NTPC LIMITED
ANNUAL REPORT 2009-2010
NOTES ON ACCOUNTS
ACCOUNTING POLICIES:
1. BASIS OF PREPARATION:
The financial statements are prepared on accrual basis of accounting under
historical cost convention in accordance with generally accepted accounting
principles in India and the relevant provisions of the Companies Act, 1956
including accounting standards notified there under.
2. USE OF ESTIMATES:
The preparation of financial statements requires estimates and assumptions
that affect the reported amount of assets, liabilities, revenue and
expenses during the reporting period. Although such estimates and
assumptions are made on a reasonable and prudent basis taking into account
all available information, actual results could differ from these estimates
& assumptions and such differences are recognized in the period in which
the results are crystallized.
3. GRANTS-IN-AID:
3.1 Grants-in-aid received from the Central Government or other authorities
towards capital expenditure as well as consumers' contribution to capital
works are treated initially as capital reserve and subsequently adjusted as
income in the same proportion as the depreciation written off on the assets
acquired out of the grants.
3.2 Where the ownership of the assets acquired out of the grants vests with
the government, the grants are adjusted in the carrying cost of such
assets.
3.3 Grants from Government and other agencies towards revenue expenditure
are recognized over the period in which the related costs are incurred and
are deducted from the related expenses.
4. FIXED ASSETS:
4.1 Fixed Assets are carried at historical cost less accumulated
depreciation.
4.2 Expenditure on renovation and modernisation of fixed assets resulting
in increased life and/or efficiency of an existing asset is added to the
cost of related assets.
4.3 Intangible assets are stated at their cost of acquisition less
accumulated amortisation.
4.4 Capital expenditure on assets not owned by the Company is reflected as
a distinct item in Capital Work-in-Progress till the period of completion
and thereafter in the Fixed Assets.
4.5 Deposits, payments/liabilities made provisionally towards compensation,
rehabilitation and other expenses relatable to land in possession are
treated as cost of land.
4.6 In the case of assets put to use, where final settlement of bills with
contractors is yet to be effected, capitalisation is done on provisional
basis subject to necessary adjustment in the year of final settlement.
4.7 Assets and systems common to more than one generating unit are
capitalised on the basis of engineering estimates/assessments.
5. CAPITAL WORK-IN-PROGRESS:
5.1 In respect of supply-cum-erection contracts, the value of supplies
received at site and accepted is treated as Capital Work-in-Progress.
5.2 Administration and general overhead expenses attributable to
construction of fixed assets incurred till they are ready for their
intended use are identified and allocated on a systematic basis to the cost
of related assets.
5.3 Deposit works/cost plus contracts are accounted for on the basis of
statements of account received from the contractors.
5.4 Unsettled liability for price variation/exchange rate variation in case
of contracts are accounted for on estimated basis as per terms of the
contracts.
6. OIL AND GAS EXPLORATION COSTS:
6.1 The Company follows Successful Efforts Method' for accounting of oil &
gas exploration activities.
6.2 Cost of surveys and prospecting activities conducted in search of oil
and gas are expensed off in the year in which these are incurred.
6.3 Acquisition and exploration costs are initially capitalized as
Exploratory Wells-in-Progress' under Capital Work-in-Progress.
7. DEVELOPMENT OF COAL MINES:
Expenditure on exploration of new coal deposits is capitalized as
Development of coal mines' under Capital Work-in-Progress till the mines
project is brought to revenue account.
8. FOREIGN CURRENCY TRANSACTIONS:
8.1 Foreign currency transactions are initially recorded at the rates of
exchange ruling at the date of transaction.
8.2 At the balance sheet date, foreign currency monetary items are reported
using the closing rate. Non-monetary items denominated in foreign currency
are reported at the exchange rate ruling at the date of transaction.
8.3 Exchange differences (loss), arising from translation of foreign
currency loans relating to fixed assets/capital work-in-progress to the
extent regarded as an adjustment to interest cost are treated as borrowing
cost.
8.4 Exchange differences arising from settlement / translation of foreign
currency loans (other than regarded as borrowing cost), deposits /
liabilities relating to fixed assets / capital work-in-progress in respect
of transactions entered prior to 01.04.2004, are adjusted in the carrying
cost of related assets. Such exchange differences arising from settlement /
translation of long term foreign currency monetary items in respect of
transactions entered on or after 01.04.2004 are adjusted in the carrying
cost of related assets.
8.5 Other exchange differences are recognized as income or expense in the
period in which they arise.
9. BORROWING COSTS:
Borrowing costs attributable to the fixed assets during construction/
renovation and modernisation are capitalised. Such borrowing costs are
apportioned on the average balance of capital work-in-progress for the
year. Other borrowing costs are recognised as an expense in the period in
which they are incurred.
10. INVESTMENTS:
10.1 Current investments are valued at lower of cost and fair value
determined on an individual investment basis.
10.2 Long term investments are carried at cost. Provision is made for
diminution, other than temporary, in the value of such investments.
10.3 Premium paid on long term investments is amortised over the period
remaining to maturity.
11. INVENTORIES:
11.1 Inventories are valued at the lower of cost, determined on weighted
average basis, and net realizable value.
11.2 The diminution in the value of obsolete, unserviceable and surplus
stores and spares is ascertained on review and provided for.
12. PROFIT AND LOSS ACCOUNT:
12.1 INCOME RECOGNITION:
12.1.1 Sale of energy is accounted for based on tariff rates approved by
the Central Electricity Regulatory Commission (CERC) as modified by the
orders of Appellate Tribunal for Electricity to the extent applicable. In
case of power stations where the tariff rates are yet to be approved,
provisional rates are adopted.
12.1.2 Advance against depreciation considered as deferred revenue in
earlier years is included in sales, to the extent depreciation recovered in
tariff during the year is lower than the corresponding depreciation
charged.
12.1.3 Exchange differences on account of translation of foreign currency
borrowings recoverable from or payable to the beneficiaries in subsequent
periods as per CERC Tariff Regulations are accounted as Deferred Foreign
Currency Fluctuation Asset/Liability'. The increase or decrease in
depreciation or interest and finance charges for the year due to the
accounting of such exchange differences as per accounting policy no. 8 is
adjusted in sales.
12.1.4 Exchange differences arising from settlement / translation of
monetary items denominated in foreign currency (other than long term) to
the extent recoverable from or payable to the beneficiaries in subsequent
periods as per CERC Tariff Regulations are accounted as Deferred Foreign
Currency Fluctuation Asset/Liability' during construction period and
adjusted in the year in which the same becomes recoverable/payable.
12.1.5 The surcharge on late payment/overdue sundry debtors for sale of
energy is recognized when no significant uncertainty as to measurability
or collectability exists.
12.1.6 Interest/surcharge recoverable on advances to suppliers as well as
warranty claims/liquidated damages wherever there is uncertainty of
realisation/acceptance are not treated as accrued and are therefore
accounted for on receipt/acceptance.
