2.14 Provisions, contingent liabilities and contingent assets:
Provisions
A provision is recognized when the Company has a present obligation as a result of past events and it is probable that
an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation
at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When
a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the
present value of those cash flows (when the effect of the time value of money is material).
Contingent liability
A possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence
or non-occurrence of one or more uncertain future events not wholly within the control of the enterprise are disclosed
as contingent liability and not provided for. Such liability is not disclosed if the possibility of outflow of resources
is remote.
Contingent assets
A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity.
Contingent assets are not recognised but disclosed only when an inflow of economic benefits is probable.
2.15 Financial instruments:
Financial assets
i) Classification of financial assets (including debt instruments)
The Company classifies its financial assets in the following measurement categories:
- those to be measured subsequently at fair value (either through other comprehensive income, or through
profit or loss), and
- those measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets and the contractual
cash flow characteristics of the financial assets.
ii) Initial measurement
Financial assets (excluding trade receivables) are initially measured at fair value. Transaction costs that are directly
attributable to the acquisition (other than financial assets at fair value through profit or loss) are added to the fair
value of the financial assets, as appropriate, on initial recognition. Transaction costs that are directly attributable to
the acquisition or issue of financial assets at fair value through profit or loss are recognised immediately in profit or
loss. Trade receivables which do not contain a significant financing component are measured at transaction price.
iii) Subsequent measurement
There are three measurement categories into which the debt instruments can be classified:
• Amortised cost
Assets that are held for collection of contractual cash flows where those cash flows represent solely
payments of principal and interest are measured at amortised cost. Interest income from these financial
assets is included in finance income using the effective interest rate method. Any gain or loss arising on
derecognition is recognised directly in profit or loss and presented in other gains/(losses). Impairment losses
are presented as separate line item in the statement of profit and loss.
• Fair value through other comprehensive income (FVOCI)
Assets that are held for collection of contractual cash flows and for selling the financial assets, where the
assets’ cash flows represent solely payments of principal and interest, are measured at fair value through
other comprehensive income (FVOCI). Movements in the carrying amount are taken through OCI, except
for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses
which are recognised in profit and loss. When the financial asset is derecognised, the cumulative gain
or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in other
gains / (losses). Interest income from these financial assets is included in other income using the effective
interest rate method. Foreign exchange gains and losses are presented in other gains and losses and
impairment expenses in other expenses. The Company currently does not have any debt instruments which
are measured at FVOCI.
• Fair value through profit or loss (FVTPL)
Assets that do not meet the criteria for amortised cost or FVOCI are measured at fair value through profit or
loss. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss is
recognised in profit or loss and presented net in the statement of profit and loss within other gains / (losses)
in the period in which it arises. Net gains / (losses) from these financial assets is included in other income.
iv) Impairment of financial assets
The Company assesses on a forward-looking basis the expected credit losses associated with its financial assets
carried at amortised cost. The impairment methodology applied depends on whether there has been a significant
increase in credit risk.
For trade receivables or any contractual right to receive cash or another financial asset that result from transactions
that are within the scope of Ind AS 115, the Company follows ‘simplified approach’ for recognition of impairment
loss and always measures the loss allowance at an amount equal to lifetime expected credit losses to measure the
expected credit losses, trade receivables have been grouped based on days past due. The Company has segmented
the customers based on shared risk attributes, i.e. Government Consumers / Non-Government consumers, Status
of Consumers i.e. Live consumers / Disconnected consumers and Security deposits provided by the Consumer.
v) Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is
primarily derecognised (i.e. removed from the Company’s balance sheet) when:
- The rights to receive cash flows from the asset have expired, or
- The Company has transferred its rights to receive cash flows from the asset.
When the entity has transferred an asset, the Company evaluates whether it has transferred substantially all
risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognised. Where
the entity has not transferred substantially all risks and rewards of ownership of the financial asset, the financial
asset is not derecognised.
Where the entity has neither transferred a financial asset nor retains substantially all risks and rewards of ownership
of financial asset, the financial asset is derecognised if the Company has not retained control over the financial
asset. Where the Company retains control of the financial asset, the asset is continued to be recognised to the
extent of continuing involvement in the financial asset.
vi) Income recognition
Dividend is accounted when the right to receive payment is established.
Interest income on financial assets at amortised cost is calculated using the effective interest method is recognised
in the statement of profit and loss as part of other income.
Interest on overdue receivables of energy bills and claims including insurance claims, coal cost variation and
other claims etc. are accounted when there is a certainty of recovery.
vii) Derivative and Hedge accounting
The Company uses derivative financial instruments such as forward contacts to hedge its risks associated with
foreign exchange fluctuation and price risk movement. Risks associated with fluctuation in the price of the fuel
are minimized by undertaking appropriate derivative instruments.
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently
re-measured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in the
statement of profit and loss immediately unless the derivative is designated and effective as a hedging instrument,
in which event the timing of the recognition in statement of profit and loss depends on the nature of the hedging
relationship and nature of hedged items.
Derivative financial instruments that hedges commodity price risk associated with highly probable forecasted
transactions are designated as cash flow hedges and measured at fair value. The effective portion of changes in the
fair value of derivatives that are designated and qualify as cash flow hedges is recognised in other comprehensive
income and accumulated under the heading cash flow hedging reserve within equity, and re-classified to the
statement of profit and loss in the period corresponding to the occurrence of the forecasted transactions. The
gain or loss relating to the ineffective portion is recognised immediately in the statement of profit and loss.
Hedge effectiveness is tested both at the inception of the hedge relationship as well as on an ongoing basis.
The Company documents the economic relationship between hedging instruments and hedged items including
whether the changes in the cash flows of the hedging instrument are expected to offset changes in cash flows
of hedged items. Hedge accounting is discontinued when the hedging instrument expires or when it is sold,
terminated or exercised or no longer qualifies for hedge accounting.
Financial liabilities
i) Classification
All the Company’s financial liabilities are measured at amortized cost.
ii) Initial measurement
Financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the issue of
financial liabilities are deducted from the fair value of the financial liabilities, as appropriate, on initial recognition.
iii) Subsequent measurement
Financial liabilities are subsequently measured at amortised cost using the Effective Interest Rate Method.
The Effective Interest Rate Method is a method of calculating the amortised cost of a financial liability and of
allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts
estimated future cash payments (including transaction costs and other premiums or discounts) through the
expected life of the financial liability.
iv) Derecognition of financial liabilities
The Company derecognises financial liabilities when, and only when, the Company’s obligations are discharged,
cancelled or waived off or have expired. An exchange between the Company and the lender of debt instruments
with substantially different terms is accounted for as an extinguishment of the original financial liability and
the recognition of a new financial liability. The difference between the carrying amount of the financial liability
derecognised and the consideration paid and payable is recognised in profit or loss.
v) Financial guarantee contracts
Financial guarantee contracts issued by the Company are those contracts that require a payment to be made
to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in
accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability
at fair value. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as
per impairment requirements of Ind AS 109 and the amount recognised less cumulative amortisation.
2.16 Contributed equity:
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of
its liabilities. Transaction costs of an equity transaction shall be accounted for in other equity.
2.17 Leases:
Company as a lessee
Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is
available for use by the Company. Contracts may contain both lease and non-lease components.
Lease liabilities
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the
net present value of the lease payments.
The lease payments include fixed payments (including in substance fixed payments) less any lease incentives
receivable, variable lease payments that depend on an index or a rate and amounts expected to be paid under residual
value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be
exercised by the Company and payments of penalties for terminating the lease, if the lease term reflects the Company
exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised
as expenses in the period in which the event or condition that triggers the payment occurs. Lease payments to be
made under reasonably certain extension options are also included in the measurement of the liability.
The lease payments are discounted using the lessee’s incremental borrowing rate. Lease payments are allocated
between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce
a constant periodic rate of interest on the remaining balance of the liability for each period.
Right-of-use assets
Right-of-use assets are measured at cost comprising the amount of the initial measurement of lease liability and lease
payments made before the commencement date.
Right-of-use assets are depreciated over the lease term on a straight-line basis. Right-of-use assets are measured
at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease
liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, and lease payments made
at or before the commencement date less any lease incentives received.
Right-of-use assets are depreciated over the asset’s lease term on a straight-line basis.
Short term leases and leases of low value assets
Payments associated with short-term leases of equipment and all leases of low-value assets are recognised on a
straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less.
Low-value assets comprise small items of office equipment including IT equipment.
2.18 Repurchase Arrangements:
A repurchase agreement is a contract in which an Company sells an asset and also promises or has the option (either
in the same contract or in another contract) to repurchase the asset. The repurchased asset may be the asset that
was originally sold to the customer, an asset that is substantially the same as that asset, or another asset of which
the asset that was originally sold is a component.
2.19 Amount presented and rounding off:
All amounts in the financial statements and notes have been presented in I Crore (except for share data) rounded to
two decimals as per the requirement of Schedule III of the Companies Act, 2013, unless otherwise stated. Figures
below I 50,000 are denoted by ‘*’.
2.20 Government grants:
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant
will be received and the Company will comply with all the attached conditions.
Government grants relating to income are recognised in profit or loss on a systematic basis over the periods in which
the Company recognises as expenses the related costs for which the grants are intended to compensate. Government
grants relating to purchase of property, plant and equipment whose primary condition is that the Company should
purchase, construct or otherwise acquire property, plant and equipment are recognised as deferred revenue in
the balance sheet and transferred to profit or loss on a systematic and rational basis over the useful lives of the
related assets.
2.21 Investment properties:
Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the
Company, is classified as investment property. Investment property is measured initially at its cost, including related
transaction costs and where applicable borrowing costs. Subsequent expenditure is capitalised to the asset’s carrying
amount only when it is probable that future economic benefits associated with the expenditure will flow to the Company
and the cost of the item can be measured reliably.
