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Notes to Accounts of SJVN Ltd.

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

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, 2017 and 31st March, 2016.

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 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

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 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:

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 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

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

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 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:

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) 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:

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.

(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 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.

* 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.

4. Segment information:

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 ''Segment Reporting''.

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

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. 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.

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) – 18 is given as under:- a) List of Related Parties – 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 – 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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