1.  Contingent Liabilities not provided for in respect of:- (Rs. in lacs)
 
 Sl.  Particulars                                 As at           As at
 No.                                         31.03.2011      31.03.2010
 
 (a) Claims against the Corporation              513.00          494.49 
 not acknowledged as debts,
 (including Rs.499.10 lacs
 pending in various courts
 including arbitration cases as
 on 31.03.2011 (Previous year
 Rs.406.36 lacs)
 
 (b) Others                                   142265.54      176559.67
 
 The amount referred to in 1(a) above is dependent upon the outcome of
 settlement of court/arbitration cases.
 
 The amount under 1(b) includes Rs.135270 lacs (Previous year Rs.173970
 lacs) against Letters of Comfort issued to various Banks for opening of
 Letters of credit to procure generation equipment against loan
 sanctioned by the Corporation to its borrowers and Rs.4820.39 lacs
 (previous year Rs.1557.65 lacs) pertain to the difference in the interest
 rate being charged on private parties that have not been graded and
 whose loans are being charged at the highest rate applicable to the
 lowest graded borrowers.
 
 The amount under 1(b) also includes Rs.2175.15 lacs (Previous year
 Rs.1032.02 lacs) against various demands raised by the Income Tax
 Department pursuant to Assessment Orders for Assessment Years 2003-04,
 2006-07 and 2008-09. Appeals have been fled against these orders with
 CIT (Appeals) by the company. Refunds are also due to the company for
 various assessment years starting from Assessment Year 1998-99 to
 2004-05. Out of the refund due to the company for Assessment Year
 2004-05, a sum of Rs.669.53 lacs has been adjusted by the Income Tax
 Department against the demands for Assessment Years 2003-04 & 2008-09
 and accordingly the adjustment has been made in the books of accounts
 by treating this sum as Advance Income Tax.
 
 2.  Estimated amount of the contracts remaining to the executed on
 capital account and not provided for as at March 31, 2011 is Rs.1331.57
 lacs (previous year Rs.599.26 lacs).
 
 3.  The Corporation is registered with the Reserve Bank of India (RBI)
 as a Non-Banking Financial Company (NBFC) since 1997- 98. As per
 notification No. DNBS (PD), CC No. 12/D2.01/99- 2000 dated 13.1.2000 of
 RBI, Govt. Companies conforming to Section 617 of the Companies Act
 have been exempted from applicability of the provisions of RBI Act 1934
 relating to maintenance of liquid assets and creation of Reserve Funds
 and the Directions relating to acceptance of public deposits and
 prudential norms. The said notification is also applicable to REC, being
 a Govt. Company conforming to Section 617 of the
 
 Companies Act, 1956. Moreover in view of the non applicability of the
 provisions of section 45 (I) C of the RBI Act, 1934 regarding creation
 of Reserve Fund, the Reserve Fund is not created.
 
 4.  On December 13, 2006, our Board of Directors approved Corporation''s
 Prudential Norms and amendments thereto were approved on February 21
 ,2009 and September 25,2010.  However, in order to bring all
 systemically important government-owned NBFCs within the framework of
 the prudential norms, the RBI had advised our Corporation on December
 12, 2006 to submit a ‘road map'' for compliance with various elements of
 the regulations governing NBFCs.  The Corporation submitted the road
 map to RBI through the Ministry of Power and RBI, vide its letter dated
 June 29, 2010 has granted exemption to REC from Prudential Exposure
 Norms in respect of Central and State entities in Power Sector till
 March 31, 2012.
 