12.1.7 Income from consultancy services is accounted for on the basis of
actual progress/technical assessment of work executed, in line with the
terms of respective consultancy contracts. Claims for reimbursement of
expenditure are recognized as other income, as per the terms of consultancy
service contracts.
12.1.8 Scrap other than steel scrap is accounted for as and when sold.
12.1.9 Insurance claims for loss of profit are accounted for in the year of
acceptance. Other insurance claims are accounted for based on certainty of
realisation.
12.2 EXPENDITURE:
12.2.1 Depreciation is charged on straight line method at the rates
specified in Schedule XIV of the Companies Act, 1956 except for the
following assets at the rates mentioned below:
a) Kutcha Roads 47.50%
b) Enabling works:
- residential buildings including their internal 06.33%
electrification.
- non-residential buildings including their 19.00%
internal electrification, water supply, sewerage
& drainage works, railway sidings, aerodromes,
helipads and airstrips.
c) Personal computers and Laptops including 19.00%
peripherals
d) Photocopiers and Fax Machines 19.00%
e) Air conditioners, Water coolers and 08.00%
Refrigerators
12.2.2 Depreciation on additions to/deductions from fixed assets during the
year is charged on pro-rata basis from/up to the month in which the asset
is available for use/disposal.
12.2.3 Assets costing up to Rs.5000/- are fully depreciated in the year of
acquisition.
12.2.4 Cost of software recognized as intangible asset, is amortised on
straight line method over a period of legal right to use or 3 years,
whichever is earlier. Intangible assets - Others are amortized on straight
line method over the period of legal right to use.
12.2.5 Where the cost of depreciable assets has undergone a change during
the year due to increase/ decrease in long term liabilities on account of
exchange fluctuation, price adjustment, change in duties or similar
factors, the unamortised balance of such asset is charged prospectively
over the residual life.
12.2.6 Where the life and/or efficiency of an asset is increased due to
renovation and modernization, the expenditure thereon along-with its
unamortized depreciable amount is charged prospectively over the revised
useful life determined by technical assessment.
12.2.7 Machinery spares which can be used only in connection with an item
of plant and machinery and their use is expected to be irregular, are
capitalised and fully depreciated over the residual useful life of the
related plant and machinery.
12.2.8 Capital expenditure on assets not owned by the company is amortised
over a period of 4 years from the year in which the first unit of project
concerned comes into commercial operation and thereafter from the year in
which the relevant asset becomes available for use. However, such
expenditure for community development in case of stations under operation
is charged off to revenue.
12.2.9 Leasehold lands other than acquired on perpetual leases are
amortised over the lease period. Leasehold buildings are amortised over the
lease period or 30 years, whichever is lower. Leasehold land and buildings,
whose lease periods are yet to be finalised, are amortised over a period of
30 years.
12.2.10 Expenses on ex-gratia payments under voluntary retirement scheme,
training & recruitment and research and development are charged to revenue
in the year incurred.
12.2.11 Preliminary expenses on account of new projects incurred prior to
approval of feasibility report/ techno economic clearance are charged to
revenue.
12.2.12 Actuarial gains/losses in respect of Employee Benefit Plans' are
recognised in the statement of Profit & Loss Account.
12.2.13 Net pre-commissioning income/expenditure is adjusted directly in
the cost of related assets and systems.
12.2.14 Prepaid expenses and prior period expenses/income of items of
Rs.100,000/- and below are charged to natural heads of accounts.
12.2.15 Carpet coal is charged off to coal consumption. However, during
pre-commissioning period, carpet coal is retained in inventories and
charged off to consumption in the first year of commercial operation.
Transit and handling losses of coal as per norms are included in cost of
coal.
13. FINANCE LEASES:
13.1 Assets taken on lease are capitalized at fair value or net present
value of the minimum lease payments, whichever is lower.
13.2 Depreciation on the assets taken on lease is charged at the rate
applicable to similar type of fixed assets as per accounting policy no.
12.2.1. If the leased assets are returnable to the lessor on the expiry of
the lease period, depreciation is charged over its useful life or lease
period, whichever is shorter.
13.3 Lease payments are apportioned between the finance charges and
outstanding liability in respect of assets taken on lease.
14. PROVISIONS AND CONTINGENT LIABILITIES:
A provision is recognised when the company has a present obligation as a
result of a past event and it is probable that an outflow of resources will
be required to settle the obligation and in respect of which a reliable
estimate can be made. Provisions are determined based on management
estimate required to settle the obligation at the balance sheet date and
are not discounted to present value. Contingent liabilities are disclosed
on the basis of judgment of the management/independent experts. These are
reviewed at each balance sheet date and are adjusted to reflect the current
management estimate.
15. CASH FLOW STATEMENT:
Cash flow statement is prepared in accordance with the indirect method
prescribed in Accounting Standard (AS) 3 on Cash Flow Statements'.
NOTES ON ACCOUNTS:
1. a) The conveyancing of the title to 10,884 acres of freehold land of
value Rs.5,071 million (Previous year 10,844 acres of value Rs.4,950
million) and buildings & structures valued at Rs.1,491 million (previous
year Rs.1,137 million), as also execution of lease agreements for 8,958
acres of land of value Rs.2,447 million (previous year 8,820 acres, value
Rs.2,720 million) in favour of the Company are awaiting completion of legal
formalities.
b) Leasehold land includes 30 acres valuing Rs.1 million (previous year 30
acres valuing Rs.1 million) acquired on perpetual lease and accordingly not
amortised.
c) Land does not include cost of 1,181 acres (previous year 1,181 acres)
of land in possession of the Company. This will be accounted for on
settlement of the price thereof by the State Government Authorities.
d) Land includes 1,247 acres of value Rs.151 million (previous year 1,223
acres of value Rs.110 million) not in possession of the Company. The
Company is taking appropriate steps for repossession of the same.
e) Land includes an amount of Rs.1,153 million (previous year Rs.1,243
million) deposited with various authorities in respect of land in
possession which is subject to adjustment on final determination of price.
f) Possession of land measuring 98 acres (previous year 98 acres)
consisting of 79 acres of free-hold land (previous year 79 acres) and 19
acres of lease hold land (previous year 19 acres) of value Rs. 2 million
(previous year Rs.2 million) was transferred to Uttar Pradesh Rajya Vidyut
Utpadan Nigam Ltd. (erstwhile UPSEB) for a consideration of Rs.2 million.
Pending approval for transfer of the said land, the area and value of this
land has been included in the total land of the Company. The consideration
received from erstwhile UPSEB is disclosed under Other Liabilities' in
Schedule-15-Current Liabilities'.
g) During the year, freehold land measuring 36 acres was handed over by
the Government of Uttar Pradesh to Company in exchange of freehold land
measuring 35 acres without any financial consideration.
h) The cost of right of use of land for laying pipelines amounting to
Rs.58 million (previous year Rs.13 million) is included under intangible
assets. The right of use, other than perpetual in nature, are amortised
over the legal right to use.
i) Cost of acquisition of the right for drawl of water amounting to Rs.84
million (previous year nil) is included under intangible assets - Right of
Use - Others. The right of drawl of water is for thirty years and the cost
is accordingly amortized.
