i) The above ageing has been calculated based on due date as per terms of agreement with customers
ii) Credit concentration:
As at 31 March 2023, out of total trade receivables, 99.82% ( 31 March 2022 : 99.75%) pertains to dues from Maharashtra State Electricity Distribution Company Limited under Long Term Power Purchase Agreement.
iii) Expected Credit Loss (ECL)
The Company is having majority of receivables against power supply from Maharashtra State Electricity Distribution Company Limited, which is a Government Undertaking. The Company is generally regular in realising its normal power sale and further is entitled to receive interest as per the terms of agreement on delayed payment, hence, the Company is secured from credit losses in the future.
The dividend, if any, proposed by Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting, except in the case of interim dividend. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the Shareholders.
Nature and purpose of other reserves Capital reserve
Capital reserve was created in earlier years in relation to specific transactions. Capital reserve is not available for distribution to the shareholders.
Securities premium
Securities premium represents premium received on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.
Employee's stock options reserve
The reserve account is used to recognize the grant date value of options issued to employees under Employee stock option plan.
i) During the year 2020-21, consequent to and upon conversion of the amount outstanding against the Facility A - nonconvertible debentures ('Facility A NCDs'), after adjusting the repayments of the principal amounts made by the Company, 196,500 Facility A NCDs of face value ' 100,000/- each were issued at an issue price of ' 100,000/- per NCD to Aditya Birla ARC Limited (ABARC) - acting on behalf of and in its capacity as trustee of ABARC-AST-002-TRUST, in terms of the Framework Facilities Agreement dated 31 December 2019, up to the date of issuance and allotment of NCDs.
ii) During the year, prepayment was made of ' 2,000 lakhs (31 March 2022 : ' 9,375 lakhs ) against Facility A NCD, ' 18,002 lakhs (31 March 2022 : ' 15,625.34) against Facility B (including interest) and ' 8,248 lakhs (31 March 2022 : ' Nil ) against Facility C as per the terms of the Framework Facilities Agreement with ABARC.
iii) Facility A NCD aggregating to ' 68,625 lakhs (31 March 2022: ' 124,625 lakhs ) is secured by way of:
a) first mortgage and charge on all immovable and movable assets, both present and future, of the Amravati Project subject to prior charge securing the bank guarantee / Letter of Credit facility (Non Fund based facility) up to ' 24,720 lakhs;
b) pledge of 2,104,649,446 (31 March 2022 : 2,104,649,446) equity shares of the Company held by RattanIndia Enterprises Limited (formerly RattanIndia Infrastructure Limited ("REL") and RR Infralands Private Limited through execution of a Deed of Pledge amongst REL, RR Infralands Private Limited (Pledgers), Company and Vistra (ITCL) India Limited (Formerly known as IL&FS Trust Company Limited); and
c) an exclusive first ranking charge over all the sponsors ICDs (RR Infralands Private Limited).
iv) Facility B - Non-convertible debentures ('Facility B NCDs') amounting to ' 38,011.83 lakhs (31 March 2022: ' 57,404.29 lakhs) is secured by second ranking charge on all immoveable and moveable assets, both present and future of Amravati project, subordinate to prior charge securing the continuing bank guarantee (Non Fund based facility), the Facility A NCDs. Further the Facility B NCD is secured by second ranking charge over all the sponsors ICDs (RR Infralands Private Limited) present and future and second raking charge over pledge of shares as stated in para above, subordinate only to the charge securing the Facility A NCD.
v) 0.001% Redeemable Preference Shares (RPS) are secured by pledge of 50,000 equity share invested in and inter corporate deposit given to Poena Power Development Limited.
vi) Repayment schedule of loan facilities are as follows:
a) Facility A- NCD - Repayable on May 15, 2023 (refer note ix below)
b) Facility B NCD - Repayable in bullet repayment of ' 37,229 lakhs in June 2023;
c) 0.001% RPS - Redeemable in bullet repayment of ' 25,000 lakhs in December 2023 (refer note viii below)
d) Loan Facility C - Repayable in bullet repayment of ' 36,752 lakhs in December 2025;
e) Elevated intercorporate deposit - Repayable in bullet repayment of ' 55,000 lakhs in December 2025.
f) Subordinate intercorporate deposit - Repayable in bullet repayment of ' 90,000 lakhs in December 2025.
g) Intercorporate deposit - Repayable in bullet repayment of ' 3,135 lakhs in January 2026;
h) 0.001% OCCRPS - Redeemable in bullet repayment of ' 37,692 lakhs upon completion of 7 years from the date of allotment and if OCCRPS are not redeemed, the same shall be convertible into Equity shares at the option of lenders.
vii) The above mentioned loans from ABARC and Intercorporate deposits carry contractual rate of interest ranging from 0.001% p.a. to 20% p.a. over the life of the loan.
viii) The Company, under the One Time Settlement scheme (OTS), had issued Redeemable Preference Shares (RPS) in December 2019 to the lenders of the Company, that had become redeemable on 27 December 2021. However, inspite of having sufficient cash and cash equivalent balance, the redemption of such RPS could not be done due to limitations as per the provisions of section 55(2) of the Act which state that such redemption is permissible only out of profits earned by the Company which are otherwise available for dividend, after adjusting the accumulated losses as read with section 123 of the Act, or out of the proceeds of a fresh issue of shares made for the purposes of such redemption. The Company has been in active discussions with the RPS holders to extend the time period for redemption of RPS and is confident that the tenure of such RPS shall get extended, following the defined process under the Act.
ix) During current year, Aditya Birla ARC Limited ("ABARC") acting in its capacity as the trustee of ABARC-AST-002 Trust, the debenture holder, holding inter-alia 196,500 Non-Convertible Debentures of face value ' 100,000/- each (issued in December 2020), has amended certain terms and further, has granted further extension for redemption of the balance due (' 68,625 lakhs as on 31 March 2023), by a period of 45 days i.e. upto 15 May 2023. The Company is in process of availing a refinancing facility and is confident to repay the above mentioned debenture dues on or before due date.
The Company's contracts with customers for the sale of electricity generally include one performance obligation. Revenue from sale of power is recognized net of cash discount over time for each unit of electricity delivered at the contracted rate.
A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration that is conditional. A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration from the customer. Contract liabilities are recognised as revenue when the Company performs obligations under the contract.
Transaction price - remaining performance obligation
The remaining performance obligation disclosure provides the aggregate amount of the transaction price yet to be recognized as at the end of the reporting period and an explanation as to when the Company expects to recognize these amounts in revenue. Applying the practical expedient as given in Ind AS 115, the Company has not disclosed the remaining performance obligation related disclosures for contracts as the revenue recognised corresponds directly with the value to the customer of the entity's performance completed till the reporting period.
