Fixed Asset Accounting Project Report

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1

ACKNOWLEDGEMENT
No endeavor however

however small can be succ
successfully
essfully accomplished w
without
ithout the
concrete efforts of all concerned. I was fortunate in being given full co-
operation & help whenever I sought it in the course of my training.
In this respect I would like to thank Mr. Anurag Bharadwaj

(Manager HR) who allowed me to under go training in NHPC (Parbati
Project Stage II) at Nagwain (Mandi).
I express my sincere thanks to Mr.K.K.Goel (Sr.Manager Finance)

who accepted me as a trainee in NHPC& for taking keen interest in my
training.
I have no appropriate words express my sense of gratitude to

Mr.Amit Bansal C.A.(Trainee Officer) & Mr.Vishal (Trainee Officer) under
whom I was placed during the training tenure. I must thank Mr. Devinder
Kumar C.A. (Dy. Manager) for his guidance. I am also thankful to Mr.
Satish (IT Supervisor) for his kind support.
I owe a special thanks to all the executives, supervisors & staff of
various sections for their co-operation & making my training period a
valuable & pleasant experience for me.

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JULY,2008
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PREFACE
The confidence of an individual is boosted as one successfully completes the

responsibilities shouldered on him. The theoretical concepts only help us to
gain Knowledge. However an administrative skill, the pre-requirement for
the completion of a success story comes with experience.
The “ON THE JOB” practical training is a stepping stone towards

the success story. A mere tenure of two months in the industrial world gives
you a bird’s view of the internal happening of the vast and complex world.
It was a privilege to undergo practical training in NHPC (National Hydro
in NHPC
Electrical Power Corporation Ltd.) which allowed me to see the most recent
management tools, techniques and methods being put in to practice.
NHPC has given me so much in this short duration that I feel

confident and capable of taking up challenge in this industrial world and
make a success story of my career. Out of different offices located
located in
different states of India, I visited one in Himachal Pradesh at Nagwain
(Mandi) i.e. Parbati Hydroelectric Project Stage-II.
The present training report deals with the work done during training
period at six weeks
weeks in Finance department.
department. It is outcome
outcome of observation,
discussion, practical work.
Report has been divided in to two parts. First deals with Introduction
about NHPC& Parbati Hydro Electric Project-II. Second part deals with the
Project Report on Fixed Asset Accounting and Accounting Standards related
functionality, aswith Fixed
well as Asset Accounting.
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CONTENTS
PART-I
● INTRODUCTORY ANALYSIS
1 BRIEF INTRODUCTION ABOUT NHPC
2 INTRODUCTION ABOUT PHEP-II
PART-II
● PROJECT REPORT ON FIXED ASSET ACCOUNTING
WITH RESPECT TO NHPC
1 FINANCE AND ACCOUNTS FUNCTION
2 DEFINITION OF FIXED ASSET

cookies to enable essential3site TERMS IN FIXED ASSET ACCOUNTING
4 ACCOUNTING STANDARDS
5 PROCESSES OF FIXED ASSETS
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PART-I

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NHPC Limited ( NATIONAL

( NATIONAL HYD HYDRO-ELECTRIC
RO-ELECTRIC POWER
CORPORATION LTD) LTD) was incorporated in 1975 by Govt. of India to
plan, design, construct,
construct, operate and maintain hydro electric power projects
maintain power projects
in central sector .
HYDRO ELECTRIC POWER

India is blessed with immense amount of hydro-electric potential and ranks
5th in terms of exploitable hydro-potential
hydro-potential on global scenario. As per
assessment made by CEA (Central Electricity Authority),
Authority), India is endowed
with economically exploitable hydro-power
hydro-power potential to the tune of 1, 48,701
MW of installed capacity. The basin wise assessed potential is as under :-
Basin/Rivers Probable Installed Capacity (MW)
Indus Basin 33,832

Ganga Basin 20,711
Central Indian River system 4,152
Western Fl
Flowing Rivers of
of so
southern In
India 9,430
Eastern Flowing Rivers of southern India 14,5
,51
11
Brahmaputra Basin 66,065
Total 1,48,701
In addition, 56 number of pumped storage projects have also been identified
Privacy Policy with probable installed capacity of 94,000 MW. In addition to this, hydro-
Potential from small, mini & micro schemes has been estimated as 6, 782
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MW from 1 512 sites. Thus, in totality India is endowed with hydro-
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potential of about 2, 50, 000 MW. HoHowever,
wever, exploitati
exploitation
on of hydro-
hydro-potential
potential
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has not been up to the desired level due to various constraints confronting
the sector.
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6

In 1998, Government of India announced "Policy on Hydro Power

Development" under which impetus is given to development of hydropower
in the country. This was a welcome step towards effective utilization of our
development.. During
water resources in the direction of hydropower development
October
study which2001, Central Electricity
prioritized and rankedAuthority
the future(CEA) came projects.
executable out with aAsranking
per the
study, 399 hydro schemes with an aggregate installed capacity of 1 06 910
MW were ranked in A,B & C categories depending upon their inter-se inter-se
attractiveness. During May 2003, Govt. of India launched 50 000 MW hydro
initiative in which preparation of Pre Feasibility Reports of 162 Projects
totalling to 50 000 MW was taken up by CEA through various agencies. The
PFRs for all these projects have already been prepared and projects with low
tariff (first year tariff less than Rs.2.50/kWh) have been identified for
preparation of DPR

How it works
So just how do we get electricity from water? Actually, hydroelectric and

coal-fired power plants produce electricity in a similar way. In both cases a
power source is used to turn a propell
propeller-like
er-like piece calle
called
d a turbine, whic
whichh
then turns a metal shaft in an electric generator , which is the motor that
produces electricity.
electricity. A coal-fired p
power
ower plant uses stea
steamm to turn the tu
turbine
rbine
blades;
cookies to enable whereas
essential site a hydroelectric
hydroelectric plant u
uses
ses falling water to turn the turbin
turbine.
e.
functionality, asThe
well as marketing,
results are the same.
Take a look at the diagram of a hydroelectric power plant to see the details:
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7
The theory is to build a dam on a large river that has a large

drop in elevation. The dam stores lots of water behind it in the reservoir at
FRL ( full reservoir level)and a live storage of 1.98 Mcum . Near the bottom
of the dam wall there is the water intake .Gravity causes it to fall through the
penstock inside the dam. dam. At the end of tthe
he penstock
penstock there
there is a turbine
propeller , which is turned by the moving water. The surge shaft (restrict the
surges within the height of shaft) from the turbine goes up into the generator,
which produces the power. Power lines are connected to the generator that
carry electricity to your home and mine. The water continues past the
through the tail race tunnel (TRT) into the river past the dam. By
propeller through
the data
This website stores way,such
it isasnot a good idea to be playing in the water right below a dam
when
cookies to enable water
essential siteis released.
Privacy Policy
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generator works:
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"A hydraulic turbine converts the energy of flowing water into mechanical
energy. A hydroelectric generator converts this mechanical energy into
electricity. The operation of a generator is based on the principles discovered
by Faraday. He found
found that when a magnet
magnet is moved past a conductor, it
causes electricity to flow. In a large generator, electromagnets are made by
circulating direct current through loops of wire wound around stacks of
magnetic
This website stores steel
as laminations. These are called field poles, and are mounted on
the data such
perimeter of the rotor. The rotor is attached to the turbine shaft, and
functionality, asrotates at a fixed speed. When the rotor turns, it causes the field poles (the
well as marketing,
personalization,electromagnets)
and analytics. You to move past the conductors mounted in the stator. This, in
may change your settings
turn, at any
causes time
electricity to flow and a voltage to develop at the generator
output terminals."
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“ABOUT NHPC”
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NHPC has successfully commissioned 13 hydro-electric projects

with total installed generation capacity of 5175 MW including 1000 MW
Indira Sagar Project and 520MW Omkareshwer Project in joint venture
with Govt. of Madhya Pradesh. 11 projects having generation capacity of
4622MW are under construction, besides number of projects are under
Govt. clearance
corporation and under
is 200,000 DPR preparation stage.The
Million. stage.The asset value of
With the commissioning of 180MW Baira Siul project in

1981, NHPC
1981, earning profit since
NHPC started earning since 1982.
1982. The first turnover was
Rs.24cr and its net profit was 8cr . NHPC is also planni
planning
ng to take Wind
and Tidal wave projects
projects in the country.
Considering the impediments faced during execution of

these projects such as unfavourable geologic
geological
al conditions, difficult law and
order problems, inaccessible and remote locations, the achievement so far
is commendable. The generation performance of these stations has been
outstanding.
The corporation has witnessed a tremendous growth during the
last few years and is likely to be a 10,000 MW plus company by the end of
XI th plan. Besides provides consultancy services, NHPC is also entering
into the field of Non-conventional
Non-conventional energy resources.

Privacy Policy
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FINANCIAL PROFILE
1 An aaut
utho
hori
rize
zed
d sh
shar
aree ca
capi
pita
tall of Rs.70,
of Rs.70, 000 Millions.
2 Go
Gove
vern
rnme
mentnt of Indi
India’
a’ss ap
appr
prov
oval
al of incr
increa
easi
sing
ng the
the au
auth
thor
oriz
ized
ed sh
shar
aree
capital of the corporatio
corporationn Rs 100,000 mmillions
illions
3 Inv
Invest
estmen
mentt bas
basee of o
over
ver Rs.
Rs. 15
155,0
5,000
00 Milli
Millions
ons aand
nd p
paid
aid up ca
capit
pital
al o
of
f
Rs. 62,709 Millions
4 In tter
erms
ms of iinv
nves
estm
tmen
entt NH
NHPC
PC iiss one o thee TOP TEN COMPANIES
off th
in the country.
CONSULTANCY SERVICES:
1 An exp
expert
ert in th
thee arena
arena of hydr
hydro
o powe
powerr deve
develop
lopmen
mentt with ex
exper
perien
ience
ce
of over 27 years.
2 Con
Consul
sultan
tancy
cy service
servicess to other
other agenci
agencies/
es/ orga
organiz
nizati
ations
ons,, both
both in Pub
Public
lic
This website stores dataandsuchPrivate

as sector.
functionality, as well3as marketing,
Ach
Achiev
ieved
ed new con
consul
sultan
tancy
cy assignme
assignments
nts tota
totalin
ling
g Rs.171
Rs.171.80
.80 Mill
Million
ionss
(2001-2002).
4 A re
regi
gist
ster
ered
ed "Co
"Cons
nsul
ulta
tant
nt"" in the area
area of hyd
hydro
ro pow
power
er wit
with
h Wo
Worl
rld
d
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Bank, Asi
Asian
an Dev
Develo
elopm
pment
ent Bank,
Bank, Africa
African
n Dev
Develo
elopm
pment
ent Ban
Bank
k and
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Kuwait Fund for Arab Economic Development.
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DESIGN & ENGINEERING:
Pool of talent, powering excellence Multi-disciplined
interactive design Division; well equipped and capable of handling intricate
design
design of all the struct
structure
uress ass
associ
ociate
ated
d with
with hyd
hydro
ro pow
power
er pro
projec
jects
ts from
from
concept to commissioning
commissioning,, operation and maintenance.
ENGINEERING, GEOLOGY AND GEOTECHNICA

GEOTECHNICAL:
L:
Specialized in the field of Engineering, Geology, Geo-
Physics and Construction material, well equipped and capable of handling
Survey/inv
Survey/investig
estigation
ationss of Hydr
Hydroelec
oelectric
tric Projects
Projects and prepa
preparatio
ration
n of DPR
(Detail Project Report) in record time.
International Experts rated NHPC's Geological Data &
interpretation of high standards.