An investment property is derecognised upon disposal or when the investment property is permanently withdrawn
from its current use and no future economic benefits are expected from the disposal. Any gain or loss arising on
derecognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount
of the asset) is included in profit or loss in the period in which the property is derecognised.
2.22 Intangible assets - acquired:
Computer software is carried at cost less accumulated amortisation and accumulated impairment losses, if any.
Amortisation is recognised on a straight-line basis over its estimated useful life of 3 years. The estimated useful life and
amortisation method are reviewed at the end of each reporting period and the effect of any changes in such estimate
is accounted for on a prospective basis.
Expenditure incurred on acquisition of intangible assets which are not ready to use at the reporting date is disclosed
under “Intangible assets under development”.
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from its use
or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between
the net disposal proceeds and the carrying amount of the asset, are recognised in profit or loss when the asset
is derecognised.
In the course of applying the policies outlined in all notes under note 2 above, the management of the Company is required
to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily
apparent from other sources. The estimates and associated assumptions are based on historical experience and other
factors that are considered to be relevant. Actual results may differ from these estimates.
Such estimates and associated assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the
revision and future period, if the revision affects current and future periods.
3.1 Revenue recognition:
The Company has recognised revenue (including the adjustment in respect of unapproved FPPPA claims and other
true up adjustment claims) as per the applicable tariff regulations / tariff orders, management’s probability estimate and
the past trends of approval. The company has not recognized those truing up adjustment claims which are disputed
and for which the company is in appeal with regulatory authorities. These are recognised on receipt of final orders
of respective regulatory authorities [Refer note 35 & 43]. However, for certain Disputed cases [Refer note 43(a)(2)(i)],
where the Company believes it has strong case, the Company continues to recognise those truing up claims.
3.2 Property, plant and equipment:
(i) Service concession arrangements
The Company has assessed applicability of Appendix D of Ind AS 115 “Service Concession Arrangements”
with respect to its Property, plant and equipment. In assessing the applicability, the Company has exercised
judgement in relation to the provisions of the Electricity Act, 2003, conditions provided under transmission and
distribution license and / or agreements. Further, the Company has ability to pledge the assets pursuant to which
it has control and ability to direct the use of assets. Based on such assessment, it has concluded that Appendix
D of Ind AS 115 is not applicable.
(ii) 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 property, plant and equipment. Further, the cash flow projections are based on
estimates and assumptions relating to expected demand, future price of fuel, expected tariff rates for electricity,
discount rate, exchange rate and electricity market scenario, based on past trends and the current and likely
future state of the industry etc. which are considered reasonable by the Management. Any reasonable possible
change in the underlying assumptions would not lead to a material change to the amount of impairment. [Refer
note 41(1)].
3.3 Impairment of investments in subsidiaries:
At the end of each reporting period, the Company reviews the carrying amounts of its investments in subsidiaries
when there is an indication for impairment. If the recoverable amount is less than its carrying amount, the impairment
loss is accounted for. [Refer note 41(2)]
Impairment of loans
The Company applies the Ind AS 109 simplified approach to measure expected credit losses which uses a lifetime
expected loss allowance for loans granted by the Company to its subsidiaries.
3.4 Taxes:
Significant management judgement is required to determine the amount of deferred tax assets and deferred tax
liabilities 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 from
the Income Tax Act, 1961.
Deferred tax assets are recognised for unused tax credits to the extent that it is probable that taxable profit will be
available against which the losses can be utilised. Management judgement is required to determine the amount of
deferred tax assets for unused tax credits that can be recognised, based upon the likely timing and the level of future
taxable profits [Refer note 42(d)]
3.5 Contingencies:
Contingent liabilities
In the normal course of business, contingent liabilities may arise from litigation and other claims against the Company.
Potential liabilities that are possible but not probable of crystallising or are very difficult to quantify reliably are treated
as contingent liabilities. Such liabilities are disclosed in the notes but are not recognised. Potential liabilities that
are remote are neither recognized nor disclosed as contingent liability. The management judgement is involved in
classification under ‘remote’, ‘possible’ or ‘probable’ which is carried out based on expert advice, past judgements,
experiences etc. [Refer note 44(a)]
3.6 Employee benefit plans:
Defined benefit plans and other long-term employee benefits
The present value of obligations under defined benefit plan and other long term employment benefits is determined
using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual
development in the future. These include the determination of the discount rate, future salary escalations, attrition rate
and mortality rates. Due to the complexities involved in the valuation and its long-term nature, these obligations are
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 present value of defined benefit obligation are
disclosed in note 48.2.
The fair value of the Company’s investment property has been arrived based on a valuation report by external
independent valuer, who is a registered valuer as defined under rule 2 of Companies (Registered valuers and valuation)
Rules 2017. Valuation is based on government rates, market research, market trend and comparable values as
considered appropriate.
3 The Company has no restrictions on the realisability or the remittance of income and proceeds of disposal of its
investment properties. There are no contractual obligations to purchase, construct or develop such investment
properties or for repairs, maintenance and enhancements thereof.
4 The Company has not revalued its investment property during the current or previous year.
5 The title deeds of investment property are held in the name of the Company as at March 31, 2025 and March 31, 2024.
6 The Company had leased the part of freehold land with effect from January 15, 2021 as disclosed above to Torrent
Electricals Limited (formerly known as TCL Cables Private Limited / Torrent Electricals Private Limited) for the lease
term of 10 years.
Footnotes:
1 During the current and previous year, Company has given corporate guarantees in favour of lender of subsidiary
company and has recognised fair value of corporate guarantee as equity investment in Torrent Saurya Urja 2
Private Limited.
2 During the year, Company has given corporate guarantees in favour of lender of step down subsidiary company,
Airpower Windfarms Private Limited (AWPL), and has recognised fair value of corporate guarantee as equity investment
in Torrent Green Energy Private Limited (holding company of AWPL), subsidiary company.
3 On March 20, 2024, the Company had entered into a Share Purchase Agreement (SPA) with PFC Consulting Limited (the
Seller) through competitive bidding process for the acquisition of 100% of the share capital of Solapur Transmission
Limited (STL), which will develop & operate transmission line and substation in Solapur, situated in the state of
Maharashtra. Pursuant to the SPA, STL has become wholly owned subsidiary of the Company w.e.f. March 20, 2024.
4 The Board of Directors of the Company at its meeting dated February 04, 2025, has approved transfer of its equity
investments in its 34 subsidiaries to Torrent Green Energy Private Limited (TGEPL), which is a wholly-owned subsidiary
of the Company. Considering the transfer is between Holding Company and its Wholly Owned Subsidiary, it is
transferred at the cost. The Company has transferred the said equity shares in March 2025. The total consideration
for this transfer was to I 1,365.93 Crore.
5 During the current and previous years, the Company has provided corporate guarantees to the lenders of various
subsidiary companies. The fair value of these guarantees initially has been recognised as equity investments in
the respective subsidiaries amounting to I 57.04 Crore. Pursuant to the transfer (Refer the note above) of its equity
investments in such subsidiaries to Torrent Green Energy Private Limited, the fair value of these corporate guarantees
has been considered as an equity investment in Torrent Green Energy Private Limited.
6 The Board of Directors of the Company at its meeting dated July 30, 2024 has approved sale of 8,40,00,000 Equity
Shares i.e. 100% of its shareholding / investment in Torrent Electricals Limited (TEL) (formerly known as Torrent
Electricals Private Limited / TCL Cables Private Limited) to Torrent Investments Limited (TIL) (formerly known as Torrent
Investments Private Limited), the Holding Company, at a consideration of I 85.00 Crore. On October 17, 2024, Share
Purchase Agreement (SPA) has been executed amongst the Company, TIL and TEL and the Company has transferred
its equity investments to TIL accordingly.
2 On December 05, 2024, the Fund Raising Committee of the Board in their meeting has approved the issue and allotted
2,32,86,759 Equity Shares of I 10 each to eligible qualified institutional buyers (QIB) at the issue price of I 1,503.00
per Equity Share (including a premium of I 1,493.00 per Equity Share) via Qualified Institutions Placement (QIP) in
accordance with the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (‘the Regulations’),
aggregating to approximately I 3,500.00 Crore.
Pursuant to allotment, the paid up share capital of the Company increased from I 480.62 Crore comprising 48,06,16,784
Equity Shares to I 503.90 Crore comprising 50,39,03,543 Equity Shares. The transaction costs amounting I 39.18
Crore (net of tax impact of I 21.04 Crore) in relation to QIP has been accounted for as reduction from equity under
securities premium.
The funds raised by the Company pursuant to QIP have been fully utilized for the purpose mentioned in the objects
of the issue in the offer document. Details of utilisation of QIP proceeds are given below:
1 Securities premium:
Securities premium reflects issuance of the shares by the Company at a premium, whether for cash or otherwise i.e. a
sum equal to the aggregate amount of the premium received on shares is transferred to a securities premium account
as per the provisions of the Companies Act, 2013. The reserve can be utilised in accordance with the provisions of
the Act.
2 Debenture redemption reserve:
The Company was required to create a Debenture Redemption Reserve (DRR) out of the profits which are available
for payment of dividend for the purpose of redemption of debentures. Pursuant to Companies (Share Capital and
Debentures) Amendment Rules, 2019 dated August 16, 2019, the Company is not required to create DRR. Accordingly,
the Company has not created DRR during the year and DRR created till previous years has been transferred to general
reserve on redemption of debentures.
3 Contingency reserve:
As per the provisions of GERC MYT Regulations read with Tariff orders passed by GERC, the Company being a
Distribution Licensee makes an appropriation to the contingency reserve to meet with certain exigencies. Investments
in Bonds issued by Government of India have been made against such reserve.