33 Details of contingent liabilities, pending litigations and other matters:
A. Claims against the Company not acknowledged as debt:
1 The Water Resource Department of the Government of Maharashtra ('WRD' or "Respondent') vide their letter dated 29 January 2013 had raised a demand of ' 23,218 lakhs on the Company for payment of irrigation restoration charges (IRC) at the rate of ' 1 lakh per hectare as per Government Resolution (GR) dated 6 March 2009, which was contrary to the Water Resources Department, Government of Maharashtra's circular dated 21 February 2004 that stated the rate to be ' 0.50 lakh per hectare. The Company had paid ' 11,657 lakh (calculated at ' 0.50 lakh per hectare) and had filed a Writ Petition before the Hon'ble Bombay High Court on 13 February 2013, challenging the validity of demand so raised by WRD. The Mumbai bench of Hon'ble Bombay High Court vide its order dated 3 August 2015 transferred the matter to Nagpur Bench. The Nagpur Bench vide its order dated 5 May 2016 had partly allowed the petition and held that demand at revised rate i.e. as per GR dated 6 March 2009 was illegal and unsustainable. As per Nagpur Bench order, the rate prescribed in the GR dated 6 March 2009 was applicable prospectively from 1 April 2009 and was not applicable in Company's case since the water allocation had already been finalized on 12 December 2007.
Pursuant to above order, Maharashtra State Government had filed a Special Leave Petition ("SLP") before the Hon'ble Supreme Court of India (SC). The Hon'ble SC vide its order dated 13 January 2023 held that the agreement executed between the Company and WRD stipulating irrigation restoration charge at the rate of ' One lakh per hectare was erroneously given credence over the erstwhile Government circular dated 21 February 2004 that prescribed the rate of ' 0.50 lakh per hectare for use of water for industrial purposes, which was otherwise reserved for irrigation of agricultural land. In the said order, the SC also erroneously held that the Company had protested for first time in 2011 which was contrary to the fact that the Company had been protesting the proposed IRC levy at the rate of ' One lakh per hectare since 2008 and further, erroneously relied on 2009 Notification, wherein IRC was notified at ' One lakh per hectare for the very first time. Aggrieved of the SC order, the Company has filed a Review petition before the SC bench on 12 February 2023, that is currently pending disposal.
The management basis inputs from internal and external legal experts believes that the Company has strong chances of favourable order in the pending Review Petition, on merits as there are errors on face of the record in the SC Judgment as narrated above and further, has assessed that likelihood of any liability devolving upon the Company in respect of the said matter is not probable and accordingly, no adjustment is currently required in these standalone financial statements.
2 During the previous year, the Company had filed writ petition before Hon'ble Delhi High Court ('Delhi HC') and had sought relief and direction to Ministry of Power and Ministry of Coal as well as Western Coalfields Limited ('WCL') and Mahanadi Coalfields Limited ('MCL'), the subsidiaries of Coal India Limited, for returning of Bank Guarantees issued pursuant to Letter of Assurance (LoA) , as the Fuel Supply Agreement (FSA) against this LoA was not materialized and Company has not utilized this for any coal supply to the plant. Subsequently during the quarter ended 30 June 2022, Company had received letters from WCL & MCL informing cancellation of LOA and invocation of bank guarantee amounting to ' 54.96 crore. The Company had filed an application of stay before Delhi HC and in response thereto, the Delhi HC had directed WCL & MCL not to take any coercive action pursuant to their letters. The Company based upon inputs from legal experts believes that it has a strong case and accordingly, no provision is considered necessary in these standalone financial statements at this stage.
3 During the year ended 2010-11, the Company entered into a contract with Bharat Heavy Electrical Limited ('BHEL') for erection and supply of certain material for phase II of its power project at Amravati. Subsequent to this contract, BHEL supplied certain materials which were not warranted at that time and there were various communications made by the Company with BHEL to take out such materials from the site. Against this, BHEL initiated arbitration proceeding against the Company, alleging the payment outstanding against the Company in respect of the materials so supplied by them. The Hon'ble High Court also disposed off the petition upon the instruction to the parties that petition before Hon'ble High Court be treated as an application under Section 17 of the Arbitration and Conciliation Act, 1996 before the Arbitral Tribunal. Subsequent to this, BHEL filed the following applications on 14 April 2016 with Arbitral Tribunal:
a. Application under Section 17 of the Arbitration and Conciliation Act, 1996 seeking an interim prayer of release of bank guarantees.
b. Application seeking amendment of the Claim petition.
c. Application under Section 31(6) of the Arbitration and Conciliation Act, 1996 seeking an interim award on the basis of admissions.
On BHEL's application for seeking interim award based on admissions, the Tribunal had heard the arguments of both
BHEL and the Company and the Tribunal had passed an interim award of ' 11,500 lakh against the Company vide its order dated 27 July 2017. Cross examination of Claimant's Witness is ongoing. The matter is now fixed for further examination of respondent's witness on 19 June 2023.
The Company had filed an appeal against the above interim award on 16 October 2017 before the Hon'ble High Court. The matter is now listed for arguments, the next date of hearing in the matter is 16 May 2023. The pecuniary risk involved in the present case cannot be quantified. The Company is confident that the matter will be disposed off in their favour.
A Petition has also been filed by BHEL praying the Hon'ble High Court to issue warrants of attachment/ or auction sale of immovable and movable assets of the Company for realizing the amount payable/due as per the Interim award dated 27 July 2017. The matter is now listed for Arguments. The next date of hearing in the matter is 16 May 2023.
4 Arbitration Proceedings had been initiated by Larsen and Toubro Ltd (L&T) against the Company in relation to the
supply and service contracts for Electrical Balance of Plant (EBOP) with respect to 5X270 MW Thermal Power Plant, Amravati. Preliminary hearing in respect of the matter was held on 08 June 2020 whereby schedule of the arbitration proceedings has been fixed by the Arbitral Tribunal (AT). Pleadings are complete in the matter. Present proceedings are adjourned sine dine with liberty to the parties to have the same revived as and when considered appropriate vide AT's order dated 16 October 2021. Application for reviving the present proceedings has been filed by L&T, reply has been filed by the Company. Arguments on the application have concluded and the Tribunal has permitted the Petitioner in reviving the petition qua RPL. A fresh discovery application was filed by the Petitioner and reply filed by the Company. The parties have been directed to file their Affidavit of Evidence. The next date of hearing in matter is 24 May 2023 to 31 May 2023.
5 Arbitration Proceedings had been initiated by Larsen and Toubro Ltd Ltd (L&T) against the Company in relation to
supply and service contract with respect to the Coal Handling plant (CHP) of 2x1600 TPH capacity for 5x270 MW TPP,
Amravati. Preliminary hearing in respect of the matter was held on 17 June 2020 whereby schedule of the arbitration proceeding has been fixed by the Arbitral Tribunal. An Application for inspection and production of documents had been filed by Larsen and Toubro Ltd (L&T). Reply has also been filed and arguments have been heard. the Arbitral Tribunal Vide order dated on 28 March 2022, has rejected all the contentions of Larsen and Toubro Ltd (L&T) except granting inspection of original invoices by Larsen and Toubro Ltd (L&T).Inspection of documents has been completed. Issues have been framed by the Tribunal and affidavit of evidence to be filed by the parties. The next date of hearing is to be notified.