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1 Cl
Clea
ean
nPPow
ower
er for
for eeve
very
ry ho
home
me..
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2 To be a Worl
World
d doss organ
organizati
ization
on in h
hydroe
ydroelectr
lectric,
ic, wi
wind,
nd, ttidal
idal & geo-
thermal power with dominant Indian leadership and global presence.
3 To at
atta
tain
in or
orga
gani
niza
zati
tion
on ex
exce
cell
llen
ence
ce by de
deve
velo
lopi
ping
ng true
true po
pote
tent
ntia
iall of
human resources and providing opportunity for growth, well being
and enrichment.
4 Pr
Prese
eserva
rvatio
tion
n of environ
environmen
mentt matri
matrix
x and bio-di
bio-diver
versit
sity
y in the pro
projec
jectt
areas as well as protecting rights of project affected people (PAP's).
“CORPORATE MISSION”
1 To harness the vast hydro, tidal, wind and geo-thermal potential of the
country by covering all aspects of investigation, planning, design,
construction operation and maintenance to produce pollution free and
This website stores dataInexhaustible

such as power.
functionality, as well2as marketing,
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Uphold ld hi
high
gh standa
standards
rds of
of or
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ganization
ational
al values
values and eethos
thos..
or accept the default3settings.
Comm
Commitmen
itmentt to h
health
ealth,, saf
safety,
ety, eenvir
nvironme
onmentnt and huma
human n res
resource
ource
development.
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Marketing 4 Fast
Faster
er the cult
culture
ure o
off com
commitm
mitment
ent and
and transp
transparenc
arency
y mak
making
ing w
workin
orking
g
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“CORPORATE OBJECTIVES”
1 Deve
Developm
lopment
ent of vast hydro
hydro poten
potential
tial at
at fas
faster
ter pa
pace
ce and opti
optimum
mum ccost
ost
elimination time and cost over-run.
2 Completion of all on going projects within stipulated time frame.
3 Ensure maximum utilization of installed capacity and help in better
system stability.
4 Gene
Generatio
ration
n of suf
suffici
ficient
ent intern
internal
al resource
resourcess for eexpans
xpansion
ion and
and sett
setting
ing
up new projects.
5 Corp
Corporate
orate devel
developme
opment
nt along
along with simu
simultane
ltaneous
ous h
human
uman resou
resource
rce
development.

“PERFORMANCE OF NHPC”
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* NHPC has been conferred “Mini Ratna” status by the Government of
India.
* Name of the Company has been changed from National Hydroelectric

Power Corporation Ltd. to NHPC Limited.

* Cross ed profit figure of Rs. 1000 crore and installed capacity of 5000
Crossed
MW. Registered a net Profit of Rs. 1,002 crorecrore against Rs. 925 crore
during the previous financial year.
* Poised to pay highest ever dividend.
* Achieved an all time high sales turnover of Rs. 2,311 crore as against
Rs. 1,963 crore during the previous year.
* Achieved 100% revenue realization of Rs. 2270 crore.
* Enjoys
may change your settings at any highes
hig
timehestt
credit rat
credit rating
ing i.e
i.e.. AAA for domestic borrowings and
or accept the defaultrat
settings.
rating
ing equequiva
ivalen
lentt
to Sovere
Sovereign
ign rating
rating for extern
external
al bor
borrow
rowing
ingss from
from
reputed International rating agencies.
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* Memorandum of Association of the Company has been amended to
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includ
inc ludee tra
tradin
ding,
g, power
power develo
developmpment
ent includ
including
ing for
forwar
ward,
d, bac
backwa
kward
rd or
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horizontal integration ancillary and other allied industries.
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* Generated 14811.35 Million Units electricity against 13048.74 Million

Units generated during previous corresponding year, thereby registering
an increase of 13.5 %.
achieved
* The Power Stations achieved a Capa
Capacity
city Index of 96.13 % agai
against
nst the
MoU target
target of
of 94.50 %.
* Im
Imple
plemen
mentin
ting
g Ind
India’
ia’ss larges
largestt hyd
hydroe
roelec
lectri
tricc pro
projec
ject,
t, the 200
2000
0 MW
Subansiri Lower Project in Arunachal Pradesh.
* Plans to become 10000 MW plus company by 11 th Plan.

* Recommendation of PIB (Public Investment Board) for Govt. sanction
and TEC (Techno Economic Clearance) of CEA obtained for the 3000
MW Dibang Multipurpose Project. Dr. Manmohan Singh, Hon’ble Prime
Minister of India laid the foundation stone of the Project on 31.1.2008.
* MoU signed with Govt. of Manipur for implementation of 66 MW

Loktak Downstream Project by NHPC in Joint Venture with Govt. of
Mani
Ma nipu
pur.
r. Mi
Mini
nist
stry
ry of Envi
Enviroronm
nmen
entt and
and Fo
Fore
rest
st ha
hass acco
accord
rded
ed pre-
pre-
construction activities on the project.
* Environment clearance has been accorded by Ministry of Environment

and Forest for 195 MW Kotli Bhel-1A, 320 MW Kotli Bhel-1B, 120 MW
Vyasi Projects, all in Uttarakhand and 1000 MW Pakal Dul Project in
Jammu & Kashmir.
This website stores *data

Implementing
such as Enterprise Resource Planning (ERP) of IFS AB, Sweden
across the
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The Bulk Power Consumers of NHPC Limited

in North India are the power utilities belonging
to the states of Haryana, Punjab, Himachal
Pradesh, Uttar Pradesh, Uttarkhand, Rajasthan,
Delhi and J&K and Union Territory of
Chandigarh. These states are being supplied
power from Baira
Baira Siul, Salal-I
Salal-I & II, Tanakpur,
Tanakpur,
Chamera-I, Chamera-II,Uri,
Chamera-II,Uri, Dhauliganga &
Dulhasti Power Stations. In the Eastern
Region, Rangit Power Station is supplying
energy to the states of West Bengal, Sikkim,
Bihar, Jharkhand and Damodar Valley
Corporation. In the North-Eastern Region,
Loktak Power Station is supplying energy to
the states of Assam, Manipur, Meghalaya,
Tripura, Nagaland, Arunachal Pradesh and
Mizoram.

Since commencing of commercial generation in 1982, the Energy sales and revenues
of the corporation have grown significantly. The Energy sales from all operating
projects of the Corporation during
during the last 25 years
years has risen from Rs.
Rs. 228.60 Million
in the year 1982-83 to Rs. 23110 Million in the year 2007-2008. Year-wise details of
sales after deduction of advance against depreciation since 1982-83 are given below :-
Sale & Revenue

Year
(Million Rs.)
cookies to enable essential
1990-1site
991 1581
personalization, and1analytics.
991-199You2 1556
or accept the default1settings.
992-1993 1552
1993-1994 2087
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1994-1995 4805
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1995-1996
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5091
Analytics 1996-1997 5344
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199 7-1998
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9930
1998-1999 11944
1999-2000 1170757
2000-2001 11799

“FINANCIAL REVIEW(2007-08)”
* Registered a net profit (after tax) of Rs. 1,002.06 crore against the net
profit (after tax) of Rs. 9, 24.
24.80
80 crore registere
registered
d during the previous
previous financial
year.
* Achieved an all time high sales turnover of Rs. 2,311.47 crore as against
Rs.1,962.76
This website stores data such as crore achieved during the year 2006-07
functionality, as*well
Poised to declare an all time high dividend for the year 2007-08. An
as marketing,
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and analytics. You of Rs.100 crore for the year 2007-08 has already been paid
may change your settings at
to Government any time
of India.
* Better business management coupled with prudent financial policies like

Privacy Policy effici
efficient
ent sal
sales
es rea
realiz
lizati
ation,
on, better
better grid
grid manage
managemen
ment,
t, effici
efficient
ent tre
treasu
asury
ry
management systems etc. have resulted in sound financial position which
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made the Company self reliant for the resources generation for ambitious
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capacity addition program in XI and XII Five year plans.
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Save * No budgetary support

Accept All support from Government
Government during the year 2007-08.
2007-08.
18
* Signed financing agreements with PFC aggregating approximately Rs.

4,000 crore at most competitive terms.
* Necessary financial closure of all ongoing projects in place.
* Likely to come up with IPO in August 2008.

2008.
“GRAPHICAL PRESENTATION”
“GENERATION”

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“SALES VS PROFIT”
“DETAIL ABOUT PROJECTS OF NHPC”

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LOCATION MAP OF N.H.P.C. PROJECTS
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S No. Project State Installed Capacity(MW) Total Capacity (MW)
1 Parbati - II Himachal Pradesh 4 * 200 800
2 Sewa - II Jammu & Kashmir 3 * 40 120
3 Subansiri (Lower) Assam 8 * 250 2000
4 Uri-II Jammu & Kashmir 4 * 60 240
5 Chamera-III Himachal Pradesh 3 * 77 231
6 Teesta Low Dam - III West Bengal 4 * 33 132
7 Kishenganga Jammu & Kashmir 3 * 110 330
8 Teesta Low Dam - IV West Bengal 4 * 40 160
9 Parbati - III Himachal Pradesh 4 * 130 520
10 Nimmo-Bazgo Jammu & Kashmir 3 * 15 45
11 Chutak Jammu & Kashmir 4 * 11 44
Total 4622
S No. Project Country/State Capacity Total Capacity Status
1 Teesta - V Sikkim 3 * 170 510 C

Co
ommissioned
2 Omkareshwar *
Omkareshwar * Madhya Pradesh 8 * 65 520 Commissioned
3 Parbati - II Himachal Pradesh 4 * 200 800 Under Construction
4 Sewa - II Jammu & Kashmir 3 * 40 120 Under Construction
5 Subansiri (Lower) Assam 8 * 250 2000 Under Construction
This website stores6 data such

Uri-II as Jammu & Kashmir 4 * 60 240 Under Construction
7 Chamera-III
cookies to enable essential site Himachal Pradesh 3 * 77 231 Under Construction
functionality, as well
8 as marketing,
Teesta Low Dam - III West Bengal 4 * 33 132 Under Construction
may change your 9settingsTeesta
at anyLow
timeDam - IV West Bengal 4 * 40 160 Under Construction
or accept the default
10 settings.
Parbati - III Himachal Pradesh 4 * 130 520 Under Construction
11 Nimmo-Bazgo Jammu & Kashmir 3 * 15 45 Under Construction

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Marketing Total 5322

* NHDC - A Joint venture between NHPC & Govt. of Madhya Pradesh
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“PARBATI
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HYDRO ELECTRIC PROJECT-II”
22
In November 1998
agreement for
harnes
harnessin
sing
g pow
power
er
potential of Parbati
basin has been
executed with Government of Himachal Pradesh.
Potential of river Parbati will be harnessed in three stages comprising
Stage-I (750 MW), Stag

Stage-I Stage-II
e-II (800 MW) an
and
d Sta
Stage
ge-II
-IIII (52
(520 MW).. NHPC
0 MW) has
therefore taken up planned development of the Basin with construction of
Stage-II initially, and completion of balance investigation of Stage-I and
This website stores data such

