p) Provisions, contingent assets and contingent liabilities
Provisions are recognized only when there is a present obligation, as a result of past events, and when a reliable estimate of the amount of obligation can be made at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates. Provisions are discounted to their present values, where the time value of money is material.
Contingent liability is disclosed for:
• Possible obligations which will be confirmed only by future events not wholly within the control of the Company, or
• Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.
Contingent liabilities may arise from litigation, taxation and other claims against the Company. The contingent liabilities are disclosed where it is management's assessment that the outcome of any litigation and other claims against the Company is uncertain or cannot be reliably quantified, unless the likelihood of an adverse outcome is remote.
Contingent assets are not recognised. However, when inflow of economic benefit is probable, related asset is disclosed.
q) Earnings per share
Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events including a bonus issue.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
r) Certain prior year amounts have been reclassified for consistency with the current year presentation. Such reclassification does not have any impact on the current year financial statements.
s) Recent accounting pronouncements:
New and Amended Standards Adopted by the Company:
The Company has applied the following amendments for the first time for their annual reporting period commencing April 1, 2023:
Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors
The amendments to Ind AS 8 clarify the distinction between changes in accounting estimates, changes in accounting policies and the correction of errors. They also clarify how entities use measurement techniques and inputs to develop accounting estimates.
Ind AS 1 - Presentation of Financial Statements
The amendments to Ind AS 1 provide guidance and examples to help entities apply materiality judgements to accounting policy disclosures. The amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for entities to disclose their 'significant' accounting policies with a requirement to disclose their 'material' accounting policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures. This amendment did not have any material impact on the Company's standalone financial statements and disclosures.
Ind AS 12 - Income Taxes
The amendments to Ind AS 12 Income Tax narrow the scope of the initial recognition exception, so that it no longer applies to transactions that give rise to equal taxable and deductible temporary differences such as leases and decommissioning liabilities.
The Company previously recognised for deferred tax on leases on a net basis. Pursuant to the aforementioned amendment, the Company has grossed-up the deferred tax assets (DTA) and deferred tax liabilities (DTL) recognised in relation to leases w.e.f. 1 April 2022. However, the said gross-up has no impact on the net deferred tax liabilities/ expense presented in the standalone financial statements.
New Standards/Amendments notified but not yet effective:
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. As at 31 March 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.
3. Significant management accounting judgements, estimates and assumptions
The preparation of the Company's standalone financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. The estimates and assumptions are based on historical experience and other factors that are considered to be relevant. The estimates and underlying assumptions are reviewed on an ongoing basis and any revisions thereto are recognized in the period of revision and future periods if the revision affects both the current and future periods. Uncertainties about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial
year, are described below. The Company based its assumptions and estimates on parameters available when the standalone financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.
Defined benefit plans
The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. Information about the various estimates and assumptions made in determining the present value of defined benefit obligations are disclosed in note 37.
Fair value measurements
In estimating the fair value of financial assets and financial liabilities, the Company uses market observable data to the extent available. Where such Level 1 inputs are not available, the Company establishes appropriate valuation techniques and inputs to the model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. Information about the valuation techniques and inputs used in determining the fair value of various assets and liabilities are disclosed in note 40.
Impairment of non-financial assets
Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm's length, for similar assets or observable market prices less incremental costs for disposing of the asset.
Impairment of property, plant and equipment
Determining whether property, plant and equipment are impaired requires an estimation of the value in use of the relevant cash generating units. The value in use calculation is based on a Discounted Cash Flow model over the estimated useful life of the Power Plants. Further, the cash flow projections are based on estimates and assumptions relating to tariff, operational performance of the Plants, life extension plans, market prices of coal and other fuels, exchange variations, inflation, terminal value etc. which are considered reasonable by the Management
Impairment of Investments made / Loans given to subsidiaries
In case of investments made and loans given by the Company to its subsidiaries, the Management assesses whether there is any indication of impairment in the value of investments and loans. The carrying amount is compared with the present value of future net cash flow of the subsidiaries based on its business model or estimates is made of the fair value of the identified assets held by the subsidiaries, as applicable.
