1. General Information
ORIENT GREEN POWER COMPANY LIMITED (“the Company”), was incorporated in the year 2006 having its registered office at No. 18/3 Sigapi Achi Building, Rukmani Lakshmipathy Road, Egmore, Chennai -600 008 to carry out the business of investment, ownership in renewable energy areas like Wind and Biomass power.
2. Applicability of new and revised Ind AS
All the Indian Accounting Standards issued and notified by the Ministry of Corporate Affairs under the Companies (Indian Accounting Standards) Rules, 2015 (as amended) till the financial statements are authorized have been considered in preparing these financial statements. There are no other Indian Accounting Standards that have been issued as at 31 March 2018, but were not mandatorily effective except as stated below:
Recent Indian Accounting Standards Issued but not effective as at 31 March 2018
In March 2018, the Ministry of Corporate affairs issued the companies (Indian Accounting Standards) (amendments) rules, 2018.
Ind AS 115, “Revenue from Contracts with Customers” establishes a single comprehensive model for entities to use in accounting for revenue arising from contract with customers. Ind AS 115 will supersede the current revenue recognition standard Ind AS 18 Revenue and Ind AS 11 Construction contracts when it becomes effective. The core Principle of Ind AS 115 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Specifically, the standard introduces a 5-step approach to revenue recognition:
Step 1 : Identify the contract(s) with a customer
Step 2 : Identify the performance obligation in contract
Step 3 : Determine the transaction Price
Step 4 : Allocate the transaction price to the performance obligation in the contracts
Step 5 : Recognize revenue when (or as) the entity satisfies a performance obligation
Under Ind AS 115, an entity recognizes revenue when (or as) a performance obligation is satisfied, i.e. when ‘control” of the goods or services underlying the particular performance obligation is transferred to the customer. The company is carrying out the evaluation of the possible impact of Ind AS 115 and will adopt the standard from 01 April, 2018, being its effective date.
Improvements and other amendments to Indian Accounting Standards applicable after 31st March 2018
A number of standards have been modified on miscellaneous issues with effect from 1st April 2018. Such changes include principle for transfer of asset to, or from, Investment Property (Amendment to Ind AS 40), determination of exchange rate for translation of foreign currency where a pre-payment asset or a deferred income liability is recognized (Amendment to Ind AS 21), segregation of deductible temporary differences in accordance with tax laws and assessing them on that basis to recognise deferred tax asset (Amendment to Ind AS 12), permitting election of fair value or equity method of accounting for investments in associates and joint ventures by venture capital ,mutual fund and other similar organisations (Amendment to Ind AS 28) and Applicability of disclosure requirements to interests classified as held for sale or as discontinued operation (Amendment to Ind AS 112).
The company is carrying out the evaluation of the possible impacts of these amendments. However, these modifications are not expected to have any material effect on the company’s financial statements.
3. Critical accounting assumptions:
The preparation of financial statements in conformity with Ind AS requires management to make judgements, estimates and assumptions, that affect the application of accounting policies and the reported amounts of assets and liabilities, disclosures of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses for the years presented. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.
In particular, information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements pertain to:
3.1 Useful lives of property, plant and equipment and intangible assets:
The Company has estimated useful life of each class of assets based on the nature of assets, the estimated usage of the asset, the operating condition of the asset, past history of replacement, anticipated technological changes, etc. The Company reviews the carrying amount of property, plant and equipment and Intangible assets at the end of each reporting period. This reassessment may result in change in depreciation expense in future periods.
Depreciation on Property Plant and Equipment is provided pro-rata for the periods of use on the straight line method(SLM) on the basis of useful life of the property, plant and equipment mandated by Part C of Schedule II of the Companies Act, 2013 or the useful life determined by the company based on technical evaluation, whichever is lower, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, maintenance support, as per details given below:
3.2 Impairment of tangible and intangible assets other than goodwill
Property, plant and equipment and Intangible assets are tested for impairment when events occur or changes in circumstances indicate that the recoverable amount of the cash generating unit is less than its carrying value. The recoverable amount of cash generating units is higher of value-in-use and fair value less cost to sell. The calculation involves use of significant estimates and assumptions which includes turnover and earnings multiples, growth rates and net margins used to calculate projected future cash flows, risk-adjusted discount rate, future economic and market conditions.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
At each Balance Sheet date, consideration is given to determine whether there is any indication of impairment of the carrying amount of the Company’s assets. If any indication exists, estimation is made for the asset’s recoverable amount, which is the greater of the net selling price and the value in use. An impairment loss, if any, is recognized whenever the carrying amount of an asset exceeds the recoverable amount.
