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Power Grid Corporation of India
BSE: 532898|NSE: POWERGRID|ISIN: INE752E01010|SECTOR: Power - Generation/Distribution
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Mar 13
Accounting Policy Year : Mar '14
1.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS
 
 The financial statements are prepared on accrual basis of accounting
 under the historical cost convention and in accordance with generally
 accepted accounting principles in India and the relevant provisions of
 the Companies Act, 2013 (to the extent notified) and the Companies Act,
 1956 (to the extent applicable) including Accounting Standards notified
 there under.
 
 1.2 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 and assumptions and such differences are
 recognized in the period in which the results are crystallized.
 
 1.3 RESERVES AND SURPLUS
 
 Self insurance reserve is created @ 0.1% p.a. on Gross Block of Fixed
 Assets (except assets covered under mega insurance policy) as at the
 end of the year by appropriating current year profit towards future
 losses which may arise from un-insured risks. The same is shown as
 Self insurance reserve under ''Reserves & Surplus''.
 
 1.4 GRANTS-IN-AID
 
 1.4.1 Grants-in-aid received from Central Government or other
 authorities towards capital expenditure for projects, betterment of
 transmission systems and specific depreciable assets are shown as
 grants-in-aid till the utilization of grant.
 
 1.4.2 on capitalization of related assets, grants received for specific
 depreciable assets are treated as deferred income and recognized in the
 Statement of Profit and Loss over the useful life of related asset and
 in proportion to which depreciation on these assets is provided.
 
 1.5 FIXED ASSETS
 
 1.5.1 Fixed assets are shown at historical cost comprising of purchase
 price and any attributable cost of bringing the assets to its working
 condition for its intended use.
 
 1.5.2 In the case of commissioned assets, deposit works/cost- plus
 contracts where final settlement of bills with contractors is yet to be
 affected, capitalization is done on provisional basis subject to
 necessary adjustments in the year of final settlement.
 
 1.5.3 Assets and systems common to more than one transmission system
 are capitalized on the basis of technical estimates/ assessments
 
 1.5.4 Transmission system assets are considered when they are ''Ready
 for intended use'', for the purpose of capitalization, after test
 charging/successful commissioning of the systems/assets and on
 completion of stabilization period wherever technically required.
 
 1.5.5 The cost of land includes provisional deposits,
 payments/liabilities towards compensation, rehabilitation and other
 expenses wherever possession of land is taken,
 
 1.5.6 Expenditure on leveling, clearing and grading of land is
 capitalized as part of cost of the related buildings.
 
 1.5.7 Insurance spares, which can be used only in connection with an
 item of fixed asset and whose use is expected to be at irregular
 intervals and Mandatory spares in the nature of sub-station equipments
 /capital spares i.e. stand-by/service/rotational equipment and unit
 assemblies, are capitalized and depreciated over the residual useful
 life of the related plant & machinery. In case the year of purchase and
 consumption is same, amount of such spares are charged to revenue.
 
 1.6 CAPITAL WORK-IN-PROGRESS (CWIP)
 
 1.6.1 Cost of material consumed, erection charges thereon along with
 other related expenses incurred for the projects are shown as CwIP till
 the date of capitalization.
 
 1.6.2 Expenditure of Corporate office, Regional offices and Projects,
 attributable to construction of fixed assets are identified and
 allocated on a systematic basis to the cost of the related assets.
 
 1.6.3 Interest during construction and expenditure (net) allocated to
 construction as per policy No. 1.6.2 above (allocated to the projects
 on prorate basis to their capital expenditure), are apportioned to
 capital work in progress (CwIP) on the closing balance of specific
 asset or part of asset being capitalized. Balance, if any, left after
 such capitalization is kept as a separate item under the CwIP Schedule
 
 1.6.4 deposit works/cost-plus contracts are accounted for on the basis
 of statement received from the contractors or technical assessment of
 work completed.
 
 1.6.5 Unsettled liability for price variation/ exchange rate variation
 in case of contracts are accounted for on estimated basis as per terms
 of the contracts.
 
 1.7 INTANGIBLE ASSETS
 
 1.7.1 The cost of software (which is not an integral part of the
 related hardware) acquired for internal use and resulting in
 significant future economic benefits, is recognized as an intangible
 assets in the books of accounts when the same is ready for its use.
 