Taxes
Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies, including estimates of temporary differences reversing on account of available benefits under the Income Tax Act, 1961.
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.
Useful lives of depreciable/ amortisable assets
The Company has estimated useful life of each class of assets based on the nature of assets, the estimated usage of the asset, the operating condition of the asset, past history of replacement, anticipated technological changes, etc. The Company reviews the useful life of property, plant and equipment and Intangible assets as at the end of each reporting period. This reassessment may result in change in depreciation expense in future periods.
Income/ Revenue
Revenue from sale of power is recognised upon judgement by the management for recoverability of the claims based on the relevant contractual terms / provisional rates as provided by the regulator / governing tariff regulations, to the extent applicable, having regard to mechanism provided in applicable tariff regulations and the bilateral arrangement with the customers, which may be subject to adjustments in future years, on receipt of final orders of the respective Regulatory Authorities or final closure of the matter with the customers.
In certain cases, the Company has claimed compensation from the Discoms based on management's interpretation of the regulatory orders and various technical parameters, which are subject to final verification and confirmation by the respective Discoms and hence, in these cases, the revenues have been recognised during various financial years / periods on a prudent basis with conservative parameters in the books in accordance with the terms of Power Purchase Agreement. The necessary true-up adjustments for revenue Claims (including carrying cost / delayed payment surcharge) are made in the books on final acknowledgement / regulatory orders / settlement of matters with respective Discoms or eventual recovery of the claims, whichever is earlier.
Classification of Trade Receivables
In view of pending litigations on regulatory matters, the classification of disputed / undisputed trade receivables is a matter of judgement based on facts and circumstances. The Company evaluates the fact pattern and circumstances, including ongoing discussions with the state-owned power distribution Companies (Discom), for each such regulatory matter pending to be adjudicated by the relevant authority. In cases, where discussions with Discom have not made reasonable progress and matters are subjudice, the related receivables are classified as disputed, even though the management is reasonably confident of recovering the dues in full, backed by the regulatory orders in favour of the Company. The management will continue to monitor the developments on regulatory matters.
ii) Facility A NCD aggregating to ' Nil (31 March 2023: ' 68,625 lakhs) was 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 2023: 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 sponsor's ICDs (RR Infralands Private Limited).
iii) Facility B - Non-convertible debentures ('Facility B NCDs') amounting to ' Nil (31 March 2023: ' 38,011.83 lakhs) was 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.
iv) During the year, the Company on 22 June 2023 has availed refinancing facility in form of non-convertible debentures and rupee term loan aggregating to ' 111,409.88 lakhs in a transaction led by Kotak Mahindra Bank and utilized such proceeds to repay the dues (including interest) of existing facilities of Aditya Birla ARC Limited ("ABARC") within the agreed extended timelines.
v) Inter corporate deposit given to Poena Power Development Limited (PPDL) is secured by pledge of 50,000 equity shares of PPDL and is to be used towards RPS Shortfall amount when due. (also refer footnote (viii) below)
vi) Repayment schedule of loan facilities are as follows:
a) Loan Facility C - Repayable in bullet repayment of ' 33,752 lakhs (remaining amount after prepayment) in December 2024.
b) Elevated intercorporate deposit - Repayable in bullet repayment of ' 55,000 lakhs in December 2025.
c) Subordinate intercorporate deposit - Repayable in bullet repayment of ' 90,000 lakhs in December 2025.
d) Intercorporate deposit - Repayable in bullet repayment of ' 3,135 lakhs in January 2026.
e) 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.
f) Non-convertible debentures - Series I (NCD Series I) - Repayable quarterly in equal instalment of ' 6,833.33 lakhs each and balance in last instalment.