Impairment losses of continuing operations, including impairment on inventories, if any, are recognized in profit or loss section of the statement of profit and loss.
3.3 Provision against investments / Loans and Advances to Subsidiaries and Associate
The management taking into account the present operations of the Company, proposed restructuring, future business prospects etc. makes provision towards impairment on the carrying value of investments in the subsidiaries and Associate and loans and advance given to them.
3.4 Application of interpretation for Service Concession Arrangements (SCA)
Management has assessed applicability of Appendix A of Indian Accounting Standards 11: Service Concession Arrangements for the power purchase agreement which the company has entered into. In assessing the applicability of SCA, the management has exercised significant judgement in relation to the underlying ownership of the assets, the attached risks and rewards of ownership, residual interest and the fact that secondary lease periods are not at nominal lease rentals etc. in concluding that the arrangements don’t meet the criteria for recognition as service concession arrangements.
3.5 Determining whether an arrangement contain leases and classification of leases
The Company enters into service / hiring arrangements for various assets / services. The determination of lease and classification of the service / hiring arrangement as a finance lease or operating lease is based on an assessment of several factors, including, but not limited to, transfer of ownership of leased asset at end of lease term, lessee’s option to purchase and estimated certainty of exercise of such option, proportion of lease term to the asset’s economic life, proportion of present value of minimum lease payments to fair value of leased asset and extent of specialized nature of the leased asset.
3.6 Employee Benefits - Defined benefit obligation (DBO)
Management’s estimate of the DBO is based on a number of critical underlying assumptions such as standard rates of inflation, medical cost trends, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses.
Notes :
4.1 The Board of Directors of the Company, at their meeting held on June 30, 2017, has approved the sale of Company’s biomass business including investments in 8 Biomass subsidiaries to M/s. Janati Bio Power Private Limited, Subsidiary of M/s. SVL Limited( Promoter Company). The Board of Directors also approved the sale of one Biomass power undertaking located at Sookri Village Narasingpur District, Madhya Pradesh and investments in its subsidiary Biobijlee Green Power Limited to its promoter company M/s. SVL Ltd. and/or its subsidiaries/ associates. During the year ended March 31, 2018, the shareholders of the Company approved the above disinvestments.
a. Accordingly, the Company transferred the control of 8 Biomass subsidiaries with effect from September 07, 2017 for an aggregate consideration of Rs.4,900.00 lakhs, which resulted in loss of Rs. 8,306.00 lakhs which is recognized in these audited financial statement for the year ended March 31, 2018.
5.1 Investments classified as held for sale (Also refer note 16)
a. The Board of Directors of the Company, in its meeting held on January 24, 2018 accorded its approval to sell the investments in M/s. Amrit Environmental Technologies Private Limited,subject to approvals from secured creditors and other regulators. Accordingly, the investment along with the corresponding provision made towards the diminution has been reclassified under assets held for sale.
b. The Board of Directors of the Company, in its meeting held on June 30, 2017, accorded its approval to sell the Biomass undertaking located in Narasinghpur, Madhya pradesh to the Company’s wholly owned subsidiary, M/s. Biobijlee Green Power Limited(BGPL) on a slumpsale basis. Subsequently, the investments in BGPL shall be sold to M/s. Janati Bio Power Private Limited. Accordingly, the investments in BGPL are classified as held for sale. (also refer note 6.1 above)
5.2 The amount of Rs. 54,429.11 lakhs ( As at 31 March, 2017 Rs.57,728.55 lakhs ) shown as Investment in deemed equity in respect of subsidiaries towards fair value of interest free/ subsidized loans and investments in 6% Cumulative Redeemable Preference shares.
5.3 The company had invested Rs. 86,423.30 Lakhs in Cumulative Redeemable Preference Shares issued by its subsidiary company Beta Wind Farm Private Limited (Beta). In accordance with Ind AS 109, “Financial Instruments” the said investments in Preference shares has been treated as a loan given by the parent and accordingly is carried at amortised cost. The difference between the amount invested and the net present value is accounted as Investment in nature of Equity.