 1.7.2 Afforestation charges paid for acquiring right-of-way of laying
 transmission lines are accounted for as intangible assets and same are
 amortized over the period of 35 years following the rates and
 methodology notified by Central Electricity Regulatory Commission
 (CERC) Tariff Regulation.
 
 1.7.3 Expenditure incurred, eligible for capitalization under the head
 Intangible Assets, are carried as Intangible Assets under development
 where such assets are not yet ready for their intended use.
 
 1.7.4 Expenditure incurred on the development of new technology is kept
 under Intangible assets under development till its completion.  After
 satisfactory completion of development stage, the expenditure is named
 as Intangible Assets to be included in the project cost of new
 assets.
 
 1.8 CONSTRUCTION STORES
 
 Construction stores are valued at cost.
 
 1.9 BORROWING COST
 
 1.9.1 All the borrowed funds (except short term funds for working
 capital) are earmarked to specific projects. The borrowing costs
 (including bond issue expenses, interest, discount on bonds, front end
 fee, guarantee fee, management fee etc.) are allocated to the projects
 in proportion to the funds so earmarked.
 
 1.9.2 The borrowing costs so allocated are capitalised or charged to
 revenue, based on whether the project is under construction or in
 operation.
 
 1.10 TRANSACTION IN FOREIGN CURRENCY
 
 1.10.1 Transactions in foreign currencies are initially recorded at the
 exchange rate prevailing on the date of transaction. Foreign currency
 monetary items are translated with reference to the rates of exchange
 ruling on the date of the Balance Sheet. Non-monetary items denominated
 in foreign currency are reported at the exchange rate ruling on the
 date of transaction.
 
 1.10.2 Foreign Exchange Rate Variation (FERV) arising on settlement /
 translation of foreign currency loans relating to fixed assets/ capital
 work-in-progress are adjusted to the carrying cost of related assets.
 
 1.10.3 FERV accounted for as per policy no 1.10.2 is
 recoverable/payable from the beneficiaries on actual payment basis as
 per Central Electricity Regulatory Commission (CERC) norms w..e..f. 1st
 April, 2004 or date of Commercial operation (doCo) which ever is later.
 
 The above FERV to the extent recoverable or payable as per the CERC
 norms is accounted for as follows:
 
 a) FERV recoverable/payable adjusted to carrying cost of fixed assets
 is accounted for as ''deferred foreign currency fluctuation asset/
 liability a/c'' with a corresponding credit/debit to ''deferred
 income/expenditure from foreign currency fluctuation a/c''
 
 b) ''Deferred income/expenditure from foreign currency fluctuation a/c''
 is amortized in the proportion in which depreciation is charged on such
 FERV.
 
 c) The amount recoverable/payable as per CERC norms on year to year
 basis is adjusted to the ''deferred foreign currency fluctuation
 asset/liability a/c'' with corresponding debit / credit to the trade
 receivables.
 
 1.10.4 FERV earlier charged to Statement of Profit and Loss & included
 in the capital cost for the purpose of tariff is adjusted against
 ''deferred foreign currency fluctuation asset/liability a/c'' in the
 following manner:
 
 i) Depreciation component of transmission charges (being 90% of such
 FERV) is adjusted against deferred foreign currency fluctuation
 asset/liability a/c in the transmission charges.
 
 ii) Balance 10% is adjusted against deferred foreign currency
 fluctuation asset/liability a/c in the transmission charges over the
 tenure of respective loans.
 
 1.10.5 FERV arising out of settlement/translation of long term monetary
 items (other than foreign currency loans) relating to fixed assets/
 CwIP are adjusted in the carrying cost of related assets.
 
 1.10.6 FERV arising during the construction period from
 settlement/translation of monetary items denominated in foreign
 currency (other than long term) to the extent recoverable/payable to
 the beneficiaries as capital cost as per CERC tariff Regulation are
 accounted as ''deferred foreign currency fluctuation asset/liability
 a/c''. Transmission charges recognised on such amount is adjusted
 against above account.
 
 1.10.7 Other exchange differences are recognized as income or expenses
 in the period in which they arise.
 
 1.11 INVESTMENTS
 
 1.11.1 Current investments are valued at lower of cost and fair value
 determined on an individual investment basis.
 
 1.11.2 Long term investments are carried at cost. Provision is made for
 diminution other than temporary, in the value of such investments.
 