 Further, RBI, vide its letter dated September 17, 2010, has categorized
 REC as an Infrastructure Finance Company (IFC) in terms of instructions
 contained in RBI Circular CC No.168 dated February 12, 2010. As an IFC,
 the total permissible exposure for lending in the private sector would
 be 25% of owned funds in case of a single borrower and 40% in case of a
 single group of borrowers and exposure for lending and investing taken
 together can be upto 30% and 50% of owned funds, respectively. REC is
 also required to maintain a Capital to Risk Weighted Assets Ratio
 (CRAR) of 15% (with a minimum Tier I Capital of 10%). Accordingly, the
 Prudential Norms have been modified with the approval of our Board on
 September 25, 2010. In view of the exemption granted by RBI in respect
 of Central and State Entities in power sector, our maximum credit
 exposure limits to such Utilities varies from 50% to 250% of our net
 worth, depending upon entity appraisal and status of unbundling of the
 respective State Utilities.
 
 5.  There has been shortfall in creation of Special Fund by some of the
 RE Cooperative Societies amounting to Rs.290.62 lacs (Previous year
 Rs.301.45 lacs) and the societies are pursued to create the required
 Special Fund.
 
 6.  Balance confirmation has been received from some of the borrowers.
 
 7.  Income Tax as applicable in respect of Interest accrued on bonds is
 deducted at source at the time of actual payment of interest to the
 bond holders since such bonds are freely transferable.
 
 8.  The formalities regarding registration of conveyance deeds etc. in
 respect of some of the Land & Building acquired by the Corporation
 amounting to Rs.458.83 lacs (Previous year Rs.3,630.58 lacs) are in the
 process of completion.
 
 9.  In terms of Accounting Policy No. 10.2, the balances in respect of
 Interest Warrants Accounts (both for institutional and 54EC Bonds) as
 on 31.03.2011 held in specified banks are Rs.2375.69 lacs (previous year
 Rs.3431.32 lacs).
 
 10.  In the opinion of the management, the current assets, loans and
 advances appearing in the balance sheet have a value equivalent to the
 amount stated therein if realized during the ordinary course of
 business and all known liabilities have been provided.
 
 11.  Provision for impairment loss as required under Accounting
 Standard-28 on impairment of Assets is not necessary as in the opinion
 of management there is no impairment of the Corporation''s Assets in
 terms of AS-28.
 
 12.  The Corporation has no outstanding liability towards Micro, Small
 and Medium undertakings.
 
 13.  No Bond Redemption Reserve (BRR) has been created since in terms
 of clarifications issued by the Department of Company Aaffairs, Govt. of
 India vide no.6/3/2001-CL.V dated 18.4.2002, BRR is not required to be
 created in the case of privately placed debentures issued by NBFC''s
 registered with the RBI under section 45-IA of the RBI (Amendment) Act,
 1997.
 
 14.  As part of hedging strategy, the company has executed, in some
 cases, interest rate swaps from fixed to floating to lower the cost by
 taking benefit of interest rate movement. The INR value of outstanding
 borrowing on which such swap has been exercised is Rs.565,000 Lacs.
 
 During the year ended 31.03.2011, the Corporation has reduced cost of
 borrowing to the extent of Rs.4,114.71 lacs (Previous year Rs.765.69 lacs)
 on account of swap (coupon only) transactions linked to rupee
 borrowing.
 
 The Net Mark to Market position in respect of the above swap
 transactions as on 31.03.2011 is of Rs.26,195.32 lacs (favorable)
 (Previous year Rs.16,544.12 lacs favorable).
 
 In respect of foreign currency borrowings, the company has executed
 cross currency swaps to hedge the Foreign Currency Exposure.
 
 (B) Information in relation to the interest of the Corporation in Joint
 Venture as required under Accounting Standard –27 issued by ICAI:
 
 Investments also include Rs.62.50 lacs (Previous year Rs.62.50 lacs)
 representing Corporation''s contribution in the equity of Joint Venture
 Company Energy Efficiency Services Limited (EESL) promoted by Ministry
 of Power.  This represents the 25% equity of EESL as on March 31, 2011.
 Corporation has also made application for allotment of further Equity
 amounting to Rs.2437.50 lacs for which Shares are yet to be allotted. The
 Corporation is not having material control on the day to day operations
 of the Joint Venture Company though it has Significant influence on the
 company. Accordingly, the investment is accounted for at cost.
 