4 Special reserve:
As per MYT Regulations (2007), the Company has created a reserve in FY 2011-12 and FY 2012-13, which represents
one third amount of controllable gain shall be retained in a special reserve by the Generating Company or Licensee
for the purpose of absorbing the impact of any future losses on account of controllable factors.
5 General reserve:
General reserve is used from time to time to transfer profits from retained earnings for appropriation purposes.
The general reserve is created by a transfer from one component of equity to another and is not an item of other
comprehensive income.
1 DGEN Power Plant
Net carrying value of Property, plant & equipment (“PPE”) (including Capital work in progress) and Right-of-Use
assets (“ROU”) as at March 31, 2025 includes I 1,176.70 Crore (March 31, 2024: I 1,237.82 Crore) pertaining to 1,200
MW DGEN Mega Power Project located at Dahej, Gujarat including its Transmission Line (“DGEN”). DGEN started
commercial operations with effect from November 2014 and thereafter had operated only intermittently / partially
including the current year due to various factors such as unavailability of domestic gas, high prices of imported gas
and non-availability of power selling arrangement.
In view of the above and given the current economic environment, the Company had carried out an impairment
assessment of DGEN as at March 31, 2025 by considering the recoverable amount based on value-in-use of DGEN
in accordance with Indian Accounting Standard 36 ‘Impairment of Assets’. Value-in-use is determined considering a
discount rate of 14% (March 31, 2024 - 15.50%) and cash flow projections over a period of 15 years (March 31, 2024
- 16 years), being the balance useful life of DGEN in terms of Central Electricity Regulatory Commission (Terms and
Conditions of Tariff) Regulations, 2024 on the basis that the Company expects to supply power in the future. Based on
the assessment, recoverable value of PPE by using value-in-use is I 1,325.94 Crore (March 31, 2024: I 1,307.00 Crore)
which is higher than the carrying amount of PPE of I 1,176.70 Crore (March 31, 2024: I 1,237.82 Crore) and accordingly
no additional impairment loss is required as at March 31, 2025. The management has conducted sensitivity analysis
on impairment test of the value in use of DGEN. The management believes that reasonable possible change in key
assumptions would not materially impact the impairment assessment as at March 31, 2025.
During the earlier years, the Company has provided for impairment loss of I 2,300.00 Crore (March 31, 2024: I 2,300.00
Crore).
Assessment of ‘value-in-use’ involves several key assumptions including expected demand, future price of fuel, expected
tariff rates for electricity, discount rate, exchange rate and electricity market scenario, based on past trends and the
current and likely future state of the industry. Management reviews such assumptions periodically to factor updated
information based on events or changes in circumstances in order to make fresh assessment of impairment, if any.
2 Investment in Torrent Pipavav Generation Limited
Torrent Pipavav Generation Limited (“TPGL”), a subsidiary of the Company and a joint venture between the Company
and Gujarat Power Corporation Limited (“GPCL”), had made payments in nature of compensation for acquisition of
private land as per the court orders in Amreli, Gujarat for the purpose of developing a coal-based power plant of
1,000 MW. Due to non-availability of fuel linkage, Government of Gujarat (“GoG”) vide its letter dated December 06,
2017, communicated that the said project may not be developed and accordingly, the joint venture is intended to be
dissolved. Further, as per the said letter, the cost of land would be reimbursed after the disposal of land.
During the current year, TPGL has received amount of I 103.18 Crore from GPCL towards the cost incurred for
acquisition of aforesaid land and other expenses incurred in prior years. Considering the above facts, assets and
liabilities are reflected at their net realisable values or cost whichever is lower and the financial statements of TPGL
for year ended March 31, 2025 have been prepared on a non - going concern basis.
Considering the above facts, Management has reversed the impairment provision I 7.15 Crore of as at March 31, 2025
for Carrying amount of equity is of I 35.95 Crore (net of impairment I 11.55 Crore after above reversal).
The tax rate used for the reconciliations given above is the actual / enacted corporate tax rate payable by corporate
entities in India on taxable profits under the Indian tax law.
# During the current year, the Company had received Income tax refunds (including interest income) of I 427.00 Crore
pertaining to earlier years on account of various favourable tax orders and as a result of which its accumulated
minimum alternative tax (MAT) credit balance as per book has utilised substantially. The Management has made an
assessment of the amount of taxable income that would be available in future to offset the accumulated MAT credit
entitlement available to the Company in the foreseeable future.
In view of the same, the management has carried out detailed assessment of deferred tax on temporary differences
that are expected to reverse during the period in which the Company would be under the new tax regime and
accordingly applied the new income tax rate of 25.168% as compared to the existing income tax rate of 34.944%
for measuring the said deferred tax in accordance with the requirements of Ind AS 12 - ‘Income Taxes’. This has
resulted in reversal of deferred tax liabilities by I 637.09 Crore during the year.
The Company has evaluated the impact of Supreme Court (“SC”) judgement dated February 28, 2019 in the
case of Regional Provident Fund Commissioner (II) West Bengal v/s Vivekananda Vidyamandir and Others,
in relation to exclusion of certain allowances from the definition of “basic wages” of the relevant employees
for the purposes of determining contribution to Provident Fund (“PF”) under the Employees’ Provident Fund &
Miscellaneous Provisions Act, 1952. There are interpretation issues relating to the said SC judgement. Based
on such evaluation, management has concluded that effect of the aforesaid judgement on the Company is not
material and accordingly, no provision has been made in the Standalone financial statements.
Footnotes:
1 Management believes that its position on the aforesaid direct and indirect tax demands and other claims
against the company will likely be upheld in the appellate process and accordingly no provision has been
made in the standalone financial statements for such demands.
2 In respect of the above, the expected outflow will be determined at the time of final resolution of the dispute
/ matters. No reimbursement is expected.
3 Break up of other claims as under:
(c) During the year ended March 31, 2025, the Company has not advanced or loaned or invested funds (either borrowed
funds or share premium or kind of funds) to any other person or entity, including foreign entities (Intermediaries) with
the understanding (whether recorded in writing or otherwise) 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
Except as detailed below, during the previous year ended March 31,2024, the Company has not advanced or loaned or
invested funds (either borrowed funds or share premium or kind of funds) to any other person or entity, including foreign
entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) 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
The Company has complied with the relevant provisions of the Companies Act, 2013 and is not violative of the
Prevention of Money-laundering Act, 2002.
During the year ended March 31, 2025 and March 31, 2024, 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.
(v) Lease asset of Shil, Mumbra and Kalwa (franchise area)
The Company has entered into a Distribution Franchise Agreement (“Agreement”) dated February 11, 2019 with
Maharashtra State Electricity Distribution Company Limited (“MSEDCL”) whereby as per the Agreement the Company
would distribute the electricity in the area of Shil, Mumbra and Kalwa in Thane District in Maharashtra (“Franchise
area”) for 20 years (effective from March 01, 2020).
As per the Agreement, the Company would purchase electricity from MSEDCL at the rate which would be derived
through mechanism as mentioned in the Agreement which is linked to the number of units purchased and would
distribute electricity to the Consumers at the tariff which has been approved by Maharashtra Electricity Regulation
Commission (MERC).
Further as per the Agreement, the Company has right to use existing assets of MSEDCL in the Franchise area provided
it shall perform all the obligations and accepts all liabilities of MSEDCL on behalf of distribution licensee in Franchise
area and MSEDCL shall not charge any rent for the use of such assets.
Considering the facts of the arrangement, the Company has the right to obtain substantially all of the economic
benefits from use of MSEDCL assets of the Franchise area and the right to direct the use of the said assets for 20
years and accordingly it would meet the definition of Lease as per Ind AS 116. Further, for distribution of electricity, the
Company would purchase power from MSEDCL for which payment would be made as per the franchise agreement
which is linked to the number of units purchased. Accordingly the payments by the Company to MSEDCL is variable
in nature and there are no fixed payments in the form of minimum purchase commitments, take or pay or any sort of
fixed charges is required to be made.
Considering the entire payment made by the Company for this arrangement is variable in nature and there would be no
lease liability required to be recognised with a corresponding right of use assets on initial recognition in accordance
with Ind AS 116 and considering non-availability of relevant observable information for lease payments, management
estimates and cost benefit analysis, total consideration payable to MSEDCL towards purchase of electricity has been
shown as ‘Electrical energy purchased’ in the Financial Statements.
Note 48: Employee Benefits Plan
48.1 Defined contribution plan
The Company has defined contribution retirement benefit plans for its employees.
The Company’s contributions to provident fund, pension scheme and employee state insurance scheme are made
to the relevant government authorities as per the prescribed rules and regulations. The Company’s superannuation
scheme for qualifying employees is administered through its various superannuation trust funds. The Company’s
contributions to the above defined contribution plans are recognised as employee benefit expenses in the statement
of profit and loss for the year in which they are due. The Company has no further obligation in respect of such plans
beyond the contributions made.
The Company’s contribution to provident, pension, superannuation funds and to employees state insurance scheme
aggregating to I 49.47 Crore (Previous year - I 46.32 Crore) has been recognised in the statement of profit and loss
under the head employee benefits expense [Refer note 37].
48.2 Defined benefit plans
(a) Gratuity
The Company operates through various gratuity trust, a plan, covering all its employees. The benefit payable is the
greater of the amount calculated as per the Payment of Gratuity Act, 1972 or the Company scheme applicable to
the employee. The benefit vests upon completion of five years of continuous service and once vested it is payable
to employees on retirement or on termination of employment. The gratuity benefits payable to the employees
are based on the tenure of employee’s service and last drawn salary at the time of leaving. The employees do
not contribute towards this plan and the full cost of providing these benefits are met by the Company. In case of
death while in service, the gratuity is payable irrespective of vesting.
The Company makes annual contribution to the gratuity schemes administered by the Life Insurance Corporation
of India through its various Gratuity Trust Funds. The liability in respect of plan is determined on the basis of an
actuarial valuation.
