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.

2.35 In the opinion of the management, the value of all the assets other than Fixed Assets and Non-current Investments, have a realizable value in the ordinary course of business, not less than the value at which these are stated in the Balance Sheet.

2.36 The effect of foreign exchange fluctuation during the year:

2.37 Disclosure under the provisions of Accounting Standard (AS)- 15 ''Employee Benefits''

General description of various defined employee benefits are as under:

a) Defined Contribution plans:

(i) Employers contribution to Provident Fund:

The Company pays fixed contribution to Provident Fund at predetermined rates to a separate trust, which invests the fund in permitted securities. The contribution of Rs.514 lakh (Previous Year: Rs.447 lakh) and Rs.484 lakh (Previous Year: Rs.442 lakh) is recognized as expense and charged to the Statement of Profit and Loss and Expenditure During Construction (EDC) respectively. The obligation of the company is limited to such fixed contribution and to ensure a minimum rate of return to the members as specified by GoI.

b) Defined benefit plans: (i) Gratuity:

The Company has a defined benefit gratuity plan, which is regulated as per the provisions of Payment of Gratuity Act, 1972. The scheme is funded by the company and is managed by a separate trust. The liability for the same is recognized on the basis of actuarial valuation.

(ii) Pension:

The company has Defined Contribution Pension Scheme as approved by Ministry of Power (MOP). The liability for the same is recognized on accrual basis. The scheme is funded by company and managed by separate trust created for this purpose.

(iii) Leave encashment:

The Company has a defined benefit leave encashment plan for its Employees. Under this plan they are entitled to encashment of earned leaves and medical leaves subject to certain limits and other conditions specified for the same. The liability towards leave encashment has been provided on the basis of actuarial valuation.

(iv) Retired Employee Health Scheme:

The Company has a Retired Employee Health Scheme, under which retired employee and the spouse are provided medical facilities in the Company hospitals/empanelled hospitals. They can also avail treatment as Out-Patient subject to a ceiling fixed by the Company. The liability towards the same has been provided on the basis of actuarial valuation.

(v) Baggage Allowance:

Actual cost of shifting from place of duty at which employee is posted at the time of retirement to any other place where he / she may like to settle after retirement is paid as per the rules of the Company. The liability towards the same has been provided on the basis of actuarial valuation.

(vi) Service Reward on Retirement:

Gift at the time of retirement is given to the employee as per the rules of the Company. The liability towards the same has been provided on the basis of actuarial valuation.

2.38 Disclosure as per Accounting Standard-16 on Borrowing Costs:

Borrowing Costs capitalized during the year are Rs. 2409 lakh (P.Y Rs. 2329 lakh)

2.39 Segment reporting:

As the company is primarily engaged in only one segment viz. ''Generation and sale of power'', there are no reportable segments as per Accounting Standard - 17.

2.40 Related Party Disclosures:

''Related party disclosures'' as required by Accounting Standard (AS) Â 18 is given as under:- a) List of Related Parties Â i) Key Management Personnel:

Shri R.P. Singh Chairman and Managing Director (CMD)

Shri R.N.Misra Director (Civil)

Shri A.S. Bindra Director (Finance)

Shri N.L. Sharma Director (Personnel)

Shri R.K. Bansal Director (Electrical)

ii) Subsidiaries: Wholly Owned

1) SJVN Arun-3 Power Development Company Pvt. Ltd (Incorporated in Nepal) w.e.f 25.04.2013.

2) SJVN Thermal Pvt. Ltd taken over w.e.f 04.07.2013. iii) Joint Ventures: 1) Cross Border Power Transmission Company Ltd.

iv) Remuneration to key management personnel is Rs.203

lakh (Previous Year: Rs.186 lakh), and amount of dues outstanding to the company as on 31.03.2014 is Rs.33 lakh (Previous Year: Rs.12 lakh).

2.42 The Company''s significant leasing arrangements are in respect of operating leases of premises for residential use of employees, offices, guest houses & transit camps. These leasing arrangements, which are not non-cancellable, are usually renewable by mutual consent on mutually agreeable terms. The Schedule of Employee Benefits Expense include Rs.611 lakh (Previous Year: Rs.598 lakh) towards lease payments, net of recoveries, in respect of premises for residential use of employees. Lease payments in respect of premises for offices, guest houses & transit camps are shown as Rent under other expenses / Expenditure during Construction (EDC).