5.4 Categorisation of Investments - as per Ind AS 109 Classification
5.5 Voluntary winding up proceedings have been initiated in respect of Orient Eco Energy Limited during the year ended 31 March, 2015 and the company received proceeds of Rs.76.50 lakhs from liquidation during the current year ended 31 March 2018. Since the investments have been adequately provided for in the financial statements in the earlier years there was no gain/loss during the year.
Notes:
6.1 The company had invested Rs. 86,423.30 Lakhs (including premium of Rs. 40,937.35 Lakhs) in 454,859,455 6% Cumulative Redeemable Preference Shares issued by its subsidiary Beta Wind Farm Private Limited (Beta). In accordance with Ind AS 109, “Financial Instruments” the said investments in Preference shares has been treated as a loan given by the parent and accordingly is carried at amortised cost. The difference between the amount invested and the net present value is accounted as Investment in nature of Equity. In view of accumulated losses of the subsidiary and considering the provisions of Companies Act, 2013 and the agreement the subsidiary has with its consortium bankers, no dividend has been declared by Beta so far and hence on a prudent basis no income has been accrued on this amount.
6.2 The amounts disclosed as Advance subscription towards equity shares represent amount paid towards investment in subsidiaries for which allotment of equity shares in favour of the Company has not yet been completed. The details of the same as at the year end are as follows:
6.3 The amount disclosed as Advance to Other Entities represent amounts paid to Sanjog Sugars and Eco Power Private Limited, Statt Agra Ventures Private Limited and Statt Green Power Private Limited.
Note :
7.1 The cost of inventories recognised as an expense during the year for continuing operations was Nil (For the year ended 31 March 2017 : Nil ) and for discontinued operations was Rs.27.03 lakhs (For the year ended 31 March 2017 : Rs.1,648.39 lakhs)
7.2 Mode of valuation of inventories has been stated in Note 3.3.
Notes:
8.1 The Investment/ Borrowing Committe of the Board of Directors of the Company, at their meeting held on 17 November, 2015 has approved the sale of the Company’s stake in Sanjog Sugars and Eco Private Limited. The Company has entered into a Memorandum of Understanding dated November 17, 2015 and Shareholder Agreement to Sell dated June 30, 2016 (“Agreements”) with Soorya Eco Power Pvt Ltd (“buyer”) with respect to 84% shares held by the Company in Sanjog Sugars and Eco Power Private Limited (“SSEPPL”).
Consequent to these Agreements, the investments have been classified as current. The cost of investmemts as at31 March 2017, 2016 and 2015 was Rs. 1,368.28 Lakhs which has been fully provided for considering the accumulated losses of the subsidiary and the sale consideration receivable based on the above referred MOU and accordingly being stated at NIL Value.
8.2 During the year ended 31 March 2018, the Company has been allotted shares worth Rs.1,899.98 lakhs in M/s. Orient Green Power Company (Maharashtra) Private Limited for consideration otherthan in cash towards the proposed slumpsale of the company’s 20MW Biomass undertaking located at Kolhapur, Maharashtra.
Note:
9.1 The average credit period on sale of power is 45 days.
9.2 Ageing of receivables
9.3 Major customers, being government undertakings and private companies having highest credit ratings, carry negligible credit risk. Concentration of credit risk to any private counter party did not exceed 10% of total debtors at any time during the year.
Note:
10.1 Earmarked account balances refers to share application money received during Initial Public Offer(IPO) made during the year 2010. During the year ended March 31, 2018, the company deposited the unclaimed share application money with the Investor Education and Protection Fund.
11.1 The Company intends to dispose land acquired for development of Energy plantation. Considering the market value, impairment has been recognized in books in the year 2015-16. The Management expects no further provision is required in this regard. The Company is in negotiation with some potential buyers and the Company expects that the fair value less costs to sell the land will be higher than the net carrying value. The Liabilities associated with the said land is identified and deducted from the realizable value.
11.2 Considering the Board’s decision to transfer the 10MW Biomass Power undertaking located in Narasinghpur, Madhyapradesh, on a slumpsale basis to its wholly owned subsidiary, M/s. Biobijlee Green Power Limited, the assetspertaining to the said biomass power undertaking has been classified as assets held for sale. Subsequent to slumpsale, the investments held by the Company in M/s. Biobijlee Green Power Limited shall be sold to M/s. SVL Limited and/or its Subsidiaries/ Associates.
