1.  a) Contingent Liabilities as on: -
 
                                                    (Rs. in Crore)
 
 Description                          Opening Balance Closing Balance
 
                                           01/04/2010      31/03/2011
 
 Claims against the Company not 
 acknowledged as debts in respect of
 
 - Capital Works                              4452.69        5112.64
 
 - Land Compensation Cases                      82.82          71.97
 
 - Others
 
 - Disputed Income Tax Demand                    0.09          10.99
 
 - Disputed Sales Tax Demand                  2099.20        2244.45
 
 - Others                                      288.96         149.44
 
 Total                                        6923.76        7589.49
 
 b) The above contingent liabilities do not include contingent
 liabilities on account of pending cases in respect of service matters &
 others where the amount cannot be quantified.
 
 c) It is not practicable to disclose the uncertainties relating to any
 outflow.
 
 d) There is a possibility of reimbursement to Corporation, of Rs.42.39
 Crore (Previous year Rs.41.96 Crore) towards above contingent
 liabilities.
 
 2.  Estimated amount of contracts remaining to be executed on capital
 account and not provided for Rs.6286.47 Crore (Previous year Rs.8265.86
 crore)
 
 3.  The company made initial public offering (IPO) during last
 financial year i. e. in 2009-10. Out of the IPO proceeds, a sum of
 Rs.1592.59 Crore has been utilised up to 31.03.2011 for re-coupment of
 capital expenditure already incurred from internal accruals on the
 projects specified for utilisation, Rs.2300 Crore has been invested as
 per extant investment policy of the company, Rs.38.71 Crore recouped for
 meeting IPO expenditure and balance of Rs.94.40 Crore is lying in bank
 account under Corporate Liquidity Term Deposit (CLTD).
 
 4.  a) Title deeds/title in respect of Land of some Projects/Units
 amounting to Rs.60.60Crore (Previous year Rs.56.89 crore), covering an area
 of 2192.36 hectare (Previous year 1864.13 hectare), are yet to be
 executed/passed. Expenses on stamp duty etc. relating to registration
 thereof will be accounted for as and when incurred.
 
 b) Land does not include the land taken from Sashatra Seema Bal (SSB)
 for Subansiri Upper Project on lease for a period of 99 years @
 notional rent of Rs.1/- per annum.
 
 5.  a) Central Electricity Regulatory Commission (CERC) has notified by
 Regulations the terms and conditions for determination of tariff
 applicable with effect from 1st April 2009 for a period of five years
 vide notification dated 19.01.2009. The petitions for all 12 power
 stations have since been filed and tariff for 3 power stations already
 stands approved.
 
 The said regulations inter-alia provides that for the purpose of filing
 petitions, Return on Equity (ROE, a component of tariff) is to be
 grossed up using applicable income tax rate for the financial Year
 2008-09 and difference in ROE, if any, that may arise due to change in
 income tax rate during the tariff period 2009-14, is to be claimed in
 2014-15. However, keeping in view the provisions of Accounting Standard
 9 on Revenue Recognition, tariff has been recomputed based on the
 principle enunciated in the aforesaid regulation by grossing up the ROE
 with applicable income tax rate for the financial year 2010-11 and
 sales have been provisionally recognized at Rs.3852.86 Crore, which
 includes Rs.391.77 Crore towards grossing up of ROE with applicable tax
 rates of 2010-11 viz-a-viz tax rates of 2008-09, (Previous year
 Rs.3306.63 Crore) also taking into consideration the principle of
 conservatism.
 
 The ibid regulation also provides that pending determination of tariff,
 the company is to provisionally bill the beneficiary at tariff approved
 by the CERC as applicable as on 31st March 2009. The amount
 provisionally billed comes to Rs.3261.42 Crore (Previous year Rs.2901.49
 Crore). Accordingly, unbilled sale for the current year comes to
 Rs.591.44Crore (Previous year Rs.405.14 Crore).
 
 b) Sales of Rs.592.44 crore included in Prior Period Adjustment (Schedule
 21) represent the difference due to grossing up of ROE at normal income
 tax instead of MAT rate, which was considered for grossing up in
 2009-10 and other tax adjustments relating to the beneficiary States.
 