2.43 Disclosure as per Accounting Standard -27 on ''Financial Reporting of Interests in Joint Ventures''

2.44 Impairment of Assets Â Accounting Standard - 28 In the opinion of the management, there is no indication of any significant impairment of assets during the year.

2.45 Quantitative details in respect of energy generated & sold : (As certified by the management)

2.50 As per the Guidelines on Corporate Social Responsibility (CSR) for Central Public Enterprises (CPEs), the company is required to spend a minimum of 0.5% on CSR and, of Profit After Tax (PAT) of Previous year. Board approved an amount of Rs.1368 lakh [1.3% of PAT of previous year (P.Y: 1.5% of PAT of previous year Rs.1603 lakh)] to be spent on CSR during the year and the same has been booked to CSR expenses as per Accounting Policy 1.14(d). The Company has formed a trust to manage CSR activities and during the year an amount of Rs.1368 lakh (P.Y: Rs.1603 lakh) has been paid to the trust.

2.51 Information in respect of micro and small enterprises as at 31st March 2014 as required by Micro, Small and Medium Enterprises Development Act, 2006.

Mar 31, 2013

1.1 Contingent Liabilities:

a. Claims against the Company not acknowledged as debt :

(Rs. Lakh)

Particulars As at As at 31.03.2013 31.03.2012

Capital Works * 34286 33162

Land Compensation 5254 5254

Disputed Income Tax Demand - 5703

Disputed Service Tax Demand 1236 1236

Others 245 38

Total 41021 45393

*This includes 18984 lakh (Previous Year: 21967 lakh) representing the amount of basic claims by the contractors of NJHPS. As the amounts recommended by the Dispute Review Boards (DRBs)/Additional Dispute Review Boards (ADRBs) are much less than the amounts claimed by the contractors, the claims on account of further interest and escalation, if any, have not been considered.

b. The above contingent liabilities do not include claims against pending cases in respect of service matters and others where the amount cannot be quantified.

c. It is not practicable to work out the outflow and possibilities of any reimbursement.

1.2 i. Capital Commitments:

Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for is Rs. 96561 lakh (Previous Year: 117319 lakh).

ii. Other Commitments:

The amount of commitments on account of plant repair and supply of related spares/ components (net of advances) and other commitments not provided for is 2666 lakh (Previous Year: 1345 Lakh).

1.3 As per the agreement between Govt. of Himachal Pradesh (GoHP) and the company, Luhri Hydroelectric Project shall be executed by an SPV with the shareholding of GoHP and the company. A proposal for execution of this project by the company itself is under consideration. Pending decision on this matter/formation of SPV, total expenditure of Rs. 11493 lakh (Previous Year: Rs. 9337 lakh) has been incurred on survey and investigation of the project upto 31.03.2013, which includes fixed assets Rs. 439 lakh (Previous Year: 423 lakh) and capital work in progress 11054 lakh (Previous Year: 8914 lakh).

1.4 The company has incurred expenditure of Rs. 6088 lakh (fixed assets Rs. 94 lakh & Capital WIP Rs. 5994 lakh) on its Nepal (Arun-3) project upto 31.03.2013. Subsequent to the Balance Sheet date, a wholly owned subsidiary company has been incorporated in Nepal with Authorized Capital of NPR 247500 lakh (154700 lakh) to implement this project.

1.5 The project cost of Rampur Hydro Electric Project (RHEP) , which is under construction, has been revised by the management from Rs. 204705 lakh (March 2006 Price Level ) to Rs. 339707 lakh (March 2012 Price Level) .

1.6 The company has awarded an EPC Contract for 47.6 MW wind power project during the year. An amount of 2977 lakh paid/provided during the year has been included under Fixed Assets (263 lakh) and Capital Works in Progress (2714 lakh).

1.7 Some of the balances shown under trade receivables, advances, deposits, trade payables, material in transit/material lying with third parties are subject to confirmation, reconciliation and consequential adjustment, if any.