As the slumpsale of the above mentioned assets and investments are proposed to be disposed at their carrying book value, no impairment is required.
11.3 The Board of directors of the Company in its meeting held on January 24, 2018 accorded its approval to dispose the investments in one of its subsidiaries, viz., Amrit Environmental Technologies Private Limited (AETPL), subject to approvals from secured creditors and other regulators. Since the investments and other receivables due from AETPL have completely been provided, no further impairment is required to be recongized in this financials.
11.4 The liabilities directly associated with assets held for sale have been identified by the management under Note 28.
Note:
12.1 Reconciliation of the number of shares and amount outstanding at the beginning and at the end of the reporting period:
* During the year ended 31 March, 2018, pursuant to the approval of shareholders through postal ballot, the Company has issued and allotted 10,924,302 Equity shares of Rs. 10 each at a price of Rs.12.55 per share (Inclusive of a premium of Rs.2.55 per equity share) on preferential allotment basis to M/s. SREI Infrastructure Finance Limited. Such Preferential shares shall rank pari passu in all respects including, as to dividend, with existing fully paid up equity shares of face value of Rs. 10 each and shall also be subject to lock-in for such period, in accordance with the provisions of SEBI (Issue of Capital and Disclosure Requirements) Regulations. Also Refer Note 35.
12.2 Terms and Rights attached to equity shares
i. The company has only one class of equity shares having a par value of Rs.10 each. Each shareholder of equity shares is entitled to one vote per share.
ii. In the event of liquidation, the equity shareholders will be entitled to receive the remainingassets of the company, after distribution of all preferential amounts, in proportion to shareholding. However, no such preferential amount exists as on the balance sheet date.
12.3 Aggregate Number and Class of Shares- allotted as Fully paid up Bonus shares (or) issued for consideration otherthan cash (or) shares bought back for the Period of 5 Years Immediately Preceding the Balance Sheet Date - Nil.
12.3 Shares reserved for issue under options and contracts or commitments for the sale of shares or disinvestment, including the terms and amounts - Nil.
13.1 Movement in the Reserves for the year has been presented under
14.1 The company has been generally regular in the repayment of dues and interest corresponding to the above loan. However there have been delays in meeting the debt service obligations during the current year. The loan accounts are presently classified as standard by the lenders.
14.2 For the current maturities of Long term debt, refer items (a) and (b) in “Other financial liabilities (current)” in Note 25.
15.1 In accordance with the accounting policy adopted by the company, the Deferred tax asset mainly arising on unabsorbed business losses/ depreciation has not been recognised in these financial statements in the absence of reasonable certainty supported by appropriate evidence regarding availability of future taxable income against which such deferred tax assets can be realised.
16.1 The Deferred Revenue is recognized from Capital Subsidy of Rs.737.70 lakhs received from Ministry of New & Renewable Energy. Out of the above subsidy, during the year ended March 31, 2018, the Company having transferred the 20MW Biomass undertaking under a slumpsale agreement written back Rs. 435.98 lakhs of grant to income on complying with the terms of the grant.
16.2 Considering the proposal to disinvest biomass business, the short term borrowings stated above for the year ended 31 March 2017 have been regrouped as Liabilities directly associated with assets held for sale for the current year. Refer Note 28.
17.1 As at 31 March, 2018 and 31 March, 2017 based on and to the extent of information available with the Company regarding the registration of suppliers as Micro and Small Enterprises under the Micro, Small and Medium Enterprises Development Act, 2006, there are no amounts outstanding in respect of these suppliers.
Note:
18.1 As at 31 March 2018 and 31 March 2017, there are no amounts due and payable to Investor Education and Protection fund. During the year ended 31 march 2018, the company remitted Rs.0.17lakhs to Investor Education and Protection fund, when the amount is due to be remitted.
18.2 The Current maturities and the interest accrued for the year ended 31 March 2018 reflects the amounts pertaining to the Continuing Operations of the Company. There have been certain defaults in repayment of long term loans pertaining to discontinued operations. (Refer Note 28)
19.1 Trade payables include Rs.92.73 lakhs towards Energy plantation land acquired by the company and Rs.95.26 lakhs towards 10MW Biomass power undertaking located at Narasinghpur. Also refer note 16 on Assets held for sale .