 6.  Pending approval of the competent authority, provisional payments
 made towards executed quantities of some of the items beyond approved
 quantities as also for extra items, are included in Capital
 Work-in-Progress/Fixed Asset.
 
 7.  Capital work in progress includes Rs.648.78 Crore as at 1st April
 2010 and Rs.161.25 Crore during the year totalling to Rs.810.03 Crore as at
 31.03.2011 on account of Survey & Investigation expenses and
 Administration & other general overhead expenses of Construction
 Projects. Similarly Capital Work in Progress includes Rs.172.35 crore on
 account of Administration & other general overhead expenses of
 Corporate Office & Regional Offices allocated to these projects during
 the year. This accounting treatment is being followed consistently in
 line with the Significant Accounting Policy No.4.1 and 4.3 as such
 expenditure forms part of Capital cost of the project.
 
 8.  a) Balances shown under Material issued to contractors, claims
 recoverable including insurance claims, advance for Capital
 Expenditure, Sundry Debtors, Advances to Contractors, Sundry Creditors
 and Deposits/Earnest money from contractors are subject to
 reconciliation/ confirmation and respective consequential adjustments.
 Claims recoverable also include claims in respect of projects handed
 over or decided to be handed over to other agencies in terms of
 Government of India Directives.
 
 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.
 
 c) Since the issue of payment of incentive to M/s Delhi Transco Limited
 has not been resolved, Rs.32.97 Crore is continuing under Other current
 Assets (Schedule-9) as well as under Other Liabilities
 (Schedule-10).
 
 d) Debtors include an amount of Rs.120.81 Crore, being recoverable from
 M/s Delhi Transco Limited (erstwhile DESU) pertaining to period prior
 to financial Year 1996-97. The case for recovery of the same has been
 taken up through Ministry of Power with Ministry of Finance, Govt. of
 India. However, a provision for entire amount has been made in the
 books during 2008-09 as an abundant precaution.
 
 9.  a) Siang Basin, Subansiri Basin & Dibang Multipurpose Projects were
 taken over from Brahmputra Board. Pending settlement of account with
 Brahmputra Board, assets and liabilities have been booked to the extent
 of amounts incurred by the Corporation on these projects.  Of the Siang
 Basin Projects, Siang Lower & Siyom HE Projects have since been handed
 over to private developer and liability arising out of settlement of
 accounts with Brahmputra Board towards these projects is recoverable
 from respective private developer. Upper Siang HE project, a project of
 Siang basin, has since been allotted to other agency for preparation of
 Pre-feasibility report and as such expenditure incurred on this project
 till 31.03.2011 amounting to Rs.37.06 Crore has been provided in the
 books as abundant precaution.
 
 b) Pakal Dul, Kiru & Kwar HE Projects are to be executed through Joint
 Venture Company with participation from state Government.  Pending
 formation of Joint Venture Company, expenditure amounting to Rs.145.71
 Crore & Rs.61.67 Crore respectively incurred by NHPC on these projects up
 to 31.03.2011 is appearing under Capital Work-in-Progress.
 
 10.  Govt. of Arunachal Pradesh had shown their inclination to hand
 over Subansiri Upper & Subansiri Middle projects to Independent Power
 Producer (IPP), on which NHPC had solicited the intervention of Govt.
 of India. As directed by GoI, Subansiri Middle Project has since been
 decided to be handed over to M/s Jindal Power Ltd. (JPL) for which an
 amount of Rs.105.21 Crore has been received by NHPC from M/s JPL. Pending
 handing over the project to M/s JPL, the amount received from M/s JPL
 has been adjusted to the extent of amount spent by NHPC towards capital
 work in progress and for creation of fixed asset of Subansiri Middle
 Project and the balance is being shown under the head Other
 Liabilities in Schedule 10-Current Liabilities & Provisions. As
 regard to Subansiri Upper Project, decision of GOI is still awaited and
 pending decision, capital expenditure amounting to Rs.0.61 Crore incurred
 on this project for the year ended 31.03.2011 has been charged to
 Profit & Loss Account as an abundant precaution, which is in addition
 to the provision of Rs.19.35 Crore, already existed as at 31.03.2010
 towards expenditure incurred on this project during 20.04.2004 to
 31.03.2010, the period in which this project was under suspension.
 