1.8 In the opinion of the management, the value of all the assets other than Fixed Assets and Non-current Investments, have a realizable value in the ordinary course of business, not less than the value at which these are stated in the Balance Sheet.

1.9 Disclosure under the provisions of Accounting Standard (AS)- 15 ''Employee Benefits''

General description of various defined employee benefits are as under:

a) Defined Contribution plans:

(i) Employers contribution to Provident Fund:

The Company pays fixed contribution to Provident Fund at predetermined rates to a separate trust, which invests the fund in permitted securities. The contribution of 889 lakh (Previous year: Rs. 760 lakh) to the fund for the year is recognized as expense and is charged to the Statement of Profit and Loss and Expenditure During Construction (EDC). The obligation of the company is limited to such fixed contribution and to ensure a minimum rate of return to the members as specified by GoI.

b) Defined benefit plans:

(i) Gratuity:

The Company has a defined benefit gratuity plan, which is regulated as per the provisions of Payment of Gratuity Act, 1972. The scheme is funded by the company and is managed by a separate trust. The liability for the same is recognized on the basis of actuarial valuation.

(ii) Pension:

The company has Defined Contribution Pension Scheme as approved by Ministry Of Power (MOP). The liability for the same is recognized on accrual basis. The scheme will be funded by company and managed by separate trust to be created for this purpose.

(iii) Leave encashment:

The Company has a defined benefit leave encashment plan for its Employees. Under this plan they are entitled to encashment of earned leaves and medical leaves subject to certain limits and other conditions specified for the same. The liability towards leave encashment has been provided on the basis of actuarial valuation.

(iv) Retired Employee Health Scheme:

The Company has a Retired Employee Health Scheme, under which retired employee and the spouse are provided medical facilities in the Company hospitals/empanelled hospitals. They can also avail treatment as Out-Patient subject to a ceiling fixed by the Company. The liability towards the same has been provided on the basis of actuarial valuation.

(v) Baggage Allowance:

Actual cost of shifting from place of duty at which employee is posted at the time of retirement to any other place where he / she may like to settle after retirement is paid as per the rules of the Company. The liability towards the same has been provided on the basis of actuarial valuation.

(vi) Service Reward on Retirement:

Gift at the time of retirement is given to the employee as per the rules of the Company. The liability towards the same has been provided on the basis of actuarial valuation.

1.10 Segment reporting:

As the company is primarily engaged in only one segment viz. ''Generation and sale of hydroelectric power'', there are no reportable segments as per Accounting Standard - 17.

1.11 Related Party Disclosures:

As required by Accounting Standard (AS) - 18 ''Related party disclosures'', details of transactions with related parties are:

a) Related Parties -

i) Joint Venture Companies:

M/s Cross Border Power Transmission Company Ltd.

1.12 The Company''s significant leasing arrangements are in respect of operating leases of premises for residential use of employees, offices, guesthouses & transit camps. These leasing arrangements, which are not non-cancellable, are usually renewable by mutual consent on mutually agreeable terms. The Schedule of Employee Benefits Expense include 598 lakh (Previous Year: 565 lakh) towards lease payments, net of recoveries, in respect of premises for residential use of employees. Lease payments in respect of premises for offices, guest houses & transit camps are shown as Rent under other expenses / Expenditure during Construction (EDC).

1.13 Impairment of Assets - Accounting Standard - 28

In the opinion of the management, there is no indication of any significant impairment of assets during the year.

1.14 As per the Guidelines on Corporate Social Responsibility (CSR) for Central Public Enterprises (CPEs), the company is required to spend a minimum of 0.5% on CSR and 0.1% plus Rs. 50 lakh on Sustainable Development (SD), of Profit After Tax (PAT) of Previous year. Board approved an amount of Rs. 1603 lakh [1.5% of PAT of previous year (P.Y: 0.86% of PAT of previous year Rs. 784 lakh)] to be spent on CSR during the year and the same has been booked to CSR expenses as per Accounting Policy 1.13(d). The Company has formed a trust to manage CSR activities and during the year an amount of Rs. 1603 lakh (P.Y: Rs. 251 lakh) has been paid to the trust. Similarly an amount of 584 lakh [0.5% of PAT of previous year plus 50 lakh (P.Y:Nil)] has been approved to be spent on SD during the year 2012-13 and the same has been booked to Sustainable Development expenses during the year as per Accounting Policy 1.13(d).