19.2 The advance is received from M/s. Biobijlee Green Power Limited, a wholly owned subsidiary of the Company towards the slumpsale of the Company’s 10MW Biomass power undertaking located in Madhyapradesh.
19.3 The Company has defaulted in repayment of Long term secured loans and interest thereof, the details of which are given below:
20.1 Details of Defaults repayment of long term borrowings:
There have been certain delays in the repayments of principal and interest amounts in respect of borrowings from Banks by the Company . During the current year ended 31 March, 2018, there were defaults to the extent of Rs.1,829.26 lakhs in respect of principal and interest repayments. Out of the same, an amount of Rs. 1,244.67 lakhs has been paid by the Group during the year. The balance amount of Rs.584.59 lakhs of principal and interest is outstanding as at 31 March 2018.
21.1 During the current year ended 31 March, 2018, there were defaults in repayment of short term borrowings to the extent of Rs. 384.78 lakhs including interest of Rs.103.16 lakhs, pertaining to the period from September 2017 to March 2018.
* The Loan has been transferred under a slumpsale agreement. (Refer note-37.3)
Note 22 : Segment Reporting
The primary reporting of the Company has been made on the basis of Business Segments. The Company has a single business segment as defined in Indian Accounting Standard (Ind AS) 108 on Segment Reporting, namely Generation of Power through Renewable Sources. Accordingly, the amounts appearing in these financial statements relate to this primary business segment.
Information about major Customers
Included in revenue from discontinued operation of Rs. Nil ( 2016-17 Rs. 3,161.91 lakhs) are revenues which arose from sale to 3 Customers of the Company. No other single customer contributed towards more than 10% or more the Company’s revenue for 2016-17.
Note 23 : Disclosure required in terms of Clause 13.5A of Chapter XIII on Guidelines for preferential issues, SEBI (Disclosure and Investor Protection) Guidelines, 2000
The Company has received an amount of Rs. 1,371.00 Lakhs (previous year - Nil) towards share application money and the allotment of equity shares was made in the month of February 2018 on completion of required formalities (Refer Notes 17 and 18). As per the objects of the preferential allotment, the end use of the funds raised was towards meeting working capital requirements, repayment of debt by the company and its subsidiaries and for other corporate purposes. The entire amount of Rs. 1,371.00 Lakhs has been utilised during the year.
Note 24 : Employee benefits
(I) Defined Contribution Plan
Company’s (employer’s) contributions to Defined contribution plans, recognised as expenses in the Statement of profit and loss are:
(II) Defined Benefit Plans:
The Company operates a gratuity plan covering qualifying 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.
These plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.
Apart from gratuity, no other post-retirement benefits are provided to these employees.
In respect of the above plans, the most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out as at 31 March 2018 by a member firm of the Institute of Actuaries of India. 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
(i) The current service cost and interest expense for the year are included in the “Employee Benefit Expenses” line item in the statement of profit & loss.
(ii) The remeasurement of the net defined benefit liability is included in other comprehensive income.
(f) Significant actuarial assumptions for the determination of defined obligation are discount rate, expected salary increase rate and mortality. The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period while holding all other assumptions constant :
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligations 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 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.
There is no change in the methods and assumptions used in preparing the sensitivity analysis from the prior years.
25 Discontinued Operations
25.1 The Board of Directors of the Company, at their meeting held on June 30, 2017, reviewed the progress of the Composite scheme of arrangement for demerger of Company’s identified Biomass undertaking and considering the delays involved in seeking the regulatory approvals, withdrawn the Composite Scheme of Arrangement and Amalgamation between Orient Green Power Company Limited, Bharath Wind Farm Limited (BWFL), Biobijlee Green Power Limited (BGPL) and their respective shareholders, which was approved by the Board of Directors of the Company at their meeting held on 13 June 2015
The Board of Directors of the Company also considered the option of disinvesting the Biomass business and approved the sale of Biomass business of the Company including investments held in certain subsidiaries. The details are given in Note 37.2.
Accordingly, the comparative financial details for previous periods prepared considering the Composite scheme are not comparable.