g) Non-convertible debentures - Series II (NCD Series II) - Repayable quarterly in equal instalment of ' 7,500.00 lakhs each starting from March 2025 and balance in last instalment.
h) Non-convertible debentures - Series III (NCD Series III) - Redeemable in bullet repayment of ' 37,500 lakhs in December 2026.
i) Rupee term loan (RTL) - Repayable quarterly in equal instalment of ' 1,666.67 lakhs and balance in last quarter.
vii) The above mentioned loans and Intercorporate deposits carry contractual rate of interest ranging from 0.001% p.a. to 20% p.a. over the tenure 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, however, the approval from the lenders is awaited as on date. The liability towards RPS is disclosed as 'current borrowings' under 'current financial liabilities' in these standalone financial statements for the year ended 31 March 2024.
Subsequent to the year- end, one of the RPS holders, holding 28,720,978 RPS aggregating to ' 2,872.10 lakhs in the Company, has filed an application against the Company and subsidiary company- Poena Power Development Limited ('PPDL') (whose shares are pledged with RPS holders and inter-corporate deposit given of ' 25,000 lakhs is also assigned to RPS holders),
under Section 7 of Insolvency and Bankruptcy Code, 2016 ('IBC Code') on 26 April 2024 which is not yet admitted, demanding redemption of the principal amount along with interest and dividend. The management is of the view that the application filed under Section 7 of IBC Code is not maintainable under applicable laws and the Company and subsidiary company plans to pursue the legal remedies in the matter available under the applicable laws and believe that the same is not expected to have any material impact on these standalone financial statements and/or on the operations and functioning of the Company.
ix) During previous 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), had amended certain terms and further, had 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. During the year, Company has refinanced aforesaid existing loan by issuance of Non convertible Debentures (NCD Series I, II, III) aggregating to ' 102,500 lakhs and Rupee Term Loan (RTLs) aggregating to ' 10,000 lakhs. During the year, Company has repaid/prepaid repaid all the dues (including interest) of existing facilities of Aditya Birla ARC Limited ("ABARC") within the agreed extended timelines.
x) During the year, the Company has repaid/prepaid amounting to ' 31,185.15 lakhs against NCD Series I, ' 8,394.65 lakhs against NCD Series II, ' 13,115.08 lakhs against NCD Series III, and ' 7,606.13 lakhs against RTL as per the terms of the Facilities Agreement.
xi) NCD Series I, II and RTLs aggregating to ' 725,000 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.
b) pledge of 2,097,598,310 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
c) an exclusive first ranking charge over all the promoters ICDs/unsecured debts; and
d) Corporate Guarantee of RR Infralands Private Limited to the extent of the value of outstanding under these facilities.
xii) NCD Series III aggregating to ' 37,500 lakhs is secured by way of* :
a) second mortgage and charge on all immovable and movable assets, both present and future, of the Amravati Project.
b) pledge of 2,097,598,310 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
c) an exclusive second ranking charge over all the promoters ICDs/unsecured debts; and
d) Corporate Guarantee of RR Infralands Private Limited to the extent of the value of outstanding under these facilities.
* First pari-passu charge shared between NCD Series I, II and existing non fund based facility of ' 25,000 lakhs, NCD Series III have second charge on above security.
33 Details of contingent liabilities, pending litigations and other matters:
A. Claims against the Company not acknowledged as debt:
1 During the year ended 31 March 2022, 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 year ended 31 March 2023, Company had received letters from WCL & MCL informing cancellation of LOA and invocation of bank guarantee amounting to ' 5,496.14 lakhs. 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.
2 During the year ended 2010-11, the Company had 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. Consequent 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 off these materials from the site. Subsequently, BHEL initiated arbitration proceeding against the Company, alleging the payment outstanding in respect of the materials so supplied by them. The Hon'ble High Court of Delhi 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. Thereafter, BHEL filed multiple applications including under Arbitration and Conciliation Act, 1996, on 14 April 2016 before Arbitral Tribunal.
