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Notes to Accounts of Tata Power Company Ltd.

Mar 31, 2017

1. Background:

The Tata Power Company Limited (the ‘Company’) is a public limited company domiciled and incorporated in India under the Indian Companies Act, 1913. The registered office of the Company is located at Bombay House, 24 Homi Mody Street, Mumbai 400001, India.

The Company pioneered the generation of electricity in India more than a century ago. Prior to 1st April, 2000 the Tata Electric Companies comprised of the following three Companies -

- The Tata Hydro-Electric Power Supply Company Limited, established in 1910 (Tata Hydro).

- The Andhra Valley Power Supply Company Limited, established in 1916 (Andhra Valley).

- The Tata Power Company Limited, established in 1919 (Tata Power).

With effect from 1st April, 2000, Andhra Valley and Tata Hydro merged into Tata Power to result in one large unified entity. The Company has an installed generation capacity of 2,954 MW in India and a presence in all the segments of the power sector viz. Fuel and Logistics, Generation (thermal, hydro, solar and wind), Transmission and Distribution.

2. Critical accounting estimates and judgements

In the application of the Company’s accounting policies, the directors of the Company are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Detailed information about each of these estimates and judgements is included in relevant notes together with information about the basis of calculation for each affected line item in the financial statements.

The areas involving critical estimates are:

Estimation of current tax and deferred tax expense - Note 24 and 33

Estimated fair value of unquoted securities and impairement of investments - Note 34

Estimation of defined benefit obligation - Note 39

Regulatory deferral accounts - Note 18

Estimation of values of contingent liabilities - Note 37

Estimates and judgement are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.

3. Assets classified as held for sale

(i) (a) The Company had a power generation unit at Belgaum, Karnataka. Operations at the unit have been discontinued on 28th February, 2013 with conclusion of Power Purchase Agreement with the customers. The Company has disposed of majority of the assets located at the unit and is in the process of disposing of the Freehold land. During the year ended 31st March, 2017, the Company has reclassified the said land as asset held for sale. No impairment loss has been recognised on reclassification as the Company expects that the fair value (estimated based on the recent market prices of similar properties in similar locations) less costs to sell is higher than the carrying amount of Rs.2.90 crore as at 31st March, 2017.

(b) The Company was in the process of setting up a thermal power generation unit in Jharkhand state and accordingly had acquired Freehold land at Tiruldih. Coal for the unit was planned to be sourced from Tubed coal block in Latehar district. However, in 2014, the H’onble Supreme Court de-allocated the said coal block. As a result, the project was left with no fuel supply and has become unviable. Hence, the Company has decided to dispose of the Freehold land at Tiruldih. During the year ended 31st March, 2017, the Company has reclassified the said land as asset held for sale. Accordingly, the Freehold Land is being carried in the books at its fair value less cost to sell of Rs.9.72 crore (i.e. fair value estimated based on market price of similar properties near the location less costs to sell the land) resulting in the recognition of Rs.34 crore as impairment loss in the statement of profit and loss.

(c) The Company has ceased power generation at its Diesel (DG set) based unit at Vadaval, Maharashtra and has disposed of the DG sets. The Company is in the process of disposing freehold land. During the year ended 31st March, 2017, the Company has reclassified the said freehold land at the the said unit as asset held for sale. No impairment loss has been recognised on reclassification as the Company expects that the fair value (estimated based on the recent market prices of similar properties in similar locations) less costs to sell is higher than the carrying amount Rs.3.21 crore as at 31st March, 2017.

(ii) The Company has ceased power generation at Unit 4 at Trombay, Maharashtra and has initiated process for disposal of its assets. During the year ended 31st March, 2017, the Company has reclassified property, plant and equipment at the said unit as asset held for sale. No impairment loss has been recognised on reclassification as the Company expects that the estimated fair value less costs to sell is higher than the carrying amount of Rs.24.68 crore as at 31st March, 2017.

(iii) The Company has decided to divest certain portion of its investments carried at fair value through other comprehensive income in Tata Teleservices (Maharashtra) Limited and Indian Energy Exchange Limited. Hence, the said investments have been classified as held for sale at fair value of Rs.195.21 crore as at 31st March, 2017.

4. Other Equity

Nature and purpose of reserves General Reserve:

General Reserve is used from time to time to transfer profits from Retained Earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the General Reserve will not be reclassified subsequently to statement of profit and loss.

Securities Premium Reserve:

Securities Premium Reserve is used to record the premium on issue of shares and is utilised in accordance with the provisions of the Companies Act, 2013.

Debenture Redemption Reserve:

The Company is required to create a Debenture Redemption Reserve out of the profits which is available for payment of dividend for the purpose of redemption of debentures.

Capital Redemption Reserve:

Capital Redemption Reserve represents amounts set aside on redemption of preference shares.

Capital Reserve:

Capital Reserve consists of forfeiture of the amount received from Tata Sons Limited on preferential allotment of convertible warrants in the Company, on the lapse of the period to exercise right to convert the said warrants and on forfeiture of amounts paid on Debentures.

Retained Earnings

Retained Earnings are the profits of the company earned till date net of appropriations.

Equity Instrument through Other Comprehensive Income:

This reserve represents the cumulative gains and losses arising on revaluation of equity instruments measured at fair value through other comprehensive income, net of amounts reclassified to retained earnings when those assets are disposed of.

Security

(i) The Debentures mentioned in (a) have been secured by a charge on movable properties and assets of the Company at Agaswadi and Visapur in Satara District of Maharashtra and Poolavadi in Tirupur District of Tamil Nadu.

(ii) The Debentures mentioned in (b) have been secured by a pari passu charge on the assets of the wind farms situated at Samana in Gujarat and Gadag in Karnataka.

(iii) The Debentures mentioned in (c) have been secured by a charge on the land situated at Village Takve Khurd (Maharashtra).

(iv) The Debentures mentioned in (d) and (e) have been secured by a pari passu charge on land in Village Takve Khurd (Maharashtra) and movable and immovable properties in and outside Maharashtra, except assets of windmill projects, present and future.

(v) The Debentures mentioned in (f) had been secured by a charge on land in Village Takve Khurd (Maharashtra), movable and immovable properties in and outside Maharashtra, as also all transmission stations/lines, receiving stations and sub-stations in Maharashtra, except assets of windmill projects, present and future.

(vi) The Loans from HDFC Bank and IDBI Bank, mentioned in (g) and (i) respectively have been secured by a pari passu charge on all movable Fixed Assets (excluding land and building), present and future (except assets of all wind projects both present and future) including movable machinery, machinery spares, tools and accessories.

(vii) The Loan from ICICI Bank, mentioned in (h) secured by way of first pari-passu charge on all the movable assets (excluding land and buildings), present and future (except assets of all windmill projects present and future), including movable machinery, current assets, machinery spares, tools and accessories.

(viii) The Loan from Kotak Mahindra Bank mentioned in (j) has been secured by a pari passu charge on all movable Fixed Assets (excluding land and building), present and future (except assets of all wind mill projects, both present and future) including movable machinery, machinery spares, tools and accessories.

(ix) The Loan from State Bank of India mentioned in (k) has been secured by a pari passu charge on all movable Fixed Assets (excluding land and building), present and future (except assets of all windmill projects, both present and future) including movable machinery, machinery spares, tools and accessories.

(x) The Loan from IDFC Bank (Loan from Infrastructure Development Finance Company Limited has been transferred to IDFC Bank on its demerger), mentioned in (l) and (o) have been secured by a pari passu charge on all movable Fixed Assets (excluding land and building), present and future (except assets of all wind projects both present and future) including movable machinery, machinery spares, tools and accessories.

(xi) The Loans from Asian Development Bank and Indian Renewable Energy Development Agency Limited mentioned in (m) and (n) respectively have been secured by a first charge on the tangible movable properties, plant & machinery and immovable properties situated at Khandke, Brahmanvel and Sadawaghapur in Maharashtra.

(xii) The Loan from Technology Development Board, Department of Science & Technology, Government of India mentioned in (p) is secured by way of Bank Guarantee.

5. (a) Coastal Gujarat Power Limited (CGPL), a wholly owned subsidiary of the Company has implemented the 4000 MW Ultra Mega Power Project at Mundra (“Mundra UMPP”). As at 31st March, 2017, the Company has a long-term investment of Rs.11,136.15 crore (31st March, 2016 -Rs.6,443.85 crore, 1st April, 2015 -Rs.6,047.90 crore) in equity (including perpetual security) of CGPL, has given loans of Rs.Nil (31st March, 2016 -Rs.3,795.89 crore, 1st April, 2015 -Rs.3,034.56 crore) to CGPL, and has given guarantees of Rs.2,781.69 crore (31st March, 2016 -Rs.3,039.24 crore, 1st April, 2015 -Rs.3,403.27 crore) to CGPL’s lenders.

The Management of CGPL, on an ongoing basis, reviews and assesses the recoverability of the carrying value of its fixed assets based on certain externally available information and assumptions relating to future fuel prices, revenues and operating parameters and useful life of the plant, which the management believes reasonably reflect the future expectation. In view of the estimation uncertainties, the future cash flows, the assumptions are monitored periodically and adjustments are made if the conditions relating to the assumptions indicate that such adjustment is appropriate.

Based on the assessment of recoverability of the carrying value of fixed assets as at 31st March, 2017 and having regard to the overall returns expected from CGPL, no impairment as at 31st March, 2017 is considered necessary for long-term investments of Rs.11,136.15 crore in CGPL and no provision is required in respect of guarantees of Rs.2,781.69 crore given to CGPL’s lenders.

(b) The Company has investments in equity shares of Tata Teleservices Limited (TTSL) which are measured at fair value through other comprehensive income. Based on a valuation report obtained from TTSL, the Company had reassessed the fair value of its investment in TTSL as at 30th September, 2016 and recorded fair value loss of Rs.124.46 crore as at that date. In the absence of updated information, it has not been possible to revise the valuation as at 31st March, 2017 and consequently adjustments, if any, to the carrying value of investments in TTSL of Rs.384.88 crore as at 31st March, 2017 have not been made.

(c) During the year, DoCoMo had filed a petition before the Delhi High Court for implementation of the Arbitration Award related to its exercise of the ‘put option’ to the transfer of its entire shareholding in TTSL at a minimum predetermined price of Rs.58.045 per share pursuant to which the Delhi High Court directed Tata Sons (as representative of the Tata Group) to deposit the damages including costs and interest in an escrow account. Accordingly, the Company deposited Rs.790 crore with Tata Sons, being its share of the contractual obligation. On 28th April, 2017, the Delhi High Court ruled that the Arbitration Award is enforceable in India. Consequently, the Company has as at 31st March, 2017 written-off ‘other advances’ of Rs.651.45 crore, being the difference between the fair value of equity shares of TTSL determined as at 30th September, 2016 and the consideration payable to DoCoMo deposited with Tata Sons. This has been disclosed as an exceptional item. The balance of Rs.138.55 crore, which represents the fair value of shares receivable from DoCoMo based on a valuation as at 30th September, 2016, is being carried forward as Other Advance and included in Other Non-current Financial Asset. As stated in note 34(b) above, valuation of TTSL shares as at 31st March, 2017 is not available.

6. Micro and small enterprises under the Micro, Small and Medium Enterprises Development Act, 2006 have been determined based on the information available with the Company and the required disclosures are given below:

7. Commitments

(i) In terms of the Sponsor Support agreement entered into between the Company, Coastal Gujarat Power Limited (CGPL) and lenders of CGPL, the Company has undertaken to provide support by way of base equity contribution to the extent of 25% of CGPL’s project cost and additional equity or subordinated loans to be made or arranged for, if required as per the financing agreements to finance the project. The Sponsor Support Agreement also includes support by way of additional financial support for any overrun in project costs, operational loss and Debt Service Reserve Guarantee as provided under the financing agreements. Pending achievement of the”Project Financial Completion Date”as defined under the Financing Agreement, the Sponsor support will continue. In terms of the conditions of the financing agreements, the Company has provided total Additional Subordinated Loans and Equity of Rs.6,022.59 crore (31st March, 2016 - Rs.5,047.00 crore, 1st April, 2015 -Rs.4,235.82 crore) to CGPL. The loans would be repaid in accordance with the conditions of the Subordination and Hypothecation Agreements either out of additional equity to be infused by the Company or out of the balance Indian rupee term loans receivable by CGPL in future on the fulfilment of conditions in the Coal Supply and Transportation Agreements Completion Date (CSTACD) agreement.

(ii) In respect of NELCO Limited, the Company has undertaken to arrange for the necessary financial support to NELCO Limited in the form of interim short term funding for meeting its business requirements.

(iii) The Company has undertaken to arrange for the necessary financial support to its Subsidiaries Khopoli Investments Limited, Bhivpuri Investments Limited, Industrial Power Utility Limited, Tata Power Jamshedpur Distribution Limited and Tata Power International Pte. Limited.

(iv) In respect of Maithon Power Limited (MPL), the Company jointly with Damodar Valley Corporation (DVC) has undertaken to the lenders of MPL, to provide support by way of base equity contribution and additional equity or subordinated loans to meet the increase in Project Cost. Further, the Company has given an undertaking to MPL to fulfil payment obligations of Tata Power Trading Company Limited (TPTCL) and Tata Power Delhi Distribution Limited (TPDDL) in case of their default.

(v) In terms of pre-implementation agreement entered into with Government of Himachal Pradesh and the consortium consisting of the Company and SN Power Holding Singapore Pte. Ltd. (Company being the Lead Member of the consortium) for the investigation and implementation of Dugar Hydro Electric Project, the Company has undertaken as Lead Member to undertake/perform various obligations pertaining to Dugar Project.

(vi) In accordance with the terms of the Share Purchase Agreement and the Shareholder’s Agreement entered into by Panatone Finvest Limited (PFL), an associate of the Company, with the Government of India, PFL has contractually undertaken a “Surplus Land” obligation including agreeing to transfer 45% of the share capital of the Resulting Company, at Nil consideration, to the Government of India upon Demerger of the Surplus Land by Tata Communication Limited (TCL). The Company has till date acquired 1,34,22,037 shares of TCL from PFL. The Company would be entitled to be allotted 4.71% of the share capital of the Resulting Company based on its holding of 1,34,22,037 shares of TCL. The Company has given an undertaking to PFL to bear the “Surplus Land” obligation pertaining to these shares.

d) (i) In respect of the Standby Charges dispute with Reliance Infrastructure Ltd. (R-Infra) for the period from 1st April, 1999 to 31st March, 2004, the Appellate Tribunal of Electricity (ATE), set aside the Maharashtra Electricity Regulatory Commission (MERC) Order dated 31st May, 2004 and directed the Company to refund to R-Infra as on 31st March, 2004, Rs.354.00 crore (including interest of Rs.15.14 crore) and pay interest at 10% per annum thereafter. As at 31st March, 2017 the accumulated interest was Rs.229.56 crore (31st March, 2016 -Rs.218.36 crore, 1st April, 2015 -Rs.207.16 crore) (Rs.11.20 crore for the year ended 31st March, 2017). On appeal, the Hon’ble Supreme Court vide its Interim Order dated 7th February, 2007, has stayed the ATE Order and in accordance with its directives, the Company has furnished a bank guarantee of the sum of Rs.227.00 crore and also deposited Rs.227.00 crore with the Registrar General of the Court which has been withdrawn by R-Infra on furnishing the required undertaking to the Court.

Further, no adjustment has been made for the reversal in terms of the ATE Order dated 20th December, 2006, of Standby Charges credited in previous years estimated at Rs.519.00 crore, which will be adjusted, wholly by a withdrawal/ set off from certain Statutory Reserves as allowed by MERC. No provision has been made in the accounts towards interest that may be finally determined as payable to R-Infra. Since 1st April, 2004, the Company has accounted Standby Charges on the basis determined by the respective MERC Tariff Orders.

The Company is of the view, supported by legal opinion, that the ATE’s Order can be successfully challenged and hence, adjustments, if any, will be recorded by the Company on the final outcome of the matter.

(ii) MERC vide its Tariff Order dated 11th June, 2004, had directed the Company to treat the investment in its wind energy project as outside the Mumbai Licensed Area, consider a normative Debt Equity ratio of 70:30 to fund the Company’s fresh capital investments effective 1st April, 2003 and had also allowed a normative interest charge @ 10% p.a. on the said normative debt. The change to the Clear Profit and Reasonable Return (consequent to the change in the capital base) as a result of the above mentioned directives for the period upto 31st March, 2004, has been adjusted by MERC from the Statutory Reserves along with the disputed Standby Charges referred to in Note 37(d)(i) above. Consequently, the effect of these adjustments would be made with the adjustments pertaining to the Standby Charges dispute as mentioned in Note 37(d)(i) above.

e) The Company, in terms of the Share Purchase Agreement, as stated in Note 36 (b)(ix), has undertaken additional “Surplus Land” obligation towards the purchase of 11,40,000 shares of Tata Communications Ltd. by Tata Sons Limited from Panatone Finvest Ltd.

f) The Company had received demands from various levels of sales tax departments in respect of entry tax on imports aggregating Rs.2,213.64 crore (including interest of Rs.643.99 crore and penalty of Rs.740.89 crore) for financial years 2005-06 to 2012-13. The Company paid Rs.246.21 crore under protest. The Hon’ble Bombay High Court upheld the levy, in respect of an appeal filed by the Company. The Company filed a Special Leave Petition against the above Order before the Hon’ble Supreme Court, which extended the interim stay granted by the Hon’ble Bombay High Court and requested to list the matter after pleadings are completed. The Company is of the view, supported by legal opinions, that the Company has a strong case on merits. Accordingly, Rs.1,967.43 crore (including interest of Rs.643.99 crore and penalty of Rs.740.89 crore) will be accounted by the Company based on the final outcome of the matter [Refer Note No. 37 (a)(i)].

8. Other Disputes

In the matter of claims raised by the Company on R-Infra, towards (i) the difference in the energy charges for the period March 2001 to May 2004 and (ii) for minimum off-take charges of energy for the period 1998 to 2000, MERC has issued an Order dated 12th December, 2007 in favour of the Company. The total amount payable by R-Infra, including interest, is estimated to be Rs.323.87 crore as on 31st December, 2007. ATE in its Order dated 12th May, 2008 on appeal by R-Infra, has directed R-Infra to pay the difference in the energy charges amounting to Rs.34.98 crore for the period March 2001 to May 2004. In respect of the minimum off-take charges of energy for the period 1998 to 2000 claimed by the Company from R-Infra, ATE has directed MERC that the issue be examined afresh and after the decision of the Hon’ble Supreme Court in the Appeals relating to the distribution licence and rebates given by R-Infra. The Company and R-Infra had filed appeals in the Hon’ble Supreme Court. The Hon’ble Supreme Court, vide its Order dated 14th December, 2009, has granted stay against ATE Order and has directed R-Infra to deposit with the Hon’ble Supreme Court, a sum of Rs.25.00 crore and furnish bank guarantee of Rs.9.98 crore. The Company had withdrawn the above mentioned sum subject to an undertaking to refund the amount with interest, in the event the Appeal is decided against the Company. On grounds of prudence, the Company has not recognised any income arising in respect of these matters.

9. Employee benefit plan

1. Defined Contribution plan

The Company makes Provident Fund and Superannuation Fund contributions to defined contribution retirement benefit plans for eligible employees. Under the schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The contributions as specified under the law are paid to the provident fund set up as a trust by the Company. The Company is generally liable for annual contributions and any shortfall in the fund assets based on the government specified minimum rates of return and recognises such contributions and shortfall, if any, as an expense in the year it is incurred. Having regard to the assets of the fund and the return on the investments, the Company does not expect any shortfall in the foreseeable future.

The Company has recognised Rs.24.02 crore (31st March, 2016 - Rs.21.53 crore) for provident fund contributions and Rs.10.23 crore (31st March, 2016 -Rs.10.13 crore) for superannuation contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

2. Defined benefit plans

2.1 The Company operates the following unfunded/funded defined benefit plans:

Unfunded:

Post-Employment Medical Benefits

The Company provides certain post-employment health care benefits to superannuated employees at some of its locations. In terms of the plan, the retired employees can avail free medical check-up and medicines at Company’s facilities.

Pension (including Director pension)

The Company operates a defined benefit pension plan for employees who have completed 15 years of continuous service. The plan provides benefits to members in the form of a pre-determined lump sum payment on retirement. Executive Director, on retirement, is entitled to pension payable for life including HRA benefit. The level of benefit is approved by the Board of Directors of the Company from time to time.

Ex-Gratia Death Benefit

The Company has a defined benefit plan granting ex-gratia in case of death during service. The benefit consists of a predetermined lump sum amount along with a sum determined based on the last drawn basic salary per month and the length of service.

Retirement Gift

The Company has a defined benefit plan granting a pre-determined sum as retirement gift on superannuation of an employee.

Funded: Gratuity

The Company has a defined benefit gratuity plan. The gratuity plan is primarily governed by the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of five years are eligible for gratuity. The level of benefits provided depends on the member’s length of service and salary at the retirement date. The gratuity plan is funded plan. The fund has the form of a trust and is governed by Trustees appointed by the Company. The Trustees are responsible for the administration of the plan assets and for the definition of the investment strategy in accordance with the regulations. The funds are deployed in recognised insurer managed funds in India. The Company does not fully fund the liability and maintains a target level of funding to be maintained over a period of time based on estimates of expected gratuity payments.

2.2 Risk exposure:

Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:

Asset volatility:

The plan liabilities are calculated using a discount rate set with reference to government bond yield. If plan assets underperform this yield, it will result in deficit. These are subject to interest rate risk. To offset the risk, the plan assets have been deployed in high grade insurer managed funds.

Inflation rate risk:

Higher than expected increase in salary will increase the defined benefit obligation.

Demographic risk:

This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligations is not straight forward and depends upon the combination of salary increase, discount rate and vesting criterion.

10. In respect of the contracts pertaining to the Strategic Engineering Business and Project Management Services, disclosures required as per Ind AS 11 are as follows:

(a) Contract revenue recognised as revenue during the year Rs.506.13 crore (31st March, 2016 -Rs.549.88 crore).

(b) In respect of contracts in progress -

(i) The aggregate amount of costs incurred and recognised profits upto 31st March, 2017 Rs.1,042.45 crore (31stMarch, 2016 -Rs.935.78 crore).

(ii) Advances and progress payments received as at 31st March, 2017 Rs.615.09 crore (31st March, 2016 -Rs.695.37 crore, 1st April, 2015 -Rs.813.25 crore).

(iii) Retention money included as at 31st March, 2017 in Sundry Debtors Rs.13.13 crore (31st March, 2016 -Rs.8.47 crore, 1st April, 2015 -Rs.6.32 crore).

(c) (i) Gross amount due to customers for contract work as a liability as at 31st March, 2017 Rs.44.20 crore (31stMarch, 2016 - Rs.66.00 crore,1st April, 2015 -Rs.191.44 crore).

(ii) Gross amount due from customers for contract work as an asset as at 31st March, 2017 Rs.370.03 crore (31stMarch,2016 -Rs.240.40 crore, 1st April, 2015 -Rs.191.89 crore).

1.2 Fair Value Hierarchy:

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels:

Level 1 Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. This includes quoted equity instruments, government securities, traded debentures (borrowings) and mutual funds that have quoted price.

Level 2 Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). This includes derivative financial instruments and investment in redeemable non-cumulative preference shares.

Level 3 Inputs are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data. This includes unquoted equity shares.

2. Financial risk management

In its ordinary operations, the Company’s activities expose it to the various types of risks, which are associated with the financial instruments and markets in which it operates. The Company has a risk management policy which covers the foreign exchanges risks and other risks associated with the financial assets and liabilities such as interest rate risks and credit risks. The risk management policy is approved by the Board of Directors. The following is the summary of the main risks:

2.1 Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates (currency risk) and interest rates (interest rate risk), will affect the company’s income or value of its holding of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

2.1.1 Foreign currency risk management

The Company is exposed to foreign exchange risk through its operations in international projects and purchase of coal from Indonesia and elsewhere and overseas borrowings. The results of the Company’s operations can be affected as the rupee appreciates/depreciates against these currencies. The Company enters into derivative financial instruments such as foreign exchange forward and option contracts to mitigate the risk of changes in exchange rates on foreign currency exposures.

2.1.2 Interest rate risk management

Interest rate risk arises from the potential changes in interest rates that may have adverse effects on the Company in the reporting period or in future years.

Interest rate sensitivity:

The sensitivity analysis below have been determined based on exposure to interest rates for term loans and debentures at the end of the reporting period and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period in case of term loans and debentures that have floating rates.