25.2 The Board of Directors of the Company, at their meeting held on June 30, 2017, has approved the sale of Company’s biomass business including investments in 8 Biomass subsidiaries to M/s. Janati Bio Power Private Limited, Subsidiary of M/s. SVL Limited( Promoter Company). The Board of Directors also approved the sale of one Biomass power undertaking located at Sookri Village Narasingpur District, Madhya Pradesh and investments in its subsidiary Biobijlee Green Power Limited to its promoter company M/s. SVL Ltd. and/or its subsidiaries/ associates. During the year ended March 31, 2018, the shareholders of the Company approved the above disinvestments.
Subsequently, the Company transferred the control of 8 Biomass subsidiaries with effect from September 07, 2017 for an aggregate consideration of Rs.4,900.00 lakhs, which resulted in loss of Rs. 8,306.00 lakhs which is recognized in these audited financial statement for the year ended March 31, 2018.
The transfer of one biomass power undertaking located at Sookri Village Narasingpur District, Madhya Pradesh under slumpsale is under progress awaiting approval from secured creditors. The company also transferred Biomass Power Generation Plant located at Kolhapur to M/s. Padmashri Dr. D. Y. Patil Sahakari Sakhar Karkhana Ltd. for consideration of Rs. 8,100.00 lakhs.
The financial details relating to the aforesaid biomass business, included in the Standalone Audited Financial Results are given below(Also Refer Note 37.1):
25.3 The Company entered into an MOU with M/s. Padmashri Dr. D. Y. Patil Sahakari Sakhar Karkhana Ltd(PDDPSSKL), for sale of the Biomass Power Generation Plant of the Company located in Kolhapur. PDDPSSKL being a party to the Built, Own, Operate and Transfer (BOOT) agreement in developing the said Power generation plant, has the right under the BOOT Agreement to purchase the plant. In this context the Board of the Company approved the sale of the said unit to PDDPSSKL. Further, the Board approved the cancellation of the Business Transfer Agreement with its subsidiary, Orient Green Power (Maharashtra) Private Limited (OGPML) dated August 02, 2016 for transferring aforesaid biomass plant, by way of a slump sale. Accordingly, The slumpsale agreement has been executed on March 26, 2018 at a consideration of Rs.8,100.00 lakhs. with M/s. Padmashri Dr. D. Y. Patil Sahakari Sakhar Karkhana Ltd (PDDPSSKL).
26 Disclosure required as per regulations 34(3) of the SEBI (Listing obligations and disclosure requirements) regulations, 2015
Loans and advances in the nature of loans (gross of provisions) given to subsidiaries are given below.
Notes:
(i) The loans shall be repaid in one or more instalments not later than 31 March 2019 or such other time as the parties may mutually agree upon from time to time.
(ii) As at 31 March 2018 and 31 March 2017, there are no parties, firms or companies in which directors are interested as defined under Section 188 of the Companies Act, 2013.
(iii) The above disclosure has been made based on the actual transaction value without considering the fair valuation, based on the approval given by the Audit Committee.
Note 27 (a) : Financial Instruments (I) Capital Management
The Company manages its capital to ensure that it is able to continue as going concern while maximising the return to the stakeholders through the optimisation of the debt and equity balance. The capital structure of the Company consists of Debt and total equity. The Company is not subject to any externally imposed capital requirement. In order to maintain the capital structure in consistent with others in the industry , the Company monitors capital on the basis of the following gearing ratio.
(III) Financial Risk Management Framework
The Company manages financial risk relating to the operations through internal risk reports which analyse exposure by degree and magnitude of risk. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk. The Company seeks to minimises the effects of these risks by using derivative financial instruments to hedge the risk exposures. The use of financial derivatives is governed by the Company’s policies approved by the Audit Committee which provides written principles on foreign exchange risk, interest rate risk , credit risk , the use of financial derivatives and non derivative financial instruments and the investment in excess of liquidity. Compliance with policies and exposure limits is reviewed by the management on a continuous basis.
The Company does not enter into or trade financial instruments including derivative financial instruments for speculative purpose.
(IV) Market Risk :
The Company’s activities exposes it primarily to the financial risk of change in foreign currency exchange rates and interest rates. The Company enters into a derivative instruments to manage its exposure to foreign currency risk and interest rate risk including forward foreign exchange contracts to the hedge the exchange rate risk arising on account export of goods.
(V) Foreign Currency Risk Management :
The Company undertakes transactions denominated in foreign currencies consequently, exposures to exchange rate fluctuations arises. Exchange rate exposures are managed within approved policy parameters utilising forward foreign exchange contracts.