6 Arbitration Proceedings had been initiated by M/s. Shapoorji Pallonji & Co. Pvt. Ltd (SPCL) against the Company in relation to the supply and service contracts for Civil Works) with respect to 5X270 MW Thermal Power Plant, Amravati. The next date of hearing in the matter is 05 May 2023 for arguments on the application for production of documents filed by SPCL and reply thereto by the Company.
7 An application under Section 9 of Insolvency and Bankruptcy Code was filed by M/s. Shapoorji Pallonji & Co. Pvt. Ltd. against the Company to initiate Corporate Insolvency Resolution process under the code before National Company Law Tribunal, New Delhi. The matter has been heard. Arguments are complete. The Hon'ble Tribunal has vide order dated 16 November 2022 dismissed the petition filed by Shapoorji. Shapoorji has filed an appeal against the said order before the Hon'ble National Company Law Appellate Tribunal. The Company is in the process of filing its reply. Next date of hearing is 16 May 2023.
8 The Company has preferred writ petition before Hon'ble Delhi High Court against UOI & South Eastern Coal Limited (SECL) for wrongfully charging and recovering GST on penalty amount under fuel supply agreement. Pleadings are yet to be completed in the matter. The next date of hearing in this matter is 26 May 2023.
9 Techno Industries invoked arbitration against the Company pertaining to a Letter of Award for construction of Lifts and Elevators at Thermal Power Project, Phase I, Amravati. Pursuant to a section 11 petition being allowed by the Hon'ble High Court of Delhi, Ramesh Singh, Advocate was appointed by the Sole Arbitrator. The Statement of Claim has been filed by Techno Industries and the Statement of Defence has also been filed. Rejoinder has also been filed. Issues framed, affidavit of evidence filed. The matter is listed for respondents' cross-examination and next date of hearing is 05 May 2023.
10 Ion Exchange India Limited was provided the contract for sewage water treatment plant. As a result of few disputed payments Ion Exchange India Limited invoked arbitration against the Company pertaining to a contract entered in June 2012 for supply, storage, handling, erection and commissioning services and for civil and structural works of Sewage and waste Water management system of 1350 (5 x 270) MW Thermal Power Project, Phase I, Amravati, Maharashtra.
Additionally, Ion Exchange India Limited also approached the Hon'ble High Court of Delhi for appointment of arbitrators (Section 11) through an application being Arbitration Petition 209/2021. The Hon'ble High Court of Delhi vide its order dated 10 November 2021 appointed Retd. ADJ Lal Singh to adjudicate the dispute between the parties. Preliminary hearing was conducted and the schedule for Arbitration was fixed. The Company had challenged the appointment of the arbitral tribunal (Section 16) by filing an application stating that the present arbitral tribunal has no jurisdiction to entertain the matter as there was no contract between Ion Exchange and the Company. Ion Exchange has been directed to file a reply to the Section 16 application filed by the Company. The next date of hearing in this matter is 12 May
2022. Reply has been filed by Ion Exchange. Cross examination of Claimant's Witness concluded. Respondent to file its evidence affidavit. Cross-examination of Respondent's Witness to commence on the next date of hearing i.e. 17 May
2023.
11 Directorate General of GST Intelligence, Mumbai issued show cause notice demanding Service-tax of ' 757.01 lakh on irrigation restoration charges paid to Water Resource Department of Maharashtra Government under reverse charge mechanism. Further the Principal Commissioner of Goods & Service Tax , Delhi had also confirmed above demand along with penalty vide its order dated 10 December 2020. Aggrieved off the above order, the Company had filed a writ petition before the Hon'ble Bombay High Court on 15 March 2021 and Court vide order dated 13 March 2023 has dismissed the petition and has allowed the Company to file appeal before Customs, Excise and Service Tax Appellate Tribunal. Subsequently, the Company has filed appeal before with Tribunal on 10 April 2023, that is pending disposal.
12 An application had been filed by Vintech under provisions of section 18(1) of (delayed payment) of the MSMED Act, 2006 seeking a claim against invoices raised on RPL pursuant to work order relating to annual maintenance work contract of lighting, cabling and 33kv transmission line at thermal power plant, Amravati. RPL has filed its reply as well as statement of accounts with documents. Next date of hearing is yet to be intimated.
13 Value Line invoked arbitration against the Company pertaining to a contract entered into in April, 2015 between the parties for interior fit-out works for the office. Pursuant to that Value Line filed section 11 petition before the High Court of Delhi vide Arb. Pet. 844 of 2019, In Arb. Pet. 844 of 2019, the Hon'ble High Court of Delhi vide order dated 17 December 2019 appointed Sole-arbitrator to adjudicate the dispute and defences between the parties. Preliminary Hearing was held on 06 February 2020, wherein schedule of the arbitration was decided. Cross examination of Claimant's witness has already commenced. The next date of hearing is 17 May 2023.
14 During the financial year 2015-16, Tahsildar of Amravati vide it's order dated 24 February 2016 had directed the Company to deposit the amount of ' 400 lakh towards payment of royalty for using the minor minerals excavated during the construction of the power plant of the Company and utilized in the embankment work of railway line on the plot of Maharashtra Industrial Development Corporation Limited ("MIDC") allotted to the Company. The Company filed a writ petition before the Nagpur bench of Hon'ble Bombay High Court against the order passed by Tahsildar. The Hon'ble Court vide its Order dated 15 December 2016 had issued a stay in the matter. The next date of hearing in the matter is to be intimated.
15 A vendor had under taken work for supply, plantation and maintenance of 100,000 trees at the Company's power plant pursuant to work order dated 25 May 2012. The Company terminated the contract vide letter dated 6 February 2014 due to unsatisfactory performance and also claimed liquidated damages from the vendor. On termination of contract by the Company, vendor alleged that the contract was wrongly terminated by the Company, only to avoid outstanding payment. The vendor had filed a Civil Suit on 03 December 2015 before Civil Judge Senior Division, Amravati claiming ' 116.25 Lakhs and court fees of ' 1.54 Lakh against the work done. The Company had filed an application under section 8 of the Arbitration and conciliation Act for the dismissal of the suit. The matter is now listed for framing of issues on 04 July 2023.
16 Becquerel Industries Private Limited had filed a suit for recovery of ' 20.73 lakh against M/s Preeti Engineering before Civil Court at Nagpur on 15 April 2015 alleging that their dues are pending against M/s Preeti Engineering to whom the Non-Distractive Testing work had been sublet by M/s Brothers Engineering. The work to M/s Brothers Engineering was subcontracted by BHEL to whom contract was awarded by the Company. The summons were serviced to M/s Preeti Engineering, M/s Bothers Engineering, BHEL and the Company. The Company had filed its reply. The matter is now listed for hearing on 21 June 2023.
17 A Suo Moto Public Interest Litigation ('PIL') has been registered before Hon'ble Bombay High Court on 27 August 2014 with regard to the occupation hazards of the employees working in various thermal power plant stations in the country. The Company (due to its plant at Amravati) had been made a party in the said PIL. The Company had filed its reply before Bombay High Court. The Hon'ble High Court has appointed one committee for regular review of the situation in Thermal Power Plants in the state. The next date of hearing in the matter is to be intimated.