1.15 Information in respect of micro and small enterprises as at 31st March 2013 as required by Micro, Small and Medium Enterprises Development Act, 2006.

Mar 31, 2012

The amounts in Financial Statements are presented in Indian Rupees and all figures have been rounded off to the nearest rupees lakh except when otherwise stated.

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 the Revised Schedule VI. Accordingly. the previous year figures have also been reclassified/regrouped/ rearranged wherever necessary to conform to this year's classification. The adoption of revised Schedule VI for previous year figures does not impact recognition and measurement principles followed for preparation of financial statements.

1.1 SHARE CAPITAL

The Company has only one class of equity shares having a par value of Rs. 10A 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 shareholding at the meeting of shareholders.

During the year ended 31st March 2012, the amount of per share dividend recognized as distribution to equity shore holders was Rs. 0.94 (previous year Rs. 0.80)

1.2 Short Term Provisions

Disclosure required by AS 15 on 'Employee Benefits' has been made in Note 2.36.

During the year, the Board of Directors (BOD) approved a Defined Contribution Pension Scheme for the employees. The same has been forwarded to Ministry of Power (MOP) for approval. Pending approval of the same, an amount of Rs. 2350 lakh (previous year-Nil) has been provided and included in Unfunded Employees" Benefits-Other Retirement Benefits.

1.3 Fixed Assets

Fixed Assets costing Rs. 5000 or less procured and depreciated fully during the year.

Possession of freehold lord measuring 0-06-26 hectare (Previous Year: 0-24-19 Hectare) is still to be handed over to the Company.

"Title deeds/title in respect of buildings costing Rs. 16 lakh (Previous Year: Rs. 15 lakh) are yet to be executed/passed in favour of the company Expenses on stamp duty etc. shall be accounted for an registration."

'Buildings include Rs. 4 lakh (Previous Year Rs. 4 lakh) being damaged assets for which provision has been made Expert Advisory Committee (EAC) of the ICAI has given an opinion that Capital Expenditure on assets not owned by the Company are to be charged to statement of Profit and loss as and when incurred, it has been represented that such expenditure being essential for setting up of a project, the same be accounted in line with the existing; accounting practices. Pending receipt of communication from ICAI regarding the review of opinion, existing treatment has been continued as per the relevant accounting practice.

1.4 Revenue from Operations

The Central Electricity Regulatory Commission (CERC) vide notification dated 19.01.200$ has notified the Tariff Regulations, 2009 containing inter-alia the terms & conditions for determination of tariff, applicable for a period of five years with effect from 01.04.2009. Pending final determination of tariff by the CERC in respect of Nathpa Jhakri Hydro Power Station (NJHPS), the sales for the year have been provisionally recognized at Rs. 180701 lakh (Previous Year: Rs. 171538 lakh) on the basis of principles enumerated in the said regulations, on the capital cast allowed by CERC for determining tariff for the year 2008-09.

The Tariff 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 31.03.2009 on capital cost of Rs. 799O80 lakh, approved by the CERC. The amount provisionally billed for the year 2011-12 on this basis is Rs. 181960 lakh (including billing of tax recovery) (Previous Year: Rs. l63286 lakh).

The Revised Cost Estimate (RCE-IV) of NJHPS has been approved by the management at Rs. 859341 lakh.

During the year, the Company has regulated the power of BRPL and BYPL after these companies failed to pay outstanding dues and sold the power allocated to these Companies through PTC as per CERC (Regulations of Power Supply} Regulations,2010, Accordingly 51.160 MUs of power was sold through PTC amounting to Rs. 1813 lakh and included in Energy Sales. An amount of Rs. 1300 lakh excess realised as compared to regulated energy charges has been adjusted as Margin from Debtors and Sales after adjusting the expenses of Rs. 94 lakh on Sale through PTC.