2. a) The Central Electricity Regulatory Commission (CERC) notified the
Tariff Regulations, 2009 in January 2009, containing inter-alia the terms
and conditions for determination of tariff applicable for a period of five
years with effect from 1st April 2009. Pending determination of station-
wise tariff by the CERC, sales have been provisionally recognized at
Rs.444,739 million during the year ended 31st March 2010 on the basis of
principles enunciated in the said Regulations on the capital cost
considering the orders of Appellate Tribunal for Electricity (ATE) for the
tariff period 2004-2009 including as referred to in para 2 (e).
The Tariff Regulations, 2009 provide that pending determination of tariff
by the CERC, the Company has to provisionally bill the beneficiaries at the
tariff applicable as on 31st March 2009 approved by the CERC. The amount
provisionally billed during the year ended 31st March 2010 on this basis is
Rs.437,651 million.
b) For the units commissioned during the year, pending the determination
of tariff by CERC, sales of Rs.17,354 million have been provisionally
recognised on the basis of principles enunciated in the Tariff Regulations,
2009. The amount provisionally billed for such units is Rs.15,365 million.
c) Sales of (-) Rs.6,006 million (previous year Rs.10,201 million)
pertaining to previous years has been recognized based on the orders issued
by the CERC/ATE.
d) In terms of Regulation 39, CERC Tariff Regulations, 2009, notified by
the CERC, the Company has determined the amount of the Deferred Tax
Liability (net) materialised during the year pertaining to the period upto
31st March 2009 by identifying the major changes in the elements of
Deferred Tax Liability/Asset, as recoverable from the beneficiaries and
accordingly a sum of Rs.2,485 million (net) has been recognised as Sales
during the year.
e) In respect of stations/units where the CERC had issued tariff orders
applicable from 1st April 2004 to 31st March 2009, the Company aggrieved
over many of the issues as considered by the CERC in the tariff orders,
filed appeals with the ATE. The ATE disposed off the appeals favourably
directing the CERC to revise the tariff orders as per the directions and
methodology given. The CERC filed an appeal with the Hon'ble Supreme Court
of India on some of the issues decided by the ATE which is pending. The
Company has submitted that it would not press for determination of the
tariff by the CERC as per ATE orders pending disposal of the appeal by the
Hon'ble Supreme Court.
Considering expert legal opinions obtained that, it is reasonable to expect
ultimate collection, the sales for the tariff period 2004-2009 amounting to
Rs.10,443 million were recognised in earlier years based on provisional
tariff worked out by the Company as per the methodology and directions as
decided by the ATE. Due to further CERC tariff orders received during the
year, the provisional sales of Rs.10,443 million has now been reduced to
Rs.10,256 million. The sales accounted as above is subject to final outcome
of the decision of the Hon'ble Supreme Court of India and consequential
effect, if any, will be given in the financial statements upon disposal of
the appeal.
3. Sundry debtors - Other Debts, Unsecured (Schedule 11) includes Rs.10,011
million (previous year Rs.3,901 million) towards revenue accounted in
accordance with the accounting policy no. 12.1 which is yet to be billed.
4. Government of India in January 2006 notified the Tariff Policy under the
provisions of the Electricity Act, 2003 which provides that the rates of
depreciation notified by the CERC would be applicable for the purpose of
tariff as well as accounting. Subsequent to the notification of the Tariff
Policy, CERC through Regulations, 2009 notified the rates of depreciation.
CERC exercising its powers under Section 79 of the Electricity Act, 2003
requested the Ministry of Power to advise the Ministry of Corporate Affairs
to notify the rates of depreciation considered by the CERC for tariff
determination as depreciation under Section 205 (2) (c) of the Companies
Act, 1956. Ministry of Corporate Affairs is yet to notify such rates under
Section 205 (2) (c) of the Companies Act, 1956.
The Company has also obtained legal opinions that the Tariff Policy cannot
override the provisions of the Companies Act, 1956 and it is required
follow Schedule XIV of the Companies Act, 1956 in the absence of any
specific provision in the Electricity Act, 2003. Hence provisions of
Section 616 of the Companies Act, 1956 are also not applicable in this
regard. Accordingly, the Company is charging depreciation consistently at
the rates specified in Schedule XIV of the Companies Act, 1956 with effect
from the financial year 2004-05 except as stated in accounting policy
no.12.2.1.
5. Due to uncertainty of realisation in the absence of sanction by the
Government of India (GOI), the Company's share of net annual profits of one
of the stations taken over by the Company in June 2006 for the period 1st
April 1986 to 31st May 2006 amounting to Rs.1,155 million (previous year
Rs.1,155 million) being balance receivable in terms of the management
contract with the GOI has not been recognised.
6. The pay revision of the employees of the Company was due w.e.f. 1st
January 2007.
Based on the guidelines issued by Department of Public Enterprises (DPE),
Government of India (GOI), the pay revision of the executive category of
employees has been approved during the year. Pending finalisation of pay
revision in respect of employees in the non-executive category, provision
of Rs.3,145 million and Rs.6,590 million (previous year Rs.1,767 million
and Rs. 3,445 million) has been made for the year and upto year
respectively on an estimated basis having regard to the guidelines issued
by DPE. A sum of Rs.1,387 million (previous year Rs.748 million) paid as
adhoc advance towards pay revision to the employees in the non-executive
category is included in Loans and Advances' (Schedule 14).
7. The amount reimbursable to GOI in terms of Public Notice No.38 dated 5th
November, 1999 and Public Notice No.42 dated 10th October, 2002 towards
cash equivalent of the relevant deemed export benefits paid by GOI to the
contractors for one of the stations amounted to Rs.2,768 million (previous
year Rs.2,768 million) out of which Rs.2,696 million (previous year
Rs.2,696 million) has been deposited with the GOI and liability for the
balance amount of Rs.72 million (previous year Rs.72 million) has been
provided for. No interest has been provided on the reimbursable amounts as
there is no stipulation for payment of interest in the public notices cited
above.
8. As per the direction of the Ministry of Power (MOP), a memorandum of
understanding was signed between the Company, Gujarat Power Corporation
Ltd. (GPCL) and Gujarat Electricity Board (GEB) on 20th February 2004 to
set up Pipavav Power Project. The Company disassociated from the Pipavav
Power Project, a wholly owned subsidiary of the Company, on 24th May 2007
after obtaining approval from the MOP. MOP, Government of India, conveyed
its approval vide Presidential Directive No. 5/5/2004-TH-II dated 3rd July
2009 for winding-up of the Pipavav Power Development Company Ltd. (PPDCL)
pending final settlement of claims with GPCL/Government of Gujarat. The
Board of Directors of NTPC Ltd. have also given consent for winding up of
the PPDCL.
MOP, GOI through its further Presidential Directive No. 5/5/2004-TH-II
dated 15th April 2010 conveyed the approval of GOI to permit NTPC for
winding up of PPDCL through striking off the name under Section 560 of the
Companies Act, 1956. Accordingly, necessary application/ declarations have
been filed with the Registrar of Companies (ROC) for striking off the name
of the Company from the Register of Companies maintained by the ROC.