18 The Company had developed a railway line track and constructed a boundary wall around the railway yard and power plant at Amravati on the land allotted to the Company by Maharashtra Industrial Development Corporation Limited. In this respect, Mr. Keshav Puranlal Bundele and others ('Plaintiffs') alleged that the approach road to their land has been obstructed and they are unable to access their land for cultivation and claimed damages to the tune of ' 5 lakhs. A suit for seeking declaration/ injunction for right of way was filed before the Civil Judge, Senior Division, Amravati by the Plaintiffs against the Company during the year 2015-16. The Company denied the allegations in its written statement and is contesting the suit and the Hon'ble Court also declined the prayer of the Plaintiffs for grant of temporary injunction.
The Plaintiffs then filed a civil appeal with regard to this matter against the Court's order of declining the prayer of the Plaintiffs for grant of temporary injunction. The matter is now listed for bringing on record the legal heirs of Keshav Puranlal Bundele due to the demise of Keshav Puranlal Bundele. The application for appointment of Court Commissioner was allowed by Hon'ble Court. The Court Commissioner has completed the spot inspection and matter is now fixed for Court Commissioner's Report on 17 June 2023.
The management basis inputs from legal experts has assessed that likelihood of any liability devolving upon the Company in respect of the above matters is not probable and accordingly, no adjustment is currently required in these standalone financial statements.
B. Contingent liabilities of demand pending under the Income-tax Act, 1961:-
Under the Income-tax Act, 1961
1 For AY 2012-13 to AY 2017-18, the Honourable Income- tax Appellate Tribunal ('ITAT' or 'Tribunal') in its order dated 5 May 2021 decided the matter related to certain disallowances/addition aggregating to ' 83,530 Lakhs, in favour of the Company. However, on accessing the Honourable High Court of Mumbai portal, the Company noted that 6 appeals have been filed by the department against the ITAT Order, which are yet to be admitted by the HC. Currently, the Company has not received any notice in this regard.
2 For AY 2018-19, in response to the appeal filed by the Department against the order of CIT (Appeals) in relation to certain disallowance/additions aggregating to ' 3,366.00 lakhs, the Honourable Tribunal in its order dated 21 March 2023 has decided the matter in Company's favour, subject to the calculation/checking of additions as per the provisions of section 115JB of the Income- tax Act, 1961, by the Assessing Officer, which is currently pending disposal.
3 For AY 2019-20, the Company has filed rectification application under section 154 against intimation u/s 143(1) of the Income Tax Act, 1961 for certain additions/ disallowances aggregating to ' 284.35 Lakhs and resultant tax demand of ' 44.69 lakhs, which is currently pending disposal.
4 For AY 2020-21, the Company has filed an appeal before CIT(Appeals) against intimation under section 143(1) of the Income Tax Act, 1961, challenging the additions/ disallowances aggregating to ' 12,300 Lakhs that decreased the returned loss, which is currently pending disposal. Further, the Company has also filed a rectification application under section 154, against the aforementioned intimation, which is also pending disposal.
The management basis inputs from experts has assessed that likelihood of any liability devolving upon the Company in respect of the above matters is not probable and accordingly, no adjustment is currently required in these standalone financial statements.
C. Claims filed by the Company :
1 The Company is supplying power to Maharashtra State Electricity Distribution Company Limited (MSEDCL) based on two power purchase agreements (PPAs) for supply of 1200 MW (450 MW 750 MW respectively) of power for the period of 25 years. The PPAs were executed based on the fuel supply agreement (FSA) which provided that domestic coal linkages would be available to meet the fuel requirements. However, adequate coal supply was not made available which adversely impacted cost as Company had to source fuel from alternate sources to meet the shortfall of coal supplied under FSA with coal supplier. The Cabinet Committee of Economic Affairs (CCEA) approved mechanism where after Ministry of Coal amended the National Coal Distribution Policy (NCDP) and communicated its decision to allow pass through of the incremental cost of procuring coal from alternative sources to meet the shortfall in supply of domestic coal under coal linkage.
The Company filed a petition before Maharashtra Electricity Regulatory Commission ('MERC' or 'the Commission') in year 2013 for realizing the shortfall in supply under NCDP. MERC vide its Order on 15 July 2014 and 20 August 2014 laid down methodology to recover compensatory fuel charges.
On 28 August 2014, the Company filed a review petition before MERC against the Orders dated 15 July 2014 as well as Order dated 20 August 2014 and MSEDCL further filed review petition against the Orders of MERC dated 20 August 2014. The review petition filed by MSEDCL got dismissed vide Order dated 16 July 2015 and the review petition filed by the Company also got dismissed vide Order dated 30 October 2015.
As at the balance sheet date, the Company has accounted such claims in the books of accounts aggregating to ' 30,890.74 lakh and related carrying cost &late payment surcharge thereon.
The Company then filed appeals before Appellate Tribunal for Electricity (APTEL) against Orders dated 15 July 2014, 20 August 2014 and 30 October 2015. The said appeals were disposed off by the Hon'ble Tribunal on 4 May 2017, remanding the matters to the Maharashtra Electricity Regulation Commission ('MERC') for fresh adjudication in the light of the direction of the Hon'ble Supreme Court in case of Energy Watchdog and Ors. v/s CERC and Ors. Dated 11 April 2017. MERC heard the matter on 15 November 2017 and reserved it's Order. On 3 April 2018, MERC had passed the said Order, whereby MERC principally held that the Company is entitled to compensation and a methodology to recover compensatory fuel charges has been laid down. The Company filed an appeal before the Hon'ble APTEL vide appeal no. 264 of 2018 against the Ld. MERC order dated 03 April 2018. The appeal was disposed off vide order dated 13 November 2020 in which prayer of the Company was allowed and matter was remanded to Ld. MERC for computation. Subsequently, the Company had filed remand petition vide Case No. 240 of 2020 before Ld. MERC. MERC pronounced the order on 16 November 2021 directing Company to submit Supplementary invoice after making changes as suggested in the order and MSEDCL to make the payment within due date. Accordingly , the Company recomputed its Change in Law claims and submitted Supplementary invoice to MSEDCL. The Company had filed Impleadment Application in Case No 240/2021 praying MERC for directing MSEDCL to release 75% payment as interim measure, which was also dismissed by MERC stating matter is sub-judiced before Hon'ble Supreme Court in Civil Appeal No. 1805/2021 and directed to follow Hon'ble Supreme Court Order. Hon'ble Supreme Court vide its hearing dated 14 February 2022 directed MSEDCL to pay 50% of total claimed amount. The matter was listed before the Hon'ble Supreme Court and written submissions were filed. The matter was referred to the Hon'ble Chief Justice's court and thereafter tagged with case (C.A.No.4143/ 2020). SC has dismissed the Appeal No. 1805/2021 filed by MSEDCL.
