TATA POWER RENEWABLE ENERGY LIMITED
Annual Report 2018-19
12th Annual Report 2018-19
CORPORATE INFORMATION
CORPORATE IDENTITY NUMBER: U40108MH2007PLC168314
BOARD OF DIRECTORS REGISTERED OFFICE
Non Independent, Non- Mr. Praveer Sinha C/o The Tata Power Company Ltd., Executive Corporate Centre, A Block, Mr. Ramesh Subramanyam 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400 009 Mr. Ashish Khanna Tel: 022 67171000 E-mail: [email protected] Website: www.tatapowerrenewables.com Independent, Non- Mr. Nawshir Mirza Executive REGISTRARS Mr. Sanjay Bhandarkar TSR Darashaw Ltd. Ms. Anjali Bansal 6-10 Haji Moosa Patrawala Industrial Estate 20, Dr E Moses Road, Mahalaxmi, Mumbai 400 001 CHIEF EXECUTIVE OFFICER Mr. Mahesh Paranjpe Tel: 022 6656 8484 Fax 022 6656 8494 Email : [email protected] Website: www.tsrdarashaw.com CHIEF FINANCIAL OFFICER Mr. Gautam Attravanam DEBENTURE TRUSTEES
COMPANY SECRETARY Ms. Mona Purandare SBI CAP Trustee Company Ltd., 6th Floor Apeejay House, 3, Dinshaw Wachha Road, STATUTORY AUDITORS S R B C & CO. LLP Churchgate, Mumbai 14th Floor, The Ruby Tel No +91 22 43025555 29, Senapati Bapat Marg, Fax No +91 22 22040465 Dadar (West) E-mail: [email protected] Mumbai - 400 028 BANKERS
ICICI Bank
IDFC Bank
IDFC Infrastructure Finance Limited
HDFC Bank
Axis Bank
Kotak Mahindra Bank Ltd
IndusInd Bank
Yes Bank State Bank of India
TATA POWER RENEWABLE ENERGY LIMITED
The TWELFTH ANNUAL GENERAL MEETING of TATA POWER RENEWABLE ENERGY LIMITED will be held on 9th day of September, 2019 at 11.30 a.m in the Conference Room No 102 on the 1st Floor of Bombay House, 24, Homi Mody Street, Mumbai, 400 001, to transact the following business:-
1A. To receive, consider and adopt the Audited Financial Statements of the Company for the financial year ended 31st March 2019, together with the Reports of the Board of Directors and the Auditors thereon.
1B. To receive, consider and adopt the Audited Consolidated Financial Statements of the Company for the financial year ended 31st March 2019, together with the Report of the Auditors thereon.
2. To appoint a Director in place of Mr. Ramesh Subramanyam (DIN: 02421481), who retires by rotation and is eligible for re-appointment.
Special Business:
3. Appointment of Ms. Anjali Bansal as a Director
To consider and, if thought fit, to pass with or without modification, the following resolution as an Ordinary Resolution:
“RESOLVED that Ms. Anjali Bansal (DIN: 00207746), who was appointed as an Additional Director of the Company with effect from 19th July 2018 by the Board of Directors and who holds office up to the date of this Annual General Meeting of the Company under Section 161(1) of the Companies Act, 2013 (the Act) but who is eligible for appointment and in respect of whom the Company has received a notice in writing under Section 160 (1) of the Act from a member proposing her candidature for the office of Director, be and is hereby appointed a Director of the Company.
RESOLVED FURTHER that pursuant to the provisions of Sections 149, 152 and other applicable provisions, if any, of the Act (including any statutory modification or re-enactment thereof for the time being in force), the Companies (Appointment and Qualifications of Directors) Rules, 2014, read with Schedule IV to the Act, and other applicable regulations of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) if any, as amended from time to time, the appointment of Ms. Anjali Bansal (DIN: 00207746), who meets the criteria for independence as provided in Section 149(6) of the Act and the Rules framed thereunder and who has submitted a declaration to that effect, and who is eligible for appointment, as an Independent Director of the Company, not liable to retire by rotation, for a term of three years commencing from 19th July 2018 up to 18th July 2021, be and is hereby approved.”
4. Ratification of Cost Auditor's Remuneration
To consider and, if thought fit, to pass with or without modification, the following resolution as an Ordinary Resolution:-
“RESOLVED that pursuant to Section 148 and other applicable provisions, if any, of the Companies Act, 2013 (including any statutory modification or re-enactment thereof for the time being in force) and the Rules made thereunder, as amended from time to time, the Company hereby ratifies the remuneration of ₹ 300,000/- plus service tax and actual out-of-pocket expenses payable to M/s. Sanjay Gupta and Associates, Cost Accountants, who are appointed as Cost Auditors to conduct the audit of cost records maintained by the Company for the Financial Year 2019-20.”
NOTES:
1. The relative Explanatory Statement pursuant to Section 102 of the Companies Act, 2013 (the Act), in regard to the business as set out in Item Nos. 3, and 4 is annexed hereto.
2. A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A MEMBER. Proxies, in order to be effective, must be received at the Company’s Registered Office not less
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TATA POWER RENEWABLE ENERGY LIMITED
than 48 hours before the meeting. Proxies submitted on behalf of companies, societies, partnership firms, etc. must be supported by appropriate resolution/authority, as applicable, issued on behalf of the nominating organisation.
3. Attached is a proxy form with instructions for filling, stamping, signing and depositing the proxy form.
4. Corporate Members intending to send their authorised representatives to attend the Annual General Meeting (AGM) are requested to send a certified copy of the Board Resolution authorising their representative to attend and vote in their behalf at the Meeting.
5. In case of joint holders attending the AGM, only such joint holder who is higher in the order of names will be entitled to vote.
6. Members are requested to notify immediately any change in their addresses and/or the Bank Mandate details to the Company’s Registrars and Share Transfer Agents, TSR Darashaw Limited (TSRD) for shares held in physical form and to their respective Depository Participants (DP) for shares held in electronic form.
7. Members holding shares in electronic form may please note that their bank details as furnished by the respective Depositories to the Company will be considered for remittance of dividend as per the applicable regulations of the Depositories and the Company will not entertain any direct request from such members for change/deletion in such bank details. Further, instructions, if any, already given by them in respect of shares held in physical form, will not be automatically applicable to the dividend paid on shares held in electronic form. Members may, therefore, give instructions regarding bank accounts in which they wish to receive dividend to their DPs.
8. Members are hereby informed that under the Act, the Company is obliged to transfer any money lying in the Unpaid Dividend Account, which remains unpaid or unclaimed for a period of seven years from the date of such transfer to the Unpaid Dividend Account, to the credit of the Investor Education and Protection Fund (the Fund) established by the Central Government.
Further, pursuant to the provisions of the Section 124 of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended (IEPF Rules), all the shares on which dividends remain unpaid/ unclaimed for a period of seven consecutive years or more shall be transferred to the demat account of the IEPF Authority as notified by the Ministry of Corporate Affairs (MCA). Hence, the Company urges all the members to encash / claim their respective dividends during the prescribed period.
By Order of the Board of Directors,
Mona Purandare Company Secretary ACS-11327
Mumbai, 24th April, 2019
Registered Office: C/o The Tata Power Company Limited Corporate Center, ‘A’ Block, 34, Sant Tukaram Road Carnac Bunder, Mumbai 400 009. CIN: U40108MH2007PLC168314 Tel: 022 67171000 E-mail: [email protected] Website: www.tatapowerrenewables.com
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TATA POWER RENEWABLE ENERGY LIMITED
EXPLANATORY STATEMENT
As required by Section 102 of the Companies Act, 2013 (the Act), the following Explanatory Statement sets out all material facts relating to the business mentioned under Item Nos. 4 and 5 of the accompanying Notice dated 24th April 2019.
Item No 3: Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors appointed Ms. Anjali Bansal (DIN: 00207746) as Additional Director of the Company and also as Independent Director, not being liable to retire by rotation, for a term of 3 years i.e. 19th July 2018 up to 18th July 2021, subject to approval of the Members.
In terms of Section 161(1) of the Act, Ms. Anjali Bansal holds office only upto the date of the forthcoming Annual General Meeting but is eligible for appointment as a Director. A notice under Section 160(1) of the Act has been received from a Member signifying its intention to propose appointment of Ms. Anjali Bansal as a Director.
The Company has received declaration from Ms. Bansal to the effect that she meets the criteria of independence as provided in Section 149(6) of the Act, read with the Rules framed thereunder. In the opinion of the Board of Directors, Ms. Bansal is independent of management.
Ms. Anjali Bansal is a Senior Advisor to TPG Capital (TPG), a leading global private equity fund, based in Mumbai. Prior to joining TPG, Ms. Bansal was a global Partner with Spencer Stuart where she founded and led their India business and co-led their Asia Pacific Board & CEO practice as part of the Asia Pacific leadership team. She has worked in various geographies across the United States, Europe and Asia, advising Indian and multinational companies. Earlier, Ms. Bansal was a strategy consultant with McKinsey & Company in New York and Mumbai. She started her career as an engineer.
An active contributor to the emerging dialogue on corporate governance and diversity, she co- founded and chaired the FICCI Center for Corporate Governance program for Women on Corporate Boards. She is a keen participant in the broader business ecosystem and has served on the managing committee of the Bombay Chamber of Commerce and Industry and on the CII National Committee for Women.
She has been listed as one of the Most Powerful Women in Indian Business by India's leading publication, Business Today, and as one of the Most Powerful Women in Business by Fortune India.
Ms. Bansal serves on the boards of GlaxoSmithKline Pharmaceuticals India, Bata India Limited, and Voltas Limited. She serves on the Advisory Board of the Columbia University Global Centers, South Asia and as a trustee on the boards of the United Way of Mumbai and Enactus. Her prior non-profit roles include chairing the board of FWWB, India's leading livelihood and microfinance organization. Ms. Bansal is an active member of the YPO (Young Presidents' Organization).
The Board commends the resolution at item no. 3 of the accompanying notice for approval by the members of the Company.
Other than Ms. Anjali Bansal, none of the Directors and Key Managerial Personnel of the Company or their respective relatives are concerned or interested in the Resolution at Item no. 3 of the accompanying Notice.
Ms. Anjali Bansal is not related to any other Director or KMP of the Company.
Item No. 4: Pursuant to Section 148 of the Act, the Company is required to have the audit of its cost records conducted by a cost accountant in practice. On the recommendation of the Audit Committee of Directors, the Board of Directors has approved the appointment of M/s Sanjay Gupta & Associates, Cost Accountants (SGA) as the Cost Auditors of the Company to conduct audit of cost records maintained by the Company for the Financial Year 2019-20, at a remuneration of 300,000/- plus service tax and actual out-of-pocket expenses.
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SGA, have furnished a certificate regarding their eligibility for appointment as Cost Auditors of the Company. They have vast experience in the field of cost audit and have conducted the audit of the cost records of the Company for the previous year under the provisions of the Companies Act, 2013 and the rules thereunder.
The Board commends the Resolution at Item No. 4 of the accompanying Notice for ratification by the Members of the Company.
None of the Directors and Key Managerial Personnel of the Company or their respective relatives are concerned or interested in the Resolution at Item No. 4 of the accompanying Notice.
By Order of the Board of Directors,
Mona Purandare Company Secretary ACS-11327
Mumbai, 24th April, 2019
Registered Office: C/o The Tata Power Company Limited Corporate Center, ‘A’ Block, 34, Sant Tukaram Road Carnac Bunder, Mumbai 400 009 CIN: U40108MH2007PLC168314 Tel: 022 67171000 E-mail: [email protected] Website: www.tatapowerrenewables.com
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TATA POWER RENEWABLE ENERGY LIMITED
Details of the directors seeking re-appointment/appointment at the forthcoming Annual General Meeting (in pursuance Secretarial Standard-2 on General Meetings)
Name of the Mr. Ramesh Subramanyam Ms. Anjali Bansal Director Date of Birth 27.06.1969 25.02.1971
Date of 30.03.2015 19.07.2018 Appointment Relationship Mr. Ramesh Subramanyam is not Ms. Anjali Bansal is not related to any other with other related to any other Director or KMP Director or KMP of the Company Directors, of the Company Manager and KMP of the Company Expertise in Mr Subramanyam is a Commerce Ms. Bansal is the former Global Partner and Specific Graduate from the University of Managing Director with TPG Private Equity functional Nagpur. He is also an Associate of the and a strategy consultant with McKinsey area Institute of Cost Accountants of India, and Company in New York and Mumbai. Associate of the Institute of Company She founded and ran Spencer Stuart’s India Secretaries of India and a Certified practice successfully growing it to a highly Public Accountant - USA. He has 21 reputed pan-India platform. She was also a years of professional experience in global partner and co-led their Asia Pacific the field of Finance, Corporate Board and CEO practice as part of the Asia Treasury, Accounts and Secretarial Pacific leadership team. She started her functions. He has worked in Siemens career as an engineer. She serves as an AG Germany, Monsanto India Independent NonExecutive Director on the Limited, Hindustan Lever Limited and public boards of GlaxoSmithKline Lloyds Steel Industries Limited. Pharmaceuticals Limited, Bata India Presently, Mr. Subramanyam is the Limited and Voltas Limited. She is on the Chief Financial Officer of The Tata Advisory Board of the Columbia University Power Company Limited. Global Centers, South Asia. She is an enthusiastic participant in the entrepreneurial ecosystem, is charter member of TiE, angel investor and mentor to young entrepreneurs and companies including the SAHA Fund, Female Founders Fund and others.
Ms. Bansal is deeply committed to social enterprise and is an advisor to SEWA. Previously, she chaired the India board of Women’s World Banking, a leading global livelihood-promoting institution and was an advisor to Grameen Foundation. An active contributor to the dialogue corporate governance and diversity, she co-founded and chaired the FICCI Center for Corporate Governance program for Women on Corporate Boards. She serves on the managing committee of the Bombay Chamber of Commerce and Industry and is part of the CII Directors Guild. She is a member of the Young Presidents’ Organization. Qualification A graduate in Commerce and B.E. (Computer Engineering), Gujarat associate member of the Institute of University, M.A. International Finance & Cost Accountants of India, Associate Business, Columbia University of the Institute of Company
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TATA POWER RENEWABLE ENERGY LIMITED
Secretaries of India and a Certified Public Accountant - USA.
Directorships 1. Coastal Gujarat Power Limited 1. Bombay Chamber Of Commerce And held in other 2. Tata Projects Limited Industry Companies 3. Tata Power Delhi Distribution 2. Glaxosmithkline Pharmaceuticals Ltd. (excluding Limited 3. Kotak Mahindra Asset Management Co. foreign Ltd. companies) 4. Bata India Ltd. 5. Apollo Tyres Ltd. 6. The Tata Power Co. Ltd. 7. Voltas Ltd. 8. Tata Power Solar Systems Ltd. 9. Delhivery Private Ltd. 10. Siemens Ltd. Chairman/Me Audit Committee Nomination and Remuneration mber of the 1. Coastal Gujarat Power Ltd. Committee Committee of 2. Tata Projects Ltd. 1. Bata India Ltd. (Chairman) the Board of 2. GlaxoSmithKline Pharmaceutical Ltd. directors of 3. Voltas Ltd. other 4. The Tata Power Co. Ltd. Companies Corporate Social Responsibility Committee 1. GlaxoSmithKline Pharmaceutical Ltd. 2. The Tata Power Co. Ltd. (Chairman) Number of NIL NIL Shares held in the Company Number of Seven (7) Four (4) Board Meetings attended during the year Remuneration NIL NIL
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VENUE OF 12th ANNUAL GENERAL MEETING OF TATA POWER RENEWABLE ENERGY LIMITED:
Conference Room No 102, on the 1st Floor of Bombay House, 24, Homi Mody Street, Mumbai,400001.
TATA POWER RENEWABLE ENERGY LIMITED
BOARD'S REPORT
To the Members,
The Directors are pleased to present the 12th Annual Report on the business and operations of your Company and the Statements of Account for the year ended 31st March 2019.
1 FINANCIAL RESULTS
Figures in ₹ crore
STANDALONE CONSOLIDATED FY19 FY18 FY19 FY18 a) Net Sales / Income from Other 715.41 486.10 2,045.77 1,745.30 Operations b) Operating Expenditure 82.95 53.43 208.92 175.66 c) Operating Profit 632.46 432.67 1,836.85 1,569.64 d) Add: Other Income 86.58 173.46 46.90 41.70 e) Less: Finance Cost 320.49 208.88 773.66 697.89 f) Less: Depreciation / Amortisation / 259.21 207.99 606.20 555.77 Impairment g) Profit before Tax 139.34 189.26 503.89 357.68 h) Tax Expenses 46.81 (1.90) 175.44 84.41 i) Net Profit/(Loss) after Tax 92.53 191.16 328.45 273.27 j) Add: Share of Profit of Associates NIL NIL NIL NIL k) Net Profit for the year 92.53 191.16 328.45 273.27 l) Other Comprehensive Income 0.36 0.31 0.79 0.47 (net of tax) m) Total Comprehensive Income 92.89 191.47 329.24 273.74 n) Total Comprehensive Income Attributable to: - Owners of the Company NIL NIL 329.24 272.06
- Non-controlling interests NIL NIL - 1.68
2 DIVIDEND
The Directors do not recommend any dividend for the financial year 2018-19.
3 FINANCIAL PERFORMANCE AND STATE OF COMPANY’S AFFAIRS -
Financial Performance
The Company's Standalone Operating Revenue was higher at ₹ 715.41 crore, as against ₹ 486.10 crore in FY18, an increase of 47%. Your Company also reported a Standalone Profit after Tax (PAT) of ₹ 92.53 crore, as against ₹ 191.16 crore for the previous year. The improvement in the Company’s revenue is attributed to higher stabilized operating capacity and addition of newer capacity. Your Company has received a dividend of ₹ 40.35 crore from its wholly owned subsidiary company, Walwhan Renewable Energy Ltd (WREL) during the period.
Consolidated Operating revenue of the Company for the current reporting year is ₹ 2,045.77 crore and Consolidated Profit after Tax (PAT) is ₹ 328.43 crore. The increase is mainly on
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TATA POWER RENEWABLE ENERGY LIMITED
account of stabilized operations of the newly commissioned solar PV capacity in your Company and improved operational performance in WREL projects.
Earnings per share
Basic Earnings per share of the Company was ₹ 0.89 per share compared to ₹ 2.24 per share in Previous Year.
No Material changes and commitments have occurred after the close of the year till the date of this Report, which affects the financial position of the Company.
Business Environment
The Government of India (GOI) with an intent to tap into the abundant indigenous renewable resources has set an ambitious target to achieve 175 GW energy from renewable resources by year 2022 with nearly 100 GW through solar power, 60 GW from wind power, 10 GW from biomass power and 5 GW from small hydro power. The estimated cumulative solar and wind capacity by the end of fiscal 2019 is 60 GW, comprising of 25 GW of solar and 35 GW of wind. Going by the current pace of development, it is very likely that the 100 GW solar target will be breached by fiscal 2022. Centralized procurement of wind and solar power of larger unit sizes, by the central and state nodal agencies is encouraging lower tariffs that is making the sector competitive. Also, central procurement through NTPC Vidyut Vyapar Nigam and Solar Energy Corporation of India (“SECI”) significantly reduces the risk of power off take and payment delays.
However, the enforcement of renewable purchase obligation targets would be critical. Further, mitigation of payment and curtailment of risk, land acquisition and availability of transmission capacities (intra-state and interstate) would also play an important part. Renewable energy capacity additions are growing quickly owing to government push, transparent policies and competition amongst the developers. Fiscal 2019 saw award of 14.5 GW of solar capacity including floating solar and solar wind hybrid capacities. Solar parks have eased the hurdles for developers to install solar power assets and, hence, offer an attractive proposition to develop solar power. Dedicated green energy corridors, particularly in the states of Rajasthan and Gujarat, are expected to facilitate evacuation from renewable projects giving a boost to interstate sale of renewable energy when completed.
The fall in renewable tariffs has significantly increased the competitiveness as the discovered tariffs have breached the variable cost of Thermal Units. This augurs well for renewable energy as it will improve affordability and off-take, leading to an increase in share in the overall power basket. Lowering of electricity tariff from renewable sources has come on the back of competitive module pricing, development in technology, and enhanced renewable purchaser obligation (“RPO”) targets. Increased scrutiny of compliance to RPO targets is seen from the Electricity Regulatory Commissions. Competition would also encourage innovation in battery energy storage systems for both grid scale PV sites and roof top solar. Hybrid wind and solar and Solar PV + Hydro Storage are other alternatives being studied by the regulators for better grid operations post large-scale addition of the renewable energy assets. Direct sale to commercial and industrial customers is increasing in select states with supportive open access policies / high Industrial tariffs, the preferred states being Maharashtra, Tamil Nadu, Uttar Pradesh.
The industry sees headwinds in terms of imposition of safe guard duty on procurement of solar cells and modules (from China and Malaysia), increase in goods and services tax (GST), enhanced competition in obtaining connectivity and long-term open access for power evacuation, increase in debt costs and the weakening of local currency. It is noteworthy that despite the above head winds the sector continues to maintain its competitiveness.
Operations
As on 31st March 2019, the operating capacity of the Company including its subsidiaries was 1,887.97 MW, consisting of 1,336.77 MW of Solar plants and 551.2 MW of Wind plants.
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The Company has commissioned two solar PV plants in FY19 and added 200 MW to its utility scale operating portfolio and 2.77 MW to its rooftop solar portfolio.
State wise capacities of the operating plants are as under:
States Solar (MW) Wind (MW) Total (MW)
Andhra Pradesh 205 100 305
Bihar 40 - 40
Gujarat 100 139.2 239.2
Karnataka 367 - 367
Madhya Pradesh 130 44 174
Maharashtra 127.5 62 189.5
Punjab 36 - 36
Rajasthan 66 185 251
Tamil Nadu 249 21 270
Telangana 15.27 - 15.27
U.P 1 - 1
Total 1,336.77 551.2 1,887.97
The Company has 826.97 MW of standalone assets. In addition, it has twenty-two operating subsidiaries: . Walwhan Renewable Energy Limited (formerly Welspun Renewables Energy Private Limited) and its 19 subsidiaries with a portfolio of 1010 MW of solar and wind assets . Indo Rama Renewables Jath Limited with an operating 30 MW wind farm in Maharashtra . Vagarai Windfarm Limited with an operating 21 MW wind farm in Tamil Nadu.
In addition to the above, 379.4 MW of renewable capacity is proposed to be transferred from its holding Company, The Tata Power Company Limited to the Company under a scheme of Arrangement, which is under approval process with regulatory authorities.
The break-up of the tied-up capacity under Power Purchase Agreement (PPA) as given below:
Entity PPA Capacity Solar (PPA Wind (PPA Capacity) Capacity) TPREL and its 877.97 MW 472.77 MW 405.2 MW subsidiaries excluding WREL WREL and its 1010 MW 864 MW 146 MW subsidiaries Tata Power Capacity 379.4 MW 3 MW 376.4 MW planned to be carved out Total 2267.37 MW 1339.77 MW 927.6 MW
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TATA POWER RENEWABLE ENERGY LIMITED
The generation sales and PAT are given below –
Standalone FY19 FY 18 Generation in MU 1,383.10 853.18 Net sales in MU 1,352.26 820.25 PAT - ₹ Crore 92.53 191.16
WREL and its subsidiaries FY19 FY18 Generation in MU 1755 1673.92 Net sales in Mu 1745 1667.9 PAT - ₹ Crore 300.1 232.46
IRRJL FY19 FY 18 Generation in MU 61.36 54.11 Net sales in Mu 58.95 51.68 PAT - ₹ Crore 4.52 0.84
Vagarai Windfarm Ltd* FY19 FY 18 Generation in MU 37.14 7.82 Net sales in MU 34.14 7.30 PAT - ₹ Crore (8.03) (5.79)
Your Company commissioned the following projects in the Financial Year 2018-19:
100 MW Solar power plant at Ananthapuramu Solar Park, Andhra Pradesh 100 MW Solar plant in Pavagada Solar Park, Karnataka.
The operations of these plants are being stabilized.
Projects under execution
The following projects of the Company are under execution: 150 MW Solar Project at Pavagada Solar Park, Karnataka. 150 MW Solar Project at Chhayan, Rajasthan 100 MW Solar Project in Uttar Pradesh
Future Growth Areas
The Company intends to build a robust renewable energy portfolio and is evaluating organic and inorganic opportunities for growth in solar, wind and other forms of renewable energy.
It is evaluating both greenfield and turnkey wind and solar power projects in various states and has also ventured into the business of rooftop solar in association with its fellow subsidiary, Tata Power Solar Systems Ltd.
4 RESERVES (OTHER EQUITY)
The net movement in the reserves of the Company for FY19 and the previous year are as follows: Figures in ₹ crore
Particulars FY19 FY18 Equity Component of compound financial instrument 5.00 5.00 (part of other equity) Capital Reserve (Pursuant to Scheme of Amalgamation of Subsidiary Company - NewGen 8.08 8.08 Saurashtra Windfarms Ltd in FY16)
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Debenture Redemption Reserve 112.19 106.75 Retained Earnings 12.46 (17.41) Other Comprehensive Income 0.67 0.31 Total Reserves (Other Equity) 138.40 102.73
5 SUBSIDIARIES/JOINT VENTURES/ASSOCIATES
As on 31st March 2019, the Company had 25 subsidiaries out of which 23 are wholly owned subsidiaries.
Report on the performance and financial position of these subsidiary companies has been provided in Annexure-I.
The Company does not have any joint ventures and associate companies.
5.1 Scheme of Arrangement
The Tata Power Company Limited (Tata Power) currently owns renewable energy projects in the states of Maharashtra, Gujarat, Karnataka, Tamil Nadu and West Bengal. At its Board meeting held on 9th November 2015 and as amended on 19th May 2017 Tata Power had approved the transfer of twelve (12) renewable projects, as per the submitted Scheme of Arrangement.
At its meeting held on 17th December 2015, and subsequent amendments at meeting held on 15th May 2017 the Board approved, subject to statutory and regulatory approvals, the acquisition on slump sale basis of the existing renewable energy projects of TPCL aggregating to 379.4 MW. The proposed restructuring/carve out is sought to be implemented by way of a Scheme of Arrangement (“Scheme”) under Sections 230 and Section 232 and other applicable provisions of the Companies Act, 2013.
The consideration for the transfer and vesting sale of the renewable energy undertakings will be equal to a lump sum amount representing the net asset value i.e., book value of the assets and liabilities being transferred pertaining to each of the renewable energy units as on “Appointed Date” will be paid by the Company and the respective transferee companies to TPCL. Appointed date is the effective date on which the certified copy of the order sanctioning the Scheme of Amalgamation is filed with the Registrar of Companies.
The scheme is currently under approval process and will be effective on approval from Honourable National Company Law Tribunal, Mumbai bench.
6 DIRECTORS AND KEY MANAGERIAL PERSONNEL
Change in Board Composition
Mr. Anil Sardana resigned as Chairman and Director of the Company effective close of business hours on 30th April 2018. Mr Rahul Shah and Ms. Anjali Kulkarni, Non-Executive Directors on your Company’s Board, resigned from the Board on 30th June 2018 and 5th July 2018 respectively. The Board has placed on record its deep sense of appreciation of the valuable contribution made by Mr. Sardana, Mr. Shah and Ms. Kulkarni to the operations and growth of the Company during their tenure.
On the recommendation of the Nomination and Remuneration Committee (NRC), Mr. Praveer Sinha and Mr. Ashish Khanna were appointed Additional Directors of the Company with effect from 7th May 2018 and 21st June 2018 respectively by the Board of Directors, in accordance with Section 161(1) of the Act. Mr. Praveer Sinha was appointed as Chairman of the Company. Their appointment was approved by members at the previous Annual General Meeting (AGM).
On the recommendation of the NRC, Ms Anjali Bansal was appointed as an Additional Director of the company with effect from 19th July 2018 by the Board of Directors, in accordance with
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Section 161(1) of the Act. Ms. Bansal was also appointed as an Independent Director for a period of 3 years with effect from 19th July 2018 upto 18th July 2021.
In accordance with the requirements of the Act and the Company’s Articles of Association, Mr. Ramesh Subramanyam retires by rotation and is eligible for re-appointment. Members’ approval is being sought at the ensuing AGM for his re-appointment.
Independent Directors
In terms of Section 149 of the Act, Mr. Nawshir Mirza, Mr. Sanjay Bhandarkar and Ms, Anjali Bansal are the Independent Directors of the Company as on date. The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the Act.
Number of Board Meetings
Eight Board Meetings were held during the year and the gap between two meetings did not exceed four months. The dates on which the said meetings were held were as follows:
9th April 2018, 24th April 2018, 21st June 2018, 19th July 2018, 19th October 2018, 3rd January 2019, 21st January 2019, 18th March 2019.