(b) Risk exposure to defined benefit plans
The plans typically expose the Company to actuarial risks such as: asset volatility, interest rate risk, longevity
risk and salary risk as described below:
Asset volatility
The present value of the defined benefit plan liability is calculated using a discount rate which is determined by
reference to market yields at the end of the reporting period on Indian government securities; if the return on plan
asset is below this rate, it will create a plan deficit.
Interest risk
A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an
increase in the return on the plan’s debt investments.
Longevity risk
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the
mortality of plan participants both during and after their employment. An increase in the life expectancy of the
plan participants will increase the plan’s liability.
Salary risk
The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan
participants. As such, an increase in the salary of the plan participants will increase the plan’s liability.
The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation was
carried out at March 31, 2025. The present value of the defined benefit obligation, and the related current service
cost and past service cost, were measured using the projected unit credit method.
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit
obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the
assumptions may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has
been calculated using the projected unit credit method at the end of the reporting period, which is the same as
that applied in calculating the defined benefit obligation liability recognised in the balance sheet.
(h) The weighted average duration of the gratuity plan based on average future service is 16 years (Previous year - 18
years).
(i) Expected contribution to the plan for the next annual reporting period is I 11.98 Crore (Previous year - I 24.76
Crore).
(j) Cash flow projection from the fund
Projected benefits payable in future years from the date of reporting
The Company manages its capital structure in a manner to ensure that it will be able to continue as a going concern
while optimising the return to stakeholders through the appropriate debt and equity balance.
The Company's capital structure is represented by equity (comprising equity shares, retained earnings and other
reserves as detailed in notes 23, 24) and debt (borrowings as detailed in note 25).
The Company's management reviews the capital structure of the Company on an annual basis. As part of this review,
the management considers the cost of capital and the risks associated with each class of capital. The Company's
plan is to ensure that the gearing ratio (debt equity ratio) is well within the limit of 2:1. No changes were made in the
objectives, policies or process for managing its capital during the year ended March 31, 2025 and March 31, 2024.
The Company reviews its Dividend policy from time to time.
Footnotes:
1 Debt is defined as all long term debt outstanding [including unamortised expense (net of premium)] contingent
liability pertaining to corporate / financial guarantee given (to the extent utilised) short term debt outstanding
in lieu of long term debt.
2 Total equity is defined as equity share capital all reserve (excluding revaluation reserve) deferred tax liabilities
- deferred tax assets - intangible assets - Intangible assets under development
Loan Covenants
The company has complied with financial covenants specified as per the terms of borrowing facilities.
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either
observable or unobservable and consists of the following three levels:
Level 1: Inputs are Quoted (unadjusted) market prices in active markets for identical assets or liabilities. This
includes investments in mutual funds that have quoted price.
Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement
is directly or indirectly observable. This includes unquoted floating and fixed rate borrowing and
Investment property.
Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement
is unobservable. This includes unquoted equity shares, loans, security deposits, investments in
Debentures, floating rate borrowings.
The Company’s principal financial liabilities, comprise borrowings, employee payables, security deposits from
consumers, trade and other payables. The main purpose of these financial liabilities is to finance the Company’s
operations and projects capital expenditure. The Company’s principal financial assets include loans, advances, trade
and other receivables and cash and cash equivalents that derive directly from its operations.
The Company’s activities expose it to a variety of financial risks viz foreign currency risk, commodity price risk,
interest rate risk, credit risk, liquidity risk etc. The Company’s primary focus is to foresee the unpredictability of
financial markets and seek to minimize potential adverse effects on its financial performance. The Company’s senior
management oversees the management of these risks. It advises on financial risks and the appropriate financial risk
governance framework for the Company.
Foreign currency risk
The Company is exposed to foreign currency risks arising from various currency exposures, primarily with respect
to the USD and EURO. Foreign currency risks arise from future commercial transactions and recognized assets and
liabilities, when they are denominated in a currency other than Indian Rupee.
The Company’s exposure with regards to foreign currency risk which are not hedged are given below:
Commodity price risk
The commodity exposure is mainly on account of fuel, a substantial part of which is a pass through cost and hence
the commodity price exposure is not likely to have a material financial impact on the Company.
The Company purchases natural gas for use in Power Generation at its gas based power plants and for trading.
The pricing of natural gas can be fixed or linked to international benchmark such as Dated Brent. The extant tariff
regulations do not permit the cost of hedging such exposure as a cost to be passed through to the long term off¬
takers / beneficiaries. As a result, the Company does not follow a policy of hedging such exposures and actual rupee
costs of import of fuel are substantially passed on to the long term off-takers / consumers, because of which such
commodity price exposure is not likely to have a material financial impact on the Company.
Derivatives
The Company uses derivative financial instruments such as commodity price swaps contract, foreign exchange
forwards to hedge its risks associated with price risk movements. Risks associated with fluctuation in the price of
the natural gas are minimized by undertaking appropriate derivative instruments. The fair values of all such derivative
financial instruments are recognized as assets or liabilities at the balance sheet date.
Cashflow hedge that qualify for hedge accounting
The future purchases of natural gas for trading are subject to market price risk, which the company hedges using
suitable hedging strategy as per approved Commodity Price Risk Management Policy with critical terms matching
the terms of the forecast purchase.
Brent crude oil is a separately identifiable component of the forecast purchase because it is explicitly specified in the
supply contract price. As there is a market for Brent crude oil price swaps, the exposure is considered to be reliably
measurable. Accordingly, the Brent crude oil price swaps are designated as cash flow hedges of the forecast purchases
of fuel. Historically, the Brent crude oil component has accounted for 82% to 85% of the cost of fuel supplied.
Hedge Ineffectiveness
Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective
effectiveness assessments to ensure that an economic relationship exists between the hedged item and the
hedging instrument. For hedges of commodity price risk, the company enters into hedge relationships where the
critical terms of the hedging instrument match exactly with the terms of the hedged item. The company therefore
performs a qualitative assessment of effectiveness. If changes in circumstances affect the terms of the hedged
item such that the critical terms no longer match exactly with the critical terms of the hedging instrument, the
company uses the hypothetical derivative method to assess effectiveness.
The Company enters into commodity Price swaps that have similar critical terms as the hedged item, such as
benchmark rate, payment dates, maturities and notional amount. The company does not hedge 100% of its
forecast transactions, and so the hedged item is identified as a proportion of the forecase transactions up to the
notional amount of the swaps. Since all critical terms matched during the year, there is economic relationship
between hedging instrument and hedged item.
The Company uses hypothetical derivative method to assess effectiveness based on “lower off” assessment. It
compares the change in the fair value or cash flows of the hedging instrument with the change in the fair value
or cash flows of a hypothetical derivative that models the hedged risk. Sources of Hedge ineffectiveness for
commodity price risk are Critical terms mismatch, Credit Risk adjustment.
Interest rate risk
The Company’s borrowings are on fixed and floating rate of interest. The Company has exposure to interest rate risk,
arising principally on changes in Marginal Cost of Funds based Lending Rate (MCLR). The Company uses a mix of
interest rate sensitive financial instruments to manage the liquidity and fund requirements for its day to day operations
like non-convertible debentures and short term credit lines besides internal accruals.
The following table provides a break-up of the Company’s fixed and floating rate borrowings:
Interest rate risk sensitivity:
The below mentioned sensitivity analysis is based on the exposure to interest rates for floating rate borrowings.
For this it is assumed that the amount of the floating rate liability outstanding at the end of the reporting period was
outstanding for the whole year. If interest rates had been 50 basis points higher or lower, other variables being held
constant, following is the impact on profit before tax.
Credit risk
Trade receivables:
(1) Exposures to credit risk
The Company is exposed to the counterparty credit risk arising from the possibility that counterparties might fail
to comply with contractual obligations. This exposure may arise with regard to unsettled amounts.
(2) Credit risk management
Credit risk is managed and limited in accordance with the type of transaction and the creditworthiness of
the counterparty. The Company has established criteria for admission, approval systems, authorisation levels,
exposure measurement methodologies, etc. The concentration of credit risk is limited due to the fact that the
customer base is large. None of the customers accounted for more than 10% of the receivables and revenue for
the year ended March 31, 2025 and March 31, 2024. The Company is dependent on the domestic market for its
business and revenues.
The Company’s credit policies and practices with respect to distribution areas are designed to limit credit
exposure by collecting security deposits prior to providing utility services or after utility service has commenced
according to applicable regulatory requirements. In respect to generation business, Company generally has letter
of credits / bank guarantees to limit its credit exposure.
(3) Other credit enhancements
The Company collects the security deposits in the form of Cash or Bank guarantee, considering the relevant
electricity regulations under the relevant geographical area to cover its credit risks associated with its
trade receivables.
(4) Age of receivables and expected credit loss
The Company has used a practical expedient by computing the expected credit loss allowance for trade
receivables. The expected credit loss allowance is based on ageing of the days the receivables are due. Trade
receivable balances mainly comprise of outstanding from consumers wherein the credit period provided to such
consumers is less than 30 days. Based on the historical trend the same is collected well within the credit period.
The Company segments the receivables for the purpose of determining historical loss rate based on shared
risk characteristics i.e. Government Consumers / Non Government consumers, Status of Consumers i.e. Live
consumers / Disconnected consumers and Security deposits provided by the Consumer. Considering the nature
of the business, the historical loss rate is not significant.
The concentration of credit risk is very limited due to the fact that the large customers are mainly government
entities and remaining customer base is large and widely dispersed and secured with security deposit.