2 There has been an increase in cost of power generation owing to increase in various statutory taxes, duties, levies, cess, surcharge etc. Based on various judgement from CERC involving similar situations, management had concluded that these charges are recoverable from MSEDCL under "Change in Law" clause of PPA. The Company filed a petition with MERC on 15 June 2016 claiming approval of additional components of costs under change in law. MERC had issued order dated 5 April 2018 in this respect. The Company has filed an appeal vide Appeal No. 263 of 2018 against the order dated 05 April 2018 before the Hon'ble Appellate Tribunal for Electricity ("APTEL") on 06 June 2018. APTEL had remanded the matter to Hon'ble Commission for quantification of amount payable to generator and pass consequential Order. MERC vide order dated 06 February 2023 has partly allowed the petition of the Company. Aggrieved by the said order, MSEDCL has filed a Review Petition before the MERC. Date of hearing in the matter is to be intimated. An appeal has also been filed by the Company against the order dated 06 February 2023 before APTEL . Date of hearing in the matter is to be intimated.
3 The Company operates a 1350 MW (5x270 MW) coal based power plant located at Nandgaonpeth, Amravati district in the state of Maharashtra. At the time of commissioning, the performance guarantee test conducted by BHEL noted that the maximum generation at rated capacity was upto 277.8MW (in non VWO mode), which corresponds to ex-bus capacity upto 252 MW. This was further corroborated by the CPRI report. In view of above, the Company requested MSLDC to increase the ex-bus export capacity for all five units from 252MW to 258 MW, however MSLDC rejected the Company's request, accordingly the Company filed petition vide Case No. 59 of 2018 before the Ld. MERC under Sections 32, 33 and 86 of The Electricity Act, 2003 read with the Maharashtra Electricity Regulatory Commission (State Grid Code) Regulations, 2006. The matter was heard by MERC on 3 October 2018 and had reserved its order. The Ld. MERC has dismissed the Case No. 59 of 2018 vide Order dated 23 October 2018. RPL has preferred an appeal against the impugned order of the Ld. MERC before the Hon'ble Appellate Tribunal of Electricity vide Appeal No. 35 of 2019. Appeal has been admitted by the Hon'ble APTEL and pleadings have to be completed. Subsequently, RPL has filed application for seeking directions against BHEL for conducting Performance Test. The Hon'ble Tribunal vide order dated 18 December 2019 directed BHEL to give test report. However, BHEL has filed review petition against the said order vide RP 04 of 2020. Pleadings are completed. The next date of hearing is to be intimated.
4 Due to low dispatch of power schedule by MSEDCL, SECL had imposed penalty on account of non-procurement of minimum quantity of fuel by Company under the FSA. The Company had filed a petition vide Case No. 146 of 2018 before the Ld. MERC under Section 86 of the Electricity Act, 2003 seeking compensation from MSEDCL for penalty of
' 3,976.79 lakhs in accordance with Clause 4.5 of Schedule 4 of the PPA between the Company and MSEDCL. The Ld. MERC heard the matter on 3 October 2018 and had reserved its order. The Ld. MERC disposed off the matter vide order dated 23 October 2018. RPL has filed an appeal before the Appellate Tribunal of Electricity vide Appeal No. 41 of 2019. Notice has been issued in the said Appeal and pleadings are completed. MSEDCL was directed to file dispatch schedule given to the Company in 2016-17. The next date of hearing is to be intimated.
5 The Company has filed an Appeal no. 118 of 2021 before Hon'ble Appellate Tribunal (APTEL) challenging the Order passed by Hon'ble Ld. Maharashtra Electricity Regulatory Commission ("MERC") wherein Ld. MERC held that levy of Evacuation Facility Charges levied by Coal India Limited does not constitute Change in Law event. Matter has been heard and APTEL vide its Order on 22 March 2022 directed MERC to determine the amount payable to the Company along with Carrying Cost to be calculated at LPS rate. MERC needs to pass fresh order considering APTEL direction within 2 months thereafter. The Company vide 76/MP/2022 filed case in MERC seeking direction from MERC to direct MSEDCL to release amount in accordance with APTEL Order dated 22 March 2022. MERC vide its Order dated 08 July 2022 directed MSEDCL to immediately pay undisputed amount as per provisions of PPA. MSEDCL has filed an appeal before the Hon'ble Supreme Court being CA 4089/2022 challenging APTEL's Order dated 22 March 2022 in App No. 118 of 2021 allowing levy of Evacuation Facility Charges by Coal India Ltd. as a Change in Law event. The Supreme Court heard the matter at length and appeal has been dismissed. EFC has been allowed as Change in Law by the Supreme Court vide order dated 20 April 2023.
6 The Company had filed an Appeal vide DFR 345/2021 before Appellate Tribunal of Electricity ("APTEL") under Section 111 of the Electricity Act, 2003 praying for setting aside the Order dated 28 July 2021 passed by Maharashtra Electricity Regulatory Commission ("MERC") in Case No 24 of 2017 insofar as the observation qua Company undertaking dated 05 April 2018. Pleadings are complete. The next date of hearing is to be intimated.
7 The Company had filed Writ Petition in Delhi High Court for quashing or setting aside the four Notifications dated 08 December 2017 passed by Central Electricity Regulatory Commission (CERC). The CERC vide the Impugned Notifications, has amended/revised the escalation rates for domestic coal chargeable by generating companies with retrospective effect going back as far the year 2012 up to 2014. Based on these amendments, tariff applicable during the period got changed and there was financial impact on the generators having Power Purchase Agreements with Discoms through Case-1 bidding route. The matter is listed for hearing on 25 August 2023.
8 MERC in Case No 26 of 2021 has passed an Order dated 11 October 2021 granting claim for Unit 1 along with LPS to the Company and rejecting claim towards Unit 4. MSEDCL has filed an appeal in APTEL vide DFR 429/2021 for stay on MERC Order in case No. 26 of 2021 . Next date of hearing is to be intimated. Further the Company has filed an Appeal challenging the MERC Order in Case 26 of 2021 against rejection of claims towards Unit 4. Matter is now listed for hearing on 12 May 2023.
9 The Company has filed claim with Joint DGFT, Mumbai amounting to ' 3,979 lakh during the year 2010-11 and onwards on account of deemed drawback for the material supplies for the construction of power plant at Amravati. Out of this, an amount of ' 637 lakh was processed and order for refund was issued during the financial year 2010-11. The said order was later withdrawn by the Joint DGFT vide its order dated 07 April 2011 due to clarification given by policy interpretation committee in its meeting no -10 on 15 March 2011. The Company has filed a writ petition on 01 September 2017 before Hon'ble Bombay High Court for recovery of deemed drawback of ' 370 lakh which is under process. Also, an appeal had been filed on 12 July 2016 before Hon'ble Supreme Court for ' 3,609 lakh which is also under process for final hearing.
10 The Company has filed an Appeal before Hon'ble Appellate Tribunal (APTEL) challenging the Order passed by Hon'ble Ld. Maharashtra Electricity Regulatory Commission ("MERC") wherein Ld. MERC had rejected the claim towards levy of Surface Transportation charges , Crushing /Sizing charges & Levy of Port Congestion Charges as Change in Law. Next date of hearing is yet to be notified.