2.2 Liquidity risk management

The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. The maturity profile of the financial assets are listed below:

11. Segment Reporting:

Information reported to the Chief Operating Decisions Maker (CODM) for the purpose of resource allocation and assessment of segment performance focus on business segment which comprises of Power and Others.

Specifically, the Company’s reportable segments under Ind AS are as follows:

Power: Comprises of Generation, Transmission, Distribution and assets relating to Power Business given on Finance Lease

Others: Comprises of Defence Electronics and Engineering, Project Contracts/Infrastructure Management Services and Property Development

Revenue and expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly identifiable to each reporting segment have been allocated on the basis of associated revenue of the segment and manpower efforts. All other expenses which are not attributable or allocable to segments have been disclosed as unallocable expenses.

Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as unallocable.

12. Disclosure in terms of G.S.R.307(E) dated 30th March, 2017 issued by the Ministry of Corporate Affairs, Government of India

The details of Specified Bank Notes (SBN) held and transacted during the period 8th November, 2016 to 30th December, 2016, the denomination wiss SBNs and other notes as per the notification is given below:

During the period from 10th November, 2016 to 15th December, 2016, the Company was allowed to receive SBNs as a legal tender from its customers towards payment of their electricity dues. The Company has designated collection centres, which are permitted to receive cash from its customers. Cash collected at these centres is directly deposited into Company’s Bank accounts. The Company has received details of SBNs deposited from respective banks, and has considered amount collected as equivalent to amount deposited.

13. Explanation of Transition to Ind AS and effect of Ind AS adoption

13.1 First-time adoption-mandatory exceptions, optional exemptions

a. Overall principle

The Company has prepared the opening balance sheet as per Ind AS as of 1st April, 2015 (the transition date) by recognising all assets and liabilities whose recognition is required by Ind AS, not recognising items of assets or liabilities which are not permitted by Ind AS, by reclassifying items from previous GAAP to Ind AS as required under Ind AS, and applying Ind AS in measurement of recognised assets and liabilities. However, this principle is subject to certain exceptions and certain optional exemptions availed by the Company as detailed below.

b. Derecognition of financial assets and liabilities

The Company has applied the derecognition requirements of financial assets and financial liabilities prospectively for transactions occurring on or after 1st April, 2015 (the transition date).

c. Classification of debt instruments

The Company has determined the classification of debt instruments in terms of whether they meet the amortised cost criteria or the FVTOCI criteria based on the facts and circumstances that existed as of the transition date.

d. Deemed cost for PPE, investment property and intangible assets

The Company has elected to restate retrospectively generally all its property, plant and equipment and intangible assets as per the Ind AS 16 on transition date (as at 1st April, 2015).

e. Determining whether an arrangement contains a lease

The Company has applied Appendix C of Ind AS 17 “Determining whether an Arrangement contains a Lease” to determine whether an arrangement existing at the transition date contains a lease on the basis of facts and circumstances existing as of the transition date.

f. Equity investments at FVTOCI

The Company has designated investment in equity shares of its non-current investments as FVTOCI on the basis of facts and circumstances that existed at the transition date.

g. Investments in subsidiaries, joint ventures and associates

The Company has elected to adopt the carrying value under previous GAAP as on the date of transition i.e. 1st April, 2015 in its separate financial statements and use that carrying values as its deemed cost as of the transition date.

13.2 Notes to reconciliations between Previous GAAP and Ind AS

(a) Under previous GAAP, current investments were stated at lower of cost and fair value. Under Ind AS these financial assets have been classified as Fair Value through Profit and Loss (FVTPL) on the date of transition and fair value changes after the date of transition have been recognised in statement of profit and loss.

(b) Under previous GAAP, non-current investments were stated at cost less provision for diminution in value of investment, if any. Under Ind AS, financial assets in equity instruments have been classified as Fair Value through Other Comprehensive Income (FVTOCI) through an irrevocable election at the date of transition.

(c) Under previous GAAP, finance lease arrangement is recorded based on the legal form. Whereas under Ind AS arrangement that do not take the legal form of a lease but fulfilment of which is dependent on the use of specific assets and which convey the right to use the assets are accounted for as lease.

(d) Under previous GAAP, the net mark-to market losses on derivative financial instruments, as at the Balance Sheet date, were recognised in statement of profit and loss and the net gains, if any, were ignored. Under Ind AS, such derivative financial instruments are to be recognised at fair value and the changes are recognised in statement of profit and loss.

(e) Under previous GAAP, dividend payable is recognised as a liability in the period to which it relates. Under Ind AS, dividend to shareholders is recognised when declared by the members in annual general meeting.

(f) Under the previous GAAP the Company had adopted para 46 of AS-11 and capitalised exchange gain/loss. Whereas in Ind AS the Company has adopted Ind AS cost for all its Fixed Assets, hence exchange gain/loss is recognised in opening reserve and changes thereafter are recognised in statement of profit and loss or other comprehensive income, as the case may be.

(g) Under Ind AS the Company has recognised income on preference shares and Interest free loans given to subsidiaries.

(h) The deferred tax adjustments include the impact of transition adjustments together with Ind AS mandate of using balance sheet approach against profit and loss approach in the previous GAAP. On the date of transition, deferred tax impact on transition provision has been accounted in the Reserves, and consequential impact in the statement of profit and loss for the subsequent periods.

(i) Under previous GAAP, loan processing fees/transaction cost were expensed when incurred, whereas under Ind AS, it is considered for calculating effective interest rate and the impact for the periods subsequent to the date of transition is accounted in the statement of profit and loss.

(j) Defined benefit plans - Under Ind AS, actuarial gains or losses arising on defined benefit plans are recognised in other comprehensive income, whereas under previous GAAP same was being charged to the statement of profit and loss.

14. The Company is engaged in the business of providing infrastructural facilities as per Section 186 (ii) read with Schedule VI of the Act. Accordingly, disclosure under Section 186 of the Act, is not applicable to the Company.

15. Significant Events after the Reporting Period

There were no significant adjusting events that occurred subsequent to the reporting period other than the events disclosed in the relevant notes.

16. Approval of Financial Statements

The financial statements were approved for issue by the Board of Directors on 19th May, 2017.


Mar 31, 2016

1. Background:

The Company, pioneered the generation of electricity in India a century ago. Prior to 1st April, 2000 the Tata Electric Companies comprised of the following three Companies -

- The Tata Hydro-Electric Power Supply Company Limited, established in 1910 (Tata Hydro).

- The Andhra Valley Power Supply Company Limited, established in 1916 (Andhra Valley).

- The Tata Power Company Limited, established in 1919 (Tata Power).

With effect from 1st April, 2000, Andhra Valley and Tata Hydro merged into Tata Power to result in one large unified entity. The Company has an installed generation capacity of 2954 MW in India and a presence in all the segments of the power sector viz. Fuel and Logistics, Generation (thermal, hydro, solar and wind). Transmission and Distribution.

2.1. The Company during the year ended 31st March, 2014, changed its accounting policy in respect of Tangible Assets at its Strategic Engineering Division. These Tangible Assets which were hitherto carried at cost have been revalued as at 1st April, 2013. The revaluation is based on a valuation made by an independent valuer using the Depreciated Replacement Cost Method. Accordingly, the gross book value of such assets and the accumulated depreciation as at 1 st April, 2013 had increased by Rs. 234.98 crore and Rs. 7.59 crore respectively and Rs. 227.39 crore had been credited to the Revaluation Reserve.

2.2. In an earlier year, in line with the Notification dated 29th December, 2011 issued by the Ministry of Corporate Affairs (MCA), the Company had selected the option given in paragraph 46Aof the Accounting Standard-11 (AS-11) -"The Effects of Changes in Foreign Exchange Rates". Accordingly, the depreciated/amortised portion of net foreign exchange (gain)/loss on long-term foreign currency monetary items for the year ended 31st March, 2016 is Rs. 50.18 crore (31st March, 2015 - Rs.128.56 crore). The unamortised portion carried forward as at 31st March, 2016 isRs. 215.75 crore (31st March, 2015 -Rs. 243.60 crore).

3. Long-term Borrowings (Contd.)

Security

(i) The Debentures mentioned in (a) have been secured by a charge on movable properties and assets of the Company at Agaswadi and Visapurin Satara District of Maharashtra and Poolavadi inTirupur District of Tamil Nadu.

(ii) The Debentures mentioned in (b) have been secured by a par/''passu charge on the assets of the wind farms situated atSamana and Gadag in Gujarat and Karnataka.

(iii) The Debentures mentioned in (c) have been secured by a charge on the land situated atVillageTakve Khurd (Maharashtra).

(iv) The Debentures mentioned in (d)and (e) have been secured by a pari passu charge on land in Village Takve Khurd (Maharashtra) and movable and immovable properties in and outside Maharashtra, except assets of windmill projects, present and future.

(v) The Debentures mentioned in (f) had been secured by a charge on land in Village Takve Khurd (Maharashtra), movable and immovable properties in and outside Maharashtra, as also all transmission stations/lines, receiving stations and sub-stations in Maharashtra, except assets of windmill projects, present and future.

(vi) The Loans from HDFC Bank and IDBI Bank, mentioned in (g) and (i) respectively have been secured by a pari passu charge on all movable Fixed Assets (excluding land and building), present and future (except assets of all wind projects both present and future) including movable machinery, machinery spares, tools and accessories.

(vii) The Loan from ICICI Bank, mentioned in (h) secured byway of first pari passu charge on all the movable assets (excluding land and buildings), present and future (except assets of all wind mill projects present and future), including movable machinery, current assets, machinery spares, tools and accessories.

(viii) The Loan from Kotak Mahindra Bank mentioned in (j) has been secured by a pari passu charge on all movable Fixed Assets (excluding land and building), present and future (except assets of all wind mill projects, both present and future) including movable machinery, machinery spares, tools and accessories.

(ix) The Loan from IDFC Bank (Loan from Infrastructure Development Finance Company Limited has been transferred to IDFC Bank on its demerger), mentioned in (k) and (n) have been secured by a pari passu charge on all movable Fixed Assets (excluding land and building), present and future (except assets of all wind projects both present and future) including movable machinery, machinery spares, tools and accessories.

(x) The Loans from Asian Development Bank and Indian Renewable Energy Development Agency Limited mentioned in (I) and (m) respectively have been secured by a first charge on the tangible movable properties, plant & machinery and immovable properties situated at Khandke, Brahmanvel and Sadawaghapur in Maharashtra.

(xi) The Loan from Export Import Bank of India mentioned in (o) had been secured by receivables (present and future), book debts and outstanding monies.

4. In an earlier year, the Company had commissioned its 120 MW Unit 4 thermal power unit at Jojobera.Jharkhand. Revenue in respect of this unit is recognised on the basis of a draft Power Purchase Agreement prepared jointly by the Company and its customer which is pending finalisation.

5. (a) Expenditure related to Corporate Social Responsibility as per Section 135 of the Companies Act, 2013 read with Schedule VII thereofRs. 29.01 crore (31st March, 2015 -Rs.31.13 crore) (includesRs. 27.00 crore paid to Tata Power Community Development Trust) (31st March, 2015 - Rs.11.57 crore).

(b) Gross amount required to be spent during the year Rs. 23.22 crore [Rs. 28.29 crore approved by the CSR committee (31st March, 2015-Rs.29.83 crore)].

6. (a) The Company has a long-term investment of Rs. 6,030.42 crore (31st March, 20 75-Rs.5,980.57crorej in equity, loans amounting to Rs. 3,795.89 crore including interest (31st March, 2015 Rs. 3,034.56 crore) and guarantees of Rs. 2,984.67 crore (31st March, 2015 Rs. 3,403.27crore) to Coastal Gujarat Power Limited (CGPL) a wholly owned subsidiary of the Company which has implemented the 4000 MW Ultra Mega Power Project at Mundra ("Mundra UMPP").

CGPL has obligated to charge escalation on 45 percent of the cost of coal in terms of the 25 year Power Purchase Agreement relating to the Mundra UMPP. During the current year, considering that the coal prices, current and forecasts, have substantially reduced in comparison to the coal prices considered at the time the assets were impaired and also considering reduction in prices from March 2015, CGPL''s Management has reassessed the recoverability of the carrying amount of the assets at Mundra, consequent to change in the estimates of future cash flows due to decline in forecast of coal prices. Therefore the Management has reversed impairment loss of Rs. 2,320 crore (net of depreciation of Rs. 330 crore) during the year ended 31st March, 2016 in the books of CGPL.

In estimating the future cash flows. Management has, based on externally available information, made certain assumptions relating to the future fuel prices, future revenues, operating parameters and the assets'' useful life which Management believes reasonably reflects the future expectation of these items. The assumptions will be monitored on a periodic basis and adjustments will be made if conditions relating to the assumptions indicate that such adjustments are appropriate.

In view of the above and the overall returns expected from the Company''s investment in CGPL, there is no diminution other than temporary, in the value of long-term investments in and no provision for loans and towards guarantees to CGPL is considered necessary as at 31st March, 2016.

In earlier years in order to provide protection to CGPL and to support its cashflows, the Management had committed to restructure the business of CGPL under which the Company had committed to transfer at least 75 percent of its equity interests in the Indonesian Coal Companies including Infrastructure Companies to CGPL.

The Management has also reviewed the need for above restructuring and decided that the restructuring is no longer necessary.

(b) The Company has a non-trade investment in Tata Teleservices Limited (TTSL) ofRs. 735.48 crore (37sf March, 2015 -Rs.735.48 crore). Based on the accounts for the year ended 31st March, 2015, TTSL has accumulated losses which has completely eroded its net worth. During the year ended 31st March, 2016, due to reduction in the Fair Market Value (FMV) of Company''s investment in TTSL, the Management has providedRs. 226.48 crore, as diminution in value, other then temporary, of this investment and shown under exceptional items.

(c) The Company has an investment in Haldia Petrochemicals Limited (HPL) ofRs. 22.50 crore (31st March, 2015 - Rs.''22.50 crore). Based on the accounts for the year ended 31st March, 2015, HPL has accumulated losses which have significantly eroded its net worth. In the opinion of the Management, having regard to the long-term nature of the business, there is no diminution other than temporary, in the value of the investment.

(d) (i) The Company has invested Rs. 39.30 crore (31st March, 2015 - Rs.39.30 crore), issued guarantees of Rs. 20.26 crore (31st March, 2015 - Rs.115.79 crore) and given loans ofRs. 54.16 crore including interest accrued (31st March, 2015 - Rs.4.50crore) to Mandakini Coal Company Limited ("Jointly Controlled Entities") which had been allotted coal blocks by Government of India through Ministry of Coal.

(ii) The Company has invested Rs. 18.12 crore (31st March, 2015 - Rs.17.84 crore) and issued guarantees ofRs. 11.36 crore (31st March, 2015-Rs. 11.36 crore) to Tubed Coal Mines Limited ("Jointly Controlled Entities") which had been allotted coal blocks by Government of India through Ministry of Coal.

(iii) Pursuant to the Order of the Hon''ble Supreme Court dated 24th September, 2014, regarding cancellation of the allotment of coal blocks and the subsequent Coal Mines (Special Provision) Ordinance, 2014, issued by the Government of India, the Company has made an assessment of the recoverability of its investments in, loans and guarantees given to Mandakini Coal Company Limited andTubed Coal Mines Limited, affected by the said Orderand recognised on a prudent basis and included in other expenses provision towards diminution in value of investments of Rs. 20.32 crore (31st March, 2015 - Rs. 37.10 crore) and loans and advancesRs. 54.16 crore (31st March, 2015 - Rs.NH) during the year ended 31st March, 2016.

7. Micro and small enterprises under the Micro, Small and Medium Enterprises Development Act, 2006 have been determined based on the information available with the Company and the required disclosures are given below:

8. Commitments:

(a) Capital Commitments (net of capital advance):

Capital commitments not provided for are estimated atRs. 523.92 crore (31 st March, 2015 - Rs.662.48 crore).

(b) Commitment towards purchase of Equity Shares of Trust Energy Resources Pte. Limited from Khopoli Investment Limited of Rs. 29.13 crore (31 stMarch, 2015 - Rs.27.48 crore) subject to approval of Reserve Bank of India.

(c) The Company has signed a Share Purchase Agreement on 10th December, 2014 for acquisition of 100% shareholding in Ideal Energy Projects Limited (IEPL), subject to statutory approvals and certain conditions precedent. The Company on 22nd January, 2016, has terminated the Share Purchase Agreement due to non conclusion of certain conditions attached to Share Purchase Agreement.

(d) Other Commitments:

(i) In terms of the Sponsor Support agreement entered into between the Company, Coastal Gujarat Power Limited (CGPL) and lenders of CGPL, the Company has undertaken to provide support by way of base equity contribution to the extent oRs.25% of CGPL''s project cost and additional equity or subordinated loans to be made or arranged for, if required as per the financing agreements to finance the project. The Sponsor Support Agreement also includes support by way of additional financial support for any overrun in project costs, operational loss and Debt Service Reserve Guarantee as provided under the financing agreements. Pending achievement of the "Project Financial Completion Date" as defined under the Financing Agreement, the Sponsor support will continue. In terms of the conditions of the financing agreements, the Company has provided total Additional Subordinated Loans of Rs. 5,047.00 crore (of whichRs. 1,562.70 crore has been converted into equity) [31st March, 2015 -Add itional Subordinated Loans of Rs.4,235.82 crore (of which Rs.7,512.85 crore has been converted into equity)] to CGPL. Balance of both the loans would be repaid in accordance with the conditions of the Subordination and Hypothecation Agreements either out of additional equity to be infused by the Company or out of the balance Indian rupee term loans receivable by CGPL in future period, after the fulfillment of conditions in the Coal Supply and Transportation Agreements Completion Date (CSTACD) agreement.

The accrued interest as at 31st March, 2016 aggregating toRs. 311.59 crore (31st March, 2015 -Rs.311.59 crore) on Additional Subordinated Loans shall be payable subject to fulfillment of conditions in Subordination Agreement and Coal Supply and Transportation Agreements Completion Date (CSTACD) agreement.

(ii) In respect of NELCO Limited, the Company has undertaken to arrange for the necessary financial support to NELCO Limited in the form of interim short term funding for meeting its business requirements.

(iii) The Company has undertaken to arrange for the necessary financial support to its Subsidiaries Khopoli Investments Limited, Bhivpuri Investments Limited, Industrial Power Utility Limited,Tata Power Jamshedpur Distribution Limited and Tata Power International Pte. Limited.

(iv) In respect of Maithon Power Limited (MPL), the Company jointly with Damodar Valley Corporation (DVC) has undertaken to the lenders of MPL, to provide support by way of base equity contribution and additional equity or subordinated loans to meet the increase in Project Cost. Further, the Company has given an undertaking to MPL to fulfil payment obligations of Tata PowerTrading Company Limited (TPTCL) and Tata Power Delhi Distribution Limited (TPDDL) in case of their default.

(v) In terms of pre-implementation agreement entered into with Government of Himachal Pradesh and the consortium consisting of the Company and SN Power Holding Singapore Pte. Ltd. (Company being the Lead Member of the consortium) for the investigation and implementation of Dugar Hydro Electric Project, the Company has undertaken as Lead Member to undertake/perform various obligations pertaining to Dugar Project.

(vi) In accordance with the terms of the Share Purchase Agreement and the Shareholder''s Agreement entered into by Panatone Finvest Limited (PFL), an associate of the Company, with the Government of India, PFL has contractually undertaken a "Surplus Land" obligation including agreeing to transfer 45% of the share capital of the Resulting Company, at Nil consideration, to the Government of India and other selling shareholders upon Demerger of the Surplus Land by Tata Communications Limited (TCL). The Company has till date acquired 1,34,22,037 shares of TCLfrom PFL. The Company would be entitled to be allotted 4.71% of the share capital of the Resulting Company based on its holding of 1,34,22,037 shares of TCL. The Company has undertaken to PFL to bear the"Surplus Land" obligation pertaining to these shares.

(vii) The Company has given an undertaking for non-disposal of shares to the lenders of Tata Power Delhi Distribution Limited in respect of its outstanding borrowings amounting toRs. 442.61 crore (31st March, 2015-Rs.520.78 crore).

(viii) The Company has given letter of comfort to Cennergi Pty. Limited amounting toRs. 71.54 crore (31st March, 2015 - Rs.83.03 crore).

9. Contingent Liabilities (to the extent not provided for):

(a) Claims against the Company not acknowledged as debts aggregating toRs. 1,630.16 crore (31st March, 2015 - Rs.1,659.61 crore) consist mainly of the following:

(i) Interest and penalty demand disputed by the Company aggregating Rs. 1,296.76 crore (31st March, 2015 -Rs.1,119.60 crore) relating to Entry tax claims for the financial years 2005-06 to 2011 -12. The Company is of the view, supported by legal opinion, that the demand can be successfully challenged.

(ii) Custom duty claims (including interest and penalty) ofRs. 170.01 crore (31st March, 2015 -Rs.7 70.07 crore) disputed by the Company relating to applicability and classification of coal [Payment made under protest against these claims of Rs. 135.52 crore (31stMarch, 2015 - Rs.735.52 crore)].

(iii) Way Leave fees (including interest) ofRs. 72.58 crore (31st March, 2015 -Rs. 62.60 crore) claims disputed by the Company relating to rates charged.

(iv) Rates, Cess, Excise and Custom Duty claims disputed by the Company aggregating Rs. 36.85 crore (31stMarch, 2015 - Rs.41.14 crore).

(v) A Suit has been filed against the Company claiming compensation ofRs. Nil (31 st March, 2015 - Rs.20.51 crore) by way of damages for alleged wrongful disconnection of power supply and interest accrued thereonRs. Nil (31st March, 2015- Rs.120.60 crore).

(vi) Octroi claims disputed by the Company aggregating to Rs. 5.03 crore (31st March, 2015 - Rs.5.03 crore), in respect of octroi exemption claimed by the Company.

(vii) Compensation disputed by private land owners aggregating toRs. 22.00 crore (31stMarch,2015- Rs.22.00crore) on private land acquired under the provisions of Maharashtra Industrial Development Act, 1961.

(viii) Other claims against the Company not acknowledged as debtsRs. 26.93 crore (31st March, 2015- Rs.98.72 crore).

(ix) Amounts in respect of employee related claims/disputes, regulatory matters is not ascertainable.

Future cash flows in respect of above matters are determinable only on receipt of judgements/decisions pending at various forums/authorities.

(b) Other Contingent Liabilities:

Taxation matters for which liability, relating to issues of deductibility and taxability, is disputed by the Company and provision is not made (computed on the basis of assessments which have been re-opened and assessments remaining to be completed) Rs. 232.99 crore (including interest demanded Rs. 1.17 crore) [31 st March, 2015 - Rs.209.52 crore (including interest demanded Rs.7.17 crore)].

Future cash flows in respect of above matters are determinable only on receipt of judgements/decisions pending at various forums/authorities.

(d) (i) In respect of the Standby Charges dispute with Reliance Infrastructure Ltd. (R-lnfra) for the period from 1st April, 1999 to 31 st March, 2004, the Appellate Tribunal of Electricity (ATE), set aside the Maharashtra Electricity Regulatory Commission (MERC) Order dated 31 st May, 2004 and directed the Company to refund to R-lnfra as on 31 st March, 2004, Rs. 354.00 crore (including interest ofRs. 15.14 crore) and pay interest at 10% per annum thereafter. As at 31st March, 2016 the accumulated interest was Rs. 218.36 crore (31stMarch, 2015- Rs. 207.16 crore) (Rs. 11.20 crore for the year ended 31st March, 2016). On appeal, the Hon''ble Supreme Court vide its Interim Order dated 7th February, 2007, has stayed the ATE Order and in accordance with its directives, the Company has furnished a bank guarantee of the sum of Rs. 227.00 crore and also deposited Rs. 227.00 crore with the Registrar General of the Court which has been withdrawn by R-lnfra on furnishing the required undertaking to the Court.

Further, no adjustment has been made for the reversal in terms of the ATE Order dated 20th December, 2006, of Standby Charges credited in previous years estimated at Rs. 519.00 crore, which will be adjusted, wholly by a withdrawal/set off from certain Statutory Reserves as allowed by MERC. No provision has been made in the accounts towards interest that may be finally determined as payable to R-lnfra. Since 1st April, 2004, the Company has accounted Standby Charges on the basis determined by the respective MERC Tariff Orders.

The Company is of the view, supported by legal opinion, that the ATE''s Order can be successfully challenged and hence, adjustments, if any, including consequential adjustments to the Deferred Tax Liability Fund and the Deferred Tax Liability Account will be recorded by the Company on the final outcome of the matter.