 1.12 INVENTORIES
 
 1.12.1.  Inventories are valued at lower of the cost, determined on
 weighted average basis and net realizable value.
 
 1.12.2 Steel scrap and conductor scrap are valued at estimated
 realizable value or book value, whichever is less.
 
 1.12.3 Mandatory spares of consumable nature and transmission line
 items are treated as inventory after commissioning of the system.
 
 1.12.4 Surplus materials as determined by the management are held for
 intended use and are included in the inventory.
 
 1.12.5 The diminution in the value of obsolete, unserviceable and
 surplus stores and spares is ascertained on review and provided for.
 
 1.13 REVENUE RECOGNITION
 
 1.13.1 Transmission Income is accounted for based on tariff orders
 notified by the CERC. In case of transmission projects where final
 tariff orders are yet to be notified, transmission income is accounted
 for as per tariff norms and other amendments notified by the CERC in
 similar cases. difference, if any, is adjusted based on issuance of
 final notification of tariff orders by the CERC. Transmission Income in
 respect of additional capital expenditure incurred after the date of
 commercial operation is accounted for based on actual expenditure
 incurred on year to year basis as per tariff norms of the CERC.
 
 1.13.2 Income from short term open access is accounted for on the basis
 of regulations notified by the CERC.
 
 1.13.3 The Transmission system Incentive / disincentive is accounted
 for based on certification of availability by the respective Regional
 Power Committees and in accordance with the norms notified / approved
 by the CERC.
 
 1.13.4.1 Advance against depreciation (AAd), forming part of tariff
 pertaining upto the block period 2004-09, to facilitate repayment of
 loans, is reduced from transmission income and considered as deferred
 income to be included in transmission income in subsequent years.
 
 1.13.4.2 The outstanding deferred income in respect of AAd is
 recognized as transmission income, after twelve years from the end of
 the financial year in which the asset was commissioned, to the extent
 depreciation recovered in the tariff during the year is lower than
 depreciation charged in the accounts.
 
 1.13.5 Surcharge recoverable from trade receivables and liquidated
 damages / warranty claims / interest on advances to suppliers are
 recognized when no significant uncertainty as to measurability and
 collectability exists.
 
 1.13.6 Income from Telecom Services are accounted for on the basis of
 terms of agreements/ purchase orders from the customers.
 
 1.13.7 Income from sole consultancy contracts are accounted for on
 technical assessment of progress of services rendered.
 
 1.13.8 In respect of ''Cost-plus-consultancy contracts'', involving
 execution on behalf of the client, income is accounted for (wherever
 initial advances received) in phased manner as under:
 
 a) 10% on the issue of Notice Inviting Tender for execution
 
 b) 5% on the Award of Contracts for execution
 
 c) Balance 85% on the basis of actual progress of work including
 supplies
 
 1.13.9 Income from Sale of Goods is recognized on the transfer of
 significant risks and reward of ownership to the buyer.
 
 1.13.10 Application Fees received on account of Long Term open Access
 (LToA) Charges is accounted for as and when received in accordance with
 CERC Guidelines.
 
 1.13.11 Scrap other than steel scrap & conductor scrap are accounted
 for as and when sold.
 
 1.13.12 dividend income is recognized when right to receive payment is
 established.
 
 1.14 LEASED ASSETS  UNIFIED LOAD DESPATCH CENTRE (ULDC)
 
 1.14.1 State sector unified load dispatch centre (ULDC) assets leased
 to the beneficiaries are considered as Finance Lease. Net investment in
 such leased assets along with accretion in subsequent years is
 accounted for as Lease Receivables under Long Term Loans & Advances.
 wherever grant-in-aid is received for construction of State Sector
 ULdC, lease receivable is accounted for net of such grant.
 
 1.14.2 Finance income on leased assets are recognised based on a
 pattern reflecting a constant periodic rate of return on the net
 investment as per the levellised tariff notified/to be notified by the
 CERC.
 
 1.14.3 FERV on foreign currency loans relating to leased assets is
 adjusted to the amount of lease receivables and is amortised over the
 remaining tenure of lease. FERV recovery (as per CERC norms) from the
 constituents is recognised net of such amortised amount.
 