The regular assessment of the Company for the Assessment Year 2009-10 has been completed during the year and a demand of tax end interest amounting to Rs. 11703 lakh has been raised. The Company deposited an amount of Rs. 6000 lakh against the demand and obtained a stay order for the balance demand. The Company has also filed an appeal against the said assessment before the CIT (Appeals). The tax of Rs. 6000 lakh has been provided for in accounts as earlier year tax adjustment. As the above tax relates to tariff period 2004-09 and is recoverable from beneficiaries separately as a pass through item. Accordingly, an amount of Rs. 7501 lakh (grossed up with current year tax rate) has been treated as sales and passed on to the beneficiaries for the relevant year.

1.5 Current Tax

The regular assessment of the company for the assessment year 2009-10 has been completed during the year, and a demand of Tax and interest amounting to Rs. 11,703 lakh has been raised. The company has filed appeal against the said assessment before the CIT(A) and has paid Rs. 6,000 lakh against the demand amount. The amount paid has been provided in accounts as Adjustments relating to earlier years.

As the above tax demand relate to tariff period 2004-09, and is recoverable from beneficiaries separately as a pass through item, the amount paid (grossed up with current year tax rates) has been treated as sales for the year and passed on to the beneficiaries for the relevant year.

1.6 Contingent Liabilities:

a. Claims against the Company not acknowledged as debt:

Particulars As at As at 31.03.2012 31.03.2011 Capital Works* 33162 35731

Land Compensation 5254 5324

Disputed Income Tax Demand 5703 -

Disputed Service Tax Demand 1236 1236

Others 38 16

Total 45393 42307

This includes Rs. 21967 lakh (Previous Year Rs. 21043 lakh) representing the amount of basic claims by the contractors of NJHPS. As the amounts recommended by the Dispute Review Boards (DRBs)/Additional Dispute Review Boards (ADRBs) are much less than the amounts claimed by the contractors, the claims on account of further interest and escalation, if any,has not been considered.

b. The above contingent liabilities do not include claims against pending coses in respect of service matters and others where the amount cannot be quantified.

c. It is not practicable to work out the outflow and possibilities of any reimbursement.

1.7.1 Capital Commitments:

Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for is Rs. 117319 lakh (Previous Year: Rs. 97563 lakh).

1.7.2 Other Commitments:

The amount of commitments on account of plant repair and supply of related spares and components (net of advances) and not provided for is Rs. 1.345 lakh (Previous year Rs. 1,456 Lakh).

1.8 As per the agreement between Govt. of Himachal Pradesh (GoHP) and the company, Luhri Hydroelectric Project shall be executed by an SPV with the shareholding of GoHP and the company. A proposal for execution of this project by the company itself is under consideration. Pending decision on this matter/formation of SPV, a total expenditure of Rs. 9337 lakh (Previous Year: Rs. 7653 lakh) has been incurred on survey and investigation of the project. which includes fixed assets Rs. 423 lakh (Previous Year: Rs. 387 lakh) and capital work in progress Rs. 8914 lakh Previous Year: Rs. 7266 lakh).

1.9 Some of the balances shown under trade receivables, advances, deposits, trade payables, material in transit/material lying with third parties are subject to confirmation, reconciliation and consequential adjustment, if any.

1.10 In the opinion of the management, the value of all the assets other than Fixed Assets and Non-Current investments, have a realizable value in the ordinary course of business, not less than the value at which these are stated in the Balance Sheet.

1.11 Disclosure under the provisions of Accounting Standard (AS)-15 'Employee Benefits'

General description of various defined employee benefits are as under:

a) Defined Contribution plans:

(I) Employers contribution to Provident Fund: The Company pays fixed contribution to Provident Fund at predetermined rates to a separate trust, which invests the fund in permitted securities. The contribution of Rs. 760 lakh (Previous year: Rs. 692 lakh) to the fund for the year is recognized as expense and is charged to the Statement of Profit and Loss and Expenditure During Construction (EDC). The obligation of the company is limited to such fixed contribution and to ensure a minimum rate of return to the members as specified by Got,

b) Defined benefit plans:

(i) Gratuity:

The Company has a defined benefit gratuity plan, which is regulated as per the provisions of Payment of Gratuity Act. 1972. The scheme is funded by the company and is managed by a separate trust. The liability for the same is recognized on the basis of actuarial valuation.