(ii) MERC vide its Tariff Order dated 11th June, 2004, had directed the Company to treat the investment in its wind energy project as outside the Mumbai Licensed Area, consider a normative Debt Equity ratio of 70:30 to fund the Company''s fresh capital investments effective 1st April, 2003 and had also allowed a normative interest charge© 10%p.a.on the said normative debt. The change to the Clear Profit and Reasonable Return (consequent to the change in the capital base) as a result of the above mentioned directives for the period upto 31st March, 2004, has been adjusted by MERC from the Statutory Reserves along with the disputed Standby Charges referred to in Note 32(d) (i) above. Consequently, the effect of these adjustments would be made with the adjustments pertaining to the Standby Charges dispute as mentioned in Note 32(d) (i) above.

(e) In 2008-09, NTT DoCoMo Inc. (DoCoMo) entered into an Agreement with Tata Teleservices Ltd. (TTSL) and Tata Sons Limited to acquire 20% of the equity share capital under the primary issue and 6% under the secondary sale from Tata Sons Limited. In terms of the Agreements with DoCoMo, Tata Sons Limited, inter alia, agreed to provide various indemnities and a Sale Option entitling DoCoMo to sell its entire shareholding in 2014 at a minimum pre-determined price ofRs. 58.045 per share if certain performance parameters were not met by TTSL. The minimum pre-determined price represented 50% of the acquisition price of 2008-09.The Agreements are governed by Indian Law.

The Company in 2008-09 had accepted an offer made voluntarily by Tata Sons Limited to all shareholders of TTSL to participate pro-rata in the secondary sale to DoCoMo together with bearing liabilities, if any, including the Sale Option in proportion of the number of shares sold by the Company to the aggregate Secondary Sale to DoCoMo. Accordingly, an Inter se Agreement was executed by the Company with Tata Sons Limited and other Selling Shareholders. The Company sold 2,72,82,177 shares of TTSL to DoCoMo atRs. 116.09 per share, resulting in a profit ofRs. 255.62 crore. The Company is obliged to acquire 13,45,95,551 shares of TTSL in the above proportion in the event the Sale Option is exercised by DoCoMo.

DoCoMo has exercised the Sale Option in July 2014 and has called upon Tata Sons Limited to acquire its entire shareholding in TTSL at the pre-determined price of Rs. 58.045 per share. Tata Sons Limited has in turn informed the Company that they may be called upon to acquire 13,45,95,551 shares, in terms of its original offer to the Company and the inter-se agreement to participate in the Secondary Sale.

Tata Sons Limited have also informed the Company that the Reserve Bank of India have not permitted acquisition of the shares at the pre-determined price and have advised that the acquisition can only be made at Fair Market Value (FMV) prevailing at the time of the acquisition. DoCoMo reiterated its position that the shares be acquired at minimum pre-determined price of 50% of the acquisition price in 2008-09.

DoCoMo had initiated Arbitration in the matter before the The London Court of International Arbitration (LCIA), London. The evidentiary hearing was completed on 6th May, 2016.The arbitral award is awaited.

The liability, if any, to the extent of the difference between the amount sought by DoCoMo and the Fair Market Value is dependent upon the outcome of the Arbitration and prevailing FEMA Regulations.

Under the above mentioned agreements with DoCoMo, TSL and TTSL have jointly and severally agreed to indemnify DoCoMo within the agreed limits against claims arising on account of any failure of certain warranties provided byTSLandTTSLto be true and correct in all respects (amount not determinable) and in respect of specified contingent liabilities [Company''s shareRs. 29.76 crore (31st March, 2015 -Rs.29.76 crore)]. The Company is liable to reimburse TSL, on a pro-rata basis.

(f) The Company, in terms of the Share Purchase Agreement, as stated in Note 31 (d)(vi), has undertaken additional "Surplus Land" obligation towards the purchase of 11,40,000 shares of Tata Communications Ltd. by Tata Sons Limited from Panatone Finvest Ltd.

10. Rate Regulated Activities:

(i) As perGuidanceNoteon Rate Regulated Activities issued by The Institute of Chartered Accountants of India (ICAI) effective from 1 st April, 2015, the business of electricity distribution is a Rate Regulated activity wherein MERC determines Tariff to be charged from consumers based on prevailing Regulations in place.

(ii) MERC Multi YearTariff Regulations, 2011 (MYT Regulations), is applicable for the period beginning from 1 st April, 2011 to 31 st March, 2016. These regulations require MERC to determine tariff in a manner wherein the Company can recover its fixed and variable costs including assured rate of return on approved equity base, from its consumers.

The Company determines the Revenue, Regulatory Assets and Liabilities as per the terms and conditions specified in MYT Regulations.

(iii) Reconciliation of Regulatory Assets/Liabilities of distribution business as per Rate Regulated Activities as on 31 st March, 2016, is as follows:

34. In the matter of claims raised by the Company on R-lnfra, towards (i) the difference in the energy charges for the period March 2001 to May 2004 and (ii) for minimum off-take charges of energy for the period 1998 to 2000, MERC has issued an Order dated 12th December, 2007 in favour of the Company. The total amount payable by R-lnfra, including interest, is estimated to be Rs. 323.87 crore as on 31 st December, 2007. ATE in its Order dated 12th May, 2008 on appeal by R-lnfra, has directed R-lnfra to pay the difference in the energy charges amounting toRs. 34.98 crore for the period March 2001 to May 2004. In respect of the minimum off-take charges of energy for the period 1998 to 2000 claimed by the Company from R-lnfra, ATE has directed MERC that the issue be examined afresh and after the decision of the Hon''ble Supreme Court in the Appeals relating to the distribution licence and rebates given by R-lnfra. The Company and R-lnfra had filed appeals in the Hon''ble Supreme Court. The Hon''ble Supreme Court, vide its Order dated 14th December, 2009, has granted stay against ATE Order and has directed R-lnfra to deposit with the Hon''ble Supreme Court, a sum of Rs. 25.00 crore and furnish bank guarantee of Rs. 9.98 crore.The Company had withdrawn the above mentioned sum subject to an undertaking to refund the amount with interest, in the event the Appeal is decided against the Company. On grounds of prudence, the Company has not recognised any income arising from the above matters.

11. Employee Benefits:

(a) Defined contribution plans

The Company makes Provident Fund and Superannuation Fund contributions to defined contribution retirement benefit plans for eligible employees. Under the schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The contributions as specified under the law are paid to the provident fund set up as a trust by the Company. The Company is generally liable for annual contributions and any shortfall in the fund assets based on the government specified minimum rates of return and recognises such contributions and shortfall, if any, as an expense in the year it is incurred. Having regard to the assets of the fund and the return on the investments, the Company does not expect any shortfall in the foreseeable future.

The Company has recognised Rs. 21.53 crore (31 st March, 2015 - Rs.21.03 crore) for provident fund contributions andRs. 10.13 aore (31st March, 2015-Rs. 10.13 crore) for superannuation contributions in the Statement of Profit and Loss.The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

(b) Defined benefit plans

The Company operates the following unfunded/funded defined benefit plans:

Unfunded:

(i) Ex-Gratia Death Benefits

(ii) Retirement Gifts

(iii) Post Retirement Medical Benefits and

(iv) Pension (including Director pension)

Funded:

(i) Gratuity

(c) The actuarial valuation of the present value of the defined benefit obligations has been carried out as at 31st March, 2016. The following tables set out the amounts recognised in the financial statements as at 31 st March, 2016 for the above mentioned defined benefit plans:

12. In respect of the contracts pertaining to the Strategic Engineering Business and Project Management Services, disclosures required as per AS-7 (Revised) are as follows:

(a) Contract revenue recognised as revenue during the yearRs. 549.88 crore (31 st March, 2015 - Rs. 530.50 crore).

(b) In respect of contracts in progress-

(i) The aggregate amount of costs incurred and recognised profits upto 31st March, 2016 Rs. 935.78 crore (31st March, 2015-Rs.814.84 crore).

(ii) Advances and progress payments received as at 31st March, 2016Rs. 695.37 crore (31 st March, 2015 - Rs.87 3.25 crore).

(iii) Retention money included as at 31st March, 2016 in Sundry DebtorsRs. 8.47 crore (31 st March, 2015 - Rs.6.32 crore).

(c) (i) Gross amount due to customers for contract work as a liability as at 31st March, 2016 Rs. 66.00 crore (31st March, 2015-Rs.191.44 crore).

(ii) Gross amount due from customers for contract work as an asset as at 31st March, 2016 Rs. 240.40 crore (31st March, 2015 -Rs.797.89 crore).

13. (a) Total number of electricity units sold and purchased during the year as certified by Management-13,204 MUs(31st March, 2015-13,603MUs) and 2,017 MUs (31stMarch,2015-2,541 MUs), respectively.

(b) C.I.F. Value of imports:

14. Related Party Disclosures:

Disclosure as required by Accounting Standard-18 (AS-18) - "Related Party Disclosures"are as follows: Names of the related parties and description of relationship:

(a) Related parties where control exists:

Subsidiaries 1) Af-Taab Investment Co. Ltd. (AICL)

2) Chemical Terminal Trombay Ltd. (CTTL)

3) Tata PowerTrading Co. Ltd. (TPTCL)

4) Powerlinks Transmission Ltd. (PTL)

5) NELCO Ltd. (NELCO)

6) Maithon Power Ltd. (MPL)

7) Industrial Energy Ltd. (IEL)

8) Tata Power Delhi Distribution Ltd. (TPDDL)

9) Coastal Gujarat Power Ltd. (CGPL)

10) Bhira Investments Ltd. (BIL)

11) Bhivpuri Investments Ltd. (BHIL)

12) Khopoli Investments Ltd. (KIL)

13) Trust Energy Resources Pte. Ltd. (TERL)

14) Energy Eastern Pte. Ltd. (EEL) **

15) Industrial Power Utility Ltd. (IPUL)

16) Tatanet Services Ltd. (TNSL) **

17) Tata Power Renewable Energy Ltd. (TPREL)

18) PT Sumber Energi Andalan Tbk. (SEA) **

19) Tata Power Green Energy Ltd. (TPGEL) **

20) NDPL Infra Ltd. (NDPUL)**

21) Dugar Hydro Power Ltd. (DHPL)

22) Tata Power Solar Systems Ltd. (TPSSL)

23) Tata Power Jamshedpur Distribution Ltd. (TPJDL)

24) Tata Power International Pte. Ltd. (TPIPL)

25) Tata Ceramics Ltd. (TCL) (w.e.f. 28th May, 2015)

26) Supa Windfarm Ltd. (SWL) ** (w.e.f. 10th December, 2015)

27)PoolavadiWindfarmLtd. (PWL)** (w.e.f. 9th January, 2016)

28) Nivade Windfarm Ltd. (NWL) ** (w.e.f. 17th December, 2015)

**Through Subsidiary Companies.

(b) Other related parties (where transactions have taken place during the year and previous year):

(i) Associates 1) Tata Projects Ltd. (TPL)

2) Yashmun Engineers Ltd. (YEL)

(ii) Jointly Controlled Entities 1) Cennergi Pty. Ltd. (CPL)**

2) Mandakini Coal Company Ltd. (MCCL)

3) Tubed Coal Mines Ltd. (TCML)

4) Itezhi Tezhi Power Corporation (ITPC) (w.e.f. 29th April, 2015)

5) Adjaristsqali Georgia LLC (AGL) ** ** Fellow Jointly Controlled Entities.

(iii) Promoters holding together with its Subsidiary more than 20% Tata Sons Ltd.

(c) Key Management Personnel Anil Sardana-CEO & Managing Director

Ashok Sethi - COO & Executive Director Ramesh Subramanyam - Chief Financial Officer

15. Disclosure under Regulation 34(3) of Securities and Exchange Board of India (SEBI) (Listing Obligations and Disclosure Requirements) Regulations, 2015

Loans and advances (excluding advance towards equity) in the nature of loans given to Subsidiaries, Jointy Controlled Entities and Associates:

16. Derivative Instruments and Unhedged foreign currency exposures:

(i) Derivative Instruments:

The following derivative positions are open as at 31st March, 2016. These transactions have been undertaken to act as economic hedges for the Company''s exposures to various risks in foreign exchange markets. The accounting for these transactions is stated in Note 2.1 (n) and 2.1 (o).

Forward exchange contracts (being derivative instrument), which are not intended for trading or speculative purposes but for hedge purposes to establish the amount of reporting currency required or available at the settlement date of certain payables and receivables. Outstanding forward exchange contracts and currency option contracts entered into by the Company as on 31 st March, 2016:

17. The Company is engaged in the business of providing infrastructural facilities as per Section 186 (ii) read with Schedule VI of the Act. Accordingly, disclosures under Section 186 of the Act, is not applicable to the Company.

18. The Company has interests in the following Jointly Controlled Entities as on 31st March, 2016 and its proportionate share in the Assets, Liabilities, Income and Expenditure are given below:

19. Previous year''s figures have been re-classified/re-arranged/re-grouped, wherever necessary to conform with the current year''s classification/disclosure. Figures below Rs. 50,000/- are denoted by ''*''.


Mar 31, 2014

1. Background:

The Company, pioneered the generation of electricity in India nine decades ago. Prior to 1st April, 2000 the Tata Electric Companies comprised of the following three Companies -

- The Tata Hydro-Electric Power Supply Company Limited, established in 1910 (Tata Hydro).

- The Andhra Valley Power Supply Company Limited, established in 1916 (Andhra Valley).

- The Tata Power Company Limited, established in 1919 (Tata Power).

With ef ect from 1st April, 2000, Andhra Valley and Tata Hydro merged into Tata Power to result in one large unif ed entity. The Company has an installed generation capacity of 3075 MW in India and a presence in all the segments of the power sector viz. Fuel and Logistics, Generation (thermal, hydro, solar and wind), Transmission and Distribution.

2. In an earlier year, the Company had commissioned its 120 MW Unit 4 thermal power unit at Jojobera, Jharkhand. Revenue in respect of this unit is recognised on the basis of a draft Power Purchase Agreement prepared jointly by the Company and its customer which is pending f nalisation.

3. The Company has been legally advised, that the Company is considered to be established with the object of providing infrastructural facilities and accordingly, Section 372A of the Companies Act, 1956 is not applicable to the Company.

4. (a) The Company has a long-term investment of Rs. 5,928.28 crore (31st March, 2013 - Rs. 5,103.61 crore) (including advance towards equity) and has extended loans amounting to Rs. 1,413.46 crore (including interest accrued) (31st March, 2013 - Rs. 436.57 crore) to Coastal Gujarat Power Limited (CGPL) a wholly owned subsidiary of the Company which has implemented the 4000 MW Ultra Mega Power Project at Mundra ("Mundra UMPP").

CGPL has obligated to charge escalation on 45 percent of the cost of coal in terms of the 25 year power purchase agreement relating to the Mundra UMPP. During the year, CGPL''s Management has re-assessed the recoverability of the carrying amount of the assets at Mundra as of 31st March, 2014 and concluded that no further provision for impairment is necessary (31st March, 2013 - Rs. 2,650 crore).

In estimating the future cash flows, Management has, based on externally available information, made certain assumptions relating to the future fuel prices, future revenues, operating parameters and the assets'' useful life which Management believes reasonably ref ects the future expectation of these items. In view of the estimation uncertainties, the assumptions will be monitored on a periodic basis and adjustments will be made if conditions relating to the assumptions indicate that such adjustments are appropriate.

The Company''s investments in Indonesian Coal Companies including Infrastructure Companies through its subsidiaries, were made to secure long-term coal supply. The Management believes that cash inflows (in the nature of prof t distribution and prof t from sale) from these investments from an economic perspective provide protection from the risk of price volatility on coal to be used in power generation in CGPL, to the extent not covered by price escalations. In order to provide protection to CGPL and to support its cash flows, the Management has committed to a future restructuring under which the Company will transfer at least 75 percent of its equity interests in the Indonesian Coal Companies including Infrastructure Companies to CGPL, subject to receipt of regulatory and other necessary approvals which are being pursued and will also evaluate other alternative options. A valuation of the equity interests in the Indonesian Coal Companies including Infrastructure Companies has been carried out on the basis of certain assumptions, including legal interpretation that there is reasonable certainty that the mining leases would be extended without signif cant cost.

The Company, through its wholly owned subsidiaries, has entered into agreements on 30th January, 2014 for sale of shares in PT Arutmin Indonesia and its associated infrastructure and trading companies. As per the terms of the agreement, it is proposed to sell its stake in these companies, for a consideration of USD 510 million, subject to tax deductions and other closing adjustments. The completion of the sale transaction is conditional upon the satisfaction or waiver of certain conditions, obtaining requisite consents and certain restructuring actions. The buyer will pay the seller interest on the purchase price from 26th November, 2013 (the ef ective date) till the completion date.

The proposed sale of shares in PT Arutmin Indonesia referred above is consistent with the above intent.

Having regard to the overall returns expected from the Company''s investment in CGPL, including the valuation of investments in the Indonesian Coal Companies including Infrastructure Companies and the proposed future restructuring, no provision for diminution in value of long-term investment in CGPL is considered necessary as at 31st March, 2014.

(b) The Company has an investment in Tata Teleservices Limited (TTSL) of Rs. 735.48 crore (31st March, 2013 - Rs. 735.48 crore). Based on the accounts for the year ended 31st March, 2013, TTSL has accumulated losses which has completely eroded its net worth. In the opinion of the Management, having regard to the long-term nature of the business, there is no diminution other than temporary, in the value of the investment.

(c) The Company has an investment in Haldia Petrochemicals Limited (HPL) of Rs. 22.50 crore (31st March, 2013 - Rs. 22.50 crore). Based on the accounts for the year ended 31st March, 2013, HPL has accumulated losses which have signif cantly eroded its net worth. In the opinion of the Management, having regard to the long-term nature of the business, there is no diminution other than temporary, in the value of the investment.

(d) (i) The Company has invested Rs. 39.30 crore (31st March, 2013 - Rs. 39.30 crore) in and issued guarantees of Rs. 86.93 crore (31st March, 2013 - Rs. 86.93 crore) on behalf of Mandakini Coal Company Limited ("Joint Venture") which had been allotted coal blocks by Government of India through Ministry of Coal.

The Company along with the other Joint Venture Partners has received notices from Ministry of Coal, seeking explanations for delay in development of the blocks and requesting for certain clarif cations as regards various clearances and execution of mining lease, on the basis of which a decision for de-allocation of coal blocks will be taken. The Company is of the view that considering the progress made in land acquisition and obtaining various clearances for development of the coal blocks, there is a case for withdrawal of the notices.

Considering the above, in the opinion of the Management, as at 31st March, 2014, there is no diminution, other than temporary, in the value of investment in the Joint Venture Entity.

(ii) The Company has invested Rs. 17.58 crore (31st March, 2013 - Rs. 11.98 crore) (including advance towards equity) in and issued guarantees of Rs. 11.36 crore (31st March, 2013 - Rs. 11.36 crore) on behalf of Tubed Coal Mines Limited ("Joint Venture") which had been allotted coal blocks by Government of India through Ministry of Coal.

The Company along with the other Joint Venture Partners has received notices from Ministry of Coal, seeking explanations for delay in development of the blocks and requesting for certain clarif cations as regards various clearances and execution of mining lease, on the basis of which a decision for de-allocation of coal blocks will be taken. The Company has filed a writ petition in the High Court so as to restrain the Ministry of Coal from taking any adverse decision in relation to the notice received and also to restrain Ministry of Coal from taking any decision on de-allocation of the coal block. In view of the interim order of the High Court the decision for de-allocation of the Coal Block to the promoters have been kept on hold.

Considering the above, in the opinion of the Management, as at 31st March, 2014, there is no diminution, other than temporary, in the value of investment in the Joint Venture Entity.

(iii) The Hon''ble Supreme Court of India is also evaluating the issue of Coal mine allocations and their judgement is awaited. The above two referred mines are a part of those referred to the Hon''ble Supreme Court.

5. Micro and small enterprises under the Micro, Small and Medium Enterprises Development Act, 2006 have been determined based on the information available with the Company and the required disclosures are given below:

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identif ed on the basis of information collected by the Management. This has been relied upon by the auditors.

@ Amounts unpaid to MSM vendors on account of retention money have not been considered for the purpose of interest calculation.

6. Commitments:

(a) Capital Commitments (net of capital advance):

Capital commitments not provided for are estimated at Rs. 681.06 crore (31st March, 2013 - Rs. 545.82 crore).

(b) Uncalled liability on Shares and Other Investment partly paid:

Uncalled liability on partly paid up shares Rs. Nil (31st March, 2013 - Rs. 13.42 crore).

(c) Commitment towards purchase of Equity Shares of Trust Energy Resouces Pte. Limited from Khopoli Investment Limited of Rs. 26.29 crore (31st March, 2013 - Rs. Nil) subject to approval of Reserve Bank of India.

(d) Other Commitments:

(i) In terms of the Sponsor Support agreement entered into between the Company, Coastal Gujarat Power Limited (CGPL) and lenders of CGPL, the Company has undertaken to provide support by way of base equity contribution to the extent of 25% of CGPL''s project cost and additional equity or subordinated loans to be made or arranged for, if required as per the financing agreements to f nance the project. The sponsor support also includes support by way of additional financial support for any overrun in project costs, operational loss and Debt Service Reserve Guarantee as provided under the financing agreements. The support will cease on the date of "project financial completion date" as def ned under the relevant financing agreements. Further, CGPL has entered into Agreements with the Company, (i) for Additional Subordinated Loan to the extent of USD 50 million (equivalent to Rs. 200.00 crore at a fixed rate of exchange of Rs. 40 = USD 1.00) and (ii) for Additional Subordinated Loans to the extent of Rs. 2,900.00 crore. In accordance with these agreements the Company has provided total Additional Subordinated Loans of Rs. 2,793.00 crore (of which Rs.1,489.41 crore has been converted into equity) [31st March, 2013 - Additional Subordinated Loans of Rs. 1,167.41 crore (of which Rs. 767.41 crore has been converted into equity)] to CGPL. Balance of both the loans would be repaid in accordance with the conditions of the Subordination and Hypothecation Agreements either out of additional equity to be infused by the Company or out of the balance Indian rupee term loans receivable by CGPL in future period, after the fulf llment of conditions in the Coal Supply and Transportation Agreements Completion Date (CSTACD) agreement. The Company had waived interest on these loans from 1st April, 2012 to 31st March, 2013.

The accrued interest as at 31st March, 2014 aggregating to Rs. 109.87 crore (31st March, 2013 - Rs. 36.57 crore) on Additional Subordinated Loans shall be payable subject to fulf llment of conditions in Subordination Agreement and Coal Supply and Transportation Agreements Completion Date (CSTACD) agreement.

(ii) In respect of NELCO Limited, the Company has undertaken to arrange for the necessary financial support to NELCO Limited in the form of interim short-term funding for meeting its business requirements.

(iii) The Company has undertaken to arrange for the necessary financial support to its Subsidiary Companies Khopoli Investments Limited, Bhivpuri Investments Limited, Industrial Power Utility Limited, Tata Power Jamshedpur Distribution Limited and Tata Power International Pte. Limited.

(iv) In respect of Maithon Power Limited (MPL), the Company jointly with Damodar Valley Corporation (DVC) has undertaken to the lenders of MPL, to provide support by way of base equity contribution and additional equity or subordinated loans to meet the increase in Project Cost. Further, the Company has given an undertaking to MPL to fulf ll payment obligations of Tata Power Trading Company Limited (TPTCL) and Tata Power Delhi Distribution Limited (TPDDL) in case of their default.

(v) In terms of pre-implementation agreement entered into with Government of Himachal Pradesh and the consortium consisting of the Company and SN Power Holding Singapore Pte. Ltd. (Company being the Lead Member of the consortium) for the investigation and implementation of Dugar Hydro Electric Project, the Company has undertaken as Lead Member to undertake/perform various obligations pertaining to Dugar Project.

(vi) In accordance with the terms of the Share Purchase Agreement and the Shareholder''s Agreement entered into by Panatone Finvest Limited (PFL), an associate of the Company, with the Government of India, PFL has contractually undertaken a "Surplus Land" obligation including agreeing to transfer 45% of the share capital of the Resulting Company, at Nil consideration, to the Government of India and other selling shareholders upon Demerger of the Surplus Land by Tata Communication Limited (TCL). The Company has till date acquired 1,34,22,037 shares of TCL from PFL. The Company would be entitled to be allotted 4.71% of the share capital of the Resulting Company based on its holding of 1,34,22,037 shares of TCL. The Company has undertaken to PFL to bear the "Surplus Land" obligation pertaining to these shares.