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 ' 11500.00 lakhs against the Company vide its order dated 27 July 2017. The Company had filed an appeal against the said interim award on 16 October 2017 before the Hon'ble High Court of Delhi, that is currently pending disposal.
A Petition had 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. During the year, in response to such petition, the Hon'ble High Court vide order dated 8 August 2023 had allowed attachment of certain assets in connection with the interim award; subject to any prior charge already created on the said assets in favour of third parties.
The Company's management, based on inputs from its legal experts, believes that the likelihood of any additional liability devolving on the Company (other than those already recorded) is not probable and there is no additional impact (including classification of attached assets as per the Hon'ble High Court order), requiring any adjustment in these standalone financial statements.
3 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 dates of hearing in matter are 22, 23 and 28 August 2024.
4 Arbitration Proceedings had been initiated by Larsen and Toubro 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 28 March 2022, had 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 intimated.
5 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. Pleadings are completed in the matter. In the meantime, mandate extension application filed by SPCL under Section 29A of A&C Act, 1996 was dismissed by Delhi High Court vide Order dated 30 May 2023. Aggrieved by the order, SPCL has preferred SLP bearing no. 17877 of 2023 before the Hon'ble Supreme Court of India. Pleadings are completed. Matter is listed for final arguments on 15 July 2024.
6 An application under Section 9 of Insolvency and Bankruptcy Code was filed by SPCL against the Company to initiate Corporate Insolvency Resolution Process (CIRP) under the IBC Code before National Company Law Tribunal, New Delhi. The Hon'ble Tribunal has vide order dated 16 November 2022 dismissed the petition filed by SPCL. SPCL had filed an appeal against the said order before the Hon'ble National Company Law Appellate Tribunal. The next date of hearing is 10 July 2024.
7 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 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. The award was reserved on 02 September 2023 and final order is awaited.
8 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. Pursuant to that, Ion Exchange India Limited had filed application under Section 11 . 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. The Tribunal vide its order dated 07 July 2022, has held that the Section 16 application be kept pending till the filing of Statement of Defence and conclusion of evidence of both the Parties. Pleadings have completed in the matter. The arbitral award was passed on 01 December 2023. An appeal challenging the award has been filed before Patiala House Court vide OMP (Comm) No. 57 of 2024. The next date of hearing for the same is 03 September 2024.
9 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.
10 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. Issues have been framed and Value line has filed its Affidavit of Evidence. It is currently listed for Claimant's arguments. The order is reserved for 05 June 2024.
11 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 lakhs 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.
12 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 on 18 June 2024.
13 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 02 July 2024.
14 A Suo Moto Public Interest Litigation ('PIL') has been registered before Hon'ble Bombay High Court on 27 August 2014 with regards to the occupational 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.
15 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 Rs 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 appointed by the Court has submitted its report. The matter is now fixed for filing objection on the said report. Next date of hearing is 19 June 2024.
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.
3. i) Direct tax matters:-
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 department has filed appeals against the ITAT Order for AY 2012-13 to 2017-18, which are yet to be admitted by the HC. Currently, the Company has not received any hearing 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 2009-10, the Company has filed rectification application under section 154 against demand of ' 14.96 lakhs for not giving the credit of advance tax and self-assessment tax of merged entity, which is currently pending for disposal.
5 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, the Honourable CIT (Appeals) in its order dated 13th September 2023 has decided the matter in Company's favour, subject to verification of the records after considering the provisions of section 115BAA(3) of the Income- tax Act, 1961, by the Assessing Officer, 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.