The details of attendance of these meetings are as follows:
Number of Attendance Sl. Name of the Director and Category of Board at AGM held No. Business Relationship Directorship Meetings on 27th June attended 2018
1 Mr. Anil Sardana 1 No
2 Mr. Praveer Sinha 6 Yes
3 Mr. Ramesh Subramanyam Non- 7 No Independent 4 Mr. Ashish Khanna Non-Executive 5 Yes
5 Mr. Rahul Shah 2 Yes
6 Ms. Anjali Kulkarni 3 Yes
7 Mr. Nawshir Mirza 8 Yes Independent 8 Mr. Sanjay Bhandarkar 8 No Non-Executive 9 Ms. Anjali Bansal 4 No
Key Managerial Personnel
In terms of Section 203 of the Act, the following were designated as Key Managerial Personnel of your Company by the Board:
Mr. Mahesh Paranjpe, Chief Executive Officer (with effect from 21st June 2018) Mr. J.V Patil, Chief Financial Officer (upto 5th November 2018) Mr. Gautam Attravanam, Chief Financial Officer (with effect from 5th November 2018) Ms. Mona Purandare, Company Secretary (with effect from 17th December 2015)
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Governance Guidelines:
The Company has adopted Governance Guidelines on Board Effectiveness. The Governance Guidelines cover aspects related to composition and role of the Board, Chairman and Directors, Board diversity, definition of independence, Director’s term, retirement age and Committees of the Board. It also covers aspects relating to nomination, appointment, induction and development of Directors, Director remuneration, subsidiary oversight, Code of Conduct, Board Effectiveness Review and mandates of Board Committees.
7 REMUNERATION POLICY FOR DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES
In terms of the provisions of Section 178(3) of the Act, the Nomination and Remuneration Committee (NRC) is responsible for formulating the criteria for determining qualification, positive attributes and independence of a Director. The NRC is also responsible for recommending to the Board a policy relating to the remuneration of the Directors, Key Managerial Personnel and other employees. In line with this requirement, the Board has adopted the Policy on Board Diversity and Director Attributes which is reproduced in Annexure-II and Remuneration Policy for Non-Executive Directors, Key Managerial Personnel and other employees of the Company which is reproduced in Annexure-III.
8 COMMITTEES OF THE BOARD
The Committees of the Board focus on certain specific areas and make informed decisions in line with the delegated authority. Each Committee of the Board functions according to its role and defined scope.
Audit Committee of Directors (AC) Nomination and Remuneration Committee (NRC) Corporate Social Responsibility Committee (CSR) Finance Committee (FC)* Stakeholders Relationship Committee (SRC)*
* Finance Committee and Stakeholders Relationship Committee of the Board was dissolved with effect from 19th July 2018.
Audit Committee of Directors The Audit Committee met Four (4) times during the year under review on the following dates: 24th April 2018, 19th July 2018, 19th October 2018, 21st January 2019
Composition of the Audit Committee (Audit Committee) and the no. of the meetings attended by the directors during the year is as under: Sl. No. Name of the Director Category No of Meetings attended 1. Mr. Nawshir Mirza, Chairman Non-Executive 4 2. Mr. Sanjay Bhandarkar Independent Director 4 3. Mr. Ramesh Subramanyam Non-Executive Director 4
The Board of Directors of your Company has adopted the Charter of the Audit Committee to bring the terms of reference, role and scope in conformity with the provisions of the Act. The Charter specifies the composition, meetings, quorum, powers, roles and responsibilities etc. of the Committee.
The Audit Committee invites such of the executives as it considers appropriate to be present at its meetings. The Chief Executive Officer (CEO) and the Chief Financial Officer (CFO) attend the meetings. The Statutory Auditors and Internal Auditors are also invited to the meetings. The Company Secretary, acts as the Secretary of the Committee.
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Nomination and Remuneration Committee The NRC met four (4) times during the year under review on 21st June 2018, 19th July 2018, 19th October 2018 and 18th March 2018. Composition of the Nomination and Remuneration Committee (NRC) and details of meetings attended by the directors during the year are as under: Sl. No. Name of the Director Category No of Meetings attended 1. Mr. Nawshir H. Mirza, Chairman Non-Executive 4 2. Mr. Sanjay Bhandarkar Independent Director 4 3. Mr. Anil Sardana* Non-Executive Director 0 4 Mr. Ramesh Subramanyam** 0 5 Mr. Praveer Sinha*** 4
* Mr. Anil Sardana was member upto 30th April 2018 ** Mr. Ramesh Subramanyam was member from 1st May 2018 upto 18th June 2018 *** Mr. Praveer Sinha is member with effect from 18th June 2018
The Company has adopted the Charter for the Nomination and Remuneration Committee which specifies the principles and objectives, composition, meetings, authority and power, responsibilities, reporting, evaluation etc of the Committee.
The Board has delegated the following powers to the NRC:
Investigate any matter within the scope of the Charter or as referred to it by the Board. Seek any information or explanation from any employee or director of the Company. Ask for any records or documents of the Company.
The roles and responsibilities of the NRC include the following:
Board Composition and Succession related Evaluation related Remuneration related Board Development related Review of HR Strategy, Philosophy and Practices Other functions
Corporate Social Responsibility Committee
The CSR Committee met twice during the year under review on 1st October 2018 and 1st February 2019
Composition of the Corporate Social Responsibility Committee (CSR) and no. of meetings attended by the directors during the year are as under:
Sl. No. Name of the Director Category No of Meetings attended 1. Ms. Anjali Kulkarni, Chairperson* Non- Executive Director 0 2. Mr. Sanjay Bhandarkar, Chairman** Non-Executive 2 Independent Director 3. Mr. Rahul Shah*** Director 0
4. Ms. Anjali Bansal**** Non-Executive 2 Independent Director 5. Mr. Ashish Khanna **** Non- Executive Director 2
* Ms. Anjali Kulkarni was Chairperson upto 5th July 2018
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** Mr. Sanjay Bhandarkar is Chairman with effect from 19th July 2018 *** Mr. Rahul Shah was member upto 30th June 2018 **** Ms. Anjali Bansal and Mr. Ashish Khanna are members of the committee with effect from 19th July 2018
The Company has adopted a CSR Policy which indicates the activities to be undertaken by the Company which are mapped to the activities specified in the Schedule VII of the Companies Act 2013.
Finance Committee Composition of the Finance Committee (FC) was as under: Sl. No. Name of the Director Category No of Meetings attended* 1. Mr. Sanjay Bhandarkar, Non-Executive Independent 0 Chairman Director 2. Mr. Ramesh Subramanyam Non-Executive Director 0
*There was no finance committee meeting held up to that date.
The Finance Committee was dissolved with effect from 19th July 2018.
Stakeholders Relationship Committee The Stakeholders Relationship Committee met once during the year under review on 3rd April 2018
Composition of the Stakeholders Relationship Committee was as under: Sl. No. Name of the Director Category No of Meetings attended 1. Mr. Ramesh Subramanyam Non-Executive Director 1 2 Mr. Rahul Shah Executive Director 1
Stakeholders Relationship Committee of the Board was dissolved with effect from 19th July 2018.
9 ANNUAL EVALUATION OF BOARD PERFORMANCE AND PERFORMANCE OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS
Pursuant to the provisions of the Companies Act 2013, the Board has carried out an annual evaluation of its own performance, performance of the Directors individually as well as the evaluation of the working of its Committees.
Board Evaluation process
Feedback was sought from each Director about their views on the performance of the Board covering various criteria such as Board structure and composition, effectiveness of Board processes, information and functioning, Board culture and dynamics, quality and relationship between the Board and the management, communication and engagement with various stakeholders. Feedback was also taken from every Director on his assessment of the performance of the other Directors. Self-assessment questionnaires were filled in by the Chairman of the Board (Board Chairman) Independent Directors and Non-Independent Non- Executive Directors.
The Nomination and Remuneration Committee (NRC) then discussed the feedback received from all the Directors
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Based on the inputs received, the Chairman of the NRC also apprised the Independent Directors at their meeting as regards inputs received on performance of the Board as a whole and that of the Chairman of the Board. The performance of the Non Independent Non-Executive Directors was also reviewed by them.
Post meeting of the Independent Directors, their collective feedback on the performance of the Board (as a whole) was discussed by the Chairman of the NRC with the Chairman of the Board and was presented to the Board by the NRC chair. The NRC chair also discussed the feedback on individual directors with the Chairman of the Board.
The chair of the Board/NRC provided feedback to individual directors as appropriate based on this feedback.
Each statutorily mandated committee of the board conducted a self-evaluation of its performance and the summary of the outcome was presented to the board. Areas on which the committees were assessed included degree of fulfilment of key responsibilities, adequacy of committee composition and effectiveness of meetings.
10 REGULATORY AND LEGAL
The business of the Company is governed primarily by the Electricity Act, 2003 and associated Regulations. The Central Electricity Regulatory Commission (CERC) and State Electricity Regulatory Commissions (SERCs) have issued various Regulations including Wind/ Solar RPOs, Renewable Energy Certificates (REC) Framework, Tariff, Grid Connectivity, Forecasting, Scheduling and Deviation Settlement Regulations, etc., for promoting renewable energy.
10.1 Policy/ Regulatory Environment
Amendment in Solar Bidding Guidelines –
The Ministry of Power has made the following amendments in the competitive bidding guidelines for the procurement of power from grid-connected solar photovoltaic (PV) projects: Timeframe for commissioning of solar PV projects inside Solar Parks has been reduced from 21 months to 15 months from the date of PPA execution and for projects outside Solar Park from 24 months to 18 months. The time period for financial closure of the projects located inside and outside the solar park will be 9 months and 12 months respectively from the date of signing the PPA. An extension for the financial closure can be considered by the procurer. This extension however will not have any impact on the scheduled commissioning date (SCD). Any penalty paid will be returned to the solar power generator without any interest on achievement of successful commissioning within the SCD.
Safeguard Duty
The Central Government on the recommendation of the Directorate General of Trade Remedies has imposed 25% safeguard duty on solar panels imported from China and Malaysia for one year. The quantum of duty would reduce to 20% in the next six months, and then to 15% for the following six months. Safeguard duty has become applicable from 30.07.2018. MNRE has capped the maximum permissible Solar tariff under competitive bidding undertaken by Solar Energy Corporation of India (SECI) at ₹2.68 per unit, including safeguard duty, and ₹2.5 per unit if the safeguard duty was not paid by the developer.
Renewable Energy Policies
National Wind - Solar Hybrid Policy: MNRE has issued National Wind – Solar Hybrid Policy, 2018. As per the policy, wind-solar plant will be recognized as a hybrid plant if the rated power capacity of one resource is at least 25% of the rated power capacity of the other resource. Government entities may invite bids for new hybrid plants keeping qualifying
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criteria such as Capacity Utilization Factor (CUF), capacity delivered at grid interface and the tariff being the main criteria for selection.
State Wind - Solar Hybrid Policies: Gujarat and Andhra Pradesh have come up with Wind- Solar Hybrid Policies, 2018. The operation period in both cases is 5 years. These states have provided incentives such as 50% concession on Cross Subsidy Surcharge, Additional Surcharge, Wheeling Charges and Distribution losses for third party sale of power.
Tamil Nadu Solar Energy Policy 2019: Under the Policy, Tamil Nadu intends to have an installed capacity of 9,000 MW by 2023, of which 40% is intended to come from rooftop solar plants. Tamil Nadu Electricity Regulatory Commission (TNERC) may introduce time of day (TOD) solar energy feed in tariff to encourage solar energy producers and solar energy storage operators to feed energy into the grid when energy demand is high.
AP New Solar Policy 2019: Andhra Pradesh Solar Policy targets for installation of 5000 MW from solar in next 5 years. Government expects to initially develop 4,000 MW capacity of solar parks. Government will promote solar rooftop systems on public buildings, domestic, commercial and industrial establishments. Salient features of the policy are:
o Procurement of power from solar projects having capacity less than 5 MW will be paid at a feed in tariff (FiT) determined by Andhra Pradesh Electricity Regulatory Commission (APERC). o The consumers are free to choose either net or gross metering option for the sale of power to DISCOMs. The applicable tariff for either of the cases will be equal to the average pooled power purchase cost (APPC) determined by the APERC. o Banking of 100 percent of energy will be permitted during all 12 months of the year, Banking charges will be adjusted at the rate of 5 percent of the energy delivered at the point of transmission.
Forecasting, Scheduling, Deviation Settlement Mechanism Regulations
The States of Karnataka, Andhra Pradesh, Rajasthan, Madhya Pradesh, Telangana and Gujarat have operationalized the Forecasting, Scheduling and Deviation Settlement Mechanism (FS & DSM) for wind and solar projects.
Tamil Nadu has issued Draft FS & DSM Regulations and is yet to issue final Regulations.
10.2 Regulatory orders of relevance
Central Electricity Regulatory Commission (CERC) has issued an order stating that the enactment of GST laws is covered as Change in Law under the Power Purchase Agreements. However, it has not permitted the claims regarding separate carrying cost/ interest on working capital and additional tax burden on operation and maintenance cost under Change in Law.
Maharashtra Electricity Regulatory Commission (MERC) has treated the imposition of Safeguard Duty (SGD) under Change in Law and directed the Power Producers to approach the Commission after commissioning of the respective projects for determination of the increase in cost on account of implementation of such Change in Law. At that stage, the Commission will determine the mode of recovery of the cost and/ or expenditure for the Power Producers due to Safeguard Duty on import of Solar panel/ modules.
MERC has approved a tariff of ₹ 1.97 per kWh as ceiling for procurement of wind power from projects under Group III and Group IV PPAs with MSEDCL post expiry of 13 years term of the PPA.
Madhya Pradesh Electricity Regulatory Commission (MPERC) has dismissed M.P. Power Management Company Limited (MPPMCL) petition seeking the review of the Commission’s wind generic Tariff Order applicable to wind energy generators by revising the Normative Capacity Utilization Factor (CUF). The MPERC has held that the petition seeking to revise
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generic tariff orders issued by the Commission for the control period which has already expired is not maintainable and cannot be considered.
10.3 Legal matters of relevance
Petition for revision of tariff: AP DISCOMs have jointly filed a petition in APERC for amendment of Wind Tariff Regulation (01 of 2015) and revision of wind tariff for the projects commissioned from FY16 to FY18 by specifying reduced norms and parameters such as CUF, interest on working capital, rate of depreciation, return on equity, interest cost on debt, tenure of loan etc. APERC has admitted the petition and called for a Public Hearing.
Pass through of Generation Based Incentives (GBI) benefit to the DISCOM: An incentive of ` 0.5/kWh is provided by Indian Renewable Energy Development Agency (IREDA) to Generators as per GBI guidelines issued by Ministry of New and Renewable Energy (MNRE). Andhra Pradesh Southern Power Distribution Company Limited (APSPDCL) filed a petition in APERC for pass through of GBI by Generators to APSPDCL and to amend tariff orders in respect of wind power projects. APERC has passed an order in favour of the DISCOMs and ruled that the GBI claimed and availed by the wind power generators under the scheme of the Government of India is directed to be given credit to, in the tariff determined for the wind power projects under Regulation 1 of 2015. AP DISCOMs have been permitted to deduct the GBI amounts from the tariff payable to wind power generators availing the GBI.
The Company as well as other wind power developers have filed writ petition in AP High court and the Court has provided interim stay on the above APERC order. Further hearings in the matter are yet to commence.
Condonation of penalty due to delay in Scheduled Commissioning date (SCOD): The Company has set up a 15 MW Solar project at Bellampally, Adilabad district in the state of Telangana. The SCOD of the project was on 22.02.2017 whereas the project was commissioned on 27.02.2017 i.e. with a delay of five days due to reasons beyond the control of Company. Telangana State Electricity Regulatory Commission has given decision in favour of the Company and condoned the delay in SCOD.
MERC had ruled against the Company’s petition for applicability of generic solar Feed in Tariff (FIT) beyond the control period for the 28.8 MW Palaswadi solar project in Maharashtra commissioned in May 2015. The Company appealed against the MERC order in the Appellate Tribunal but has subsequently withdrawn the appeal.
The Company had filed an appeal in the Supreme Court of India challenging the Andhra Pradesh High Court Order for an interim injunction restraining the bank from encashing the bank guarantee issued by Photon Energy System Private Ltd. The Supreme Court has allowed the appeal. The Company has filled writ petition in Hyderabad High Court and the order is awaited. Merits of the case are being heard through an independent arbitrator.
11 RISK MANAGEMENT FRAMEWORK AND INTERNAL FINANCIAL CONTROLS
Your Company is faced with risks of different types, all of which need different approaches for mitigation. These are risks common to several peers in the sector. Risk very specific to the Company due its business /operations are structured. Disaster Management and Business continuity risks which are by nature rare, but are events with dramatic impact.
The key risks and concerns the Renewable Power Sector in India are as follows: Poor financial health of state Discoms continues to be a factor that impedes the growth of the sector, and impacts the cash flows and viability of affected plants. Inadequate transmission infrastructure and non-availability of green transmission corridor.
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The British Standards Institution (BSI), basis its assessment in August 2018, has awarded the "Statement of Compliance for ISO 31000:2009 – a recognition that implies that the Company has strong processes for risk identification, management and mitigation. The Company had similarly been conferred the "Statement of Compliance" for last 2 years.
Risk Management Framework:
Based on the Risk Management Policy, a standardized Risk Management Process and System has been implemented in the Company. Risk plans have been framed for all identified risks and uploaded in the system with mitigation action, target dates and responsibility. This has enabled continuous tracking of status of mitigation action and monitoring of Risk Mitigation Completion Index (RMCI). The Risk Register contains the mitigation plans for eleven categories of risk. Subsidiary Risk Management Committee (SRMC) closely monitors and reviews the risk plans. Last year standardization of risks and mitigation measures was taken up as an exercise to ensure uniformity of risks across Tata Power Group and learning and sharing.
All risks have been classified into strategic, tactical and operational risks. The senior leadership team of the Tata Power Group meets every quarter to review major strategic and tactical risks, identify new risks and assess the status of mitigation measures. The SRMC meets regularly to review critical strategic risks and summary of top risks and their status in terms of mitigation actions.
Internal financial controls and systems:
The Company has on internal audit function reviews and ensures sustained effectiveness of Internal Financial Controls (IFC) by adopting a systematic approach to its work.
To fulfil the requirements of the Companies Act, 2013 the in-house internal audit team integrated IFC controls into risk control matrix (RCMs) of enterprise processes in FY18. 100% testing of IFC controls was ensured during process audit or creating separate audit areas of IFC testing where process audits were not due.
On review of the internal audit observations and action taken on audit observations, we can state that there are no adverse observations having material impact on financials, commercial implications or material non-compliances which have not been acted upon.
The Company continued the Control Self-Assessment (CSA) process, which included seven Tata Power group companies this year, whereby responses of all process owners are used to assess internal controls in each process. This helps the Company to identify focus audit areas, design the audit plan and support CEO/CFO certifications for internal controls.
12 SUSTAINABILITY
The Company has been conscious of its role as a sustainability steward and continuously works towards climate change abatement. It remains committed to the legacy of being a responsible organization and thus reinforces the Tata Power Group Company core values of Leadership with Care. The Sustainability Model of Leadership with Care aims at strengthening structures and processes for environmental performance, stronger engagement with community, customers and employees, by using enablers like new technology, benchmarking and going beyond compliance in key operational parameters.
The initiatives, under the aegis of the Sustainability Model of Leadership with Care are several well-planned projects that generate power from wind and solar energy sources, and an unflinching commitment towards biodiversity conservation and community development. The Company will always strive to lead on the path towards growth with responsibility and commitment of generating electricity using cleaner sources of energy.
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12.1 Safety - Care for our People
The Company follows the safety policies and re-affirms its commitment to provide safe workplace and clean environment to its employees and to foster a safer, healthier and cleaner environment to the surrounding community as an integral part of its business philosophy and values.
The Company makes all efforts to ensure conscientious observance of all National, State and other statutory requirements for maintaining a safe, healthy and pollution-free work environment.
Safety Statistics FY18:
Sl. Safety Parameters (Employees and contractors) FY19 FY 18 No.
1 Fatality (Number) 0 0 LTIFR (Lost Time Injuries Frequency Rate per million man 2 0 0 hours) Total Injuries Frequency Rate (TIFR) (Number of Injuries per 3 0 0 million man hours) 4 First Aid Cases (Number) 0 0
12.2 Care for Our Community / Community Relations
Details of CSR spend (standalone) is provided in Annexure IV.
Your Company has actively worked on five thrust areas in Corporate Social Responsibility (CSR) - Education, Health & Sanitation, Livelihood & Employability, Water, Financial Inclusion.
The CSR policy for the Company was aligned to the parent company policy which is based on the five thrust areas. The programs were rolled out across locations and mapped with Schedule –VII to the Act with timelines and outcome indicators. The same was approved by the CSR Committee of the Company.
In FY19, the company reached out to more than 10 villages/urban pockets in Maharashtra, Gujarat & Karnataka. The year saw your Company ramp-up CSR capabilities and operations across all locations by bringing robustness to systems and processes to ensure effective programs which deliver long-term impact and bring changes to the community. Tata Power Community Development Trust (TPCDT), being the developmental vehicle for CSR programs, was assigned to undertake CSR Programs for the company.
Total CSR spend for the Company in FY19 stood at ₹ 1.42 crore as against the requirement of ₹ 1.42 crore as per the Act.
Independent monitoring, effectiveness of implementation and impact assessment were undertaken to provide feedback and to refine and realign the programs so that the extent and effectiveness of the initiatives could be improved in pursuance of the Company objective to improve the quality of life of the community and to get community’s tacit or implied acceptance of the Company’s co-existence with them.
Major highlights of programs in FY19 are as follows:
CSR project or activity Beneficiaries Academic Coaching and Counselling up to Students are covered. 25% progress seen in primary level. Teacher's Training - the Below Average Students (BAS) through TLM/Pedagogy various interventions in language, maths & Digital E-learning science.
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67 ZP primary teachers are covered under training. 400 students are covered in digital e learning. Villages: Palsawade, Shirtav, GSW, Agaswadi, Jath, Khandake-Supa , Mithapur, Rojmal, Maval Livelihood (Farm & Non-Farm) for farmers 19117 beneficiaries were covered in various -On and Off Farm Extension and interventions of organic farming and allied farm Livelihood Training Initiative and non-farm activities. Backyard poultry units were provided for needy women. 60 Self Help Group's (SHGs) were formed and their capacity building was done. Trainings were conducted on Gram Sabha and Govt. Schemes. Booklets were published on organic farming and goatery. Micro-enterprise for Youth and Women The Company facilitated setting up of 40 small home-based businesses like goatery, poultry, tailoring, laundry, grain flour centres, grinder machine, beauty parlour, weaving work etc. which resulted in income generation. Drinking Water Supply Systems Community RO Water ATM Centres in 3 locations were commissioned benefitting 670 households in Gujarat and Maharashtra. 2 RO units were installed in schools which gave access to safe and clean drinking water for 1150 students. Integrated Water Resource Management 10000 villagers were benefitted through watershed work. Volunteering / ‘Shramdan’ was actively done by the villagers and employees during "Water Cup" initiative of the Paani Foundation. Ranjani Village has been selected by NABARD for integrated water management program.
Linkage with Govt. Social Welfare Scheme 961 Households enrolled in 27 varied (including SHG and other vulnerable government schemes and programs. sections) ₹ 97.16 lakhs were mobilized till December 2018 through various Government schemes
Loans of ₹ 26.22 lakhs were received from different banks by SHGs
12.3 Affirmative Action
The Company’s Operations and day to day working is supported by departments of its holding company, Tata Power. These departments are governed by the standard Tata Power practices and policies including those for Sustainability.
12.4 Care for our Environment
The Company’s renewable energy generation capacity does not consume fossil fuels and has no emissions. It aims to minimize the impact of its operations on the environment by acting responsibly towards the environment. Your Company addresses various aspects of resource conservation including rainwater harvesting, energy efficiency and biodiversity.
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13 HUMAN RESOURCES
The Company has a lean management structure supported by departments of Tata Power such as finance, accounts, operations, projects, contracting etc. under the Asset Management Service Agreements and Project Management Service Agreements. All these employees are covered by the Human Resources Practices and Policies of Tata Power.
Sexual Harassment
The Company has zero tolerance for sexual harassment at the work place and has adopted a policy on prevention, prohibition and redressal of sexual harassment in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder for prevention and redressal of complaints of sexual harassment at workplace.
The policy has set guidelines on the redressal and enquiry process that is to be followed by complainants and the ICC whilst dealing with issues related to sexual harassment at the work place towards any woman associates. All women associate(permanent, temporary, contractual and trainees) as well as any woman visiting the Company’s office premises or women service providers are covered under this policy. Multi-pronged efforts have been made during FY19 for awareness of provisions and redressal of complaints as also to continue with and improve the work climate in all establishments where women employees feel safe and secure.
Tata Power, the holding company has adopted the POSH policy and has constituted an Internal Complaints Committee (ICC) comprising of members from its divisions and additionally from its major subsidiary companies including your company. Complaints if any received will be handled by this committee.
The following is a summary of sexual harassment issues raised, attended and dispensed during FY19:
- No. of Complaints received: Nil - No. of complaints disposed-off: Not Applicable - No. of cases pending for more than 90 days: Not Applicable - No. of workshops or awareness program against sexual harassment carried out: 1 - Nature of action taken by the employer or District Officer: Nil
14 CREDIT RATING
As on 31st March 2019, your Company had the following credit ratings:
Short Terms rating of "CARE AA- stable/ CARE A1+" for working capital facilities Short Terms rating of "CRISIL A1+" for Commercial Papers without corporate guarantee Long Term rating of "CARE AA- stable" for Loans without corporate guarantee Long Term rating of "CARE AA" stable (SO) for Non- Convertible Debentures and Borrowings with corporate guarantee Long Term Rating of "ICRA AA-" stable for Letter of Credit facility without corporate guarantee Long Term Rating of "ICRA AA-" stable for Borrowings without corporate guarantee.
15 PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
The Company being an infrastructure company, is exempt from the provisions as applicable to loans, guarantees and securities under Section 186 of the Act. The details of investments are provided in the schedules to the financial statements.
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16 FOREIGN EXCHANGE EARNINGS AND OUTGO- Figures in ₹ crore
Particulars – Standalone FY 19 FY 18 Foreign Exchange Earnings mainly on account of interest, NIL NIL dividend Foreign Exchange Outflow mainly on account of: Fuel purchase NIL NIL Interest on foreign currency borrowings, NRI dividends NIL NIL Purchase of capital equipment, components and spares and NIL NIL other miscellaneous expenses
There is no Foreign Currency Exposure to the Company as on 31st March 2019.
17 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION
17.1 Conservation of Energy
The Company monitors auxiliary consumption at its plants and takes measures to reduce it through use of energy efficient appliances, prudent use of resources, natural ventilation, etc. Following are the initiatives taken by company for conservation of energy:
a. Spare modules available at Palsawade plant have been used for Rooftop Solar providing energy to control room devices. b. Solar powered street lights are installed at Mithapur, Palsawade, Belampally sites optimizing import energy consumption.
17.2 Technology Absorption
The Company ensures that its equipment vendors share their supplier details, design drawings and train Company personnel in operation and maintenance of the equipment. The Company has used the following technologies:
1. The Company has used Unmanned Aerial Vehicles (UAV) for thermal imaging of solar assets. UAV based thermal imaging is a quick and speedy process of scanning the solar farm which gives a bird’s eye view of the farm and with artificial intelligence even pin-points faulty locations. 2. LiDAR for Yaw Angle calibration of Nacelle for Wind Turbine Generators 3. PV diagnostic tool for Re-binning of modules. Variation of power output from each module varies with number of years of operation. Modules connected in series should operate at near-equal current output levels to reduce losses due to mismatch. Binning the modules with near-equal current levels enhances the output of solar farm. 4. Higher rated inverters (up to 3.125 MVA) to get better efficiencies and reduced auxiliary consumption 5. Centralized Control Room for Monitoring of RE assets (CCRRA) is under implementation, CCRRA will help in close monitoring of assets spread across 10 states and number of locations.
18 EMPLOYEES AND REMUNERATION
The information required under section 197 (12) of the Act read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure V. The information required under Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in the Annexure forming part of this Report. In terms of the first provision to section 136 of the Act, the report and accounts are being sent to the members excluding the aforesaid Annexure. Any Member interested in obtaining the same may write to the Company Secretary at the Registered Office of the Company.
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None of the employees listed in the said Annexure are related to any Director of the Company.
19 DEPOSITS
The Company has not accepted any deposits.