Pending liquidation of the PPDCL, an amount of Rs.4 million (Previous year
Rs.4 million) received from GPCL is included in other liabilities under
Current Liabilities' (Schedule-15). As full amount has been received
towards equity invested, no provision is considered necessary for
diminution in the value of investment.
9. Consequent to the notification no. S.O.2804 (E) dated 3rd November 2009,
issued by Ministry of Environment and Forest (MoEF), Government of India,
direct/indirect expenses relating to fly ash for the period from 3rd
November 2009 to 31st March 2010 amounting to Rs.8 million has been
adjusted from Ash Utilisation and Marketing Expenses' (Schedule 21) and
transferred to the subsidiary company NTPC Vidyut Vyapaar Nigam Limited for
adjustment with reserve. The reserve in terms of the said notification is
maintained by the said subsidiary company.
10. As a result of issuance of the New Coal Distribution Policy (NCDP) by
Ministry of Coal in October 2007, the Company and Coal India Ltd
renegotiated the Model Coal Supply Agreement (CSA) and Model CSA was signed
between the Company & CIL on 29th May 2009. Based on the Model CSA, coal
supply agreements have been signed with the various subsidiary companies of
CIL by all excepting three of the coal based stations of the Company. The
CSAs are valid for a period of 20 years with a provision for review after
every 5 years.
11. The Company challenged the levy of transit fee/entry tax on supplies of
coal to some of its power stations and has paid under protest such transit
fee/entry tax to Coal Companies/Sales Tax Authorities. Further, in line
with the agreement with GAIL India Ltd., the Company has also paid entry
tax and sales tax on transmission charges in respect of supplies made to
various stations in the state of Uttar Pradesh. GAIL India Ltd. has paid
such taxes to the appropriate authorities under protest and filed a
petition before the Hon'ble High Court of Allahabad challenging the
applicability of relevant Act. In case the Company gets refund from Coal
Companies/Sales Tax Authorities/GAIL India Ltd. on settlement of these
cases, the same will be passed on to respective beneficiaries.
12. Fixed assets, capital work-in-progress and construction stores and
advances include Rs.6,765 million in respect of one of the hydro power
project, the construction of which has been suspended temporarily from 18th
May 2009 on the advice of the Ministry of Power, GOI. Presently, the issue
regarding resumption of the project is under consideration with the GOI.
Pending decision, borrowing costs of Rs.237 million have not been
capitalised from the date of suspension.
13. Progress of work under the contract for steam generator and auxiliaries
package at one of the project has been affected due to certain disputes
with the contractor. While the contractual and other related issues are
under deliberation, the contract continues to be in force and supplies of
equipment/structural items have been made by the contractor during the
year. Construction of other systems for the project is also in progress.
Since activities that are necessary to prepare the asset for its intended
use are in progress, borrowing costs continue to be capitalised.
14. Issues related to the evaluation of performance and guarantee test
results of steam/turbine generators at some of the stations are under
discussion with the equipment supplier. Pending settlement, liquidated
damages for shortfall in performance of these equipments have not been
recognised.
15. The Company is executing a thermal power project in respect of which
possession certificates for 1,489 acres of land has been handed over to the
Company and all statutory and environment clearances for the project have
been received. Subsequently, a high power committee has been constituted as
per the directions of GOI to explore alternate location of the project
since present location is stated to be a coal bearing area. Aggregate cost
incurred up to 31st March 2010 Rs.1,831 million is included in Fixed Assets
(Schedules 6,7 and 8). Management is confident of recovery of cost
incurred, hence no provision is considered necessary.
16. a) Certain loans & advances and creditors in so far as these have
since not been realised/discharged or adjusted are subject to confirmation/
reconciliation and consequential adjustment, if any.
b) In the opinion of the management, the value of current assets, loans
and advances on realisation in the ordinary course of business, will not be
less than the value at which these are stated in the Balance Sheet.
17. Effect of changes in Accounting Policies:
a) Tariff Regulations, 2009 issued by the CERC provide that the balance
depreciable value of the each of the existing stations as on 1st April,
2009 shall be worked out by deducting the cumulative depreciation including
the Advance Against Depreciation (AAD) as admitted by the CERC up to 31st
March 2009 from the gross depreciable value of the assets thereby merging
AAD with depreciation for tariff recovery. Under the said Tariff
Regulations, the CERC also has notified the revised rates of depreciation
and removed the provision for AAD.
In view of the change in CERC Tariff Regulations, 2009, the Company revised
its accounting policy no. 12.1.2 and the amount of AAD required to meet the
shortfall in the component of depreciation in revenue over the depreciation
to be charged off in future years has been assessed station-wise and
wherever an excess has been determined as on 1st April 2009, the same
amounting to Rs.3,115 million has been recognised as sales during the year.
In addition, Rs.53 million has been recognised as sales during the year out
of AAD consequent to this change.
b) Claims on the Company for price variation which were hitherto accounted
for on acceptance. During the year, unsettled liabilities for price
variation/exchange rate variation in case of contracts are accounted for on
estimated basis as per terms of the contracts. Consequently, profit for the
year is lower by Rs. 20 million, fixed assets are higher by Rs.2,849
million and current liabilities are higher by Rs. 2,869 million.
18. Revenue grants recognised during the year is Rs.17 million (previous
year Rs.9 million).
19. Disclosure as per Accounting Standard (AS) 15:
General description of various defined employee benefit schemes are as
under:
A. Provident Fund:
Company pays fixed contribution to provident fund at predetermined rates to
a separate trust, which invests the funds in permitted securities.
Contribution to family pension scheme is paid to the appropriate
authorities. The contribution of Rs. 1,597 million (Previous year Rs. 985
million) to the funds for the year is recognised as expense and is charged
to the Profit & Loss Account. The obligation of the Company is to make such
fixed contribution and to ensure a minimum rate of return to the members as
specified by GOI. As per report of the actuary, overall interest earnings
and cumulative surplus is more than the statutory interest payment
requirement. Hence no further provision is considered necessary.
B. Gratuity & Pension:
The Company has a defined benefit gratuity plan. Every employee who has
rendered continuous service of five years or more is entitled to get
gratuity at 15 days salary (15/26 X last drawn basic salary plus dearness
allowance) for each completed year of service subject to a maximum of Rs.1
million on superannuation, resignation, termination, disablement or on
death.
The Company has a scheme of pension at one of the stations in respect of
taken over employees from erstwhile State Government Power Utility.
These schemes are funded by the Company and are managed by separate trusts.
The liability for the same is recognised on the basis actuarial valuation.
C. Post-Retirement Medical Facility (PRMF):
The Company has Post-Retirement Medical Facility (PRMF), under which
retired employee and the spouse are provided medical facilities in the
Company hospitals / empanelled hospitals. They can also avail treatment as
Out-Patient subject to a ceiling fixed by the Company.
