a) Terms / rights attached to the equity shares:
The company has only one class of equity shares having a par value of Rs.
2 per share (previous year Rs. 10 per share). Each holder of the equity
shares is entitled to one vote per share.
1 Contingent liabilities :
Claims against the company not acknowledged as debt :
i) a Income Tax Pending Appeals Rs. Crore 45.20 32.61
b Against which paid under protest included under
the head deposits others Rs. Crore 0.00 0.02
ii) a Sales Tax Demand Rs. Crore 732.70 509.84
b Against which paid under protest included
under the head Advances Recoverable Rs. Crore 98.39 92.97
iii) a Excise Duty demands Rs. Crore 320.08 216.14
b Against which paid under protest included
under the head Advances Recoverable Rs. Crore 7.84 8.41
iv) a Custom Duty demands Rs. Crore 0.21 0.21
b Against which paid under protest included under
the head Advances Recoverable Rs. Crore 0.06 0.06
v) Court & Arbitration cases Rs. Crore 559.23 375.07
vi) a Liquidated Damages Rs. Crore 2283.63 1401.11
b Amount deducted by customers towards
LD included in vi) a Rs. Crore 1579.19 825.70
vii) Counter Claim by contractors Rs. Crore 0.61 0.61
viii) a Service Tax Demand Rs. Crore 132.17 214.13
b Against which paid under protest Rs. Crore 0.00 0.22
ix) Others Rs. Crore 106.34 120.58
x) Corporate Guarantee given on behalf of
subsidiary company (BHPV) Rs. Crore 9.57 -
(In view of the various court cases and litigations and claims disputed
by the company financial impact as to outflow of resources is not
ascertainable at this stage).
2 Cash credit limit from banks aggregating to Rs. 3000 crore (previous
year Rs. 600 crore) and Company''s counter guarantee / indemnity
obligations in regard to bank guarantee / letters of credit limit
aggregating to Rs. 52000 Crore (previous year Rs. 49400 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 31.03.2012 is Rs. 38200
Crore (previous year Rs. 37474 Crore) and Corporate Guarantee as on
31.03.2012 is Rs. 4448.14 Crore (Previous year Rs. 4192 Crore).
3 Other payable/ liabilities include a sum of Rs. 100.51 Crore (previous
year Rs.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. Vide BHEL letter dated 18.02.2011, Department
of Heavy Industries (DHI) has been again requested for waiver of the
guarantee fee. The matter is under discussions with DHI.
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 as the company
is in the business of long term construction contracts & provisions
wherever considered necessary have been made in line with the
a) The estimates of total costs and total revenue in respect of
construction contracts entered on or after 1st April 2003 in accordance
with Accounting Standard (AS) -7 (R) Construction Contracts are
reviewed and up dated periodically to ascertain the percentage
completion for revenue recognition. However, it is impracticable to
quantify the impact of change in estimates.
6 The company has accounted for leave encashment expenditure with 30
days a month as base for computation of encashment of leave as per
specific instructions from Department of Public Enterprises (DPE) on
the subject. This is against the earlier formula of computation of
leave encashment on 26 days a month as base. The impact due to this
change, is increase in Profit before tax by Rs.180.46 crore for the year
2011-12. However, in some of the units the workers union has filed an
appeal against the change and court has given interim stay order. The
consequentail impact, if any, will be accounted for in the year of
7 The operations of the Libyan project site have been consolidated
based on the unaudited accounts maintained at the regional headquarter
at Noida, in view of the ongoing turmoil in Libya.
*The above amount include leave encashment on payment basis & excludes
group insurance premium.
The CMD and functional directors have been allowed the use of staff car
for both duty and non-duty journeys. The ceiling of non duty journey is
1000 kms p.m against recovery of prescribed amount in accordance with
terms and condition of appointment. The monetary value of the
perquisite for the use of car, if calculated in accordance with the
provisions of I.T. Rules 1962 would amount to Rs.0.02 Crore (Previous
Year Rs.0.01 Crore)
8 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
Reconciliation of opening and closing balances of the present value of
the defined benefit obligation as at the year ended are as follows:
9 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. (wound up w.e.f. 11.10.2011)
Raichur Power Corporation Ltd.
Dada Dhuniwale Khandwa Power Ltd.
Latur Power Company Ltd. (w.e.f. 06.04. 2011)
ii) Other related parties (Key Management Personnel- Functional
Directors: existing & retired):
S/Shri B.P. Rao , Anil Sachdev (upto 31.03.2012), Atul Saraya, O. P.
Bhutani, M.K. Dube (w.e.f. 25.06.2011) and P. K. Bajpai (w.e.f.
a) During the year company has sub-divided existing equity shares of
face value of Rs. 10/- into 5 equity shares of face value of Rs. 2/- each
and the record date was fixed 04.10. 2011. Hence, previous year Basic
and Diluted earning per share has been restated accordingly.
10.1 The company has filed Draft Red Herring Prospectus (DRHP) dated
28.09.2011 with Securities and Exchange Board of India (SEBI) on
30.09.2011 for disinvestment of 5% of the paid up equity capital out of
Government of India''s shareholding. Consequent upon the receipt of
''no-objection'' for withdrawal of DRHP for FPO, from Department of
Heavy Industry/ Department of Disinvestment, the Board of Directors in
its meeting held on 03.04. 2012 has approved the withdrawal of DRHP
filed by the company with (SEBI).
b) The provision for diminution in value of investment in PPIL has been
made since the company is under liquidation and the amount paid as
equity is not recoverable, the investment in Barak Power Pvt. Ltd. is
written off as the company has been wound up w.e.f. 11.10.2011.
c) Aggregate amount of company''s interest in Joint Ventures as per
accounts is as under:
Latur power company Ltd. was incorporated on 06.04.2011. Therefore,
first account of the company are made for the period from 06.04.2011 to
11 As per the listing agreement with the Stock Exchanges, the requisite
details of loans and advances in the nature of loans, given by the
Company are given below:
ii) No loans have been given (other than loans to employees), wherein
there is no repayment schedule or repayment is beyond seven years; and
iii) There are no loans and advances in the nature of loans, to
firms/companies, in which directors are interested.
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 item No. 5 of Note no. 31
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 Note no. 1 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
12 The financial statements have been prepared in line with the
requirements of Revised Schedule VI of Companies Act, 1956 as
introduced by the Ministry of Corporate Affairs from financial year
ended on 31st March 2012. Accordingly, assets and liabilities are
classified between current and non-current considering 12 months period
as operating cycle. The adoption of Revised Schedule VI does not impact
recognition and measurement principles followed for preparation of
financial statements. However, it has significant impact on
presentation and disclosures made in the financial statements.
Consequently, the company has re-classified previous year figures to
comfirm to this year classification.
13 Item of expense and income less than Rs. one Lakh are not considered
for booking under Prior Period Items.