20 RELATED PARTY TRANSACTIONS
The Company has formulated a policy on Related Party Transactions in line with the requirements of the Act and listing regulations. The same can be accessed on the company’s website at https://tatapowerrenewables.com/about-us/policies-code-of-conduct Details of Related Party Transactions as per AOC-2 are provided in Annexure VI.
21 EXTRACT OF ANNUAL RETURN
Pursuant to Section 92 of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Extract of Annual Return in Form MGT-9 is provided in Annexure-VII.
22 STATUTORY AUDITORS
Messrs. S R B C & Co., LLP (SRBC), Chartered Accountants (ICAI Firm Reg No324982E/E300003) are the Statutory Auditors of the company appointed by the members at the 10th Annual General Meeting (AGM) held in the year 2017 for a period of 5 years from the conclusion of that AGM till, the conclusion of the 15th AGM of the Company to be held in the year 2022.
The Auditors' Report does not contain any qualifications reservations or adverse remarks. The standalone and consolidated financial statements of the Company have been prepared in accordance with Indian Accounting Standards (IND AS) notified under section 133 of the companies act, 2013.
23 COST AUDITOR
In accordance with the requirement of the Central Government and pursuant to Section 148 of the Companies Act, 2013, your Company carries out an audit of cost accounts relating to electricity every year.
The Cost Audit Report and the Compliance Report of your Company for the Financial Year ended 31st March, 2018, was filed on 10th August 2018 with the Ministry of Corporate Affairs through Extensive Business Reporting Language (XBRL) by M/s. Sanjay Gupta & Associates, Cost Accountants.
The Board has re-appointed M/s Sanjay Gupta & Associates, Cost Accountants as Cost Auditors of the Company for FY20 at a remuneration of ₹ 300,000/- lakh plus applicable taxes and out-of-pocket expenses. As required under the Act, the remuneration payable to the cost auditor is required to be ratified by the members of the Company. Accordingly, a resolution seeking members' ratification for the remuneration payable to M/s. M/s Sanjay Gupta & Associates, Cost Auditors is included at Item No.4 of the Notice convening the AGM.
The Cost Audit Report for FY19 is due for filing within six months from the end of FY19 i.e. by 30th September 2019.
24 SECRETARIAL AUDITORS REPORT
M/s. Parikh & Associates, Company Secretaries, were appointed as Secretarial Auditors to conduct Secretarial Audit of records and documents of the Company for FY19. The Secretarial Audit Report confirms that the Company has generally complied with the provisions of the Act, Rules, Regulations, and Guidelines and that there were no deviations or non-compliances.
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The Secretarial Audit Report does not contain any qualifications, reservations or adverse remarks or disclaimers.
Secretarial Audit Report is provided in Annexure VIII to this report
The Company confirms compliance with the requirements of Secretarial Standards 1 and 2.
25 VIGIL MECHANISM
The Company believes in the conduct of affairs of its constituents in a fair and transparent by adopting the highest standards of professionalism, honesty, integrity and ethical behaviour. In line with the Tata Code of Conduct any actual or potential violation, howsoever insignificant or perceived as such, would be a matter of serious concern for the Company. The role of the employees in pointing out such violations of the TCOC cannot be undermined.
Pursuant to clause 177(9) of the Act a vigil mechanism was established for Directors and employees to report to the management instances of unethical behaviour, actual or suspected, fraud violation of the Company's code of conduct or ethics policy. The Vigil Mechanism provides a mechanism for employees of the Company to approach the Chairman of the Audit Committee of the Company.
26 DIRECTORS’ RESPONSIBILITY STATEMENT
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost auditors, secretarial auditors and external consultants including audit of IFC for financial reporting by the statutory auditors and the reviews performed by management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company’s IFC were adequate and effective during FY19.
Accordingly, pursuant to Section 134(5) of the Act, the Board of Directors, to the best of its knowledge and ability, confirms that:
a. in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;
b. the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;
c. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d. the Directors had prepared the annual accounts on a going concern basis;
e. the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;
f. the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
(19)
TATA POWER RENEWABLE ENERGY LIMITED
27 ACKNOWLEDGEMENTS
On behalf of the Directors of the Company, I would like to place on record our deep appreciation to our shareholders, customers, business partners, vendors, bankers, financial institutions and academic institutions for all the support rendered during the year.
The Directors are thankful to the Government of India and the various Ministries, the State Governments and the various Ministries, the central and state electricity regulatory authorities, communities in the neighbourhood of our operations, corporation and municipal authorities of Mumbai and local authorities in areas where we are operational for all the support rendered during the year.
Finally, we appreciate and value the contributions made by all our employees and their families for making the Company what it is.
On behalf of the Board of Directors,
Praveer Sinha Chairman (DIN: 01785164) Mumbai, April 24, 2019
(20)
TATA POWER RENEWABLE ENERGY LIMITED
Annexure - I
Form AOC-I
(Ref: Board's Report, Section 5)
(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014)
Statement containing salient features of the financial statement of subsidiaries/ associate companies/joint ventures
Part "A": Subsidiaries
(in lakhs ) S Name of the Report R eport Excha - Share Reserves Total Total Investments Turnover Other Total Profit/ Prov ision Profit / Proposed Proposed % of N Subsidiary -ing -ing nge capital & surplus assets Liabilities Income Revenue (Loss) for (Loss) Dividend Dividend shareholding period curren Rate (Incl. (Excl. Sh. before taxation after on Equity on Equity for the cy as at Pref. Capital & taxation (incl. taxation Shares Shares subsid 31st shares) Reserves) Deferred (%) iary March, tax) concer 2019 ned
1 Supa 31st Indian Windfarm March, 1.00 5.00 (5.78574) 3.19258 3.97832 Nil Nil Nil Nil (3.99396) Nil (3.99396) Nil Nil 100.00 Rupee Ltd 2019
2 Poolavadi 31st Indian Windfarm March, 1.00 5.00 (1.54947) 4.19495 0.74442 Nil Nil Nil Nil (0.76942) Nil (0.76942) Nil Nil 100.00 Rupee Ltd 2019
3 Nivade 31st Indian Windfarm March, 1.00 5.00 (5.78564) 3.19268 3.97832 Nil Nil Nil Nil (3.99396) Nil (3.99396) Nil Nil 100.00 Rupee Ltd 2019
4 Indorama 31st Indian Renewables March, 1.00 6030.00 (71.77) 15912.34 9954.11 37.77 3707.44 33.72 3741.16 794.52 342.79 451.73 Nil Nil 100.00 Rupee Jath Ltd. 2019
5 Walwhan 31st Indian Renewable March, 1.00 61135.59 150742.01 734419 522541.00 4323.00 127169.00 2409.00 129578.00 43494.00 13484.00 30010.00 Nil Nil 100.00 Rupee Energy Ltd. 2019
6 Vagarai 31st Indian Windfarm March, 1.00 52.50 (1382.98) 11952.72 13283.20 366.54 2163.82 29.06 2192.88 (803.96) Nil (803.96) Nil Nil 72.00 Rupee Ltd 2019
Notes:
1. Names of subsidiaries which are yet to commence operations: Supa Windfarm Limited, Nivade Windfarm Limited and Poolavadi Windfarm Limited 2. Accounts of all subsidiaries of Walwhan Renewable Energy Pvt Ltd (Formerly known as Welspun Renewable Energy Ltd) have been consolidated with Walwhan Renewable Energy Ltd
(1)
TATA POWER RENEWABLE ENERGY LIMITED
Part “B”: Associates and Joint Ventures
Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures: The Company does not have any Associate Companies and Joint Ventures.
On behalf of the Board of Directors,
Ashish Khanna Ramesh Subramanyam Director Director
Mahesh Paranjpe Gautam Attravanam Mona Purandare Chief Executive Officer Chief Financial Officer Company Secretary
Mumbai, 24th April 2019
(2) TATA POWER RENEWABLE ENERGY LIMITED
Annexure II
POLICY ON BOARD DIVERSITY AND DIRECTOR ATTRIBUTES (Ref: Board's Report, Section 7) 1. Objective
1.1 The Policy on Board Diversity (‘the Policy’) sets out the approach to diversity on the board of directors (‘the Board’) of Tata Power Renewable Energy Limited (the company).
1.2 The company recognizes that diversity at board level is a necessary requirement in ensuring an effective board. A mix of executive, independent and other non-executive directors is one important facet of diverse attributes that the company desires. Further, a diverse board representing differences in the educational qualifications, knowledge, experience, gender, age, thought and perspective results in delivering a competitive advantage and a better appreciation of the interests of stakeholders. These differences should be balanced against the need for a cohesive, effective board. All board appointments shall be made on merit having regard to this policy.
2. Attributes of directors
The following attributes need to be considered in considering optimum board composition:
i) Gender diversity: Having at least one woman director on the Board with an aspiration to reach three women directors.
ii) Age The average age of board members should be in the range of 40 - 60 years.
iii) Competency The board should have a mix of members with different educational qualifications, knowledge and with adequate experience in finance, accounting, economics, legal and regulatory matters, the environment, green technologies, operations of the company’s businesses, energy commodity markets and other disciplines related to the company’s businesses.
iv) Independence The independent directors should satisfy the requirements of the Companies Act, 2013 (the Act).
v) Additional Attributes
The directors should not have any other pecuniary relationship with the company, its subsidiaries, associates or joint ventures and the company’s promoters, besides sitting fees and commission. The directors should not have any of their relatives (as defined in the Act and Rules made thereunder) as directors or employees or other stakeholders (other than with immaterial dealings) of the company, its subsidiaries, associates or joint ventures. The directors should maintain an arm’s length relationship between themselves and the employees of the company, as also with the directors and employees of its subsidiaries, associates, joint ventures, promoters and stakeholders for whom the relationship with these entities is material. The directors should not be the subject of allegations of illegal or unethical behaviour, in their private or professional lives. The directors should have ability to devote sufficient time to the affairs of the Company.
TATA POWER RENEWABLE ENERGY LIMITED
3. Role of the Nomination and Remuneration Committee
3.1 The Nomination and Remuneration Committee (‘the NRC’) shall review and assess board composition whilst recommending the appointment or reappointment of independent directors.
4. Review of the Policy
4.1 The NRC will review this policy periodically and recommend revisions to the board for consideration.
TATA POWER RENEWABLE ENERGY LIMITED
Annexure III
REMUNERATION POLICY FOR NON-EXECUTIVE DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES OF THE COMPANY
(Ref: Board's Report, Section 7)
The philosophy for remuneration of directors, Key Managerial Personnel (“KMP”) and all other employees of Tata Power Renewable Energy Limited (“company”) is based on the commitment of fostering a culture of leadership with trust. The remuneration policy is aligned to this philosophy.
This remuneration policy has been prepared pursuant to the provisions of Section 178(3) of the Companies Act, 2013 (“Act”) and Clause 49(IV)(B)(1) of the Equity Listing Agreement (“Listing Agreement”). In case of any inconsistency between the provisions of law and this remuneration policy, the provisions of the law shall prevail and the company shall abide by the applicable law. While formulating this policy, the Nomination and Remuneration Committee (“NRC”) has considered the factors laid down under Section 178(4) of the Act, which are as under:
A. The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully;
B. Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and
C. Remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals.
Key principles governing this remuneration policy are as follows:
Remuneration for independent directors and non-independent non-executive directors
Independent directors (“ID”) and non-independent non-executive directors (“NED”) may be paid sitting fees (for attending the meetings of the Board and of committees of which they may be members) and commission within regulatory limits. Within the parameters prescribed by law, the payment of sitting fees and commission will be recommended by the NRC and approved by the Board. Overall remuneration (sitting fees and commission) should be reasonable and sufficient to attract, retain and motivate directors aligned to the requirements of the company (taking into consideration the challenges faced by the company and its future growth imperatives). Overall remuneration should be reflective of size of the company, complexity of the sector/ industry/ company’s operations and the company’s capacity to pay the remuneration. Overall remuneration practices should be consistent with recognized best practices. Quantum of sitting fees may be subject to review on a periodic basis, as required. The aggregate commission payable to all the NEDs and IDs will be recommended by the NRC to the Board based on company performance, profits, return to investors, shareholder value creation and any other significant qualitative parameters as may be decided by the Board. The NRC will recommend to the Board the quantum of commission for each director based upon the outcome of the evaluation process which is driven by various factors including attendance and time spent in the Board and committee meetings, individual contributions at the meetings and contributions made by directors other than in meetings. In addition to the sitting fees and commission, the company may pay to any director such fair and reasonable expenditure, as may have been incurred by the director while performing his/ her role as a director of the company. This could include reasonable expenditure incurred by the director for attending Board/ Board committee meetings, general meetings, court convened meetings, meetings with shareholders/ creditors/ management, site visits, induction and training (organized by the company for directors) and in obtaining professional advice from independent advisors in the furtherance of his/ her duties as a director.
TATA POWER RENEWABLE ENERGY LIMITED
Remuneration for managing director (“MD”)/ executive directors (“ED”)/ KMP/ rest of the employees1 The extent of overall remuneration should be sufficient to attract and retain talented and qualified individuals suitable for every role. Hence remuneration should be Market competitive (market for every role is defined as companies from which the company attracts talent or companies to which the company loses talent) Driven by the role played by the individual, Reflective of size of the company, complexity of the sector/ industry/ company’s operations and the company’s capacity to pay, Consistent with recognized best practices and Aligned to any regulatory requirements.
In terms of remuneration mix or composition, The remuneration mix for the MD/ EDs is as per the contract approved by the shareholders. In case of any change, the same would require the approval of the shareholders. Basic/ fixed salary is provided to all employees to ensure that there is a steady income in line with their skills and experience. In addition to the basic/ fixed salary, the company provides employees with certain perquisites, allowances and benefits to enable a certain level of lifestyle and to offer scope for savings and tax optimization, where possible. The company also provides all employees with a social security net (subject to limits) by covering medical expenses and hospitalization through re- imbursements or insurance cover and accidental death and dismemberment through personal accident insurance. The company provides retirement benefits as applicable. In addition to the basic/ fixed salary, benefits, perquisites and allowances as provided above, the company provides MD/ EDs such remuneration by way of commission, calculated with reference to the net profits of the company in a particular financial year, as may be determined by the Board, subject to the overall ceilings stipulated in Section 197 of the Act. The specific amount payable to the MD/ EDs would be based on performance as evaluated by the Board or the NRC and approved by the Board. [In addition to the basic/ fixed salary, benefits, perquisites and allowances as provided above, the company provides MD/ EDs such remuneration by way of an annual incentive remuneration/ performance linked bonus subject to the achievement of certain performance criteria and such other parameters as may be considered appropriate from time to time by the Board. An indicative list of factors that may be considered for determination of the extent of this component are:
o Company performance on certain defined qualitative and quantitative parameters as may be decided by the Board from time to time, o Industry benchmarks of remuneration, o Performance of the individual.]3
1 Excludes employees covered by any long term settlements or specific term contracts. The remuneration for these employees would be driven by the respective long term settlements or contracts. 2 To be retained if Commission is provided to MD/ EDs 3 To be retained only if Commission is not provided to MD/ EDs
The company provides the rest of the employees a performance linked bonus. The performance linked bonus would be driven by the outcome of the performance appraisal process and the performance of the company.
Remuneration payable to Director for services rendered in other capacity
The remuneration payable to the Directors shall be inclusive of any remuneration payable for services rendered by such director in any other capacity unless:
TATA POWER RENEWABLE ENERGY LIMITED a) The services rendered are of a professional nature; and b) The NRC is of the opinion that the director possesses requisite qualification for the practice of the profession.
Policy implementation
The NRC is responsible for recommending the remuneration policy to the Board. The Board is responsible for approving and overseeing implementation of the remuneration policy.
TATA POWER RENEWABLE ENERGY LIMITED
Annexure IV
DETAILS OF CORPORATE SOCIAL RESPONSIBILITY SPEND
(Ref: Board's Report, Section 12.2)
1. Brief outline of the company's CSR TPREL has been actively working under following policy, including overview of projects or thrust areas in CSR programs proposed to be undertaken • Gender Balance in Education upto Primary with a reference to the web-link to the Level CSR policy and projects or programs • Health and Sanitation Practices • Livelihood and Employability • Water • Financial Inclusivity
Digital Learning, Academic Coaching Counselling, TLM - Trainings to the Teachers for bridging the gaps between curriculum and extra curriculum. RO plant installation for pure drinking water supply to the schools and water ATM machines to ensure clean and safe drinking water facilities to the community. Integrated Watershed Development Programs in collaboration with NABARD, undertaking various watershed interventions in order to recharge ground water recharging interventions. Organic way of farming, and soil and water management through various trainings in order to prevent soil erosion and chemical free agricultural productivity. Capacity building and empowerment of the Women Self Help Groups (SHGs) Initiated community based micro entrepreneurs to develop themselves and fulfil community needs in the villages itself. Agricultural yield improvement programmes, poultry, goatery - livestock development for sustainable livelihood for Women Farmers. Financial inclusivity through linkages with different government schemes Employee volunteering activities - Water literacy rallies, clean water assessment, shramdan campaigns etc.
The Company has ramped up its CSR capabilities and operations by bringing robustness to systems and processes to ensure effective programs which deliver long term impact and change to the community.
The CSR programs are executed through Tata Power Community Development Trust (TPCDT) which has the internal capability to implement the programs efficiently and effectively.
TATA POWER RENEWABLE ENERGY LIMITED
The Company's CSR policy is provided on the Company website: https://www.tatapowerrenewables.com
2 The Composition of the CSR Committee Mr. Sanjay Bhandarkar, Chairman Ms. Anjali Bansal Mr. Ashish Khanna
3 Average net profit of the company for last ₹ 70.75 crore three financial years 4 Prescribed CSR Expenditure (two ₹ 1.42 crore percent of the amount as in item 3 above) 5 Details of CSR spent during the financial ₹ 1.42 crore have spent in the area of Education, year: Livelihood and Employability, Water and Financial Inclusivity. (a) Total amount spent for the financial year; ₹ 1.42 crore (b) Amount unspent, if any; NIL (c) Manner in which the amount spent during the financial year is detailed below
Amount spent on the projects Amou Project or or nt Programs (1) program outlay Cumulative Amount Local area or s Sub- (budg- expenditure spent: other (2) heads: Sl Sector in et) up to the Direct CSR project Specify the (1) . which the project reporting or or activity State and Direct N Project is or period (as through identified district where Expendi o covered progra on implem projects or ture on ms 31.03.2019) enting programs projects wise (₹ (₹ in lakh) agency were or in undertaken Progra lakh) ms (2) Overhea ds (₹in lakh)
Digital Learning, Gujrat, Academic Maharashtra NGO Coaching (Dwarka, i Education 32.55 32.55 58.25 and Counselling, Shamana Vendor TLM - Ahmednagar, Trainings, Sangali and Class Room Satara) Construction
TATA POWER RENEWABLE ENERGY LIMITED
Livelihood(Fa rm & Non- Gujrat, Livelihood Farm) for Maharashtra and farmers, (Dwarka, ii Employabi- 41.86 41.86 94.62 NGO Micro- Ahmednagar, lity (Farm/ enterprise for Satara and non-farm) Youth and Sangali) Women
Gujarat, Telangana, Integrated Maharashtra Water Govt. and Karnataka Resource Institute, (Dwarka, iii Management Water 50.00 50.00 50.00 NGO Bellampally, , Drinking and Ahmednagar, Water Supply Vendors Sangali, Satara System abd Hubli/ Dharwad))
Employee Volunteering, Miscellan- At various sites iv Financial 17.60 17.60 17.6 eous of the Company Inclusivity etc.
Total 142.01 142.01 220.07
Key Highlights of the CSR Program (Thrust Areawise)
Education - Academic Coaching and Classes 1. Covering 1429 students across 15 villages of Ahmednagar, Satara and Sangali Districts Nagar, Parner, Maan, Khatav and Jath blocks respectively. 2. Special Coaching was conducted in vernacular language and English, Maths and Science in 15 Schools covering 1034 Students 3. Subject experts, special coaching to below average students through various Tests and Exams 4. Handwriting/Calligraphy Camps
Digital Learning:
1. Provided Academic syllabus software's to the schools benefitting 430 students.
Education- TLM- Pedagogy (Teacher Need Assessment and Subject Orientation through Experts
1. 62 Primary School Teachers were benefitted 2. Special Activity Book for students developed in order to mark progress of the pupils
TATA POWER RENEWABLE ENERGY LIMITED
Education - Classroom Construction:
1. Constructed class rooms at Shamana site of Gujrat for enrolment of the students benefitting 400 students
Livelihood and Employability:
1. Formation of new Women SHGs - 55 Nos. comprising 450 women 2. Capacity building of the SHGs
3. Training given to 15 villages on Govt. schemes and good governance 4. Soil testing intervention to know the yield quality of the soil benefitted 1050 farmers. 5. 151 goats were given to needy women in order to get the extra income in addition to the agro work 6. Trainings on vermicompost pits, jivamrut / amritpani, biological nutrient foliar, biodynamic composting, waste decomposer, organic insecticides, benefitted more than 9000 villagers across 15 villages of Ahmednagar, Satara and Sangali districts of Maharashtra State 7. 520 backyard poultry units were started to get additional income through this intervention
Micro - entrepreneurship:
1. Started 50 new entrepreneur small homebased business activities in 16 villages of Gujrat and Maharashtra sites.
Water
1. Community water ATM centres in three locations of the Jath, Maan and Mithapur sites, benefitting 3500 villagers 2. RO Water facilities to the Mojap, Tandur of Gujrat and Telangana respectively, benefitting 1050 students 3. Drilled borewells in 3 villages of Khandake, Gadag sites of Maharashtra and Karnataka, benefitting 1750 villagers
Integrated Watershed Development Program
1. Through the PPP Model, TPCDT and NABARD initiated Integrated Watershed Program in Ranjani village of Ahmednagar district of Maharashtra. 2. Watershed activities in Jath, Agaswadi, GSW site villages helped to overcome water crisis. 2 villages are tanker free.
Financial Inclusivity:
1. Empowering community in availing of various govt. schemes, benefitted more than 10500 villagers across 18 villages.
Ashish Khanna Mr. Sanjay Bhandarkar Director Chairman, CSR Committee (DIN: 06699527) (DIN: 01260274)
Mumbai, April 24, 2019
TATA POWER RENEWABLE ENERGY LIMITED
Annexure V
DISCLOSURE OF MANAGERIAL REMUNERATION (Ref: Board's Report, Section 18) a) The ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year
Name of Director Ratio of Director’s remuneration to the median remuneration of the employees of the company for the financial year
Mr. Praveer Sinha NA
Mr. Nawshir Mirza 1.24
Mr. Sanjay Bhandarkar 1.31
Ms. Anjali Bansal 0.52
Mr. Ramesh Subramanyam NA
Mr. Ashish Khanna NA
Mr. Anil Sardana NA
Mr. Rahul Shah NA
Ms. Anjali Kulkarni 0.27
b) The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year
Name of Director and Key Managerial Personnel Percentage increase in remuneration in the financial year
Mr. Praveer Sinha (wef 07.05.18) NA
Mr. Nawshir Mirza 1.47
Mr. Sanjay Bhandarkar (2.67)
Ms. Anjali Bansal (wef 19.07.18) NA
Mr. Ramesh Subramanyam NA
Mr. Ashish Khanna (wef 21.06.18) NA
Mr. Anil Sardana NA
Mr. Rahul Shah (upto 30.06.18) NA
Ms. Anjali Kulkarni (upto 05.07.18) (61.54)
TATA POWER RENEWABLE ENERGY LIMITED
Mr. Gautam Attravanam (wef 05.11.18) NA
Mr. Mahesh Paranjpe (wef 21.06.18) NA
Mr. Jinendra V Patil , Chief Financial Officer (upto (21.18) 05.11.18)
Ms. Mona Purandare, Company Secretary (10.81)
c) The percentage increase in the median remuneration of employees in the financial year: 1.98% d) The number of permanent employees on the rolls of the company: 42 e) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year, its comparison with the percentile increase in the managerial remuneration, justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:
Average increase in remuneration of Managers (CEO and ED on the Board of the Company) was -45.79%. For employees of the Company, the median increase was 1.98% f) Affirmation that the remuneration is as per the remuneration policy of the Company: It is affirmed that the remuneration is as per the 'Remuneration Policy for Directors, Key Managerial Personnel and other employees' adopted by the Board.
On behalf of the Board of Directors,
Praveer Sinha Chairman Mumbai, April 24, 2019 (DIN 01785164)
TATA POWER RENEWABLE ENERGY LIMITED
Annexure VI
RELATED PARTY TRANSACTIONS (Ref.: Board’s Report, Section 20)
FORM NO AOC-2
Disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in section 188(1) of the Companies Act, 2013 including certain arm’s length transactions under third proviso thereto [Pursuant to clause (h) of subsection 3 of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014
Details of contracts or arrangements or transactions not at arm’s length basis: Nil
Details of material contracts or arrangement or transactions at arm’s length basis:
Name(s) of Nature of Duration Salient terms Date (s) of Amount the related contracts/ including approval by paid as party and arrangements/ value the Board advances nature of transactions , if any relationship
Tata Power Corporate Guarantee for Guarantee for 26.11.2016 - Company Guarantee ₹ 500.00 crore repayment of Limited issued for NCD raised in principal & (Holding issuance of Non- May 2017. Interest Company) Convertible Guarantee payment to Debentures from 25th May NCD holders (NCD) 2017 & valid for amount till 25th May not exceeding 2025 ₹ 560.00 crore Tata Power Corporate 10 years Guarantee for 21.03.2017 Company Guarantee repayment of Limited issued for Long principal & (Holding term loan of Interest Company) HDFC Bank payment for Limited amount not exceeding ₹ 525 crore Tata Power Corporate 15 years Guarantee for 24.06.2017 Company Guarantee repayment of Limited issued for Long principal & (Holding term loan of Axis Interest Company) Bank Limited payment for amount not exceeding ₹ 525 crore Tata Power Corporate Guarantee for Guarantee for Company Guarantee ₹ 575.00 crore repayment of Limited issued for NCD raised in principal & (Holding issuance of Non- Jun 2016. Interest Company) Convertible Guarantee payment to Debentures from 15th NCD holders (NCD) June 2016 & for amount valid till 15th not exceeding June 2026 ₹ 625.00 crore
TATA POWER RENEWABLE ENERGY LIMITED
Tata Power Power Sale from Power ₹ 24.52 crore 02.01.2013 Company Girija Purchase during the year Limited Shankarwadi Agreement Cash discount- (Holding Plant (32 MW (PPA) from Nil. Net ₹ 24.52 Company) Wind Plant) 12h August crores 2013 valid till 31st December 2027 Tata Power Power Sale from Power ₹ 39.09 crore 18.03.2013 Company Palasawadi Purchase during the year Limited Solar Plant (28.8 Agreement Less cash (Holding MW Solar Plant) (PPA) from discount 0.78 Company) 19th December crores. Net ₹ 2012 for 25 38.31 crores years period. Tata Power Inter Corporate Short Term ₹295.00 crore 28.10.2017 Company Deposits loans are ICD received Limited (taken or given) taken from or (Holding given within ₹402.10 crore Company the Tata ICD provided Power Group companies Aftaab Inter Corporate Short Term ₹125.00 crore 28.10.2017 (100% Deposits loans are ICD received Subsidiary (taken or given) taken from or during the year. Company of given within holding the Tata ₹125.00 crore company) Power Group outstanding as companies 31.03.2019
Tata Power Purchase of EPC order for ₹ 1219.55 19.07.2018 Solar System fixed assets constructing crore during the Limited (100% Solar Plants year Subsidiary Company of (KREDL 250 holding MW) company) Tata Power Purchase of EPC order for ₹ 595.50 crore 16.02.2018 Solar System fixed assets constructing during the year Limited (100% Solar Plants Subsidiary Company of (MSEDCL 250 holding MW) company) Tata Power Purchase of EPC order for ₹ 42.29 crore Solar System fixed assets constructing during the year Limited (100% Solar roof top Subsidiary Plants Company of holding (Roof tops) company) Walwhan Inter Corporate On call ₹191.40 crore 28.10.2017 Renewable Deposits (taken ICD taken and Energy or given) completely Limited repaid during the year
TATA POWER RENEWABLE ENERGY LIMITED
(100% Subsidiary Company of TPREL)
Tata Power Inter Corporate On call ₹110.40 crore 28.10.2017 Trading Deposits (taken ICD provided Company Ltd or given) and completely (100% repaid during Subsidiary the year Company of TPCL)
Details of receipt of commission by a director from holding company or subsidiary company –
During the year, Mr. Nawshir Mirza, Ms. Anjali Bansal and Mr. Sanjay Bhandarkar, also being Independent Directors of The Tata Power Company Limited (Tata Power) and Mr. Praveer Sinha, Chairman who was also the CEO and Managing Director of The Tata Power Company Limited received commission of ₹ 70 lakhs, ₹ 50 lakhs, ₹ 55 lakhs and ₹ 250 lakhs, respectively from Tata Power for FY19.