(vii) The Company has given an undertaking for non-disposal of shares to the lenders of Tata Power Delhi Distribution Limited in respect of its outstanding borrowings amounting to Rs. 635.13 crore (31st March, 2013 - Rs. 721.22 crore).

(viii) The Company has given letter of comfort to the Cennergi Pty. Limited amounting to Rs. 11.67 crore (31st March, 2013 - Rs. 27.57 crore).

7. Contingent Liabilities (to the extent not provided for):

(a) Claims against the Company not acknowledged as debts aggregating to Rs. 1,230.81 crore (31st March, 2013 - Rs. 370.06 crore) consist mainly of the following:

(i) Interest and penalty demand disputed by the Company aggregating Rs. 795.55 crore (31st March, 2013 - Rs. Nil) relating to Entry tax claims for the financial years 2005-06, 2006-07, 2008-09 and 2009-10. The Company is of the view, supported by legal opinion, that the demand can be successfully challenged.

(ii) Custom duty claims of Rs. 135.52 crore (31st March, 2013 - Rs. 135.52 crore) disputed by the Company relating to applicability and classif cation of coal [Payment made under protest against these claims of Rs. 135.52 crore (31st March, 2013 - Rs. 135.52 crore)].

(iii) Way Leave fees (including interest) of Rs. 54.00 crore (31st March, 2013 - Rs. 46.65 crore) claims disputed by the Company relating to rates charged.

(iv) Rates, Cess, Excise and Custom Duty claims disputed by the Company aggregating Rs. 40.95 crore (31st March, 2013 - Rs. 17.08 crore).

(v) A Suit has been filed against the Company claiming compensation of Rs. 20.51 crore (31st March, 2013 - Rs. 20.51 crore) by way of damages for alleged wrongful disconnection of power supply and interest accrued thereon Rs. 116.29 crore (31st March, 2013 - Rs. 111.99 crore).

(vi) Octroi claims disputed by the Company aggregating to Rs. 5.03 crore (31st March, 2013 - Rs. 5.03 crore), in respect of octroi exemption claimed by the Company.

(vii) Other claims against the Company not acknowledged as debts Rs. 62.96 crore (31st March, 2013 - Rs. 33.28 crore).

(viii) Amounts in respect of employee related claims/disputes, regulatory matters is not ascertainable.

Future cash flows in respect of above matters are determinable only on receipt of judgements/decisions pending at various forums/authorities.

(b) Other Contingent Liabilities:

Taxation matters for which liability, relating to issues of deductibility and taxability, is disputed by the Company and provision is not made (computed on the basis of assessments which have been re-opened and assessments remaining to be completed) Rs. 188.29 crore (including interest demanded Rs. 1.43 crore) [31st March, 2013 - Rs. 58.82 crore (including interest demanded Rs. 1.25 crore)].

Future cash flows in respect of above matters are determinable only on receipt of judgements/decisions pending at various forums/authorities.

(d) In respect of the Standby Charges dispute with Reliance Infrastructure Ltd. (R-Infra) for the period from 1st April, 1999 to 31st March, 2004, the Appellate Tribunal of Electricity (ATE), set aside the Maharashtra Electricity Regulatory Commission (MERC) Order dated 31st May, 2004 and directed the Company to refund to R-Infra as on 31st March, 2004, Rs. 354.00 crore (including interest of Rs. 15.14 crore) and pay interest at 10% per annum thereafter. As at 31st March, 2014 the accumulated interest was Rs. 195.96 crore (31st March, 2013 - Rs. 184.76 crore) (Rs. 11.20 crore for the year ended 31st March, 2014). On appeal, the Hon''ble Supreme Court vide its Interim Order dated 7th February, 2007, has stayed the ATE Order and in accordance with its directives, the Company has furnished a bank guarantee of the sum of Rs. 227.00 crore and also deposited Rs. 227.00 crore with the Registrar General of the Court which has been withdrawn by R-Infra on furnishing the required undertaking to the Court.

Further, no adjustment has been made for the reversal in terms of the ATE Order dated 20th December, 2006, of Standby Charges credited in previous years estimated at Rs. 519.00 crore, which will be adjusted, wholly by a withdrawal/set of from certain Statutory Reserves as allowed by MERC. No provision has been made in the accounts towards interest that may be f nally determined as payable to R-Infra. Since 1st April, 2004, the Company has accounted Standby Charges on the basis determined by the respective MERC Tarif Orders.

The Company is of the view, supported by legal opinion, that the ATE''s Order can be successfully challenged and hence, adjustments, if any, including consequential adjustments to the Deferred Tax Liability Fund and the Deferred Tax Liability Account will be recorded by the Company on the f nal outcome of the matter.

(e) MERC vide its Tarif Order dated 11th June, 2004, had directed the Company to treat the investment in its wind energy project as outside the Mumbai Licensed Area, consider a normative Debt Equity ratio of 70:30 to fund the Company''s fresh capital investments ef ective 1st April, 2003 and had also allowed a normative interest charge @ 10% p.a. on the said normative debt. The change to the Clear Prof t and Reasonable Return (consequent to the change in the capital base) as a result of the above mentioned directives for the period upto 31st March, 2004, has been adjusted by MERC from the Statutory Reserves along with the disputed Standby Charges referred to in Note 32(d) above. Consequently, the ef ect of these adjustments would be made with the adjustments pertaining to the Standby Charges dispute as mentioned in Note 32(d) above.

(f) In terms of agreements entered into in 2008-09 between The Tata Power Company Limited and NTT Docomo Inc. the Company sold to NTT Docomo Inc. of Japan (Strategic Partner – SP), 2,72,82,177 equity shares of Tata Teleservices Ltd ("TTSL") at Rs. 116.09 per share which resulted in a prof t of Rs. 255.62 crore in the same year.

Tata Sons Limited is party to a Shareholders Agreement with NTT Docomo Inc. of Japan (Strategic Partner – SP) dated 25th March, 2009 and amended on 21st May, 2010.

The Company has an "inter se" agreement with Tata Sons Limited and other Tata Group companies. Tata Sons Limited has informed the Company as follows:

1. Under the terms of the Shareholders Agreement if certain performance parameters and other conditions are not met by TTSL by 31st March, 2014 the SP has an option to divest its entire shareholdings in TTSL at a price being the higher of fair value or Rs. 58.05 per share (i.e. 50 percent of the subscription price) ("Sale Price"), subject to compliance with applicable law and regulations ("Sale Option").

2. Tata Sons Limited had of ered other shareholders of TTSL, including the Company, the option in 2008-09 to sell to the S P. If Tata Sons Limited becomes obliged to acquire the Sale Shares under the Sale Option the Company can be nominated by it to acquire pro-rated proportions of the Sale Shares based on the number of shares sold by the Company to the S P. On a pro rated bases the number of shares would be 13,45,95,551 shares out of the Sale Shares. The Company has further agreed to reimburse Tata Sons Limited for any other indemnif cation claim made on Tata Sons Limited by SP on a similar proportionate basis.

3. In the wake of recent regulatory developments in India, Tata Sons Limited has considered its position relating to the possible exercise of the Sale Option under the Shareholders Agreement.

4. The Shareholders Agreement obliges Tata Sons Limited to f nd a buyer for the shares at the Sale Price.

5. If there is no buyer at the Sale Price, then Tata Sons Limited is obliged to acquire or procure the acquisition of such shares. These obligations are subject to compliance with applicable law and regulations.

6. No notice of exercise of the Sale Option has been received although the SP has communicated its board decision to exercise the Sale Option.

7. Pending receipt of a notice exercising the Sale Option and in view of applicable law and regulations, the exposure of the Company (if any) cannot be ascertained.

The aforementioned agreements are governed by Indian Law. 33. (a) In an earlier year, the Company had provisionally determined Statutory Appropriations and adjustments to be made on Annual Performance Review as per Multi Year Tarif (MYT) Regulations, 2011 for Mumbai Licensed Area for financial year 2011-12. In view of deferment of implementation of MYT tariffs to 1st April, 2012, as directed by MERC, revenue amounting to Rs. 155.00 crore was reversed in the previous year.

The Company had filed a petition at the Appellate Tribunal for Electricity (ATE). ATE in its Order dated 28th November, 2013 has ruled in favour of the Company for implementation of MYT tariffs ef ective 1st April, 2011. Accordingly, during the year ended 31st March, 2014, the Company has recognised revenues amounting to Rs. 185.00 crore for the financial year 2011-12.

(b) During the previous year, the Appellate Tribunal for Electricity (ATE) in its Order dated 31st August, 2012, had allowed the Company''s claim regarding certain expenses/accounting principles which were disallowed/not recognised by MERC in earlier years in its true-up order. Accordingly, during the previous year, the Company had treated such expenses as recoverable and had recognised revenue of Rs. 142.00 crore.

(c) During the previous year, pursuant to the favourable ATE Order dated 31st August, 2012, true-up order dated 15th February, 2012 and other favourable orders received by other regulated entities in the power sector within Maharashtra, the Company had recognised revenue of Rs. 172.00 crore in respect of earlier years towards carrying cost entitlement on the regulatory assets (net) carried in the books as at 31st March, 2013.

(d) In an earlier year, Jharkhand State Electricity Regulatory Commission (JSERC) had determined the Annual Revenue Requirement (ARR) for Units 2 and 3 at Jojobera for financial year 2011-12 by treating the entire capacity as regulated under JSERC (Terms and Conditions for Determination of Generation Tarif ) Regulations, 2010. The Company, on the basis ofilegal opinions obtained, had appealed against the disallowances/deviations at the ATE.

The ATE in its Order dated 20th September, 2012, had disallowed the Company''s claim. Accordingly, during the previous year, the Company had reversed revenue of Rs. 43.61 crore.

(e) During the year ended 31st March, 2014, Maharashtra Electricity Regulatory Commission (MERC) has completed truing-up for the financial year 2011-12 and issued Tarif Orders. In these Tarif Orders, MERC has allowed true-up of the claims made by the Company in respect of earlier years incorporating the impact of favourable ATE Order. Accordingly, an amount of Rs. 115.00 crore has been recognised in the financial statements for the year ended 31st March, 2014.

8. In the matter of claims raised by the Company on R-Infra, towards (i) the difference in the energy charges for the period March 2001 to May 2004 and (ii) for minimum of -take charges of energy for the period 1998 to 2000, MERC has issued an Order dated 12th December, 2007 in favour of the Company. The total amount payable by R-Infra, including interest, is estimated to be Rs. 323.87 crore as on 31st December, 2007. ATE in its Order dated 12th May, 2008 on appeal by R-Infra, has directed R-Infra to pay the difference in the energy charges amounting to Rs. 34.98 crore for the period March 2001 to May 2004. In respect of the minimum of -take charges of energy for the period 1998 to 2000 claimed by the Company from R-Infra, ATE has directed MERC that the issue be examined afresh and after the decision of the Hon''ble Supreme Court in the Appeals relating to the distribution licence and rebates given by R-Infra. The Company and R-Infra had filed appeals in the Hon''ble Supreme Court. The Hon''ble Supreme Court, vide its Order dated 14th December, 2009, has granted stay against ATE Order and has directed R-Infra to deposit with the Hon''ble Supreme Court, a sum of Rs. 25.00 crore and furnish bank guarantee of Rs. 9.98 crore. The Company had withdrawn the above mentioned sum subject to an undertaking to refund the amount with interest, in the event the Appeal is decided against the Company. On grounds of prudence, the Company has not recognised any income arising from the above matters.

9. Employee benefits:

(a) The Company makes contribution towards provident fund and superannuation fund to a def ned contribution retirement benefit plan for qualifying employees. The provident fund is administered by the Trustees of Tata Power Consolidated Provident Fund and the Superannuation Fund is administered by the Trustees of Tata Power Superannuation Fund. Under the Schemes, the Company is required to contribute a specif ed percentage of salary to the retirement benefit schemes to fund the benefit.

The Rules of the Company''s Provident Fund administered by a Trust require that if the Board of Trustees are unable to pay interest at the rate declared by the Central Government under para 60 of the Employees'' Provident Fund Scheme, 1952, then the shortfall shall be made good by the Company. Having regard to the assets of the fund and the return on the investments, the Company does not expect any shortfall in the foreseeable future.

On account of Def ned Contribution Plans, a sum of Rs. 30.56 crore (31st March, 2013 - Rs. 28.54 crore) has been charged to the Statement of Prof t and Loss.

(b) The Company operates the following unfunded/funded def ned benefit plans: Unfunded:

(i) Ex-Gratia Death benefits

(ii) Retirement Gifts

(iii) Post Retirement Medical benefits and

(iv) Pension

Funded:

(i) Gratuity

(c) The actuarial valuation of the present value of the def ned benefit obligations has been carried out as at 31st March, 2014. The following tables set out the amounts recognised in the financial statements as at 31st March, 2014 for the above mentioned def ned benefit plans:

- Discount rate is based on the prevailing market yields of Indian Government Securities as at the Balance Sheet date for the estimated term of the obligation.

- The estimates of future salary increases, considered in actuarial valuation, take account of the inf ation, seniority, promotion and other relevant factors.

10. In respect of the contracts pertaining to the Strategic Engineering Business and Project Management Services, disclosures required as per AS-7 (Revised) are as follows:

(a) Contract revenue recognised as revenue during the year Rs. 343.07 crore (31st March, 2013 - Rs. 298.66 crore).

(b) In respect of contracts in progress –

(i) The aggregate amount of costs incurred and recognised prof ts upto 31st March, 2014 Rs. 343.15 crore (31st March, 2013 - Rs. 279.73 crore)

(ii) Advances and progress payments received as at 31st March, 2014 Rs. 709.25 crore (31st March, 2013 -Rs. 567.93 crore) (iii) Retention money included as at 31st March, 2014 in Sundry Debtors Rs. 9.81 crore (31st March, 2013 - Rs. 12.53 crore).

(c) (i) Gross amount due to customers for contract work as a liability as at 31st March, 2014 Rs. 402.03 crore (31st March, 2013 - Rs. 327.46 crore) (ii) Gross amount due from customers for contract work as an asset as at 31st March, 2014 Rs. 35.93 crore (31st March, 2013 - Rs. 39.26 crore).

11. (a) Total number of electricity units sold and purchased during the year as certif ed by Management - 14,516 MUs (31st March, 2013 - 16,002 MUs) and 2,321 MUs (31st March, 2013 - 1,378 MUs).

12. Related Party Disclosures:

Disclosure as required by Accounting Standard 18 (AS-18) - "Related Party Disclosures" are as follows: Names of the related parties and description of relationship:

(a) Related parties where control exists:

Subsidiaries

1) Af-Taab Investment Co. Ltd. (AICL)

2) Chemical Terminal Trombay Ltd. (CTTL)

3) Tata Power Trading Co. Ltd. (TPTCL)

4) Powerlinks Transmission Ltd. (PTL)

5) NELCO Ltd. (NELCO)

6) Maithon Power Ltd. (MPL)

7) Industrial Energy Ltd. (IEL)

8) Tata Power Delhi Distribution Ltd. (TPDDL)

9) Coastal Gujarat Power Ltd. (CGPL)

10) Bhira Investments Ltd. (BIL)

11) Bhivpuri Investments Ltd. (BHIL)

12) Khopoli Investments Ltd. (KIL)

13) Trust Energy Resources Pte. Ltd. (TERL)

14) Energy Eastern Pte. Ltd. ** (EEL)

15) Industrial Power Utility Ltd. (IPUL)

16) Tatanet Services Ltd.** (TNSL)

17) Tata Power Renewable Energy Ltd. (TPREL)

18) PT Sumber Energi Andalan Tbk. ** (SEA)

19) Tata Power Green Energy Ltd. ** (TPGEL)

20) NDPL Infra Ltd. ** (NDPLIL)

21) Dugar Hydro Power Ltd. (DHPL)

22) Tata Power Solar Systems Ltd. (TPSSL)

23) Tata Power Jamshedpur Distribution Limited (TPJDL)

24) Tata Power International Pte. Ltd. (TPIPL) (from 5th April, 2013)

25) AES Saurashtra Windfarms Ltd ** (AESSWL) (from 24th February, 2014)

** Through Subsidiary Companies.

(b) Other related parties (where transactions have taken place during the year) :

(i) Associates

1) Tata Projects Ltd. (TPL)

2) Yashmun Engineers Ltd. (YEL)

(ii) Joint Ventures - Jointly

Controlled Entities

1) Tubed Coal Mines Ltd. (TCML)

2) Dagachhu Hydro Power Corporation Ltd. (DHPCL)

3) OTP Geothermal Pte. Ltd. ** (OTPGL)

4) PT Antang Gunung Meratus ** (PTAGM)

5) Adjaristsqali Georgia LLC ** (AGL)

6) Cennergi Pty. Ltd. ** (CPL)

7) Mandakini Coal Company Ltd. (MCCL)

** Fellow Jointly Controlled Entities

(iii) Promoters holding together with its Subsidiary more than 20%

Tata Sons Ltd.

(c) Key Management Personnel

Anil Sardana - CEO & Managing Director

S. Ramakrishnan - Executive Director (upto 28th February, 2014)

S. Padmanabhan - Executive Director

Ramesh Subramanyam - Chief Financial Of cer (from 31st March, 2014)

13. Disclosures as required under clause 32 of listing agreement:

Loans and advances (excluding advance towards equit y) in the nature of loans given to Subsidiaries, Joint Ventures and Associates:

14. Derivative Instruments and Unhedged foreign currency exposures:

(i) Derivative Instruments :

The following derivative positions are open as at 31st March, 2014. These transactions have been undertaken to act as economic hedges for the Company''s exposures to various risks in foreign exchange markets and may/may not qualify or be designated as hedging instruments. The accounting for these transactions is stated in Note 2.1 (n) and 2.1

(o) Forward exchange contracts (being derivative instrument), which are not intended for trading or speculative purposes but for hedge purposes to establish the amount of reporting currency required or available at the settlement date of certain payables and receivables.

15. Earnings Per Share:

The Company, vide its Letter of Of er dated 19th March, 2014, of ered upto 33,22,30,130 Equity Shares of face value of Rs. 1/- each at a price of Rs. 60/- per equity share (including share premium of Rs. 59/- per equity share) for an amount aggregating to Rs. 1,993.38 crore to the existing shareholders of the Company on rights basis in the ratio of 7 equity shares for every 50 equity shares held by the equity shareholders on the record date i.e. 20th March, 2014. The issue opened on 31st March, 2014 and closed on 15th April, 2014. On 25th April, 2014 the Company has allotted 33,15,52,894 equity shares, balance 6,77,236 equity shares being kept in abeyance.

The equity shares issued vide the said Rights Issue have not been considered for computing Earnings Per Share.

16. Disclosures as required by Accounting Standard 29 (AS-29) " Provisions, Contingent Liabilities and Contingent Assets" as at 31st March, 2014:

17. The Company has interests in the following Joint Ventures-Jointly Controlled Entities as on 31st March, 2014 and its proportionate share in the Assets, Liabilities, Income and Expenditure are given below:

18. Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current year''s classification/ disclosure. Figures below Rs. 50,000 are denoted by ''*''


Mar 31, 2013

1. Background:

The Company, pioneered the generation of electricity in India nine decades ago. Prior to 1st April, 2000 the Tata Electric Companies comprised of the following three Companies -

- The Tata Hydro-Electric Power Supply Company Limited, established in 1910 (Tata Hydro).

- The Andhra Valley Power Supply Company Limited, established in 1916 (Andhra Valley).

- The Tata Power Company Limited, established in 1919 (Tata Power).

With effect from 1st April, 2000, Andhra Valley and Tata Hydro merged into Tata Power to result in one large unified entity.

The Company has an installed generation capacity of 3075 MW in India and a presence in all the segments of the power sector viz.

Fuel and Logistics, Generation (thermal, hydro, solar and wind), Transmission and Distribution.

2.1. The Company has been providing depreciation on assets at rates and methodology relating to the electricity business in accordance with the Central Government notification under the Electricity (Supply) Act, 1948 (repealed).

Vide its notification dated 31st May, 2011, the Ministry of Corporate Affairs (MCA) has clarified that companies engaged in the generation and supply of electricity can provide for depreciation at rates and methodology notified by Central Electricity Regulatory Commission (CERC). The CERC, under the provisions of The Electricity Act, 2003, notified the rates and methodology effective 1st April, 2009, under the Terms and Conditions of Tariff Regulations, 2009. These rates would be applicable for purposes of tariff determination and accounting in terms of the provisions of National Tariff Policy notified by the Government of India.

Management had sought clarifications and guidance from the MCA on the applicability of the CERC rates as the Company has both regulated and non-regulated generating capacity.

The Company has, during the year ended 31st March, 2013, based on a legal opinion, provided for depreciation in respect of its electricity business following the rates and methodology notified by the CERC w.e.f. 1st April, 2009 and at the rates as per the Power Purchase Agreements (PPA) for capacities covered under PPAs, if higher than those notified by CERC. Accordingly, depreciation of Rs. 219.80 crore for the years 2009-10 to 2011-12 has been written back during the year ended 31st March, 2013. Further the depreciation charge for the year ended 31st March, 2013 is lower by Rs. 48.02 crore. As a result, the current tax for the year ended 31st March, 2013, is higher by Rs. 53.58 crore and the deferred tax charge for the year ended 31st March, 2013 is higher by Rs. 204.28 crore.

2.2. (a) During the previous year, in line with the Notification dated 29th December, 2011 issued by the Ministry of Corporate Affairs (MCA), the Company had selected the option given in paragraph 46A of the Accounting Standard-11 (AS-11) - "The Effects of Changes in Foreign Exchange Rates". Accordingly, the depreciated/amortised portion of net foreign exchange (gain)/loss on long-term foreign currency monetary items for the year ended 31st March, 2013 is Rs. 83.84 crore (31st March, 2012 -Rs.39.01 crore). The unamortised portion carried forward as at 31st March, 2013 is Rs. 253.86 crore (31st March, 2012 - Rs. 213.56 crore).

(b) During the previous year, the Company had changed its accounting policy pertaining to accounting for expenditure incurred on purchase/implemenation of application software which hitherto was being charged off in the year of accrual and is now being capitalised and amortised over the useful economic life or 5 years whichever is lower. This results in a more appropriate presentation. As a result of this change, the depreciation and amortisation for the previous year was lower by Rs. 10.07 crore and the profit before tax was higher by Rs. 10.07 crore.

3. In an earlier year, the Company had commissioned its 120 MW thermal power unit at Jojobera, Jharkhand. Revenue in respect of this unit is recognised on the basis of a draft Power Purchase Agreement prepared jointly by the Company and its customer which is pending finalisation.

4. The Company has been legally advised that the Company is considered to be established with the object of providing infrastructural facilities and accordingly, Section 372A of the Companies Act, 1956 is not applicable to the Company.

5. (a) The Company has a long-term investment of Rs. 5,103.61 crore (including advance towards equity) (31st March, 2012 - Rs. 4,112.08 crore) and has extended loans amounting to Rs. 436.57 crore (including interest accrued) (31st March, 2012 - 7248.88crore) to Coastal Gujarat Power Limited (CGPL) a wholly owned subsidiary of the Company which has implemented the 4000 MW Ultra Mega Power Project at Mundra ("Mundra UMPP") and declared commercial operations for all its five Units of 800 MW each.

CGPL has obligated to charge escalation on 45 percent of the cost of coal in terms of the 25 year power purchase agreement relating to the Mundra UMPP. During the year, CGPL''s Management has re-assessed the recoverability of the carrying amount of the assets at Mundra as of 31st March, 2013 and concluded that the cash flows expected to be generated over the useful life of the asset of 40 years would not be sufficient to recover the carrying amount of such assets and has therefore recorded in CGPL''s books as at 31st March, 2013, a provision for an impairment loss of Rs. 2,650.00 crore (31st March, 2012 - Rs. 1,800.00 crore).

In estimating the future cash flows, Management has, based on externally available information, made certain assumptions relating to the future fuel prices, future revenues, operating parameters and the assets'' useful life which Management believes reasonably reflects the future expectation of these items. In view of the estimation uncertainties, the assumptions will be monitored on a periodic basis and adjustments will be made if conditions relating to the assumptions indicate that such adjustments are appropriate.