Stage-Ill as
projects before taking up these for construction.
functionality, asThe Parbati
well as Hydroelectric Project Stage-II is a run of the river scheme to
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and analytics.
hydroYoupotential of lower reaches of the river Parbati.
Parbati. The Parbati
river along with Tosh Nallah will be diverted by way of constructing a
Concrete Gravity Dam at village Pulga.
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Location
Save NAME Accept All PARBATI HYDROELECTRIC PROJECT (STAGE -II)
23
DISTRICT KULLU
STATE HIMACHAL PRADESH
NEAREST RAIL HEAD KIRATPUR (190 KM FROM SAINJ, POWER HOUSE SITE)
NEAREST AIRPORT BHUNTER (35 KM FROM SAINJ, POWER HOUSE SITE)
RIVER PARBATI (A TRIBUTARY OF RIVER BEAS)
LOCATION OF DAM & DIVERSION DAM ON RIVER PARBATI AT PUGLA

POWERHOUSE VILLAGE AND POWREHOUSE ON RIVER SAINJ RIGHT
BANK OF SUIND VILLAGE.
INSTALLED CAPACITY 4 X 200 (800 MW)
ANNUAL GENERATION 3076.95GWh
DATE OF CCEA APPROVAL SEPTEMBER 2002
LATEST ESTIMATED COST RS.4120.25CRORES
BENEFICIARY STATES H.P, DELHI, J&K, PUNJAB, HARYANA, RAJASTHAN, U.P
Hydrology
Four Catchments of the project are:

1.Parbati River
Ca
Catc
tch
hment Are
Area at Dive
iversion Dam
Dam 1155Sq.km.
Snow Catchment 971Sq.km.
Maximum observed discharge 369.10Cumecs
2. Jigrai Nallah
Catchment A
Arrea aatt D
Diiversion site 42Sq.km.
Snow Catchment 21Sq.km.
3. Hurla Nallah
Catchment A
Arrea aatt D
Diiversion site 34Sq.km.
Snow Catchment 9.5Sq.km.
This website stores data
4. Jiwa such as
Nallah
Catchment Ar
Area aatt Di
Diversion si
site 180Sq.km.
Privacy Policy Package: Lot PB-I

Marketing
Description Details
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Work Description Civil and Hydromechanical works for Diversion Dam
Analytics and Part Head Race tunnel.
Agency / Name of Contractor Joint Venture comprising of M/s Patel Engg Ltd and
Save Accept All M/s SEW Constructions Ltd.
24
Value of Award
Contract Price for Civil Works 29929
Contract Price for Hydro Mechanical Works 2361.09
Total of the above two works 322,90.09
Percentage of Foreign currency payments 23.82% in US $ 2.19% in Euro
Date of Award 11.09.2002

Original Schedule of completion (date as p er 60 months (10.09.2007) from the date of issue of
per
contract) Notification of Award .
Package: Lot PB-II
Description Details
Work Description Civil and Hydromechanical works for Head Race tunnel
and Associated works.
Agency / Name of Contractor Joint Venture comprising of M/s Maytas Infra Ltd, M/s
Sri Shankarnarayana Construction Co. and M/s
Nagarjuna Const. Co. Ltd. (Collectively Know as
Himachal Joint Venture)

Value of Award
Contract Price for Civil Works 41623.41 lacs.
Contract Price for Hydro Mechanical Works 365.30 lacs.
Total of the above two works 41988.71 lacs.
p er 60 months (10.09.2007) from the date of issue of
Original Schedule of completion (date as per
contract) Notification of Award .
Package:
cookies to enable essential siteLot PB-III
I Package:
may change your settings at anyDtimeescription Details
Work settings.
Description Civil and Hydromechanical works for Power House,
Pressure shaft, Surge shaft and Part Head Race tunnel.
Agency / Name of Contractor M/s Gammon India Ltd.
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Value of Award
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25

contract) Notification of Award.
Package::
Package:: Lot PB-IV -IV Package: Lot PB-IV 908 a
Description Details
Work Description Civil and Hydromechanical works for Jiwa Nallah &
Associated works.
Agency / Name of Contractor Joint Venture comprising of M/s Bholasingh Jaiprakash
Construction Ltd, M/s Techno Trade and M/s Harbhajan
Sarabjeet & Associates. (BJ-Techno-HSA JV)
Value of Award
Total of the above two works 56,46.99 lacs.
Percentage of Foreign currency payments Nil
p er 60 months(10.09.2007)from the date of issue of

CONTRACTPackage PB-V First Contract

Package: Lot PB-V FIRST CONTRACTPackage
cookies to enable essential site Description Details
personalization,Work Description
and analytics. You Ex-works Supply and CIF / CIP Supply of all equipments
and materials including Mandatory Spares Electrical and
Machanical Works.
Agency / Name of Contractor M/s Bharat Heavy Electricals Ltd
Value of Award
Privacy Policy
CIF / CIP Supply of all Off-shore equipments
US $ 11,228,000.00
and materials including Mandatory Spares
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Ex-works Supply and CIF / CIP Supply of all
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equipments and materials including US $ 54,516,000.00
AnalyticsMandatory Spares
Total of the above two works US $ 65,744,000
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26
p er 52 months (23.04.2007)from the date of issue of

pPackage: Lot-V SECOND CONTRACT PB-V Second Contract
Description Details
Work Description Providing all services i.e. inland transportation for
deliveryu at site, unloading, storage, handling at site,
insatallation, Testing and Commissioning including
Performance Testing in respect of all the equipmnets
supplied under the 'First Contract' and any other services
specifie in the Contract documents for Electrical and
Machanical Works.
Agency / Name of Contractor M/s Bharat Heavy Electricals Ltd
Value of Award
Local transportation including Port clearance
670.00 lacs.
and Port Charges and Inland Insurance
Installation and other services 3420.00 lacs.

Total of the above two works US $ 65,744,000

Revenue to HP Government
Government due to construction of project up to October
October
Privacy Policy 2004
Sales Tax
Marketing Rs. 589.75 lakhs.
Royalty
Personalization Rs. 49.17 lakhs.
Total Rs. 638.92 lakhs.
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27
Vehicles Taken on Hire Basis
Light Vehicles/Tractors belonging to locals are bin hired by NHPC as well as by our major
contactors.
Hired By Inspection Vehicle Tractor/Truck

NHPC 35 Nos. 11 Nos. (HRTC Buses)
HJV 4 Nos. 18 Nos.
Gammon 7 Nos. 7 Nos.
BJ Techno 5 Nos. 1 Nos.
Total 51 Nos. 37 Nos.
Contract Given to Local Contractors
Details of work contract/work order given to various contractors of H.P. by Parbati HE

Project
Area Total No. of works awarded Total Amount

DAM Complex 219 Rs.9,05,67,980
HRT Complex 142 Rs.3,51,43,429
Township Complex 160 Rs.9,85,33,931
Power House Complex 180 Rs.9,64,18,802
JNW Complex 4 Rs.1,53,48,264
Total 705 Rs.33,60,12,406

POWER HOUSE
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The proposed surface power house is located on the right bank of River
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Sainj near Village Sainj at about 200 m downstream of the confluence of
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Save
River
River Accept
Sainj
Sainj Alland Jiw
Jiwaa Nal
Nallah
lah.. The power
power hou
house
se sha
shall
ll hav
havee an ins
instal
talled
led
28
capacity of 800 MW with four generating units of 200 MW each.

each . Short Tail
Race Channels shall discharge the water from

water from Power House to river Sainj .
“ENVIRONMENTAL ASPECTS”
Based on Environment Impact Assessment Studies conducted by the State
Forest Department, an Environment Management Plan has been prepared
incorporating the Catchments Area Treatment Plan and Compensator
Afforestation scheme. The project involves diversion of 87.79 ha of forest
land. In lieu of this forest land to be acquired, compensatory forestation is
proposed over 190.28 ha of land. Biological and engineering soil

cons
co nser
erva
vati
tion
on measmeasur
ures
es ha
have
ve be
been
en pr
prop
opos
osed
ed un
unde
derr Ca
Catc
tchm
hmen
ents
ts Ar
Area
ea
personalization,Treatment
and analytics.Plan.
You Other environmental measures proposed include wildlife
protection, heath measures, subsidized fu
fuel
el , supply to labo
laborers
rers etc.
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29
PART-II

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“FINANCE”
DEFINITION:
A branch of economics concerned with resource allocation as well as resource
management, acquisition and investment. Simply, finance deals with matters related to
money and the markets.
“FINANCE AND ACCOUNTS FUNCTIONS”

F&A department is responsible for carrying out all the activities and
aspects related
Corporation to the finance
in achieving and accounts
the corporate function and to assist the
objectives.
ACCOUNTING FUNCTIONS
• The F&A department is responsible for the book keeping function

and ensuring maintenance of proper books of accounts in accordance
with the generally accepted ACOUNTING STANDARDS and in
conformity with the COMPANIES ACT, 1956.
1956.
•
The
these
books of accounts
necessaryare
site contain necessary
required
data, to be
audit trails
trail maintained
s etc. in achecking,
Necessary manner that
review and internal
internal controls are to b
bee exercised to ensur
ensuree the
accuracy of the books of accounts.
Annual accounts of Corporation are required to be prepared on an
or accept the default• settings.
annual basis in accordance with the relevant laws and getting these
Privacy Policy audited by the Statutory auditors and CAG ( Controller Auditor
General of India).
India).There
There is also the requirement of preparing
preparing the
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periodic accounts
accounts( monthly/ quarterly/ six monthly).
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The Accounting Functions include:
¤ To maintain journal, cash-book and bank book.

¤ To maintain price store ledger
¤ To maintain work accounts
¤ To maintain Fixed Asset Register
¤ To maintain loan ledgers
¤ To prepare salary bills and disburse payment
¤ To make deductions on account of income tax,
EPF (Employee Provident Fund)
¤ To maintain subsidiary ledger and general ledger
¤ To prepare monthly trial balance
¤ To prepare periodic profit & Loss Accounts, Balance Sheet
etc.
¤ To interact with Internal Auditors, Statutary Auditors
Auditors,, CAG
CAG
(Controller Auditor General) of India.
¤ To compile the accounting and financial data for information
and use of various stakeholders like banks, financial institutions, bond/
debenture holders, share holders etc.
PAYMENT FUNCTION
The F&A department is responsible for the bill passing and payment.
Necessary adjustments/
adjustments/ deductions are to bebe made from the
the bills (such as
for advances, recoveries, taxes, shortages etc.)
The Payment Function includes:

may change your settings¤at any
To time
prepare bank accounts
¤ To handle cash
¤ To make payment to suppliers and contractors on the basis of bills
Privacy Policy approved for the payments
¤ To ensure that all expenditure is incurred with due economy aass if
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and with as much care as a person with ordinary prudence would take in
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case of his own business
Analytics ¤ To follow
follow instr
instructions
uctions regarding
regarding EPF and
and other Employees Trusts
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32
FINANCIAL MANAGEMENT
The F&A department is to assist the management in exercising

adequate financial management over the operations of the Corporation in
terms of budgetary control over revenue and capital expenditure.
The financial management functions include:
¤ To assist inin preparations
preparations of long term and annual
annual capital budget
budget
and operating budget for each project and the corporation.
¤ To assist the management in making various investment decision.
¤ To assist
assist the management in fformulating
ormulating profitability
profitability//
performance improvement
improvement plan
plans.
s.
¤ To analyse periodically the rea reason
son for time aand
nd cost overrun.
¤ To maintain
maintain cost account records
records and generate costing rreports.
eports.
¤ To manage working ccapital
apital and ensure that the wor
working
king capital is
with in the budget / norms.
TAX MANAGEMENT
The F&A department is responsible for tax planning and ensuring

compliance with the tax laws viz income tax, sales tax, custom duty etc.