 11.  CERC while notifying tariff regulation for the period 2009-14 vide
 notification dated 19.01.2009 has revised the rates of depreciation and
 has also provided the methodology for computing the depreciation. As
 per ibid tariff regulation, depreciation is to be calculated at
 specified depreciation rates till 31st March of the year closing after
 a period of 12 years from the date of commercial operation of an
 operating unit and thereafter amortisation of residual depreciable
 value of the assets over the remaining useful life of operating unit,
 life of the unit being considered 35 years from the date of commercial
 operation.
 
 The Company had however provided depreciation in financial year
 2009-10, following the rate notified by CERC even in respect of assets
 of Operating Units, which have completed 12 years as at 31.03.2009.
 During the year ended 31.03.2011, Company has recomputed its
 depreciation charge w.e.f. 01.04.2009 in compliance of opinion of the
 Office of C&AG of India that depreciation is to be provided following
 the rates of depreciation as well as methodology notified by CERC.
 
 Accordingly, the depreciation charge for the financial year 2009-10 and
 for the year ended 31.03.2011 has reduced by Rs.96.27 Crore (adjusted as
 prior period item) and Rs.191.97 Crore respectively. In view of forgoing,
 the Significant Accounting Policies on ''Depreciation and Amortisation''
 (Significant Accounting Policy No.5.2.1 to 5.2.4, 5.7, 5.9) and
 `Machinery Spares'' (Significant Accounting Policy No. 3.1(a)) have been
 suitably reworded to disclose the fact of rate of depreciation as well
 as methodology wherever required.
 
 12.  During the year Company has received the opinion from the Expert
 Advisory Committee of the Institute of Chartered Accountants of India
 (EAC of ICAI) and as per opinion of EAC, expenditure incurred for
 creation of assets not within the control of company should be charged
 to profit & loss account in the year of incurrence itself. The Company
 has represented to the EAC of ICAI that such expenditure, being
 essential for setting up of a hydro project, should be allowed to be
 capitalised. Pending receipt of further opinion / communication from
 the EAC, the accounting treatment as per existing accounting practices
 / policies has been continued.
 
 13.  In pursuance of the J&K Water Resources (Regulation & Management)
 Act, 2010, Govt of J&K has levied cess on use of water by power
 stations in the state of J&K with effect from 10.11.2010, which has
 since been challenged in J&K High Court. A petition has also been filed
 with CERC for allowing reimbursement of the said cess being a new levy.
 However, as an abundant precaution, a provision of Rs.138.87 Crore has
 been made in the books of accounts.
 
 14.  Pending final settlement of arrears of pay revision of Employees
 w.e.f 01.01.2007, a further provision of Rs.199.69 Crore has been made in
 the books for the year ended 31.03.2011 on reasonable estimate basis.
 In addition to this, an amount of Rs.89.11 Crore towards Performance
 Related Pay Scheme in terms of DPE guidelines, pending approval of the
 scheme by Board, has also been provided.
 
 15.  Disclosure as required by 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. The contribution to the fund for the period 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.
 
 B.  Gratuity
 
 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. 0.10 Crore, on superannuation, resignation, termination,
 disablement or on death. The liability for the same is recognised on
 the basis of actuarial valuation.
 
 C.  Retired Employee Health Scheme
 
 The Company has a Retired Employee Health Scheme, under which retired
 employee and the spouse are provided medical facilities in the Company
 hospitals / empanelled hospitals. They can also avail treatment as
 Out-Patient subject to a ceiling fixed by the Company.
 
 D.  Allowance on Retirement / Death
 
 Actual cost of shifting from place of duty at which employee is posted
 at the time of retirement to any other place where he / she may like to
 settle after retirement is paid as per the rules of the corporation. In
 case of death, family of deceased employee can also avail this
 facility.
 
 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.
 