On behalf of the Board of Directors
Praveer Sinha Chairman (DIN 01785164)
Mumbai, 24 April 2019
TATA POWER RENEWABLE ENERGY LIMITED
Annexure VII
FORM NO. MGT-9 (Ref: Board's Report, Section 20)
EXTRACT OF ANNUAL RETURN
as on the financial year ended on 31st March 2019
[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]
I. REGISTRATION AND OTHER DETAILS: i) CIN: U40108MH2007PLC168314 ii) Registration Date: 02/03/2007 iii) Name of the Company: Tata Power Renewable Energy Limited iv) Category / Sub-Category of the Company: Public Company v) Address of the registered office and contact details: C/o The Tata Power Company Ltd., Corporate Centre Block A, 34, Sant Tukaram Road, Carnac Bunder, Mumbai-400009 vi) Whether listed company: Yes / No The Company has listed its Non- Convertible debentures vii) Name, Address and Contact details of Registrar and Transfer Agent, if any:
TSR Darashaw Limited 6-10, Haji Moosa Patrawala Industrial Estate (Near Famous Studio) 20, Dr. E. Moses Road, Mahalaxmi, Mumbai 400011 Tel.: 022 66568484, Fax.: 022 66568494 Email: [email protected] Website: www.tsrdarashaw.com
II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY
All the business activities contributing 10 % or more of the total turnover of the company shall be stated:-
Sl. No. Name and Description of NIC Code of the % to total turnover of main products / services Product/ service the company 1 Sale of Solar Power 35105 42.51 2 Sale of Wind Power 35106 57.49
III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES
Sl. *Name and CIN/GLN Holding/ % of Applicable No Address of the Subsidiary Shares Section of Company /Associate Held the Companie s Act 2013 1. The Tata Power L28920MH1919PLC000567 Holding 100 Section 2 Company Company (46) Limited Companies Bombay House, Act, 24 Homi Mody Street Mumbai 400001
1
TATA POWER RENEWABLE ENERGY LIMITED
2. Supa Windfarm U40300MH2015PLC270878. Subsidiary 100 Section 2 Ltd Company (87) of C/O The Tata Companies Power Company Act, 2013 Ltd., Corporate Center Block, 34, Sant Tukaram Road, Carnac Bunder, Mumbai-400009 3. Nivade U40300MH2015PLC271114. Subsidiary 100 Section 2 Windfarm Ltd Company (87) of C/O The Tata Companies Power Company Act, 2013 Ltd., Corporate Center Block, 34, Sant Tukaram Road, Carnac Bunder, Mumbai-400009 4. Poolavadi U40300MH2016PLC271899. Subsidiary 100 Section 2 Windfarm Ltd Company (87) of C/O The Tata Companies Power Company Act, 2013 Ltd., Corporate Center Block, 34, Sant Tukaram Road, Carnac Bunder, Mumbai-400009 5. Vagarai U40106MH2017PLC291708 Subsidiary 72 Section 2 Windfarm Ltd. Company (87) of C/O The Tata Companies Power Company Act, 2013 Ltd., Corporate Center Block, 34, Sant Tukaram Road, Carnac Bunder, Mumbai-400009 6. Indo Rama U40300HR2012PLC046057 Subsidiary 100 Section 2 Renewables Company (87) of Jath Ltd, Companies **C/o The Tata Act, 2013 Power Company Limited, Corporate, Center, 34, Sant Tukaram Road,Carnac Bunder, Mumbai,
2
TATA POWER RENEWABLE ENERGY LIMITED
Mumbai City, Maharashtra, India, 400009 7. Walwhan U40103MH2009PLC197021 Subsidiary 100 Section 2 Renewable Company (87) of Energy Limited Companies (Formerly known Act, 2013 as Walwhan Renewable Energy Private Limited and Welspun Renewables Energy Private Limited), C/o The Tata Power Company Limited, Corporate Center B, 34 Sant Tukaram Road, Carnac Bunder Mumbai Mumbai City MH 400009 IN 8. Northwest U40108MH2008PTC182762 Subsidiary 100% Section 2 Energy Private Company Shares (87) of Limited, C/o The held by Companies Tata Power Walwh Act, 2013 Company an Limited, Renew Corporate able Center B, 34 Energy Sant Tukaram Limited Road, Carnac Bunder Mumbai Mumbai City MH 400009 IN 9. Clean U40300MH2014PTC254371 Subsidiary 99.99% Section 2 Sustainable Company shares (87) of Solar Energy held by Companies Private Limited, Walwh Act, 2013 C/o The Tata an Power Company Renew Limited, able Corporate Energy Center B, 34 Limited Sant Tukaram Road, Carnac Bunder Mumbai Mumbai City MH 400009 IN 10. Walwhan Solar U40106MH2010PLC209615 Subsidiary 100% Section 2 BH Limited Company Shares (87) of (Formerly known held by Companies as Walwhan Walwh Act, 2013 Solar BH Private an Limited and Renew Welspun Energy able
3
TATA POWER RENEWABLE ENERGY LIMITED
Jharkhand Energy Private Limited) Limited C/o The Tata Power Company Limited, Corporate Center B, 34 Sant Tukaram Road, Carnac Bunder Mumbai Mumbai City MH 400009 IN 11. Walwhan Solar U40108MH2006PLC165673 Subsidiary 100% Section 2 MH Limited Company Shares (87) of (Walwhan Solar held by Companies MH Private Walwh Act, 2013 Limited and an Welspun Energy Renew Maharashtra able Private Limited), Energy C/o The Tata Limited Power Company Limited, Corporate Center B, 34 Sant Tukaram Road, Carnac Bunder Mumbai Mumbai City MH 400009 IN 12. Walwhan Solar U40109MH2008PLC178769 Subsidiary 100% Section 2 AP Limited Company Shares (87) of (Formerly known held by Companies as Walwhan Walwh Act, 2013 Solar AP Private an Limited and Renew Welspun Solar able AP Private Energy Limited), C/o Limited The Tata Power Company Limited, Corporate Center B, 34 Sant Tukaram Road, Carnac Bunder Mumbai Mumbai City MH 400009 IN 13. Walwhan Solar U40105MH2010PLC202097 Subsidiary 100% Section 2 Raj Limited Company Shares (87) of (Formerly known held by Companies as Walwhan Walwh Act, 2013 Solar Raj an Private Limited Renew and Viraj able Renewables Energy Energy Private Limited Limited), C/o
4
TATA POWER RENEWABLE ENERGY LIMITED
The Tata Power Company Limited, Corporate Center B, 34 Sant Tukaram Road, Carnac Bunder Mumbai Mumbai City MH 400009 IN 14. Walwhan Solar U40104MH2008PLC184134 Subsidiary 100% Section 2 Energy GJ Company Shares (87) of Limited held by Companies (Formerly known Walwh Act, 2013 as Walwhan an Solar Energy GJ Renew Private Limited able and Unity Power Energy Private Limited), Limited C/o The Tata Power Company Limited, Corporate Center B, 34 Sant Tukaram Road, Carnac Bunder Mumbai Mumbai City MH 400009 IN 15. Walwhan Solar U40106MH2010PLC206275 Subsidiary 100% Section 2 MP Limited Company Shares (87) of (Formerly known held by Companies as Walwhan Walwh Act, 2013 Solar MP an Private Limited Renew and Welspun able Solar Madhya Energy Pradesh Private Limited Limited), C/o The Tata Power Company Limited, Corporate Center B, 34 Sant Tukaram Road, Carnac Bunder Mumbai Mumbai City MH 400009 IN 16. Walwhan Solar U40300MH2012PLC233418 Subsidiary 100% Section 2 KA Limited Company Shares (87) of (Formerly known held by Companies as Walwhan Walwh Act, 2013 Solar KA Private an Limited and Renew Welspun Solar able Kannada Private Energy Limited), C/o Limited The Tata Power
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TATA POWER RENEWABLE ENERGY LIMITED
Company Limited, Corporate Center B, 34 Sant Tukaram Road, Carnac Bunder Mumbai Mumbai City MH 400009 IN 17. Walwhan U40105MH2010PLC206475 Subsidiary 100% Section 2 Energy RJ Company Shares (87) of Limited held by Companies (Formerly known Walwh Act, 2013 as Walwhan an Energy RJ Renew Private Limited able and Welspun Energy Solar Rajasthan Limited Private Limited), C/o The Tata Power Company Limited, Corporate Center B, 34 Sant Tukaram Road, Carnac Bunder Mumbai Mumbai City MH 400009 IN 18. Walwhan Solar U40300MH2011PLC213470 Subsidiary 100% Section 2 RJ Limited Company Shares (87) of (Formerly known held by Companies as Walwhan Walwh Act, 2013 Solar RJ Private an Limited and Renew Welspun Solar able UP Private Energy Limited), C/o Limited The Tata Power Company Limited, Corporate Center B, 34 Sant Tukaram Road, Carnac Bunder Mumbai Mumbai City MH 400009 IN 19. Walwhan Urja U40109MH2006PLC165964 Subsidiary 100% Section 2 India Limited Company Shares (87) of (Formerly known held by Companies as Welspun Urja Walwh Act, 2013 India Limited), an C/o The Tata Renew Power Company able Limited, Energy Corporate Limited Center B, 34 Sant Tukaram
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TATA POWER RENEWABLE ENERGY LIMITED
Road, Carnac Bunder Mumbai Mumbai City MH 400009 IN 20. Dreisatz Mysolar U40102DL2009PTC195082 Subsidiary 100% Section 2 24 Private Company Shares (87) of Limited, C-14, held by Companies Lower Ground Walwh Act, 2013 Floor, Chirag an Enclave, Greater Renew Kailash - 1 New able Delhi New Delhi Energy DL 110048 IN Limited 21. MI Mysolar24 U40106DL2009PTC195090 Subsidiary 100% Section 2 Private Limited, Company Shares (87) of C-14, Lower held by Companies Ground Floor, Walwh Act, 2013 Chirag Enclave, an Greater Kailash - Renew 1 New Delhi able New Delhi DL Energy 110048 IN Limited 22. Walwhan Solar U40300DL2010PLC274220 Subsidiary 100% Section 2 PB Limited Company Shares (87) of (Formerly known held by Companies as Walwhan Walwh Act, 2013 Solar PB Private an Limited and Renew Welspun Solar able Punjab Private Energy Limited), C-14, Limited Lower Ground Floor, Chirag Enclave, Greater Kailash - 1 New Delhi New Delhi DL 110048 IN 23. Walwhan Solar U40106DL2010PLC277364 Subsidiary 100% Section 2 TN Limited Company Shares (87) of (Formerly known held by Companies as Walwhan WREL Act, 2013 Solar TN Private along Limited and with its Welspun Solar six Tech Private nomine Limited), C-14, es Lower Ground Floor, Chirag Enclave, Greater Kailash - 1 New Delhi New Delhi DL 110048 IN 24. Walwhan Wind U40108DL2006PLC274219 Subsidiary 100% Section 2 RJ Limited Company Shares (87) of (Formerly known held by Companies as Walwhan Walwh Act, 2013 Wind RJ Private an Limited and Renew Welspun Energy able
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TATA POWER RENEWABLE ENERGY LIMITED
Rajasthan Energy Private Limited), Limited C-14, Lower Ground Floor, Chirag Enclave, Greater Kailash - 1 New Delhi New Delhi DL 110048 IN 25. Walwhan Urja U40300DL2010PLC282627 Subsidiary 100% Section 2 Anjar Limited Company Shares (87) of (Formerly known held by Companies as Walwhan Urja Walwh Act, 2013 Anjar Private an Limited and Renew Welspun Urja able Gujarat Private Energy Limited), C-14, Limited Lower Ground Floor, Chirag Enclave, Greater Kailash - 1 New Delhi New Delhi DL 110048 IN 26. Solarsys U74999DL2004PTC131074 Subsidiary 100% Section 2 Renewable Company Shares (87) of Energy Private held by Companies Limited, C-14, Walwh Act, 2013 Lower Ground an Floor, Chirag Renew Enclave, able Greater Kailash Energy - 1 New Delhi Limited New Delhi DL 110048 IN
* Includes direct and indirect subsidiaries ** Registered office of Indo Rama Renewables Jath Ltd. is shifted from State of Haryana to the State of Maharashtra.
IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity) i) Category-wise Share Holding
% Chan- Category of No. of Shares held at the No. of Shares held at the end of ge Sharehold-ers beginning of the year the year Duri-ng the year
% of % of Ph Total Total Demat Physical Total Demat ysi Total Share Share cal s s
A. Promoters
(1) Indian a) Individual/HUF ------
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TATA POWER RENEWABLE ENERGY LIMITED
b) Central Govt ------c) State Govt ------(s) d) Bodies Corp. 1,045,107,709 6 1,045,107,715 100 1,045,107,709 6 1,045,107,715 100 0
e) Banks / FI ------f) Any Other…. Sub-total (A) 1,045,107,709 6 1,045,107,715 100 1,045,107,709 6 1,045,107,715 100 0 (1):- (2) Foreign
a) NRIs ------
Individuals ------
b) Other – ------
Individuals ------
c) Bodies Corp. ------
d) Banks / FI ------
e) Any Other…. ------Sub-total (A) ------(2):- Total shareholding of Promoters 1,045,107,709 6 1,045,107,715 100 1,045,107,709 6 1,045,107,715 100 0 (A) = (A)(1)+(A)(2) B. Public ------Shareholding 1. Instituti ------ons a) Mutual Funds ------
b) Banks / FI ------
c) Central Govt ------
d) State Govt(s) ------e) Venture ------Capital Funds ------
f) Insurance ------
Companies ------
g) FIIs ------h) Foreign ------Venture Capital Funds ------i) Others ------(specify) Sub-total ------(B)(1):- 2. Non-
Institutions a) Bodies Corp. ------
i) Indian ------
ii) Overseas ------
b) Individuals ------
i) Individual ------
shareholders ------
holding nominal ------share capital ------upto ₹. 1 lakh ------
ii) Individual ------
shareholders ------
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TATA POWER RENEWABLE ENERGY LIMITED
holding ------
nominal share ------
capital in ------excess of ------₹1lakh c) Others ------(specify) Sub-total ------(B)(2):- Total Public ------Shareholding (B)=(B)(1)+ (B)(2) C. Shares held ------by Custodian for GDRs & ADRs
Grand Total 1,045,107,709 6 1,045,107,715 100 1,045,107,709 6 1,045,107,715 100 0 (A+B+C)
(ii) Shareholding of Promoters (including the promoter group)
% change in the Shareholder’s sharehold Sl No Shareholding at the beginning of the year Shareholding at the end of the year Name ing during the year %of %of Shares Shares % of total % of total Pledged Pledged shares of shares of No. of Shares /encumbere No. of Shares /encumb the the d to total ered to Company Company shares total shares
The Tata Power
Company 1 1,045,107,709 68.13 1,045,107,709 24.70 - Limited
The Tata Power Company 2 Limited 1 - - - - Jointly with Mr Nandakumar Tirumalai 100 100
The Tata Power Company 3 1 Limited - - - - Jointly with Mr Sanjay Dube
The Tata Power Company 4 Limited Jointly 1 - - - - with Mr Mahesh Paranjpe
The Tata 5 1 - 1 - - Power Company
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TATA POWER RENEWABLE ENERGY LIMITED
Limited Jointly with Mr Hanoz Mistry
The Tata Power Company - 6 1 - - Limited Jointly - with Mr Rahul Shah
The Tata Power Company 7 Limited Jointly 1 - - - with Mr - Ramesh Subramanyam
The Tata Power Company 1 - 8 0 - - Limited Jointly with Mr. Anand Agarwal
The Tata Power 1 - Company 9 0 - - Limited Jointly with Mr. Jeraz Mahernosh
The Tata Power Company 10 0 - - Limited Jointly 1 - with Mr. Kasturi Soundararajan
The Tata Power Company 1 - 11 0 - - Limited Jointly with Mr. Prasad Bagade
The Tata Power Company 1 - 12 0 - - Limited Jointly with Mr. Pradip Roy
Total 1,045,107,715 100 68.13 1,045,107,715 100 24.70 -
(iii) Change in Promoters’ Shareholding (please specify, if there is no change)
Cumulative Shareholding during the Name of the Shareholder Shareholding at the beginning of the year year
% of total % of total shares of the No. of shares No. of shares shares of the company company
The Tata Power Company Limited
At the beginning of the year 1,045,107,709 100 1,045,107,709 100
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TATA POWER RENEWABLE ENERGY LIMITED
Date wise Increase /Decrease in Promoters Shareholding during the year specifying the reasons for increase / Nil Nil Nil Nil decrease (e.g. allotment / transfer / bonus/ sweat equity etc):
At the end of the year 1,045,107,709 100 1,045,107,709 100
The Tata Power Company Limited Jointly with Mr Nandakumar Tirumalai
At the beginning of the year 1 - 1 -
Date wise Increase /Decrease in Promoters Shareholding during the year
specifying the reasons for increase / (1) - (1) - decrease (e.g. allotment / transfer / bonus/
sweat equity etc): transfer of share on 27th September 2018
At the end of the year - - - -
The Tata Power Company Limited Jointly with Mr Sanjay Dube
At the beginning of the year 1 - 1 -
Date wise Increase /Decrease in Promoters Shareholding during the year
specifying the reasons for increase / (1) - (1) - decrease (e.g. allotment / transfer / bonus/
sweat equity etc): transfer of share on 27th September 2018
At the end of the year - - - -
The Tata Power Company Limited Jointly with Mr Mahesh Paranjpe
At the beginning of the year 1 - 1 -
Date wise Increase /Decrease in Promoters Shareholding during the year
specifying the reasons for increase / (1) - (1) - decrease (e.g. allotment / transfer / bonus/
sweat equity etc): transfer of share on 27th September 2018
At the end of the year - - - -
The Tata Power Company Limited Jointly with Mr Hanoz Mistry
At the beginning of the year 1 - 1 -
Date wise Increase /Decrease in Promoters Shareholding during the year
specifying the reasons for increase / - - - - decrease (e.g. allotment / transfer / bonus/
sweat equity etc): transfer of share on 27th September 2018
At the end of the year 1 - 1 -
The Tata Power Company Limited Jointly with Mr Rahul Shah
At the beginning of the year 1 - 1 -
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TATA POWER RENEWABLE ENERGY LIMITED
Date wise Increase /Decrease in Promoters Shareholding during the year
specifying the reasons for increase / (1) - (1) - decrease (e.g. allotment / transfer / bonus/
sweat equity etc): transfer of share on 27th September 2018
At the end of the year - - - -
The Tata Power Company Limited Jointly with Mr Ramesh Subramanyam
At the beginning of the year 1 - 1 -
Date wise Increase /Decrease in Promoters Shareholding during the year
specifying the reasons for increase / (1) - (1) - decrease (e.g. allotment / transfer / bonus/
sweat equity etc): transfer of share on 27th September 2018
At the end of the year - - - -
The Tata Power Company Limited Jointly with Mr Anand Agarwal
At the beginning of the year - - - -
Date wise Increase /Decrease in Promoters Shareholding during the year
specifying the reasons for increase / 1 - 1 - decrease (e.g. allotment / transfer / bonus/
sweat equity etc): transfer of share on 27th September 2018
At the end of the year 1 - 1 -
The Tata Power Company Limited Jointly with Mr. Jeraz Mahernosh
At the beginning of the year - - - -
Date wise Increase /Decrease in Promoters Shareholding during the year
specifying the reasons for increase / 1 - 1 - decrease (e.g. allotment / transfer / bonus/
sweat equity etc): transfer of share on 27th September 2018
At the end of the year 1 - 1 -
The Tata Power Company Limited Jointly with Mr. Kasturi Soundararajan
At the beginning of the year - - - -
Date wise Increase /Decrease in Promoters Shareholding during the year
specifying the reasons for increase / 1 - 1 - decrease (e.g. allotment / transfer / bonus/
sweat equity etc): transfer of share on 27th September 2018
At the end of the year 1 - 1 -
The Tata Power Company Limited Jointly with Mr. Prasad Bagade
At the beginning of the year - - - -
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TATA POWER RENEWABLE ENERGY LIMITED
Date wise Increase /Decrease in Promoters Shareholding during the year
specifying the reasons for increase / 1 - 1 - decrease (e.g. allotment / transfer / bonus/
sweat equity etc): transfer of share on 27th September 2018
At the end of the year 1 - 1 -
The Tata Power Company Limited Jointly with Mr. Pradip Roy
At the beginning of the year - - - -
Date wise Increase /Decrease in Promoters Shareholding during the year
specifying the reasons for increase / 1 - 1 - decrease (e.g. allotment / transfer / bonus/
sweat equity etc): transfer of share on 27th September 2018
At the end of the year 1 - 1 -
At the End of the year 1,045,107,715 100 1,045,107,715 100
(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs): N.A.
(v) Shareholding of Directors and Key Managerial Personnel:
Cumulative Sl Shareholding at the Shareholding during the No. beginning of the year Year % of total % of total shares For Each of the Directors and No. of shares of of KMP No. of shares shares the the
company compan y
* Mr.Rahul Shah, Director (Share held jointly with The Tata Power Company Limited with 1 The Tata Power Co. Ltd. being the first holder) At the beginning of the year 1 0 1 0 Date wise Increase / Decrease in Promoters Shareholding during the Decreased due to transfer of one share on 27th year specifying the reasons for September 2018 increase /decrease (e.g. allotment /transfer/ bonus/ sweat equity etc.) At the end of the year 0 0 0 0 Cumulative Shareholding at the 2 Shareholding during the beginning of the year Year
% of total % of For Each of the Directors and No. of shares of total No. of shares KMP shares the shares company of
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TATA POWER RENEWABLE ENERGY LIMITED
the compan y
*Mr.Ramesh Subramanyam, Director (Share held jointly with The Tata Power Co. Ltd.
with The Tata Power Co. Ltd. being the first holder At the beginning of the year 1 0 1 0 Date wise Increase / Decrease in Promoters Shareholding during the Decreased due to transfer of one share on 27th year specifying the reasons for September 2018 increase /decrease (e.g. allotment /transfer/ bonus/ sweat equity etc.) At the End of the year 0 0 0 0
V. INDEBTEDNESS
Indebtedness of the Company including interest outstanding/accrued but not due for payment-
₹ in crore Secured Loans Unsecured Total excluding Deposits Loans Indebtedness deposits Indebtedness at the beginning
of the financial year i) Principal Amount 861.83 2500 - 3361.83 ii) Interest due but not paid - - - - iii) Interest accrued but not due 5.21 60.16 - 65.37 Total (i+ii+iii) 867.04 2560.16 - 3427.20 Change in Indebtedness during
the financial year • Addition i) Principal Amount 750 5361.40 - 6111.4 ii) Interest due but not paid - - - - iii) Interest accrued but not due 6.16 - 6.16
• Reduction i) Principal Amount 21.25 5211.4 5232.65 ii) Interest due but not paid 5.80 5.80 iii) Interest accrued but not due Net Change 734.92 144.20 879.11 Indebtedness at the end of the
financial year i) Principal Amount 1590.58 2650.00 - 4240.58 ii) Interest due but not paid iii) Interest accrued but not due 11.37 54.36 65.73 Total (i+ii+iii) 1601.95 2704.36 4306.31
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TATA POWER RENEWABLE ENERGY LIMITED
VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. Remuneration to Managing Director, Whole-time Directors and/or Manager:
Sl. Particulars of Remuneration Name of MD Total no. /WTD / Manager Amount 1. Gross salary Nil Nil (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961
(b) Value of perquisites u/s 17(2) Income-tax Act, 1961
(c) Profits in lieu of salary under section 17(3) Income- tax Act, 1961 2. Stock Option Nil Nil 3. Sweat Equity Nil Nil 4. Commission Nil Nil - as % of profit - others, specify 5. Others, please specify Nil Nil Total (A) Ceiling as per the Act (@5% of the profit calculated under section 198 of the _ Companies Act 2013 (₹crore)
B. Remuneration to other directors:
Sl. Name of Directors Particulars of Remuneration Total Amount no. (₹) Fee for Commission* Others, attending * please board / specify committee Meetings* A. Independent Directors 1. Mr. Nawshir Mirza 690,000 Nil Nil 690,000 2. Mr. Sanjay Bhandarkar 730,000 Nil Nil 730,000 3. Ms. Anjali Bansal 290,000 Nil Nil 290,000 Total (A) 1,710,000 Nil Nil 1,710,000 B. Other Non-Executive Directors Ms. Anjali Kulkarni 150,000 150,000 Total (B) 150,000 Nil Nil 150,000 Total Managerial 1 Remuneration 1,860,000 Nil Nil 1,860,000 Overall Ceiling as per the Act (@1% of profit calculated under section 13,933,798.55 198 of the Companies Act 2013) (₹)
None of the NEDs had any pecuniary relationship or transactions with the Company
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TATA POWER RENEWABLE ENERGY LIMITED
C. Remuneration to Key Managerial Personnel Other than Managing Director/Manager/Whole Time Director:
Sl. Particulars of Key Managerial Personnel o. Remuneration Mr. Mr Mr. Ms. Total Mahesh Jinendra Gautam Mona Paranjpe Patil Attravanam Purandare Chief Chief Chief Company Executive Financial Financial Secretary Officer Officer Officer (CS) (CEO) (CFO) (CFO) (wef 1.10.18) (upto (wef 05.11.18) 05.11.18) Gross salary (a) Salary as per provisions contained in 3,789,071 4,264,789 1,742,382 2,174,354 11,970,596 section 17(1) of the Income-tax Act, 1961
(b) Value of perquisites u/s 17(2) Income- tax Act, 1961
(c) Profits in lieu of salary under section 17(3) Income tax Act, 1961 2. Stock Option Nil Nil Nil Nil Nil 3. Sweat Equity Nil Nil Nil Nil Nil
4. Commission Nil Nil Nil Nil Nil - as % of profit - others, specify 5. Others, please Nil Nil Nil Nil Nil specify Total 3,789,071 4,264,789 1,742,382 2,174,354 11,970,596
VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:
Type Section of Brief Description Details of Authority Appeal made, if the Penalty/ [RD/NCLT/ any (give Companies Punishment/Co COURT] details) Act mpounding fees imposed
A. COMPANY
Penalty Nil Punishment
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TATA POWER RENEWABLE ENERGY LIMITED
Compounding
B. DIRECTORS
Penalty
Punishment Nil
Compounding
C. OTHER OFFICERS IN DEFAULT
Penalty
Punishment Nil
Compounding
On behalf of the Board of Directors,
Praveer Sinha Chairman (DIN: 01785164) Mumbai, April 24, 2019
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TATA POWER RENEWABLE ENERGY LIMITED
Annexure VIII
SECRETARIAL AUDIT REPORT (Ref: Board's Report, Section 24)
FORM No. MR-3
FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2019
(Pursuant to Section 204 (1) of the Companies Act, 2013 and rule No. 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014)
To, The Members, Tata Power Renewable Energy Limited
We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Tata Power Renewable Energy Limited (hereinafter called the Company). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.
Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the company, the information provided by the company, its officers, agents and authorized representatives during the conduct of secretarial audit, the explanations and clarifications given to us and the representations made by the Management, we hereby report that in our opinion, the company has, during the audit period covering the financial year ended on 31st March, 2019 generally complied with the statutory provisions listed hereunder and also that the Company has proper Board processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:
We have examined the books, papers, minute books, forms and returns filed and other records made available to us and maintained by the Company for the financial year ended on 31st March, 2019 according to the provisions of:
(i) The Companies Act, 2013 (the Act) and the rules made thereunder;
(ii) The Securities Contract (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder;
(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;
(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;
(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’)
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; (Not applicable to the Company during the audit period)
(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 and Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;
(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 and amendments from time to time; (Not applicable to the Company during the audit period)
(d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and The Securities and Exchange Board of India TATA POWER RENEWABLE ENERGY LIMITED
(Share Based Employee Benefits) Regulations, 2014; (Not applicable to the Company during the audit period)
(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;
(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client; (Not applicable to the Company during the audit period)
(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; (Not applicable to the Company during the audit period) and
(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018; (Not applicable to the Company during the audit period)
(vi) Other laws applicable specifically to the Company namely:
1. The Electricity Act, 2003 2. The Indian Electricity Rules, 1956 3. The Rules, Regulations and applicable orders under the Central and Electricity Regulatory Commissions/Authority 4. The Energy Conservation Act, 2001
We have also examined compliance with the applicable clauses of the following:
(i) Secretarial Standards issued by The Institute of Company Secretaries of India with respect to board and general meetings.
(ii) The Listing Agreements entered into by the Company with National Stock Exchange of India Limited read with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
During the period under review the Company has generally complied with the provisions of the Act, Rules, Regulations, Guidelines, etc. mentioned above.
We further report that:
The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.