Other financial assets/instruments:
The Company is having balances in cash and cash equivalents, term deposits with banks, loans to subsidiaries,
investments in government securities and investment in mutual funds. The Company is having balances in
cash and cash equivalents, term deposits with scheduled banks with high credit rating and hence perceive low
credit risk of default. With respect to investments, the Company limits its exposure to credit risk by investing in
liquid securities with counterparties depending on their Composite Performance Rankings (CPR) published by
CRISIL. The Company’s investment policy lays down guidelines with respect to exposure per counterparty, rating,
processes in terms of control and continuous monitoring. The Company therefore considers credit risks on such
investments to be negligible. The credit loss from loans receivable from related parties and financial guarantees
is considered immaterial. The recoverable amount of unbilled revenue (including revenue gap/surplus) perceives
low credit risk of default considering applicable tariff regulations / tariff orders, management’s probability estimate
and the past trends of approval.
Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its
financial liabilities that are required to be settled by delivering the cash or another financial asset. The Company
manages liquidity risk by maintaining adequate reserves, banking facilities and unused borrowing facilities, by
continuously monitoring projected / actual cash flows.
Maturities of financial liabilities:
The Company’s remaining contractual maturity for its financial liabilities with agreed repayment periods is given
below. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the
earliest date on which the Company can be required to pay. The tables include both interest and principal cash
flows. The contractual maturity is based on the earliest date on which the Company may be required to pay.
A Transactions cost reduced from the borrowing is excluded.
The amount included in Note 44(A)(2)(a) to (d) for financial guarantee contracts are the maximum amounts the Company
could be forced to settle under respective arrangements for the full guaranteed amount if that amount is claimed by
the counterparty to the guarantee. Based on expectations at the end of the reporting period, the Company considers
that it is more likely than not that such amount will not be payable under the arrangement.
Note 57: Provision for Onerous Contracts
The Company has a outstanding provision of I 24.98 Crore as at March 31, 2025 (March 31, 2024 - I 24.98 Crore) in respect
of certain onerous contracts towards potential damages and other project related costs, arising from expected delays or
failure to set up certain wind power generation capacities, awarded to the Company in a prior period under a competitive
bidding process. During the current year, the Company had received claim of I 30.73 Crore against outstanding provision of
I 24.98 Crore. Accordingly I 5.75 Crore has been shown as ‘Other claims’ [Refer Note 44]. The Company has filed a petition
before CERC and the expected outflow of the outstanding provision will be determined at the time of resolution of the matter.
During the previous year, the Company had received final order dated March 28, 2024 from Central Electricity Regulatory
Commission rejecting the Company’s plea for termination of Power Purchase Agreement executed between the Company
and Solar Energy Corporation of India (SECI) on account of a Force Majeure event and the Performance Bank Guarantees
(BGs) submitted to SECI amounting to I 99.96 Crore had been encashed on April 02, 2024, accordingly I 99.96 Crore
provision had been utilised from the outstanding provision of I 124.94 Crore as at March 31, 2023.
Note 58: Government Grant
(a) Nature of government grant
Ministry of Power, Government of India (GoI), had introduced the Accelerated Power Development & Reforms
Programme (APDRP) to achieve reduction in Aggregate Technical & Commercial losses, to strengthen the Transmission
& Distribution network and to ensure reliable and quality power supply with adequate consumer satisfaction. The
projects approved for financing under the programme are eligible for a grant and soft loan each equivalent to 25% of
the project cost from the GoI. The balance 50% was required to be funded by the Company. There are no unfulfilled
conditions or other contingencies attached to these grants.
Note 59: Scheme of Arrangement
The National Company Law Tribunal (NCLT) vide its Order dated January 27, 2025, subsequently modified vide order dated
February 18, 2025 (received on March 07, 2025), has sanctioned the Scheme of Arrangement (“Scheme”) for transfer and
vesting of “the Renewable Power Undertakings” (RPU) (comprises of 316.60 MW of solar and wind power) of the Company
to Torrent Green Energy Private Limited (TGEPL), a wholly owned subsidiary (incorporated w.e.f. August 02, 2023) of the
Company, on a going concern basis by way of slump sale with effect from the appointed date i.e. April 01, 2024 under
sections 230 to 232 and other applicable provisions of the Companies Act, 2013. The certified copy of the said order has
been filed with Registrar of Companies on April 01, 2025 (“Effective Date”) and the Scheme is legally effective from April 01,
2024 (“Appointed Date”). Accordingly, the effect of the Scheme has been given in the financial statements for the year ended
March 31, 2025 with effect from the Appointed Date instead of Effective date, the date on which the control is transferred
by Company, as required under Ind AS 110. Further as per Guidance note issued by Institute of Chartered Accountants of
India (ICAI), where a law requires a different treatment, accounting standards are considered to be overruled to that extent.
The RPU has been transferred under the Scheme for a lump sum consideration of I 880.12 Crore based on the report of
independent valuer, adjusted for working capital adjustments as per the Scheme. There is no gain on such transfer as per
said Scheme.
Note 66: Social Security Code
The Indian Parliament has approved the Code on Social Security, 2020 (“Code”) which may likely impact the obligations
of the Company for contribution to employees’ provident fund and gratuity. The effective date from which the Code is
applicable and the rules to be framed under the Code are yet to be notified. In view of this, impact if any, of the change will
be assessed and accounted in the period in which the Code and the rules thereunder are notified.
Note 67: Registration of Charges
There are no charges or satisfactions which are yet to be registered with the Registrar of Companies beyond the statutory
period for year ended March 31, 2025 and March 31, 2024.
Note 68: Electricity Distribution (Accounts and Additional Disclosure) Rules, 2024
The Ministry of Power has notified Electricity Distribution (Accounts and Additional Disclosure) Rules, 2024 (‘the Rules’)
in pursuance of Section 176(1) and 176(2)(z) of the Electricity Act, 2003 read with second proviso to Section 129 (1) of the
Companies Act, 2013, which are applicable to Distribution Licensees and effective from the date of notification in the Official
Gazette i.e. October 24, 2024. The impact of the said circular on the financial statement for the year ended March 31, 2025
is not material. Further, as per proviso to rule 6(2) of the said Rules, the Company has chosen to publish the Additional
Disclosure Statements in Integrated Annual Report FY 2024-25, as permitted during the first year of implementation.
Note 69: Audit Trail in Accounting Software
The Company has been using SAP ERP as a book of accounts. While SAP audit logging has been enabled from the
beginning of the year and captures all the changes made in the audit log as per SAP note no 3042258 version 7 dated
March 06, 2024. However, changes made using certain privileged access with debug functionality for capturing “old value”
and “new value” of changes made was configured on March 10, 2025.
After thorough testing and validation of tolerable impact on performance of SAP system, the audit trail at Database level was
configured on March 27, 2024. Due to standard database functionality of HANA DB, while changes made are logged in the
database, it does not capture “old value” of changes made. This is SAP related issue and management is working towards
resolving the same with the vendor. As a part of privileged access management, Company has implemented ARCON make
PAM (Privileged Access Management System) suite. This PAM system provides access based on need/approval and does
the video recording of all activities carried out by privileged user. This is a secondary control implemented to mitigate the
risk associated with HANA database.
Note 70: Refund of Income Taxes
During the current year, the Company had received the Income tax refunds (including interest ) of I 71.28 Crore, I 200.83
Crore and I 146.93 Crore pertaining to FY 2011-12, FY 2019-20 and FY 2021-22 respectively. In accordance with the Gujarat
Electricity Regulatory Commission (Multi-Year Tariff) Regulations, 2016 (the ‘Tariff regulations’) with respect to claim on Tax
on Income, the Company had recovered from the consumers pro-rate income tax based on profit of regulatory generating
and distribution units (namely Ahmedabad Generation, Ahmedabad Distribution, Surat Distribution and Dahej Distribution)
calculated based on the actual income taxes paid in the respective financial year.
The management of the Company has calculated the refund of income tax received, required to be passed on to the
consumers considering the revised profit before taxes i.e., after taking adjustment pertaining to the matter for which the
refunds have been received amounting to I 38.47 Crore, which have been recorded into the books of accounts of the
Company for the year ending March 31, 2025.
3 25,74,22,311 equity shares (25,74,22,311 equity shares as at March 31, 2024) of I 10 each fully paid up are held by the
Parent Company - Torrent Investments Limited (Formerly known as Torrent Investments Private Limited).
4 Terms / Rights attached to equity shares:
The Company has only one class of equity shares having par value of I 10 per share. Each holder of equity shares
is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend, if any,
proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General
Meeting, except in 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 preferential amounts. The distribution will be in proportion to the number of equity
shares held by the shareholders.
7 Distributions made:
Interim dividend for FY 2024-25 of I 14.00 per equity share [Previous year - I 12.00 per equity share] aggregating to
I 705.46 Crore [Previous year - I 576.74 Crore] was paid in the month of March 2025 [Previous year - March 2024].
The Board of Directors at its meeting held on May 14, 2025 has recommended a final dividend of 50% (I 5.00 per
equity share of par value I 10 each) [Previous year - I 4.00 per equity share]. The proposal is subject to the approval of
shareholders at the ensuing Annual General Meeting and if approved, would result in a cash outflow of I 251.95 Crore.
1 Securities premium:
Securities premium reflects issuance of the shares by the Company at a premium, whether for cash or otherwise i.e. a
sum equal to the aggregate amount of the premium received on shares is transferred to a securities premium account
as per the provisions of the Companies Act, 2013. The reserve can be utilised in accordance with the provisions of
the Act.
2 Debenture redemption reserve:
The Company was required to create a Debenture Redemption Reserve (DRR) out of the profits which are available
for payment of dividend for the purpose of redemption of debentures. Pursuant to Companies (Share Capital and
Debentures) Amendment Rules, 2019 dated August 16, 2019, the Company is not required to create DRR. Accordingly,
the Company has not created DRR during the year and DRR created till previous years has been transferred to general
reserve on redemption of debentures.
3 Contingency reserve:
As per the provisions of GERC MYT Regulations read with Tariff orders passed by GERC, the Company being a
Distribution Licensee makes an appropriation to the contingency reserve to meet with certain exigencies. Investments
in Bonds issued by Government of India have been made against such reserve.