 F.  Social Security Scheme
 
 NHPC has a Social Security Scheme in lieu of compensate appointment
 subject to the condition that the scheme will be withdrawn on
 introduction of pension scheme. Corporation makes a matching
 contribution per month per employee and such contribution is to be made
 for 8 years to build up corpus. The scheme is in operation since
 01.06.2007. The scheme has been created to take care of and helping
 brieved families in event of death of its employee or permanent total
 disability.
 
 The above mentioned schemes (B, C, D and E) are unfunded and are
 recognised on the basis of actuarial valuation. Schemes A and F are
 Defined contribution benefits.
 
 16. a) Electricity generation is the principal business activity of the
 Corporation. Other operations viz., Contracts, Project Management and
 Consultancy works do not form a reportable segment as per the
 Accounting Standard - 17 on Segment Reporting issued by the Institute
 of Chartered Accountants of India.
 
 b) The Corporation has power stations located within the country and
 therefore, geographical segments are inapplicable.
 
 17.  In compliance of Accounting Standard – 18 on related party
 disclosures issued by the Institute of Chartered Accountants of India,
 the required information is given as under: -
 
 a) Related Parties
 
 (i) Joint Venture Companies
 
 National Power Exchange Ltd.  
 
 (ii) Key Management Personnel
 
 Shri S. K. Garg CMD (retired on attaining the age of superannuation
 w.e.f. 31.12.2010)
 
 Shri A. B. L.Srivastava Director (Finance) with additional Charge of
 CMD w.e.f. 01.01.2011.
 
 Shri D. P. Bhargava Director (Technical)
 
 Shri J. K. Sharma Director (Projects)
 
 Shri R. S. Mina Director (Personnel)
 
 18. The Company''s significant leasing arrangements are in respect of
 operating leases of premises for residential use of employees, offices,
 guesthouses & transit camps. These leasing arrangements, which are not
 non-cancellable, are usually renewable on mutually agreeable terms. The
 Schedule of Employees remuneration and benefits includes Rs.26.48 Crore
 (Previous year Rs. 14.40 Crore) towards lease payments, net of
 recoveries, in respect of premises for residential use of employees.
 Lease payments in respect of premises for offices, guest house &
 transit camps are shown as Rent / Hiring charges under Schedule of
 Generation, Administration and other expenses.
 
 19.  The Management is of the opinion that no case of impairment of
 assets exists under the provision of Accounting Standard (AS)-28 on
 Impairment of assets as at 31st March 2011.
 
 20.  (a) Cash & Cash equivalents include an amount of Rs.57.39 Crore
 (Previous year Rs.14.34 Crore) towards margin money kept with banks for
 opening Letter of Credit or similar facility, which is not available
 for use as on 31.03.2011.
 
 (b) Cash & cash equivalents include Rs.486.44 Crore, held for Rural Road
 and Rural Electrification works being executed by Corporation on behalf
 of other agencies and are not freely available for the business of the
 Corporation. Similarly Loans & Advances under Schedule 9 include
 Rs.49.40 Crore given as Advance to Contractors & Suppliers in respect of
 these works.
 
 21.  Previous year figures / Opening balances have been
 regrouped/re-arranged/re-cast wherever necessary.
 
 22.  Subsequent to the approval of accounts for the year ended 31st
 March 2011 by the Board of directors on 27th May, 2011, the members of
 the Board has recommended dividend @ Rs.0.60/- per share (subject to
 rounding off to nearest Rupee in terms of Rule 23 of Companies (Central
 Government''s) General Rules & Forms, 1956) on the paid up equity
 capital of the Company (as per Balance Sheet as at 31st March 2011) for
 the year ended as at 31st March 2011 in the meeting held on 30.06.2011.
 Accordingly the Company has reopened and revised its earlier finalized
 audited accounts for the year ended 31st March 2011 and a provision for
 dividend amounting to Rs.738.04 Crore (subject to rounding off) @6% on
 the paid up equity capital amounting to Rs.12300.74 Crore (divided into
 1230,07,42,773 equity shares of Rs.10/- each fully paid up) and dividend
 distribution tax thereon, has been made.