D. Terminal Benefits:
Terminal benefits include settlement at home town for employees &
dependents and farewell gift to the superannuating employees. Further, the
Company also provides for pension in respect of taken over employees from
erstwhile State Government Power Utility at another station.
E. Leave:
The Company provides for earned leave benefit (including compensated
absences) and half-pay leave to the employees of the Company which accrue
annually at 30 days and 20 days respectively. 75% of the earned leave is
en-cashable while in service and a maximum of 300 days on superannuation.
Half-pay leave is en-cashable only on superannuation up to the maximum of
240 days as per the rules of the Company. The liability for the same is
recognised on the basis of actuarial valuation.
The above mentioned schemes (C, D and E) are unfunded and are recognised on
the basis of actuarial valuation.
The summarised position of various defined benefits recognised in the
profit and loss account, balance sheet are as under:
(Figures given in { } are for previous year)
i) Expenses recognised in Profit & Loss Account:
Rs. million
A B C D
Current Service Cost 489 82 335 50
{496} {77} {391} {54}
Past Service Cost - - - -
{4144} {-} {-} {-}
Interest cost on benefit obligation 781 160 486 94
{376} {123} {361} {71}
Expected return on plan assets (427) - - -
{(371)} {-} {-} {-}
Net actuarial (gain)/loss recognised (399) 116 345 361
in the year {192} {212} {1111} {165}
Expenses recognised in the Profit & 444 358 1166 505
Loss Account {4837} {412} {1863} {290}
A = Gratuity/Pension
B = PRMF
C = Leave
D = Terminal Benefits
ii) The amount recognised in the Balance Sheet:
Rs. million
A B C D
Present value of obligation as 10,649 2,444 5,851 1,675
at 31.03.2010 {10,409} {2,133} {6,479} {1,255}
Fair value of plan assets as 9,871 - - -
at 31.03.2010 {5,364} {-} {-} {-}
Net liability recognised in 779 2,444 5,851 1,675
the Balance Sheet {5,045} {2,133} {6,479} {1,255}
A = Gratuity/Pension
B = PRMF
C = Leave
D = Terminal Benefits
iii) Changes in the present value of the defined benefit obligations:
Rs. million
A B C D
Present value of obligation 10,409 2,133 6,479 1,255
as at 1.04.2009 {5,361} {1,750} {5,160} {1,017}
Interest cost 781 160 486 94
{376} {123} {361} {71}
Current Service Cost 489 82 335 50
{496} {77} {391} {54}
Past Service Cost - - - -
{4,144} {-} {-} {-}
Benefits paid (886) (47) (1,794) (85)
{(211)} {(29)} {(544)} {(52)}
Net actuarial (gain)/loss on (144) 116 345 361
obligation {243} {212} {1,111} {165}
Present value of the defined 10,649 2,444 5,851 1,675
benefit obligation as at {10,409} {2,133} {6,479} {1,255}
31.03.2010
A = Gratuity/Pension
B = PRMF
C = Leave
D = Terminal Benefits
iv) Changes in the fair value of plan assets:
Rs. million
A B C D
Fair value of plan assets as at 1.04.2009 5,364 - - -
{4,623} {-} {-} {-}
Expected return on plan assets 427 - - -
{371} {-} {-} {-}
Contributions by employer 4,691 - - -
{512} {-} {-} {-}
Benefit paid (866) - - -
{(193)} {-} {-} {-}
Actuarial gain/(loss) (255) - - -
{51} {-} {-} {-}
Fair value of plan assets as at 9,871 - - -
31.03.2010 {5,364} {-} {-} {-}
A = Gratuity/Pension
B = PRMF
C = Leave
D = Terminal Benefits
v) The effect of one percentage point increase/decrease in the medical cost
of PRMF will be as under:
Rs. million
Particulars Increase by Decrease by
Service and Interest cost 50 39
Present value of obligation 422 336
F. Other Employee Benefits:
Provision for Long Service Award and Family Economic Rehabilitation Scheme
amounting to Rs.34 million (credit) (previous year debit of Rs.16 million)
for the year have been made on the basis of actuarial valuation at the year
end and credited to the Profit & Loss Account.
G. Details of the Plan Assets
The details of the plan assets at cost as on 31st March are as follows:
Rs. million
2010 2009
i) State Government securities 2,292 938
ii) Central Government securities 3,177 1,824
iii) Corporate Bonds/debentures 4,221 2,236
iv) RBI Special Deposit 240 240
v) Money Market Instruments 249 Nil
Total 10,179 5,238
H. Actuarial Assumptions:
Principal assumption used for actuarial valuation are:
2010 2009
i) Method used Projected Unit Credit Method
ii) Discount rate 7.50% 7.00%
iii) Expected rate of return on assets:
- Gratuity 8.00% 8.00%
- Pension 7.00% 9.00%
iv) Future salary increase 5.00% 4.50%
The estimates of future salary increases considered in actuarial valuation,
take account of inflation, seniority, promotion and other relevant factors,
such as supply and demand in the employment market. Further, the expected
return on plan assets is determined considering several applicable factors
mainly the composition of plan assets held, assessed risk of asset
management and historical returns from plan assets.
I. Actual return on plan assets Rs.681 million (previous year Rs.423
million).
J. The Company's best estimate of the contribution towards Gratuity/Pension
for the financial year 2010-11 is Rs.320 million.
20. The effect of foreign exchange fluctuation during the year is as under:
i) The amount of exchange differences (net) credited to the Profit & Loss
Account is Rs.189 million (previous year debit of Rs.244 million).
ii) The amount of exchange differences (net) credited to the carrying
amount of fixed assets and Capital work-in-progress is Rs.11,815 million
{previous year Rs.11,649 million (debit)}.
21. Borrowing costs capitalised during the year are Rs.14,804 million
(previous period Rs.12,221 million).
22. Segment information:
a) Business Segments:
The Company's principal business is generation and sale of bulk power to
State Power Utilities. Other business includes providing consultancy,
project management and supervision, oil and gas exploration and coal
mining.
b) Segment Revenue and Expense:
Revenue directly attributable to the segments is considered as Segment
Revenue. Expenses directly attributable to the segments common expenses
allocated on a reasonable basis are considered as Segment Expenses.
c) Segment Assets and Liabilities:
Segment assets include all operating assets in respective segments
comprising of net fixed assets and current assets, loans and advances.
Construction work-in-progress, construction stores and advances are
included in unallocated corporate and other assets. Segment liabilities
include operating liabilities and provisions.