6 For AY 2022-23, the Company has filed rectification application under section 154 against assessment order u/s 143(3) of the Income Tax Act, 1961 for certain addition/disallowance aggregating to ' 27.72 lakhs and resultant tax demand of ' 7.53 lakhs, which is currently pending for 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.
ii) Indirect tax matters :-
1 The Company had 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.
2 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 of 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 Tribunal on 10 April 2023, that is 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 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 and passed the orders on 03.04.2018 providing a mechanism for computation of the compensation amounts. 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 13.11.2020 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. Also, aggrieved by the APTEL Order No. 264 of 2018 dated 13.11.2020, MSEDCL preferred a Civil Appeal No. 1805 of 2021 on 12.03.2021 in the Hon'ble Supreme Court of India.
MERC pronounced the order on 16.11.2021 in Case No. 240 of 2020 directing RPL 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. Aggrieved by MERC Order dated 16.11.2022, RPL filed an appeal vide Appeal No. 216 of 2023 in APTEL to set aside Order passed by MERC in case no 240 of 2020RPL has also filed Interim Application in Case No 240/2021 vide 153/MP/2021 praying MERC for directing MSEDCL to release 75% payment as interim measure, which was also dismissed by MERC stating matter is sub-judiced in 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 14.02.2022 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). The Supreme Court vide order dated 27 March 2023 in Civil Appeal No. 1805/2021 disposed off the appeal 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 which was dismissed on 20 February 2024. An appeal has also been filed by the Company against the order dated 06 February 2023 before APTEL, wherein vide order dated 06 October 2023 APTEL has partially allowed the appeal of the Company and remanded the matter to MERC for fresh adjudication. Aggrieved by the said order, the Company has preferred a Civil Appeal before the Hon'ble Supreme Court (Civil Appeal No. 8232 of 2023) challenging the order of APTEL dated 06 October 2023. In the hearing held on 27 February 2024 before the Registrar Court of the Hon'ble Supreme Court, Ld. Registrar granted 4 weeks' time to MSEDCL for filing of counter affidavit. MSEDCL filed its reply on 05 March 2024. Rejoinder to be filed by RPL. The matter is listed for hearing on 22 July 2024.
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. The APTEL vide order dated 01 September 2023 condoned the delay in filing the reply and rejoinder in the matter. APTEL further allowed BHEL's Review Petition inter alia on the grounds that Order dated 18.12.2019 was passed in violation of the principles of natural justice. APTEL directed that Appeal No. 35 of 2019 filed by RPL, which is in the list of finals in Court 2 and would be taken up in its own turn. 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. APTEL vide order dated 06 February 2024 had allowed to recover the penalty from MSEDCL amounting to ' 39.77 Cr imposed by SECL for Short lifting of FSA Coal along with interest. Company has also filed an Application before the Hon'ble APTEL seeking clarification from the Hon'ble APTEL for payment of late payment surcharge on above amount as per the terms of PPA instead of Carrying Cost. Hon'ble APTEL granted four weeks' time to MSEDCL to file reply. MSEDCL filed the reply on 01 April 2024. Company is in the process of filing the rejoinder. Matter is listed to be heard on 12 July 2024.
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 before 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 18 July 2024.
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. During the hearing dated, the Hon'ble Tribunal was directed that Appeal No. 169 of 2023 filed by MERC in case of Unit 1 would be tagged with the APTEL Appeal No. 422 of 2022 (DFR 459/2021) filed by RPL in case of Unit 4.. The order has been reserved for 31 May 2024.
9 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 and expenses incurred towards fly ash transportation as Change in Law. Next date of hearing is yet to be notified.
10 The Company had filed a petition before the Ld. Maharashtra State Electricity Regulatory Commission for compensation on account of mandatory use of washed coal by Company's Amravati Power Plant impacting revenues and costs related to procurement of coal by the Company. MERC had disallowed claims of the Company. An Appeal has been filed by the Company against MERC Order. The next date of the hearing is to be intimated.
11 The Company has filed petition in MERC seeking compensation on account of "change in law" events pertaining to imposition of Forest Cess on coal lifted from Gevra Coal Mines and lifting of coal through RCR mode. MERC reserved the matter for order and granted 15 days' time to the parties to file the written submissions.