The taxsitemanagement function includes:
¤ ToYou
personalization, and analytics. maintain necessary records as per the tax laws
may change your settings at any
¤ To maketime recovery/ deduction and deposit
deposit of taxes as per the
prescribed time limits
limits
¤ To file various tax returns
Privacy Policy ¤ To carry out tax planning so as to minimize tax
tax incidenc
incidencee
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33
“FIXED ASSETS”
Item that has physical substance and a life in excess of one year. It is bought
for use in the operation of the business and not intended for resale to
customers. Examples are building,
are building, machin
machinery,
ery, auto, and land.
land. Fixed assets
with the exception of land are subject to Depreciation
Depreciation.. Fixed assets are
usually referred to as property,
as property, plant
plant,, and equipment.
equipment.
as property, plant
Fixed asset, also known as property, plant,, and equipment (PP&E),
(PP&E), is a term
used in accountancy for assets and property
for assets property which cannot easily be
converted into cash. assets such as
cash. This can be compared with current assets
assets. In most cases,
cash or bank accounts, which are described as liquid assets.
only tangible assets are referred to as fixed.
Fixed assets normally include items such as land and buildings

buildings,, motor
vehicles,, furniture
vehicles furniture,, office equipment,
equipment, computers
computers,, fixtures and fittings,
machinery. These often receive favorable tax treatment
and plant and machinery.
(depreciation allowance)
allowance) over short-term assets because they depreciate
over time.
Current
Current asset
assetss ar
aree th
thos
osee th
that
at fo
form
rm pa
part
rt of th
thee ci
circ
rcul
ulat
atin
ing
g ca
capi
pita
tall of a
business. They are replaced frequently or converted into cash during the
course of trading. The most common current assets are stocks, trade debtors,
and cash.
Compare current assets with fixed assets. A fi

fixe
xed
d as
asse
sett is an asset of a
business
cookies to enable essential intended
site for continuing use, rather than a short-term, temporary
asset such as
stocks.
may change your Fixed assets
settings at anymust
time be classified in a company's balance sheet as intangible,
tangible, or investments.
investments. Examples of intangible assets include goodwill,
patents, and trademarks
trademarks.. Examples of tangible fixed assets include land and
Privacy Policy buildings, plant and machinery, fixtures and fittings, motor vehicles and IT
equipment.
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34
How
How sh
shou
ould
ld th
thee ch
chan
angi
ging
ng va
valu
luee of a fi
fixe
xed
d as
asse
sett be re
refl
flec
ecte
ted
d in a
company's accounts?
The benefits
years.
yea rs. that
Forr exa
Fo exampla e,business
mple, a com obtains
compan
pany
y mayfrom
usea fixed asset pie
the same extend
ce ofover
piece several
produc
pro ductio
tion
n
machinery for many years, whereas a company-owned motor car used by a
salesman probably has a shorter useful life.
By accepting that the life of a fixed asset is limited, the accounts of a

business need to recognise the benefits of the fixed asset as it is "consumed"
over several years.
This consumption of a fixed asset is referred to as depreciation.
RELEVANT COST OF FIXED ASSET

The cost of a fixed asset includes all amounts incurred to acquire the asset
and any amounts that can be directly attributable to bringing the asset into
working condition.
Directly attributable costs may include:

include:
- Delivery costs
cookies to enable- Costs associated
essential site with acquiring the asset such as stamp duty and import
functionality, asduties
well as marketing,
- Costs of preparing the site for installation of the asset
- Professional fees, such as legal fees and architects' fees

Privacy Policy
Marketing
Note that general overhead costs or administration costs would not
be included as part of the total
Personalization
costs of a fixed asset (e.g. the costs of the factory building in which the asset
Analyticsis kept, or the cost of the maintenance team who keep the asset in good
Save working condition)

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35
The cost of subsequent expenditure on a fixed asset will be

added to the cost of the asset provided that this expenditure enhances the
benefits of the fixed
fixed asset or restores
restores any benefits consumed.
consumed.
This means that major improvements or a major overhaul may

be capitalised and included
included as part of the
the cost of the asset in the
the accounts.
However, the costs of repairs or overhauls that are carried out
simply to maintain existing performance will be treated as expenses of the
accounting period in which the work is done, and charged in full as an
expense in that period.
USEFUL LIFE OF A FIXED ASSET
An asset may be seen as having a physical life and an economic life.

Most fixed assets suffer physical deterioration through usage and
thee pa
th pass
ssag
agee of ti
time
me.. Al
Alth
thou
ough
gh ca
care
re an
andd ma
maininte
tena
nanc
ncee ma
mayy su
succ
ccee
eed
d in
extending the physical life of an asset, typically it will, eventually, reach a
condition where the benefits have been exhausted.
However, a business may not wish to keep an asset until the end
of its physical life. There may be a point when it becomes uneconomic to
continue to use the asset even though there is still some physical life left.

cookies to enable as essential
tech
techno
nolo The
logi
site economic
gica
cal
l pr
prog
ogre
resslifean
ss ofdthech
and asset
chan gesswill
ange inbede
determined
dema nd.. Forbypu
mand such
pur
rpofactors
pose
sess of
functionality, ascalculating
well as marketing,
depreciation, it is the estimated economic life rather than the
may change your potential
settings atphysical
any time life
life of the fixed asset that is used.
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36
RESIDUAL VALUE OF A FIXED ASSET

At the end of the useful life of a fixed asset the business will dispose of it
and any amounts received from the disposal will represent its residual value.
This, again, may be difficult to estimate in practice. However, an estimate
has to be made. If it is unlikely to be a significant amount, a residual value
of zero will be assumed.
The cost of a fixed asset less its estimated residual value represents the total
amount to be depreciated over its estimated useful life.
CHARACTERISTICS OF ASSETS
There are three essential characteristics of assets:
• It embodies a probable future benefit that involves a capacity,

singly or in combination with other assets, to combine directly
or indirectly to future net cash in flows.
• Aparticular entity can obtain the benefit and control others

access to it.
• The transaction or other event giving rise to the entity’s right to or control
cookies to enableof essential
the benefit
site has already occurred.
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37
“FIXED ASSET ACCOUNTING”
Fixed Asset Accounting uses a highly flexible approach to revaluation,

ensuring that your capital, financial, and strategic plans are based on the
most current information. You can elect constant currency or current cost
accounting as the basis for asset revaluation and leverage government
indices to quickly revalue a large number of assets.
Fixed Asset Accounting automatically creates the necessary

journal entries, so business
business decisions can be based
based on timely, accurate
accurate fixed-
asset records.
Fixed Asset Accounting allows you to ethods.
With Fixed Asset Accounting, you can easily make

comprehensive changes across your accounting structure —and maintain the
integrity of the system—by leveraging global updates to revise account
numbers, business units, or companies.

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“TERMS USED IN FIXED ASSET

ACCOUNTING”
Accounting The collecting, recording, compiling and forecasting of

financial information.
Auditing A check by an independent company that accounts are being

kept accurately and up to date. E.g. CAG of India, Statutary auditors.
BALANCE SHEET
A balance sheet is a st stat

atem
emen
entt of th
thee to
tota
tall as
asse
sets
ts an
and d li
liab
abil
ilit
itie
iess of an
organi
organisat
sation
ion at a pa
parti
rticul
cular
ar dat
datee - usu
usuall
ally
y the last dat
datee of an acc
accoun
ountin
ting
g
period.
The balance sheet is split into two parts:
(1) A statement of fixed

of fixed assets, current assets and the liabilities (sometimes
referred to as "Net Assets")
(2) A sta
statem
tement
ent sho
showin
wingg how th thee Ne
Nett As
Asse
sets
ts ha
have
ve be
been
en fi
fina
nanc
nced
ed,, for
example through share capital and retained profits.
cookies to enable The
Th e Co
Compmpan
essential anie
site iess Ac
Actt re
requ
quir
ires
es th
thee ba
bala
lanc
ncee sh
shee
eett to be in
incl
clud
uded
ed in th
thee
functionality, as published
well as marketing,
financial accounts of all limited companies. In reality, all other
may change your organisations that need to prepare accounting information for external users
settings at any time
(e.g.settings.
or accept the default charities, clubs, partnerships) will also product a balance sheet since it
is an important statement of the financial affairs of the organisation.
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A balance sheet does not necessary "value" a company, since assets and
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liabilities are shown at "historical cost" and some intangible assets (e.g.
brands, quality of management, market
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are not included.
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39
Example Balance Sheet
Set out below is a summarised balance sheet for Tesco plc to illustrate the
main elements of the balance sheet.

Tesco plc: Balance Sheet (amounts shown 24 February 26 February
in £' millions) 2001 2000

FIXED ASSETS 10,038 8,527

Current Assets 1,694 1,342
Short-term creditors (4,389) (3,487)

NET CURRENT LIABILITIES
LIABILITIES (2,695) (2,145)

Total Assets less Current Liabilities 7,343 6,382

Long-term creditors (1,927) (1,565)
Provisions (24) (19)

TOTAL NET ASSETS 5,392 4,798

Equity shareholder’s funds 5,356 4,769
Minority interests
36 29
Toessential
cookies to enable tal Capsite
ital Employed 5,392 4,798
DEFINITION
or accept the default settings. OF LIABILITIES
To acquire its assets, a business may have to obtain money from various
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sources in addition to its owners (shareholders) or from retained profits. The
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40
DEPRICIATION
"the wearing out, using up, or other reduction in the useful economic life of
a ta
tang
ngib
ible
le fi
fixe
xed
d as
asse
sett wh
whet
ethe
herr ar
aris
isin
ing
g fr
from
om us
use,
e, ef
effl
flux
uxio
ion
n of ti
time
me or
obsolescence through either changes in technology or demand for goods
and services produced by the asset.'
A portion of the benefits of the fixed asset will be used up or

consumed in each accounting period of its life in order to generate revenue.
To calculate profit for a period, it is necessary to match expenses with the
revenues they help earn.
In determining the expenses for a period, it is therefore important

to include an amount to represent the consumption of fixed assets during that
period (i.e., depreciation).
depreciation).
In essence, depreciation involves allocating the cost of the fixed

asset (less any residual value) over its useful life.
To calculate the depreciation charge for an accounting period, the following

factors are relevant:
- the cost of the fixed asset;
- the (estimated) useful life of the asset;
- the (estimated) residual value of the asset.

personalization,Straight-Line
and analytics. You Method:
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“ACCOUNTING STANDARDS”
The ACCOUNTING STANDARDS given by by ICAI have been followed by
every organization in India. These are some fixed rules which are being used
in accounts. There are 29 Accounting Standards out of which following are
related with fixed asset accounting:
As-1 Disclosure of Accounting Policies
As-6 Depreciation Accounting
As-10 Accounting for Fixed Assets
As-11 Effects on Change in Foreign Exchange Rates
As-12 Government Grants
As-16 Borrowing Cost
As-26 Accounting for Intangible Assets
As-28 Impairment of assets