Rs. Million
Business Segments
Generation
Current Year Previous Year
Revenue:
Sale of Energy/Consultancy, Project 461,687 417,913
Management and Supervision fees*
Internal consumption of electricity 551 514
Total 462,238 418,427
Segment Result# 101,524 90,531
Unallocated Corporate Interest and Other
Income
Unallocated Corporate expenses, interest and
finance charges
Profit before Tax
Income/Fringe Benefit Taxes (Net)
Profit after Tax
Other information:
Segment assets 469,569 424,333
Unallocated Corporate and other assets
Total assets 469,569 424,333
Segment liabilities 75,066 85,967
Unallocated Corporate and other liabilities
Total liabilities 75,067 85,967
Depreciation 26,180 23,376
Non-cash expenses other than Depreciation 109 245
Capital Expenditure 98,647 130,843
Rs. Million
Business Segments
Others
Current Year Previous Year
Revenue :
Sale of Energy/Consultancy, Project 1,539 1,325
Management and Supervision fees*
Internal consumption of electricity - -
Total 1,539 1,325
Segment Result# 582 418
Unallocated Corporate Interest and Other
Income
Unallocated Corporate expenses, interest and
finance charges
Profit before Tax
Income/Fringe Benefit Taxes (Net)
Profit after Tax
Other information:
Segment assets 1,433 1,045
Unallocated Corporate and other assets
Total assets 1,433 1,045
Segment liabilities 889 722
Unallocated Corporate and other liabilities
Total liabilities 889 722
Depreciation 2 2
Non-cash expenses other than Depreciation - -
Capital Expenditure 1,139 277
Rs. Million
Business Segments
Total
Current Year Previous Year
Revenue :
Sale of Energy/Consultancy, Project 463,226 419,238
Management and Supervision fees*
Internal consumption of electricity 551 514
Total 463,777 419,752
Segment Result# 102,106 90,949
Unallocated Corporate Interest and Other 24,677 30,615
Income
Unallocated Corporate expenses, interest and 17,929 27,969
finance charges
Profit before Tax
Income/Fringe Benefit Taxes (Net) 21,572 11,582
Profit after Tax 87,282 82,013
Other information:
Segment assets 471,002 425,378
Unallocated Corporate and other assets 657,735 626,870
Total assets 1,128,737 1,052,248
Segment liabilities 75,955 86,689
Unallocated Corporate and other liabilities 428,407 391,858
Total liabilities 504,362 478,547
Depreciation 26,182 23,378
Non-cash expenses other than Depreciation 109 245
Capital Expenditure 99,786 131,121
* Includes (-) Rs.6,006 million (previous year Rs.10,201 million) for sales
related to earlier years.
# Generation segment result would have been Rs.107,530 million (previous
period Rs.80,330 million) without including the sales related to earlier
years.
d) The operations of the Company are mainly carried out within the country
and therefore, geographical segments are inapplicable.
23. Related Party Disclosures:
a) Related parties:
i) Joint ventures:
Utility Powertech Ltd., NTPC-Alstom Power Services Private Ltd., BF-NTPC
Energy Systems Ltd.
ii) Key Management Personnel:
Shri R.S. Sharma Chairman and Managing Director
Shri Chandan Roy Director (Operations)
Shri R.K. Jain(1) Director (Technical)
Shri A.K. Singhal Director (Finance)
Shri R.C. Shrivastav Director (Human Resources)
Shri K.B. Dubey(2) Director (Projects)
Shri I.J. Kapoor Director (Commercial)
Shri. B.P. Singh(3) Director (Projects)
Notes:
(1). Superannuated on 31st December 2009.
(2). Superannuated on 31st July 2009.
(3). W.e.f. 1st August 2009.
b) Transactions with the related parties at a (i) above are as follows:
Rs. million
Particulars Current Year Previous Year
Transactions during the year:
Contracts for Works/Services for
services received by the Company:
- Utility Powertech Ltd. 2,176 1,853
- NTPC-Alstom Power Services Private Ltd. 99 355
Deputation of Employees:
- Utility Powertech Ltd. 17 13
- NTPC-Alstom Power Services Private Ltd 45 23
Dividend Received:
- Utility Powertech Ltd. 3 12
- NTPC-Alstom Power Services Private Ltd. 6 6
Amount recoverable for contracts for
works/services received:
- Utility Powertech Ltd. 3 17
- NTPC-Alstom Power Services Private Ltd 16 9
Amount payable for contracts for works/
services received:
- Utility Powertech Ltd. 361 281
- NTPC-Alstom Power Services Private Ltd 147 143
Amount recoverable on account of deputation
of employees:
- Utility Powertech Ltd. 7 5
- NTPC-Alstom Power Services Private Ltd 18 37
The Company has received bank guarantees from Utility Powertech Ltd. for an
amount of Rs.40 million (previous year Rs.39 million).
c) Remuneration to key management personnel for the year is Rs.26 million
(previous year Rs.14 million) and amount of dues outstanding to the Company
as on 31st March 2010 are Rs.1 million (previous year Rs.3 million).
24. Disclosure regarding leases:
a) Finance leases:
The Company has taken on lease certain vehicles and has the option to
purchase the vehicles as per terms of the lease agreements, details of
which are as under:
Rs. million
31.03.2010 31.3.2009
a) Obligations towards minimum lease payments:
Not later than one year 7 6
Later than one year and not later than five years 8 14
Later than five years - -
Total 15 20
b) Present value of (a) above:
Not later than one year 6 4
Later than one year and not later than five years 7 12
Later than five years - -
Total 13 16
c) Finance Charges 2 4
b) Operating leases:
The Company's significant leasing arrangements are in respect of operating
leases of premises for residential use of employees, offices and guest
houses/transit camps. These leasing arrangements are usually renewable on
mutually agreed terms but are not non-cancellable. Schedule 20 - Employees'
remuneration and benefits include Rs.689 million (previous period Rs.307
million) towards lease payments, net of recoveries, in respect of premises
for residential use of employees. Lease payments in respect of premises for
offices and guest house/transit camps are shown as Rent in Schedule 21 -
Generation, Administration and Other Expenses.
25. Earning per share:
The elements considered for calculation of Earning Per Share (Basic and
Diluted) are as under:
Current Year Previous Year
Net Profit after Tax used as numerator 87,282 82,013
- Rs. million
Weighted average number of equity shares 8245,464,400 8245,464,400
used as denominator
Earning per share (Basic and Diluted)- 10.59 9.95
Rupees
Face value per share - Rupees 10/- 10/-
26. a) The item-wise details of deferred tax liability (net) are as under:
Rs. million
31.03.2010 31.03.2009
Deferred tax liability:
i) Difference of book depreciation and tax 41,046 70,045
depreciation
Less: Deferred tax assets
i) Provisions & Other disallowances for tax 8,478 15,310
purposes
ii) Disallowances u/s 43B of the Income Tax 2,074 3,385
Act, 1961
10,552 18,695
Deferred tax liability (net) 30,494 51,350
During the year, the deferred tax liability (net) and the deferred tax
recoverable from the beneficiaries as at 31st March 2009 amounting to
Rs.51,349 million have been reviewed and restated to Rs.24,942 million. In
terms of Regulation 39, CERC Tariff Regulations, 2009, the Company has
determined the amount of the deferred tax liability (net) materialised
during the year pertaining to the period up to 31st March 2009 by
identifying the major changes in the elements of deferred tax
liability/asset, as recoverable from the beneficiaries. Accordingly,
deferred tax liability (net) and the deferred tax recoverable from the
beneficiaries as at 31st March 2010 works out to Rs.30,494 million and
Rs.28,402 million respectively. The net increase during the year in the
deferred tax liability is Rs.2,091 million (previous year decrease Rs.4,488
million) has been debited to Profit & Loss Account.