(ii) Leave encashment

The Company has a defined benefit leave encashment plan for its Employees. Under this plan they are entitled to encashment of earned leaves and medical leaves subject to certain limits and other conditions specified for the some. The liability towards leave encashment has been provided on the basis of actuarial valuation.

(iii) Retired Employee Health Scheme: The Company has a Retired Employee Health Scheme, under which retired employee and the spouse are provided medical facilities in the Company hospitals/empanelled hospitals. They can also avail treatment as Out-Patient subject to a ceiling fixed by the Company. The liability towards leave encashment has been provided on the basis of actuarial valuation.

(iv) Baggage Allowance:

Actual cost of shifting from place of duty at which employee is posted at the time of retirement to any other place where he/she may like to settle after retirement is paid as per the rules of the Company. The liability towards leave encashment has been provided on the basis of actuarial valuation,

1.12 Segment reporting:

As the company is primarily engaged in only one segment viz. 'Generation and sale of hydroelectric power' there are no reportable segments as per Accounting Standard-17.

1.13 Related Party Disclosure:

As required by Accounting Standard (AS) - 18 'Related party disclosures', details of transactions with related parties are:

a) Related Parties - Key Management Personnel:

Whole Time Directors:

Shri R.P. Singh Chairman and Managing Director (CMD) and additional Charge of Director (Electrical) from 31.01.2012 (A.N.)

Shri R.P. Singh Director (Electrical) and additional charge of CMD upto 31.01.2012 (F.N.)

Shri. R.N.Misro Director (Civil)

Shri A.S.Bindra Director (Finance)

Shri N.L.Sharma Director (Personnel)

b) Remuneration to key management personnel is Rs. 276 lakh (Previous Year: Rs. 92 lakh). and amount of dues outstanding to the company as on 31.03.2012 is Rs. 11 lakh (Previous Year:Rs. 10 lakh).

1.14 The Company's significant leasing arrangements are in respect of operating leases of premises for residential use of employees, offices, guest houses & transit camps. These leasing arrangements, which are not non-cancellable, are usually renewable by mutual consent on mutually agreeable terms Employee Benefits Expense include Rs. 565 lakh (Previous Year: Rs. 210 lakh} towards lease payments, net of recoveries, in respect of premises for residential use of employees. Lease payments in respect of premises for offices, guest house & transit camps are shown as Rent/ Hiring charges under other expenses/ Expenditure during Construction IEDCI.

1.15 Impairment of Assets - Accounting Standard - 28

In the opinion of the management, there is no indication of any significant impairment of assets during the year,

1.16 As per the Guidelines on Corporate Social Responsibility (CSRI for Central Public Enterprises (CPEs), the company is required to spend a minimum of 0.50% of Prof it After Tax (PAT) of Previous year. BOD approved an amount of Rs. 784 lakh 10.86% of PAT of previous year) to be spent during the year 2011-12 and the same has been booked to CSR expenditure during the year as per Accounting Policy 1.13(d).

1.17 Information in respect of micro and small enter prises as at 31st March 2012 as required by Micro, Small and Medium Enterprises Development Act, 2006.

(Rs. Lakh)

Particulars Amount

a) Amount remaining unpaid to any supplier: Principal amount 8 Interest due thereon

b) Amount of interest paid in terms of section 16 of the MSMED Act along with the amount paid to the suppliers beyond the appointed day. -

c) Amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under the MSMED - Act.

d) Amount of interest accrued and remaining unpaid -

e) Amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprises, for the purpose of dis-allowances as a deductible expenditure under section 21 of MSMED Act. -

Mar 31, 2009

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

i. Capital Works:

Rs. 34423 lakh (Previous Year Rs. 88414 lakh) The above includes Rs. 30544 lakh (Previous Year Rs. 83026 lakh) representing the amount of basic claims by the contractors of NJHPS. Since the amount, wherever recommended by the Dispute Review Boards (DRBs)/Additional Dispute Review Boards (ADRBs) are much less than the amount claimed by the contractors, the claims on account of interest and escalation have not been included in the contingent liability.

ii. Land Compensation:

Rs. 1449 lakh (Previous Year Rs 2297 lakh)

iii. Disputed Service Tax Demand:

Rs.1236lakh (PreviousYearNIL)

iv. Others:

Rs. 34 lakh (Previous Year Rs. 35 lakh)

b. The above contingent liabilities do not include claims against pending cases in respect of service matters and others where the amount cannot be quantified.

c. It is not practicable to work out the outflow and possibilities of any reimbursement.