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“AS -1 Disclosure of Accounting Policies”

INTRODUCTION
1. This statement deals with the disclosure of significant accounting policies
followed in preparing and presenting financial statements.
2. The view presented in the financial statements of an enterprise of its state

of affairs and of the profit or loss can be significantly affected by the
accounting policies followed in the preparation and presentation of the
financial statements.
AREAS IN WHICH DIFFERENT ACCOUNTING POLICIES

ARE ENCOUNTERED:
* Methods of depreciation, depletion and amortization
* Treatment of expenditure during construction
* Conversion of foreign currency items
* Valuation of fixed assets
* Recognition of profit on long term contracts
* Treatment of retirement benefits

cookies to enable* Valuation
essential siteof investments
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“AS-6 (Depreciation Accounting)”

Depreciation has a significant effect in determining and presenting the
financial position and results of operations of an enterprise.
* Depreciation is charged in each accounting period by reference to the

extent of the depreciable amount, irrespective of an increase in the market
value of the assets.
assets.
* Assessment of depreciation and amount to be charged in respect of in

an accounting period are usually are based on the following three factors:
- Historical cost or other amount substituted for the historical cost

of the depreciable asset when the asset has been revalued;
- Expected useful life of the depreciable asset; and
- Estimated residual value of the depreciable asset.
* The useful life of a depreciable asset is shorter than its physical life
life
and is:
- Pre-determined by legal limits, such as the expiry dates of

related leases;
- Directly governed by extraction or consumption.
DISCLOSURE:
functionality, asThe
well as marketing, information should be disclosed in the
following financial statements:
* gross and net book values of fixed assets at
or accept the default settings. the beginning and end
of an accounting period showing additions, disposals, acquisitions and other
movements;
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construction or acquisition.
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“AS-10 (Accounting for Fixed Assets)”

Financial statements disclose certain information relating to fixed assets. In
many enterprises these assets are grouped into various categories, such as
land, buildings, plant and machinery, vehicles, furniture and fittings.
* This statement does not deal with accounting for the following
items to which special considerations apply:
-forests, plantations and similar regenerative natural

resources;
- Wasting assets including mineral rights, expenditure on the

exploration for and extraction of minerals, oil, natural gas;
- Livestock.
* This statement does not cover the allocation of the depreciable

amount of fixed assets to future periods since this subject is dealt with in
Accounting Standard 6 on ‘Depreciable Accounting’.
* This statement does not deal with the treatment of government

grants and subsidies, and assets under leasing rights. It makes only a brief
reference to the capitalization of the borrowing costs and to assets acquired
in an amalgamation or merger.

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“FIXED ASSET ACCOUNTING WITH

RESPECT TO NHPC”
INTRODUCTION:
Historical cost
The fixed asset costs shall be recorded in the books of account
on a his
histor
torica
icall cos
costt bas
basis,
is, i.e
i.e.. the cos
costt of acq
acquis
uisiti
ition
on con
constr
struct
uction
ion.. The
hist
histor
oric
ical
al co
cost
st shshal
alll be dete
determ
rminined
ed in acco
accord
rdan
ance
ce wiwith
th the
the acco
accoun
unti
ting
ng
guidelines as described in this manual.
Components of cost of a fixed asset

The cost of an item of fixed asset shall comprise of its
purchase contract price, including import duties and other non-refunda
non-refundable
ble
taxes or levies and any directly attributable costs of bringing the asset to its
working condition or for its intended use. Trade discounts and rebates, if
any, shall be deducted in arriving at the purchase price.
Directly attributable costs shall include the following items:

Site preparation
functionality, as well•as marketing,
personalization, and•analytics.
InitialYou
delivery and handling costs
Installation costs, such as special foundations
or accept the default• settings. for plant
• Professional fees (fees to architects, engineers, etc.)
Privacy Policy • Other costs incurred for bringing the asset in a position that it is ready
to use
Marketing
Personalization The assets shall be capitalized based on the acquisition
price and the other costs incurred for
Analytics for bringing the asset in a position that
that it is
ready to use.
use. It should be ensured that all the relevant costs have been
Save included Accept All cost of the asset as per the accounting policy.
in the
46
The assets shall be capitalized as and when they are ready

for use. The capitalization of assets should not be deferred till the asset is put
to actual use.
The cost of a fixed asset may undergo changes subsequent

to its acquisition or construction on account of final settlement of bills,
changes in duties, settlement of arbitration / legal cases in respect of works
completed and capitalized in earlier years etc.
etc . Subsequent adjustments shall
be made to the cost of the assets as and when it is incurred with prospective
effect on depreciation as per the accounting guidelines given in this manual.
Assets on lease
Lease premium payable on acquiring lease rights on assets
shall be treated as the cost to the leasehold assets. However periodic rentals
payable on leasehold assets shall be charged to revenue in the year in which
the rental accrue.
Survey and Investigation expenses

The expenses incurred on survey and investigation for new
projects shall be treated
treated as Capital Work in Progress unde
underr a separate head.
Such expenses shall be capitalised to the assets

constructed on capitalisation of the project.
In case a project is abandoned, the expenditure should be

written offsitein the year in which the project is abandoned.
Incidental expenses during construction period
In respect of projects under construction the incidental
expenses during construction period of a project shall be capitalized and in
Privacy Policy the manner given below.
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Personalization
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47
Borrowing costs
The borrowing costs comprise of interest and
commitment charges, exchange rate variation arising from foreign currency
borrowings to the extent regarded as adjustment to the interest costs, etc.
The bor
borrow
rowing
ing costs
costs att
attrib
ributa
utable
ble to con
constr
struct
uction
ion or acquis
acquisiti
ition
on of fixed
fixed
assets for the period up to the completion of construction or acquisition of
fixed assets are to be capitalized.
The capitalization of borrowing costs as part of the cost

of an asset should commence when all the following conditions are satisfied:
satisfied:
i. ex
expe
pend
ndititur
uree for th
thee acq
acqui
uisi
siti
tion
on or co
cons
nstr
truc
ucti
tion
on of th
thee asse
assett is be
bein
ing
g
incurred;
ii.
ii. borr
borrow
owining
g cost
costss aare
re bein
being
g iinc
ncur
urre
red;
d; and
and
iii.
iii. ac
acti
tivi
viti
ties
es th
that
at ar
aree nec
neces
essa
sary
ry to pr
prep
epar
aree the ass
asset
et fo
forr its in
inte
tend
nded
ed use
use
are in progress.
Capitalization of borrowing costs should cease when
substantially all the activities necessary to prepare the asset are complete
complete..
When the construction of a qualifying asset is

completed in parts and completed part is capable of being used while
construction continues for the other parts, capitalization of borrowing costs
in re
rela
lati
tion
on to a part
part sh
shou
ould
ld ce
ceas
asee when
when su
subs
bsta
tant
ntia
iall
lly
y all
all the
the acti
activi
viti
ties
es
necessary to prepare that part are complete.
Exchange rate variation
Exchange rate variation (ERV) may arise in respect
settlement or restatement of foreign currency liabilities (except for interest
Privacy Policy cov
covere
ered
d abo
above
ve und
under
er the head
head borrow
borrowing
ing cos
cost)
t) rel
relati
ating
ng to acq
acquis
uisiti
ition/
on/
Marketingconstruction of assets shall be treated as capital expenditure and are to be
capitalized along with the asset to which they relate. This may arise during
Personalization
construction period as well as after the construction period i.e. till loan is
Analytics
fully repaid / settled.
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48
However if any ERV arises relating on an assets that has

already been retired from active use/ declared surplus/ held for disposal, it
shall be charged to the profit and loss account for the period when the ERV
arises.
Administration and other general overhead expenses

during construction phase
The following expenditure incurred as an incidental
to construction of a project shall also be included in the IEDC:
 Expenditures on upgradation, widening of roads, culverts, etc. not

belonging to NHPC
NHPC
 Share of maintenance expenditure of common public facilities used
during construction of project
Depreciation
▪ In case of assets which are purchased / constructed for use in the

construction of the project such as construction plant and equipment,
depreciation is charged based on the normal rates of depreciation and
booked
This website stores to IEDC(Incidental
data suchIEDC(Incidenta
as l expenditure during construction).
construction).
▪ FurtherYou
personalization, and analytics. adjustment should be made in case any such item of fixed asset
has beenatretired
any timefrom active use/ declared surplus and is held for disposal at
the date of commercial operation, based on the Net Realisable Val
the Net Value(NRV).
ue(NRV).
The NRV shall be determined based on Engineering estimates or through
Privacy Policy approved valuers.
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49
LOSSES DURING CONSTRUCTION

Losses during construction period shall be treated depending
upon whether they are avoidable losses or unavoidable losses.
UNAVOIDABLE LOSSES:
* Losses which takes place d during

uring construct
construction
ion period like cr
crakes
akes in
civil structure, collapses of loose strata, cavity formation in tunnel, etc. other
than natural calamities are part of normal construction activity in Hydro
Projects. Expenditure incurred on encountering such problems after
adjusting actual insurance shall form part of relevant Capital Work In
Progress.
* etc.
like fire, Losses duedo
which to not
natu
natural
ral calamities
form cala
partmities e.g. floods,
of relevant earthquakes,
earthquakes,
Capital accidents
Work In Progress
Progress
are due to unavoidable reasons.
AVOIDABLE LOSSES:
Avoidable losses are attributable to the negligence of the personal engaged

in the construction activities. In such cases the losses after insurance receipt
if any, shall be charged off to the Profit and Loss Account.

INCOME DURING CONSTRUCTION PERIOD
may change your settings at any Income
time during construction period shall be adjusted against the
or accept the default settings. during construction period, before the allocation of the IEDC is
expenditure
carried out.
Privacy Policy
In such case income is taxable as per the provisions of the Income
Marketing
Tax Act, then tax liability in respect of these items shall be considered as
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IEDC.
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50
ALLOCATION OF IEDC ( INCIDENTAL

EXPENDITURE DURING CONSTRUCTION) TO
ASSETS:
shall be allocated
IEDC is allocated at the
on the major time of capitalization
immovable assets (otherofthan
the land
project.
project.
and IEDC
infrastructural facilities) on commissioning of the project. The incidental
expenditure should be allocated to various CWIP (Capital Work In Progress)
assets heads in the ratio of the yearly capital expenditure incur
incurred
red on the
CWIP asset heads and yearly IEDC incurred which is to be identified and
allocated to any specific asset item, such as borrowing cost, ERV etc.
Capitalization of assets
An asset is to be capitalized when it is ready to be put to use.
There are a few assets which are commissioned during the

construction period itself such as township, office buildings, etc. These can
be capitalized as and when
when these assets are read
readyy to use.
However assets which cannot be used in isolation without other

assets/ completion of the project shall not be capitalized even if they are
This website stores
fullydata such as
constructed. Such assets shall be capitalized only when they be used on
completion of the other assets/ project. (e.g. powerhouse/ dam/ tunnel, etc.
personalization,are
andcapitalized
analytics. Youon commissioning of the project while individually they may
may change your besettings
completeat anyprior
time to commissionin
commissioning g of the project)
project)
Capitalization of assets shall be done on issue of “Asset
Privacy Policy Commissioning Certificate” from the relevant technical authority of the
Corporation.
Marketing
Personalization
All capital expenditure (in respect of assets constructed) should be
Analyticsaccounted for through CWIP accounts.
accounts. On capitalization of the assets the
expenditure should be transferred to the appropriate fixed assets account.
account.
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bought out assets should be capitalized directly i.e. without
routing through the CWIP account.
51
Assets used during construction period