 1.15 DEPRECIATION / AMORTIZATION
 
 1.15.1 depreciation / amortization on Fixed assets is provided on
 straight line method following the rates and methodology notified by
 the CERC for the purpose of recovery of tariff except for the following
 assets in respect of which depreciation / amortization is provided at
 the rates mentioned below:
 
 a) Computers & Peripherals 30%
 
 b) Mobile Phones 33.33%
 
 c) Software 33.33%
 
 1.15.2 ULDC assets are depreciated on Straight Line Method @ 6.67% per
 annum as determined by the CERC for levellized tariff.
 
 1.15.3 Depreciation/ Amortization on Fixed assets of telecom and
 consultancy business, is provided for on straight line method as per
 rates specified in Schedule XIV of the Companies Act, 1956.
 
 1.15.4 Dreciation/ Amortization on additions to/deductions from fixed
 assets during the year is charged on pro-rata basis.
 
 1.15.5 Where the cost of depreciable asset has undergone a change due
 to increase/decrease in long term monetary items on account of exchange
 rate fluctuation, price adjustment, change in duties or similar
 factors, the unamortized balance of such asset is depreciated
 prospectively at the rates and methodology as specified by the CERC
 Tariff Regulations, except for telecom assets where residual life is
 determined on the basis of rates of depreciation as specified in
 Schedule XIV of the Companies Act, 1956.
 
 1.15.6 Plant and machinery, loose tools and items of scientific
 appliances, included under different heads of fixed assets, costing
 Rs.5,000/- or less, or where the written down value is Rs.5,000/- or less
 as at the beginning of the year, are charged off to revenue.
 
 1.15.7 Other fixed assets costing upto Rs.5,000/- are fully depreciated
 in the year of acquisition.
 
 1.15.8 Leasehold Land is fully amortized over 25 years or lease period
 whichever is lower in accordance with the rates and methodology
 specified in the Central Electricity Regulatory Commission (Terms and
 Conditions of Tariff) Regulations, 2009. Lease hold Land acquired on
 perpetual lease is not amortised.
 
 1.15.9 In the case of assets of National thermal power corporation
 limited (NTPC) , National hydro-electric power corporation limited
 (NHPC), North-eastern electric power corporation limited (NEEPCo),
 Neyveli lignite corporation limited (NLC) transferred w.e.f. April 1,
 1992, Jammu and Kashmir Lines w.e.f. April 1, 1993, and Tehri hydro
 development corporation limited (THdC) w.e.f. August 1, 1993,
 depreciation is charged based on gross block as indicated in
 transferor''s books with necessary adjustments so that the life of the
 assets as laid down in the CERC notification for tariff is maintained.
 
 1.16 EXPENDITURE
 
 1.16.1 Pre-paid/prior-period expenses/Income of items up to Rs.100,000/-
 are charged to natural heads of account.
 
 1.16.2 Expenditure of research and development, other than Capital
 Expenditure , are charged to revenue in the year of incurrence.  1.16.3
 Capital expenditure on assets not owned by the company is charged off
 to revenue as and when incurred
 
 1.17 IMPAIRMENT OF ASSETS
 
 Cash generating units as defined in Accounting Standard -28 on
 ''Impairment of Assets'' are identified at the balance sheet date with
 respect to carrying amount vis--vis. recoverable amount thereof and
 impairment loss, if any, is recognised in Statement of profit & loss.
 Impairment loss, if need to be reversed subsequently, is accounted for
 in the year of reversal.
 
 1.18 EMPLOYEE BENEFITS
 
 1.18.1 Company contribution paid/payable during the year to defined
 pension contribution scheme and provident fund scheme is recognized in
 the Statement of Profit and Loss. The same is paid to a fund
 administered through a separate trusts.
 
 1.18.2 The liability for retirement benefits of employees in respect of
 Gratuity, is ascertained annually on actuarial valuation at the year
 end, is provided and funded separately.
 
 1.18.3 The liabilities for compensated absences, leave encashment, post
 retirement medical benefits, settlement allowance & long term awards to
 employees are ascertained annually on actuarial valuation at the year
 end and provided for.
 
 1.18.4 Short term employee benefit are recognized at the undiscounted
 amount in the Statement of Profit and Loss in the year in which the
 related services are rendered.
 