4 Special reserve:
As per MYT Regulations (2007), the Company has created a reserve in FY 2011-12 and FY 2012-13, which represents
one third amount of controllable gain shall be retained in a special reserve by the Generating Company or Licensee
for the purpose of absorbing the impact of any future losses on account of controllable factors.
5 General reserve:
General reserve is used from time to time to transfer profits from retained earnings for appropriation purposes.
The general reserve is created by a transfer from one component of equity to another and is not an item of other
comprehensive income.
Note 41: Impairment Assessment
1 DGEN Power Plant
Net carrying value of Property, plant & equipment (“PPE”) (including Capital work in progress) and Right-of-Use
assets (“ROU”) as at March 31, 2025 includes I 1,176.70 Crore (March 31, 2024: I 1,237.82 Crore) pertaining to 1,200
MW DGEN Mega Power Project located at Dahej, Gujarat including its Transmission Line (“DGEN”). DGEN started
commercial operations with effect from November 2014 and thereafter had operated only intermittently / partially
including the current year due to various factors such as unavailability of domestic gas, high prices of imported gas
and non-availability of power selling arrangement.
In view of the above and given the current economic environment, the Company had carried out an impairment
assessment of DGEN as at March 31, 2025 by considering the recoverable amount based on value-in-use of DGEN
in accordance with Indian Accounting Standard 36 ‘Impairment of Assets’. Value-in-use is determined considering a
discount rate of 14% (March 31, 2024 - 15.50%) and cash flow projections over a period of 15 years (March 31, 2024
- 16 years), being the balance useful life of DGEN in terms of Central Electricity Regulatory Commission (Terms and
Conditions of Tariff) Regulations, 2024 on the basis that the Company expects to supply power in the future. Based on
the assessment, recoverable value of PPE by using value-in-use is I 1,325.94 Crore (March 31, 2024: I 1,307.00 Crore)
which is higher than the carrying amount of PPE of I 1,176.70 Crore (March 31, 2024: I 1,237.82 Crore) and accordingly
no additional impairment loss is required as at March 31, 2025. The management has conducted sensitivity analysis
on impairment test of the value in use of DGEN. The management believes that reasonable possible change in key
assumptions would not materially impact the impairment assessment as at March 31, 2025.
During the earlier years, the Company has provided for impairment loss of I 2,300.00 Crore (March 31, 2024: I 2,300.00
Crore).
Assessment of ‘value-in-use’ involves several key assumptions including expected demand, future price of fuel, expected
tariff rates for electricity, discount rate, exchange rate and electricity market scenario, based on past trends and the
current and likely future state of the industry. Management reviews such assumptions periodically to factor updated
information based on events or changes in circumstances in order to make fresh assessment of impairment, if any.
2 Investment in Torrent Pipavav Generation Limited
Torrent Pipavav Generation Limited (“TPGL”), a subsidiary of the Company and a joint venture between the Company
and Gujarat Power Corporation Limited (“GPCL”), had made payments in nature of compensation for acquisition of
private land as per the court orders in Amreli, Gujarat for the purpose of developing a coal-based power plant of
1,000 MW. Due to non-availability of fuel linkage, Government of Gujarat (“GoG”) vide its letter dated December 06,
2017, communicated that the said project may not be developed and accordingly, the joint venture is intended to be
dissolved. Further, as per the said letter, the cost of land would be reimbursed after the disposal of land.
During the current year, TPGL has received amount of I 103.18 Crore from GPCL towards the cost incurred for
acquisition of aforesaid land and other expenses incurred in prior years. Considering the above facts, assets and
liabilities are reflected at their net realisable values or cost whichever is lower and the financial statements of TPGL
for year ended March 31, 2025 have been prepared on a non - going concern basis.
Considering the above facts, Management has reversed the impairment provision I 7.15 Crore of as at March 31, 2025
for Carrying amount of equity is of I 35.95 Crore (net of impairment I 11.55 Crore after above reversal).
The tax rate used for the reconciliations given above is the actual / enacted corporate tax rate payable by corporate
entities in India on taxable profits under the Indian tax law.
# During the current year, the Company had received Income tax refunds (including interest income) of I 427.00 Crore
pertaining to earlier years on account of various favourable tax orders and as a result of which its accumulated
minimum alternative tax (MAT) credit balance as per book has utilised substantially. The Management has made an
assessment of the amount of taxable income that would be available in future to offset the accumulated MAT credit
entitlement available to the Company in the foreseeable future.
In view of the same, the management has carried out detailed assessment of deferred tax on temporary differences
that are expected to reverse during the period in which the Company would be under the new tax regime and
accordingly applied the new income tax rate of 25.168% as compared to the existing income tax rate of 34.944%
for measuring the said deferred tax in accordance with the requirements of Ind AS 12 - ‘Income Taxes’. This has
resulted in reversal of deferred tax liabilities by I 637.09 Crore during the year.
The Company has evaluated the impact of Supreme Court (“SC”) judgement dated February 28, 2019 in the
case of Regional Provident Fund Commissioner (II) West Bengal v/s Vivekananda Vidyamandir and Others,
in relation to exclusion of certain allowances from the definition of “basic wages” of the relevant employees
for the purposes of determining contribution to Provident Fund (“PF”) under the Employees’ Provident Fund &
Miscellaneous Provisions Act, 1952. There are interpretation issues relating to the said SC judgement. Based
on such evaluation, management has concluded that effect of the aforesaid judgement on the Company is not
material and accordingly, no provision has been made in the Standalone financial statements.
Footnotes:
1 Management believes that its position on the aforesaid direct and indirect tax demands and other claims
against the company will likely be upheld in the appellate process and accordingly no provision has been
made in the standalone financial statements for such demands.
2 In respect of the above, the expected outflow will be determined at the time of final resolution of the dispute
/ matters. No reimbursement is expected.
3 Break up of other claims as under:
(c) During the year ended March 31, 2025, the Company has not advanced or loaned or invested funds (either borrowed
funds or share premium or kind of funds) to any other person or entity, including foreign entities (Intermediaries) with
the understanding (whether recorded in writing or otherwise) 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
Except as detailed below, during the previous year ended March 31,2024, the Company has not advanced or loaned or
invested funds (either borrowed funds or share premium or kind of funds) to any other person or entity, including foreign
entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) 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
The Company has complied with the relevant provisions of the Companies Act, 2013 and is not violative of the
Prevention of Money-laundering Act, 2002.
During the year ended March 31, 2025 and March 31, 2024, 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.
Note 47: Leases (Contd.)
(v) Lease asset of Shil, Mumbra and Kalwa (franchise area)
The Company has entered into a Distribution Franchise Agreement (“Agreement”) dated February 11, 2019 with
Maharashtra State Electricity Distribution Company Limited (“MSEDCL”) whereby as per the Agreement the Company
would distribute the electricity in the area of Shil, Mumbra and Kalwa in Thane District in Maharashtra (“Franchise
area”) for 20 years (effective from March 01, 2020).
As per the Agreement, the Company would purchase electricity from MSEDCL at the rate which would be derived
through mechanism as mentioned in the Agreement which is linked to the number of units purchased and would
distribute electricity to the Consumers at the tariff which has been approved by Maharashtra Electricity Regulation
Commission (MERC).
Further as per the Agreement, the Company has right to use existing assets of MSEDCL in the Franchise area provided
it shall perform all the obligations and accepts all liabilities of MSEDCL on behalf of distribution licensee in Franchise
area and MSEDCL shall not charge any rent for the use of such assets.
Considering the facts of the arrangement, the Company has the right to obtain substantially all of the economic
benefits from use of MSEDCL assets of the Franchise area and the right to direct the use of the said assets for 20
years and accordingly it would meet the definition of Lease as per Ind AS 116. Further, for distribution of electricity, the
Company would purchase power from MSEDCL for which payment would be made as per the franchise agreement
which is linked to the number of units purchased. Accordingly the payments by the Company to MSEDCL is variable
in nature and there are no fixed payments in the form of minimum purchase commitments, take or pay or any sort of
fixed charges is required to be made.
Considering the entire payment made by the Company for this arrangement is variable in nature and there would be no
lease liability required to be recognised with a corresponding right of use assets on initial recognition in accordance
with Ind AS 116 and considering non-availability of relevant observable information for lease payments, management
estimates and cost benefit analysis, total consideration payable to MSEDCL towards purchase of electricity has been
shown as ‘Electrical energy purchased’ in the Financial Statements.
Note 48: Employee Benefits Plan
48.1 Defined contribution plan
The Company has defined contribution retirement benefit plans for its employees.
The Company’s contributions to provident fund, pension scheme and employee state insurance scheme are made
to the relevant government authorities as per the prescribed rules and regulations. The Company’s superannuation
scheme for qualifying employees is administered through its various superannuation trust funds. The Company’s
contributions to the above defined contribution plans are recognised as employee benefit expenses in the statement
of profit and loss for the year in which they are due. The Company has no further obligation in respect of such plans
beyond the contributions made.
The Company’s contribution to provident, pension, superannuation funds and to employees state insurance scheme
aggregating to I 49.47 Crore (Previous year - I 46.32 Crore) has been recognised in the statement of profit and loss
under the head employee benefits expense [Refer note 37].
48.2 Defined benefit plans
(a) Gratuity
The Company operates through various gratuity trust, a plan, covering all its employees. The benefit payable is the
greater of the amount calculated as per the Payment of Gratuity Act, 1972 or the Company scheme applicable to
the employee. The benefit vests upon completion of five years of continuous service and once vested it is payable
to employees on retirement or on termination of employment. The gratuity benefits payable to the employees
are based on the tenure of employee’s service and last drawn salary at the time of leaving. The employees do
not contribute towards this plan and the full cost of providing these benefits are met by the Company. In case of
death while in service, the gratuity is payable irrespective of vesting.