The management basis inputs from legal experts has assessed that all the above are eligible claims as per terms of PPA entered with MSEDCL/ applicable regulations and the likelihood of favourable outcome in all the above matters is virtually certain.
D. Other pending litigations :
1 The Company had taken a large risk insurance policy no 500300/11/14/36/00000170 for the period 01 June 2014 to 31 May 2015 for business interruption risk. The generator of unit -2 was damaged on 30 October 2014 and the Company informed United India Insurance Company Limited (UIICL) of the damage on 31 October 2014. During the period from
November 2014 to December 2017, despite complete cooperation by the company, the surveyor kept delaying the claim by asking for irrelevant documents and information. Vide letter dated 15 February 2018, UIICL repudiated the insurance claim. Through a detailed letter dated 11 June 2018, the Company strongly protested to UIICL against the wrongful repudiation of its claim, but to no avail.
On 04 October 2018, a complaint was filed by the Company against UIICL & another before National Consumer Disputes Redressal Commission, praying that-
i) UIICL be held deficient in providing services to the Company and the repudiation of the claim be held as invalid as it was without any basis.
ii) The claim amount along with Interest be paid to the Company, and it should also be compensated for harassment and mental agony as well as for the litigation costs.
Pleadings are complete in this matter. Respondent has to file the Affidavit of Evidence. An early hearing application was moved by the Company. Early hearing allowed, all pleadings were to be completed. Last opportunity has been given to the Respondent to file its affidavit of evidence. The next date of hearing in the matter is 25 September 2023.
2 The Company had filed a Writ Petition before the Hon'ble Bombay High Court (Nagpur Bench) seeking directions against Water Resources Department, Amravati to take decision on the request of the Company for the partial surrender of 27.60 million cubic metres of Water and the refund of proportionate amount of Irrigation Restoration Charges and Water Commitment Charges already paid for the year 2016-17. The Hon'ble Court vide its judgment dated 10 February 2023 partially allowed the Company's petition and held partial surrender will be treated as approved after deposit of balance irrigation restoration charges demanded at rate of ' One lakh per hectare, as per the Hon'ble Supreme Court of India order dated 13 January 2023, as already enumerated in Note 33(A)(1). The conclusion in the current matter is dependent on final outcome in the other matter.
3 A consumer complaint under Section 21 of the Consumer Protection Act, has been filed by the Company (Consumer Case No. 87/2021) against United India Insurance Company Limited before National Consumer Disputes Redressal Commission (NCDRC) praying for compensation in relation to damage of Generator of Unit 5. Matter has been admitted and notice has been issued to NCDRC. The next date of hearing in the matter is 24 August 2023.
4 A consumer complaint under Section 21 of the Consumer Protection Act, has been filed by the Company (Consumer Case no. 2/2022) against Tata AIG Insurance Co. before National Consumer Disputes Redressal Commission (NCDRC) praying for compensation in relation to damage of Generator of Unit 2. Matter has been admitted and notice has been issued to NCDRC. The next date of hearing in the matter is 25 July 2023.
5 The Company had paid ' 265 lakhs as GST under Reverse Charge on account of "Goods Transport Agency" (GTA) in case of one of the vendor. While the supply of services doesn't qualify as GTA, GST paid has become refundable. Accordingly, GST paid has been recorded as recoverable in the standalone financial statements and the Company is under process to prepare and file the refund claim with Department.
The Company is involved in various legal proceedings and other regulatory matters relating to conduct of its business. In respect of such claims, the Company believes that these claims do not constitute material litigation matters and with its meritorious defences, the ultimate disposition in these matters will not have material adverse effect on these standalone financial statements.
E Others
The Company has provided commitment bank guarantees of ' 24,719.78 lakh (31 March 2022 : ' 24,657.78 lakh) which are secured by pledge on its fixed deposits of ' 5,195.30 lakh (31 March 2022 : ' 12,504.91 lakh) as margin for issuance of bank guarantees. Further, the Company has provided lien on its fixed deposit of ' NIL lakh (31 March 2022 : ' 341.47 lakh) as margin for issuance of a commitment bank guarantee of ' 5,903.79 lakh (31 March 2022: ' 5,903.79 lakh) on behalf of Sinnar Thermal Power Limited (formerly known as RattanIndia Nasik Power Limited) (STPL), a wholly owned subsidiary of the Company, to subsidiaries of Coal India Limited for issuance of Letter of Assurance for supply of coal for STPL's Nashik Thermal Power Project.
34 Estimated amount of contracts remaining to be executed on account of capital and other commitments towards the project not provided for: ' 31,201.30 lakhs (31 March 2022: ' 17,541.88 lakhs) - advances made there against ' 135.51 lakhs (31 March 2022: ' 425.54 lakhs).
35 The Code on Social Security, 2020 ('Code') has been notified in the Official Gazette of India on 29 September 2020, which could impact the contributions of the Company towards certain employment benefits. Effective date from which changes
are applicable is yet to be notified and the rules are yet be framed. Impact, if any, of change will be assessed and accounted for in the period of notification of relevant provisions.
36 Employee Stock Options Schemes
The Company has formulated ESOS/ ESOP schemes for applicable/ eligible employees. The schemes so formulated are also applicable to the eligible employees of its subsidiaries and of other Companies under common control with the Company. The subsidiaries have adopted the said schemes of the Company which are administered by a Compensation Committee constituted by the Board of Directors of the Company. The Company does not seek reimbursement of expenses from subsidiary companies for ESOP granted to employees of subsidiary companies.
Stock Option Schemes of RattanIndia Power Limited ("RPL"):RPL ESOP - 2008
On 10 January 2008 the erstwhile IPSL (Indiabulls Power Services Limited), had established the IPSL ESOS Plan, under which, IPSL was authorised to issue upto 20,000,000 equity settled options at an exercise price of ' 10 per option to eligible employees. Employees covered by the plan were granted an option to purchase equity shares of IPSL subject to the requirements of vesting. A Compensation Committee constituted by the Board of Directors of IPSL administered the plan. All these options were outstanding as at 1 April 2008.