 1.18.5 Actuarial gains/losses are recognized immediately in the
 Statement of Profit & Loss.
 
 1.19 PROVISIONS AND CONTINGENT LIABILITIES
 
 A provision is recognized when the company has a present obligation as
 a result of past event and it is probable that an outflow of resources
 will be required to settle the obligation, in respect of which a
 reliable estimate can be made based on technical valuation and past
 experience. Provisions are determined based on management estimate
 required to settle the obligation at the balance sheet date and .are
 not discounted to its present value. No provision is recognized for
 liabilities whose future outcome cannot be ascertained with reasonable
 certainties. Such contingent liabilities are not recognized but are
 disclosed on the basis of judgment of the management / independent
 expert. These are reviewed at each balance sheet date and adjusted to
 reflect the current management estimate.
 
 1.20 INCOME TAX
 
 Income Tax comprises of current and deferred tax. Current income taxes
 are measured at the amount expected to be paid to the provisions of
 income tax authorities in accordance with Income Tax Act, 1961.
 deferred tax resulting from timing difference between accounting and
 taxable profit is accounted for using the tax rates and the tax laws
 enacted or substantively enacted at the balance sheet date. deferred
 tax assets are recognized only to the extent that there is reasonable
 certainty that sufficient future taxable income will be available
 against which such deferred tax assets can be realized.
 
 2.33 Cash equivalent of deemed export benefits availed of Rs. 209.99
 crore in respect of supplies affected for East South Inter Connector-
 II Transmission Project (ESI) and Sasaram Transmission Project (STP),
 were paid to the Customs and Central Excise Authorities in accordance
 with direction from Ministry of Power (Govt. of India) during 2002-03
 due to non availability of world Bank loan for the entire supplies in
 respect of ESI project and for the supplies prior to March 2000 in
 respect of STP project and the same was capitalised in the books of
 accounts. Thereafter, world Bank had financed both the ESI project and
 STP project as originally envisaged and they became eligible for deemed
 export benefits. Consequently, the company has lodged claims with the
 Customs and Excise Authorities.
 
 In this regard the Cumulative amount received and de-capitalized upto
 31st March 2014 is Rs. 12.12 crore (previous year Rs. 12.12 crore).  The
 company continued to show the balance of Rs. 197.87 crore as at 31st
 March 2014 (previous year Rs. 197.87 crore) in the capital cost of the
 respective assets / projects pending receipt of the same from Customs
 and Excise Authorities.
 
 2.34 during the year company made Follow on Public offer (FPo) and
 allotted 601,864,295 fresh equity shares of face value of Rs. 10 each at
 a premium of Rs. 80 each (Rs. 75.50 for retail investors and employees) and
 further company has made an offer for Sale of 185,189,014 equity shares
 of Rs. 10 each for a consideration of Rs. 90 each (Rs. 85.50 each to retail
 investors and employees) being disinvestment on behalf of President of
 India on 16th december 2013. The company received Rs. 5321.31 crore
 through fresh issue of shares including share premium of Rs. 4719.45
 crore and sale proceeds of equity of Government of India amounting to Rs.
 1637.33 crore which was paid to Government of India. The issue proceeds
 of Rs. 2346.31 crore have been utilized during the year (Rs. 2332.16 crore
 for part financing of capital expenditure on the projects specified for
 utilization and Rs. 14.15 crore for share issue expenses spent out of
 total amount of Rs. 31.64 crore) and the balance amount of Rs. 2975.00
 crore is kept in the banks as term deposits.
 
 Issue expenses of Rs. 16.31 crore (Net after adjustment of Share of
 expenses recoverable from Government of India Rs. 6.93 crore and tax
 benefit Rs. 8.40 crore respectively) has been adjusted against Securities
 Premium Reserve (Note - 2.2).
 
 2.35 a) Certain balances in Loans and Advances & Trade Payables are
 subject to confirmation and consequential adjustments, if any.
 
 b) In the opinion of the management, the value of any of the assets
 other than fixed assets and non current investments on realization in
 the ordinary course of business will not be less than value at which
 they are stated in the Balance Sheet.
 
 2.37 The company has been entrusted with the responsibility of billing
 collection and disbursement (BCd) of the transmission charges on behalf
 of all the ISTS (Interstate transmission System) licensees through the
 mechanism of the PoC (Point of Connection) charges introduced w.e.f.
 01st July 2011 which involves billing based on approved drawl/injection
 of power in place of old mechanism based on Mega watt allocation of
 power by Ministry of Power. By this mechanism, revenue of the company
 will remain unaffected.
 
