SENSEX NIFTY India | Notes to Account > Power - Generation/Distribution > Notes to Account from Power Grid Corporation of India - BSE: 532898, NSE: POWERGRID
Power Grid Corporation of India
BSE: 532898|NSE: POWERGRID|ISIN: INE752E01010|SECTOR: Power - Generation/Distribution
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« Mar 13
Notes to Accounts Year End : Mar '14
1.1 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. 211.73 crore (previous year Rs. 172.60 crore) 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 which are
 yet to be settled. In such cases, contingent liability of Rs. 2393.45
 crore (previous year Rs. 2522.64 crore) has been estimated.
 (iii) Other claims
 In respect of claims made by various State/Central Government
 departments/Authorities towards building permission fees, penalty on
 diversion of agriculture land to non-agriculture use, Nala tax, water
 royalty etc. and by others, contingent liability of Rs. 5.80 crore
 (previous year Rs.2.73 crore ) has been estimated.
 (iv) Disputed Income Tax/Sales Tax/Excise/Municipal Tax Matters
 disputed Income Tax/Sales Tax/Excise/Municipal Tax Matters amounting to
 Rs. 474.74 crore (previous year Rs. 294.86 crore) are pending before
 various Appellate Authorities 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
 (v) Others
 a) other contingent liabilities amounts to Rs. 778.54 crore (previous
 year Rs. 89.78 crore)
 b) 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.
 2.  Special purpose vehicle (SPV) companies namely POWERGRID NM
 Transmission Company Ltd. (wholly owned subsidiary) (erstwhile
 Nagapattinam Madugiri Transmission Company Ltd.) , POWERGRID Vemagiri
 Transmission Company Ltd. (wholly owned subsidiary) (erstwhile Vemagiri
 Transmission System Limited), Vizag Transmission Limited and Unchahar
 Transmission Limited has been taken over to carry over the business
 awarded under Tariff based bidding. Bank guarantee of Rs. 45.00 crore
 (previous year Rs. 45.00 crore ), Rs. Nil (previous year Rs. 36.00 crore), Rs.
 45.00 crore and Rs. 5.40 crore respectively has been given by the company
 on behalf of SPV companies towards performance of the work awarded.
 2.50 Vemagiri Transmission Limited was acquired for execution of
 Vemagiri Transmission system based on Tariff Based Competitive Bidding
 (TBCB).CERC vide order dated 09.05.2013 and 27.09.2013 interalia stated
 that Vemagiri Transmission system cannot be executed in its present
 form and directed CTU to return the bank guarantees of identified long
 term transmission customers and also directed the customer to return
 the contract performance guarantee given by POWERGRID. Based on the
 CERC order, action for winding up Special Purpose Vehicle and recovery
 of cost incurred by POWERGRID will be taken. Pending any decision for
 recovery of cost incurred, provision of Rs. 19.40 crore has been made in
 respect of Investment and advances made by POWERGRID.
 1.2 a) Figures have been rounded off to nearest rupees in crore up to
 two decimal.
 b) Previous year figures have been regrouped / rearranged wherever
 considered necessary.
Source : Dion Global Solutions Limited
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