Adequate notice was given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.
Decisions at the Board Meetings were taken unanimously.
We further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
We further report that during the audit period the Company has following events which had bearing on the Company’s affairs in pursuance of the above referred laws, rules, regulations, guidelines, etc.:
TATA POWER RENEWABLE ENERGY LIMITED
i) Redeemed 4,250 Unsecured Non-Cumulative Redeemable Listed Non-Convertible Debentures of ₹ 10,00,000 each on July 23, 2018.
For Parikh & Associates Company Secretaries Place: Mumbai Date: April 24, 2019 Mitesh Dhabliwala Partner FCS No: 8331 CP No: 9511
This Report is to be read with our letter of even date which is annexed as Annexure A and Forms an integral part of this report
‘Annexure A’
To, The Members Tata Power Renewable Energy Limited
Our report of even date is to be read along with this letter.
1. Maintenance of Secretarial record is the responsibility of the management of the Company. Our responsibility is to express an opinion on these secretarial records based on our audit.
2. We have followed the audit practices and process as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in Secretarial records. We believe that the process and practices, we followed provide a reasonable basis for our opinion.
3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.
4. Where ever required, we have obtained the Management representation about the Compliance of laws, rules and regulations and happening of events etc.
5. The Compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedure on test basis.
6. The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.
For Parikh & Associates Company Secretaries Place: Mumbai Date: April 24, 2019 Mitesh Dhabliwala Partner FCS No: 8331 CP No: 9511 TATA POWER RENEWABLE ENERGY LIMITED
INDEPENDENT AUDITOR’S REPORT To the Members of Tata Power Renewable Energy Limited
Report on the Audit of the Standalone Ind AS Financial Statements
Opinion
We have audited the accompanying standalone Ind AS financial statements of Tata Power Renewable Energy Limited (“the Company”), which comprise the Balance sheet as at March 31 2019, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Companies Act, 2013 (“the Act”) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2019, its profit including other comprehensive income its cash flows and the changes in equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ‘Auditor’s Responsibilities for the Audit of the Standalone Ind AS Financial Statements’ section of our report. We are independent of the Company in accordance with the ‘Code of Ethics’ issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone Ind AS financial statements for the financial year ended March 31, 2019. These matters were addressed in the context of our audit of the standalone Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the standalone Ind AS financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone Ind AS financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone Ind AS financial statements.
Key audit matters How our audit addressed the key audit matter Impairment evaluation of assets (as described in note 2.5 and 3 of the standalone Ind AS financial statements)
At the end of every reporting period, the Our audit procedures included considering the Company assesses whether there is any Company's accounting policies with respect to TATA POWER RENEWABLE ENERGY LIMITED
indication that a property, plant and equipment impairment in accordance with Ind AS 36 (PPE) or investment may be impaired. If any “Impairment of assets” such indication exists, the Company estimates the recoverable amount of the PPE or We performed test of controls over impairment Investment. process through inspection of evidence of performance of these controls. The determination of recoverable amount, being the higher of fair value less costs to sell and We performed the following tests of details: value-in-use involves significant estimates, We obtained the management’s impairment assumptions and judgements of the long term assessment financial projections. We evaluated the key assumptions Impairment of assets is a key audit matter including projected generation and weighted considering the significance of the carrying average cost of capital by comparing them value, long term estimation and the significant with prior years and external data, where judgements involved in the impairment available. assessment. We discussed the future business plans and financial projections with the management.
We evaluated the sensitivity analysis prepared by the Company
We assessed the disclosures in accordance with Ind AS 36 “Impairment of assets”. Recognition and recoverability of tax credit (as described in note 29 of the standalone Ind AS financial statements)
The Company has recognized Minimum Our audit procedures included considering the Alternate Tax (MAT) credit receivable of Rs. Company's accounting policies with respect to 54.98 crore as at March 31, 2019. recognition and recoverability of MAT credits in accordance with Ind AS 12 “Income Taxes” The recognition and recovery of MAT credit is a key audit matter as the recoverability of such We performed test of controls over recognition MAT credit within the allowed time frame and recoverability of MAT credits through involves significant estimate of the financial inspection of evidence of performance of these projections, availability of sufficient taxable controls. income in the future and significant judgements in the interpretation of tax regulations and tax We performed the following tests of details: positions adopted by the Company.
We discussed the financial projections and future business plans with the management
We assessed the key assumptions used in the financial projections by comparing it to the approved business plan and projections used for impairment assessment where applicable We involved our tax specialists who evaluated the reasonableness of the Company’s tax positions by comparing it with prior years and past precedents
Tested the arithmetical accuracy of the tax computations, future projections of taxable profits including its correlation with the
TATA POWER RENEWABLE ENERGY LIMITED
annual business plans approved by the Board of Directors
We assessed the disclosures in accordance with the requirements of Ind AS 12 “Income Taxes” Disputes with customers (as described in note 35 of the standalone Ind AS financial statements) The Company sells power to various customers Our audit procedures included the following: in accordance with the long term Power Purchase Agreements (‘PPA’) entered with We read the relevant PPAs with the them for respective power plants of the customer and evaluated relevant clauses Company. to understand terms of PPA.
One of the customer of the Company - Andhra With respect to the disputed matter, we Pradesh Southern Power Distribution Company have obtained and read the case Limited (APSPDCL) is deducting the amount of documents including petitions filed, Generation Based Incentive (‘GBI’) while grounds of appeal, respondent claims, any making payment of power invoices. Total orders of the lower Courts or authorities amount deducted till March 2019 is Rs. 19.56 including any similar cases. crore. We have read the legal opinions obtained Disputes with customers is a key audit matter by the management relating to the dispute considering the significance of the amount and to obtain understanding of the the judgement involved in assessing the management’s assessment of realization realizability of trade receivables. of disputed receivables.
We assessed the disclosure of the disputed matters in the financial statements. Information Other than the Financial Statements and Auditor’s Report Thereon The Company’s Board of Directors is responsible for the other information. The other information comprises the information included in the Director’s report, but does not include the standalone Ind AS financial statements and our auditor’s report thereon.
Our opinion on the standalone Ind AS financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone Ind AS financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management for the Standalone Ind AS Financial Statements
The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and TATA POWER RENEWABLE ENERGY LIMITED
estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. In preparing the standalone Ind AS financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those Board of Directors are also responsible for overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Standalone Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone Ind AS financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone Ind AS financial statements. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the standalone Ind AS financial statements, including the disclosures, and whether the standalone Ind AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. TATA POWER RENEWABLE ENERGY LIMITED
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone Ind AS financial statements for the financial year ended March 31, 2019 and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Other Matter
The comparative Ind AS financial information of the Company for the corresponding year as at April 1, 2017 included in these Ind AS Financial Statements, were audited by the predecessor auditor whose report for the year ended March 31, 2017 dated May 15, 2017 expressed an unmodified opinion on those Ind AS financial statements. The comparative financial information is based on the previous Ind AS financial statements prepared in accordance with the principles laid down in the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Companies Act, 2013, read with relevant rules issued thereunder and other accounting principles generally accepted in India, and is adjusted for the differences as explained in note 32 of these Ind AS financial statements, which have been audited by us. Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the “Annexure 1” a statement on the matters specified in paragraphs 3 and 4 of the Order. 2. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
(c) The Balance Sheet, the Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of the written representations received from the directors as on March 31, 2019 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2019 from being appointed as a director in terms of Section 164 (2) of the Act;
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company with reference to these standalone Ind AS financial statements and the operating effectiveness of such controls, refer to our separate Report in “Annexure 2” to this report;
(g) In our opinion, the managerial remuneration for the year ended March 31, 2019 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act; TATA POWER RENEWABLE ENERGY LIMITED
(h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements – Refer Note 26 to the standalone Ind AS financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
For S R B C & CO LLP Chartered Accountants ICAI Firm Registration Number: 324982E/E300003
______per Abhishek Agarwal Partner Membership Number: 112773
Place: Mumbai Date: April 24, 2019
TATA POWER RENEWABLE ENERGY LIMITED
Annexure 1 referred to in paragraph 1 under the heading ‘Report on Other Legal and Regulatory Requirements’ of our report of even date on the standalone Ind AS financial statements of Tata Power Renewable Energy Limited
(i) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were identified on such verification.
(c) According to the information and explanations given by the management, the title deeds of immovable properties included in property, plant and equipment are held in the name of the company
(ii) The Company’s business does not involve inventories and, accordingly, the requirements under paragraph 3(ii) of the Order are not applicable to the Company.
(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly, the provisions of clause 3(iii)(a), (b) and (c) of the Order are not applicable to the Company and hence not commented upon
(iv) In our opinion and according to the information and explanations given to us, there are no loans, investments, guarantees, and securities given in respect of which provisions of section 185 and 186 of the Companies Act 2013 are applicable and hence not commented upon
(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013, related to power generation and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.
(vii) According to the information and explanations given to us in respect of statutory dues:
(a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees’ state insurance, income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax, cess and other statutory dues applicable to it.
(b) According to the information and explanations given to us, undisputed dues in respect of provident fund, employees’ state insurance, income-tax, service tax, sales-tax, duty of custom, duty of excise, value added tax, goods and service tax, cess and other statutory dues which were outstanding, at the year end, for a period of more than six months from the date they became payable, are as follows:
Name of the Nature of Amount Period to Due Date Date of Remarks, if
Statute the Dues (Rs.) which the Payment any
amount relates
The Gujarat Profession 5,800 April 2018 July 15, Not paid Awaiting Professions Tax – June 2018 registration Tax Act, TATA POWER RENEWABLE ENERGY LIMITED
1976 2018
Statement of Arrears of Statutory Dues Outstanding for More than Six Months
(c) According to the records of the Company, the dues of income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax, goods and service tax and cess on account of any dispute, are as follows:
Name of the Nature of the dues Amount ( Period to which the Forum where statute Rs) amount relates the dispute is pending Maharashtra Value Added Tax 5,512,131 FY 2013-14 Appeal has Value Added been filed with Tax Act, 2002 Joint Commissioner of Sales Tax
(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of loans or borrowing to a financial institution, bank or government or dues to debenture holders.
(ix) In our opinion and according to the information and explanations given by the management, the term loans have been applied by the Company during the year for the purposes for which they were obtained, other than temporary deployment pending application of proceeds. The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments). (x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the company or no fraud on the company by the officers and employees of the Company has been noticed or reported during the year.
(xi) According to the information and explanations given by the management, the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
(xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the company and, not commented upon. (xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of Companies Act, 2013.
TATA POWER RENEWABLE ENERGY LIMITED
(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.
For S R B C & CO LLP Chartered Accountants Firm Registration No. 324982E/E300003
per Abhishek Agarwal Partner Membership No.: 112773
Place: Mumbai Date: April 24, 2019
TATA POWER RENEWABLE ENERGY LIMITED
Annexure 2 to the Independent Auditor’s Report of Even Date on the Standalone Financial Statements of Tata Power Renewable Energy Limited
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)
We have audited the internal financial controls over financial reporting of Tata Power Renewable Energy Limited (“the Company”) as of March 31, 2019 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Management’s Responsibility for Internal Financial Controls
The Company’s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditor’s Responsibility
Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting with reference to these standalone financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting with reference to these standalone financial statements was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls over financial reporting with reference to these standalone financial statements and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting with reference to these standalone financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls over financial reporting with reference to these standalone financial statements.
Meaning of Internal Financial Controls Over Financial Reporting With Reference to these Financial Statements
A company's internal financial control over financial reporting with reference to these standalone financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting with reference to these standalone financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that TATA POWER RENEWABLE ENERGY LIMITED
transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting With Reference to these Standalone Financial Statements
Because of the inherent limitations of internal financial controls over financial reporting with reference to these standalone financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting with reference to these standalone financial statements to future periods are subject to the risk that the internal financial control over financial reporting with reference to these standalone financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, adequate internal financial controls over financial reporting with reference to these standalone financial statements and such internal financial controls over financial reporting with reference to these standalone financial statements were operating effectively as at March 31, 2019, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For S R B C & CO LLP Chartered Accountants ICAI Firm Registration Number: 324982E/E300003
per Abhishek Agarwal Partner Membership Number: 112773
Place: Mumbai Date: April 24, 2019 Tata Power Renewable Energy Limited
Balance Sheet as at 31st March, 2019
As at As at As at Notes 31st March, 2019 31st March, 2018 * 01st April, 2017 * ₹ Crores ₹ Crores ₹ Crores ASSETS Non-current Assets (a) Property, plant and equipment 3 4,545.13 3,706.96 2,532.48 (b) Capital Work-in-Progress 1,567.15 699.75 747.87 (c) Intangible Assets 3 A 0.78 - - (d) Financial Assets (i) Investments 4 A 3,818.01 3,818.01 3,887.92 (ii) Loans 5 A 298.77 262.77 0.21 (iii) Finance Lease Receivable 5 C 11.35 - - (iv) Other Financial Assets 6 A 29.17 8.03 - (e) Deferred Tax Asset 16 - 19.57 0.23 (f) Non-current Tax Assets (Net) 7 7.92 11.38 7.14 (g) Other Non-current Assets 8 A 53.26 22.01 16.91 Total Non-current Assets 10,331.54 8,548.48 7,192.76
Current Assets (a) Financial Assets (i) Investments 4 B 42.16 33.27 266.55 (ii) Trade Receivables 9 167.60 60.54 39.40 (iii) Unbilled Revenue 70.14 58.60 37.32 (iv) Cash and cash Equivalents 10 31.53 27.41 72.44 (v) Bank Balances other than (iv) above 11 11.76 0.01 51.11 (vi) Loans 5 B 9.17 8.06 410.90 (vii) Finance Lease Receivable 5 C 0.32 - - (viii) Other financial assets 6 B 170.93 107.62 88.12 (b) Other Current Assets 8 B 7.47 1.80 0.95 Total Current Assets 511.08 297.31 966.79
Assets Classified as Held for Sale 11A 131.27 - -
TOTAL ASSETS 10,973.89 8,845.79 8,159.55
EQUITY AND LIABILITIES Equity (a) Equity Share Capital 12 A 1,045.11 1,045.11 566.11 (b) Share Application Money Pending Allotment - - 168.00 (c) Unsecured Perpetual Securities 12 B 3,895.00 3,895.00 3,895.00 (d) Other Equity 13 138.40 102.73 66.60 Total Equity 5,078.51 5,042.84 4,695.71
LIABILITIES Non-current Liabilities (a) Financial Liabilities (i) Borrowings 14 3,067.15 2,826.91 1,661.30 (ii) Other Financial Liabilities 19 6.64 - - (b) Provisions 15 3.57 3.84 - (c) Deferred Tax Liabilities (Net) 16 5.01 - - (d) Other Non-current Liabilities 17 99.63 82.70 66.95 Total Non-current Liabilities 3,182.00 2,913.45 1,728.25
Current Liabilities (a) Financial Liabilities (i) Borrowings 18 1,058.98 495.60 794.76 (ii) Trade Payables (a) Total outstanding dues of micro enterprises and 0.03 - - small enterprises (Note no - 33) (b) Total outstanding dues of creditors other than 24.64 20.17 12.96 micro enterprises and small enterprises (iii) Other Financial Liabilities 19 1,625.50 370.30 919.19 (b) Provisions 15 0.24 0.11 - (c) Other Current Liabilities 20 3.99 3.32 8.68 Total Current Liabilities 2,713.38 889.50 1,735.59
Total Liabilities 5,895.38 3,802.95 3,463.84
TOTAL EQUITY AND LIABILITIES 10,973.89 8,845.79 8,159.55
* Restated (Refer Note 2.1, 32.1 & 32.2)
See accompanying notes forming part of the financial statements
For S R B C & Co LLP For and on behalf of the Board, Chartered Accountants ICAI Firm registration number: 324982E/E300003
per Abhishek Agarwal Ashish Khanna Ramesh Subramanyam Partner Director Director Membership No.: 112773
Mahesh Paranjpe Gautam Attravanam Mona Purandare Chief Executive Officer Chief Financial Officer Company Secretary
Mumbai, 24th April, 2019 Mumbai, 24th April, 2019 Tata Power Renewable Energy Limited
Statement of Profit and Loss for the year ended 31st March, 2019
For the year ended For the year ended Notes 31st March, 2019 31st March, 2018 * ₹ Crores ₹ Crores
I Revenue from operations 21 715.41 486.10 II Other Income 22 86.58 173.46 III Total Income (I + II) 801.99 659.56
IV Expenses Employee Benefits Expense 23 6.31 5.68 Finance Costs 24 320.49 208.88 Depreciation and Amortization Expenses 3 259.21 207.99 Other Expenses 25 76.64 47.75 Total Expenses 662.65 470.30
V Profit Before Tax (III - IV) 139.34 189.26
VI Tax Expense Current Tax 22.43 17.60 MAT Credit (Refer note 36) (11.10) (43.88) Deferred Tax (Refer note 29) 35.48 24.38 Total Tax Expense 46.81 (1.90)
VII Profit For The Period (V - VI) 92.53 191.16
VIII Other Comprehensive Income A Add/(Less): (i) Items that will not be reclassified to profit and loss (a) Remeasurement of the Defined Benefit Plans 0.56 0.47 (ii) Tax relating to items that will not be reclassified to profit or loss (a) Current Tax - - (b) Deferred Tax 0.20 0.16 Total Other Comprehensive Income 0.36 0.31
IX Total Comprehensive Income for the period (VII + VIII) 92.89 191.47
X Earnings Per Equity Share (Face Value ₹ 10/- Per Share) 30 Basic (₹) 0.89 2.24 Diluted (₹) 0.89 2.14
* Restated (Refer Note 2.1 & 32.3)
See accompanying notes forming part of the financial statements
For S R B C & Co LLP Chartered Accountants For and on behalf of the Board, ICAI Firm registration number: 324982E/E300003
per Abhishek Agarwal Ashish Khanna Ramesh Subramanyam Partner Director Director Membership No.: 112773
Mahesh Paranjpe Gautam Attravanam Mona Purandare Chief Executive Officer Chief Financial Officer Company Secretary
Mumbai, 24th April, 2019 Mumbai, 24th April, 2019 Tata Power Renewable Energy Limited
Cash Flow Statement for the year ended 31st March, 2019 Accounting Policy Cash flows are reported using the indirect method, where by profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
Amount in ₹ Crores For the year ended For the year ended 31st March, 2019 31st March, 2018 * A. Cash Flow from Operating Activities
Profit before tax 139.34 189.26
Adjustments for : Depreciation and Amortisation Expense 259.21 207.99 Finance Cost 320.49 208.88 Interest Income (29.83) (34.01) Gain/loss on Sale of Current Investments (10.90) (12.97) Dividend income (40.35) (125.33) Other Non operating Income (5.50) (0.29) Loss on Sale of non current investment - 0.01 Provision for Doubtful debts - (0.50) Amortisation of Deferred Revenue 6.76 7.37 Amortization of Leasehold Land 0.88 0.35 Amortization of Deferred expense and income (2.82) 497.94 (0.04) 251.46 Operating profit before working capital changes 637.28 440.72
Working Capital Adjustments Adjustments for (increase) / decrease in operating assets: Trade receivables (107.06) (21.14) Other financial assets- current 11.70 62.59 Non current Loans (0.08) (0.10) Current Loans (0.28) - Other current assets (5.02) (0.73) Finance lease (11.67) - Other non-current assets (19.93) (4.67) Unbilled revenue (11.54) (143.88) (21.29) 14.66
Adjustments for increase / (decrease) in operating liabilities: Trade payables 4.50 7.21 Other Current Financial Liabilities (19.09) - Other Non Current financial liabilities - - Other Non Current Provisions (0.27) 3.83 Current Provisions 0.69 0.58 Other current liabilities 0.67 (13.50) (5.36) 6.26
Cash flow from operations 479.90 461.64 Income tax paid (21.85) (21.83)
Net cash flows from operations 458.05 439.81
B. Cash Flow from Investing Activities Payments for property, plant and equipment (928.91) (1,877.28) Acquisition of lease hold land (0.39) (0.88) Sale of Long-term Investments - in Subsidiary Companies - 0.02 Payment for Long Term Investment - in Subsidiary Companies - (0.33) Payment to acquire non current investment - acquisition cost - (51.63) Purchase of Current Investments (3,961.02) (3,354.76) Proceeds from Sale of Current Investments 3,922.72 3,601.01 Interest Received 27.09 46.57 Dividend received from subsidiary company 94.76 70.92 Other Non operating Income 5.50 0.29 Loans given to Subsidiaries (158.23) (197.92) Repayment of loan by subsidiaries 124.52 338.80 Loans given to Holding company 402.10 - Repayment of loan by Holding company (402.10) - Bank Balance not considered as Cash and Cash Equivalents (11.75) 51.11 Net cash flow used in investing activities (885.71) (1,374.08)
C. Cash flow from Financing Activities Proceeds from issue of Equity shares - 311.00 Interest and Other Borrowing Cost paid (260.29) (172.86) Proceeds from Long term borrowings 750.00 1,200.00 Repayment of Long term borrowings (446.25) (21.52) Proceeds from Subordinated Loan from Holding Company 295.00 - Repayment of Subordinated Loan from Holding Company (295.00) - Proceeds from Short term borrowings 4,991.35 1,774.05 Repayment of Short term borrowings (4,491.40) (2,100.00) Dividend Paid (including Dividend Distribution Tax) (111.63) (100.92) Net cash (used in) / generated from financing activities 431.78 889.75
Net increase / (decrease) in cash and cash equivalents 4.12 (44.52)
Cash and cash equivalents at the beginning of the year 27.41 71.93
Cash and cash equivalents at the end of the period 31.53 27.41
Cash and cash equivalents comprises Balance with banks (a) in current account 28.28 27.41 (b) in deposit account 3.25 - (c) in bank overdraft - - 31.53 27.41 * Restated (Refer Note 2.1 & 32) See accompanying notes forming part of the Financial Statements Tata Power Renewable Energy Limited
Cash Flow Statement for the year ended 31st March, 2019
Reconciliation of liabilities from financing activities:
Amount in ₹ Crores Particulars As at Cash Flows Non-cash Changes / As at 31.03.2019 31.03.2018 Additions Repayments Amortisation Long term borrowings (including current 2,845.66 750.00 (446.25) 2.13 3,151.54 maturity of long term borrowings)
Short term borrowings 495.60 4,991.35 (4,491.40) 63.43 1,058.98 Total 3,341.26 5,741.35 (4,937.65) 65.56 4,210.52
For S R B C & Co LLP For and on behalf of the Board, Chartered Accountants ICAI Firm registration number: 324982E/E300003
per Abhishek Agarwal Ashish Khanna Ramesh Subramanyam Partner Director Director Membership No.: 112773
Mahesh Paranjpe Gautam Attravanam Mona Purandare Chief Executive Officer Chief Financial Officer Company Secretary
Mumbai, 24th April, 2019 Mumbai, 24th April, 2019 Tata Power Renewable Energy Limited
Statement of changes in equity for the year ended 31st March, 2019
A. Equity Share Capital ₹ Crores No. of Shares Amount
Balance as at 1st April, 2017 566,107,715 566.11 Issue of Equity Shares during the period 479,000,000 479.00 Balance as at 31st March, 2018 1,045,107,715 1,045.11
Balance as at 1st April,2018 1,045,107,715 1,045.11 Issue of Equity Shares during the period - - Balance as at 31st March, 2019 1,045,107,715 1,045.11
B. Unsecured Perpetual Securities ₹ Crores No. of Securities Amount
Balance as at 1st April, 2017 NA 3,895.00 Issue of Equity Shares during the period NA - Balance as at 31st March, 2018 3,895.00
Balance as at 1st April, 2018 NA 3,895.00 Issue of Equity Shares during the period NA - Balance as at 31st March, 2019 3,895.00
C. Other Equity
Amount in ₹ Crores Retained Debenture Capital Other Deemed Equity Earnings Redemption Reserve Comprehensive Particulars Contribution from Total Reserve Income Holding Company
Balance as at 1st April, 2018 5.00 (17.41) 106.75 8.08 0.31 102.73
Profit for the period - 92.53 - - 0.36 92.89 Payment of dividends on equity shares - Interim $ - (40.34) - - - (40.34) Payment of dividends on equity shares - Final $$ - (14.00) - - - (14.00) Tax on Dividend - (2.88) - - - (2.88) Transfer to / from debenture redemption reserve - (5.44) 5.44 - - -
Balance as at 31st March, 2019 5.00 12.46 112.19 8.08 0.67 138.40 $ Interim Dividend ₹ 0.3861 per share on 29th June, 2018. $$ Final Dividend ₹ 0.1615 per share on 27th June, 2018.
Amount in ₹ Crores Retained Debenture Capital Other Deemed Equity Earnings Redemption Reserve Comprehensive Particulars Contribution from Total Reserve Income Holding Company
Balance as at 1st April, 2017* 5.00 5.93 47.59 8.08 - 66.60
Profit for the period - 191.16 - - 0.31 191.47 Fair value of corporate guarantee - - - - - Payment of dividends on equity shares - Interim $ - (125.34) - - - (125.34) Payment of dividends on equity shares - Final $$ - (24.93) - - - (24.93) Tax on Dividend - (5.07) - - - (5.07) Transfer to debenture redemption reserve - (59.16) 59.16 - - -
Balance as at 31st March, 2018 5.00 (17.41) 106.75 8.08 0.31 102.73 * Restated (Refer Note 2.1 & 32.4) $ Interim Dividend ₹ 0.4164 per share on 29th June, 2017 and ₹ 0.4159 per share on 29th September, 2017 and ₹ 0.52 per share on 31st March 2018. $$ Final Dividend ₹ 0.3245 per share on 05th September, 2017.
See accompanying notes forming part of the Financial Statements
For S R B C & Co LLP For and on behalf of the Board, Chartered Accountants ICAI Firm registration number: 324982E/E300003
per Abhishek Agarwal Ashish Khanna Ramesh Subramanyam Partner Director Director Membership No.: 112773
Mahesh Paranjpe Gautam Attravanam Mona Purandare Chief Executive Officer Chief Financial Officer Company Secretary
Mumbai, 24th April, 2019 Mumbai, 24th April, 2019 Tata Power Renewable Energy Limited Notes forming part of the financial statements
1. Corporate information:
Tata Power Renewable Energy Limited (TPREL) is a wholly owned subsidiary of The Tata Power Company Limited. The principal business of the Company is to engage in business of generation and sale of electricity from renewable sources. Walwhan Renewable Energy Limited (WREL), Indo Rama Renewables Jath Limited (IRRJL) and Vagarai Windfarm Limited (VWL) are operating subsidiaries of the Company. Total MW generating capacity is given below:
As at 31st March 2019 (in MW) As at 31st March 2018 (in MW) Company Solar Wind * Total Solar Wind Total TPREL * 472.77 354.20 826.97 270.00 354.20 624.20 WREL 864.00 146.00 1,010.00 864.00 146.00 1,010.00 IRRJL - 30.00 30.00 - 30.00 30.00 VWL - 21.00 21.00 - 21.00 21.00 Total 1,336.77 551.20 1,887.97 1,134.00 551.20 1,685.20 * Including wind asset of 32 MW classified as held for sale 400 MW of additional solar capacity is under construction.
Power generated from operating assets is generally sold under long term power sale agreements to central and state power procurement companies as well as to the holding company.
The Company is incorporated and domiciled in India and has its registered office at C/o The Tata Power Company Limited, Corporate Center B, 34 Sant Tukaram Road, Carnac Bunder Mumbai City - 400009. The financial statements are prepared in Indian Rupees. 2. Other Significant accounting policies
2.1 Statement of compliance
The financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as notified under the Companies (Indian Accounting Standards) Rules, 2015 read with section 133 of the Companies Act, 2013 (the Act) (as amended from time to time). The accounting policies adopted are consistent with those of the previous financial year except as set out below:
2.1.1 Adoption of IND AS 115 Revenue from Contract with Customers
The Company adopted Ind AS 115 ‘Revenue from contract with customers’ (Ind AS 115) effective 1st April 2018 using full retrospective method. Under the previous standard, the Company recognised revenue for power supplied at contracted rate as per power purchase agreement (PPA). The contracted rates are not even throughout the term of PPA in certain cases.
Under Ind AS 115, the Company has straight-lined the revenue recognition over the term of the PPA and has also made adjustment for appropriate financing component.
On application of Ind AS 115, the retained earnings as at 1st April 2017 is lower by ₹ 47.52 crore, net of tax effect. Refer Note 32 for restatement. Tata Power Renewable Energy Limited Notes forming part of the financial statements
2.1.2 Adoption of amendment in IND AS 20 Accounting for Government Grants and Disclosure
As per the amendment, the Company has an option to present government grant by setting up the grant as deferred income or by deducting the grant in arriving at the carrying amount of the asset.
