1.1 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.
 
 During the year, Company has recovered deemed export benefits to the
 extent of Rs. Nil (Previous year Rs. 0.78 crore). The cumulative amount
 received and de-capitalized upto 31st March 2012 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 2012 (Previous year Rs. 197.87
 crore) in capital cost of the respective assets / projects pending
 receipt of the same from Customs and Excise Authorities.
 
 1.2 Out of the proceeds of Follow on Public Offer (FPO) made in
 Financial Year 2010-11, a sum of Rs. 1371.17 crore (Previous Year Rs. 1600
 crore) has been utilised during the year for part financing of capital
 expenditure on the projects specified for utilization and the balance
 amount of Rs. 750crore (Previous year Rs. 2121.17 crore) has been invested
 in Terms Deposits with Banks.
 
 1.3 a) Certain balances in Loans and Advances & Trade Payable 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.
 
 1.4 The company has been entrusted with the responsibility of billing
 collection and disbursement (BCD) of the transmission charges on behalf
 of all the interstate transmission licensees(ISTS) through the
 mechanism of the Point of Connection charges(POC) introduced w.e.f.
 01-07-2011 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 and continue to make payment
 as per old system of billing. Due to this, an unrealized amount of Rs.
 141.56 crore is included in Trade Receivables. The company has
 preferred an appeal before the Supreme Court for transferring all the
 cases in the Delhi High Court and also requested for directing the
 agitating states to pay full transmission charges as per new
 methodology pending settlement of the matter.
 
 1.5 i) Foreign Exchange Rate Variation (FERV) loss (to the extent not
 exceeding the difference between the Interest on foreign currency
 borrowings and local currency borrowings) has been adjusted to
 borrowing cost amounting to Rs. 672.44 crore (net of Rs. 246.01 crore FERV
 loss for the construction projects) {previous year FERV loss of Rs. 74.19
 crore (net of Rs. 0.27 crore FERV loss for the construction projects)}
 towards loan liabilities attributable to fixed assets/CWIP.
 
 ii) FERV Loss of Rs. 882.14 crore (previous year FERV loss Rs. 15.71 crore)
 has been adjusted in the respective carrying amount of Fixed
 Assets/Capital work in Progress (CWIP)/lease receivables.
 
 iii) FERV Gain of Rs. Nil ( previous year FERV gain of Rs. 77.96 crore) has
 been recognized in the Statement of Profit and Loss in respect of loans
 contracted on or after 1st April, 2004 in terms of provisions of AS-11
 (revised 2003)
 
 1.6 FERV Loss of Rs. 588.01 crore (previous year FERV loss Rs. 0.71 crore)
 has been shown as FERV Recoverable in statement of Profit and Loss.
 
 1.7 Accounting of FERV as stated in note no. 2.38 and 2.39 above, has
 resulted in decrease in profit for the year by Rs. 84.43 crore (previous
 year increase in profit by Rs. 4.48 crore).
 
 1.8 Effect due to change in accounting policies during the year -
 
 i) In view of option allowed by Ministry of Corporate Affairs vide its
 notification dated 29.12.2011 on Accounting
 
 Standard-11, the Company, during the year, has capitalized the Foreign
 Exchange Rate Variation (FERV) loss arising on account of
 settlement/restatement of long term monetary liabilities relating to
 depreciable capital assets. Consequently, FERV loss, which has hitherto
 charged to Profit &Loss Account has been adjusted in cost of related
 Fixed Assets/Capital work-in-progress. As a result, profit before tax
 for the year ended 31.03.2012 after considering the amount of FERV loss
 recoverable from beneficiaries as per CERC Tariff Regulations 2009 is
 higher by Rs. 11.93 crore.
 
 ii) Intangible Assets –Right of Way (Afforestation expense) were
 hitherto amortised over the useful life of related assets.  During the
 year company has changed accounting policy in this regard and now these
 assets are being amortised following the rates and methodology notified
 by CERC Tariff Regulation with retrospective effect from 01.04.2009.
 This has resulted in increase in amortisation for the year and Prior
 Period amortisation of Rs. 7.62 crore and Rs. 11.40 crore respectively.
 
 1.9 Unspent expenditure of Rs. 2.04 crore out of the budget for the year
 towards corporate social responsibility(CSR) which was hitherto
 transferred to CSR reserve by appropriating profit is now provided for
 by way of charge to statement of Profit and Loss.  An amount of Rs. 13.22
 crore appropriated to CSR reserve in earlier years has been treated as
 prior period item .
 
 1.10 Borrowing cost capitalised during the year is Rs. 1667.14 crore
 (previous Year Rs. 1057.41 crore)
 
 1.11 The guidelines issued by the Department of Public Enterprises
 (DPE) provide for ceiling of percentage of Performance Related Pay
 (PRP) payable to executives and non-unionized supervisors within the
 overall limit of 5% of the year''s Profit Before Tax.  Provision for PRP
 in the accounts from financial year 2007-08 onwards are made based on
 the basis of guidelines issued by DPE.  Pending approval of the PRP
 scheme for non-unionized supervisors, payment are made to executives on
 provisional basis as per PRP scheme and payment to supervisor is being
 made in accordance to the old Performance linked Incentive scheme.
 Provision net of payment outstanding as on 31.03.2012 is Rs. 215.10 crore
 (previous year Rs. 190.71 crore)
 
 In respect of Workmen, incentive is being paid as per old Performance
 linked incentive scheme.
 