2. Estimated amount of contracts remaining to be executed on capital account net of advances and not provided for Rs. 125295 lakh (Previous Year Rs. 87355 lakh).

3. The revised cost estimate (RCE -III) of Nathpa Jhakri Hydro Power Station (NJHPS) has been approved by the Govt, of India at Rs.8187.71 crore. This does not include the amount of Arbitration Awards / Court Awards settled after the approval of RCE - III and under settlement. The proposal for further revision of the Cost Estimate shall be submitted to the Govt. after inclusion of the above in due course.

4. Title deeds/ title in respect of land amounting to Rs. 220 lakh (Previous Year Rs. 1121 lakh) covering an area of 01-18-59 hectare (Previous Year 14-71-20 hectare) and buildings having Gross Block of Rs. 15 lakh (Previous Year Rs. 15 lakh) are yet to be executed/passed. Expenses on stamp duty etc. relating to registration shall be accounted for as and when incurred.

Possession of land measuring 01-07-76 hectare (Previous Year 01 -12-71 Hectare) is still to be handed over to the Company.

5. As per the agreement between GoHP and the Company, Luhri Hydroelectric Project shall be executed by an SPV with the shareholding of GoHP and SJVNL. A proposal for execution of this project by the Company itself is under consideration. Pending decision on this matter/formation of SPV, expenditure of Rs. 4184 lakh (Previous year Rs. 2701 lakh) incurred on survey and investigation of the project has been shown as fixed assets and capital work in progress. The expenditure amounting to

Rs. 4482 lakh (Previous year Rs. 997 lakh) incurred on other projects under survey and investigation has also been shown as fixed assets and capital work in progress.

6. Sundry Debtors and Sales include an amount of Rs. 17666 lakh (Previous Year Rs. 9419 lakh) towards bills raised after the end of the financial year. Sales for current year also include an amount of Rs. 2826 lakh (Previous year Rs. (-) 2597 lakh) towards income tax yet to be billed.

7. The depreciation on Fixed Assets is charged as per Significant Accounting Policy No. 6 (Schedule-20) of the Corporation. Ministry of Power (MOP) has already notified tariff policy which provides that rates of depreciation as notified by the Central Electricity Regulatory Commission (CERC) would be applicable for the purpose of tariff as well as accounting. The revised rates of depreciation as notified by CERC have been made applicable w.e.f. 01.04.2009. Accordingly, the rates notified under present tariff norms have been considered for charging depreciation for the year. The depreciation for the year as per rates prescribed under schedule XIV of the Companies Act, 1956 works out to Rs. 17939 lakh more than that worked out as per CERC rates (Previous year Rs.12730 lakh). However, the Management considers the depreciation provided in the books as appropriate and adequate keeping in view matching concept of Accounting.

8. Final tariff order for the period 2004-05 to 2008-09 has been received during the year. Accordingly an amount of Rs.11734 lakh (net) has been billed as arrears for the period up to 31.03.2008 and included in sales. Similarly, an amount of Rs. 10775 lakh and Rs.5620 lakh on account of interest receivable and payable respectively on arrear billing, has also been billed during the year.

9. Leave Salary/Pension Contribution in respect of employees on deputation has been paid /provided on the basis of provisional demand received from the lending organizations. The difference, if any will be adjusted on receipt of final demand.

10. Pending implementation of wage revision of employees w.e.f.01.01.2006/01.01.2007, a provision of Rs. 4642 lakh (Previous year Rs.2094 lakh) inclusive of Performance Related Pay (PRP) has been made during the current year.

