S.  Description                               2010-11       2009-10
 No.
 
 1 Contingent liabilities :
 
 A Claims against the company not 
 acknowledged as debt :
 
 i) a Income Tax Pending Appeals    s Crore     32.61         28.77
 
 b Against which paid under protest 
 included under the head deposit 
 others                           s Crore       0.02          0.03
 
 ii) a Sales Tax Demand            s Crore     509.84        353.06
 
 b Against which paid under 
 protest included under the
 head Advances Recoverable       s Crore      92.97         76.91
 
 iii) a Excise Duty demands        s Crore     216.14        195.47
 
 b Against which paid under 
 protest included under the head
 Advances Recoverable            s Crore       8.41          5.01
 
 iv) a Custom Duty demands         s Crore       0.21          0.21
 
 b Against which paid under 
 protest included under the head
 Advances Recoverable            s Crore       0.06          0.06
 
 v) Court & Arbitration cases      s Crore     375.07        254.26
 
 vi) a Liquidated Damages          s Crore    1401.11       1287.94
 
 b Amount deducted by customers 
 towards LD included in vi)a       s Crore     825.70        730.57
 
 vii) Counter Claim by contractors s Crore       0.61          0.61
 
 viii) a Service Tax Demand        s Crore     214.13        105.74
 
 b Against which paid under 
 protest                           s Crore       0.22          0.22
 
 ix) Others                        s Crore     120.58         59.10
 
 (In view of the various court cases and litigations and claims disputed
 be the company financial impact as to outflow of resources is not
 ascertainable at this stage).
 
 2 Cash credit limit from banks aggregating to s 600 Crore (previous
 year s 100 Crore) and Company''s counter guarantee / indemnity
 obligations in regard to bank guarantee / letters of credit limit
 aggregating to s 49400 Crore (previous year s 40000 Crore) sanctioned
 by the consortium banks are secured by first charge by way of
 hypothecation of raw materials, components, work in progress, finished
 goods, stores, book debts and other current assets both present and
 future. The outstanding bank guarantees as at 31.03.2011 is s 37474
 Crore (previous year s 31541 Crore) and Corporate Guarantee as on
 31.03.2011 is s 4192 Crore (Previous year s 1685 Crore).
 
 3 Other liabilities include a sum of s 100.51 Crore (previous year s
 100.51 Crore) towards guarantee fee demanded by the Government of India
 in respect of foreign currency loans taken by the company at the
 instance of the Government upto 1990-91. The matter for its waiver has
 been taken up with the Government since there was no stipulation for
 payment of such guarantee fee at the time the loans (guaranteed by
 Government) were taken. DHI has been again requested for waiver of the
 guarantee fee by BHEL vide letter dated 18.02.2011.
 
 4 Amorphous Silicon Solar Cell Plant (ASSCP), Gurgaon was taken on
 April 1, 1999 from Ministry of Non- conventional Energy Sources on
 lease for a period of 30 years. The formal lease agreement with the
 Ministry of Non-Conventional Energy Sources is yet to be finalised.
 
 5 Balances shown under debtors, creditors, contractor''s advances,
 deposits and stock/materials lying with sub- contractors/fabricators
 are subject to confirmation, reconciliation & consequential adjustment,
 if any. The reconciliation is carried out ongoing basis & provisions
 wherever considered necessary have been made in line with the
 guidelines.
 
 6 The company has changed the Accounting Policy on Provision for
 warranties in respect of AS-7(R) construction contracts during the
 year. As against creation of provision for warranties @ 2.5% of
 contract value on trial operation, the company has revised it that
 company provides warranty cost at 2.5% of the revenue progressively as
 and when it recognises the revenue and maintains the same through the
 warranty period . This is against the earlier policy of deferring
 warranty provision and corresponding revenue till the completion of
 Trial Operation.  The impact due to change in the accounting policy for
 the year 2010-11 is increase in turnover by Rs 2772.79 Crore, Provision
 for Contractual Obligation by Rs 2077.31 Crore and Profit before Tax by
 Rs 695.48 Crore.
 