12 Appeal No. 382 of 2022 (DFR 387/2022) has been filed by the Company against MERC order seeking the following relief:-
(a) Damages for Inordinate delay in making payments and default in complying with the material obligations under
the Power Purchase Agreements executed between the parties. On account of the said default, the Appellant could not procure coal and operate the power plant to its optimum capacity to recover the full Capacity Charges; and
(b) Amounts deducted/short payments from Capacity Charges due to alleged over-injection during FY 2013-14 to July 2016. Next date of hearing 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 500300/11/14/06/00000170 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 11 September 2024.
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 enumerated in note 34. Company has filed SLP No. 21251/2023 before Hon'ble Supreme Court of India challenging the order passed by Hon'ble High Court, Nagpur Bench in a Writ Petition which was partly allowed. The matter is likely to be listed on 23 July 2024. 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 Respondent. The next date of hearing in the matter is 18 October 2024.
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 Respondent. The next date of hearing in the matter is 03 July 2024.
5 A consumer complaint under Section 21 of the Consumer Protection Act, has been filed by the Company (Consumer Case No. 2236/2018) against United India Insurance Company Limited before National Consumer Disputes Redressal Commission (NCDRC) praying for UIICL to be held deficient in providing services to RattanIndia Power Limited, (ii) the repudiation of the claim under Large Risk Insurance Policy No. 500300/11/14/06/30000170 is without any basis and is invalid and (iii) the claim amount of ' 608.67 lakhs along with Interest .The next date of hearing in the matter is 11 September 2024.
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 ' 24,878.68 lakhs (31 March 2023 : ' 24,719.78 lakhs) which are secured by pledge on its fixed deposits of ' 12,441.84 lakhs (31 March 2023 : ' 5,195.30 lakhs) as margin for issuance of bank guarantees.
34 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 set aside the order of Bombay High Court holding that the Company is liable to pay IRC at rate of ' 1 lakh/hectare. Aggrieved of the SC order, the Company had filed a review petition before the SC bench on 12 February 2023, that has been dismissed by the Hon'ble SC vide order dated 10 August 2023. Consequently, during the year, the management had assessed and accounted for the financial impact of the aforesaid matter in these standalone financial statements, as per applicable Indian Accounting Standards and believes no further adjustment is necessary.
35 Estimated amount of contracts remaining to be executed on account of capital and other commitments towards the project not provided for: ' 17,486.58 lakhs (31 March 2023: ' 31,201.30 lakhs) - advances made there against ' 308.83 lakhs (31 March 2023: ' 135.51 lakhs).
36 (i) 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.
(ii) 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 2024 and 31 March 2023.
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 ' 79.59 lakhs (31 March 2023: ' 64.53 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.
ii) Risk management
The Company's risk management activities are subject to the management direction and control under the framework of Risk Management Policy as approved by the Board of Directors of the Company. The Management ensures appropriate risk governance framework for the Company through appropriate policies and procedures and the risks are identified, measured and managed in accordance with the Company's policies and risk objectives.
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 Company's financial liabilities (other than derivatives) comprises mainly of borrowings including interest accrual, leases, trade, capital and other payables. The Company's financial assets (other than derivatives) comprise mainly of investments, cash and cash equivalents, other balances with banks, loans, trade and other receivables.
A) Credit risk
Credit risk is the risk that a counterparty fails to discharge an obligation to the Company. Credit risk arises from cash and cash equivalents, trade receivables, investments carried at amortised cost and deposits with banks and financial institutions. The Company's maximum exposure to credit risk is limited to the carrying amount of financial assets recognised at 31 March 2024 and 31 March 2023, as summarised below:
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 counter party and to be recovered under the power purchase agreement and also have interest clause on delayed payments. 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.
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.