11. Pending receipt of utilization certificate, provision has been made for Rs. 819 lakh (Previous year NIL) paid till date under CAT Plan.

12. As per GoHP Notification dated 18.12.2006, the developers of hydroelectric projects are required to contribute 1.5% of the project cost for Local Area Development (LAD) in equal annual installments during construction period of the project. The District Authorities are, therefore, demanding payment under this notification for Rampur HE Project (RHEP). Since the agreement for implementation of this project was signed with the GoHP before the issue of above notification and the Company has approved plan to spend more than as required under the notification in terms of the provisions of Loan Agreement with the World Bank to which GoHP is also a signatory, the Company has requested GoHP to reconsider its decision for RHEP on which their response is awaited. The Company has already incurred an amount of Rs.1467 lakh up to 31.03.09 as against the total requirement of Rs.3071 lakh as per the notification. In view of the above, no provision is considered necessary.

13. Some claims of the contractors and counter claims of the Company are under various stages of dispute/settlement. Although, the liability has been recognized in terms of Accounting Policy No. 13.3, there is no certainty about the amount which may become finally payable to/receivable from the contractors. In view of this uncertainty, deductions towards Income Tax shall be made on final settlement with the contractors.

14. Pending approval of the Competent Authority, provisional payments made towards executed quantities of some of the items beyond approved quantities as also for extra items, are included in Capital Works-in Progress.

15. Some of the balances shown under advances, deposits, creditors, material in transit/material lying with third parties are subject to confirmation, reconciliation and consequential adjustment, if any.

In the opinion of the management, the value of current assets, loans and advances on realization in the ordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.

16. The changes in Accounting Policies during the year and their impact on the accounts for the year are as under:

i. Accounting Policy No. 4.2 - Machinery Spares

The Accounting Policy with regard to Machinery Spares retrieved and suitable for reuse has been modified in line with the opinion of Expert Advisory Committee of ICAI. This has resulted in increase of repair & maintenance expenses by Rs.262 lakh, decrease in depreciation by Rs. 5262 lakh and increase in profit by Rs. 5000 lakh.

ii. Accounting Policy No. 5.2 - Allocation of Administration and Other General Overhead Expenses

Accounting Policy has been changed in view of withdrawal of Guidance Note on Incidental Expenditure during Construction (IEDC) issued by the ICAI. This has resulted in decrease in profit by Rs. 2043 lakh and increase in EDC by the same amount. Consequently earlier Accounting Policy relating to Allocation of Corporate Office Expenses @ 1% of sale of energy to the operating units have been deleted.

17. The Companys significant leasing arrangements are in respect of operating leases of premises for residential use of employees, offices, guesthouses & transit camps. These leasing arrangements, which are not non-cancellable, are usually renewable by mutual consent on mutually agreeable terms. The Schedule of Employees remuneration and benefits include Rs.135 lakh (Previous year Rs.135 lakh) towards leases payments, net of recoveries, in respect of premises for residential use of employee. Lease payments in respect of premises for offices, guest house & transit camps are shown as Rent/Hiring charges under Schedule of Generation, Administration and other expenses / Expenditure durina Construction (EDC).

18. The Management is of the opinion that no case of impairment of assets exists under the provisions of Accounting Standard (AS) - 28 on impairment of assets as on 31.03.2009.

19. Segment reporting:

Electricity generation is the principal business activity of the Company. Other operations viz., consultancy services do not form a reportable business segment. The Company has one operating station located within the country and therefore, geographical segments are not applicable.

20.Related Party Disclosure

a) Related Parties - Key Management Personnel: Whole Time Directors:

Shri H.K. Sharma Chairman & Managing Director.

Shri J.K. Sharma Director (Civil)

Shri R.S.Katoch Director (Personnel)

Shri K.K.Garg Director (Finance)

Shri R.P. Singh Director (Electrical)

b) Summary of transactions with related parties (other than for contractual obligations)-Nil. (Previous Year-Nil)

21. Previous Years figures have been re-grouped /re-arranged and recasted wherever necessary to conform to this years classification.

22. Figures have been rounded off to the nearest lakh of rupees.

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