 7 The Company has modified the Accounting Policy on Employee Benefits
 during the year in respect of leave liability. As against the policy of
 creating provision for these leaves on accrual basis, the company
 changed it to actuarial valuation basis treating the same as Other
 Long Term Benefits based on behavioural patterns etc. as per AS-15(R).
 The impact due to change in accounting policy for the year 2010-11 is
 increase in Profit before Tax by Rs 240.75 Crore.
 
 8 During the year the cranes used at the project sites have been
 classified under General Plant & Machinery as against the earlier
 practice of Erection Equipment. Accordingly the depreciation rate has
 been changed based on a review of their useful life, from 20% p.a. to
 8% p.a., with retrospective effect. The impact due to the above change
 is decrease in depreciation by Rs. 80.62 Crore ( Rs 49.03 Crore pertains
 to earlier years) and increase in profit before tax by Rs46.80 Crore
 
 9 The operations of the Libyan project site has been consolidated
 based on the unaudited accounts maintained at the regional headquarter
 at Noida, in view of the ongoing turmoil in Libya.
 
 10 The company accounts the leave encashment expenditure with 26 days a
 month as base. The company proposed a change in the base as 30 days a
 month in line with the directives of Government of India, Department of
 Public Enterprise vide their O.M. dated 20.9.2005. However, some of the
 workers unions have raised a dispute under section 9(A) of the
 Industrial Dispute Act 1947 against the proposed changes in the
 calculation of leave encashment with 30 days month base instead of 26
 days month.  As per section 33 (3) of the Industrial Dispute Act no
 employer can alter the service conditions during the pendency of such
 proceedings with the Conciliation Officer. Pending final disposal of
 the dispute by the Conciliation officer/ Industrial Tribunal, the
 status quo is being continued. The proposed change has already been
 effected for the employees who have joined/ joining BHEL on or after
 1st Jan 2010.
 
 11 The disclosure relating to derivative instruments:
 
 a) The derivative instruments that are hedged and outstanding as on
 31.03.2011 is Nil (previous year Nil).
 
 12 The disclosure relating to AS-15 (R) – Employee Benefits
 
 a) Gratuity Plan
 
 The gratuity liability arises on account of future payments, which are
 required to be made in the event of retirement, death in service or
 withdrawal. The liability has been assessed using projected unit credit
 actuarial method.
 
 13 Related Party Transactions:
 
 i) Related Parties where control exists (Joint Ventures):
 
 Powerplant Performance Improvement Ltd.
 
 BHEL-GE Gas Turbine Services Pvt. Ltd.
 
 NTPC-BHEL Power Projects Pvt. Ltd.
 
 Udangudi Power Corporation Ltd.
 
 Barak Power Pvt. Ltd.
 
 Raichur Power Corporation Ltd.
 
 Dada Dhuniwale Khandwa Power Ltd.  
 
 ii) Other related parties (Key Management Personnel- Functional
 Directors: existing & retired):
 
 S/Shri B.P. Rao , Anil Sachdev, Atul Saraya, O. P. Bhutani and C S
 Verma (upto 10.06.2010)
 
 14 Joint Ventures / Subsidiaries :
 
 A subsidiary company has been incorporated on 19th January 2011 under
 the name of BHEL Electrical Machnies Limited which would take up
 manufacture of rotating electrical machines, after acquiring the assets
 of Kasargod unit of KEL, Kerala. BHEL owns 51% equity in the company
 and Govt. of Kerala owns 49%.
 
 Pursuant to compliance of Accounting Standard-27 issued by the
 Institute of Chartered Accountants of India, relevant disclosures
 relating to Joint Ventures are as follows:
 
 15 The disclosure relating to Accounting Standard -29
 
 b) Liquidated damages are provided in line with the Accounting Policy
 of the company and the same is dealt suitably in the accounts on
 settlement or otherwise. Contingent liability relating to liquidated
 damages is shown in Note No. 5 of Sch-19.
 
 c) The provision for contractual obligation is made at the rate of 2.5%
 of the contract revenue in line with significant Accounting Policy
 No.14 to meet the warranty obligations as per the terms and conditions
 of the contract. The same is retained till the completion of the
 warranty obligations of the contract. The actual expenses on warranty
 obligation may vary from contract to contract and on year to year
 depending upon the terms and conditions of the respective contract.
 
 16 Item of expense and income less than s One Lakh are not considered
 for booking under Prior Period Items.