Pursuant to a Scheme of Amalgamation under Sections 391 to 394 of the Companies Act, 1956, duly approved by the Hon'ble High Court of Delhi at New Delhi vide its order dated 1 September 2008, IPSL was amalgamated with Sophia Power Company Limited ("SPCL"). With effect from the Appointed Date the IPSL ESOS Plan was terminated and in lieu, in terms of Clause 14 (c) of the Scheme of Amalgamation, SPCL - IPSL Employees Stock Option Plan - 2008 ("SPCL - IPSL ESOP - 2008") was established in SPCL for the outstanding, unvested options for the benefit of the erstwhile IPSL option holders, on terms and conditions not less favourable than those provided in the erstwhile IPSL ESOS Plan and taking into account the share exchange ratio i.e. one equity share of SPCL of face value ' 10 each for every one equity share of IPSL of face value ' 10 each. All the option holders under the IPSL ESOS Plan on the Effective Date were granted options under the SPCL - IPSL ESOP - 2008 in lieu of their cancelled options under the IPSL ESOS Plan. The SPCL - IPSL ESOP - 2008 was treated as a continuation of the IPSL ESOS Plan and all such options were treated outstanding from their respective date of grant under the IPSL ESOS Plan. During the year ended 31 March 2015, pursuant to the name change of the Company from Indiabulls Power Limited. to RattanIndia Power Limited, the name of the ESOP scheme SPCL - IPSL Employees' Stock Option Plan 2008 ("SPCL-IPSL ESOP 2008") was changed to RattanIndia Power Limited Employees' Stock Option Plan 2008 ("RPL ESOP 2008"). These options vest uniformly over a period of 15 years commencing one year after the date of grant.
RPL ESOS 2009
During the financial year ended 31 March 2010, the Company had established the "Indiabulls Power Limited Employees' Stock Option Scheme 2009" ("IPL ESOS 2009"). The Company had issued 20,000,000 equity settled options at an exercise price of ' 14 per option under the IPL ESOS 2009 to eligible employees which gave them the right to subscribe to stock options representing an equal number of equity shares of face value ' 10 each of RPL. During the year ended 31 March 2015, pursuant to the name change of the Company from Indiabulls Power Limited. to RattanIndia Power Limited, the name of the ESOS scheme IPL ESOS 2009 was changed to RattanIndia Power Limited Employees' Stock Option Scheme 2009 ("RPL ESOS 2009"). These options vest uniformly over a period of 15 years commencing one year after the date of grant.
RPL ESOS 2011
During the financial year ended 31 March 2012, the Company had established the "Indiabulls Power Limited Employee Stock Option Scheme -2011" ("IPL ESOS -2011"). The Company had issued 50,000,000 equity settled options at an exercise price of ' 12 per option equivalent to the fair market value of the equity shares of RPL on the date of grant of option under the IPL ESOS -2011 to the eligible employees of the Company which gave them the right to subscribe an equal number of equity shares of face value of ' 10 each of RPL. During the year ended 31 March 2015, pursuant to the name change of the Company from Indiabulls Power Limited. to RattanIndia Power Limited, the name of the ESOS scheme IPL ESOS 2011 was changed to RattanIndia Power Limited Employees' Stock Option Scheme 2011 ("RPL ESOS 2011"). These options vest uniformly over a period of 15 years commencing one year after the date of grant.
The Fair values of the options under the RPL ESOP - 2008, RPL ESOS 2009 and RPL ESOS 2011 using the binomial pricing model based on the following parameters, is Re. 1.00 per option for RPL ESOS 2009, as certified by an independent firm of Chartered Accountants. The fair value of the re-granted options under the RPL ESOP - 2008 plan is ' 1.58 per option and under RPL ESOS 2011 plan is ' 1.78 per option as certified by an independent firm of Chartered Accountants.
37 Employee benefits Defined contribution:
Contributions are made to the Government Provident Fund and Family Pension Fund which cover all regular employees eligible under applicable Acts. Both the eligible employees and the Company make pre-determined contributions to the Provident Fund. The contributions are normally based upon a proportion of the employee's salary. The Company has recognized in the statement of profit and loss an amount of ' 64.53 lakhs (31 March 2022: ' 54.84 lakhs) towards employer's contribution towards Provident Fund.
Defined benefits:
Gratuity scheme - This is an unfunded defined benefit plan and it entitles an employee, who has rendered at least 5 years of continuous service, to receive one-half month's salary for each year of completed service at the time of retirement/exit/ death as below.
i) On normal retirement / early retirement / withdrawal / resignation: As per the provisions of the Payment of Gratuity Act, 1972 with vesting period of 5 years of service.
ii) On death in service: As per the provisions of the Payment of Gratuity Act, 1972 without any vesting period. Gratuity payable to employee in case (i) and (ii), as mentioned above, is computed as per the Payment of Gratuity Act, 1972 except that the Company does not have any limit on gratuity amount.
Other benefits:
Provision for unfunded compensated absences payable to eligible employees on retirement/ separation is based upon an actuarial valuation as at the year ended 31 March 2023. Major drivers in actuarial assumptions, typically, are years of service and employee compensation. The commitments are actuarially determined using the 'Projected Unit Credit Method' as at the year end. Gains/ losses on changes in actuarial assumptions are accounted for in the statement of profit and loss/ capital work-in-progress, as applicable and as identified by the Management of the Company.
40 Financial instruments i) Fair values hierarchy
Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:
Level 1: Quoted prices (unadjusted) in active markets for financial instruments.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data rely as little as possible on entity specific estimates.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
ii) Risk management
The Company is exposed to various risks in relation to financial instruments. The Company's financial assets and liabilities by category are summarised in note 40(i). The main types of risks are market risk, credit risk and liquidity risk. The most significant financial risks to which the Company is exposed are described below.
The Company's risk management is carried out by a central finance department (of the Company) under direction of the Board of Directors. The Board of Directors provides principles for overall risk management, and covering specific areas, such as foreign exchange risk, interest rate risk, credit risk and investment of excess liquidity.
The Company continuously monitors defaults of customers and other counterparties, and incorporates this information into its credit risk controls. The Company's policy is to deal only with creditworthy counterparties.
The Company's management considers that all of the above financial assets are not impaired and/ or past due for each of the above assets reporting dates under review are of good credit quality.
The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an on-going basis throughout each reporting period. In general, it is presumed that credit risk has significantly increased since initial recognition if the payments are more than 30 days past due. A default on a financial asset is when the counterparty fails to make contractual payments when they fall due. This definition of default is determined by considering the business environment in which entity operates and other macro-economic factors.
(i) The Company's management considers assets other than trade receivables, which are 30 days past due and analyses facts and circumstances surrounding each such defaults separately. If the facts indicate a probability of loss of value, the asset's then expected cash flows are plotted in present value based impairment model to determine the amount of impairment loss. Amounts are written off only in the following circumstances: a) no probable legal recourse is available for recovery, b) the counterparty is bankrupt, c) the cost of recovery is more than the amount or d) after all possible efforts the Company is unable to recover amounts after a period of 3 years.
Similarly, substantial part of Company's financial assets, other than trade receivables are recoverable from Company's subsidiaries, which the management of the Company believes are not credit impaired and there are no 12 month expected credit losses that are required to be recognised, other than those already assessed and recorded.
(ii) The Company has no such assets where credit losses have been recognised as none of the assets are credit impaired. Company's trade receivables are only with a single, government owned counterparty and are to be recovered under the power purchase agreement. Therefore, these trade receivables are considered high quality and accordingly no life time expected credit losses are recognised on such receivables based on simplified approach.
(iii) The credit risk for cash and cash equivalents and other bank balances is considered negligible, since the counterparties are reputable banks with high quality external credit ratings.
B) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature of the business, the Company maintains flexibility in funding by maintaining availability under committed facilities.Management monitors rolling forecasts of the Company's liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates.