The Company had set up a deferred grant of ₹ 47.36 crore under other liabilities as on 31st March, 2018. Pursuant to the amendment, the Company has now opted to present the government grant by deducting the grant from the carrying amount of the asset. This government grant is to compensate the capital expenditure incurred by the Company and hence setting up of the grant against PPE will depict better presentation of the Company's net investment in property, plant and equipment.
Refer note 32 for restatement.
2.1.3 Delayed payment charges Delayed payment charges were hitherto recognized only when they are realised/recovered. With effect from April 01, 2018, the Company has revised its accounting policy to recognize Delayed Payment Charges (DPC) on accrual basis based on contractual terms and an assessment of certainty of realization which could be based either an acknowledgement of the charges by the concerned customer or if a regulatory or statutory body passes a favourable order. Management believes that this policy results in the financial statements providing reliable and more relevant information about the effects of transaction on the Company’s financial position and performance. The revision in accounting policy has been applied retrospectively and does not have any significant impact on current year's and previous year's statement of profit and loss and retained earnings as at March 31, 2017.
2.2 Basis of preparation and presentation
The financial statements have been prepared on a historical cost basis, except for the following assets and liabilities which have been measured at fair value - derivative financial instruments, - certain financial assets and liabilities measured at fair value (refer accounting policy regarding financial instruments). - employee benefit provision (refer note 25 for accounting policy)
2.3 Current versus non-current classification The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is treated as current when it is: - expected to be realised or intended to be sold or consumed in normal operating cycle, - held primarily for the purpose of trading, - expected to be realised within twelve months after the reporting period, or - cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. All other assets are classified as non-current. A liability is current when: - it is expected to be settled in normal operating cycle, - it is held primarily for the purpose of trading, - it is due to be settled within twelve months after the reporting period, or - there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. The Company classifies all other liabilities as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities. The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Company has identified twelve months as its operating cycle.
2.4 Government Grants Government grants are not recognised until there is reasonable assurance that the Company will comply with the conditions attached to them and that the grant will be received. Government grant is recognised at fair value and is netted off from the cost of Property, Plant & Equipment. Tata Power Renewable Energy Limited Notes forming part of the financial statements
2.5 Financial Instruments A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Accounting Policy Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in the statement of profit and loss.
Financial Assets All regular purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the market place. All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets. Financial assets at amortised cost Financial assets are subsequently measured at amortised cost if these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial assets at fair value through other comprehensive income A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. On initial recognition, the Company makes an irrevocable election on an instrument-by-instrument basis to present the subsequent changes in fair value in other comprehensive income pertaining to investments in equity instruments, other than equity investment which are held for trading. Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognised in other comprehensive income and accumulated in the 'Reserve for equity instruments through other comprehensive income'. The cumulative gain or loss is not reclassified to profit or loss on disposal of the investments.
Financial assets at fair value through profit or loss Financial assets except investments in subsidiary are measured at fair value through profit or loss unless it is measured at amortised cost or at fair value through other comprehensive income on initial recognition. Investment in subsidiary Investment in subsidiary is measured at cost less impairment as per Ind AS 27 - Separate Financial Statements.
Impairment of investments: The Company reviews its carrying value of investments carried at cost annually, or more frequently when there is indication for impairment. If the recoverable amount is less than its carrying amount, the impairment loss is accounted for in statement of Profit & Loss account.
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:
(a) the right to receive Cash flows from the asset have expired, or (b) the Company has transferred its right to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (i) the Company has transferred substantially all the risks and rewards of the asset, or (ii) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred When the Company has transferred its right to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognise the transferred asset to the extent of the Company’s continuing involvement. In that case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained. Tata Power Renewable Energy Limited Notes forming part of the financial statements
Impairment of financial assets (other than at fair value) The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance. The Company recognises lifetime expected losses for trade receivables that do not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to the 12 month expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition.
Financial liabilities and equity instruments Classification as debt or equity Debt and equity instruments issued by a Company entity are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
Equity Instruments An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by a Company entity are recognised at the proceeds received, net of direct issue costs.
Financial liabilities All financial liabilities are recognised initially at fair value and in case of financial liabilities at amortised cost, net of directly attributable transaction costs. All financial liabilities are subsequently measured at amortised cost using the effective interest method. Gains and losses are recognised in statement of profit and loss when the liabilities are derecognised as well as through the Effective Interest Rate (EIR) amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss.
Derecognition of financial liabilities A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit and loss.
Reclassification of financial assets and liabilities The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. The Company’s senior management determines change in the business model as a result of external or internal changes which are significant to the Company’s operations. Such changes are evident to external parties. A change in the business model occurs when the Company either begins or ceases to perform an activity that is significant to its operations. If the Company reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model. The Company does not restate any previously recognised gains, losses (including impairment gains or losses) or interest.
Offsetting of financial instruments Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously. Tata Power Renewable Energy Limited Notes forming part of the financial statements
2.6 Standards Issued but not yet effective 2.6.1 Ind AS 116 – Leases Ind AS 116 Leases was notified in March 2019 and it replaces Ind AS 17 Leases. Ind AS 116 is effective for annual periods beginning on or after 1 April 2019. It sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under Ind AS 17. Lessor accounting under Ind AS 116 is substantially unchanged from today’s accounting under Ind AS 17. Ind AS 116 requires lessees and lessors to make more extensive disclosures than under Ind AS 17. The Company is in the process of evaluating the requirements of the standard and its impact on its financial statements.
2.6.2 Ind AS 12 – Income taxes (amendments relating to income tax consequences of dividend and uncertainty over income tax treatments) The amendment relating to income tax consequences of dividend clarify that an entity shall recognise the income tax consequences of dividends in profit or loss, other comprehensive income or equity according to where the entity originally recognised those past transactions or events. The company does not expect any impact from this pronouncement. It is relevant to note that the amendment does not amend situations where the entity pays a tax on dividend paid which is effectively a portion of dividends paid to taxation authorities on behalf of shareholders. Such amount paid or payable to taxation authorities continues to be charged to equity as part of dividend, in accordance with Ind AS 12. The amendment to Appendix C of Ind AS 12 specifies that the amendment is to be applied to the determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates, when there is uncertainty over income tax treatments under Ind AS 12. It outlines the following: (1) the entity has to use judgement, to determine whether each tax treatment should be considered separately or whether some can be considered together. The decision should be based on the approach which provides better predictions of the resolution of the uncertainty (2) the entity is to assume that the taxation authority will have full knowledge of all relevant information while examining any amount (3) entity has to consider the probability of the relevant taxation authority accepting the tax treatment and the determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates would depend upon the probability. The Company does not expect any significant impact of the amendment on its financial statements.
2.6.3 Ind AS 109 – Prepayment Features with Negative Compensation The amendments relate to the existing requirements in Ind AS 109 regarding termination rights in order to allow measurement at amortised cost (or, depending on the business model, at fair value through other comprehensive income) even in the case of negative compensation payments. The Company does not expect this amendment to have any impact on its financial statements.
2.6.4 Ind AS 19 – Plan Amendment, Curtailment or Settlement The amendments clarify that if a plan amendment, curtailment or settlement occurs, it is mandatory that the current service cost and the net interest for the period after the re-measurement are determined using the assumptions used for the re-measurement. In addition, amendments have been included to clarify the effect of a plan amendment, curtailment or settlement on the requirements regarding the asset ceiling. The Company does not expect this amendment to have any significant impact on its financial statements.
2.6.5 Ind AS 23 – Borrowing Costs The amendments clarify that if any specific borrowing remains outstanding after the related asset is ready for its intended use or sale, that borrowing becomes part of the funds that an entity borrows generally when calculating the capitalisation rate on general borrowings. The Company does not expect any impact from this amendment.
2.A Use of Estimates, Assumptions and Judgements In the application of the Company's accounting policies, management of the Company is required to make judgements, estimates and assumptions about the carrying amounts 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. The estimates and underlying 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 periods if the revision affects both current and future periods. Detailed information about each of these estimates and judgements is included in relevant notes together with information about the basis of calculation for each affected line item in the financial statements.
The areas involving critical estimates or judgements are:
Estimation of impairment of assets - Note 3 Estimation of current tax and deferred tax expense (including Minimum Alternate Tax credit) - Note 29
Estimation of defined benefit obligation - Note 15
Estimates and judgement are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances. Tata Power Renewable Energy Limited Notes forming part of the financial statements
3. Property plant and equipment Accounting Policy Property, plant and equipment is stated at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes purchase price (net of trade discount and rebates) and any directly attributable cost of bringing the asset to its working condition for its intended use and for qualifying assets, borrowing costs capitalised in accordance with the Ind AS 23. Capital work in progress is stated at cost, net of accumulated impairment loss, if any. When significant parts of plant and equipment are required to be replaced at intervals, the Company depreciates them separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in the statement of profit and loss as incurred.
Depreciation Depreciation commences when an asset is ready for its intended use. Freehold land and assets held for sale are not depreciated.
Depreciation on assets (other than roads), which are governed by the Feed-in-tariff regime, has been provided using the rates as well as methodology prescribed under the Central Electricity Regulatory Commission (CERC) Regulations and relevant State Commission Tariff Orders and the assets awarded in a competitive bid have been depreciated based on the useful lives of the assets on a straight line method. Roads are depreciated on straight line method at the rate prescribed in Schedule II to the Companies Act, 2013.
Estimated useful lives of the assets are as follows: Plant (machinery) & Equipment : 25 years Buildings (Others) : 25 years Roads (Crossings, etc.) : 5 years Transmission Lines & Cable Network : 25 years
Residual value of the assets has been estimated at 10% of the original cost of the asset.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. The difference between the sale proceeds and the carrying amount of such assets are recognised in the statement of profit and loss. Decapitalisation An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the statement of profit and loss. Impairment Impairment of tangible and intangible assets The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or group of assets. When the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. 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. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators. The Company bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for each of the individual assets. These budgets and forecast calculations generally cover a period of five years. For longer periods, project future cash flows are calculated after considering expected PLF (plant load factor) and cost inflation.
Impairment losses of tangible and intangible assets are recognised in the statement of profit and loss. Tata Power Renewable Energy Limited Notes forming part of Financial Statements
3. Property, Plant and Equipment (contd.) Amount in ₹ Crores Description Freehold Land Buildings Roads Plant and Transmission Total Equipment lines and cable network
Cost Balance as at 1st April, 2018 62.04 49.12 3.62 4,070.11 138.29 4,323.18 Additions 52.73 9.57 2.81 1,117.36 45.83 1,228.30 Reclassified as held for sale 3.17 - - 188.55 - 191.72 Balance as at 31st March, 2019 111.60 58.69 6.43 4,998.92 184.12 5,359.76
Accumulated depreciation and impairment Balance as at 1st April, 2018 - 3.02 0.90 602.47 9.83 616.22 Depreciation Expense - 2.12 0.47 249.33 7.23 259.15 Reclassified as held for sale - - - 60.74 - 60.74 Balance as at 31st March, 2019 - 5.14 1.37 791.06 17.06 814.63
Net carrying amount As at 31st March, 2019 111.60 53.55 5.06 4,207.86 167.06 4,545.13 As at 31st March, 2018 62.04 46.10 2.72 3,467.64 128.46 3,706.96
1. Amount of borrowing cost capitalised is ₹ 15.92 Crores for the year ended 31st March,2019. 2. The Company has created charge on certain assets in favour of lenders. Refer note 14.
Amount in ₹ Crores Description Freehold Land Buildings - Plant Roads Plant and Transmission Total Equipment lines and cable network
Cost Balance as at 1st April, 2017 50.95 12.03 1.74 2,832.27 43.71 2,940.70 Additions 11.09 37.09 1.88 1,237.84 94.58 1,382.48 Disposals ------Reclassified as held for sale ------Balance as at 31st March, 2018 62.04 49.12 3.62 4,070.11 138.29 4,323.18
Accumulated depreciation and impairment Balance as at 1st April, 2017 - 1.85 0.47 400.18 5.72 408.22 Depreciation Expense - 1.17 0.43 202.29 4.11 207.99 Balance as at 31st March, 2018 - 3.02 0.90 602.47 9.83 616.22
Net carrying amount As at 31st March, 2018 62.04 46.10 2.72 3,467.64 128.46 3,706.96 As at 1st April, 2017 50.95 10.18 1.27 2,432.09 37.99 2,532.48
Note: Amount of borrowing cost capitalised is ₹ 39.37 crores for the year ended 31st March, 2018. Tata Power Renewable Energy Limited Notes forming part of Financial Statements
3A. Intangible assets
Accounting Policy
Intangible assets acquired separately Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses, if any.
Derecognition of Intangible Assets An intangible asset is derecognised on disposal, or when no future economic benefits are expected from 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 statement of profit and loss when the asset is derecognised.
Useful life of Intangible Assets Intangible assets with finite life are amortised over the useful economic life on straight line basis and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit and loss unless such expenditure forms part of carrying value of another asset.
Estimated useful lives of the Intangible Assets are as follows: Type of asset Useful life Computer software 5 years
Amount in ₹ Crores Computer software Total Cost Balance as at 1st April, 2018 - - Additions 0.84 0.84 Disposal - - Balance as at 31st March, 2019 0.84 0.84 Accumulated amortisation and impairment Balance as at 1st April, 2018 - - Amortisation expense 0.06 0.06 Impairment losses recognised in the statement of profit or loss - - Balance as at 31st March, 2019 0.06 0.06 Net Block As at 31st March, 2019 0.78 0.78 As at 31st March, 2018 - - As at 1st April, 2017 - -
Depreciation and Amortisation: For the year ended For the year ended 31st March, 2019 31st March, 2018 ₹ Crores ₹ Crores Depreciation on Tangible Assets 259.15 207.99 Add: Amortisation on Intangible Assets 0.06 - Total 259.21 207.99 Tata Power Renewable Energy Limited Notes forming part of Financial Statements
Accounting Policy Investments in Subsidaries is measured at cost as per Ind AS-27- Separate Financial Statements.
4. Investments
Face Value As at As at As at As at As at As at in Rs. 31st March, 2019 31st March, 2018 01st April, 2017 31st March, 2019 31st March, 2018 01st April, 2017 Fully Paid Quantity Quantity Quantity ₹ Crores ₹ Crores ₹ Crores
A Non - Current
Investments carried at cost less accumulated impairment, if any Investment in Equity Shares of Subsidiary Companies (unquoted)
Indo Rama Renewable Jath Limited 10 6,03,00,000 6,03,00,000 6,03,00,000 84.12 84.12 84.12 Poolavadi Windfarms Limited 10 50,000 50,000 50,000 0.05 0.05 0.05 Nivade Windfarms Limited 10 50,000 50,000 50,000 0.05 0.05 0.05 Supa Windfarms Limited 10 50,000 50,000 50,000 0.05 0.05 0.05 Tata Power Green Energy Limited 10 - - 50,000 - - 0.03 Walwhan Renewable Energy Limited * 10 61,13,55,942 61,13,55,942 61,13,55,942 3,733.36 3,733.36 3,803.57 (formerly: Welspun Renewable Energy Private Limited) Vagarai Windfarms Limited 10 3,78,000 3,78,000 50,000 0.38 0.38 0.05
Aggregate amount of unquoted investment 3,818.01 3,818.01 3,887.92
* The Company acquired 100% equity shares of Welspun Renewable Energy Private Limited (now Walwhan Renewable Energy Limited) on 14th September 2016 (Closing date). The purchase consideration was provisionally determined at ₹ 3,782.30 crores for the purpose of initial accounting. As per the Share purchase agreement, the consideration was to be adjusted for certain events existing at the closing date. During the previous year, the Company has adjusted the fair value of consideration by ₹ 70.21 crores and retrospectively adjusted the provisional amounts recognized at the acquisition date as per the requirements of Ind AS.
Face Value As at As at As at As at As at As at in Rs. 31st March, 2019 31st March, 2018 01st April, 2017 31st March, 2019 31st March, 2018 01st April, 2017 Fully Paid Quantity Quantity Quantity ₹ Crores ₹ Crores ₹ Crores B Current Investments carried at Fair Value through Profit and Loss Investments in Mutual Funds (Quoted)
Axis Liquid Fund - Direct Plan - Growth 1,000 5,574.22 52,909.67 265,054.42 1.16 10.20 47.80 Baroda Pioneer Liquid Fund- Plan B (Direct) 1,000 - - 88,860.29 - - 16.62 BNP Paribas Liquid Fund - Direct - Growth 1,000 40,909.67 - - 11.75 - - DHFL Pramerica Insta Cash Fund Direct Plan growth 100 137,890.36 - - 3.35 - - DSP Blackrock Liquidity Fund - Direct Plan - Growth 1,000 30,658.57 7,669.92 41,487.91 8.20 1.91 9.65 Invesco India Credit Opportunities - Direct - Growth 1,000 - 3,212.00 - - 0.65 - Invesco India Liquid Fund - Direct Plan - Growth 1,000 53,070.51 64,308.71 317,905.59 13.65 15.38 71.17 JM High Liquidity Fund - Direct Plan - Growth 10 792,116.02 114,536.06 10,727,254.37 4.05 0.54 47.75 Kotak Liquid Fund - Direct Growth 1,000 - 90.92 - - 0.03 - L & T Liquid Fund - Direct - Growth 1,000 - 600.03 - - 0.14 - Sundaram Money Fund - Direct - Growth 10 - - 16,064,421.48 - - 55.09 Tata Money Market Fund - Direct Plan - Growth 1,000 - 16,124.56 72,065.78 - 4.42 18.47
Aggregate amount of quoted investment 42.16 33.27 266.55 Tata Power Renewable Energy Limited Notes forming part of Financial Statements
5. Loans - At Amortised Cost
As at As at As at 31st March, 2019 31st March, 2018 01st April, 2017 ₹ Crores ₹ Crores ₹ Crores
A. Non-current (i) Unsecured Loans to Related Parties, considered good Chirasthaayee Saurya Limited 79.50 79.50 - Vagarai Windfarm Limited 128.13 114.96 - Indo Rama Renewables Jath Limited 87.13 67.50 - 294.76 261.96 - (ii) Other Loans Unsecured, considered good Loan to Employees 0.08 - - (iii) Security Deposits Unsecured, considered good 3.93 0.81 0.21 Credit impaired 0.01 0.01 0.51 3.94 0.82 0.72 Less: Allowance for Doubtful Deposits 0.01 0.01 0.51 3.93 0.81 0.21 298.77 262.77 0.21
As at As at As at 31st March, 2019 31st March, 2018 01st April, 2017 ₹ Crores ₹ Crores ₹ Crores
B. Current (i) Unsecured Loans to Related Parties, considered good Indo Rama Renewables Jath Limited 5.12 5.00 150.90 Vagarai Windfarm Limited 3.77 3.06 - Walwhan Renewable Energy Limited - - 260.00 (formerly: Welspun Renewable Energy Private Limited) 8.89 8.06 410.90 (ii) Security Deposits Unsecured, considered good 0.28 - -
9.17 8.06 410.90
Disclosure under Regulation 53(f) and 34(3) read together with Para A Schedule V of Securities and Exchange Board of India (SEBI) (listing obligations and disclosure requirements) Regulations, 2015.
Loans and advances (excluding advance towards equity) in the nature of loans given to Subsidiaries, Joint Ventures and Associates: Amount Maximum Principal Outstanding Amount as at the Outstanding Name of the Company Relationship year end ** during the year (excluding interest accrued) ₹ Crores ₹ Crores
Indo Rama Renewables Jath Ltd. 2019 Subsidiary 92.25 102.50 2018 72.50 150.90 2017 150.90 150.90
Vagarai Windfarm Ltd. 2019 Subsidiary 131.91 135.68 2018 118.02 118.02 2017 - -
Walwhan Renewable Energy Ltd. 2019 Subsidiary - - 2018 - 260.00 2017 260.00 260.00
Chirasthaayee Saurya Ltd. 2019 Fellow Subsidiary 84.97 79.50 2018 82.34 79.50 2017 - -
Tata Power Trading Company Ltd. 2019 Fellow Subsidiary - 80.00 2018 - - 2017 - -
Notes: ** Including interest accrued. Previous year's figures are in italics. Tata Power Renewable Energy Limited Notes forming part of Financial Statements
5C Finance Lease Receivable (Unsecured unless otherwise stated)
Accounting Policy
Leasing arrangement The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.
The Company as lessor Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an asset are classified as operating leases. Rental income from operating lease is recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned.
Leases are classified as finance leases when substantially all of the risks and rewards of ownership transfer from the Company to the lessee. Amounts due from lessees under finance leases are recorded as receivables at the Company's net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the net investment outstanding in respect of the lease.
As at As at As at 31st March, 2019 31st March, 2018 01st April, 2017 ₹ Crores ₹ Crores ₹ Crores
Finance Lease Receivable - Non-current 11.35 - - Finance Lease Receivable - Current 0.32 - - Total 11.67 - -
5C.1. Leasing Arrangements The Company has entered into Power Purchase Agreements (PPA) with various customers for its rooftop solar assets located across various locations. As this arrangement is dependent on the use of a specific asset and conveys a right to use on the customer, it qualifies as a lease. As these are long tenor PPAs spread over a major part of the economic life of the asset, this arrangement has been categorized as a finance lease.
5C.2 Amount receivable under Finance Lease Minimum Lease Payments Present Value of Minimum Lease Payments As at As at As at As at As at As at 31st March, 2019 31st March, 2018 01st April, 2017 31st March, 2019 31st March, 2018 01st April, 2017 ₹ Crores ₹ Crores ₹ Crores ₹ Crores ₹ Crores ₹ Crores Not later than one year 1.62 - - 0.32 - - Later than one year and not later than five years 7.91 - - 2.03 - - Later than five years 18.04 - - 9.32 - - 27.57 - - 11.67 - - Ind AS 17.47 (b) Unearned finance income 15.90 - - - - Present value of minimum lease payments receivable 11.67 - - 11.67 - - Ind AS 17.47 (d) Allowance for uncollectible lease payments ------11.67 - - 11.67 - -
The interest rate inherent in the leases is constant in the contract for the entire lease term. The average effective interest rate contracted is approximately in the range of 9.00% - 13.00% per annum. Tata Power Renewable Energy Limited Notes forming part of Financial Statements
6. Other Financial Assets
As at As at As at 31st March, 2019 31st March, 2018 01st April, 2017 ₹ Crores ₹ Crores ₹ Crores A. Non-current ( At Amortised Cost ) Government Grants Receivables * 29.17 8.03 -
Total 29.17 8.03 -
B. Current ( At Amortised Cost ) (i) Accruals Unsecured, considered good Interest Accrued on Bank Deposits 0.11 - 0.11 Interest Accrued on Loans and Advances to Related Parties Walwhan Renewable Energy Limited - - 15.31 Chirasthaayee Saurya Limited 5.47 2.85 - 5.58 2.85 15.42
(ii) Others Unsecured, considered good Dividend Receivable - 54.41 - Receivable on sale of Current Investments 39.72 - - Other Receivables From Related Party Vagarai Windfarm Limited - 10.00 - Indo Rama Renewables Jath Limited 0.14 0.11 0.11 Walwhan renewable energy Ltd 0.92 - - Supa Windfarms Limited 0.04 - - Nivade Windfarms Limited 0.04 - - From Others 0.10 - 72.59 40.96 64.52 72.70
(iii) Government Grants Receivables * 58.05 40.25 -
(iv) Claim against change in law 66.34 - -
Total 170.93 107.62 88.12
* The Company is eligible for government grant for Charanka, Palaswadi phase II and Ananthapuram projects. The Company has recognised the same at fair value. Till date the Company has received the grant of ₹ 30.50 crore in full for Charanka project. It is in the process of creating charge on the other eligible project assets in the favour of Solar Energy Corporation of India. Once charge is created, the Company will file application for release of the grant.
7. Non-current tax Assets
As at As at As at 31st March, 2019 31st March, 2018 01st April, 2017 ₹ Crores ₹ Crores ₹ Crores
Advance Income-tax (Net of provision) 7.92 11.38 7.14 7.92 11.38 7.14 Tata Power Renewable Energy Limited Notes forming part of Financial Statements
8. Other Assets As at As at As at 31st March, 2019 31st March, 2018 01st April, 2017 ₹ Crores ₹ Crores ₹ Crores A. Non-current
(i) Capital Advances Capital Advances - Secured considered good 17.21 1.40 1.40
(ii) Balances with Government Authorities Service Tax paid under protest 2.15 - - Value Added Tax Receivable 2.94 2.94 2.48
(iii) Unamortised Premium for Leasehold Land Payments towards Leasehold Land 3.73 4.22 3.51 Deferred rent Expenses 26.50 11.75 9.52
(iv) Others Prepaid Expenses 0.73 1.70 -
Total 53.26 22.01 16.91
B. Current
(i) Unamortised Premium for Leasehold Land Payment towards Leasehold Land 0.18 0.18 0.18
(ii) Other Loans and Advances Prepaid Expenses 1.67 0.97 0.45 Advances to Vendors - 0.22 - Deferred Rent Expense 0.89 0.24 0.14 Other Advances Employees - 0.01 - Others 4.73 0.18 0.19 7.29 1.62 0.78 Less: Allowance for Bad and Doubtful Advances - - - 7.29 1.62 0.78
Total (i + ii) 7.47 1.80 0.95
9. Trade Receivables
As at As at As at 31st March, 2019 31st March, 2018 01st April, 2017 ₹ Crores ₹ Crores ₹ Crores
Trade Receivables-Unsecured, considered good 167.60 60.54 39.40
Total 167.60 60.54 39.40
Notes: 1)(a) The average credit period is 7 to 45 days in respect of receivables pertaining to sale of power. No interest is charged on trade receivables from date of receipt of invoice by customers till the end of the credit period defined in the Power Purchase Agreement (PPA). Thereafter, interest is charged at the rates prescribed under the PPA on the outstanding balance but this interest is recognised upon an assessment of certainty of realisation.
1)(b) In respect of Generation Benefit Incentive (GBI) receivables from Indian Renewable Energy Development Authority (IREDA), there is no specified credit period and the amounts are received by the Company as and when funds are disbursed to IREDA by Government of India. 2) Age of receivables As at As at As at 31st March, 2019 31st March, 2018 01st April, 2017 ₹ Crores ₹ Crores ₹ Crores Within the credit period 41.77 29.68 8.55 1-90 days past due 49.11 14.53 12.59 91-182 days past due 34.97 2.88 11.82 More than 182 days past due 41.75 13.45 6.44 Tata Power Renewable Energy Limited Notes forming part of Financial Statements
Trade Receivables (Contd.)
Ind AS 115 Disclosures Contract Balances
The following table provides information about receivables, contract assets and contract liabilities from contract with customers.
As at As at As at Particulars 31st March, 2019 31st March, 2018 1st April, 2017 ₹ Crores ₹ Crores ₹ Crores Contract assets - - -
Contract liabilities Advance from customers - - - Deferred revenue from customers 99.63 82.70 66.95 Total Contract Liabilities 99.63 82.70 66.95
Receivables Trade receivables (Gross) 167.60 60.54 39.40 Unbilled revenue 70.14 58.60 37.32 Less : Allowances for doubtful debts - - - Net receivables 237.74 119.14 76.72
Total 138.11 36.44 9.77
Contract asset is the right to consideration in exchange for goods or services transferred to the customer. Contract liability is the entity's obligation to transfer goods or services to a customer for which the entity has received consideration from the customer in advance. Contract assets are transferred to receivables when the rights become unconditional and contract liabilities are recognized as and when the performance obligation is satisfied.
Significant changes in the contract assets and the contract liabilities balances during the year are as follows:
Current Year Previous Year Contract Contract Contract Contract Assets Liabilities Assets Liabilities
Opening Balance - 82.70 - 66.95
Less : Revenue recognized during the year from balance at - - - - the beginning of the year
Add : Advance received during the year not recognized as - 6.76 - 7.37 revenue
Interest income/expense for the year - 10.17 - 8.38 Add : Revenue in respect of earlier years recognized during the year (Delayed payment charges received during the year in respect of earlier years and change in law in respect - - - - of earlier years) Add : Revenue recognized during the year apart from above - - - - Transfer from contract assets to receivables - - - -
Closing Balance - 99.63 - 82.70 Tata Power Renewable Energy Limited Notes forming part of Financial Statements
10. Cash and Cash Equivalents
Accounting Policy
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value. Cash and cash equivalents include balances with banks which are unrestricted for withdrawal and usage. For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Company's cash management.