The Company''s investments in Indonesian coal companies through its wholly owned subsidiaries, Bhira Investments Limited and Khopoli Investments Limited, were made to secure long-term coal supply. The Management believes that cash inflows (in the nature of profit distribution) from these investments from an economic perspective provide protection from the risk of price volatility on coal to be used in power generation in CGPL, to the extent not covered by price escalations. In order to provide protection to CGPL and to support its cash flows, the Management has committed to a future restructuring under which the Company will transfer at least 75 percent of its equity interests in the Indonesian Coal Companies to CGPL, subject to receipt of regulatory and other necessary approvals which are being pursued and will also evaluate other alternative options. A valuation of the equity interests in the Indonesian Coal Companies has been carried out on the basis of certain assumptions, including legal interpretation that there is reasonable certainty that the mining leases would be extended without significant cost.

Having regard to the overall returns expected from the Company''s investment in CGPL, including the valuation of investments in the Indonesian Coal Companies and the proposed future restructuring, no provision for diminution in value of long-term investment in CGPL is considered necessary as at 31st March, 2013.

(b) The Company has an investment in Tata Teleservices Limited (TTSL) of Rs. 735.48 crore (31stMarch,2012 -r735.48crore). Based on the accounts as certified by the TTSL Management for the period ended 31st December, 2012, TTSL has accumulated losses which have significantly eroded its net worth. In the opinion of the Management, having regard to the long-term nature of the business, there is no diminution other than temporary, in the value of the investment also considering the Hon''ble Supreme Court judgement cancelling the three (3) CDMA licenses pertaining to Jammu & Kashmir, Assam and North East Circles of TTSL.

(c) The Company has an investment in Haldia Petrochemicals Limited (HPL) of Rs. 22.50 crore (31stMarch, 2012 - f 22.50 crore). Based on the accounts for the year ended 31st March, 2012, HPL has accumulated losses which have significantly eroded its net worth. In the opinion of the Management, having regard to the long-term nature of the business, there is no diminution other than temporary, in the value of the investment.

6. Commitments:

(a) Capital commitments:

Capital commitments not provided for are estimated at Rs. 545.82 crore (31stMarch, 2012 -Rs.477.46 crore).

(b) Uncalled liability on Shares and Other Investment partly paid:

Uncalled liability on partly paid-up shares - Rs. 13.42 crore (31stMarch, 2012 -Rs. 13.33 crore).

(c) Other commitments:

(i) In terms of the Sponsor Support agreement entered into between the Company, Coastal Gujarat Power Limited (CGPL) and lenders of CGPL, the Company has undertaken to provide support by way of base equity contribution to the extent of 25% of CGPL''s project cost and additional equity or subordinated loans to be made or arranged for, if required as per the financing agreements to finance the project. The sponsor support also includes support by way of additional equity for any overrun in project costs and Debt Service Reserve Guarantee as provided under the financing agreements. The support will cease on the date of "financial completion" as defined under the relevant financing agreements. Further, CGPL has entered into Agreements with the Company, (i) for Additional Subordinated Loan to the extent of USD 50 million (equivalent to Rs. 200.00 crore at a fixed rate of exchange of Rs. 40 = USD 1.00) and (ii) for Additional Subordinated Loans to the extent of Rs. 1,600.00 crore. In accordance with these agreements the Company has provided total Additional Subordinated Loans of Rs. 1,167.41 crore (of which Rs. 767.41 crore has been converted into equity ) (31st March, 2012 - Rs.212.31 crore) to CGPL. Balance of both the loans would be repaid in accordance with the conditions of the Subordination and Hypothecation Agreements either out of additional equity to be infused by the Company or out of the balance Indian rupee term loans receivable by CGPL in future period, after the fulfillment of conditions in the Coal Supply and Transportation Agreements Completion Date (CSTACD) agreement. The Company has waived charging interest on these loans from 1st April, 2012.

The accrued interest as at 31st March, 2013 aggregating to Rs. 36.57 crore (31st March, 2012 - f36.57crore) on Additional Subordinated Loans shall be payable subject to fulfillment of conditions in Subordination Agreement and Coal Supply and Transportation Agreements Completion Date (CSTACD) agreement.

(ii) The Company has undertaken to arrange for the necessary financial support to its Subsidiary Companies Khopoli Investments Limited, Bhivpuri Investments Limited, Industrial Power Utility Limited and Tata Power Jamshedpur Distribution Limited.

(iii) In respect of Maithon Power Limited (MPL), the Company jointly with Damodar Valley Corporation (DVC) has undertaken to the lenders of MPL, to provide support by way of base equity contribution and additional equity or subordinated loans to meet the increase in Project Cost. Further, the Company has given an undertaking to MPL to fulfill payment obligations of Tata Power Trading Company Limited (TPTCL) and Tata Power Delhi Distribution Limited (TPDDL) in case of their default.

(iv) In terms of pre-implementation agreement entered into with Government of Himachal Pradesh and the consortium consisting of the Company and SN Power Holding Singapore Pte. Limited (Company being the Lead Member of the consortium) for the investigation and implementation of Dugar Hydro Electric project, the Company has undertaken as Lead Member to undertake/perform various obligations pertaining to Dugar Project.

(v) In accordance with the terms of the Share Purchase Agreement and the Shareholder''s Agreement entered into by Panatone Finvest Limited (PFL), an associate of the Company, with the Government of India, PFL has contractually undertaken a"Surplus Land" obligation including agreeing to transfer 45% of the share capital of the Resulting Company, at Nil consideration, to the Government of India and other selling shareholders upon Demerger of the Surplus Land by Tata Communications Limited (TCL). The Company has till date acquired 1,34,22,037 shares of TCL from PFL. The Company would be entitled to be allotted 4.71% of the share capital of the Resulting Company based on its holding of 1,34,22,037 shares of TCL. The Company has undertaken to PFL to bear the "Surplus Land" obligation pertaining to these shares.

(vi) The Company has given an undertaking for non-disposal of shares to the lenders of Tata Power Delhi Distribution Limited amounting to Rs. 721.22 crore (31stMarch, 2012 -Rs. 931.28crore).

(vii) The Company has given letter of comfort to Cennergi Pty. Limited amounting to Rs. 27.57 crore (31st March, 2012 - Rs. Nil).

7. Contingent Liabilities (to the extent not provided for):

(a) Claims against the Company not acknowledged as debts aggregating to Rs. 370.06 crore (31st March, 2012 - Rs.234.66 crore) consist mainly of the following:

(i) Octroi claims disputed by the Company aggregating to Rs. 5.03 crore (31st March, 2012 - f 5.03 crore), in respect of octroi exemption claimed by the Company.

(ii) A Suit has been filed against the Company claiming compensation of Rs. 20.51 crore (31st March, 2012 - f 20.51 crore) by way of damages for alleged wrongful disconnection of power supply and interest accrued thereon Rs. 111.99 crore (31st March, 2012 - Rs. 107.68 crore).

(iii) (a) Rates, Cess, Way Leave Fees and Duty claims disputed by the Company aggregating Rs. 63.73 crore (31stMarch, 2012 - Rs. 68.90 crore). In respect of certain dues as per the terms of an agreement, the Company has the right to claim reimbursement from a third party.

(b) Custom duty claims of Rs. 135.52 crore disputed by the Company relating to issue of applicability and classification (Payment made under protest against these claims of Rs. 135.52 crore).

(iv) Other claims against the Company not acknowledged as debts Rs. 33.28 crore (31st March, 2012 - f 32.54 crore).

(v) Amounts in respect of employee related claims/disputes, regulatory matters is not ascertainable.

Future cash flows in respect of the above matters are determinable only on receipt of judgements/decisions pending at various forums/authorities.

(b) Other Contingent Liabilities:

Taxation matters for which liability, relating to issues of deductibility and taxability, is disputed by the Company and provision is not made (computed on the basis of assessments which have been re-opened and assessments remaining to be completed) Rs. 58.82 crore (including interest demanded Rs. 1.25 crore) [(31st March, 2012 - f 113.85 crore) (including interest demanded f 6.31 crore)].

Future cash flows in respect of the above matters are determinable only on receipt of judgements/decisions pending at various forums/authorities.

(d) In respect of the Standby Charges dispute with Reliance Infrastructure Limited (R-Infra) for the period from 1st April, 1999 to 31st March, 2004, the Appellate Tribunal of Electricity (ATE), set aside the Maharashtra Electricity Regulatory Commission (MERC) Order dated 31st May, 2004 and directed the Company to refund to R-Infra as on 31st March, 2004, Rs. 354.00 crore (including interest of Rs. 15.14 crore) and pay interest at 10% per annum thereafter. As at 31st March, 2013 the accumulated interest was Rs. 184.76 crore (31st March, 2012 - r 173.56 crore) (Rs. 11.20 crore for the year ended 31st March, 2013). On appeal, the Hon''ble Supreme Court vide its Interim Order dated 7th February, 2007, has stayed the ATE Order and in accordance with its directives, the Company has furnished a bank guarantee of the sum of Rs. 227.00 crore and also deposited Rs. 227.00 crore with the Registrar General of the Court which has been withdrawn by R-Infra on furnishing the required undertaking to the Court.

Further, no adjustment has been made for the reversal in terms of the ATE Order dated 20th December, 2006, of Standby Charges credited in previous years estimated at Rs. 519.00 crore, which will be adjusted, wholly by a withdrawal/set off from certain Statutory Reserves as allowed by MERC. No provision has been made in the accounts towards interest that may be finally determined as payable to R-Infra. Since 1st April, 2004, the Company has accounted Standby Charges on the basis determined by the respective MERC Tariff Orders.

The Company is of the view, supported by legal opinion, that the ATE''s Order can be successfully challenged and hence, adjustments, if any, including consequential adjustments to the Deferred Tax Liability Fund and the Deferred Tax Liability Account will be recorded by the Company on the final outcome of the matter.

(e) MERC vide its Tariff Order dated 11th June, 2004, had directed the Company to treat the investment in its wind energy project as outside the Mumbai Licensed Area, consider a normative Debt Equity ratio of 70:30 to fund the Company''s fresh capital investments effective 1st April, 2003 and had also allowed a normative interest charge @ 10% per annum on the said normative debt. The change to the Clear Profit and Reasonable Return (consequent to the change in the capital base) as a result of the above mentioned directives for the period upto 31st March, 2004, has been adjusted by MERC from the Statutory Reserves along with the disputed Standby Charges referred to in Note 32(d) above. Consequently, the effect of these adjustments would be made with the adjustments pertaining to the Standby Charges dispute as mentioned in Note 32(d) above.

(f) During the year 2008-09, in terms of the agreements entered into between Tata Teleservices Limited (TTSL), Tata Sons Limited (TSL) and NTT DoCoMo, Inc. of Japan (Strategic Partner-SP), TSL gave an option to the Company to sell 2,72,82,177 equity shares in TTSL to the SP, as part of a secondary sale of 25,31,63,941 equity shares effected along with a primary issue of 84,38,79,801 shares by TTSL to the SP.

If certain performance parameters and other conditions are not met by TTSL by 31st March, 2014 and should the SP decide to divest its entire shareholding in TTSL and TSL is unable to find a buyer for such shares, the Company is obligated to acquire the shareholding of the SP, at the higher of fair value or 50 percent of the subscription purchase price in proportion of the number of shares sold by the Company to the aggregate of the secondary shares sold to the SP, subject to compliance with applicable exchange control regulations, or should the SP decide to divest its entire shareholding in TTSL and TSL is unable to find a buyer for such shares and the SP divests the shares at a lower price, subject to compliance with applicable exchange control regulations, the Company is obliged to pay a compensation representing the difference between such lower sale price and the price referred to above in proportion of the number of shares sold by the Company to the aggregate of the secondary shares sold to the SP.

Under the above mentioned aggrements with SP, TSL and TTSL have jointly and severally agreed to indemnify SP with the agreed limits against claims arising on account of any failure of certain warranties provided by TSL and TTSL to be true and correct in all respect (amount not determinable) and in respect of specifed contingent liabilities (Company''s share Rs. 31.10 crore). The Company is liable to reimburse TSL, on a pro-rata basis.

8. (a) In the previous year, the Company had provisionally determined the Statutory Appropriations and the adjustments to be made on Annual Performance Review as stipulated under the Multi Year Tariff Regulations, 2011 (MYT Regulation) for its operations in respect of the Mumbai Licensed Area. During the year ended 31st March, 2013, Maharashtra Electricity Regulatory Commission (MERC) has approved the Multi Year Tariff Business Plan of the Company''s Mumbai Licensed Area for the Second Control Period from FY 2012-13 to FY 2015-16 and directed the Company to submit its Annual Revenue Requirement (ARR) for FY 2011-12 as per old regulations i.e. MERC (Terms and Conditions of Tariff) Regulations, 2005.

In view of the above, during the year, the Company has reversed revenue amounting to Rs. 155.00 crore accrued in the previous year in respect of its Mumbai Licensed Area as per the MYT Regulation.

(b) The Appellate Tribunal for Electricity (ATE) in its Order dated 31st August, 2012, has allowed the Company''s claim regarding certain expenses/accounting principles which were disallowed/not recognised by MERC in earlier years in its true-up order. Accordingly, during the year, the Company has treated such expenses as recoverable and has recognised revenue of Rs. 142.00 crore.

(c) During the year, pursuant to the favourable ATE Order dated 31st August, 2012, true-up order dated 15th February, 2012 and other favourable orders received by other regulated entities in the power sector within Maharashtra, the Company has recognised revenue of Rs. 172.00 crore in respect of earlier years towards carrying cost entitlement on the regulatory assets (net) carried in the books as at 31st March, 2013.

(d) In the previous year, Jharkhand State Electricity Regulatory Commission (JSERC) had determined the Annual Revenue Requirement (ARR) for Units 2 and 3 at Jojobera for financial year 2011-12 by treating the entire capacity as regulated under JSERC (Terms and Conditions for Determination of Generation Tariff) Regulations, 2010. The Company, on the basis of legal opinions obtained, had appealed against the disallowances/deviations at the ATE.

The ATE in its Order dated 20th September, 2012, has disallowed the Company''s claim. Accordingly, during the year, the Company has reversed revenue of Rs. 43.61 crore including Rs. 34.16 crore on account of previous year.

(e) During the previous year, the Maharashtra Electricity Regulatory Commission (MERC) had completed truing-up for the financial years 2009 -10 and 2010 -11 and issued Tariff Orders. In these Tariff Orders, it had disallowed certain claims made by the Company amounting to Rs. 86.00 crore and Rs. 55.00 crore respectively. The Company has filed an appeal to the Appellate Tribunal for Electricity (ATE) against these disallowances. Based on the earlier favourable ATE Order on similar matters, the Company is confident of ATE allowing its claims and accordingly, the above disallowances have not been recognised in the financial results.

9. In the matter of claims raised by the Company on R-Infra, towards (i) the difference in the energy charges for the period March 2001 to May 2004 and (ii) for minimum off-take charges of energy for the period 1998 to 2000, MERC has issued an Order dated 12th December, 2007 in favour of the Company. The total amount payable by R-Infra, including interest, is estimated to be Rs. 323.87 crore as on 31st December, 2007. ATE in its Order dated 12th May, 2008 on appeal by R-Infra, has directed R-Infra to pay the difference in the energy charges amounting to Rs. 34.98 crore for the period March 2001 to May 2004. In respect of the minimum off-take charges of energy for the period 1998 to 2000 claimed by the Company from R-Infra, ATE has directed MERC that the issue be examined afresh and after the decision of the Hon''ble Supreme Court in the Appeals relating to the distribution licence and rebates given by R-Infra. The Company and R-Infra had filed appeals in the Hon''ble Supreme Court. The Hon''ble Supreme Court, vide its Order dated 14th December, 2009, has granted stay against ATE Order and has directed R-Infra to deposit with the Hon''ble Supreme Court, a sum of Rs. 25.00 crore and furnish bank guarantee of Rs. 9.98 crore. The Company had withdrawn the above mentioned sum subject to an undertaking to refund the amount with interest, in the event the Appeal is decided against the Company. On grounds of prudence, the Company has not recognised any income arising from the above matters.

10. Employee Benefits:

(a) The Company makes contribution towards provident fund and superannuation fund to a defined contribution retirement benefit plan for qualifying employees. The provident fund is administered by the Trustees of Tata Power Consolidated Provident Fund and the Superannuation Fund is administered by the Trustees of Tata Power Superannuation Fund. Under the Schemes, the Company is required to contribute a specified percentage of salary to the retirement benefit schemes to fund the benefit.

The Rules of the Company''s Provident Fund administered by a Trust require that if the Board of Trustees are unable to pay interest at the rate declared by the Central Government under para 60 of the Employees'' Provident Fund Scheme, 1952, then the shortfall shall be made good by the Company. Having regard to the assets of the fund and the return on the investments, the Company does not expect any shortfall in the foreseeable future.

On account of Defined Contribution Plans, a sum of Rs. 28.54 crore (31stMarch,2012 - r26.99crore) has been charged to the Statement of Profit and Loss.

(b) The Company operates the following unfunded/funded defined benefit plans:

Unfunded:

(i) Ex-Gratia Death Benefits

(ii) Retirement Gifts

(iii) Post Retirement Medical Benefits and

(iv) Pension Funded:

(i) Gratuity

(c) The actuarial valuation of the present value of the defined benefit obligation has been carried out as at 31st March, 2013. The following tables set out the amounts recognised in the financial statements as at 31st March, 2013 for the above mentioned defined benefit plans:

11. In respect of the contracts pertaining to the Strategic Engineering Business and Project Management Services, disclosures required as per AS-7 (Revised) are as follows:

(a) Contract revenue recognised as revenue during the year Rs. 298.66 crore (31st March, 2012 -Rs. 310.74 crore).

(b) In respect of contracts in progress -

(i) The aggregate amount of costs incurred and recognised profits upto 31st March, 2013 - Rs. 279.73 crore (31stMarch, 2012 -Rs. 254.50 crore).

(ii) Advances and progress payments received as at 31st March, 2013 - Rs. 567.93 crore (31stMarch, 2012 -Rs. 313.01 crore).

(iii) Retention money included as at 31st March, 2013 in Sundry Debtors - Rs. 12.53 crore (31stMarch, 2012 -Rs. 12.46 crore).

(c) (i) Gross amount due to customers for contract work as a liability as at 31st March, 2013 - Rs. 327.46 crore (31stMarch, 2012 - Rs. 219.45 crore).

(ii) Gross amount due from customers for contract work as an asset as at 31st March, 2013 - Rs. 39.26 crore (31st March, 2012 -Rs. 99.32 crore).

12. (a) Total number of electricity units sold and purchased during the year as certified by Management - 16,002 MUs (31st March, 2012 -15,240 MUs) and 1,378 MUs (31st March, 2012 -1,042 MUs).

13. Related Party Disclosures:

Disclosure as required by Accounting Standard 18 (AS-18) - "Related Party Disclosures" are as follows:

Names of the related parties and description of relationship:

(a) Related parties where control exists:

Subsidiaries 1) Af-Taab Investment Co. Ltd. (AICL)

2) Chemical Terminal Trombay Ltd. (CTTL)

3) Tata Power Trading Co. Ltd. (TPTCL)

4) Powerlinks Transmission Ltd. (PTL)

5) NELCO Ltd. (NELCO)

6) Maithon Power Ltd. (MPL)

7) Industrial Energy Ltd. (IEL)

8) Tata Power Delhi Distribution Ltd. (TPDDL)

9) Coastal Gujarat Power Ltd. (CGPL)

10) Bhira Investments Ltd. (BIL)

11) Bhivpuri Investments Ltd. (BHIL)

12) Khopoli Investments Ltd. (KIL)

13) Trust Energy Resources Pte. Ltd. (TERL)

14) Energy Eastern Pte. Ltd. ** (EEL)

15) Industrial Power Utility Ltd. (IPUL)

16) Tatanet Services Ltd.** (TNSL)

17) Tata Power Renewable Energy Ltd. (TPREL)

18) PT Sumber Energi Andalan Tbk. ** (SEA)

19) Tata Power Green Energy Ltd. ** (TPGEL)

20) NDPL Infra Ltd. ** (NDPLIL)

21) Dugar Hydro Power Ltd. (DHPL)

22) Tata Power Solar Systems Ltd. (TPSSL) (from 28th June, 2012)

23) Tata Power Jamshedpur Distribution Limited (TPJDL) (from 6th November, 2012)

** Through Subsidiary Companies.

(b) Other related parties (where transactions have taken place during the year) :

(i) Associates 1) Tata Projects Ltd. (TPL)

2) Yashmun Engineers Ltd. (YEL)

(ii) Joint Ventures 1) Tubed Coal Mines Ltd. (TCML)

2) Mandakini Coal Company Ltd. (MCCL)

3) Dagachhu Hydro Power Corporation Ltd. (DHPCL)

4) Cennergi Pty. Ltd. (CPL)

5) OTP Geothermal Pte. Ltd. (OTPGL)

(iii) Promoters holding together with

its Subsidiary more than 20% Tata Sons Ltd.

(c) Key Management Personnel Anil Sardana

S. Ramakrishnan

S. Padmanabhan

14. Derivative Instruments and Unhedged foreign currency exposures:

(i) Derivative Instruments :

The following derivative positions are open as at 31st March, 2013. These transactions have been undertaken to act as economic hedges for the Company''s exposures to various risks in foreign exchange markets and may/may not qualify or be designated as hedging instruments. The accounting for these transactions is stated in Note 2.1(n) and 2.1(o).

Forward exchange contracts (being derivative instrument), which are not intended for trading or speculative purposes but for hedge purposes to establish the amount of reporting currency required or available at the settlement date of certain payables and receivables.

15. Disclosures as required by Accounting Standard 29 (AS-29) "Provisions, Contingent Liabilities and Contingent Assets" as at 31st March, 2013:

16. Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current year''s classification/ disclosure. Figures below Rs. 50,000 are denoted by ''*''


Mar 31, 2012

1. (a) During the year ended 31st March, 2012, in line with the Notification dated 29th December, 2011 issued by the Ministry of Corporate Affairs, the Company has selected the option given in paragraph 46A of the Accounting Standard11 (AS-11) - "The Effects of Changes in Foreign Exchange Rates". Accordingly, the Company has, with effect from 1st April, 2011, depreciated the foreign exchange (gain)/loss arising on revaluation on long term foreign currency monetary items in so far as they relate to the acquisition of depreciable capital assets over the balance life of such assets and in other cases amortized the foreign exchange (gain)/loss over the balanced period of such long term foreign currency monetary items. The depreciated/amortized portion of net foreign exchange (gain)/loss on such long term foreign currency monetary items for the year ended 31 st March, 2012 is Rs. 39.01 crore. The unamortized portion carried forward as at 31st March, 2012 is Rs. 213.56 crore. Had the Company, followed the earlier policy of charging the entire amount to the Statement of Profit and Loss, the profit before tax for the year would have been lower by Rs. 213.56 crore.

(b) During the year, the Company has changed its accounting policy pertaining to accounting for expenditure incurred on purchase/implementation of application software which hitherto was being charged off in the year of accrual and is now being capitalized and mortised over the useful economic life or 5 years whichever is lower. This results in a more appropriate presentation. As a result of this change, the depreciation and amortization for the year is lower by Rs. 10.07 crore and the profit for the year is higher by Rs. 10.07 crore.

(c) During the previous year, the Company had changed its accounting policy pertaining to amounts received from consumers towards capital/service line contributions. These contributions which were earlier recognized as liability were in the previous year recognized as income over the life of the fixed assets. Pursuant to this change, a sum of Rs. 38.90 crore pertaining to earlier years was recognized as income during the previous year.

(c) Terms/rights attached to Equity Shares

The Company has issued only one class of Equity Shares having a Par Value of Rs. 1/- per share. Each holder of Equity Shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended 31st March 2012, the amount of per share dividend recognized as distribution to equity shareholders was Rs. 1.25 per share of Face Value of Rs.1/- each (31st March 2011- Rs.12.50 per share of Face Value of Rs. 10/- each)

In the event of liquidation of the company, the holders of Equity Shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of Equity Shares held by the Shareholders.

(e) In an earlier year, the Company issued 3,000 1.75% Foreign Currency Convertible Bonds (FCCB) with Face Value of U.S. $ 100,000 each aggregating to U.S. $ 300 million. The bondholders have an option to convert these Bonds into Equity Shares, at an initial conversion price of Rs.145.6125 per share at a fixed rate of exchange on conversion of Rs. 46.81 = U.S. $ 1.00, at any time on and after 31st December, 2009, up to 11th November, 2014. The conversion price is subject to adjustment in certain circumstances. The FCCB may be redeemed, in whole but not in part, at the option of the Company at any time on or after 20th November, 2011 subject to satisfaction of certain conditions. Unless previously converted, redeemed or repurchased and cancelled, the FCCB fall due for redemption on 21st November, 2014 at 109.47 percent of their principal amount together with accrued and unpaid interest.