The Company makes annual contribution to the gratuity schemes administered by the Life Insurance Corporation
of India through its various Gratuity Trust Funds. The liability in respect of plan is determined on the basis of an
actuarial valuation.
(b) Risk exposure to defined benefit plans
The plans typically expose the Company to actuarial risks such as: asset volatility, interest rate risk, longevity
risk and salary risk as described below:
Asset volatility
The present value of the defined benefit plan liability is calculated using a discount rate which is determined by
reference to market yields at the end of the reporting period on Indian government securities; if the return on plan
asset is below this rate, it will create a plan deficit.
Interest risk
A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an
increase in the return on the plan’s debt investments.
Longevity risk
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the
mortality of plan participants both during and after their employment. An increase in the life expectancy of the
plan participants will increase the plan’s liability.
Salary risk
The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan
participants. As such, an increase in the salary of the plan participants will increase the plan’s liability.
The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation was
carried out at March 31, 2025. The present value of the defined benefit obligation, and the related current service
cost and past service cost, were measured using the projected unit credit method.
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit
obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the
assumptions may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has
been calculated using the projected unit credit method at the end of the reporting period, which is the same as
that applied in calculating the defined benefit obligation liability recognised in the balance sheet.
(h) The weighted average duration of the gratuity plan based on average future service is 16 years (Previous year - 18
years).
(i) Expected contribution to the plan for the next annual reporting period is I 11.98 Crore (Previous year - I 24.76
Crore).
(j) Cash flow projection from the fund
Projected benefits payable in future years from the date of reporting
The Company manages its capital structure in a manner to ensure that it will be able to continue as a going concern
while optimising the return to stakeholders through the appropriate debt and equity balance.
The Company's capital structure is represented by equity (comprising equity shares, retained earnings and other
reserves as detailed in notes 23, 24) and debt (borrowings as detailed in note 25).
The Company's management reviews the capital structure of the Company on an annual basis. As part of this review,
the management considers the cost of capital and the risks associated with each class of capital. The Company's
plan is to ensure that the gearing ratio (debt equity ratio) is well within the limit of 2:1. No changes were made in the
objectives, policies or process for managing its capital during the year ended March 31, 2025 and March 31, 2024.
The Company reviews its Dividend policy from time to time.
Footnotes:
1 Debt is defined as all long term debt outstanding [including unamortised expense (net of premium)] contingent
liability pertaining to corporate / financial guarantee given (to the extent utilised) short term debt outstanding
in lieu of long term debt.
2 Total equity is defined as equity share capital all reserve (excluding revaluation reserve) deferred tax liabilities
- deferred tax assets - intangible assets - Intangible assets under development
Loan Covenants
The company has complied with financial covenants specified as per the terms of borrowing facilities.
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either
observable or unobservable and consists of the following three levels:
Level 1: Inputs are Quoted (unadjusted) market prices in active markets for identical assets or liabilities. This
includes investments in mutual funds that have quoted price.
Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement
is directly or indirectly observable. This includes unquoted floating and fixed rate borrowing and
Investment property.
Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement
is unobservable. This includes unquoted equity shares, loans, security deposits, investments in
Debentures, floating rate borrowings.
The Company’s principal financial liabilities, comprise borrowings, employee payables, security deposits from
consumers, trade and other payables. The main purpose of these financial liabilities is to finance the Company’s
operations and projects capital expenditure. The Company’s principal financial assets include loans, advances, trade
and other receivables and cash and cash equivalents that derive directly from its operations.
The Company’s activities expose it to a variety of financial risks viz foreign currency risk, commodity price risk,
interest rate risk, credit risk, liquidity risk etc. The Company’s primary focus is to foresee the unpredictability of
financial markets and seek to minimize potential adverse effects on its financial performance. The Company’s senior
management oversees the management of these risks. It advises on financial risks and the appropriate financial risk
governance framework for the Company.
Foreign currency risk
The Company is exposed to foreign currency risks arising from various currency exposures, primarily with respect
to the USD and EURO. Foreign currency risks arise from future commercial transactions and recognized assets and
liabilities, when they are denominated in a currency other than Indian Rupee.
The Company’s exposure with regards to foreign currency risk which are not hedged are given below:
Commodity price risk
The commodity exposure is mainly on account of fuel, a substantial part of which is a pass through cost and hence
the commodity price exposure is not likely to have a material financial impact on the Company.
The Company purchases natural gas for use in Power Generation at its gas based power plants and for trading.
The pricing of natural gas can be fixed or linked to international benchmark such as Dated Brent. The extant tariff
regulations do not permit the cost of hedging such exposure as a cost to be passed through to the long term off¬
takers / beneficiaries. As a result, the Company does not follow a policy of hedging such exposures and actual rupee
costs of import of fuel are substantially passed on to the long term off-takers / consumers, because of which such
commodity price exposure is not likely to have a material financial impact on the Company.
Derivatives
The Company uses derivative financial instruments such as commodity price swaps contract, foreign exchange
forwards to hedge its risks associated with price risk movements. Risks associated with fluctuation in the price of
the natural gas are minimized by undertaking appropriate derivative instruments. The fair values of all such derivative
financial instruments are recognized as assets or liabilities at the balance sheet date.
Cashflow hedge that qualify for hedge accounting
The future purchases of natural gas for trading are subject to market price risk, which the company hedges using
suitable hedging strategy as per approved Commodity Price Risk Management Policy with critical terms matching
the terms of the forecast purchase.
Brent crude oil is a separately identifiable component of the forecast purchase because it is explicitly specified in the
supply contract price. As there is a market for Brent crude oil price swaps, the exposure is considered to be reliably
measurable. Accordingly, the Brent crude oil price swaps are designated as cash flow hedges of the forecast purchases
of fuel. Historically, the Brent crude oil component has accounted for 82% to 85% of the cost of fuel supplied.
Hedge Ineffectiveness
Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective
effectiveness assessments to ensure that an economic relationship exists between the hedged item and the
hedging instrument. For hedges of commodity price risk, the company enters into hedge relationships where the
critical terms of the hedging instrument match exactly with the terms of the hedged item. The company therefore
performs a qualitative assessment of effectiveness. If changes in circumstances affect the terms of the hedged
item such that the critical terms no longer match exactly with the critical terms of the hedging instrument, the
company uses the hypothetical derivative method to assess effectiveness.
The Company enters into commodity Price swaps that have similar critical terms as the hedged item, such as
benchmark rate, payment dates, maturities and notional amount. The company does not hedge 100% of its
forecast transactions, and so the hedged item is identified as a proportion of the forecase transactions up to the
notional amount of the swaps. Since all critical terms matched during the year, there is economic relationship
between hedging instrument and hedged item.
The Company uses hypothetical derivative method to assess effectiveness based on “lower off” assessment. It
compares the change in the fair value or cash flows of the hedging instrument with the change in the fair value
or cash flows of a hypothetical derivative that models the hedged risk. Sources of Hedge ineffectiveness for
commodity price risk are Critical terms mismatch, Credit Risk adjustment.
Interest rate risk
The Company’s borrowings are on fixed and floating rate of interest. The Company has exposure to interest rate risk,
arising principally on changes in Marginal Cost of Funds based Lending Rate (MCLR). The Company uses a mix of
interest rate sensitive financial instruments to manage the liquidity and fund requirements for its day to day operations
like non-convertible debentures and short term credit lines besides internal accruals.
The following table provides a break-up of the Company’s fixed and floating rate borrowings:
Interest rate risk sensitivity:
The below mentioned sensitivity analysis is based on the exposure to interest rates for floating rate borrowings.
For this it is assumed that the amount of the floating rate liability outstanding at the end of the reporting period was
outstanding for the whole year. If interest rates had been 50 basis points higher or lower, other variables being held
constant, following is the impact on profit before tax.
Credit risk
Trade receivables:
(1) Exposures to credit risk
The Company is exposed to the counterparty credit risk arising from the possibility that counterparties might fail
to comply with contractual obligations. This exposure may arise with regard to unsettled amounts.
(2) Credit risk management
Credit risk is managed and limited in accordance with the type of transaction and the creditworthiness of
the counterparty. The Company has established criteria for admission, approval systems, authorisation levels,
exposure measurement methodologies, etc. The concentration of credit risk is limited due to the fact that the
customer base is large. None of the customers accounted for more than 10% of the receivables and revenue for
the year ended March 31, 2025 and March 31, 2024. The Company is dependent on the domestic market for its
business and revenues.
The Company’s credit policies and practices with respect to distribution areas are designed to limit credit
exposure by collecting security deposits prior to providing utility services or after utility service has commenced
according to applicable regulatory requirements. In respect to generation business, Company generally has letter
of credits / bank guarantees to limit its credit exposure.
(3) Other credit enhancements
The Company collects the security deposits in the form of Cash or Bank guarantee, considering the relevant
electricity regulations under the relevant geographical area to cover its credit risks associated with its
trade receivables.
(4) Age of receivables and expected credit loss
The Company has used a practical expedient by computing the expected credit loss allowance for trade
receivables. The expected credit loss allowance is based on ageing of the days the receivables are due. Trade
receivable balances mainly comprise of outstanding from consumers wherein the credit period provided to such
consumers is less than 30 days. Based on the historical trend the same is collected well within the credit period.
The Company segments the receivables for the purpose of determining historical loss rate based on shared
risk characteristics i.e. Government Consumers / Non Government consumers, Status of Consumers i.e. Live
consumers / Disconnected consumers and Security deposits provided by the Consumer. Considering the nature
of the business, the historical loss rate is not significant.
The concentration of credit risk is very limited due to the fact that the large customers are mainly government
entities and remaining customer base is large and widely dispersed and secured with security deposit.