As at As at As at 31st March, 2019 31st March, 2018 01st April, 2017 ₹ Crores =Selection!$F$9₹ Crores ₹ Crores
Balances with Banks: In Current Accounts 28.28 27.41 7.55 In Deposit Accounts (with original maturity less than three months) 3.25 - 64.89 31.53 27.41 72.44
For the purpose of the statement of cash flows, cash and cash equivalents comprise the following:
As at As at As at 31st March, 2019 31st March, 2018 01st April, 2017 ₹ Crores ₹ Crores ₹ Crores
Balances with Banks: In Current Accounts 28.28 27.41 7.55 In Deposit Accounts (with original maturity less than three months) 3.25 - 64.89 31.53 27.41 72.44 Bank Overdraft - - (0.51) Total 31.53 27.41 71.93
11. Other Balances with Banks As at As at As at 31st March, 2019 31st March, 2018 01st April, 2017 ₹ Crores =Selection!$F$9₹ Crores ₹ Crores
(a) in deposit escrow account* - - 45.20 (b) in current escrow account* - - 5.90 (c) in deposit account (with original maturity of more than three months) 11.76 0.01 0.01 11.76 0.01 51.11
* Pertaining to acquisition of 100% shares of Walwhan Renewable Energy Limited (formerly; Welspun Renewable Energy Pvt Ltd) Tata Power Renewable Energy Limited Notes forming part of Financial Statements
11A. Assets Classified as Held For Sale
Accounting Policy
Non-current assets or disposal group are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the asset or disposal group is available for immediate sale in its present condition subject only to terms that are usual and customary for sale of such asset or disposal group and its sale is highly probable. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification. As at each balance sheet date, the management reviews the appropriateness of such classification.
Non-current assets or disposal group classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell.
The Company treats sale/distribution of the asset or disposal group to be highly probable when:
- the appropriate level of management is committed to a plan to sell the asset (or disposal group), - an active programme to locate a buyer and complete the plan has been initiated (if applicable), - the asset (or disposal group) is being actively marketed for sale at a price that is reasonable in relation to its current fair value,
- the sale is expected to qualify for recognition as a completed sale within one year from the date of classification, and - actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.
Property, plant and equipment and intangible assets once classified as held for sale/distribution to owners are not depreciated or amortised.
A disposal group qualifies as discontinued operation if it is a component of an entity that either has been disposed of, or is classified as held for sale, and:
- represents a separate major line of business or geographical area of operations, - is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations.
As at As at As at 31st March, 2019 31st March, 2018 01st April, 2017 ₹ Crores ₹ Crores ₹ Crores
Property, Plant and Equipment [Refer note (i)] 130.98 - - Leasehold land 0.29 - - Total 131.27 - -
(i) During the year, the Company signed a binding term sheet for sale of its 32 MW wind project in Maharashtra. Subsequent to the year end, the Company signed a Business Transfer Agreement on 18th April, 2019 with the buyer. The sale transaction is likely to be concluded in next three months. Tata Power Renewable Energy Limited Notes forming part of Financial Statements
12 A. Equity - Share Capital
As at 31st March, 2019 As at 31st March, 2018 As at 01st April, 2017 Number ₹ Crores Number ₹ Crores Number ₹ Crores
Authorised 1,39,25,00,000 fully paid equity shares of ₹ 10 each 139,25,00,000 1,392.50 139,25,00,000 1,392.50 139,25,00,000 1,392.50 Issued 1,04,51,07,715 fully paid equity shares of ₹ 10 each 104,51,07,715 1,045.11 1,045,107,715 1,045.11 56,61,07,715 566.11
Subscribed and Paid-up 104,51,07,715 fully paid equity shares of ₹ 10 each 104,51,07,715 1,045.11 104,51,07,715 1,045.11 56,61,07,715 566.11
Total Issued, Subscribed and fully Paid-up Share Capital 104,51,07,715 1,045.11 1,045,107,715 1,045.11 566,107,715 566.11
(i) Reconciliation of the shares outstanding at the beginning and at the end of the reporting period
Equity Shares As at 31st March, 2019 As at 31st March, 2018 As at 01st April, 2017 Number of Shares Number of Shares Number of Shares At the beginning of the year 1,045,107,715 566,107,715 506,107,715 Issued during the year - 479,000,000 60,000,000 Outstanding at the end of the year 1,045,107,715 1,045,107,715 566,107,715
(ii) Terms/rights attached to Equity Shares
The Company has issued only one class of Equity Shares having a par value of ₹ 10/- per share. Each holder of Equity Shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
(iii) The entire share capital of the company is held by The Tata Power Company Limited, the holding company.
12 B. Unsecured Perpetual Securities As at 31st March, 2019 As at 31st March, 2018 As at 01st April, 2017 ₹ Crores ₹ Crores ₹ Crores
Opening balance 3,895.00 3,895.00 3,895.00 Add: Issued during the year - - - Closing balance 3,895.00 3,895.00 3,895.00
The Tata Power Company Limited (Holding Company) has provided ₹ 3,895 crore to the Company by way of unsecured perpetual securities. The securities are perpetual in nature with no maturity/redemption terms and is repayable only at the option of the Company. The interest on the perpetual securities is non-cumulative in nature. The distribution on these securities is subject to the availability of profits and the consolidated debt to equity ratio of the company as per last audited financial statement is less than 2.33 without considering these perpetual securities. Such distribution would be at the rate at which dividend has been declared by the Company on equity shares for the relevant financial year. If no dividend is declared by the Company on equity shares in a given financial year, no interest shall be accrued, due or payable by the Company to Tata Power for such financial year. As these securities are perpetual in nature and ranked senior only to the share capital of the company and do not have any redemption obligation, these are considered to be in the nature of equity instruments. Tata Power Renewable Energy Limited Notes forming part of Financial Statements
13. Other Equity
As at As at As at 31st March, 2019 31st March, 2018 01st April, 2017 ₹ Crores ₹ Crores ₹ Crores
A. Debenture Redemption Reserve Opening Balance 106.75 47.59 13.43 Add: Amount transferred from Retained Earnings 5.44 59.16 34.16 Closing Balance 112.19 106.75 47.59
B. Capital Reserve Opening Balance 8.08 8.08 8.08 Add: Amount transferred from Surplus in Statement of Profit and Loss - - - Closing Balance 8.08 8.08 8.08
C. Retained Earnings Opening balance (17.10) 5.93 (25.41)
Add: Other Comprehensive Income/(Expense) arising from - 0.36 0.31 Remeasurement of Defined Benefit Obligation (Net of Tax) Profit for the year 92.53 191.16 68.65 Tansfer from Debenture Redemption Reserve - - -
Less: Dividend Declared (net of tax) Payment of dividends on equity shares - Interim 40.34 125.34 - Payment of dividends on equity shares - Final 14.00 24.93 - Tax on Dividend 2.88 5.07 - Equity Component of Compound Financial Instrument - - 3.15 Transfer to Debenture Redemption Reserve 5.44 59.16 34.16
Closing Balance 13.13 (17.10) 5.93
D. Deemed equity contribution from holding company Opening Balance 5.00 5.00 5.00 Add: Fair value of corporate guarantee - - - Closing Balance 5.00 5.00 5.00
Total 138.40 102.73 66.60
Nature and purpose of reserves
Debenture Redemption Reserve The Company is required to create a Debenture Redemption Reserve out of the profits which is available for payment of dividend for the purpose of redemption of debentures. Capital Reserve Capital Reserve has been created consequent to Scheme of Amalgamation between NewGen Saurashtra Windfarms Ltd. and cannot be utilized toward distribution of dividend.
Retained Earnings Retained earnings are the profit of the Company earned till date net of appropriations. Deemed equity contribution from holding company The Tata Power Company has provided corporate guarantee of ₹ 2,235.00 Crores (₹ 2,735 Crores as on 31st March, 2018 and ₹ 2,225 crore as on 1st April, 2017) for TPREL NCD and term loan. This has benefited the company by way of its ability to raise loans at lower interest rate. As per IND AS 113, an entity shall measure the fair value of an liability using the assumptions that market participants would use when pricing the liability, assuming that market participants act in their economic best interest. Accordingly fair value was derived using interest saved approach. This amount is amortised over the period of loan against which guarantee was taken. Tata Power Renewable Energy Limited Notes forming part of Financial Statements
14. Non-current Borrowings
As at 31st March, 2019 As at 31st March, 2018 As at 01st April, 2017 Non-current Current Non-current Current Non-current Current ₹ Crores ₹ Crores ₹ Crores ₹ Crores ₹ Crores ₹ Crores
(A) Unsecured - At Amortised Cost
Redeemable Non-Convertible Debentures [Refer Note (a) below] (a) 8.99% Series 2027 397.70 - 397.37 - 397.01 - (b) 9.38% Series 2025 - - 422.63 - 422.38 - (c) 8.99% Series 2023 174.10 - 173.85 - 173.73 - (d) 8.45% Series 2022 498.25 - 497.74 - - -
(A) 1,070.05 - 1,491.59 - 993.12 -
Term loan from Bank (a) HDFC Bank 467.45 30.00 497.11 - 298.85 -
(B) 467.45 30.00 497.11 - 298.85 - (B) Secured - At Amortised Cost
Term Loans from Banks (a) IDFC Bank [Refer Note (d) below] 88.83 9.97 98.81 9.50 108.30 9.02 (b) Kotak Mahindra Bank [Refer Note (b) below] (i) Term Loan -I (Rs 228 crs) 202.49 15.99 218.40 2.28 229.01 2.33 (ii) Term Loan -II (Rs 250 crs) 240.70 6.25 - - - - (c) Axis Bank [Refer Note (c) below] (i) Term Loan -I (Rs 500 crs) 486.23 5.00 490.95 5.00 - - (ii) Term Loan -II (Rs 500 crs) 483.54 15.00 - - - - 1,501.79 52.21 808.16 16.78 337.31 11.35
Term Loans from Others (a) IDFC Infrastructure Finance Limited 27.86 2.18 30.05 1.97 32.02 1.77 [Refer Note (d) below] 27.86 2.18 30.05 1.97 32.02 1.77
(C) 1,529.65 54.39 838.21 18.75 369.33 13.12
(A) + (B) + (C) 3,067.15 84.39 2,826.91 18.75 1,661.30 13.12
Security
a The Non-Convertible Debentures are backed by unconditional and irrevocable Corporate Guarantee (CG) from The Tata Power Company Ltd for all amounts due under the facility including but not limited to interest, principal amount, penal interest and any other costs/charges under the issue. CG shall remain valid till the issue is completely redeemed.
b Lenders have first charge over the entire movable assets, both present and future, cash flows, receivables, book debts, revenues, all bank accounts, all intangibles present and future pertaining to the 44 MW Lahori Wind Plant (Term Loan-I) & 50 MW Pavagada Solar B-27 (term Loan -II). c Lenders have first charge over the entire movable assets, both present and future, cash flows, receivables, book debts, revenues, all bank accounts, all intangibles present and future pertaining to the 100 MW Pawagada solar project B-32 & B-34 (Term loan -I). The loan is backed by unconditional and irrevocable Corporate Guarantee (CG) from The Tata Power Company Ltd for all amounts due under the loan including but not limited to interest, principal amount, penal interest and any other costs/charges under the issue. CG shall remain valid till the issue is completely redeemed. Mortgage for term loan -II is yet to be done and is in process.
d Lenders have first charge over the entire movable assets, both present and future, cash flows, receivables, book debts, revenues, all bank accounts, all intangibles present and future pertaining to the 28.8 MW Solar Palaswadi Plant. Tata Power Renewable Energy Limited Notes forming part of Financial Statements
14 Non-current borrowings (continue)
Terms of Repayment Amount in ₹ Crores As at Particulars Financial Year 31st March, 2019 FY 19-20 FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 FY 30-33 (a) Unsecured Borrowing - at amortised cost
Redeemable Non-Convertible Debentures (i) 8.99% Series 2027 400.00 - - - - 70.00 70.00 70.00 190.00 - - - - (ii) 9.38% Series 2025 - (iii) 8.99% Series 2023 175.00 - 70.00 70.00 35.00 ------(iv) 8.45% Series 2022 500.00 - - - 500.00 ------(A) 1,075.00
Term loan from Bank HDFC Bank (B) 500.00 Term loan from HDFC Bank is having structured repayment starting from June 2019 and ending in March 2027.
(b) Secured Borrowing - at amortised cost
Term Loans from Banks (i) IDFC Bank 98.81 Term loan from IDFC Bank is having structured repayment starting from September 2016 and ending in September 2027. (ii) Kotak Mahindra Bank (a) Term Loan -I (Rs 228 crs) 219.23 Term loan from Kotak Bank is having structured repayment starting from March 2017 and ending in March 2029. (b) Term Loan -II (Rs 250 crs) 247.50 Term loan from Kotak Bank is having structured repayment starting from November 2018 and ending in Feb 2029. (iii) Axis Bank (a) Term Loan -I (Rs 500 crs) 495.00 Term loan from Axis Bank is having structured repayment starting from June 2018 and ending in March 2033. (b) Term Loan -II (Rs 500 crs) 500.00 Term loan from Axis Bank is having structured repayment starting from June 2019 and ending in March 2031. 1,560.54
Term Loans from Others (i) IDFC Infrastructure Finance Limited 30.04 Term loan from IDFC Infrastructure is having structured repayment starting from June 2016 and ending in September 2027. 30.04
(C) 1,590.58
Total borrowings (A + B + C) 3,165.58
Less: Impact of recognition of borrowing at amortised cost using 7.04 effective interest method under Ind AS. Less: Unamortised portion of fair value of corporate guarantee 7.01
Total long term borrowings 3,151.53 Tata Power Renewable Energy Limited Notes forming part of Financial Statements
15. Provisions
Accounting Policy
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. 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).
As at As at As at 31st March, 2019 31st March, 2018 01st April, 2017 ₹ Crores ₹ Crores ₹ Crores
Non-current Provision for Employee Benefits Compensated Absences 0.84 0.83 - Gratuity 2.28 2.61 - Post-Employment Medical Benefits 0.14 0.07 - Other Defined Benefit Plans 0.08 0.17 - Other Employee Benefits 0.23 0.16 -
Total 3.57 3.84 -
As at As at As at 31st March, 2019 31st March, 2018 01st April, 2017 ₹ Crores ₹ Crores ₹ Crores Current Provision for Employee Benefits Compensated Absences 0.01 0.01 - Gratuity 0.05 0.05 - Other Defined Benefit Plans 0.16 0.02 - Other Employee Benefits 0.02 0.03 -
Total 0.24 0.11 - Tata Power Renewable Energy Limited Notes forming part of Financial Statements
15. Provisions…..(Contd.) Employee benefit plan
15.1 Defined Contribution plan
The Company makes Provident Fund and Superannuation Fund contributions to defined contribution retirement benefit plans for eligible employees. Under the schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The contributions as specified under the law are paid to the provident fund set up as a trust by The Tata Power Company Limited and also to the Regional Provident Fund Commission. The Company is generally liable for annual contributions and any shortfall in the fund assets based on the government specified minimum rates of return and recognises such contributions and shortfall, if any, as an expense in the year it is incurred. Having regard to the assets of the fund and the return on the investments, the Company does not expect any shortfall in the foreseeable future.
The Company has recognised ₹ 0.20 crores (31st March, 2018 - ₹ 0.14 Crores) for provident fund contributions and ₹ 0.08 Crores (31st March, 2018 - ₹ 0.08 Crores) for superannuation contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.
15.2 Defined benefit plans
The Company operates the following unfunded/funded defined benefit plans:
Unfunded:
Post Employment Medical Benefits
The Company provides certain post-employment health care benefits to superannuated employees. In terms of the plan, the retired employees can avail free medical check-up and medicines at Company's facilities.
Pension
The Company operates a defined benefit pension plan for employees who have completed 15 years of continuous service. The plan provides benefits to members in the form of a pre-determined lumpsum payment on retirement.
Ex-Gratia Death Benefit
The Company has a defined benefit plan granting ex-gratia in case of death during service. The benefit consists of a pre-determined lumpsum amount along with a sum determined based on the last drawn basic salary per month and the length of service.
Retirement Gift
The Company has a defined benefit plan granting a pre-determined sum as retirement gift on superannuation of an employee.
Gratuity
The Company has a defined benefit gratuity plan. The gratuity plan is primarily governed by the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of five years are eligible for gratuity. The level of benefits provided depends on the member's length of service and salary at the retirement date. Tata Power Renewable Energy Limited Notes forming part of Financial Statements
15.3 The principal assumptions used for the purposes of the actuarial valuations were as follows:
Valuation as at 31st March, 2019 31st March, 2018 01st April, 2017
Discount Rate 7.40% p.a. 7.70% p.a. NA Salary Growth Rate - Management 7.00% p.a. 7.00% p.a. NA - Non-Management 5.00% p.a. 5.00% p.a. NA
Turnover Rate - Age 21 to 44 years - Management 2.50% p.a. 2.50% p.a. NA - Non-Management 0.50% p.a. 0.50% p.a. NA
Turnover Rate - Age 45 years and above - Management 1.00% p.a. 1.00% p.a. NA - Non-Management 0.50% p.a. 0.50% p.a. NA
Mortality Table Indian Assured Lives Indian Assured Lives NA Mortality (2006-08) Mortality (2006-08) (modified) Ult (modified) Ult Annual Increase in Healthcare Cost 8.00% p.a. 8.00% p.a. NA
Unfunded Plan: For the year ended 31st March, 2019 ₹ Crores
Balance as at 1st April, 2018 2.92 Current service cost 0.20 Past service cost - Interest Cost/(Income) 0.21 Amount recognised in statement of profit and loss 3.33
Remeasurement (gains)/losses Actuarial (gains)/losses arising from changes in financial assumptions 0.15 Actuarial (gains)/losses arising from changes in demographic assumptions -
Actuarial (gains)/losses arising from experience (0.62) Amount recognised in other comprehensive income (0.47)
Benefits paid (0.28) Acquisitions credit/(cost) 0.11 Balance as at 31st March, 2019 2.69
For the year ended 31st March, 2018 ₹ Crores
Balance as at 1st April, 2017 - Current service cost 0.14 Past service cost - Interest Cost/(Income) 0.15 Amount recognised in statement of profit and loss 0.29
Remeasurement (gains)/losses Actuarial (gains)/losses arising from changes in financial assumptions (0.39) Actuarial (gains)/losses arising from changes in demographic assumptions 0.07
Actuarial (gains)/losses arising from experience (0.15) Amount recognised in other comprehensive income (0.47)
Benefits paid (0.01) Acquisitions credit/(cost) 3.11 Balance as at 31st March, 2018 2.92 Tata Power Renewable Energy Limited Notes forming part of Financial Statements
15. Provisions….(Contd.) Employee Benefit Plans
15.4 Sensitivity Analysis
The sensitivity of the defined benefit obligations to changes in the weighted principal assumptions is:
Change in assumption Increase in assumption Decrease in assumption
31st March, 31st March, 31st March, 31st March, 31st March, 31st March, 2019 2018 2019 2018 2019 2018
Discount rate 0.50% 0.50% (0.25) (0.23) 0.28 0.26
Salary growth rate 0.50% 0.50% 0.25 0.24 (0.23) (0.22)
Mortality rates 1 year 1 year (0.01) (0.00) 0.01 0.00
Healthcare cost 0.50% 0.50% 0.02 0.01 (0.02) (0.01)
Claims Rate 5.00% 5.00% (0.47) (0.36) - 0.05
The figures in bracket signifies reduction in liability. The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The method and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
15.5 The expected maturity analysis of undiscounted defined benefit obligation is as follows:
Unfunded 31st March, 2019 31st March, 2018
Within 1 year 0.07 0.08 Between 1 - 2 years 0.09 0.07 Between 2 - 3 years 0.10 0.09 Between 3 - 4 years 0.11 0.11 Between 4 - 5 years 0.15 0.21 Beyond 5 years 1.06 1.81
The weighted average duration of the defined benefit obligation is 8.1 years (31st March, 2018 - 8.1 years ).
15.6 Risk exposure:
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
Inflation rate risk: Higher than expected increase in salary will increase the defined benefit obligation. Demographic risk: This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligations is not straight forward and depends upon the combination of salary increase, discount rate and vesting criterion.
Interest rate risk: The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase. Tata Power Renewable Energy Limited Notes forming part of Financial Statements
16. Deferred Tax As at As at As at 31st March, 2019 31st March, 2018 01st April, 2017 ₹ Crores ₹ Crores ₹ Crores
Deferred Tax Assets (DTA) (93.84) (69.74) (19.54)
Deferred Tax Liabilities (DTL) 98.85 50.17 19.31 Total Net Deferred Tax (Asset) / Liability 5.01 (19.57) (0.23)
For the year ended 31st March, 2019
Deferred Tax Liability on account of: Opening Balance Recognised Closing Balance
Property, plant and equipment 44.09 44.23 88.32 Mutual funds carried at FVTPL 0.08 0.30 0.38 EIR impact on borrowings 5.65 (0.74) 4.91 Leasehold Land 0.19 (0.19) - Finance Lease Receivable - 4.07 4.07 Other financial liabilities - 0.81 0.81 Other comprehensive income 0.16 0.20 0.36
Total DTL 50.17 48.68 98.85
Deferred Tax Assets on account of: Opening Balance Recognised Closing Balance
MAT credit (43.88) (11.10) (54.98) Deferred Revenue -Ind AS 115 (24.93) (5.97) (30.90) Government grants (0.60) (1.59) (2.19) Other non-current financial assets (0.33) (0.18) (0.51) Unabsorbed Depreciation - (5.26) (5.26)
Total DTA (69.74) (24.10) (93.84)
For the year ended 31st March, 2018
Deferred Tax Liability on account of: Opening Balance Recognised Closing Balance
Property, plant and equipment 19.31 24.78 44.09 EIR impact on borrowings - 5.65 5.65 Mutual funds carried at FVTPL (0.11) 0.19 0.08 Other non-current financial assets - 0.19 0.19 Other comprehensive income - 0.16 0.16
Total DTL 19.20 30.97 50.17
Deferred Tax Assets on account of: Opening Balance Recognised Closing Balance
MAT credit - (43.88) (43.88) Deferred Revenue -Ind AS 115 (19.43) (5.50) (24.93) Government grants - (0.60) (0.60) Other non-current financial assets - (0.33) (0.33)
Total DTA (19.43) (50.31) (69.74)
For the year ended 31st March, 2017
Deferred Tax Liability on account of: Opening Balance Recognised Closing Balance
Property, plant and equipment 9.91 9.40 19.31 EIR impact on borrowings 0.29 (0.29) -
Total DTL 10.20 9.11 19.31
Deferred Tax Assets on account of: Opening Balance Recognised Closing Balance
MAT credit - - - Mutual funds carried at FVTPL 0.43 (0.54) (0.11) Deferred Revenue - Ind AS 115 (19.43) - (19.43) Other non-current financial assets (0.25) (0.25) -
Total DTA (19.25) (0.79) (19.54) Tata Power Renewable Energy Limited Notes forming part of Financial Statements
17. Other Non-current Liabilities
As at As at As at 31st March, 2019 31st March, 2018 01st April, 2017 ₹ Crores ₹ Crores ₹ Crores
(i) Deferred Revenue - Opening 82.70 66.95 - - Add: Additions during the year 16.93 15.75 66.95 - Closing balance 99.63 82.70 66.95
Total Other Non-current Liabilities 99.63 82.70 66.95
18. Current Borrowings As at As at As at 31st March, 2019 31st March, 2018 01st April, 2017 ₹ Crores ₹ Crores ₹ Crores
Unsecured - At Amortised Cost
From Related Parties Af-Taab Investment Company Limited 125.00 - - From Banks Bank Overdraft - - 0.51 From Others Commercial Paper (maximum outstanding FY 19 Rs.1,300 933.98 495.60 794.25 crore, previous year FY 18 Rs.1,000 crore, FY 17 Rs 1,000 crore)
Total 1,058.98 495.60 794.76
19. Other Financial Liabilities
As at As at As at 31st March, 2019 31st March, 2018 01st April, 2017 ₹ Crores ₹ Crores ₹ Crores
Non-current Payable for capital supplies and services 6.64 - -
Total 6.64 - -
Current (a) Current Maturities of Long-term Debt (refer note 14) 84.39 18.75 13.12 (b) Interest accrued but not due on Borrowings 65.51 65.37 24.38 (c) Interest accrued but not due on Borrowings - related parties 0.22 - - (d) Payables for capital supplies and services 1,432.81 170.11 704.14 (e) Dividend payable to Holding Company - 54.41 - (f) Corporate guarantee commission payable to Holding Company - 5.95 - (g) Other Financial Liabilities 42.57 55.71 177.55 Total 1,625.50 370.30 919.19
20. Other Current Liabilities As at As at As at 31st March, 2019 31st March, 2018 01st April, 2017 ₹ Crores ₹ Crores ₹ Crores
Statutory Liabilities 3.95 3.31 8.68 Other Liabilities 0.04 0.01 - 3.99 3.32 8.68 Tata Power Renewable Energy Limited Notes forming part of Financial Statements
21. Revenue from Operations
Revenue recognition
Accounting Policy
Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customers at an amount that reflects the consideration to which the Company expects to be ebtitled in exchange for those goods or services.
A. Sale of power Revenue from sale of power is recognised net of cash discount over time for each unit of electricity delivered at the contracted rate. The transaction price is adjusted for significant financing component, if any and the adjustment is accounted as finance cost.
Under the previous standard, the Company recognized revenue on the basis of quantity of power supplied to procurers at contractually agreed rates as per the Power Purchase Agreement (PPA). As per Ind AS 115, the Company has identified supply of power over the term of PPA as a single performance obligation and is recognizing revenue over time using a single measure of progress.
Consumers are billed on a monthly basis and are given average credit period of 7 to 45 days for payment. No delayed payment charges ('DPC') is charged for the initial 30 days from the date of receipt of invoice by customers. Thereafter, DPC is charged at the rate prescribed by the Power Purchase Agreement on the outstanding balance once the dues are received. Revenue in respect of delayed payment charges and interest on delayed payments leviable as per the relevant contracts are recognised on actual realisation or accrued based on an assessment of certainty of realization.
B. Delayed payment charges Delayed payment charges were hitherto recognized only when they are realised/recovered. With effect from 01st April, 2018, the Company has revised its accounting policy to recognize Delayed Payment Charges (DPC) on accrual basis based on contractual terms and an assessment of certainty of realization which could be based either an acknowledgement of the charges by the concerned customer or if a regulatory or statutory body passes a favourable order. Management believes that this policy results in the financial statements providing reliable and more relevant information about the effects of transaction on the Company’s financial position and performance. The revision in accounting policy has been applied retrospectively and does not have any significant impact on current year and previous year statement of profit and loss and retained earnings as at March 31, 2017.
C. Dividend and Interest income Dividend income from investments is recognised when the shareholder's right to receive payment has been established.
Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount on initial recognition.
D. Unbilled Revenue Unbilled revenue represents services rendered by the Company but not invoiced as at the balance sheet date. Tata Power Renewable Energy Limited Notes forming part of Financial Statements
21. Revenue from Operations (Contd.)
For the year ended For the year ended 31st March, 2019 31st March, 2018 ₹ Crores ₹ Crores
(a) Revenue from contract with customers Revenue from Power Supply 682.50 443.42 (Less): Cash Discount (6.43) (2.98) 676.07 440.44
(b) Other Operating Revenue Generation Based Incentive 30.12 28.62 Compensation Earned 4.19 15.68 Income from Finance Lease 0.56 - Sale of Carbon Credits - 1.08 Amortisation of Deferred Grant 2.82 0.04 Miscellaneous Revenue 1.65 0.24 39.34 45.66
Total 715.41 486.10
Add : Significant financing component 10.17 8.38 Add : Cash Discount/Rebates etc. 6.43 2.98
Total revenue as per contracted price 732.01 497.46
Disclosure on Transaction Price - Remaining Performance Obligation
Revenue from Power Supply to be recognised Within one year 54.61 54.68 Beyond one year 914.82 969.43 Total 969.43 1,024.11
22. Other Income
For the year ended For the year ended 31st March, 2019 31st March, 2018 ₹ Crores ₹ Crores (a) Interest Income On Financial Assets held at Amortised Cost Interest on Banks Deposits 0.11 1.81 Interest on Income-tax Refund 0.09 - Interest on loans to Subsidiaries 29.63 32.19 Other Interest - 0.01 29.83 34.01
(b) Dividend Income From Non-current Investments Subsidiaries 40.35 125.33 40.35 125.33
(c) Gain on Investments Gain on fair value/sale of Current Investment measured at FVTPL 10.90 12.97 10.90 12.97
(d) Other Non-operating Income Delayed Payment Charges - 0.36 Miscellaneous Income 5.50 0.29 Provision for Doubtful Debts written back - 0.50 5.50 1.15
Total 86.58 173.46 Tata Power Renewable Energy Limited Notes forming part of Financial Statements
23. Employee Benefits Expense
Accounting Policy
Defined contribution plans Payments to defined contribution retirement benefit plans are recognised as an expense when employees have rendered service entitling them to the contributions.