The unutilized portion of FCCB has been invested in short term deposits with Bank.

During the year ended 31st March, 2012, the Company raised 1,500 crore through issue of Unsecured Perpetual Securities (the "Securities"). These Securities are perpetual in nature with no maturity or redemption and are callable only at the option of the Company. As these securities are perpetual in nature and ranked senior only to the Share Capital of the Company, these are considered to be in the nature of equity instruments, and are not classified as "Debt" and the distribution on such securities is not considered under "Interest".

Unless all arrears of distribution are fully paid to these Securities, the company shall not declare or pay any dividends or distributions or make any other payment on, or will procure that no dividend, distribution or other payment is made on any securities of the company ranking pari passu with, or junior to, the Securities, or redeem, reduce, cancel, buy- back or acquire for any consideration any security of the company ranking pari passu with, or junior to, the Securities.

f Security

The Debentures mentioned in (a) have been secured by a pari passu charge on Immovable properties at Takve Khurd of Taluka Mawal, District, Pune and Sub-District Mawal and first pari passu charge on movable fixed assets (excluding land and building) present and future 'except assets of all windmill projects, present and future.

g. The Debentures mentioned in (b) have been secured by a first charge on the assets of the wind farms situated at Samana and Gadag In Gujarat and Karnataka.

(i) The Debentures mentioned in (c) and (d) have been secured by a pari passu charge on (and In Village Takve Khurd (Maharashtra) and moveable and immovable properties in and outside Maharashtra.

(ii) The Debentures mentioned In (e) have been secured by land In Village Takve Khurd (Maharashtra), moveable and immovable properties in and outside Maharashtra, as also all transmission stations/lines, receiving stations and sub-stations in Maharashtra.

(iii) The loans from HDFC Bank, ICICI Bank and IDBI Bank, mentioned In (f), (g) and (h) respectively have been secured by a pari passu charge on all moveable "fixed Assets (excluding land and building), present and future (except assets of all wind projects both present and future) Including moveable machinery, machinery spares, tools and accessories.

(iv) The loans from Asian Development Bank and Industrial Renewable Energy Development Agency mentioned in (i) and respectively have been secured by a first charge on the tangible moveable properties, plant & machinery and immovable properties situated at Khandke, Brahmanvel in Maharashtra.

(v) The loans from Infrastructure Development Finance Limited mentioned in (k) have been secured by a charge on the moveable assets except assets of alt windmill projects present and future more particularly situated in and Samsna in Maharashtra, Karnataka and Gujarat.

vi). The loan from Export Import Bank of India mentioned in (I) has been secured by receivables (present and future), book debts and outstanding monies. (x) The loan mentioned in (m) has been secured by hypothecation of specific assets (vehicles) taken on finance lease.

Redemption

(i) The Debentures mentioned in (a) above are redeemable at par in fourteen annual installments of Rs.16 crore and one Installment of Rs.26 crore commencing from 18th September, 2011.

(ii) The Debentures mentioned in (b) above are redeemable at par in ten annual Installments of Rs.25 crore each and five annual installments of Rs. 20 crore each commencing from 23rd July, 2011.

(iii) The Debentures mentioned in (c) and (d) are redeemable at par at the end of 10 years from the respective dates of allotment viz., 25th April, 2018 and 20th June, 2018.

(iv) The Debentures mentioned in (e) are redeemable at premium In three installments amounting to Rs. 180 crore, Rs. 240 crore and Rs. 180 crore at the end of 9th, 10th and 11th year respectively from 18th October, 2004.

(v) The loan from HDFC Bank mentioned in (f) is redeemable at par In 36 quarterly installments of Rs. 7.50 crore each commencing from 1 st June 2010 and 4 quarterly installments of 7 82.50 crore each commencing from 30th June, 2020.

(vi) The loan from ICICI Bank mentioned In (g) Is redeemable at par In 16 quarterly Installments of Rs. 7.75 crore each commencing from 31st October, ."CIO, 4 quarterly installments of Rs. 5 crore each commencing from 31st October, 2014 and 4 quarterly installments of Rs. 1.50 crore ' each commencing from 31st October, 2015.

(vii) The loan from IDBI Bank of Rs. 300 crore mentioned in (h) is redeemable at par in 46 quarterly installments of Rs. 3.75 crore each commencing from 1st October, 2010 and one installment of Rs. 127.50 crore on 1st April, 2022 and,

The second loan from IDBI Bank of Rs. 400 crore mentioned in (h) is redeemable at par in 36 quarterly installments of Rs. 5 crore commencing from 1st April, 2011 and one installment of Rs. 220 crore on 1st April, 2020.

(viii) The loan from Asian Development Bank mentioned in (i) is redeemable at par in 26 semi-annual installments commencing from 15th December, 2007.

(ix) The loan from Industrial Renewable Energy Development Agency of Rs. 95 crore mentioned in (j) is redeemable at par In 26 semi-annual installments commencing from 15th December, 2007 and,

The second loan from Industrial Renewable Energy Development Agency of Rs. 450 crore mentioned in (j) is redeemable at par in 24 semi- annual installments of Rs. 14.63 crore each commencing from 30th June, 2012 and two semi-annual installments of 749.50 crore each j commencing from 30th June, 2024.

(x) The loan from Infrastructure Development Finance Company Limited of Rs. 250 crore mentioned in (k) is redeemable at par in 36 quarterly installments of Rs. 5 crore each commencing from 15th November, 2010 and four installments of Rs.17.50 crore commencing from 15th November, 2019 and,

The second loan from Development Finance Company Limited of Rs. 450 crore mentioned in (k) is redeemable at par in 35 quarterly installments of Rs. 5.65 crore each commencing from 1st October, 2009 and one installment of Rs. 252.25 crore commencing from 15th July, 2018 and, .

The third loan from Infrastructure Development Finance Limited of Rs. 150 crore mentioned in (k) is redeemable at par in 36 quarterly installments of Rs. 1.88 crore commencing from 15th May, 2010 and 4 quarterly installments of Rs. 20.63 crore commencing from 15th May, 2019 and,

The fourth loan from Infrastructure Development Finance Company Limited of Rs. 800 crore mentioned in (k) is redeemable at par in 40 quarterly installments of Rs. 15 crore commencing from 15th October, 2013 and 4 quarterly installments of Rs. 50 crore from 15th October, 2023.

(xi) The loan from Export Import Bank of India mentioned in (I) is redeemable at par in 19 semi-annual installments of USD 372,200 each commencing from 29th September, 2006.

(xii) 8.50% Euro Notes mentioned in (n) above is repayable fully on 19th August, 2017.

(xiii)The loans from ICICI Bank mentioned in (p) is redeemable at par in 10 annual installments commencing from 1st April, 2012.

(xiv) Sales Tax Deferral mentioned in (q) above is repayable fully in 2018.

Security

Cash credit from Banks is secured against first pari passu charge on all Current Assets including goods, book debts, receivables and other moveable Current Assets of the Company. The Cash Credit is repayable on demand and carries interest @ 11.10% to 12.85% p.a.

Buyer's line of Credit is secured against first pari passu charges on all Current Assets including goods, book debts, receivables and other moveable Current Assets of the Company.

** Includes amounts outstanding aggregating Rs. 0.83 crore (31st March, 2011- Rs.0.81 crore) for more than seven years pending legal cases.

2. In an earlier year, the Company had commissioned its 120 MW thermal power unit at Jojobera, Jharkhand. Revenue in respect of this unit is recognized on the basis of a draft Power Purchase Agreement prepared jointly by the Company and its customer which is pending finalization.

3. The Company has been legally advised that the Company is considered to be established with the object of providing infrastructural facilities and accordingly. Section 372A of the Companies Act, 1956 is not applicable to the Company.

4. (a) The Company has an investment in Tata Teleservices Limited (TTSL) of Rs. 735.48 crore (31st March, 2011- Rs. 735.48 crore).

Based on the accounts as certified by the TTSL Management for the year ended 31 st March, 2012, TTSL has accumulated losses which have significantly eroded its net worth. In the opinion of the Management, having regard to the long term nature of the business, there is no diminution other than temporary, in the value of the investment also considering the recent Hon'ble Supreme Court judgment cancelling the three (3) CDMA licenses pertaining to Jammu & Kashmir, Assam and North East Circles of TTSL.

(b) The Company has an investment in Haldia Petrochemicals Limited (HPL) of Rs. 22.50 crore (31st March, 2011- Rs. 22.50 crore). Based on the accounts for the year ended 31st March, 2011, HPL has accumulated losses which have significantly eroded its net worth. In the opinion of the Management, having regard to the long term nature of the business, there is no diminution other than temporary, in the value of the investment.

5. Micro and small enterprises under the Micro, Small and Medium Enterprises Development Act, 2006 have been determined based on the information available with the Company and the required disclosures are given below:

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

@ Amounts unpaid to MSM vendors on account of retention money have not been considered for the purpose of interest calculation.

6. Capital commitments not provided for are estimated at Rs. 477.46 crore (31st March, 2011 - Rs. 903.72 crore)

7. Contingent Liabilities and Other Commitments (to the extent not provided for):

(a) Claims against the Company not acknowledged as debts aggregating to Rs. 234.66 crore (31st March, 2011-1:261.81 crore) consist mainly of the following:

(i) Octroi claims disputed by the Company aggregating to Rs. 5.03 crore (31st March, 2011 - Rs. 5.03 crore), in respect of control exemption claimed by the Company.

(ii) A Suit has been filed against the Company claiming compensation of Rs. 20.51 crore (31st March, 2011 - Rs. 20.51 crore) by way of damages for alleged wrongful disconnection of power supply and interest accrued thereon Rs. 107.68 crore (31st March, 2011 – Rs.103.37 crore).

(iii) Rates, Cess, Way Leave Fees, Entry tax and Duty claims disputed by the Company aggregating Rs. 68.90 crore (31st March, 2011 - Rs. 87.47 crore). In respect of certain dues as per the terms of an agreement, the Company has the right to claim reimbursement from a third party.

(iv) Other claims against the Company not acknowledged as debts Rs. 32.54 crore (31st March, 2011 - Rs. 45.43 crore).

(v) Amounts in respect of employee related claims/disputes, regulatory matters is not ascertainable.

No cash flow in respect of the above items is expected in the near future.

(b) Taxation matters for which liability, relating to issues of deductibility and taxability, is disputed by the Company and provision is not made (computed on the basis of assessments which have been re-opened and assessments remaining to be completed) Rs. 113.85 crore (including interest and penalty demanded Rs. 6.31 crore) [(31st March, 2011 – Rs.63.72 crore) (including interest and penalty demanded Rs.15.19 crore)].

No Cash flow in respect of the above items is expected in the near future.

(ii) In terms of the Sponsor Support agreement entered into between the Company, Coastal Gujarat Power Limited (CGPL) and lenders of CGPL, the Company has undertaken to provide support by way of base equity contribution to the extent of 25% of CGPL's project cost and additional equity or subordinated loans to be made or arranged for, if required as per the financing agreements to finance the project. The sponsor support also includes support by way of additional equity for any overrun in project costs and Debt Service Reserve Guarantee as provided under the financing agreements. The support will cease on the date of "financial completion" as defined under the relevant financing agreements. Further, CGPL has entered into Agreements with the Company, (i) for Additional Subordinated Loan to the extent of U.S. $ 50 million (equivalent to Rs. 200.00 crore at a fixed rate of exchange of Rs.40.00 = U.S. $ 1.00) and (ii) for Additional Subordinated Loans to the extent of Rs. 1,600.00 crore. In accordance with these agreements the Company has provided total Additional Subordinated Loans of Rs. 212.31 crore (31st March, 2011 - Rs. 200.00 crore) to CGPL. Both the loans would be repaid in accordance with the conditions of the Subordination and Hypothecation Agreements either out of additional equity to be infused by the Company or out of the balance Indian rupee term loans receivable by CGPL in future period, after the fulfillment of conditions in the Coal Supply and Transportation Agreements Completion Date (CSTACD) agreement.

The accrued interest as at 31st March, 2012 aggregating to Rs. 36.57 crore (31st March, 2011 - Rs.21.06 crore) on Additional Subordinated Loans shall be payable subject to fulfillment of conditions in Subordination Agreement and Coal Supply and Transportation Agreements Completion Date (CSTACD) agreement.

(d) In respect of NELCO Limited, the Company has undertaken to arrange for the necessary financial support to NELCO Limited in the form of interim short term funding for meeting its business requirements.

(e) The Company has undertaken to arrange for the necessary financial support to its Subsidiary Companies KIL and BHIL.

(f) In respect of the Standby Charges dispute with Reliance Infrastructure Ltd. (R-lnfra) for the period from 1st April, 1999 to 31st March, 2004, the Appellate Tribunal of Electricity (ATE), set aside the MERC Order dated 31st May, 2004 and directed the Company to refund to R-lnfra as on 31st March, 2004, Rs. 354.00 crore (including interest of Rs. 15.14 crore) and pay interest at 10% per annum thereafter. As at 31st March, 2012 the accumulated interest was Rs. 173.56 crore (31st March, 2011 - Rs. 162.36 crore) (Rs. 11.20 crore for the year ended 31st March, 2012). On appeal, the Hon'ble Supreme Court vide its Interim Order dated 7th February, 2007, has stayed the ATE Order and in accordance with its directives, the Company has furnished a bank guarantee of the sum of Rs. 227.00 crore and also deposited Rs. 227.00 crore with the Registrar General of the Court which has been withdrawn by R-lnfra on furnishing the required undertaking to the Court. The said deposit has been accounted as "Long term Security Deposits".

Further, no adjustment has been made for the reversal in terms of the ATE Order dated 20th December, 2006 of Standby Charges credited in previous year's estimated at Rs. 519.00 crore, which will be adjusted, wholly by a withdrawal/set off from certain Statutory Reserves as allowed by MERC. No provision has been made in the accounts towards interest that may be finally determined as payable to R-lnfra. Since 1st April, 2004, the Company has accounted Standby Charges on the basis determined by the respective MERC Tariff Orders.

The Company is of the view, supported by legal opinion, that the ATE's Order can be successfully challenged and hence, adjustments, if any, including consequential adjustments to the Deferred Tax Liability Fund and the Deferred Tax Liability Account will be recorded by the Company on the final outcome of the matter.

(g) MERC vide its Tariff Order dated 11th June, 2004, had directed the Company to treat the investment in its wind energy project as outside the Mumbai Licensed Area, consider a normative debt equity ratio of 70:30 to fund the Company's fresh capital investments effective 1st April, 2003 and had also allowed a normative interest charge @ 10% p.a. on the said normative debt. The change to the Clear Profit and Reasonable Return (consequent to the change in the capital base) as a result of the above mentioned directives for the period upto 31st March, 2004, has been adjusted by MERC from the Statutory Reserves along with the disputed Standby Charges referred to in Note 32(f) above. Consequently, the effect of these adjustments would be made with the adjustments pertaining to the Standby Charges dispute as mentioned in Note 32(f) above.

(h) In an earlier year, in terms of the agreements entered into between Tata Teleservices Ltd. (TTSL), Tata Sons Ltd. (TSL) and NTT DoCoMo, Inc. of Japan (Strategic Partner-SP), the Company was given by TSL an option to sell 2,72,82,177 equity shares in TTSL to the SP, as part of a secondary sale of 25,31,63,941 equity shares effected along with a primary issue of 84,38,79,801 shares by TTSL to the SP. Accordingly, in an earlier year the Company had realized Rs. 316.72 crore on sale of these shares resulting in a profit of Rs. 255.62 crore.

If certain performance parameters and other conditions are not met by TTSL by 31st March, 2014 and should the SP decide to divest its entire shareholding in TTSL, acquired under the primary issue and the secondary sale and should TSL be unable to find a buyer for such shares, the Company is obligated to acquire the shareholding of the SP, at the higher of fair value or 50 percent of the subscription purchase price, subject to compliance with applicable control regulations, in proportion of the number of shares sold by the Company to the aggregate of the secondary shares sold to the SP, or if the SP divests the shares at a lower price pay a compensation representing the difference between such lower sale price and the price referred to above.

Further, in the event of breach of the representations and warranties (other than title and tax) and covenants not capable of specific performance, the Company is liable to reimburse TSL, on a pro-rata basis, upto a maximum sum of Rs. 409.51 crore.

The exercise of the option by SP being contingent on several variables, the liability if any, is considered by Management to be remote and indeterminable.

(i) In accordance with the terms of the Share Purchase Agreement and the Shareholder's Agreement entered into by Pantone Finevest Ltd. (PFL), an associate of the Company, with the Government of India, PFL has contractually undertaken a "Surplus Land" obligation including agreeing to transfer 45% of the share capital of the Resulting Company, at Nil consideration, to the Government of India and other selling shareholders upon Demerger of the Surplus Land by Tata Communication Limited (TCL).The Company has till date acquired 1,34,22,037 shares of TCL from PFL. The Company would be entitled to be allotted 4.71% of the share capital of the Resulting Company based on its holding of 1,34,22,037 shares of TCL. The Company has undertaken to PFL to bear the "Surplus Land" obligation pertaining to these shares.

(j) The Company has a long term investment of Rs. 4,112.08 crore (including advance towards equity) (31st March, 2011 - Rs. 3,172.50 crore) and has extended loans amounting to Rs. 248.88 crore (including interest accrued) (31st March, 2011 Rs. 221.06 crore) to Coastal Gujarat Power Limited (CGPL) a wholly owned subsidiary of the Company which is implementing the 4000 MW Ultra Mega Power Project at Mundra ("Mundra UMPP").

CGPL has agreed to not charge escalation on 55 percent of the cost of coal in terms of the 25 year power purchase agreement relating to the Mundra UMPP. As a result of the changes in the fuel prices, CGPL's Management has assessed the recoverability of the carrying amount of the assets under construction at Mundra as of 31st March, 2012 of Rs. 16,366.50 crore and concluded that the cash flows expected to be generated (on completion of construction and commencement of commercial operations) over the useful life of the asset of 40 years would not be sufficient to recover the carrying amount of such assets and has therefore recorded in CGPL's books as at 31st March, 2012, a provision for an impairment loss of Rs. 1,800.00 crore.

In estimating the future cash flows. Management has, based on externally available information, made certain assumptions relating to the future fuel prices, future revenues, operating parameters and the asset's useful life which Management believes reasonably reflects the future expectation of these items. In view of the estimation uncertainties, the assumptions will be monitored on a periodic basis and adjustments will be made if external conditions relating to the assumptions indicate that such adjustments are appropriate.

The Company's investments in Indonesian coal companies through its wholly owned subsidiaries, Bhira Investments Limited and Khopoli Investments Limited, were made to secure long term coal supply. The Management believes that cash inflows (in the nature of profit distribution) from these investments from an economic perspective provide protection from the risk of price volatility on coal to be used in power generation in CGPL, to the extent not covered by price escalations. In order to provide protection to CGPL and to support its cash flows, the Management has committed to a future restructuring under which the Company will transfer at least 75 percent of its equity interests in the Indonesian coal companies to CGPL, subject to receipt of regulatory and other necessary approvals which are being pursued and will also evaluate other alternative options.

Having regard to the overall returns expected from the Company's investment in CGPL, including the proposed future restructuring no provision for diminution in value of long term investment in CGPL is considered necessary as at 31st March, 2012.

(k) Uncalled liability on partly paid up shares Rs. 13.33 crore (31st March, 2011 – Rs. 31.03 crore).

8. (a) During the year, the Company has provisionally determined the Statutory Appropriations and the adjustments to be . made on Annual Performance Review as stipulated under the Multi Year Tariff Regulations, 2011 for its operations in respect of the Mumbai Licensed Area.

(b) During the year, Jharkhand State Electricity Regulatory Commission (JSERC) for financial year 2011-12 has determined the Annual Revenue Requirement (ARR) for Units 2 and 3 at Jojobera by treating the entire capacity as regulated under JSERC (Terms and Conditions for Determination of Generation Tariff) Regulations, 2010. The Company, on the basis of legal opinions obtained, has appealed against the disallowances/deviations at the Appellate Tribunal for Electricity (ATE), pending disposal of which, a sum of Rs. 34.16 crore has been accrued as revenue for the year ended 31st March, 2012.

(c) During the year, the Maharashtra Electricity Regulatory Commission (MERC) has completed truing-up for the financial years 2009-10 and 2010-11 and has accordingly issued Tariff Orders. In these Tariff Orders, it has disallowed certain claims made by the Company amounting to Rs. 86.00 crore and Rs. 55.00 crore respectively. The Company intends to appeal to the Appellate Tribunal for Electricity (ATE) against these disallowances. Based on the earlier favorable ATE Order on similar matters, the Company is confident of ATE allowing its claims and accordingly, the above disallowances have not been recognized in the financial results.

(d) In the previous year, ATE in its Order dated 15th February, 2011, had upheld amongst others the Company's claim towards entitlement of carrying cost in respect of truing-up done by MERC for financial years 2004-05 and 2005-06. Accordingly, the Company had accounted for an amount of X 86.00 crore as its entitlement of carrying cost in the books during the previous year. Consequent to the truing-up Orders issued by MERC for the financial years 2009-10 and 2010-11 during the year ended 31st March, 2012, an additional amount of Rs. 65.00 crore has been booked.

9. In the matter of claims raised by the Company on R-lnfra, towards (i) the difference in the energy charges for the period March 2001 to May 2004 and (ii) for minimum off-take charges of energy for the period 1998 to 2000, MERC has issued an Order dated 12th December, 2007 in favour of the Company. The total amount payable by R-lnfra, including interest, is estimated to be Rs. 323.87 crore as on 31st December, 2007. ATE in its Order dated 12th May, 2008 on appeal by R-lnfra, has directed R-lnfra to pay the difference in the energy charges amounting to Rs. 34.98 crore for the period March 2001 to May 2004. In respect of the minimum off-take charges of energy for the period 1998 to 2000 claimed by the Company from R-lnfra, ATE has directed MERC that the issue be examined afresh and after the decision of the Hon'ble Supreme Court in the Appeals relating to the distribution license and rebates given by R-lnfra. The Company and R-lnfra had filed appeals in the Hon'ble Supreme Court. The Hon'ble Supreme Court, vide its Order dated 14th December, 2009, has granted stay against ATE Order and has directed R-lnfra to deposit with the Hon'ble Supreme Court, a sum of Rs. 25.00 crore and furnish bank guarantee of Rs. 9.98 crore. The Company had withdrawn the above mentioned sum subject to an undertaking to refund the amount with interest, in the event the Appeal is decided against the Company. On grounds of prudence, the Company has not recognized any income arising from the above matters.

10. Employees Benefits:

(a) In an earlier year, the Company had adopted Accounting Standard 15 (AS-15) (Revised 2005) - 'Employee Benefits'. This had resulted in a transitional liability (net) of Rs.61.70 crore as at 1st April, 2007. In accordance with the transitional provisions of the Accounting Standard, the Company had decided to charge the transitional liability as an expense over a period of 5 years and accordingly, Rs. 2.28 crore (31st March, 2011 - Rs. 22.40 crore) has been recognized as an expense for the year under item 1 of Note "24" and balance amount of Rs. Nil (31st March, 2011 - Rs. 2.28 crore) is the unrecognized transitional liability as at 31st March, 2012.

(b) The Company makes contribution towards provident fund and superannuation fund to a defined contribution retirement benefit plan for qualifying employees. The provident fund is administered by the Trustees of Tata Power Consolidated Provident Fund and the Superannuation Fund is administered by the Trustees of Tata Power Superannuation Fund. Under the Schemes, the Company is required to contribute a specified percentage of salary to the retirement benefit schemes to fund the benefit.

The Rules of the Company's Provident Fund administered by a Trust require that if the Board of Trustees are unable to pay interest at the rate declared by the Central Government under para 60 of the Employees' Provident Fund Scheme, 1952, then the shortfall shall be made good by the Company. Having regard to the assets of the fund and the return on the investments, the Company does not expect any shortfall in the foreseeable future.

On account of defined contribution plans, a sum of Rs. 26.99 crore (31st March, 2011 – Rs.29.69 crore) has been charged to the Statement of Profit and Loss.