55 The Company had non-current investment of ' 121,181.77 lakhs (net of impairment provision of ' 181,439.79 lakhs) and loans under 'current financial assets' of ' 3,332.64 lakhs (net of impairment provision of ' 4,334.02 lakhs) recoverable from Sinnar Thermal Power Limited ('STPL'), an erstwhile wholly-owned subsidiary company upto 18 January 2024. All 5 units of STPL relating to power generation projects had been commissioned, but were 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") had 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 endeavor to start power generation from 2 out of its 5 units at the earliest possible. STPL had been in discussions with various stake holders to ensure that the plant could be started at the earliest possible and to ensure steps are taken for the long- term resolution.
During the previous year, the Hon'ble National Company Law Tribunal, New Delhi (the 'NCLT') vide order dated 19 September 2022, had admitted an application for insolvency filed by an operational creditor against STPL and had 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, had directed the Interim Resolution Professional ('the IRP') to abstain from taking any steps and had allowed STPL to participate further with the Ministry of Power in continuation of the earlier meetings/ discussions for making the plant operational. During last few months, while the STPL's management had been actively engaging with the lenders for restructuring of overdue debts and for reaching consensus on alternate options post the non-acceptance of the earlier financial proposal made by STPL management, the Hon'ble NCLAT vide Order dated 19 January 2024 has dismissed STPL's appeal. Pursuant to the dismissal of appeal, Corporate lnsolvency Resolution Process (CIRP) under the lnsolvency and Bankruptcy Code 2016 ('IBC') were reinitiated. In accordance with the provisions of IBC, the powers of the Board of Directors of STPL stand suspended and the management of STPL presently vests with the Resolution Professional ('RP') appointed under the provisions of IBC. Accordingly, STPL has ceased to be a subsidiary of the Company with effect from 19 January 2024.
In view of uncertainties associated with the outcome of CIRP and as a matter of prudence, the Company has recorded full impairment of its investment [Gross investment amount: ' 302,621.55 lakhs; impairment provision already recorded in earlier years: ' 181,439.79 lakhs; Balance impairment recorded during the current year: ' 121,181.76 lakhs] in and write off of loans extended to STPL [Gross amount of loans extended: ' 8,181.69 lakhs; impairment provision already recorded in earlier years: ' 4,849.05 lakhs; balance loss recorded during the current year: ' 3,332.64 lakhs], resulting in accounting for aggregate impairment/ write off expense of ' 124,514.40 lakhs during the current year, that has been presented as an exceptional item in these standalone financial statements.
56 Revenue from operations on account of Change in Law events in terms of PPA is accounted for by the Company based on the best estimates, favourable and covered 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 did 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 did 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 did not have any charges or satisfaction which is yet to be registered with Registrar of Companies 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) Rules 2017.
59 The Ministry of Corporate Affairs (MCA) has prescribed a new requirement for companies under the proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 inserted by the Companies (Accounts) Amendment Rules 2021 requiring companies, which uses accounting software for maintaining its books of account, shall use only such accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in the books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled.
The Company has used accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software, except that audit trail (edit log) was not enabled for direct changes to the underlying database. Further, no instance of audit trail feature being tampered with was noted in respect of the software.
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.
For Walker Chandiok & Co LLP For and on behalf of the Board of Directors
Chartered Accountants
Firm Registration No.: 001076N/ N500013
Deepak Mittal Rajiv Rattan Himanshu Mathur
Partner Executive Chairman Whole Time Director
Membership No. : 503843 DIN: 00010849 DIN: 03077198
Place: Gurugram Place: Dubai Place: New Delhi
Date: 22 May 2024 Date: 22 May 2024 Date: 22 May 2024
Manish Ratnakar Chitnis Gaurav Toshkhani
Chief Financial Officer Company Secretary
PAN: AAKPC6703C FCS- 7940
Place: Mumbai Place: New Delhi
Date: 22 May 2024 Date: 22 May 2024
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