The following types of assets are used during construction period:
• Construction facilities: Construction plant and equipment (tipper,

dumper, etc.)
• Fixed assets: Assets required during construction as well as operation
period
The capitalization on the above assets should take place as and

when completed and ready to use. The capitalization should not be withheld
till construction period is over.
Depreciation in respect of assets used during the construction

period (including
(including construction equ
equipment)
ipment) should b bee charged at the
prescribed rates/ based
based on the balance usef
useful
ul life.
Construction stores
The cost incurred for materials procured for construction
should be treated as Construction stores and disclosed as part of the
‘Construction Stores and Advances Schedule’ under the head ‘Fixed Capital
Expenditure’ in the Balance sheet.
This website stores data such as After commissioning of the concerned asset the material in
hand, site is required for operation of project should be transferred from
which
the Construction Stores account to the Inventory account.
Advances to contractor/ supplier
Privacy Policy The advances given to contractor /supplier in respect of the

construction activities shall be accounted for as Capital advances and
Marketing
disclosed as part of the ‘Construction Stores and Advances Schedule’ under
Personalization
the head ‘Fixed Capital Expenditure’ in the Balance sheet.
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52
Construction of several assets for a lump sum

consideration
The fixed assets should be capitalized as per the account heads
given in the Chart of Accounts (COA). The total contract value should be
broken up into the
the various assets that are being constructed under the
contract.
Renovation and modernization

Only expenditure that increases the future benefits from the
existing asset beyond its previously assessed standard of performance, e.g.,
an increase in capacity is to be capitalized.
The cost of an addition or extension to an existing asset

which is of a capital nature and which becomes an integral part of the
existing asset is usually added to its gross book value. However any addition
or extension, which has a separate identify and is capable of being used after
the existing asset is disposed off, is accounted for separately.
DEPRECIATION
This website stores* data such as
Depreciation shall be provided in the books of account at the prescribed
rates. As per the existing policy of NHPC the rates are as follows:
may change your ▪ Straight
settings at any time Line Method
Method at rates prescribed
prescribed by Central Electricity
Electricity
or accept the default settings. Commission.
Regulatory
Privacy Policy ▪ In respect of assets w

where
here rates have not been prescribed by
CERC, SLM at rates Income Tax Act, 1961.
Marketing
Personalization
* In respect of the leasehold assets the depreciation to be charged every
Analyticsyear shall be such an amount as is required to write off 100% of the cost of
the leased asset on the straight line method:
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53
▪ Over the estimated useful life of the asset, or
▪ Over the period of lease
* Depreciation on the assets purchased during the year costing less

than or equ
than equal
al to Rs.
Rs.500
5000/-
0/- (bu
(butt mor
moree tha
thann Rs.
Rs.750
750/-)
/-) or assets with an
opening written down value less than or equal to Rs.5000/- shall be fully
depreciated during the year, with Re.1/- as a balance value.
TRANSFER OF ASSETS
* Inter unit transfer of asset takes place on the receipt of advice
(either debt or credit advice). Such advice shall be authorized by the Head of
project of the transferee unit and by the Head of concerned department at
corporate office.
* The dismantling charges, as well as cost of civil works and erection

charge for the initial erection on the asset transferred should be written off to
the profit & loss account/ IEDC/A/c by the transferor unit.
PHYSICAL
PHYSICAL VERI
VERIFICAT
FICATION
ION AND MAIN
MAINTENA
TENANCE
NCE
OF FIXED ASSET REGISTER
* All fixed assets constructed should be recorded in the FAR
Privacy Policy (Fixed
(Fixed Ass
Asset
et Reg
Regist
ister)
er) ma
main
inta
tain
ined
ed.. Th
Thee FA
FARR sh
shou
ould
ld be pe
peri
riod
odic
ical
ally
ly
reconciled with the books of account.
Marketing
Personalization * The FAR should contain the particulars of the assets,
Analyticsquantity, location rate of depreciation, accumulated depreciation,
depreciation, etc.
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54
S.NO. ACCOUNTING ASSET DIFFERENCE IN AMOUNT DETAILS

OF ACTION
PERIOD DESCRIPTION QUANTITY
QUANTITY AS PER (Rs.)
PHYSICAL
REFERENCE VERIFICATION
GROSS NET
TOTAL
“SUMMARY OF FIXED ASSET REGISTER”
S.NO ASSET GROSS BLOCK DEPRECIATION NET

CATEGORY
VALUE
Opg Add Adj Closg Opg Add Adj Closg
blnc during during blnc blnc during during blnc
year year year year

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55
“PROCESSES OF FIXED ASSETS”
PROCES
PROC ESS S 1: (E
(Est
stab
abli
lish
shme
ment
nt of As
Asse
sett Co
Cont
ntro
roll
Authorities)

For exercising control over the assets an asset control authority is to be
established for each category of assets.
The Head of each unit should decide the specific asset control
authorities (ACA) for the assets and the compilation section of the F&A
department should maintain the list for same.
The suggestive ACA for the various categories of assets can be as

follows :
* Land- Township department
* Roads, bridges, culverts, aerodromes, buildings( township, hospital

etc.) – Township department
* Railway siding, hydrol

hydrolic
ic works, generating pl
plant
ant and machinery, plan
plantt
and mac
machinhinery
ery sub
substa
statio
tion
n and transm
transmiss
ission
ion lin
lines
es – Conser
Conserned
ned tec
techni
hnical
cal
department
personalization, and*analytics. You
Construction equipment – Stores and Mechanical Division
* Furniture and fixtures – Personnel department
Privacy Policy * Communication equipment – IT and Communication department

department
Marketing
* Hospital equipment – Chief Medical Officer
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56
ACA should ensure the following:
* The asset identification number is indicated on all assets, where relevant
* Any movement of asset ( within or outside the premises of the unit), is on

the basis of duly approved orders
* The movement, damage, sale or disposal of an asset is intimated to the

F&A Department to update the Fixed Asset Register(FAR)
DEPARTMENTAL
DEPARTMENTAL FIXED ASSET REGISTER:
Each department having the custody of the assets, shall also

maintain a Departmental FAR. Such register should be prepared to record
the quantitative detail of all the assets held by the department. The register
should be updated in the following cases:
* Receipt of asset
* Transfer of asset
* retirement of asset
* Physical verification of the asset

functionality, as well as marketing, “ASSET CONTROL REGISTER”
may
S.
S.Nochange
No.. St
Stor your
ores
es dosettings
docu
cume nt atSource
ment any time Date of Asset Received Location Transfer d
deetails Balance Remarks
or acceptdetail
the default settings.
of re
recceipt in identification quantity
eipt quantity
receipt/ the no.
purchase departmen
Privacy Policy order t
no. and
Marketing date
type No. date Location quantity
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57

PROCES
PROCESS S 2: (A
(All
llo
oca
cati
ting
ng Ass
sset
et Id
Iden
enttif
ifiica
cattio
ion
n
Number )
The AIN should be recorded in the FAR.
AIN Structure:
Accounting unit Asset sub Year of Serial number Custodial

Acquisition./ department/section
(Location code) category
Transfer in
XX XX XX XXX XX
(Numeric) *(alpha) (numeric) (numeric) (numeric)**
- * Asset subcategory may need to be defined for the following assets

category, as there are only generic heads in the Chart of Account.
** The custodial department shall be defined by each accounting location.
The AIN should be given for the following main category of fixed assets:
Movable plant and machinery
as marketing,
may change your settings at any
* Electrical time
installations
* Furniture and Fixtures

Privacy Policy
* EDP equipment/ computers
Marketing
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* Office equipment
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* Other movable assets
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58
On receipt of fixed assets through stores the ACA should ensure that
AIN is allocated to all the items.
Finance should ensure that AIN has been allocated and update the FAR.
The custodial department code shall be allotted on issue and shall be updated
for any inter transfer department.

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59
PROCESS 3: (Capitalisation of Assets other than

Bought Out Assets)

This process lays down the procedure to be followed for maintenance of
capital work in progress register and capitalization of assets.
CAPITALISATION PROCESS:
Capitalisation process will involve the following:
* Determination of date of capitalisation
* Completion of all records till the date of capitalisation
* Determination of direct cost on works
* Allocation of survey and investigation expenses
* Allocation of borrowing cost
* Allocation of ERV
* Allocation
This website stores data such asof IEDC to capital works
functionality, as*well as marketing,
Based on the above, arrive at the total cost for the works and working of
may change your asset costatfor
settings any each
time fixed asset item, as per the Chart of Account heads
* Accounting for surplus construction material etc.
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60
Date of Capitalisation
Commissioning of an asset is technical matter which involves
consideration of various factors such as trial, testing etc. Capitalisation of
asset shall be done o issue of “Asset Commissioning Certificate”. The cut
off date for the project being declared ready for use shall be the date
notified by Director (Technical) of NHPC by issue of the completion
certificate.
On this date the plant shall be capitalized and shall enter the
Operation and Maintenance period.
Completion of all records till the date of capitalization
All records pertaining to the project/ unit to be capitalized should be

completed and finalized before the process of determination of costs and
allocation of expenses are undertaken. The finalizing of records/ accounts
shall include the following:
* Passing of all bills pertaining to contra

contractors,
ctors, supplier, others till the date of
capitalization
* Iden
Identifi
tificatio
cationn of surp
surplus
lus fixed asset
assetss used during constru
construction
ction period and
bringing the WDV (Written Down Value) of these surplus items down to
their NRV (Net Realisation Value)
* Credit
This website stores for as
data such sale of power du
during
ring trial run is given
Char
Charging
ging deprec
depreciatio
as marketing, iation
n till the date of commissionin
commissioning
g on the asset
assetss used
during construction
personalization, and analytics. You period
Privacy Policy Direct costs incurred on capital works

Marketing
CWIP REGISTER
Personalization
Analytics To facilitate capitalization of fixed assets under the relevant fixed

assets account head, the chart of accounts provides capital work in progress
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heads which are parallel to the relevant fixed assets heads.
61
The CWIP register shall be maintained contact wise to record the total
expenditure incurred on a particular work . The amount to be booked to
CWIP for each contract/ work shall include the following:
* Dir
Direct
ect pay
payme
ments
nts und
under
er th
thee cont
contrac
ract:
t:
- Value of suppliers received and accepted at the site
- Value of physical progress of civil construction and erection
* Other payments such as freight, insurance, custom duty, rates and taxes
* The CWIP register shall be main

maintain
tained
ed by the Work
Workss Accou
Accounts
nts Group in
the F&A Department.
* The CWIP register may also be maintained in form of a sub ledger linked
to the CWIP Heads.
DETERMINATION OF DIRECT COST
* All direct costs associated with particular work/ asset head should be
identified in CWIP register.
* Atdata
This website stores thesuch
time
as of capitalization, the works section should ensure from the
functionality, asavailable records and the MB (Measurement Book) that all the bills have
well as marketing,
been passed.
Privacy Policy
Marketing Incidental expenditure during construction:

Personalization
Analytics The IEDC would include the expenditure incurred by the

projects as well as allocated
allocated by the Corpo
Corporate
rate Office and R
Regional
egional Office.
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Regional Office Expenses
62
Regional office shall allocate their expenses to the projects

under them on annual basis, as per the procedure given in the Final Accounts
manual.
Corporate Office Expenditu

Expenditure
re
The expenditure/ income of liaison offices shall be absorbed and

merged in Corporate Centre Expenses
Expenditure By Projects
IEDC expenditure should be debited to the natural heads of accounts
provided in the chart
chart of accounts.
The portion of expenditure identified for capitalization should be

transferred to IEDC heads under the CWIP category in the chart of accounts,
by credit/ debit to account codes for expenditure/ income during
construction.
Allocation of IEDC
As per Accounting Policy the IEDC and other indirect costs are to be
allocated
allocated only on major
major componen
components
ts of the project. The major compon
components
ents
of the project, as identified by NHPC, consists of the following assets:
Buildings
1.marketing,
functionality, as well as Building containing Hydro Electric Generating Plant
personalization, and analytics. You Works ( Dams, Water conductor System, Hydro
Hydrolic Mechanical
Gates)
2. Dams and Barrages

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Marketing 3. Canals and Channels

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4. Desilting basins
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5. Tunnels and pipe lines
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6. Penstocks
63
7. Tailrace Channel
8. Tailrace Tunnel
Generating Plant and Machinery
9. Main generating Equipment
10. Generator Step Up Transformer
STATEMENT OF ALLOCATION OF IEDC
Year: (separate folio for each year)
Particulars Amount
( Rs.)
IEDC incurred till the end of current year (as per current year’s annual A
accounts)
IEDC incurred till the end of last year (as per last year’s annual accounts) * B
Difference as IEDC incurred during the year)
(i.e. C=A-B
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64
ALLOCATION OF IEDC FOR THE YEAR
S.No. Asset Opng Clsng Difference IE

IEDC
DC for
for IEDC Total
Head**
Head** blnc in blnc in (i.e. the year allocated IEDC
CWIP CWIP annual allocated on these allocated
(as per (as per accretion assets
assets till
till till date
last current to CWIP the
year’s year’s for the previous
annual annual year) year*****
year*****
a/c a/c
D E F G H=G-F I*** K L=I+K
a (a/i)*C
b (b/i)*C
c (c/i)*C
d (d/i)*C
e (e/i)*C
f (f/i)*C
g (g/i)*C
h (h/i)*C
Total IEDC i J= Sum of

allocated all the
above***
above ***
*
This website stores *dataCross checked from the previous folio

such as
functionality, as well**
as To
marketing,
include only those assets identified by NHPC as major components
of Fixed Assets
*** Total IEDC of the year i.e. “C” to be allocated in the ratio of annual
accretion to CWIP
Privacy Policy
Marketing **** Cross check with J=C

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***** Brought forward from previous folio
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65
Borrowing Cost
Where a loan has been taken for construction of a specific
project/ asset, the borrowing cost relating to the period till the asset is
ready for use should be capitalized as a part of the cost of the asset. Such
borrowing cost should be reduced by any income on temporary
investment of such borrowing during the period.
Exchange Rate Variation

ERV arises as a result of settlement during the tear/ translation at
the end of the year at closing rates of the receivable/ payables in the
foreign currencies.
The balance ERV should be allocated to various CWIP asset

heads.
Determination of Total Cost to be Capitalised

Necessary accounting entry shall be passed through Journal
Voucher, for creation of asset records. The exercise should be reviewed
and cross checked by another senior officer and approved by Head of
Finance and Head of Project.

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66
PROCESS 4: ( Capit
ita
alisati
tio
on of Bought Out
Assets)
This process lays down the procedure to be followed for the
capitalization of bought out assets.
The following type of assets may be bought out:
* Land
* Buildings
* Movable assets
Such assets would generally be ready for use on acquisition. However in

some
some ca
case
sess th
ther
eree woul
would
d be a st
stag
agee tr
trea
eati
ting
ng them
them as Ca
Capi
pita
tall Wo
Work
rk In
Progress.
CONTRACT
* The pr process
ocess of pr
procur
ocuremen
ementt of as
assets
sets purchas
purchased
ed th
throug
rough
h cont
contracts
racts is
prescribed in the Manual
Manual on works contract accounting.
accounting. The capitali
capitalization
zation of
cookies to enabletheessential
assets site
shall take place as and when the completion certificate is issued by
functionality, asthe
well engineer in charge (IEC), to the effect that the asset is ready for use. The
as marketing,
personalization,capitalization
and analytics. You
shall be carried out by the works account group.
* In case the work is finished and the completion certificate
certificate is awaited / final
bill is pending, the capitalization should not be stopped. Thus the EIC shall
Privacy Policy
inform the work accounts officer as and when the construction is complete
Marketingand the asset is ready for use. On this date the work officer closes the work
record and accounts for the capitalization.
Personalization
Analytics
* The
The co
comp
mpililat
atio
ion
n se
sect
ctio
ion
n sh
shal
alll ge
gene
nera
rate
te the
the Fixe
Fixed
d As
Asse
sett ledg
ledger
erss on a
Save monthly basis
Accept Alland update the FAR for the additions.
67
PURCHASE ORDERS
* In case the procurement is made through purchase orders then the receipt
of the assets shall be accounted for through stores department. The AIN is
allocated at the time of preparation of the Goods Received Note (GRN).
* In respect of these asset

assetss the Stores Bill section shall send a stat
statement
ement to
Compilation section every month end and the compilation section shall pass
the necessary accounting entries for capitalization.
capitalization.
* In ca
case
se th
thee asse
assets
ts are
are re
read
adyy fo
forr us
usee item
itemss the
the capi
capita
tali
liza
zati
tion
on sh
shal
alll
immediately be carried out after confirmation from the ACA.
* No accounting shall be carried out by the stores officer for issue from the
stores.
ACCOUNTING ENTRIES:
Event Voucher Accounting Entry Subsidiary Record/
Debit Credit Register
Land acquired by NHPC BPV Land a/c Bank a/c FAR

Land given by Govt. at JV Land a/c Capital FAR
no co cost-
st- where
where tititle
tle is reserve
transferred to NHPC
Right to use land given JV Land Capital
by govt. at no cost- rights reserve
where title is not
transferred to NHPC
This website stores
Rightdata such
to use as given
land BPV Land Bank a/c
functionality, as by
wellgovt.
title isas at cost-where
marketing,
not transferred to rights
NHPC
Expend
Exp enditur at any
itures
es inctime
incurr
urred
ed BPV Land a/c Bank FAR
on landsettings.
Amortiz
Amor tizat
ation
ion of leas
leasee BPV Lease Bank a/c FAR
hold land: rental
Privacy Policy written
- periodic payments off
Marketing
JV
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- lumpsum payments Lease
written Leasehold
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off land
Capita
Cap italiza
lization
tion of fixed
fixed JV Relevant Relevant FAR
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assets fixed asset sundry
head creditors
a/c
68
PROCESS 5: (Depreciation Accounting)

* Depreciation is a measure of the wearing out, consumption or other loss of
valu
valuee of a de
depr
prec
ecia
iabl
blee asse
assett aris
arisin
ing
g from
from ususe,
e, effl
efflux
uxio
ion
n of time
time or
obsolescence through technology and market changes. Depreciation includes
amortization of assets whose useful life is predetermined.
* De
Depr
prec
ecia
iati
tion
on sh
shal
alll be ch
char
arge
ged
d in th
thee bo
book
okss of acco
accoun
unts
ts at the
the rate
ratess
prescribed. As per the existing
existing depreciati
depreciation
on policy of NHPC the
the depreciation
rates are as follows:
● Straight Line Method (SLM) a rates prescribed by Central

Electricity Regulatory Commission (CERM)
Straight-Line Method:
● In respect of assets where rates have not been prescribed by

CERM, SLM at rates prescribed in the Income Tax Act, 1961
Inasrespect of leasehold assets the depreciation to be charged
marketing, every year
shall be such
personalization, and analytics. You an amount as is required to write off 100% of the cost of the
may change your leased assets
settings at anyon
timethe SLM:
● Over the estimated useful life of the asset, or
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● Over the period of lease,
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Personalization Whichever, is earlier.
Analytics
* Depreciation on assets acquired during the year is to be provided on a
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asset was ready for use for less than 15 days in the month, the depreciation
shall be charged from the following month.
69
* Depreciation on assets purchased during the year costing less than Rs.
5000/- (but more than Rs. 750/-)
750/-) or assets with a opening written down value
less than Rs. 5000/- (excluding immovable assets) shall be fully depreciated
year, with Re. 1/- as a balance value.
during the year,
* Any addition or extension which retains a separate identity and is capable

of being used after the existing asset is disposed off, should be depreciated
independently on the
the basis of an estim
estimated
ated of its own useful life.
CHANGE IN DEPRECIATION RATES

Wheree the histori
Wher historical
cal cost of a depreci
depreciable
able asset und
undergoe
ergoess
subsequent changes arising as a result of increase or decrease in long term
liability on account of exchange fluctuations, price adjustments, change in
duties, etc. depreciation on the revised unamortized depreciable amount is
provided prospectively
prospectively over the res
residual
idual useful life o
off the asset.
CHANGE IN DEPRECIATION METHOD

* In case of change in method of depreciation, depreciation is
recalculated in accordance with the new method from the date of the asset
coming into use. In case the change in the method results in surplus, the
surplus is credited to the statement of profit and loss.

* Such a change is treated as a change in accounting policy and its
functionality, aseffect
well as is quantified and disclosed.
marketing,
ACCOUNTING ENTRIES
Event Voucher Accounting entry Subsidiary

Privacy Policy Debit Credit Record/ Register
Marketing
Depreciation JV Depreciation Accumulated FAR
provision
Personalization (rel
(relev
evan
antt asse
assett depreciation
category)
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70
PROCESS 6: (Transfer of Assets)

This process lays down the procedure to be followed for transfer of
asse
assets
ts.. As
Asse
sets
ts of unit
unit may
may be tran
transf
sfer
erre
red
d wi
with
thin
in the
the un
unit
it or may
may be
transferred to other units.
TRANSFER WITHIN A UNIT:
* Transfer of an asset within a unit should take place as approved by

the competent authority and after intimating the concerned ACA.
* The ACA shall forward a copy of the above approval to the

compilation section for updation of FAR. The ACA shall update the Asset
Control Register with the details of change in location/ person to whom the
asset is issued.
INTER UNIT TRANSFERS:
* Inter unit transfers of assets take place on receipt of the requisition

i.e. Inter Unit Advice (IUA) from the transferee unit. Such requisition shall
be authorized by the the Head of Proje
Project
ct of the transf
transferee
eree unit and by tthe
he head of
the concerned department at corporate office. The requisition shall be sent to
the head as transferor unit.
of the
* The
personalization, and analytics. Youhead of the transferor unit shall approve the transfer. A copy
such at any time
approval shall be forwarded to the concerned ACA for his information.
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Marketing
Expenses Incurred on the Dismantling and Transfer of Asset:
Personalization The dismantling charges, as well as cost of civil works and erection
Analyticscharge for the initial erection on the asset transferred should be written off to
the Profit & Loss A/C by the transferor unit.
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71
Depreciation:
Depreciation on the transferred asset should be provided for the whole

year by the transferee unit irrespective of the period for which such asset
was actually used by it.
ACCOUNTING ENTRIES
Event Voucher Accounting Entry Subsidiary
Record/
Register
Transfer of assets by JV Debit Credit FAR
transferor unit Accumulated Gross block of
depreciation of the asset
the related transferred
asset
Receipt of the IUA JV Gross block of Accumulated FAR
(Inter Unit Advice) the asset depreciation of
from the transferor transferred the related
unit asset