 15.  Related Party Disclosure:
 
 A.  Key Management Personnel:
 
 Sh. P. Uma Shankar        Chairman & Managing Director (till
                           15.06.2010 FN)
 Dr. J. M. Phatak          Chairman & Managing Director (from
                           15.06.2010 AN)
 
 Sh. H.D. Khunteta         Director (Finance)
 
 Sh. Guljit Kapur          Director (Technical)
 
 Remuneration to whole time Directors including Chairman & Managing
 Director is disclosed in Note No.15.
 
 Advances due from whole time Directors including Chairman & Managing
 Director have been disclosed in Note No.15.
 
 B.  Other Related Parties with whom transactions exist:
 
 subsidiary Companies: relationship
 
 1.  REC Transmission Projects Company Ltd.  Subsidiary
 
 2.  REC Power Distribution Company Ltd.  Subsidiary
 
 16.  Subsidy Under Accelerated Generation & Supply Programme (AG&SP): -
 
 The Corporation is maintaining a Interest Subsidy Fund Account and was
 given AG&SP subsidy (for disbursement to the eligible borrowers) by
 Govt. of India at net present value calculated at indicative rates and
 year in accordance with GOI''s letter vide D.O.No. 32024/17/97-PFC dated
 23.09.1997 and O.M.No.32024/23/2001-PFC dated 07.03.03 irrespective of
 the actual repayment schedule, moratorium year and duration of
 repayment of the eligible schemes. The impact of difference between the
 indicative rate and year considered at the time of drawl and the actual
 can be ascertained only after the end of the respective schemes.
 
 17. The Corporation has been providing for deferred tax assets /
 liabilities in terms of Accounting Standard No. 22 on Accounting for
 Taxes on Income.
 
 18. In terms of Accounting Standard No. 20 issued by the Institute of
 Chartered Accountants of India, Earnings per share (Basic and Diluted)
 is worked out as under: -
 
 19.  Some of the erstwhile State Electricity Boards (SEBs) against whom
 loans were outstanding or on whose behalf guarantees were given, were
 restructured by the respective State Governments and new entities were
 formed in the past. Consequently, the liabilities of the erstwhile SEBs
 stand transferred to new entities and transfer agreements in some of
 the cases are to be executed amongst the Corporation, new entities and
 the State Governments.
 
 20.  The expenses of Rs. 643.98 lacs incurred up to Financial Year 2006-
 07 on RGGVY implementation were adjusted out of interest earned on such
 funds. The Corporation had approached MOP for regularization of above
 adjustments which is still pending.  The management considers that
 amount is still recoverable from Govt. of India.
 
 21.  The Corporation has adopted AS-15 (revised 2005) ‘Employees
 Benefit''. Defined employee benefit schemes are as follows:
 
 a.  Provident Fund
 
 Corporation pays fixed contribution of Provident Fund at pre-determined
 rates to a separate trust which invests the funds in permitted
 securities. The trust fixes the rate of interest on contribution to the
 members of the trust.  As per Actuarial report, the affair value of the
 assets of the Provident fund including the returns of the assets
 thereof, as at 31st March 2011 is greater than the obligation under the
 defined contribution plan.
 
 b.  Gratuity
 
 The Corporation has a defined benefit gratuity plan. Every employee is
 entitled to gratuity as per the provisions of the Payment of Gratuity
 Act. The scheme is funded by the Corporation and is managed by separate
 trust. The liability of Gratuity is recognized on the basis of
 actuarial valuation.
 
 c.  Post-Retirement Medical Facility (PRMF)
 
 The corporation has Post Retirement Medical Facility under which
 entitled retired (including his/her spouse) are covered as per
 Corporation''s rule. The expenditure is recognized in the profit & loss
 account on the basis of actuarial valuation.
 
 d.  Employees Family Economic Rehabilitation Scheme
 
 The Corporation has a scheme to provide monetary benefit and support to
 the family of an employee in case of his/her permanent total
 disablement /death if the same takes place while the employee is in
 service of the Corporation. The expenditure is recognized in the profit
 & loss account on the basis of actuarial valuation.
 
 e.  Scheme for long service award to the employees.
 