The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities at the end of each reporting period are as follows :
(VI) Foreign Currency sensitivity analysis :
The Company is mainly exposed to the currencies of Europe. Sensitivity of profit or loss arises mainly from Euro denominated receivables.
As per management’s assessment of reasonable possible changes in the exchange rate of /- 5% between EUR-INR currency pair, sensitivity of profit or loss only on outstanding foreign currency denominated monetary items at the period end is presented below:
Notes :
1. In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year.
(VII) Liquidity Risk Management :
Ultimate responsibility for liquidity risk management rests with the board of directors, which has established an appropriate liquidity risk management framework for the management of the Company’s short-, medium- and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
Liquidity and Interest Risk Tables :
“The following tables detail the Company’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. 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 following table details the Company’s expected maturity for its non-derivative financial assets. The table has been drawn up based on the undiscounted contractual maturities of the financial assets including interest that will be earned on those assets. The inclusion of information on non-derivative financial assets is necessary in order to understand the Company’s liquidity risk management as the liquidity is managed on a net asset and liability basis.
The amounts included above for variable interest rate instruments for both non-derivative financial assets and liabilities is subject to change if changes in variable interest rates differ to those estimates of interest rates determined at the end of the reporting period.
Note 27 (b) - Fair Value Measurement
(i) Fair value of financial assets and financial liabilities that are not measured at fair value :
The Company considers that the carrying amount of financial asset and financial liabilities recognised in the financial statements approximate the fair values.
Notes
28.1 The Company accounts for costs incurred by the Related parties based on the actual invoices/debit notes raised and accruals as confirmed by such related parties. The Related parties have confirmed to the Management that as at 31 March, 2017, there are no further amounts payable to/receivable from them, other than as disclosed above.
28.2 A. An amount of Rs. 12.00 Lakhs was paid as remuneration to Mr. T Shivaraman, Vice chairman of the Company for the financial year 2012-13. As per the direction of the Central Government, the Company has obtained the approval of the Shareholders on 14 September 2015 for waiver of the excess remuneration paid to him and the same has been informed by the Company to the Central Government. As per the Instructions of the Ministry of Corporate Affairs vide letter ref. SRN C7431170/2016-CL-VII dated 30 October 2017, Mr. T Shivaraman has refunded the remuneration amount of Rs. 12.00 lakhs to the Company and the same was informed to the Central Government.
28.2 B In the Board Meeting of the Company held on August 11, 2016, Mr. S. Venkatachalam, Managing Director of the Company, has been reappointed for a further period of three years from 23rd September 2016 to 22nd September 2019 under Sections 196, 197, 198, 203 read with Schedule V of the Companies Act 2013 for a total remuneration of Rs. 80 Lakhs per annum. The members of the Company vide postal ballot process held on March 28, 2017 had approved the reappointment and the remuneration, subject to requisite approvals
28.3 Theta Management Consultancy Private Limited has pledged 13.5 million shares of the Company held by them in connection with a loan obtained by the Company.
28.4 The Company has accounted for Management Services Fee to SVL Limited based on the debit notes raised by SVL Limited in connection with various support/advisory services provided by SVL Limited to the Company during the year ended 31 March 2018.
28.5 The Company under a disinvestment plan to divest Biomass business, disposed 8 biomass subsidiaries during the year ended 31 March 2018 with effect from 07 September 2017. Accordingly the transactions with the said subdidiaries for the year are till the date of disposal. (Also Refer Note 37)
29 Leases
(a) Operating Leases
(i) The Company as lessee
The Company has applied Appendix C to Ind AS 17 ‘Leases’ to hiring / service contracts of rigs, vessels, helicopters, etc. to evaluate whether these contracts contains a lease or not. Based on evaluation of the terms and conditions of the arrangements, the Company has evaluated such arrangements to be operating leases.
30. The Board of Directors of the Company has reviewed the realisable value of all the current assets and has confirmed that the value of such assets in the ordinary course of business will not be less than the value at which these are recognized in the financial statements. In addition, the Board has also confirmed the carrying value of the non-current assets including long-term investments in the financial statements. The Board, duly taking into account all the relevant disclosures made, has approved these financial statements in its meeting held on May 03, 2018.
|