 Some of the beneficiaries aggrieved by the PoC mechanism have preferred
 appeal before various High Courts of India. All such appeals have been
 transferred to delhi High Court as per order of the Supreme Court on
 the appeal preferred by the company and company has also requested for
 directing agitating states to pay full transmission charges as per new
 methodology pending settlement of the matter. Honorable delhi High
 Court has directed all the above beneficiaries to release payments and
 accordingly the beneficiaries have started making payments as per the
 said directions. Unrealized amount of Rs. 151.09 crore (Previous Year Rs.
 273.27 crore) is included in trade receivables.
 
 2.38 (i) FERV Loss of Rs. 2258.13 crore (Previous Year Rs. 1660.02 crore )
 has been adjusted in the respective carrying amount of Fixed Assets/
 
 Capital work in Progress (CwIP)/lease receivables.
 
 (ii) FERV Loss of Rs. 8.34 crore (Previous Year FERV Gain Rs. 1.16 crore)
 has been recognised in the Statement of Profit and Loss.
 
 2.39 Borrowing cost capitalised during the year is Rs. 2274.62 crore
 (previous year Rs. 1824.93 crore) as per AS 16- Borrowing Costs.
 
 2.40 Based on information available with the company, there are few
 suppliers/service providers who are registered as micro, small or
 medium enterprise under The Micro, Small and Medium Enterprises
 development Act,2006 (MSMEd Act, 2006). Information in respect of micro
 and small enterprises as required by MSMEd Act, 2006 is given as under:
 
 2.41 Disclosures as per Accounting Standard (AS) 15 -Employee benefits
 
 Defined employee benefit/ contribution schemes are as under:-
 
 A. Provident Fund
 
 Company pays fixed contribution to Provident Fund at predetermined rate
 to a separate trust, which invests the funds in permitted securities.
 Contribution to family pension scheme is paid to the appropriate
 authorities. The contribution to the fund for the year amounting to
 Rs.74.88 crore(previous year Rs.66.57 crore) has been recognized as expense
 and is charged to Statement of Profit and Loss. The obligation of the
 company is limited to such fixed contribution and to ensure a minimum
 rate of interest on contributions to the members as specified by GoI.
 As per the report of actuary over all interest earning and cumulative
 surplus ''is more'' than statutory interest payment requirement. Hence,
 no further provision is considered necessary.
 
 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 on
 superannuation, resignation, termination, disablement or on death
 subject to a maximum of Rs. 10 lacs. The scheme is funded by the company
 and is managed by a separate trust. The liability for the same is
 recognised on the basis of actuarial valuation on annual basis on the
 Balance Sheet date.
 
 C. Pension
 
 The Company has scheme of employees defined Pension Contribution.
 Company contribution is paid to separate trust. Amount of contribution
 paid/payable for the year is Rs. 60.08 crore (previous year Rs. 52.24
 crore) has been recognised as expense and is charged to statement of
 profit & loss.
 
 D. Post-Retirement Medical Facility (PRMF)
 
 The company has Post-Retirement Medical Facility (PRMF), under which
 retired employees and the spouse are provided medical facilities in the
 empanelled hospitals. They can also avail treatment as out-Patient
 subject to a ceiling fixed by the company. The scheme is unfunded and
 liability for the same is recognised on the basis of actuarial
 valuation on annual basis on the Balance Sheet date.
 
 E. Other Defined Retirement Benefits (ODRB)
 
 The Company has a scheme for settlement at the time of superannuation
 at home town for employees and dependents to superannuated employees.
 The scheme is unfunded and liability for the same is recognised on the
 basis of actuarial valuation on annual basis on the Balance Sheet date.
 
 The summarised position of various defined benefits recognized in the
 Statement of Profit & Loss and Balance Sheet and funded status is as
 under:- a) Expenses recognised in Statement of profit and loss:
 
 F. Other Employee Benefits
 
 Provision for Leave encashment (including compensated leave) amounting
 to Rs. 51.84 crore (previous year Rs. -11.65 crore) for the year has been
 made on the basis of actuarial valuation at the year end and same is
 recognised in the Statement of Profit and Loss.
 
 Provision for Long Service Award amounting to Rs. 0.84 crore (previous
 year Rs. 1.19 crore) has been made on the basis of actuarial valuation at
 the year end.
 