Other financial assets/instruments:
The Company is having balances in cash and cash equivalents, term deposits with banks, loans to subsidiaries,
investments in government securities and investment in mutual funds. The Company is having balances in
cash and cash equivalents, term deposits with scheduled banks with high credit rating and hence perceive low
credit risk of default. With respect to investments, the Company limits its exposure to credit risk by investing in
liquid securities with counterparties depending on their Composite Performance Rankings (CPR) published by
CRISIL. The Company’s investment policy lays down guidelines with respect to exposure per counterparty, rating,
processes in terms of control and continuous monitoring. The Company therefore considers credit risks on such
investments to be negligible. The credit loss from loans receivable from related parties and financial guarantees
is considered immaterial. The recoverable amount of unbilled revenue (including revenue gap/surplus) perceives
low credit risk of default considering applicable tariff regulations / tariff orders, management’s probability estimate
and the past trends of approval.
Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its
financial liabilities that are required to be settled by delivering the cash or another financial asset. The Company
manages liquidity risk by maintaining adequate reserves, banking facilities and unused borrowing facilities, by
continuously monitoring projected / actual cash flows.
Maturities of financial liabilities:
The Company’s remaining contractual maturity for its financial liabilities with agreed repayment periods is given
below. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the
earliest date on which the Company can be required to pay. The tables include both interest and principal cash
flows. The contractual maturity is based on the earliest date on which the Company may be required to pay.
A Transactions cost reduced from the borrowing is excluded.
The amount included in Note 44(A)(2)(a) to (d) for financial guarantee contracts are the maximum amounts the Company
could be forced to settle under respective arrangements for the full guaranteed amount if that amount is claimed by
the counterparty to the guarantee. Based on expectations at the end of the reporting period, the Company considers
that it is more likely than not that such amount will not be payable under the arrangement.
Note 57: Provision for Onerous Contracts
The Company has a outstanding provision of I 24.98 Crore as at March 31, 2025 (March 31, 2024 - I 24.98 Crore) in respect
of certain onerous contracts towards potential damages and other project related costs, arising from expected delays or
failure to set up certain wind power generation capacities, awarded to the Company in a prior period under a competitive
bidding process. During the current year, the Company had received claim of I 30.73 Crore against outstanding provision of
I 24.98 Crore. Accordingly I 5.75 Crore has been shown as ‘Other claims’ [Refer Note 44]. The Company has filed a petition
before CERC and the expected outflow of the outstanding provision will be determined at the time of resolution of the matter.
During the previous year, the Company had received final order dated March 28, 2024 from Central Electricity Regulatory
Commission rejecting the Company’s plea for termination of Power Purchase Agreement executed between the Company
and Solar Energy Corporation of India (SECI) on account of a Force Majeure event and the Performance Bank Guarantees
(BGs) submitted to SECI amounting to I 99.96 Crore had been encashed on April 02, 2024, accordingly I 99.96 Crore
provision had been utilised from the outstanding provision of I 124.94 Crore as at March 31, 2023.
Note 58: Government Grant
(a) Nature of government grant
Ministry of Power, Government of India (GoI), had introduced the Accelerated Power Development & Reforms
Programme (APDRP) to achieve reduction in Aggregate Technical & Commercial losses, to strengthen the Transmission
& Distribution network and to ensure reliable and quality power supply with adequate consumer satisfaction. The
projects approved for financing under the programme are eligible for a grant and soft loan each equivalent to 25% of
the project cost from the GoI. The balance 50% was required to be funded by the Company. There are no unfulfilled
conditions or other contingencies attached to these grants.
Note 59: Scheme of Arrangement
The National Company Law Tribunal (NCLT) vide its Order dated January 27, 2025, subsequently modified vide order dated
February 18, 2025 (received on March 07, 2025), has sanctioned the Scheme of Arrangement (“Scheme”) for transfer and
vesting of “the Renewable Power Undertakings” (RPU) (comprises of 316.60 MW of solar and wind power) of the Company
to Torrent Green Energy Private Limited (TGEPL), a wholly owned subsidiary (incorporated w.e.f. August 02, 2023) of the
Company, on a going concern basis by way of slump sale with effect from the appointed date i.e. April 01, 2024 under
sections 230 to 232 and other applicable provisions of the Companies Act, 2013. The certified copy of the said order has
been filed with Registrar of Companies on April 01, 2025 (“Effective Date”) and the Scheme is legally effective from April 01,
2024 (“Appointed Date”). Accordingly, the effect of the Scheme has been given in the financial statements for the year ended
March 31, 2025 with effect from the Appointed Date instead of Effective date, the date on which the control is transferred
by Company, as required under Ind AS 110. Further as per Guidance note issued by Institute of Chartered Accountants of
India (ICAI), where a law requires a different treatment, accounting standards are considered to be overruled to that extent.
The RPU has been transferred under the Scheme for a lump sum consideration of I 880.12 Crore based on the report of
independent valuer, adjusted for working capital adjustments as per the Scheme. There is no gain on such transfer as per
said Scheme.
Note 66: Social Security Code
The Indian Parliament has approved the Code on Social Security, 2020 (“Code”) which may likely impact the obligations
of the Company for contribution to employees’ provident fund and gratuity. The effective date from which the Code is
applicable and the rules to be framed under the Code are yet to be notified. In view of this, impact if any, of the change will
be assessed and accounted in the period in which the Code and the rules thereunder are notified.
Note 67: Registration of Charges
There are no charges or satisfactions which are yet to be registered with the Registrar of Companies beyond the statutory
period for year ended March 31, 2025 and March 31, 2024.
Note 68: Electricity Distribution (Accounts and Additional Disclosure) Rules, 2024
The Ministry of Power has notified Electricity Distribution (Accounts and Additional Disclosure) Rules, 2024 (‘the Rules’)
in pursuance of Section 176(1) and 176(2)(z) of the Electricity Act, 2003 read with second proviso to Section 129 (1) of the
Companies Act, 2013, which are applicable to Distribution Licensees and effective from the date of notification in the Official
Gazette i.e. October 24, 2024. The impact of the said circular on the financial statement for the year ended March 31, 2025
is not material. Further, as per proviso to rule 6(2) of the said Rules, the Company has chosen to publish the Additional
Disclosure Statements in Integrated Annual Report FY 2024-25, as permitted during the first year of implementation.
Note 69: Audit Trail in Accounting Software
The Company has been using SAP ERP as a book of accounts. While SAP audit logging has been enabled from the
beginning of the year and captures all the changes made in the audit log as per SAP note no 3042258 version 7 dated
March 06, 2024. However, changes made using certain privileged access with debug functionality for capturing “old value”
and “new value” of changes made was configured on March 10, 2025.
After thorough testing and validation of tolerable impact on performance of SAP system, the audit trail at Database level was
configured on March 27, 2024. Due to standard database functionality of HANA DB, while changes made are logged in the
database, it does not capture “old value” of changes made. This is SAP related issue and management is working towards
resolving the same with the vendor. As a part of privileged access management, Company has implemented ARCON make
PAM (Privileged Access Management System) suite. This PAM system provides access based on need/approval and does
the video recording of all activities carried out by privileged user. This is a secondary control implemented to mitigate the
risk associated with HANA database.
Note 70: Refund of Income Taxes
During the current year, the Company had received the Income tax refunds (including interest ) of I 71.28 Crore, I 200.83
Crore and I 146.93 Crore pertaining to FY 2011-12, FY 2019-20 and FY 2021-22 respectively. In accordance with the Gujarat
Electricity Regulatory Commission (Multi-Year Tariff) Regulations, 2016 (the ‘Tariff regulations’) with respect to claim on Tax
on Income, the Company had recovered from the consumers pro-rate income tax based on profit of regulatory generating
and distribution units (namely Ahmedabad Generation, Ahmedabad Distribution, Surat Distribution and Dahej Distribution)
calculated based on the actual income taxes paid in the respective financial year.
The management of the Company has calculated the refund of income tax received, required to be passed on to the
consumers considering the revised profit before taxes i.e., after taking adjustment pertaining to the matter for which the
refunds have been received amounting to I 38.47 Crore, which have been recorded into the books of accounts of the
Company for the year ending March 31, 2025.
Note 71: Additional Regulatory Information Required by Schedule III
(a) Compliance with number of layers of companies
The Company is in compliance with number of layers of companies in accordance with clause 87 of Section 2 of the
Act read with the Companies (Restriction on number of Layers) Rules, 2017 during the year ended March 31, 2025
and March 31, 2024.
(b) Details of crypto currency or virtual currency
The Company has not invested or traded in Crypto Currency or Virtual Currency during the year ended March 31, 2025
and March 31, 2024.
(c) Details of benami property held
No proceedings have been initiated on or are pending against the Company for holding benami property under the
Prohibition of Benami Property Transactions Act, 1988 (as amended in 2016) (formerly the Benami Transactions
(Prohibition) Act, 1988 (45 of 1988)) and Rules made thereunder during the year ended March 31, 2025 and March
31, 2024.
(d) Wilful defaulter
The Company has not been declared Wilful defaulter by any bank or financial institution or government or any
government authority during the year ended March 31, 2025 and March 31, 2024.
(e) Undisclosed income
During the year ended March 31, 2025 and March 31, 2024, the Company has not surrendered or disclosed as income
any transactions not recorded in the books of accounts in the course of tax assessments under the Income Tax Act,
1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).
Note 72: Approval of Financial Statements
The financial statements were approved for issue by the board of directors on May 14, 2025.
Signature to Note 1 to 72
In terms of our report attached For and on behalf of the Board of Directors
For Price Waterhouse Chartered Accountants LLP Samir Mehta
Firm Registration Number: 012754N / N500016 Chairperson
DIN:00061903
Priyanshu Gundana Saurabh Mashruwala Rahul Shah
Partner Chief Financial Officer Company Secretary
Membership No.: 109553
Ahmedabad, May 14, 2025 Ahmedabad, May 14, 2025
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