27. Research and development expenditure charged to revenue during the year
is Rs.206 million (previous period Rs.81 million).
28. Interest in Joint Ventures:
a) Joint Venture Entities:
Company Proportion of ownership interest as on (Excluding Share Application
Money):
31.03.2010 31.03.2009
% age % age
1. Utility Powertech Ltd. 50 50
2. NTPC-Alstom Power Services Private Ltd. 50 50
3, NTPC-SAIL Power Company Private Ltd. 50 50
4. NTPC-Tamilnadu Energy Company Ltd. 50 50
5. Ratnagiri Gas and Power Private Ltd.* 29.65 28.33
6. Aravali Power Company Private Ltd. 50 50
7. NTPC-SCCL Global Ventures Private Ltd. 50 50
8. Meja Urja Nigam Private Ltd. 50 50
9. NTPC-BHEL Power Projects Private Ltd. 50 50
10. BF-NTPC Energy Systems Ltd. 49 49
11. Nabinagar Power Generating Company Private 50 50
Ltd.
12. National Power Exchange Ltd.* 16.67 16.67
13. International Coal Ventures Private. Ltd.* 14.28 -
14. National High Power Test Laboratory Private 25 -
Ltd.
15. Transformers & Electrical Kerala Ltd.* 44.60 -
16. Energy Efficiency Services Private Ltd.* 25 -
* The accounts are unaudited.
The above joint venture entities are incorporated in India. The Company's
share of the assets, liabilities, contingent liabilities and capital
commitment as at 31st March 2010 and income and expenses for the year in
respect of joint venture entities based on audited/unaudited accounts are
given below:
Rs. million
31.03.2010 31.03.2009
A. Assets:
Long Term Assets 86,729 59,208
Current Assets 10,320 6,509
Total 97,049 65,717
B. Liabilities:
Long Term Liabilities 63,395 42,537
Current Liabilities and Provisions 9,155 6,242
Total 72,550 48,779
C. Contingent Liabilities 599 148
D. Capital Commitments 39,895 36,936
Current Year Previous Year
E. Income 18,369 6,412
F. Expenses 17,238 7,879
b) Joint Venture Operations:
The Company along-with M/s Geopetrol International Inc., M/s Canoro
Resources Ltd. and M/s Brownstone Ventures Inc. (the consortium) is
carrying out exploration for oil and gas block (Block AA-ONN-2003/2)
allotted in the State of Arunachal Pradesh for which a Production Sharing
Contract (PSC) was entered into with Government of India. M/s Geopetrol
International Inc. with 30% participating interest (PI) is the Operator of
the Block. M/s Canoro Resources Ltd. and M/s Brownstone Ventures Inc. with
15% PI each and the Company with 40% PI are the other joint venture
partners.
During the year, unforeseen difficulties were encountered in the drilling
plinth preparation at the first location where the operations were taken
up. The operator has proposed to withdraw from the PSC and served a notice
of resignation. The Company is in search of suitable partner(s) for
reconstitution of the consortium and for operation of the block to restart
the drilling activities. The Company has taken up the matter with
Directorate General of Hydrocarbons for suitable time extension on account
of delays in grant of statutory clearances for completion of minimum work
programme (MWP) and also on account of force majeure conditions.
Based on the un-audited statement of the accounts forwarded by the
Operator, the Company's share of PI in respect of assets and liabilities
as at 31st March 2010 and expenditure for the year ended on that date has
been accounted for as under:
Rs. million
Item 2009-10 2008-09
(Un-audited) (Audited)
Expenses 32 87
Fixed Assets including Capital work-in-progress 80 35
Other Assets 69 54
Current Liabilities 18 3
Contingent liability 465 -
The Company's share of the MWP committed under the PSC for the block is
Rs.606 million (Previous year Rs.612 million).
29. As required by Accounting Standard (AS) 28 Impairment of Assets'
notified under the Companies (Accounting Standards) Rules, 2006, the
Company has carried out the assessment of impairment of assets. Based on
such assessment, there has been no impairment loss during the year.
30. Foreign currency exposure not hedged by a derivative instrument or
otherwise:
Rs. million
Particulars Currencies Amount
31.03.2010 31.03.2009
a) Borrowings, including interest USD 70,522 74,612
accrued but not due thereon. JPY 29,113 32,339
Others 4,225 4,727
b) Sundry creditors/deposits and USD 9,672 6,902
retention monies EURO 3,493 1,218
Others 419 997
c) Sundry debtor and Bank balances USD 16 119
EURO - 310
d) Unexecuted amount of contracts USD 33,465 43,818
remaining to be executed EURO 46,426 40,270
Others 329 587
31. The pre-commissioning expenses during the year amounting to Rs.1,459
million (previous year Rs.1,689 million) have been included in Fixed
Assets/Capital work-in-progress after adjustment of pre-commissioning sales
of Rs.961 million (previous year Rs.1,610 million) resulting in a net pre-
commissioning expenditure of Rs. 498 million (previous year Rs.79 million).
32. Payment to the Statutory Auditors (Schedule - 21):
Rs. million
Current year Previous year
Audit Fees 7 8
Tax audit Fees 3 3
Certification Fees 8 7
Reimbursements:
- Travelling Expenses 4 5
- Service Tax 2 2
Total 24 25
33. Information in respect of Micro, Small and Medium Enterprises as at
31st March 2010:
Rs. million
Particulars Amount
a) Amount remaining unpaid to any supplier:
Principal amount 5
Interest due thereon (* Rs.218,964/-) *
b) Amount of interest paid in terms of 5
section 16 of the Micro, Small and Medium
Enterprises Development Act, 2006 along-with
the amount paid to the suppliers beyond the
appointed day.
c) Amount of interest due and payable for the *
period of delay in making payment (which have
been paid but beyond the appointed day during
the year) but without adding the interest
specified under the Micro, Small and Medium
Enterprises Development Act, 2006.