(c) The Company operates the following unfunded/funded defined benefit plans:

Unfunded:

(i) Ex-Gratia Death Benefits

(ii) Retirement Gifts

(iii) Post Retirement Medical Benefits and

(iv) Pension

Funded:

(i) Gratuity

(d) The actuarial valuation of the present value of the defined benefit obligation has been carried out as at 31st March, 2012. The following tables set out the amounts recognized in the financial statements as at 31st March, 2012 for the above mentioned defined benefit plans:

(i) Net employee benefit expense (recognized in employee cost) for the year ended 31st March, 2012:

During the year the Company has paid Rs.40.00 crore to Tata Power Gratuity Fund. Of the payment of Rs.40.00 crore, Rs. 15.00 crore towards the current year liability and 125.00 crore towards the Opening Liability. The balance of the Opening Liability to be funded over a period of 4 years and hence previous year's figures are not applicable to the Company.

- Discount rate is based on the prevailing market yields of Indian Government Securities as at the Balance Sheet date for the estimated term of the obligation.

- The estimates of future salary increases, considered in actuarial valuation, take account of the inflation, seniority, promotion and other relevant factors.

(vi) The contribution expected to be made by the Company during the financial year 2012-13 has not been ascertained.

11. In respect of the contracts pertaining to the Strategic Electronics Business and Project Management Services, disclosures required as per AS-7 (Revised) are as follows:

(a) Contract revenue recognized as revenue during the year Rs. 310.74 crore (31st March, 2011 - Rs. 163.26 crore).

(b) In respect of contracts in progress -

(i) The aggregate amount of costs incurred and recognized profits upto 31st March, 2012 - Rs. 254.50 crore (31st March, 2011- Rs.759.94 crore).

(ii) Advances and progress payments received as at 31st March, 2012 - Rs. 313.01 crore (31st March, 2011 - Rs.244.24 crore).

(iii) Retention money included as at 31st March, 2012 in Sundry Debtors - Rs. 12.46 crore (31st March, 2011 - Rs.8.39 crore)

(c) (i) Gross amount due to customers for contract work as a liability as at 31st March, 2012 – Rs. 219.45 crore (31st March, 2011 - Rs. 181.49 crore).

(ii) Gross amount due from customers for contract work as an asset as at 31st March, 2012 - Rs. 99.32 crore (31st March, 2011- f66.63 crore).

12. (a) Total number of electricity units sold and purchased during the year as certified by Management - 15,240 MUs (31st March, 2011 - 16,060 MUs) and 1,042 MUs (31st March, 2011 -1,510 MUs).

The above loans and advances are long term in nature.

** Excluding interest accrued.

### Right to convert to equity and sub-ordinate loan.

& Provided for.

Note: Previous year's figures are in italics.

13. Derivative instruments and unheeded foreign currency exposures:

(i) Derivative instruments:

The following derivative positions are open as at 31st March, 2012. These transactions have been undertaken to act as economic hedges for the Company's exposures to various risks in foreign exchange markets and may/may not qualify or be designated as hedging instruments. The accounting for these transactions is stated in Note 2.1 (o) and 2.1 (p). Forward exchange contracts (being derivative instrument), which are not intended for trading or speculative purposes but for hedge purposes to establish the amount of reporting currency required or available at the settlement date of certain payables and receivables.

14. The Revised Schedule VI has become effective from 1st April, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped/reclassified wherever necessary to correspond with the current year's classification/disclosure. Figures below Rs. 50,000 are denoted by


Mar 31, 2011

1. During the year the Company has changed its accounting policy pertaining to amounts received from consumers towards capital/service line contributions. These contributions which were earlier recognised as liability are now recognised as income over the life of the fixed assets. Pursuant to this change a sum of Rs. 38.90 crores pertaining to earlier years has been recognised as income during the current year.

2. During the previous year, the Company issued 3,000 1.75% Foreign Currency Convertible Bonds (FCCB) with face value of U.S. $ 100,000 each aggregating to U.S. $ 300 million (Rs. 1,404.45 crores at issue, net proceeds received Rs. 1,391.67 crores). The bondholders have an option to convert these Bonds into Equity Shares, at an initial conversion price of Rs. 1,456.125 per share at a fixed rate of exchange on conversion of Rs. 46.81 = U.S. $ 1.00, at any time on and after 31st December, 2009, upto 11th November, 2014. The conversion price is subject to adjustment in certain circumstances. The FCCB may be redeemed, in whole but not in part, at the option of the Company at any time on or after 20th November, 2011 subject to satisfaction of certain conditions. Unless previously converted, redeemed or repurchased and cancelled, the FCCB fall due for redemption on 21st November, 2014 at 109.47 percent of their principal amount together with accrued and unpaid interest.

The unutilised portion of FCCB amounting to U.S. $ 129.44 million (31st March, 2010 – U.S. $ 247.75 million) has been invested in short term deposits with Bank.

3. During the previous year, the Company issued equity shares in the form of Global Depository Receipts (GDRs) listed on the Luxembourg Stock Exchange for a gross amount of U.S. $ 335 million. Each GDR represents 1 equity share of the Company, at a nominal value of Rs. 10 per equity share. The Company had issued 1,48,38,110 GDRs which had been priced at U.S. $ 22.577 per GDR (Rs. 48.27 being the reference exchange rate) as per relevant pricing guidelines for issue of GDRs. Consequently, in previous year, there was an increase in the Subscribed Share Capital by Rs. 14.84 crores and Securities Premium Account by Rs. 1,601.38 crores (net of issue expenses).

4. In an earlier year, the Company had commissioned its 120 MW thermal power unit at Jojobera, Jharkhand. Revenue in respect of this unit is recognised on the basis of a draft Power Purchase Agreement prepared jointly by the Company and its customer which is pending finalisation.

5. The Company has been legally advised that the Company is considered to be established with the object of providing infrastructural facilities and accordingly, Section 372A of the Companies Act, 1956 is not applicable to the Company.

6. The Company has an investment in Tata Teleservices Limited (TTSL) of Rs. 735.48 crores (31st March, 2010 – Rs. 735.48 crores). Based on the accounts as certified by the Management for the year ended 31st March, 2011, TTSL has accumulated losses which have significantly eroded its net worth. In the opinion of the Management, having regard to the long term nature of the business, there is no diminution other than temporary, in the value of the investment.

7. Capital commitments not provided for are estimated at Rs. 903.72 crores (31st March, 2010 – Rs. 594.10 crores).

8. Contingent Liabilities and Other Commitments:

(a) Claims against the Company not acknowledged as debts Rs. 261.81 crores (31st March, 2010 – Rs. 216.14 crores) consists mainly of the following:

(i) Octroi claims disputed by the Company aggregating to Rs. 5.03 crores (31st March, 2010 – Rs. 5.03 crores), in respect of Octroi exemption claimed by the Company.

(ii) A Suit has been filed against the Company claiming compensation of Rs. 20.51 crores (31st March, 2010 – Rs. 20.51 crores) by way of damages for alleged wrongful disconnection of power supply and interest accrued thereon Rs. 103.37 crores (31st March, 2010 – Rs. 99.06 crores).

(iii) Rates, Cess, Way Leave Fees, Entry tax and Duty claims disputed by the Company aggregating to Rs. 87.47 crores (31st March, 2010 – Rs. 62.14 crores). In respect of certain dues as per the terms of an agreement, the Company has the right to claim reimbursement from a third party.

(iv) Other claims against the Company not acknowledged as debts Rs. 45.43 crores (31st March, 2010 – Rs. 29.40 crores).

(c) Uncalled liability on partly paid up shares Rs. 31.03 crores (31st March, 2010 – Rs. 55.60 crores).

(ii) In terms of the Sponsor Support agreement entered into between the Company, Coastal Gujarat Power Limited (CGPL) and lender's of CGPL, the Company has undertaken to provide support by way of base Equity contribution to the extent of 25% of CGPL's project cost and additional equity or subordinated loans to be made or arranged for, if required as per the financing agreements to finance the project. The sponsor support also includes support by way of additional equity for any overrun in project costs and Debt Service Reserve Guarantee as provided under the financing agreements. The support will cease on the date of "financial completion" as defined under the relevant financing agreements. Further, CGPL has entered into an Agreement with the Company for Additional Subordinated Loan to the extent of U.S. $ 50 million (equivalent to Rs. 200.00 crores). In accordance with this agreement the Company has provided an Additional Subordinated Loan of Rs. 200.00 crores (31st March, 2010 – Rs. 172.00 crores) to CGPL. The accrued interest on Additional Subordinated Loan shall be payable subject to fulfillment of conditions in Subordination Agreement and Coal Supply and Transportation Agreements Completion Date (CSTACD) agreement.

(iii) In terms of the Sponsor Support agreement entered into between the Company, Industrial Energy Limited (IEL) and lender's of IEL, in the event of any overrun in the project cost of IEL to the extent of 10% of the project cost, the Company has undertaken to provide in proportion to its shareholding in IEL, support by way of infusion of fresh equity/preference capital or unsecured loans.

(e) In respect of NELCO Limited, the Company has undertaken to arrange for the necessary financial support to NELCO Limited in the form of interim short term funding for meeting its business requirements.

(f) In respect of the Standby Charges dispute with Reliance Infrastructure Ltd. (R-Infra - formerly Reliance Energy Ltd.) for the period from 1st April, 1999 to 31st March, 2004, the ATE, set aside the MERC Order dated 31st May, 2004 and directed the Company to refund to R-Infra as on 31st March, 2004, Rs. 354.00 crores (including interest of Rs. 15.14 crores) and pay interest at 10% per annum thereafter. As at 31st March, 2011 the accumulated interest was Rs. 162.36 crores (31st March, 2010 - Rs. 151.16 crores) (Rs. 11.20 crores for the year ended 31st March, 2011). On appeal, the Hon'ble Supreme Court vide its interim order dated 7th February, 2007, has stayed the ATE Order and in accordance with its directives, the Company has furnished a bank guarantee of the sum of Rs. 227.00 crores and also deposited Rs. 227.00 crores with the Registrar General of the Court which has been withdrawn by R-Infra on furnishing the required undertaking to the Court. The said deposit has been accounted as "Other Deposits".

Further, no adjustment has been made for the reversal in terms of the ATE Order dated 20th December, 2006 of Standby Charges credited in previous years estimated at Rs. 519.00 crores. The aggregate of Standby Charges credited in previous years, net of tax is estimated at Rs. 415.56 crores, which will be adjusted, wholly by a withdrawal/set off from certain Statutory Reserves as allowed by MERC. No provision has been made in the accounts towards interest that may be finally determined as payable to R-Infra. Since 1st April, 2004, the Company has accounted Standby Charges on the basis determined by the respective MERC Tariff Orders.

The Company is of the view, supported by legal opinion, that the ATE's Order can be successfully challenged and hence, adjustments, if any, including consequential adjustments to the Deferred Tax Liability Fund and the Deferred Tax Liability Account will be recorded by the Company on the final outcome of the matter.

(g) MERC vide its Tariff Order dated 11th June, 2004, had directed the Company to treat the investment in its Wind energy project as outside the Mumbai Licensed Area, consider a normative Debt Equity ratio of 70:30 to fund the Company's fresh capital investments effective 1st April, 2003 and had also allowed a normative interest charge @ 10% p.a. on the said normative debt. The change to the Clear Profit and Reasonable Return (consequent to the change in the Capital Base) as a result of the above mentioned directives for the period upto 31st March, 2004, has been adjusted by MERC from the Statutory Reserves along with the disputed Standby Charges referred to in Note 10(f) above. Consequently, the effect of these adjustments would be made with the adjustments pertaining to the Standby Charges dispute as mentioned in Note 10(f) above.

(h) In an earlier year, in terms of the agreements entered into between Tata Teleservices Ltd. (TTSL), Tata Sons Ltd. (TSL) and NTT DoCoMo, Inc. of Japan (Strategic Partner-SP), the Company was given by Tata Sons an option to sell 2,72,82,177 equity shares in TTSL to the S P, as part of a secondary sale of 25,31,63,941 equity shares effected along with a primary issue of 84,38,79,801 shares by TTSL to the S P. Accordingly, the Company realised Rs. 316.72 crores on sale of these shares resulting in a profit of Rs. 255.62 crores.

If certain performance parameters and other conditions are not met, should the SP decide to divest its entire shareholding in TTSL, acquired under the primary issue and the secondary sale and should TSL be unable to find a buyer for such shares, the Company is obligated to acquire the shareholding of the S P, at the higher of fair value or 50 percent of the subscription purchase price, in proportion of the number of shares sold by the Company to the aggregate of the secondary shares sold to the S P, or if the SP divests the shares at a lower price pay a compensation representing the difference between such lower sale price and the price referred to above.

Further, in the event of breach of the representations and warranties (other than title and tax) and covenants not capable of specific performance, the Company is liable to reimburse TSL, on a pro-rata basis, upto a maximum sum of Rs. 409.51 crores.

The exercise of the option by SP being contingent on several variables, the liability if any, is considered by management to be remote and indeterminable.

(i) In accordance with the terms of the Share Purchase Agreement and the Shareholder's Agreement entered into by Panatone Finvest Ltd. (Panatone), an associate of the Company, with the Government of India, Panatone has contractually undertaken a "Surplus Land" obligation including agreeing to transfer 45% of the share capital of the Resulting Company, at Nil consideration, to the Government of India and other selling shareholders upon Demerger of the Surplus Land by Tata Communications Limited (TCL). The Company has till date acquired 1,34,22,037 shares of TCL from Panatone. The Company would be entitled to be allotted 4.71% of the share capital of the Resulting Company based on its holding of 1,34,22,037 shares of TCL. The Company has undertaken to Panatone to bear the "Surplus Land" obligation pertaining to these shares.

(j) The Company has a long term investment of Rs. 3,172.50 crores (including advance towards equity) and has extended loans amounting to Rs. 221.06 crores (including interest accrued) to Coastal Gujarat Power Limited (CGPL) a wholly owned subsidiary of the Company which is implementing the 4000 MW Ultra Mega Power Project at Mundra ("Mundra UMPP").

Management is of the view that at the end of the reporting period there are estimation uncertainties in assessing the recoverability of carrying amounts of asset under construction that could result in a material adjustment to the Company's long term investment in CGPL.

CGPL has agreed to charging no escalation on 55 percent of the cost of coal in terms of the 25 year power purchase agreement relating to the Mundra UMPP. During the year, as a result of the changes in the fuel prices, management has assessed the recoverability of the carrying amount of the asset under construction at Mundra as of 31st March, 2011 of Rs. 12,842.95 crores and concluded that the cash flows expected to be generated (on completion of construction and commencement of commercial operations) over the useful life of the asset of 40 years would be sufficient to recover the carrying amount of such asset. In estimating the future cash flows, management has based on externally available information, made certain assumptions relating to the future fuel prices, future revenues, operating parameters and the asset's useful life which management believes reasonably reflects the future expectation of these items.

Having regard to the above, in the opinion of the management of the Company, no provision is considered necessary on this account as at 31st March, 2011.

However, if these assumptions change consequent to change in future conditions, there could be an adverse effect on the recoverable amount of the underlying asset.

The assumptions will be monitored on periodic basis by the management and adjustments will be made if external conditions relating to the assumptions indicate that such adjustments are appropriate.

11. (a) In the previous year, in respect of the Company's Generation Business as a Licensee, MERC in its Tariff Order dated 28th May, 2009, had drawn from Contingencies Reserve to partially meet the impact on tariff of the ATE Order dated 12th May, 2008, wherein ATE upheld the stand taken by the Company regarding allowability of expenses/accounting principles which were earlier disallowed/not recognised by MERC in its truing-up for financial years 2004-05 and 2005-06. Accordingly, the Company had drawn Rs. 108.83 crores from Contingencies Reserve. Further, the Company had recognised revenue of Rs. 105.40 crores and transferred Rs. 24.89 crores from Tariffs and Dividends Control Reserve consequent to the above Order and the Orders pertaining to the Transmission and Distribution Businesses dated 28th May, 2009 and 15th June, 2009 respectively. Certain disallowances arising from these Orders aggregating to about Rs. 91.00 crores had not been recognised as expense since they have been challenged by the Company at the ATE.

(b) In the previous year, ATE in its Order dated 15th July, 2009, had upheld the Company's claim regarding allowability of certain expenses/accounting principles which were earlier disallowed/not recognised by MERC in its truing-up for the financial year 2006-07. On this basis, during the period ended 31st December, 2009, the Company had treated such expenses as recoverable through tariff and had recognised revenue of Rs. 147.00 crores in respect of the financial years 2006-07 to 2008-09.

(c) During the year ended 31st March, 2011, MERC had completed truing-up for the financial year 2008-09 and has accordingly issued Tariff Orders. In these Tariff Orders, it has disallowed certain reasonable claims made by the Company amounting to Rs. 74.00 crores. Further, while giving effect to the favourable ATE Order dated 15th July, 2009, pertaining to the financial years 2006-07 to 2007-08, MERC has disallowed certain items amounting to Rs. 47.00 crores. Consequently, the Company has appealed to the ATE against these disallowances. Based on the earlier favourable ATE Order on similar matters, the Company is confident of ATE allowing its claims and accordingly, the above disallowances have not been recognised in the financial statements.

(d) During the year ATE in its order dated 15th February, 2011, has upheld amongst others the Company claim towards entitlement of carrying cost in respect of truing-up done by MERC for financial years 2004-05 and 2005-06. Accordingly the Company has booked an amount of Rs. 86.00 crores as its entitlement of carrying cost during the current year.

9. In the matter of claims raised by the Company on R-Infra, towards (i) the difference in the energy charges for the period March 2001 to May 2004 and (ii) for minimum off-take charges of energy for the period 1998 to 2000, MERC has issued an Order dated 12th December, 2007 in favour of the Company. The total amount payable by R-Infra including interest is estimated to be Rs. 323.87 crores as on 31st December, 2007. ATE in its order dated 12th May, 2008 on appeal by R-Infra, has directed R-Infra to pay for the difference in the energy charges amounting to Rs. 34.98 crores for the period March 2001 to May 2004. In respect of the minimum off-take charges of energy for the period 1998 to 2000 claimed by the Company from R-Infra, ATE has directed MERC that the issue be examined afresh and after the decision of the Supreme Court in the Appeals relating to the distribution licence and rebates given by R-Infra. The Company and R-Infra had filed appeals in the Supreme Court. The Supreme Court, vide its Order dated 14th December, 2009, has granted stay against ATE Order and has directed R-Infra to deposit with the Supreme Court, a sum of Rs. 25.00 crores and furnish Bank Guarantee of Rs. 9.98 crores. The Company had withdrawn the above mentioned sum subject to an undertaking to refund the amount with interest, in the event the Appeal is decided against the Company. On grounds of prudence, the Company has not recognised any income arising from the above matters.

10. Other Advances include advance towards equity, paid to Coastal Gujarat Power Limited Rs. 342.00 crores (31st March, 2010 - Rs. 52.00 crores) and Maithon Power Limited Rs. 74.00 crores (31st March, 2010 - Rs. 55.50 crores).

11. Employee Benefits:

(a) In an earlier year the Company had adopted Accounting Standard (AS-15) (Revised 2005) - 'Employee Benefits'. This had resulted in a transitional liability (net) of Rs. 61.70 crores as at 1st April, 2007. In accordance with the transitional provisions of the Accounting Standard, the Company had decided to charge the transitional liability as an expense over a period of 5 years and accordingly Rs. 22.40 crores (31st March, 2010 – Rs. 12.34 crores) has been recognised as an expense for the year under item 1 of Schedule "2" and balance amount of Rs. 2.28 crores (31st March, 2010 – Rs. 24.68 crores) is the unrecognised transitional liability as at 31st March, 2011.

(b) The Company makes contribution towards provident fund and superannuation fund to a defined contribution retirement benefit plan for qualifying employees. The provident fund is administered by the Trustees of Tata Power Consolidated Provident Fund and the Superannuation Fund is administered by the Trustees of Tata Power Superannuation Fund. Under the Schemes, the Company is required to contribute a specified percentage of salary to the retirement benefit schemes to fund the benefit.

The Rules of the Company's Provident Fund administered by a Trust require that if the Board of Trustees are unable to pay interest at the rate declared by the Central Government under para 60 of the Employees' Provident Fund Scheme, 1952, then the shortfall shall be made good by the Company. Having regard to the assets of the Fund and the return on the investments, the Company does not expect any shortfall in the foreseeable future.

On account of Defined Contribution Plans, a sum of Rs. 29.69 crores (Previous Year – Rs. 22.09 crores) has been charged to the Profit and Loss Account.

(c) The Company operates the following unfunded defined benefit plans:

(i) Post Retirement Gratuity

(ii) Ex-Gratia Death Benefits

(iii) Retirement Gifts

(iv) Post Retirement Medical Benefits and

(v) Pension

(d) The actuarial valuation of the present value of the defined benefit obligation has been carried out as at 31st March, 2011. The following tables set out the amounts recognised in the financial statements as at 31st March, 2011 for the above mentioned defined benefit plans:

12. (a) Total number of electricity units sold during the year as certified by Management - 16,060 MUs (31st March, 2010 - 15,574 MUs).

(b) Total number of electricity units purchased during the year as certified by Management - 1,510 MUs (31st March, 2010 - 292 MUs).

13. In respect of the contracts pertaining to the Transmission EPC, Strategic Electronics Business and Project Management Services, disclosures required as per AS-7 (Revised) are as follows:

(a) Contract revenue recognised as revenue during the year Rs. 163.26 crores (31st March, 2010 - Rs. 141.94 crores).

(b) In respect of contracts in progress -

(i) The aggregate amount of costs incurred and recognised profits upto 31st March, 2011 - Rs. 159.94 crores (31st March, 2010 - Rs. 157.41 crores).

(ii) Advances and progress payments received as at 31st March, 2011 - Rs. 244.24 crores (31st March, 2010 - Rs. 19.04 crores).

(iii) Retention money included as at 31st March, 2011 in Sundry Debtors -Rs. 8.39 crores (31st March, 2010 - Rs. 6.58 crores).

(c) (i) Gross amount due to customers for contract work as a liability as at 31st March, 2011 - Rs. 181.49 crores (31st March, 2010 - Rs. Nil ).

(ii) Gross amount due from customers for contract work as an asset as at 31st March, 2011 - Rs. 66.63 crores (31st March, 2010 - Rs. Nil).

(b) Managerial Remuneration shown above includes Rs. 1.00 crore (31st March, 2010 – Rs. 0.21 crore) being short provision for commission relating to the previous year.

(c) The above figures do not include charge for Gratuity, leave encashment and other long term benefits, as separate figures are not available.

(d) The Company has paid during the year monthly payments aggregating to Rs. 0.95 crore (31st March, 2010 – Rs. 0.83 crore) under the post retirement scheme to former Managing/Executive Directors.

14. Miscellaneous Expenses include donations aggregating to Rs. Nil (31st March, 2010 – Rs. 1.00 crore) to Electoral Trust whose main object is to create a transparent, non-discriminatory and non-discretionary vehicle which would enable making of contributions to political parties in a well regulated, efficient and objective manner. The Trust currently provides only for distribution of funds for the Lok Sabha Parliamentary Election.

15. Disclosure as required by Accounting Standard 18 (AS-18) "Related Party Disclosures" are as follows: Names of the related parties and description of relationship:

(a) Related parties where control exists: Subsidiaries

Af-Taab Investment Co. Ltd. (AIL)

Chemical Terminal Trombay Ltd. (CTTL)

Tata Power Trading Co. Ltd. (TPTCL)

Powerlinks Transmission Ltd. (PTL)

NELCO Ltd. (Nelco)

Maithon Power Ltd. (MPL)

Industrial Energy Ltd. (IEL)

North Delhi Power Ltd. (NDPL)

Coastal Gujarat Power Ltd. (CGPL)

Veltina Holdings Ltd. (VHL)

Bhira Investments Ltd. (BIL)

Bhivpuri Investments Ltd. (BHIL)

Khopoli Investments Ltd. (KIL)

Trust Energy Resources Pte. Ltd. (TERL)

Energy Eastern Pte. Ltd. ** (EEL)

Industrial Power Utility Ltd. (IPUL)

Tatanet Services Ltd.** (TNSL)

Industrial Power Infrastructure Ltd. (IPIL)

Vantech Investments Ltd. ** (VIL)

PT Itamaraya Tbk. ** (ITMA)

Tata Power Green Energy Private Ltd. ** (TPGEPL)

(from 5th January, 2011)

(b) Other related parties (where transactions have taken place during the year): (i) Associates

Panatone Finvest Ltd. (PFL)

Tata Ceramics Ltd. (TCL)

Tata Projects Ltd. (TPL)

Yashmun Engineers Ltd. (YEL)

Rujuvalika Investments Ltd. (RUIL)

(ii) Joint Ventures

Tubed Coal Mines Ltd. (TCML)

Mandakini Coal Company Ltd. (MCCL)

Tata BP Solar India Ltd. (TBSIL)

Dagachhu Hydro Power Corporation Ltd. (DHPCL)

OTP Geothermal Pte. Ltd. ** (OTPGL) (from 19th April, 2010)

(iii) Promoters holding together with its Subsidiary is more than 20%

Tata Sons Ltd.