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72
PROCESS 7: (Maintenance of Fixed Asset Register)

* The FAR is to be maintained and updated by the compilation
se
sect
ctio
ion,
n, F&
F&AA Depa
Depart
rtme
ment
nt.. The
The FA
FAR
R shshal
alll co
cont
ntai
ain
n the
the info
inform
rmat
atio
ion
n as
required under the Companies Act, 1956.
* The FAR should be maintained asset category-wise and item

wise.
The FAR should have the following details:

Category/sub-category
Category/subcategory Account Code
Shift:Single/Double/Tripleshift…………………………………………………………………………………………………
Depreciation Rate………………………………………………………………………………………………………………………………………………………..
CERC notification………… Companies Act………… Tax Act……………….
Life………………………….
S. AIN Voucher Asset Details Gross Block Depreciation CERC/IT/Co’s Act W Rem
No Reference D arks
. No D asset supplier / yr. Loca qt opng add adj clsn opng add adj cl V
t. desc source of of tion y blnc duri during g blnc during during sng
receipt com ng year blnc year year blnc
miss year
ioni
ng
data such as
This website stores
The FAR should be updated on :
* Acquisition/
or accept the default settings. commissioning of new asset
* Transfer of an asset based on Stock Transfer Note (STN)

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Marketing* On retirement from active use

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* Disposal of the asset
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* Receipt of the physical verification report
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73
At the end of each quarter a complete set of FAR should be printed

and a su
summ
mmarary
y pr
prep
epar
ared
ed of th
thee ba
bala
lanc
nces
es ap
appe
pear
arin
ing
g in th
thee FA
FAR
R . Such
Such
summary and complete set of FAR should be installed by the Head of
Finance.
SUMMARY OF FIXED ASSET REGISTER:
Location Name:
Location Code:
(Amount in Rs.)
S.No. Asset Gross Block Depreciation Net

Category opg add adj closg opg add adj closg value
blnc during during blnc blnc during during blnc
the the the the
year year year year
Prepared By:
Authorised By:

personalization, and analytics.*You
The summary of balances (gross block and depreciation) as per
FAR should be reconciled on a quarterly bases with
the balances in the
general ledger.
Privacy Policy * The FAR should also be reconciled with the ACA register and
the departmental register on a quarterly basis.
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74
Process 8: ( Physical Verification of Assets)

The fixed asset should be physically verified periodically. It
should be ensured that the fixed assets at all the locations are verified at least
once every year.
* The physical verification team shall comprise of four

members.. Su
members Such
ch memb
member
erss sh
shal
alll be the reprepres
eseenta
ntativ
tives of foll
ollow
owin
ing
g
departments:
- Finance Department
- Internal Audit Wing
- Concerned Department
- Asset Control Authority

* The physical verification shall be carried based on the

departmental FAR maintained by all the departments.
departments . It should be ensured
that the departmental register has been reconciled with the FAR and the
ACA register before the physical verification.
* The compilation section shall compile all the reports

received
This website stores andasprepared a consolidated report on the physical verification and
data such
functionality, asawell as marketing,
report on discrepancies with reference toProject.
FAR. Such reports shall be
submitted
personalization, and analytics.toYou
the concerned ACA and Head of
ACCOUNTING ENTERIES:
EVENT VOUCHER ACCOUNTING ENTRY SUBSIDIARY

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RECORD/
DEBIT CREDIT REGISTER
Marketing
shor
shorta
tage
ge in JV accumulated de
depreciation gross block FAR
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fixed
fixed assets
assets
pending losses pending
Analytics
investigation investigation
JV recoverable from losses
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employee/ claims pending
recoverable from insurance investigation
company/ asset written off
75
PHYSICAL VERIFICATION REPORT:
Name of Division/
Division/ Department: Officer: concer
concerned
ned division
Financial year: Officer: internal audit wing
Date of verification: Officer: P&A division
Report reference no.: Officer: ACA
s.no. Register Nomenclature A No. of No. of Dis

iscr
crep
epen
ency
cy Cond
ndit
itio
ion
n Action
folio of the asset I items items as of asset taken
number#
number # N as pe
perr per to
registe physical adjust
r verificatio
n
Signature of physical verification item:
Signature of officer in charge
# Departmental fixed asset register
CO
COMP MPIL ILED
ED PHPHYS
YSIC
ICAL
AL VE
VERI
RIFI
FICA
CATI
TION
ON OF FI
FIXE
XED
D AS
ASSE
SETS
TS
REPORT
functionality, asDate:
well as marketing,
Name
or accept the default of asset:
settings.
Physical verification report reference number:

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S.No.
Marketing Report AIN Location Quantity as per Remarks
reference FAR Departmental Physical Difference
Personalization number register verificatio
Analytics
n
Save Accept All
Total
Prepared by:
76
Proc
Proces
esss 9: (A
(Accco
coun
unti
ting
ng for Dis
isp
pos
osa
al of Fi
Fix
xed
Assets)
This process deals with accounting for disposal of fixed assets.
The sale of fixed assets may take in the following circumstances:
- Surplus construction plant and equipment
- Other fixed assets
Surplus Construction Plant and Equipment:
* As per the NHPC manual for disposal of construction plant,

equipment and spares, the status of surplus plant and equipment shall be
reviewed once a year by a committee approved by the unit head . The
committee shall be formed as under:
- Manager/ Sr. manager of mechanical complex
- Manager/ Sr. manager (stores/ disposal)
- Manager/ Sr. manager (finance)
- An executive of construction plant and equipment

(CEP) division of corporate office.
* TheYou
personalization, and analytics. shall take place in the first weak of February so that the
review
fina
finall re
repoat
portany time
rt ca
can n be
submitted to the Head of the CEP division at the
corporate office by March 31 st.
Privacy Policy * The equipment reports in the report should be classified in the
following three categories:
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Category A: equipment which are in working condition
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Category B: equipment which can be economically repaired
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and put into working condition
77
Category C: equipment which can not be repaired

economically or is unfit for further use due to obsolescence or other such
reasons.
* The custody of such assets should be transferred from the

mechanical division to the disposal section in the stores department.
Sales of Fixed Assets:
* A committee is formed by Head Of Project (HOP), as per DOP, to

assets . The committee surveys the
initiate the procedure for sale of fixed assets.
fixed assets held for disposal in the disposal section of stores and ascertains
the reserve price of the fixed asset. The committee shall be constituted as
follows:
- Manager/ Sr. manager of mechanical complex
- Manager/ Sr. manager (stores/ disposal)
- Manager/ Sr. manager (finance)
* In case the fixed asset is to be sold to Government departments

(central
This website stores or state)
data such as or to the PSUs, the disposal shall take place at a mutually
negotiated
cookies to enable price and NHPC shall not resort to tendering in this case.
essential site
personalization, and analytics.*YouThe committee fixes the Reserve price of the assets to be sold.
Notice
or accept the default inviting tenders are floated in the newspapers informing prospective
settings.
buyers of the sale of fixed assets.
Privacy Policy
* Tender documents are sold to willing buyers and a Tender
Open
Op
Marketing enin
ing
g Co
Comm
mmititte
teee is fo
form
rmed
ed fo
forr op
open
enin
ing
g the
the tend
tender
erss rece
receiv
ived
ed.. A
comparative statement is drawn and negotiations are held with the highest
Personalization
bidder.
Analytics
Save Accept*AllA sale order is released, duly authorized by the HOP/ Head of
the CEP division at the corporate office.
78
ACCOUNTING ENTERIES:
Event Voucher Accounting Entry Subsidiary

Record/ Register
Debit Credit
Declar
Declarat
atio
ion
n of JV NO ENTRY.
the surplus UPDATE THE
construction FAR
plant and
equipment Depreciation A/c
Accumulated
(rel
(relev
evan
antt asse
assett
Charging depreciation
category) FAR
depreciat
depreciation
ion till (r
(rel
elev
evan
antt asse
assett
the previous category)
month ( previous
to the month
when
whe n asset
asset was
declared surplus)
Transfer of JV Accumulated Gross block FAR
surpl
surplus
us asset
asset to depreciation (r
(rel
elev
evan
antt asse
assett
another head (rel
(relev
evan
antt asse
assett category)
category)
Loss
oss on asset
ssetss
retired from
active
use/surplus assets
Obsolete/ surplus
asset
For sale of BRV Bank Assets -
surp
surplu
luss fixe
fixed
d A/c he
held
ld fo
for
r
functionality, as well
assetas marketing, disposal
personalization, and analytics. You A/c
may change yourFor payment
settings of time
at any BPV Sales tax Bank -
salessettings.
or accept the default tax to the payable A/c
Government A/c

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79
BIBLIOGRAPHY
BOOKS
• FINANCE ANDACCOUNTS MANUAL OF NHPC
• MAGAZINES OF NHPC
• NHPC NEWS
WEBSITE
•
www.nhpcindia.com
• www.google.com
• www.icai.com
• Website of PHEP-II

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No endeavor however

In this respect I would like to thank Mr. Anurag Bharadwaj

I express my sincere thanks to Mr.K.K.Goel (Sr.Manager Finance)

I have no appropriate words express my sense of gratitude to

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The confidence of an individual is boosted as one successfully completes the

The “ON THE JOB” practical training is a stepping stone towards

NHPC has given me so much in this short duration that I feel

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1 BRIEF INTRODUCTION ABOUT NHPC

2 INTRODUCTION ABOUT PHEP-II

● PROJECT REPORT ON FIXED ASSET ACCOUNTING

WITH RESPECT TO NHPC

1 FINANCE AND ACCOUNTS FUNCTION

2 DEFINITION OF FIXED ASSET

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NHPC Limited ( NATIONAL

HYDRO ELECTRIC POWER

Basin/Rivers Probable Installed Capacity (MW)

Indus Basin 33,832

In 1998, Government of India announced "Policy on Hydro Power

So just how do we get electricity from water? Actually, hydroelectric and

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The theory is to build a dam on a large river that has a large

Analytics The diagram of a hydroelectric generator given below shows how

NHPC has successfully commissioned 13 hydro-electric projects

With the commissioning of 180MW Baira Siul project in

Considering the impediments faced during execution of

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Rs. 62,709 Millions

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DESIGN & ENGINEERING:

Pool of talent, powering excellence Multi-disciplined

interactive design Division; well equipped and capable of handling intricate

ENGINEERING, GEOLOGY AND GEOTECHNICA

Specialized in the field of Engineering, Geology, Geo-

Physics and Construction material, well equipped and capable of handling

(Detail Project Report) in record time.

International Experts rated NHPC's Geological Data &

interpretation of high standards.

This website stores data such as

Privacy Policy “CORPORATE VISION”

thermal power with dominant Indian leadership and global presence.

human resources and providing opportunity for growth, well being

areas as well as protecting rights of project affected people (PAP's).

country by covering all aspects of investigation, planning, design,

construction operation and maintenance to produce pollution free and

This website stores dataInexhaustible

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elimination time and cost over-run.

2 Completion of all on going projects within stipulated time frame.