 H. Actuarial Assumptions
 
 Principal assumptions used for actuarial valuation are:
 
 i) Method used - Projected unit credit ( PUC) (Previous Year (PUC))
 
 ii) discount rate - 8.50 % (previous year 8 %)
 
 iii) Expected rate of return on assets (Gratuity only)  8.50 %
 (previous year 8.50%)
 
 iv) Future salary increase- 6.50 % (previous year 6%)
 
 The estimate of future salary increases, considered in actuarial
 valuation, takes into account (i) inflation, (ii) Seniority (iii)
 Promotion and (iv) 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, assessed risk of asset management and
 historical return for plan assets.
 
 I. The Company''s best estimate of contribution towards gratuity for the
 financial year 2014-15 is Rs. 4.65 crore (previous year Rs. 8.13 crore)
 
 2.42 Disclosure as per AS 17- Segment Reporting
 
 a) Business Segments
 
 The company''s principal business is transmission of bulk power across
 different States of India. However, telecom and consultancy business
 are also treated as a reportable segment in accordance with para 28 of
 AS-17 Segment Reporting.
 
 b) Segment Revenue and Expense
 
 Revenue directly attributable to the segments is considered as Segment
 Revenue. Expenses directly attributable to the segments and common
 expenses allocated on a reasonable basis are considered as segment
 expenses.
 
 c) Segment Assets and Liabilities
 
 Segment assets include all operating assets comprising of net fixed
 assets, current assets and loan and advances. Construction work-
 in-progress, construction stores & advances and investments are
 included in unallocated assets. Segment liabilities include operating
 liabilities and provisions.
 
 2.44 Disclosure as per AS 18- Related Party Disclosure a) List of
 Related Parties:- 
 
 i) Key Management Personnel
 
 Sh. R.N. Nayak        Chairman and Managing director
 
 Sh. I.S. Jha          Director (Projects)
 
 Sh. R.T. Agarwal      Director (Finance)
 
 Sh. Ravi P Singh      Director (Personnel)
 
 Sh. R.P. Sasmal       Director (Operations)
 
 ii) Subsidiaries:- Wholly Owned
 
 i) Power System operation Corporation Limited (POSOCO)
 
 ii) POWERGRID NM Transmission Limited
 
 iii) POWERGRID Vemagiri Transmission Limited
 
 iv) Vizag Transmission Limited (w.e.f 30th August 2013)
 
 v) Unchahar Transmission Limited (w.e.f 24th March 2014)
 
 iii) Joint Ventures:-
 
 i) Powerlinks Transmission Limited
 
 ii) Torrent Power Grid Limited
 
 iii) Jaypee POWERGRID Limited
 
 iv) Parbati Koldam Transmission Company Limited
 
 v) Teestavalley Power Transmission Limited
 
 vi) North East Transmission Company Limited
 
 vii) National High Power Test Laboratory Private Limited
 
 viii) Energy Efficiency Services Limited.
 
 ix) Bihar Grid Company Limited
 
 x) Kalinga Bidyut Prasaran Nigam Private Limited
 
 xi) Cross Border Power Transmission Company Limited
 
 2.45 Disclosure as per AS 19-Leases
 
 a) Finance Leases :- Long Term Loans and Advances and Short Term Loans
 and Advances include lease receivables representing the present value
 of future lease rentals receivable on the finance lease transactions
 entered into by the company with the constituents in respect of State
 Sector ULdC. disclosure requirements of Accounting Standard (AS)  19
 Leases notified under the Companies Act, 1956 are given as under:
 
 2.47 Disclosure as per AS 28- Impairment of assets
 
 In accordance with Accounting Standard (AS-28) Impairment of Assets,
 the company has assessed as on the Balance Sheet date whether there are
 any indications with regard to impairment of any of the assets. Based
 on such assessment, it has been ascertained that no potential loss is
 present. Accordingly, no impairment loss has been provided in the books
 of accounts.
 
 2.48 Capital and Other Commitments
 
 i) Estimated amount of contracts remaining to be executed on capital
 account and not provided for is Rs. 30175.65 crore (previous year Rs.
 43190.76 crore).
 
 ii) As at 31st March,2014, the company has commitment of Rs. 812.82 crore
 (previous year Rs. 1005.31 crore) towards further investment in joint
 venture entities.
 
 iii) As at 31st March,2014, the company has commitment of Rs. 730.00
 crore (previous year Rs. 183.33 crore) towards further investment in
 subsidiary companies.
 
Source : Dion Global Solutions Limited
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