(*Rs.10,813/-)
d) Amount of interest accrued and remaining *
unpaid (*2,18,964/-)
e) Amount of further interest remaining due *
and payable even in the succeeding years, until
such date when the interest dues as above are
actually paid to the small enterprises,
for the purpose of disallowances as a deductible
expenditure under section 23 of Micro, Small
and Medium Enterprises Development Act, 2006
(*Rs.1,77,047/-)
34. Loans and Advances due from subsidiaries:
Rs. million
Name of Subsidiary A B C D
NTPC Electric Supply Company Ltd. 87 129 306 524
NTPC Vidyut Vyapar Nigam Ltd 85 20 212 78
Pipavav Power Development Company Ltd. - * # *
(# Rs.27,641/- and* Rs.11096/-)
NTPC Hydro Ltd. 10 3 40 68
Kanti Bijlee Utpadan Nigam Ltd. 331 394 394 492
Bharatiya Rail Bijlee Company Ltd. 20 9 72 82
Total 533 555 1,024 1,244
A = Outstanding Balance as at - 31.03.2010
B = Outstanding Balance as at - 31.03.2009
C = Maximum Amount Outstanding - 31.03.2010
D = Maximum Amount Outstanding - 31.03.2009
35. Disclosure as required by Clause 32 of Listing Agreements:
A. Loans and Advances in the nature of Loans:
1. To Subsidiary Companies:
Rs. million
Name of the Company A B C D
Kanti Bijlee Utpadan Nigam Ltd. 263 308 308 400
NTPC Vidyut Vyapar Nigam Ltd. Nil Nil 165 Nil
A = Outstanding Balance as at - 31.03.2010
B = Outstanding Balance as at - 31.03.2009
C = Maximum Amount Outstanding - 31.03.2010
D = Maximum Amount Outstanding - 31.03.2009
2. To Firms/Companies in which Directors are interested:
Nil
3. Where there is no repayment schedule or repayment beyond seven year or
no interest or interest below Section 372A of the Companies Act, 1956:
Rs.263 million
B. Investment by the loanee (as detailed above) in the shares of NTPC:
Nil
36. Estimated amount of contracts remaining to be executed on capital
account and not provided for as at 31st March 2010 is Rs. 305,346 million
(previous year Rs.272,199 million).
37. Contingent Liabilities:
1. Claims against the Company not acknowledged as debts in respect of:
(i) Capital Works:
Some of the contractors for supply and installation of equipments and
execution of works at our projects have lodged claims on the Company for
Rs.38,798 million (previous year Rs.46,623 million) seeking enhancement of
the contract price, revision of work schedule with price escalation,
compensation for the extended period of work, idle charges etc. These
claims are being contested by the Company as being not admissible in terms
of the provisions of the respective contracts.
The company is pursuing various options under the dispute resolution
mechanism available in the contract for settlement of these claims. It is
not practicable to make a realistic estimate of the outflow of resources if
any, for settlement of such claims pending resolution.
(ii) Land compensation cases:
In respect of land acquired for the projects, the land losers have claimed
higher compensation before various authorities/courts are yet to be
settled. In such cases, contingent liability of Rs.17,863 million
(previous year Rs.15,515 million) has been estimated. (iii) Others In
respect of claims made by various State/Central Government
departments/Authorities towards building permission fees, penalty on
diversion of agricultural land to non- agricultural use, Nala tax, Water
royalty etc. and by others, contingent liability of Rs.12,848 million
(previous year Rs.12,585 million) has been estimated. This includes amount
of Rs.2,558 million (previous year Rs.2,558 million) billed by the Coal
supplier on account of MPGATSV tax up to 31st July 2007 which is subject
matter of dispute before the Hon'ble Supreme Court.
In respect of (i) and (ii) above, payments, if any, by the company on
settlement of the claims would be eligible for inclusion in the capital
cost for the purpose of determination of tariff as per CERC Regulations
subject to prudence check by the CERC. In case of (iii), the estimated
possible reimbursement is Rs. 4,289 million (previous year Rs.2,750
million).
2. Disputed Income Tax/Sales Tax/Excise Matters:
Disputed Income Tax/Sales Tax/Excise matters are pending before various
Appellate Authorities amounting to Rs. 22,924 million (previous year Rs.682
million) are disputed by the Company and contested before various Appellate
Authorities. Many of these matters are disposed off in favour of the
Company but are disputed before higher authorities by the concerned
departments. In such cases, the company estimated possible reimbursement of
Rs.17,934 million (previous year Rs.8 million).
3. Others:
Other contingent liabilities amounts to Rs. 2,661 million (previous year
Rs.1,698 million). Some of the beneficiaries have filed appeals against the
tariff orders of the CERC. The amount of contingent liability in this
regard is not ascertainable.
38. Managerial remuneration paid/payable to Directors:
Rs. million
Current Year Previous Year
Salaries and allowances 19 11
Contribution to provident fund & other 2 1
funds including gratuity & group
insurance
Other benefits 5 2
Directors' fees 3 2
In addition to the above remuneration the whole time Directors have been
allowed the use of staff car including for private journeys, on payment of
Rs.780/- per month, as contained in the Ministry of Finance (BPE) Circular
No.2 (18)/pc/64 dt.29.11.64, as amended.
The provisions for/contribution to gratuity, leave encashment and post-
retirement medical facilities are ascertained on actuarial valuation on
overall Company basis and hence not ascertainable separately.
39. During the year, Further Public Offer' of 412,273,220 equity shares of
Rs.10/- each of the Company through an offer for sale by the India, acting
through the Ministry of Power, GOI was made through the alternate book
building process. Consequently, shareholding of the reduced to 84.50% from
89.50%.
40. Licensed and Installed Capacities as at: (As certified by Management):
Current Year Previous Year
Licensed Capacity - Not applicable
Installed Capacity (MW Commercial units) 28,902 27,912
Quantitative information in respect of Generation and Sale of Electricity:
Current Period Previous Period
a) Pre-commissioning period:
Generation (in MUs) 401 785
Sales (in MUs) 338 724
b) Commercial period:
Generation (in MUs) 218,439 206,156
Sales (in MUs) 205,091 193,688
(Rs. million)
Current Year Previous Year
c) Value of imports calculated on CIF
basis:
Capital goods 8,970 10,386
Spare parts 1,393 919
d) Expenditure in foreign currency:
Professional and Consultancy fee 53 24
Interest 3,588 4,067
Others 188 601
e) Value of Components, Stores and Spare parts consumed (including fuel):
(Rs. million)
% age Amount % age Amount
Current Year Previous Year
Imported 14.13 42,607 10.40 28,855
Indigenous 85.87 258,960 89.60 248,484
(Rs. million)
Current Year Previous Year
f) Earnings in foreign exchange:
Professional & Consultancy fee 8 21
Interest - 14
Others 1 1
41. Figures have been rounded off to nearest rupees in millions.
42. Previous year figures have been regrouped /rearranged wherever
necessary.
For and on behalf of the Board of Directors
(A.K. Rastogi) (A.K. Singhal) (R.S. Sharma)
Company Secretary Director (Finance) Chairman & Managing Director
As per our report of even date
For Dass Gupta & Associates
Chartered Accountants
Firm Reg. No.000112N
[Naresh Kumar]
Partner
M. No.: 082069
For S.K. Mittal & Co.
Chartered Accountants
Firm Reg. No.001135N
[Krishan Sarup]
Partner
M. No.: 010633
For Varma and Varma
Chartered Accountants
Firm Reg. No.: 004532S
[Cherian K. Baby]
Partner
M. No.: 016043
For Parakh & Co.
Chartered Accountants
Firm Reg. No.01475C
[V.D. Mantri]
Partner
M. No.: 074678
For B.C. Jain & Co.
Chartered Accountants
Firm Reg. No.001099C
[Ranjeet Singh]
Partner
M. No.: 073488
For S.K. Mehta & Co.
Chartered Accountants
Firm Reg. No.000478N
[Rohit Mehta]
Partner
M. No.: 091382
Place: New Delhi
Date : 17th May 2010
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