(c) Key Management Personnel

Prasad R. Menon (upto 31st January, 2011)

Anil Sardana (from 1st February, 2011)

S. Ramakrishnan

S. Padmanabhan

Banmali Agrawala

16. (i) Derivative Instruments:

The Company has entered into forward contracts, which are not intended for trading or speculative purposes, to establish the amount of reporting currency required or available at the settlement date of certain short term borrowings.

(b) Secondary Segment Information:

The export turnover of the Company being Nil (31st March, 2010 – 0.02%) of the total turnover, there are no reportable geographical segments.

17. Previous year's figures have been regrouped, wherever necessary, to conform to this year's classification. Figures are rounded off to nearest lakh. Figures below Rs. 50,000 are denoted by '*'.


Mar 31, 2010

1. (a) In an earlier year, the Company issued 200,000 1% Foreign Currency Convertible Bonds (FCCB) with face value of U.S.$ 1,000 each aggregating to U.S. $ 200 million (Rs.878.80 crores at issue). The bond holders had an option to convert these Bonds into shares, at an initial conversion price of Rs. 590.85 per share at a fixed rate of exchange on conversion of Rs. 43.38 = U.S. $ 1.00, at any time on or after 6th April, 2005, upto 15th February, 2010. The conversion price is subject to adjustment in certain circumstances. The FCCB may be redeemed, in whole but not in part, at the option of the Company at any time on or after 24th February, 2008 and prior to 15th February, 2010 subject to satisfaction of certain conditions. Unless previously converted, redeemed or repurchased and cancelled, the FCCB fall due for redemption on 25th February, 2010 at 115.734 percent of their principal amount. Accordingly, the Company has redeemed the balance non-converted Bonds at a premium as per the terms of the issue during the year.

(b) During the year, in respect of the above Bonds, bond holders holding 14,229 bonds (31st March, 2009 ~ 9,865 bonds) have opted for conversion of the same into equity shares and accordingly 10,44,683 shares [includes 5,84,713 shares (31st March, 2009-6,87,572shares) on which dividend of Rs.0.67 crore (31stMarch,2009-Rs.0.72 crore) has been paid during the year] (31st March, 2009-7,24,281 shares) of Rs. 10 each have been issued at a premium as per terms of issue. Consequently there is an increase in the Subscribed Share Capital by Rs.1.04 crores (31st March, 2009-Rs.0.72 crore) and Securities Premium by Rs. 67.90 crores (31st March, 2009 - Rs.41.39 crores). Further, provision made for premium on redemption of FCCB by debiting Securities Premium in an earlier year has been reversed to the extent it pertains to the converted FCCB. As a result, balance in Securities Premium Account has increased by Rs. 9.85 crores (31st March, 2009 - Rs. 6.83 crores). Hence, the total increase in Securities Premium Account amounted to Rs. 77.75 crores (31st March, 2009 - Rs. 48.22 crores).

(c) During the year ended 31 st March, 2010, the Company issued 3,000 1.75% Foreign Currency Convertible Bonds (FCCB) with face value of U.S. $ 100,000 each aggregating to U.S.$ 300 million (Rs. 1,404.45 crores at issue, net proceeds received Rs. 1,391.67 crores). The bond holders have an option to convert these Bonds into Equity Shares, at an initial conversion price of Rs. 1,456.125 per share at a fixed rate of exchange on conversion of Rs. 46.81 = U.S. $ 1.00,at any time on and after 31 st December, 2009, upto 11th November, 2014.The conversion price is subject to adjustment in certain circumstances.The FCCB may be redeemed, in whole but not in part, at the option of the Company at any time on or after 20th November, 2011 subject to satisfaction of certain conditions. Unless previously converted, redeemed or repurchased and cancelled, the FCCB fall due for redemption on 21 st November, 2014 at 109.47 percent of their principal amount together with accrued and unpaid interest.

The unutilised portion of FCCB amounting to U.S. $ 247.75 million has been invested in short term deposits with Bank.

2. During the year ended 31st March, 2010, the Company issued equity shares in the form of Global Depository Receipts (GDRs) listed on the Luxembourg Stock Exchange for a gross amount of U.S. $ 335 million. Each GDR represents 1 equity share of the Company, at a nominal value of Rs.10 per equity share.The Company has issued 1,48,38,110 GDRs which have, been priced at U.S. $ 22.577 per GDR (Rs. 48.27 being the reference exchange rate) as per relevant pricing guidelines for issue of GDRs. Consequently, there is an increase in the Subscribed Share Capital by Rs.14.84 crores and Securities Premium Account by Rs. 1,616.22 crores (net of issue expenses).

3. In respect of previous year, Contingencies Reserve Investments and Deferred Taxation Liability Fund Investments hitherto included the cost of 6.75% Unit Trust of India-Tax Free US Bonds 2008 received on conversion of units in Scheme US-64, which bonds were redeemed during the previous year. In the terms of Appellate Tribunal for Electricity (ATE) Order dated 25th February, 2009 the appropriations made to Contingencies Reserve and Deferred Taxation Liability Fund have been utilised to meet the loss of Rs.155.47 crores realised on redemption of the above statutory investments.

4. In an earlier year, the Company had commissioned its 120 MW thermal power unit at Jojobera, Jharkhand. Revenue in respect of this unit is recognised on the basis of a draft Power Purchase Agreement prepared jointly by the Company and its customer which is pending finalisation.

5. The Company has been legally advised that the Company is considered to be established with the object of providing infrastructural facilities and accordingly, Section 372A of the Companies Act, 1956 is not applicable to the Company.

6. (a) The Company has an investment in TataTeleservices Limited (TTSL) of Rs.735.48 crores (31stMarch,2009 - Rs. 735.48 crores) and Nelco Limited (Nelco) Rs. 11.07 crores (31st March, 2009-Rs. 11.07 crores);

(b) TTSL and Nelco based on the accounts as certified by their Managements for the year/period ended 31 st March, 2010, have accumulated losses which have significantly eroded their net worth. In the opinion of the Management, having regard to the long term nature of their business, there is no diminution other than temporary, in the value of the investments.

7. Capital commitments not provided for are estimated at Rs. 594.10 crores (31st March, 2009 - Rs. 722.90 crores).

8. Contingent Liabilities and Other Commitments:

(a) Claims against the Company not acknowledged as debts Rs. 216.14 crores (31st March, 2009 - Rs. 188.56 crores) consists mainly of the following:

(i) Octroi claims disputed by the Company aggregating to Rs. 5.03 crores (31st March, 2009 -Rs. 5.03 crores), consisting of octroi exemption claimed by the Company.

(ii) A Suit-filed against the Company claiming compensation of Rs. 20.51 crores (31st March, 2009 - Rs. 20.51 crores) by way of damages for alleged wrongful disconnection of power supply and interest accrued thereon Rs. 99.06 crores ¦X31st March, 2009 - Rs. 94.76 crores).

(iiij Rates, Duty and Cess claims disputed by the Company aggregating to Rs. 62.14 crores (31st March, 2009 - Rs.51.71 crores), consisting mainly for levy of cess and way leave fees by Maharashtra Pollution Control Board at higher rates and interest thereon which is challenged by the Company and for levy of excise duty on fuel consumed in generation of electricity that was not sold but consumed by the Company.

(iv) Other claims against the Company not acknowledged as debts Rs. 29.40 crores (31st March, 2009 - Rs. 16.55 crores).

(c) Uncalled liability on partly paid up shares - Rs. 55.60 crores (31st March, 2009 - Rs. 72.28 crores).

(ii) The Company has in terms of the shareholders agreement, an obligation to subscribe for or arrange along with the participants of the Tata Group, for additional capital as per specified schedule, in case ofTTSL.

(iii) In terms of the Deed of Pledge of Shares executed by the Company and Power Grid Corporation of India Limited (PowerGrid) in favour of Infrastructure Development Finance Company Limited (IDFC) acting as Security Trustee for the Lenders, with PTL as a confirming party for pledging the Companys current and future shareholding in PTL. Powers of Attorney are executed in favour of the Security Trustee and the Lenders to accomplish the purpose of the Deed with full authority in terms of the Deed.

(iv) In terms of the Sponsor Support agreement entered into between the Company, Coastal Gujarat Power Limited (CGPL) and lenders of CGPL,the Company has undertaken to provide support by way of base Equity contribution to the extent of 25% of CGPLs project cost and additional equity or subordinated loans to be made or arranged for, if required as per the financing agreements to finance the project.The sponsor support also includes support by way of additional equity for any overrun in project costs and Debt Service Reserve Guarantee as provided under the financing agreements. The support will cease on the date of "financial completion" as defined under the relevant financing agreements. Further, CGPL has entered into an Agreement with the Company for Additional Subordinated Loan to the extent of U.S.$ 50 million (equivalent to Rs. 200.00 crores). In accordance with this agreement, the Company has provided an Additional Subordinated Loan of Rs. 172.00 crores to CGPL as on 31 st March, 2010.The accrued interest on Additional Subordinated Loan shall be payable subject to fulfilment of conditions in Subordination Agreement and Coal Supply and Transportation Agreements Completion Date (CSTACD) agreement.

(v) In terms of the Sponsor Support agreement entered into between the Company, Industrial Energy Limited (IEL) and lenders of IEL, in the event of any overrun in the project cost of IEL to the extent of 10% of the project cost, the Company has undertaken to provide in proportion to its shareholding in IEL, support by way of infusion of fresh equity/preference capital or unsecured loans.

(e) In respect of Nelco Limited, whose net worth has been substantially eroded, the Company has undertaken to arrange for the necessary financial support to Nelco Limited in the form of interim short-term funding for meeting its business requirements.

(f) In respect of the Standby Charges dispute with Reliance Infrastructure Ltd. (R-lnfra - formerly Reliance Energy Ltd.) for the period from 1 st April, 1999 to 31 st March, 2004, the ATE, set aside the MERC Order dated 31 st May, 2004 and directed the Company to refund to R-lnfra as on 31 st March, 2004, Rs. 354.00 crores (including interest of Rs.15.14 crores) and pay interest at 10% per annum thereafter. As at 31st March, 2010 the accumulated interest was Rs. 151.16 crores (31st March, 2009 - Rs. 139.96 crores) (Rs.11.20 crores for the year ended 31 st March, 2010).On appeal, the Honble Supreme Court vide its interim order dated 7th February, 2007, has stayed the ATE Order and in accordance with its directives, the Company has furnished a bank guarantee of the sum of Rs. 227.00 crores and also deposited Rs.227.00 crores with the Registrar General of the Court (the Court) which has been withdrawn by R-lnfra on furnishing the required undertaking to the Court.The said deposit has been accounted as "Other Deposits"

Further, no adjustment has been made for the reversal in terms of the ATE Order dated 20th December, 2006 of Standby Charges credited in previous years estimated at Rs. 519.00 crores.The aggregate of Standby Charges credited in previous years, net of tax is estimated at Rs. 430.80 crores, which will be adjusted, wholly by a withdrawal/set-off from certain Statutory Reserves as allowed by MERC. No provision has been made in the accounts towards interest that may be finally determined as payable to R-lnfra. However, since 1st April, 2004,the Company has accounted Standby Charges on the basis determined by the respective MERC Tariff Orders.

The Company is of the view, supported by legal opinion, that the ATEs Order can be successfully challenged and hence, adjustments, if any, including consequential adjustments to the Deferred Tax Liability Fund and the Deferred Tax Liability Account will be recorded by the Company on the final outcome of the matter.

(g) MERC vide its Tariff Order dated 11 th June, 2004, had directed the Company to treat the investment in its Wind energy project as outside the Mumbai Licensed Area, consider a normative Debt Equity ratio of 70:30 to fund the Companys fresh capital investments effective 1 st April, 2003 and had also allowed a normative interest charge @ 10% p.a. on the said normative debt.

The change to the Clear Profit and Reasonable Return (consequent to the change in the Capital Base) as a result of the above mentioned directives for the period upto 31 st March, 2004, has been adjusted by MERC from the StatutoryReserves along with the disputed Standby Charges referred to in Note 10(f) above. Consequently, the effect of these adjustments would be made with the adjustments pertaining to the Standby charges dispute as mentioned in Note 10 (f) above.

(h) During the previous year, in terms of the agreements entered into between Tata Teleservices Ltd.(TTSL),Tata Sons Ltd.(TSL) and NTT DoCoMo, Inc. of Japan (Strategic Partner-SP), the Company was given by Tata Sons an option to sell 2,72,82,177 Equity Shares in TTSL to the SP, as part of a secondary sale of 25,31,63,941 Equity Shares effected along with a primary issue of 84,38,79,801 shares by TTSL to the SP. Accordingly, the company realised Rs. 316.72 crores on sale of these shares resulting in a profit of Rs. 255.62 crores.

If certain performance parameters and other conditions are not met, should the SP decide to divest its entire shareholding in TTSL, acquired under the primary issue and the secondary sale and should TSL be unable to find a buyer for such shares, the Company is obligated to acquire the shareholding of the SP,at the higher of fair value or 50 percent of the subscription purchase price, in proportion of the number of shares sold by the Company to the aggregate of the secondary shares sold to the SP, or if the SP divests the shares at a lower price pay a compensation representing the difference between such lower sale price and the price referred to above.

Further, in the event of breach of the representations and warranties (other than title and tax) and covenants not capable of specific performance, the Company is liable to reimburse TSL, on a pro rata basis, upto a maximum sum of Rs. 409.51 crores.

The exercise of the option by SP being contingent on several variables, the liability if any, is considered by management to be remote and indeterminable.

(i) The Company has investments in 1,09,80,837 shares of Tata Communications Ltd.(TCL) which were acquired from Panatone Finvest Ltd. (Panatone) in current and prior years. In accordance with the terms of the Share Purchase Agreement (SPA) and the Shareholders agreement between Panatone and Government of India (GOI)/Principle Owners of TCL, Panatone has agreed to cause TCL to hive off or demerge certain land it owns into a separate company (the "Resultant Company") pursuant to a scheme of arrangement as further described in the SPA.The proportionate shares received in the Resultant Company are to be transferred to GOI at Nil consideration. Consequently, Panatone would require the Company to give up proportionate shares received in the Resultant Company to enable it meet its obligation.

9. (a) ATE in its Order dated 15th July, 2009, has upheld the Companys claim regarding allowability of certain expenses/ accounting principles which were earlier disallowed/not recognised by MERC in its truing-up for the financial year 2006-07. On this basis, in the current period, the Company has treated such expenses as recoverable through tariff of the current year and has recognized revenue of Rs. 147.00 crores in respect of the financial years 2006-07 to 2008-09.

(b) In respect of the Companys Generation Business as a Licensee, MERC in its Tariff Order dated 28th May, 2009,has drawn from Contingencies Reserve to partially meet the impact on tariff of the ATE Order dated 12th May, 2008, wherein ATE upheld the stand taken by the Company regarding allowability of expenses/accounting principles which were earlier disallowed/not recognised by MERC in its truing-up for financial years 2004-05 and 2005-06. Accordingly, the Company has drawn Rs. 108.83 crores from Contingencies Reserve. Further, the Company has recognised revenue of Rs.105.40 crores and transferred Rs. 24.89 crores from Tariffs and Dividends Control Reserve consequent to the above Order and the Orders pertaining to the Transmission and Distribution Businesses dated 28th May, 2009 and 15th June, 2009 respectively. Certain disallowances arising from these Orders aggregating to about Rs. 83.00 crores have not been recognised as expense since they have been challenged by the Company at the ATE.

10. In the matter of claims raised by the Company on R-lnfra, towards (i) the difference in the energy charges for the period March 2001 to May 2004 and (ii) for minimum off-take charges of energy for the period 1998 to 2000, MERC has issued an Order dated 12th December, 2007 in favour of the Company. The total amount payable by R-lnfra including interest is estimated to be Rs. 323.87 crores as on 31st December, 2007. ATE in its order dated 12th May, 2008 on appeal by R-lnfra, has directed R-lnfra to pay for the difference in the energy charges amounting to Rs.34.98 crores for the period March 2001 to May 2004. In respect of the minimum off-take charges of energy for the period 1998 to 2000 claimed by the Company from R-lnfra, ATE has directed MERC that the issue be examined afresh and after the decision of the Supreme Court in the Appeals relating to the distribution licence and Rebates given by R-lnfra.The Company and R-lnfra have filed appeals in the Supreme Court.The Supreme Court, vide its Order dated 14th December, 2009, has granted stay against ATE order and has directed R-lnfra to deposit with the Supreme Court, a sum of Rs.25.00crores and furnish Bank Guarantee of Rs.9.98 crores.The Company has withdrawn the above mentioned sum subject to an undertaking to refund the amount with interest, in the event the Appeal is decided against the Company. On grounds of prudence, the Company has not recognised any income arising from the above matters.

11. Other Advances include advance towards equity, paid to Coastal Gujarat Power Limited - Rs. 52.00 crores (31st March, 2009 - Rs. 133.00 crores), Mandakini Coal Company Limited - Rs. Nil (31st March, 2009 - Rs. 1.75 crores) and Maithon Power Limited Rs. 55.50 crores (31st March, 2009 - Rs. Nil).

12. Employee Benefits:

(a) In an earlier year the Company had adopted Accounting Standard (AS-15) (Revised 2005) -"Employee Benefits" This had resulted in a transitional liability (net) of Rs.61.70 crores as at 1 st April, 2007. In accordance with the transitional provisions of the Accounting Standard, the Company had decided to charge the transitional liability as an expense over a period of 5 years and accordingly Rs. 12.34 crores (31st March, 2009-Rs. 12.34 crores) has been recognised as an expense for the year under item 1 of Schedule"2"and balance amount of Rs.24.68 crores (31st March, 2009-Rs. 37.02 crores) is the unrecognised transitional liability as at 31st March, 2010.

(b) The Company makes contribution towards provident fund and superannuation fund to a defined contribution retirement benefit plan for qualifying employees. The provident fund is administered by the Trustees ofTata Power Consolidated Provident Fund and the Superannuation Fund is administered by the Trustees ofTata Power Superannuation Fund. Under the Schemes, the Company is required to contribute a specified percentage of salary to the retirement benefit schemes to fund the benefit.

The Rules of the Companys Provident Fund administered by a Trust require that if the Board of Trustees are unable to pay interest at the rate declared by the Central Government under para 60 of the Employees Provident Fund Scheme, 1952, then the shortfall shall be made good by the Company. Having regard to the assets of the Fund and the return on the investments, the Company does not expect any shortfall in the foreseeable future.

On account of Defined Contribution Plans, a sum of Rs. 22.09 crores (Previous Year Rs. 20.34 crores) has been charged to the Profit and Loss Account.

(c) The Company operates the following unfunded defined benefit plans: (i) Post Retirement Gratuity

(ii) Ex-Gratia Death Benefits

(iii) Retirement Gifts

(iv) Post Retirement Medical Benefits and

(v) Pension.

(d) The actuarial valuation of the present value of the defined benefit obligation has been carried out as at 31st March, 2010. The following tables set out the amounts recognised in the financial statements as at 31st March, 2010 for the above mentioned defined benefit plans:

13. (a) Total number of electricity units sold during the year - 15,574 MUs (31st March, 2009 - 14,703 Mils). (b) Total number of electricity units purchased during the year- 292 MUs (31st March, 2009 - 540 MUs).

14. In respect of the contracts pertaining to the Transmission EPC, Strategic Electronics Business and Project Management Services, disclosures required as per AS 7 (Revised) are as follows:

(a) Contract revenue recognised as revenue during the year - Rs. 141.94 crores (31st March, 2009 - Rs. 122.30 crores).

(b) In respect of contracts in progress -

(i) Theaggregateamountofcostsincurredandrecognisedprofitsupto31stMarch, 2010-Rs.157.41 crores (31st March, 2009- Rs.369.06 crores).

(ii) Advances and progress payments received as at 31 st March, 2010 - Rs. 19.04 crores (31st March, 2009-Rs. 36.47 crores).

(iii) Retention money included as at 31st March, 2010 in Sundry Debtors - Rs. 6.58 crores (31st March, 2009-Rs. 22.08 crores).

(c) Gross amount due to customers for contract work as a liability as at 31 st March, 2010 - Rs. Nil (31st March, 2009 - Rs. Nil).

15. Disclosures as required by Accounting Standard 19 (AS-19) are as follows:

(a) Operating Leases:

(i) The Companys significant leasing arrangements are in respect of residential flats, office premises, plant and machinery and equipments taken on lease.The arrangements range between 11 months and 10 years generally and are usually renewable by mutual consent or mutually agreeable terms. Under these arrangements, generally refundable interest- free deposits have been given.

(b) Finance Leases:

The Company has not entered into any material financial lease.

16. (a) During the previous year, in respect of the Licensed Business, in terms of the Government of Maharashtra approvals, on the difference between the written down value of fixed assets (including foreign exchange fluctuations on approved borrowings) as per the books of accounts and the Income-tax Act, 1961, deferred tax liability was being set up by a special appropriation to the Deferred Taxation Liability Fund. In terms of the approvals, the amounts credited to the Fund are invested and permitted to be utilised, only subject to certain conditions. In terms of Appellate Tribunal for Electricity (ATE) Order dated 25th February, 2009 loss realised on redemption of 6.75% Unit Trust of India -Tax Free US Bonds 2008 amounting to Rs. 116.09 crores had been adjusted against the balance lying in Deferred Taxation Liability Fund.

The resultant shortfall in the Deferred Taxation Liability Fund and the deferred tax liability recognized at Rs. 37.84 crores has been accounted for during the previous year.

17. Miscellaneous Expenses include donations aggregating to Rs. 1.00 crore (31st March, 2009-Rs. Nil) to Electoral Trust whose main object is to create a transparent, non-discriminatory and non-discretionary vehicle which would enable making of contributions to political parties in a well regulated,efficient and objective manner. TheTrust currently provides only for distribution of funds for the Lok Sabha Parliamentary Election.

18. Disclosure as required by Accounting Standard 18 (AS-18) "Related Party Disclosures" are as follows: Names of the related parties and description of relationship:

(a) Related parties where control exists: Subsidiaries

Af-Taab Investment Co. Ltd. (AIL)

Chemical Terminal Trombay Ltd. (CTTL)

Tata Power Trading Co. Ltd. (TPTCL)

Powerlinks Transmission Ltd.(PTL)

NelcoLtd.(Nelco)

Maithon Power Ltd. (MPL)

Industrial Energy Ltd. (IEL)

North Delhi Power Ltd.(NDPL)

Coastal Gujarat Power Ltd. (CGPL)

Veltina Holdings Ltd.(VHL)

Bhira Investments Ltd.(BIL)

Bhivpuri Investments Ltd.(BHIL)

Khopoli Investments Ltd.(KIL)

Trust Energy Resources Pte. Ltd. (TERL)

Energy Eastern Pte.Ltd.** (EEL)

Industrial Power Utility Ltd.** (IPUL)

Tatanet Services Ltd.** (TNSL)

Industrial Power Infrastructure Ltd.** (IPIL)

Vantech Investments Ltd. (from 30th March, 2010) ** (VIL)

PT Itamaraya Tbk (from 26th August, 2009) ** (ITMA)

(b) Other related parties (where transactions have taken place during the year):

(i) Associates

Panatone Finvest Ltd. (PFL) Tata Ceramics Ltd. (TCL) Tata Projects Ltd. (TPL) Yashmun Engineers Ltd.(YEL) Rujuvalika Investments Ltd.(RUIL)

(ii) Joint Ventures

Indocoal Resources (Cayman) Ltd.** (IRCL)

Tubed Coal Mines Ltd.(TCML)

Mandakini Coal Company Ltd. (MCCL)

Tata BP Solar India Ltd. (TBSIL)

Dagachhu Hydro Power Corporation Ltd.(DHPCL)

(iii) Promoters holding together with its Subsidiary is more than 20%

(c) Key Management Personnel

Tata Sons Ltd. Prasad R.Menon S.Ramakrishnan S.Padmanabhan Banmali Agrawala

**Through Subsidiary Companies.

19. Previous years figures have been regrouped, wherever necessary, to conform to this years classification. Figures are rounded off to nearest lakh. Figures below Rs. 50,000 are denoted by*.

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