Maturities of financial liabilities
The tables below analyse the Company's financial liabilities into relevant maturity groupings based on their contractual maturities for all non-derivative financial liabilities.
C) Market Risk
a) Foreign currency risk
The Company is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to amount payable to capital creditors in US Dollar and EURO. Foreign exchange risk arises from recognised assets and liabilities denominated in a currency that is not the Company's functional currency.
b) Interest rate risk Liabilities/assets
The Company's policy is to minimise interest rate cash flow risk exposures on long-term financing. At 31 March 2023 and 31 March 2022, the Company is not exposed to changes in market interest rates through bank borrowings at variable interest rates. The Company's fixed deposits are carried at amortised cost and are fixed rate deposits. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.
c) Price risk Exposure
The Company is exposed to price risk in respect of its investment in mutual funds (refer note 6B). The mutual funds are Unquoted investments.
42 Capital management
The Company' s capital management objectives are
- to ensure the Company's ability to continue as a going concern
- to provide an adequate return to shareholders
The Company monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as presented on the face of balance sheet.
The Company has elected not to recognise a lease liability for short term leases (leases of expected term of 12 months or less) or for leases of low value assets. Payments made under such leases are expensed on a straight-line basis. In addition, certain variable lease payments are not permitted to be recognised as lease liabilities and are expensed as incurred.
52 The Company has non-current investment of ' 43,277.11 lakhs ( 31 March 2022'43,277.11 lakhs) in, and loan under noncurrent financial assets of ' 12,258.05 lakhs (31 March 2022'12,258.05 lakhs) recoverable from Bracond Limited, a wholly-owned subsidiary of the Company. Bracond Limited had further invested in two wholly-owned subsidiaries namely Renemark Limited and Genoformus Limited who had given advances to non-related parties for business purposes. The management had undertaken assessment of recoverability and had created provision of these financial assets wherever necessary, in earlier years.
53 In light of the ratio laid down by the Hon'ble Supreme Court in Civil Appeal No 5399-5400 of 2016 in the matter of Energy Watchdog vs CERC vide judgment dated 11 April 2017 followed by judgment dated 13 November 2020 of Appellate Tribunal for Electricity (APTEL) and order dated 16 November 2021 of MERC, RPL has recomputed its Change in Law claims and has raised supplementary invoice on MSEDCL, as directed by MERC. Subsequently, vide interim Order dated 14 February 2022, Supreme Court directed MSEDCL to pay 50% of the outstanding claim amount till the time the matter attains finality. Further, on 27 March 2023 Supreme Court has dismissed the civil appeal 1805/2021 filed by MSEDCL. Till date MSEDCL had paid ' 31,215 lakhs and is in the process of making balance payment. Hence, it would not be unreasonable to expect the realisation of amount of compensation along with interest recorded in the books of account on account of the aforesaid developments.
54 Investments in subsidiaries
a) These standalone financials statements are separate financial statements prepared in accordance with Ind As-27 "Separate financial Statements"
55 The Company has non-current investment of ' 121,181.77 lakhs and loans under 'current financial assets' of ' 3,134.16 lakhs (net of impairment provision) recoverable from Sinnar Thermal Power Limited ('STPL'), wherein all 5 units have been commissioned, but are yet to commence commercial operations, pending the execution of Power Purchase Agreement ("PPA") for offtake of power. The matter related to execution of PPA with Maharashtra State Electricity Distribution Company Limited ("MSEDCL") has been in dispute wherein STPL had filed a petition before Maharashtra Electricity Regulatory Commission (MERC) for adjudication of the dispute, however, the petition was withdrawn pursuant to the observation of MERC that STPL may reapproach MERC after securing firm and unconditional commitment from Lenders for providing working capital/ bank guarantees required for executing the PPA. In view of acute power shortage faced by the country during the recent past, the Ministry of Power had identified certain power plants, including that of STPL, that are commissioned and preserved in a condition that they can be brought into operation within few months' notices. In this context, STPL had been directed to make plant operational and endeavour to start power generation from 2 out of its 5 units at the earliest possible. STPL had been in active discussions with the lenders and other stake holders to ensure plant can be started in time and to ensure steps are taken for the long- term resolution and accordingly, the management had assessed that the STPL's status as going concern for the purpose of accounting is appropriate. The Management had undertaken assessment of recoverability of the financial assets and had created provision, wherever deemed necessary.
During the current year, the Hon'ble National Company Law Tribunal, New Delhi (the 'NCLT) vide order dated 19 September 2022, admitted an application for insolvency filed by an operational creditor against STPL and initiated Corporate Insolvency Resolution Process ('CIRP') under the Insolvency and Bankruptcy Code, 2016 ('IBC'). Subsequently, the Hon'ble National Company Law Appellate Tribunal ('NCLAT') vide its order dated 26 September 2022 in response to the appeal filed against the NCLT order, has directed the Interim Resolution Professional ('the IRP') to abstain from taking any steps and has allowed STPL to participate further with the Ministry of Power in continuation of the earlier meetings/ discussions for making the plant operational.
The management based upon inputs from legal experts has assessed that NCLAT order dated 26 September 2022 has directed the IRP to abstain from taking any steps; thereby, staying CIRP proceedings initiated by NCLT. Thus, the Company continues to control the composition of the Board of STPL and the current Board of Directors of STPL continue to perform STPL's affairs and discharge day to day activities / transactions in the normal course of business and STPL continues to qualify as a wholly- owned subsidiary under Ind AS, as on the date of approval of these standalone financial statement and that no adjustment is currently required. Further, the STPL management is confident that the PPA would soon be restored in its favor, allowing STPL to commence its business operations.
56 Revenue from operations on account of Change in Law events in terms of Power Purchase Agreements (PPA) with MSEDCL is accounted for by the Company based on the best management estimates including orders of Regulatory Authorities in some cases, which may be subject to adjustments on account of final orders of Respective Authorities that are not expected to have material impact on these standalone financial statements.
58 Other statutory information
(i) The Company do not have any Benami property and no proceedings have been initiated or pending against the Company and its Indian subsidiaries for holding any Benami property, under the Benami Transactions (Prohibitions) Act, 1988 (45 of 1988) and the rules made thereunder..
(ii) The Company do not have any transactions with struck off companies under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956.
(iii) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the year.
(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
b. provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
(vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
b. provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,
(vii) The Company has not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
(viii) The Company has not been declared as a 'Wilful Defaulter' by any bank or financial institution (as defined under the Companies Act, 2013) or consortium thereof, in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India
(ix) The company complies with the number of layers prescribed under clause (87) of section 2 of the act read with companies (restriction on number of layers) rule 2017.
59 In respect of amounts as mentioned under Section 125 of the Companies Act, 2013, there were no dues required to be credited to the Investor Education and Protection Fund as at 31 March 2023 and 31 March 2022.
60 The Company evaluates events and transactions that occur subsequent to the balance sheet date, there were no significant adjusting events that occurred other than those disclosed/given effect to in these standalone financials statements.
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