 The Corporation has a scheme for Long service Award to the employees on
 completion of milestones of continuous service of 10 years, 20 years
 and 30 years in the corporation. The expenditure is recognized in the
 profit & loss account on the basis of actuarial valuation.
 
 f.  Other Defined Retirement Benefit (ODRB)
 
 The Corporation has a scheme for settlement of the employee and their
 dependents at the time of superannuation at home town. The expenditure
 is recognized in the profit & loss account on the basis of actuarial
 valuation.
 
 OTHER EMPLOYEE BENEFITS :-
 
 During the year, Provision for Earned Leave Encashment amounting to
 Rs.469.47 lacs (Previous Year Rs.209.69 lacs) , provision for sick leave
 amounting to Rs.216.21 lacs (Previous year Rs.155.44 lacs), Provision for
 Economic Rehabilitation allowance amounting to Rs.205.91 lacs (Previous
 Year Nil) and Provision for Long Service Award amounting to Rs.236.95
 lacs (Previous Year NIL) have been made on the basis of Actuarial
 Valuation and charged to P&L A/c.
 
 No provision for LTC has been made this year since after the
 implementation of 2nd Pay Revision Committee Recommendations, LTC has
 now become a part of the monthly perquisites being paid with the
 salary.
 
 22.  (A) Government of India has appointed REC as a nodal agency
 for implementation of Rajiv Gandhi Gramin Vidyutikaran Yogna (RGGVY).
 The funds received for disbursement to various agencies under such
 schemes are kept in a separate bank account. The undisbursed funds and
 interest earned thereto are classified as current liabilities.
 
 (B) During the current year, interest earned of Rs.1143.02 lacs (Previous
 year Rs.880.73 lacs) including TDS nil (Previous year Rs.154.43 lacs) has
 been taken to RGGVY Subsidy account.
 
 23.  During the year, Corporation has invested its surplus funds with
 the Public Mutual Funds in Liquid Scheme and Liquid Plus Scheme.  The
 same have been disinvested during the year itself.
 
 24.  The Corporation''s main business is to provide finance to power
 sector. Accordingly, the Corporation does not have more than
 
 25.  The Bond Series and other secured borrowings are secured by a
 charge on the receivables, both present and future, in favour of IDBI
 Trusteeship Services Ltd. and IL&FS Trust Company Ltd., on the basis of
 joint hypothecation agreement dated 25th January 2008. However, certain
 specific receivables of Rs.2,76,736 lacs (Previous Year Rs.430509 lacs) are
 hypothecated in favour of IL&FS Trust Company Ltd. in terms of that
 agreement. Refinance loan of Rs.1,87,000 lacs (Previous Year Rs.87000 lacs)
 availed from IIFCL shall also be covered under the same agreement with
 regard to pooling of securities and IIFCL shall have pari-passu charge
 on the receivables charged to these Trustees.
 
 26.  The Capital Adequacy Ratio of the Corporation as on March 31, 2011
 is 19.09% (previous year 16.05%).
 
 27.  Modifications/Disclosures have been made in Significant Accounting
 Policies no. 2, 2.1 (c), 2.2 (i) and 10.3 to make them more
 clarificatory/ explicit. There is no financial impact of such
 Modifications/disclosures.
 
 28.  Previous year figures have been regrouped/rearranged/ recasted,
 wherever necessary, to make them comparable with the current year''s
 figures.
 
 29.  Figures have been rounded of to the nearest lacs.
 
 30.  Schedules 1 to 17 form an integral part of the Balance Sheet and
 Profit & Loss Account and have been duly authenticated.