 1.12 Disclosures as per Accounting Standards (AS) 15
 
 Defined employee benefit 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 period is Rs. 60.69
 crore (previous year Rs. 58.01 crore) 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
 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.  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.
 
 D.  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.
 
 f) During the year the company has provided liability for pension
 contribution payable as superannuation benefits as per DPE Guidelines
 amounting to Rs. 30.36 crore (previous year reversal of Rs. 44.26 crore).
 The Scheme of superannuation benefits is yet to be finalized.
 
 E.  Other Employee Benefits
 
 Provision for Leave encashment amounting to Rs. 60.33 crore (previous
 Year Rs. 16.52 crore) for the year has been made on the basis of
 actuarial valuation at the year end and charged to Statement of Profit
 and Loss.
 
 Provision for Long Service Award amounting to Rs. 8.67 crore (including
 for earlier years Rs. 7.43 crore) have been made on the basis of
 actuarial valuation at the year end.
 
 G.  Actuarial Assumptions
 
 Principal assumptions used for actuarial valuation are:
 
 i) Method used - Projected unit credit (PUC)
 
 ii) Discount rate - 8.5% (previous Year 8%)
 
 ii) Expected rate of return on assets (Gratuity only) – 8.50 %
 (previous Year 8.50%)
 
 iv) Future salary increase - 6% (previous Year 5.5%)
 
 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.
 
 H.  The Company''s best estimate of contribution towards gratuity for
 the financial year 2012-13 is Rs. 22.36 crore (previous year Rs. 9.14
 crore)
 
 1.13 Segment information:
 
 a) Business Segments
 
 The Company''s principal business is transmission of bulk power across
 different States of India. However, Power System Operation Assets,
 ULDC, RLDC, 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, construction work-in-progress, construction stores,
 investments, loans and advances and current assets. Segment liabilities
 include long term and short term borrowings, current and non current
 liabilities and provisions This does not include transactions with
 respect to an agreement with Powerlinks Transmission Ltd. Under which
 transmission charges for transmission line associated with Tala hydro
 electric power project are raised by Powerlinks Transmission Ltd. to
 the company which pay the same and collect from the respective
 beneficiaries.
 
 c) Remuneration to whole time directors including chairman and managing
 director is Rs. 2.10 crore previous year Rs. 1.77 crore) and amount of dues
 outstanding to the Company as on 31st March, 2012 are Rs. 0.05 crore
 (previous year Rs. 0.07 crore).
 
 1.14 Disclosures regarding 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, as per
 the Accounting Standard (AS) – 19 Leases notified under the Companies
 Act, 1956.
 
 b) Operating leases:-
 
 The Company''s significant leasing arrangements are in respect of
 operating leases of premises for residential use of employees, offices
 and guest houses/transit camps are usually renewable on mutually agreed
 terms but are not non-cancellable.  Employees'' remuneration and
 benefits include Rs. 32.40 crore (previous Year Rs. 26.67 crore) towards
 lease payments, net of recoveries, in respect of premises for
 residential use of employees. Lease payments of Rs. 8.14 crore (previous
 Year Rs. 6.27 crore) in respect of premises for offices and guest
 house/transit camps are shown under Rent in Note 2.30 Transmission,
 Administration and Other expenses.
 
 Under the Transmission Service Agreement (TSA) with Powerlinks
 Transmission Ltd, the company has an obligation to purchase the JV
 company (Powerlinks Transmission Ltd) at a buyout price determined in
 accordance with the TSA. Such an obligation may result in case JV
 company (Powerlinks Transmission Ltd) serves a termination notice
 either on POWERGRID event of default or on force majeure event
 prescribed under TSA. No contingent liability on this account has been
 considered as the same is not ascertainable.
 
 The above joint venture companies are incorporated in India. The
 company''s share in assets, liabilities, contingent liabilities and
 capital commitment as on 31st March 2012 and income and expenses for
 the year in respect of above joint venture entities based on their
 accounts are given below:-
 
 
 1.15     In accordance with AS-28 Impairment of Assets, impairment 
 analysis of assets of transmission activity & telecom activity of
 the company by evaluation of its cash generating units, was carried out
 by an outside agency in the year 2004-05 & 2006-07 respectively and
 since recoverable amount was more than the carrying amount thereof, no
 impairment loss was recognised. 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 and therefore no formal
 estimate of recoverable amount has been made. Accordingly, no
 impairment loss has been provided in the accounts.
 
 1.16 Estimated amount of contracts remaining to be executed on capital
 account and not provided for is Rs. 41949.50 crore (previous year Rs.
 30612.06 crore).
 
 1.17 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. 73.15 crore (previous year Rs. 1780.92 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. 1765.09
 crore (previous year Rs. 1328.87 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. 11.72 crore
 (previous year Rs. 52.92 crore ) has been estimated.
 
 iv) Disputed Tax/Sales Tax/Excise Matters
 
 Disputed Income Tax/Sales Tax/Excise Matters are pending before various
 Appellate Authorities amounting to Rs. 257.86 crore (previous year Rs.
 102.57 crore ) are disputed by the Company 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 departments.
 
 v) Others
 
 a) Other contingent liabilities amounts to Rs. 80.16 crore (previous year
 Rs. 105.98 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) company namely Nagapattinam Madugiri
 Transmission Company Ltd. (wholly owned subsidiary) has been taken over
 to carry over the business awarded under Tariff based bidding. Bank
 guarantee of Rs. 45.00 crore has been given by the company on behalf of
 SPV towards performance of the work awarded.
 
 1.18 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.