Defined benefits plans The cost of providing benefits under the defined benefit plan is determined using the projected unit credit method. Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods. Past service costs are recognised in the statement of profit and loss on the earlier of:
- The date of the plan amendment or curtailment, and - The date that the Company recognises related restructuring costs Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Company recognises the following changes in the net defined benefit obligation as an expense in the statement of profit and loss:
- Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non routine settlements; and - Net interest expense or income. A liability for a termination benefit is recognised at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognises any related restructuring costs.
The cost of the defined benefit gratuity plan and other post-employment medical benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds. The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates.
Current and other non-current employee benefits A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.
Liabilities recognised in respect of current employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.
Liabilities recognised in respect of other non-current employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date.
For the year ended For the year ended 31st March, 2019 31st March, 2018 ₹ Crores ₹ Crores
Salaries, Wages and Bonus 5.23 4.74 Contribution to Provident Fund 0.20 0.14 Contribution to Superannuation Fund 0.08 0.08 Retiring Gratuities 0.35 0.25 Leave Encashment 0.27 0.06 Pension - - Staff Welfare Expenses 0.82 0.41 6.95 5.68 Less: Employee Cost Capitalised 0.64 - 0.64 -
Total Employee Benefit Expenses 6.31 5.68 Tata Power Renewable Energy Limited Notes forming part of Financial Statements
24. Finance Costs Accounting Policy
Borrowing Costs Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in statement of profit and loss in the period in which they are incurred.
For the year ended For the year ended 31st March, 2019 31st March, 2018 ₹ Crores ₹ Crores
(a) Interest Expense: Borrowings Interest on Debentures 105.72 122.52 Interest on Loans - Banks & Financial Institutions 137.21 87.10 Interest on Loans - Related Parties 8.89 - Interest on Commercial Paper 63.43 27.30
Others Other Interest and Commitment Charges 0.08 0.02 315.33 236.94 Less: Interest Capitalised 15.88 39.21 299.45 197.73 (b) Other Borrowing Cost: Other Finance Costs 21.08 11.31 Less: Finance cost Capitalised 0.04 0.16 21.04 11.15
320.49 208.88
Note: * The weighted average capitalisation rate on the Company's general borrowings is 8.28% per annum (8.12% per annum for 31st March, 2018). Tata Power Renewable Energy Limited Notes forming part of Financial Statements
25. Other Expenses
For the year ended For the year ended 31st March, 2019 31st March, 2018 ₹ Crores ₹ Crores
Rental of Land, Buildings, Plant and Equipment, etc. 2.42 0.21 Repairs and Maintenance 46.83 18.17 Rates and Taxes 1.09 1.90 Insurance 3.17 3.50 Other Operation Expenses 0.02 0.83 Penalty 0.12 6.84 Travelling and Conveyance Expenses 0.94 0.37 Electricity Consumed 6.59 2.63 Other Fees 1.65 1.27 Business Development Expenditure 2.33 0.53 Consultants' Fees 1.03 2.22 Auditors' Remuneration 0.31 0.62 Cost of Services Procured 4.69 4.56 Amortisation of Leasehold Land 0.88 0.35 Legal Charges 0.99 1.00 Corporate Social Responsibility Expenses 1.42 1.00 Tata Brand Equity 1.88 1.32 Director's Fee 0.22 0.21 Loss on sale of investment - 0.01 Miscellaneous Expenses 0.06 0.21 Total 76.64 47.75
(i) Payment to the auditors comprises (inclusive of service tax / Goods & Service Tax):
For the year ended For the year ended 31st March, 2019 31st March, 2018 ₹ Crores ₹ Crores
Statutory Audit 0.18 0.27 For Taxation Matters 0.05 0.04 For Other Services 0.06 0.30 Reimbursement of Expenses 0.02 0.01 Total 0.31 0.62
(ii) Corporate Social Responsibility Expenses For the year ended For the year ended 31st March, 2019 31st March, 2018 ₹ Crores ₹ Crores
Contribution to Tata Power Community Development Trust 1.42 1.00 Expenses incurred by the Company - - Total 1.42 1.00
Amount required to be spent as per section 135 of the Act 1.42 0.97
Amount spent during the year on: (a) Construction/Acquisition of asset - - (b) On purposes other than (a) above 1.42 1.00 Tata Power Renewable Energy Limited Notes forming part of Financial Statements 26. Contingent Liabilities:
Accounting Policy Contingent liabilities are disclosed in the financial statements by way of notes to accounts, unless possibility of an outflow of resources embodying economic benefit is remote.
(a) As at 31st March, 2019, there is ₹ NIL income tax dispute (₹ NIL as on 31st March, 2018; ₹ 1.24 crore as on 1st April, 2017).
(b) As at 31st March, 2019, there is a demand of ₹ 0.55 crore (₹ 0.55 crore as on 31st March, 2018; ₹ NIL as on 1st April, 2017) related to VAT Assessment for FY 2013-14. The company has filed an appeal against the aforesaid order.
The department has disallowed ₹ 0.67 crore of refund due to the company for VAT Assessment for FY 2014-15. The company is in the process of filing appeal against this order. (c) During the year ended 31st March, 2019, service tax audit for the year 2013-14 to 2016-17 was carried out by GST audit department. Company has received an observation letter from the department with a service tax demand of ₹ 6.11 crore for the said year. Out of this, the Company has already accounted and paid ₹ 3.97 crore pertaining to FY 2015-16 to 2016-17 in respective years. It has paid the balance amount of ₹ 2.14 crore under protest to the department.
(d) The Company has provided Corporate Guarantee of ₹ 298.84 crore as on 31st March, 2019 (31st March, 2018 ₹ 78.90 crore; 01st April, 2017 ₹ 1,804.17 crores) on behalf of Walwhan Renewable Energy Limited (WREL).
(e) Bank Guarantee issued ₹ 313.01 crore (including ₹15.10 crore on behalf of WREL) as on 31st March, 2019 (31st March, 2018 ₹ 2,220.01 crore, including ₹ 15.10 crores and ₹ 1,740.49 crore, including ₹ 20.09 crore as on 1st April, 2017 on behalf of WREL).
(f) There are numerous interpretative issues relating to the Supreme Court (SC) judgement dated 28th February, 2019 on Provident Fund (PF) on the inclusion of allowances for the purpose of PF contribution as well as its applicability of effective date. The Company is consulting Legal counsel for further clarity and evaluating its impact on its financial statement.
27. Commitments :
(a) Estimated amount of contracts remaining to be executed (net of capital advance) on Capital account and not provided for ₹ 284.85 crores (31st March, 2018 ₹ 30.27 crore; 1st April, 2017 ₹ 246.16 crore).
(b) WREL has taken credit facility of ₹ 2,186.00 crore from State Bank of India. Against this facility of WREL, the Company has undertaken that it shall, without recourse to any of the assets of the WREL, bring in additional funds to meet any shortfall in debt servicing obligations of the WREL on account of any downward revision / re-negotiation in the tariff.
(c) Walwhan Solar MP Limited (WSML) has taken credit facility of ₹ 145.00 crore from Kotak Mahindra Bank. Against this facility, The Company has undertaken that it shall, without recourse to any of the assets of the (WSML), bring in additional funds to meet any shortfall in debt servicing obligations of the WSML on account of rating downgrade below AA- by any rating agency or more than 50% of receivables are due for more than 180 days.
28. Disclosure as required by Indian Accounting Standard 24 (IND AS-24) "Related Party Disclosures" as notified under the Companies (Accounts) Rules, 2014 is as follows:
(a) Names of the related parties and description of relationship:
Name of the Related Party Country of Origin
Holding Company The Tata Power Company Limited (TPCL) India Tata Power Renewable Energy Limited Notes forming part of Financial Statements
28. (a) Names of the related parties and description of relationship...(Continued):
Subsidiaries Supa Windfarm Limited India Nivade Windfarm Limited India Poolavadi Windfarm Limited India Vagarai Windfarm Limited India Indo Rama Renewables Jath Limited (IRRJL) India
Walwhan Renewable Energy Limited and its subsidiaries (WREL) India
Fellow Subsidiaries (where transactions have taken place) Tata Power Green Energy Limited India Tata Power Solar Systems Limited (TPSSL) India Tata Power Trading Company Limited (TPTCL) India Af-Taab Investment Company Limited India Chirasthaayee Saurya Limited (CSL) India
Others Tata Sons Private Limited (Promoter of the Holding company) India Tata AIG General Insurance Company Limited (Joint Venture of India Tata Sons Private Limited)
Key Management Personnel Relationship
Mahesh Paranjpe Chief Executive Officer, with effect from 21st June, 2018
Rahul Shah Director, resigned with effect from 30th June,2018 Chief Financial Officer, resigned with effect from 05th Jinendra Patil November, 2018 Chief Financial Officer, with effect from 05th November, Gautam Attravanam 2018 Mona Purandare Company Secretary Nawshir Mirza Independent Director Sanjay Bhandarkar Independent Director Anjali Kulkarni Director, resigned with effect from 05th July,2018 Anjali Bansal Independent Director with effect from 19th July, 2018 Tata Power Renewable Energy Limited Notes forming part of Financial Statements
28 (b) Details of Transactions / Balances Outstanding: Amount in ₹ Crore
Particulars TPCL WREL IRRJL VWL CSL TPSSL TPTCL
Operation / Project Management Service 3.64 ------6.01 ------
Receiving of Services 2.50 - - - - 19.24 - 0.59 - - - - 6.25 0.02
Other Income - - 0.05 ------0.05 - - - -
Purchase of Fixed asset - - - - - 1,885.79 ------1,298.37 -
Guarantees given including corporate guarantee - 298.84 ------
Guarantees taken including corporate guarantee ------2,210.00 ------
Guarantees returned including corporate guarantee 500.00 78.89 - - - - - 1,700.00 1,730.28 - - - - -
Fair value of corporate guarantee ------661.49 ------
Interest Expenditure 2.36 3.09 ------
Interest Income 2.03 - 7.60 13.37 6.36 - 0.28 - 16.41 10.48 2.14 3.16 - -
Dividend Received - 40.35 ------125.32 - - - - -
Dividend Paid 54.35 ------150.25 ------
Borrowings Received 295.00 191.40 ------
Borrowings Repaid (including conversion in equity) 295.00 191.40 ------
Equity Contribution (including Share Application Money pending for ------allotment and conversion of debt) 479.00 ------
Investment in equity (including conversion) ------0.33 - - -
Sale of Power 63.61 ------64.07 ------
Cash Discount given 0.78 ------0.83 ------
Loans given or assigned 402.10 - 30.50 17.66 - - 110.00 - - - 118.42 79.50 - -
Loans given (received back) 402.10 - 10.75 3.77 - 110.00 - 260.00 78.40 0.40 - - -
Expenses incurred on behalf of 0.45 ------0.97 0.52 - - -
Sale of Investment ------0.02 ------
Received on account of Third party - - - 10.00 ------62.59 - - -
Balance Outstanding
Perpetual securities outstanding 3,895.00 ------3,895.00 ------3,895.00 ------
Loan given outstanding (including interest accrued thereon) - - 92.25 131.91 84.97 - - - - 72.50 118.02 82.34 - - - 275.31 150.90 - - - -
Dividend Payable ------54.41 ------
Other Payables 3.27 - - - - 1,410.82 - 6.68 - - - - 153.77 - 4.42 - - - - 357.23 -
Other Receivable 5.66 0.92 0.13 - - - - 4.45 54.41 0.10 10.00 - - - 5.19 0.04 0.06 - - - -
Fair value of corporate guarantee 5.00 ------5.00 ------5.00 ------
Guarantees given on behalf of TPREL 2,235.00 ------2,735.00 ------2,225.00 ------
Guarantees given on behalf of WREPL - 313.94 ------93.99 ------1,824.27 - - - - - Tata Power Renewable Energy Limited Notes forming part of Financial Statements
28 (b) Details of Transactions / Balances Outstanding…(Contd.) Amount in ₹ Crore Key Management Particulars Supa Nivade TPGEL Af-Taab Tata AIG Tata Sons Personnel
Operation / Project Management Service ------
Receiving of Services - - - - 2.50 ------6.11 - -
Other Income ------
Insurance claim Received - - - - 1.50 ------
Purchase of Fixed asset ------
Guarantees given including corporate guarantee ------
Guarantees taken including corporate guarantee ------
Guarantees returned including corporate guarantee ------
Guarantee issued including corporate guarantee ------
Guarantee returned including corporate guarantee ------
Fair value of corporate guarantee ------
Interest Expenditure - - - 3.43 ------
Interest Income ------
Dividend Received ------
Dividend Paid ------
Perpetual securities issued ------
Borrowings Received - - - 125.00 ------
Borrowings Repaid (including conversion in equity) ------
Equity Contribution (including Share Application Money pending for ------allotment and conversion of debt) ------
Investment in equity (including conversion) ------
Sale of Power ------
Cash Discount given ------
Loans given or assigned ------
Loans given (received back) ------
Expenses incurred on behalf of 0.04 0.04 0.03 ------
Remuneration * ------2.46 ------2.58
Sale of Investment ------
Loss on Sale of Investment ------
Received on account of Third party ------
Tata Brand Equity - - - - - 1.78 - - - - - 1.17 -
Balance Outstanding Loans taken (including Interest thereon) - - - 125.22 ------
Perpetual securities outstanding ------Loan given outstanding (including interest accrued thereon) ------Dividend receivable ------Dividend Payable ------
Other Payables - - - - - 1.78 ------1.17 ------
Other Receivable 0.04 0.04 0.03 ------0.01 ------
Fair value of corporate guarantee ------
Guarantees given on behalf of TPREL ------
Guarantees given on behalf of WREPL ------Above related party transactions are in ordinary course of business and are at arm's length.
* Key Managerial Personnel are entitled to post-employment benefits and other long term employee benefits recognised as per Ind AS 19 - ‘Employee Benefits’ in the financial statements. As these employee benefits are lump sum amounts provided on the basis of actuarial valuation, the same is not included above.
Note: Previous year's figures are in Italics. Comparative period of the movement is for the period 01st April, 2017 to 31st March, 2018 and closing balance is for the year ended 31st March, 2018 and 01st April, 2017 Tata Power Renewable Energy Limited Notes forming part of Financial Statements
29 Tax expense reconciliation
Accounting Policy
(i) Current Tax Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date in the countries where the Company operates and generates taxable income.
Current income tax relating to items recognised outside statement of profit and loss is recognised outside statement of profit and loss (either in other comprehensive income or in equity). Current tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Income taxes recognised in the statement of profit and loss
For the year ended For the year ended 31st March, 2019 31st March, 2018 ₹ Crores ₹ Crores
Current tax In respect of the current year 22.00 17.20 In respect of the previous years 0.43 0.40 Total income tax expense recognised in the current year 22.43 17.60
The income tax expense for the year can be reconciled to the accounting profit as follows:
For the year ended For the year ended 31st March, 2019 31st March, 2018 ₹ Crores ₹ Crores
Profit before tax 139.34 189.26
Income tax expense calculated at 34.944% (PY: 34.608%) 48.69 65.50 Effect of expenses that are not deductible in determining taxable profit 1.31 2.60 Effect of expenses that are deductible in determining taxable profit - - Effect of non-taxable income (14.10) (43.37) Effect of Tax Holiday period 0.42 (3.57) Effect of MAT recognition for earlier years - (28.66) Effect of deferred tax pertaining to previous year - 3.09 Effect of deferred tax recognised on unamortised upfront fees (0.72) 2.68 Effect of MAT credit for earlier years 10.90 - Effect of Tax on Other Items 0.31 (0.45) Effect of deferred tax balances due to changes in income tax rate from 34.608% to - 0.28 34.944% Income tax expense recognised in statement of profit or loss 46.81 (1.90)
1. The tax rate used for the year 2018-19 and 2017 - 18 is the corporate tax rate of 34.944% and 34.608% respectively payable by corporate entities in India on taxable profits under the Indian tax law. 2. The Company has to pay taxes based on the higher of income tax profit of the company or MAT at 21.549% and 21.342% of book profit for the year 2018-19 and 2017-18 respectively. 3. The rate used for calculation of deferred tax is 34.944% for 2017-18 and 2018-19. Tata Power Renewable Energy Limited Notes forming part of Financial Statements
(ii) Deferred Tax Accounting Policy Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. For operations carried out under tax holiday period (80IA benefits of Income Tax Act, 1961), deferred tax assets or liabilities, if any, have been established for the tax consequences of those temporary differences between the carrying values of assets and liabilities and their respective tax bases that reverse after the tax holiday ends. Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.
Deferred tax assets include Minimum Alternative Tax (MAT) paid in accordance with the tax laws in India, which is likely to give future economic benefits in the form of availability of set off against future income tax liability. Accordingly, MAT is recognised as deferred tax asset in the balance sheet when the asset can be measured reliably and it is probable that the future economic benefit associated with the asset will be realised. The Company reviews the “MAT credit entitlement” asset at each reporting date and writes down the asset to the extent that it is no longer probable that it will pay normal tax during the specified period. In the situations where one or more units of the Company are entitled to a tax holiday under the tax law, no deferred tax (asset or liability) is recognized in respect of temporary differences which reverse during the tax holiday period, to the extent the concerned unit's gross total income is subject to the deduction during the tax holiday period. Deferred tax in respect of temporary differences which reverse after the tax holiday period is recognized in the year in which the temporary differences originate. However, the Company restricts recognition of deferred tax assets to the extent it is probable that sufficient future taxable income will be available against which such deferred tax assets can be realized. For recognition of deferred taxes, the temporary differences which originate first are considered to reverse first. Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.
For the year ended For the year ended 31st March, 2019 31st March, 2018 ₹ Crores ₹ Crores Deferred tax In respect of the current year 35.48 24.38 In respect of the previous year - - Adjustments to deferred tax attributable to changes in tax rates - - MAT Credit recognised in respect of current year (22.00) (43.88) MAT Credit derecognised in respect of previous years 10.90 - Income Tax recognised in OCI 0.20 0.16 24.58 (19.34) Tata Power Renewable Energy Limited Notes forming part of Financial Statements
30 Earnings per Share:
Accounting Policy
Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares outstanding during the period. Diluted earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the proceeds receivable had the equity shares been actually issued at fair value (i.e. the average market value of the outstanding equity shares). Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.
The number of equity shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for any share splits and bonus shares issues including for changes effected prior to the approval of the financial statements by the Board of Directors.
For the year ended For the year ended Particulars 31st March, 2019 31st March, 2018
Basic Net profit for the period attributable to equity shareholders (₹ crores) 92.53 191.16 Weighted Average Number of Equity Shares for Basic EPS (Nos) 1,045,107,715 854,406,345 Par value per equity share (₹) 10.00 10.00 Basic Earnings Per Share (₹) 0.89 2.24
Diluted Net profit for the period attributable to equity shareholders (₹ crores) 92.53 191.16 Profit attributable to equity shareholders on dilution (₹ crores) 92.53 191.16
The weighted average number of equity shares for Basic EPS (Nos) 1,045,107,715 854,406,345 Add: Effect of Share application money pending allotment - 40,460,274 Weighted average number of equity shares for Diluted 1,045,107,715 894,866,619 ParEPS value (Nos) per equity share (₹) 10.00 10.00 Diluted Earnings Per Share (₹) 0.89 2.14 Tata Power Renewable Energy Limited Notes forming part of Financial Statements
31 a) Financial Instruments (i) Fair Value The carrying value of financial instruments by categories as of 31st March, 2019 is as follows: Amount in ₹ Crore Fair Value through Fair Value Total Carrying Particulars Amortised Cost Fair Value Profit and Loss through OCI Value
Assets : Cash and Cash Equivalents - - 31.53 31.53 31.53 Trade Receivables - - 167.60 167.60 167.60 Unbilled Revenue - - 70.14 70.14 70.14 Investments (mutual funds) 42.16 - - 42.16 42.16 Other balances with banks - - 11.76 11.76 11.76 Loans - - 307.94 307.94 307.94 Finance lease receivable - - 11.67 11.67 11.67 Other financial assets - - 200.10 200.10 200.10
Total 42.16 - 800.74 842.90 842.90
Liabilities : Fixed rate borrowings (including current maturities) - - 653.30 653.30 617.34 Floating rate borrowings (including current maturities) - - 3,557.22 3,557.22 3,591.98 Trade Payables - - 24.67 24.67 24.67 Other Financial Liabilities - - 1,547.75 1,547.75 1,547.75
Total - - 5,782.94 5,782.94 5,781.74
The carrying value of financial instruments by categories as of 31st March, 2018 is as follows:
Fair Value through Fair Value Total Carrying Particulars Amortised Cost Fair Value Profit and Loss through OCI Value Assets : Cash and Cash Equivalents - - 27.41 27.41 27.41 Trade Receivables - - 60.54 60.54 60.54 Unbilled Revenue - - 58.60 58.60 58.60 Investments (mutual funds) 33.27 - - 33.27 33.27 Other balances with banks - - 0.01 0.01 0.01 Loans - - 270.83 270.83 270.83 Other financial assets - - 115.65 115.65 115.65
Total 33.27 - 533.04 566.31 566.31
Liabilities : Fixed rate borrowings (including current maturities) - - 497.74 497.74 500.23 Floating rate borrowings (including current maturities) 2,843.52 2,843.52 2,852.05 Trade Payables - - 20.17 20.17 20.17 Other Financial Liabilities - - 351.55 351.55 351.55
Total - - 3,712.98 3,712.98 3,724.00
The carrying value of financial instruments by categories as of 1st April, 2017 is as follows:
Fair Value through Fair Value Total Carrying Particulars Amortised Cost Fair Value Profit and Loss through OCI Value
Assets : Cash and Cash Equivalents - - 72.44 72.44 72.44 Trade Receivables - - 39.40 39.40 39.40 Unbilled Revenue - - 37.32 37.32 37.32 Investments (mutual funds) 266.55 - - 266.55 266.55 Other balances with banks - - 51.11 51.11 51.11 Loans - - 411.11 411.11 411.11 Other financial assets - - 88.12 88.12 88.12
Total 266.55 - 699.50 966.05 966.05 Liabilities : Fixed rate borrowings (including current maturities) - - - - - Floating rate borrowings (including current maturities) 2,469.18 2,469.18 2,478.72 Trade Payables - - 12.96 12.96 12.96 Other Financial Liabilities - - 906.07 906.07 906.07
Total - - 3,388.21 3,388.21 3,397.75 Tata Power Renewable Energy Limited Notes forming part of Financial Statements
(ii) Fair Value hierarchy
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:
Level1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. This includes traded debentures (borrowings) and mutual funds that have quoted price.
Level 2: Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: Inputs are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.
The following table summarises financial assets measured at fair value on a recurring basis and financial assets that are not measured at fair value on a recurring basis (but fair value disclosures are required) :
Amount in ₹ Crore
As at 31.03.2019 Level 1 Level 2 Level 3 Total
Financial Assets Mutual Fund Investment 42.16 - - 42.16
Total 42.16 - - 42.16
As at 31.03.2018 Level 1 Level 2 Level 3 Total Financial Assets Mutual Fund Investment 33.27 - - 33.27
Total 33.27 - - 33.27
As at 01.04.2017 Level 1 Level 2 Level 3 Total Financial Assets Mutual Fund Investment 266.55 - - 266.55
Total 266.55 - - 266.55
The following table summarises financial liabilities measured at fair value on a recurring basis and financial liabilities that are not measured at fair value on a recurring basis (but fair value disclosures are required) :
Amount in ₹ Crore
As at 31.03.2019 Level 1 Level 2 Level 3 Total
Financial Liabilities Fixed rate borrowings (including current maturity) 492.34 125.00 - 617.34
Floating rate borrowings (including current maturity) 576.52 3,015.46 - 3,591.98
Total 1,068.86 3,140.46 - 4,209.32
As at 31.03.2018 Level 1 Level 2 Level 3 Total Financial Liabilities Fixed rate borrowings (including current maturity) 500.23 - - 500.23
Floating rate borrowings (including current maturity) 1,002.38 1,849.67 - 2,852.05
Total 1,502.61 1,849.67 - 3,352.28
As at 01.04.2017 Level 1 Level 2 Level 3 Total Financial Liabilities Fixed rate borrowings (including current maturity) - - - -
Floating rate borrowings (including current maturity) 1,002.66 1,476.06 - 2,478.72
Total 1,002.66 1,476.06 - 2,478.72
The carrying amount of cash and cash equivalents, other bank balance trade receivable, unbilled revenue, current loans, other financial assets, trade payables and other financial liabilities are considered to be the same as their fair value, due to their short term nature.
The carrying amount of other non-current financial assets are considered to be a close approximate to their fair value.
Borrowings from banks and other financial institutions are the variable rate loans. The current borrowing rate represents the discounting rate, which means that the carrying value will be closely approximate to their fair value. Tata Power Renewable Energy Limited Notes forming part of Financial Statements
b) Capital Management:
The Company's capital management is intended to create value for shareholders by facilitating the meeting of its long-term and short-term goals. Its Capital structure consists of net debt (borrowings as detailed in notes below) and total equity.
Gearing ratio The gearing ratio at the end of the reporting period was as follows: For the year ended For the year ended For the year ended 31st March, 2019 31st March, 2018 01st April, 2017 ₹ Crores ₹ Crores ₹ Crores (i) Debt 4,276.25 3,406.62 2,493.56 Less : Cash and Bank balances (including cash and bank balances in a disposal group 43.29 27.42 123.56 Net debt 4,232.96 3,379.20 2,370.00 (ii) Total Equity 5,078.51 5,042.84 4,743.23 Net debt to equity ratio (%) 83.35% 67.01% 49.97%
(i) Debt is defined as non-current borrowings (including current maturities) and current borrowings (excluding derivative, financial guarantee contracts and contingent considerations) and interest accrued on non- current and current borrowings. (ii) Equity is defined as Equity share capital, Unsecured perpetual securities and other equity including reserves and surplus.
c) Financial Risk Management:
In its ordinary operations, the Company's activities expose it to the various types of risks, which are associated with the financial instruments and markets in which it operates. The Company has the risk management policy which covers risk associated with the financial assets and liabilities such as interest rate risks and credit risk. The Company on periodic basis reviews the risk associated with the financial assets and liabilities. The following is the summary of the main risks:
Market risk Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of three types of risk: currency risk, interest rate risk and equity price risk. The impact of equity price risk is not material. Financial instruments affected by market risk include loans and borrowings, derivative financial instruments and FVTOCI investments.
The sensitivity analyses in the following sections relate to the position as at 31st March, 2019, 31st March, 2018 and 01st April, 2017.
The sensitivity analyses have been prepared on the basis that the amount of net debt and the ratio of fixed to floating interest rates of the debt. The analyses exclude the impact of movements in market variables on: the carrying values of gratuity and other post-retirement obligations and provisions.
Interest rate risk management Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long-term debt obligations with floating interest rates. The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings.
(i) Interest rate risk sensitivity
Interest rate risk arises from the potential changes in interest rates that may have adverse effects on the Company in the reporting period or in future years.
Interest rate sensitivity: The sensitivity analysis below have been determined based on exposure to interest rates for term loans and debentures at the end of the reporting period and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period in case of term loans and debentures that have floating rates.
If the interest rates had been 50 basis points higher or lower and all the other variables were held constant, the effect on Interest expense for the respective financial years and consequent effect on Company's profit in that financial year would have been as below:
As of 31st March, 2019 As of 31st March, 2018 As of 01st April, 2017 50 bps increase 50 bps decrease 50 bps increase 50 bps decrease 50 bps increase 50 bps decrease
Interest expense on loan (+) Rs.13.87 crs (-) Rs.13.87 crs (+) Rs.9.98 crs (-) Rs.9.98 crs (+) Rs.7.04 crs (-) Rs.7.04 crs
Effect on profit before tax (-) Rs.13.87 crs (+) Rs.13.87 crs (-) Rs.9.98 crs (+) Rs.9.98 crs (-) Rs.7.04 crs (+) Rs.7.04 crs
(ii) Credit risk management
The Company takes on exposure to credit risk, which is the risk that counterparty will default on its contractual obligations resulting in financial loss to the company. Financial assets that potentially expose the Company to credit risks are listed below:
The Company's cash inflows are secured under Power Purchase Agreement (PPA) with holding company and respective Power Procurers which are State Government utilities. Being a State Government undertaking credit risk is very low.
In respect of advance due from vendor ₹ NIL (31st March, 2018 ₹ NIL, 1st April, 2017 ₹ 72.59 crore ) which are backed by bank guarantees based on which Management concludes credit risk in respect of the same is low.
Financial assets that potentially expose the Company to credit risks are listed below:
For the year ended For the year ended For the year ended 31st March, 2019 31st March, 2018 01st April, 2017 ₹ Crores ₹ Crores ₹ Crores Loans 307.94 270.83 411.11 Other financial assets 200.10 115.65 88.12
All of the above are due from the parties under normal course of the business and as such the company believe exposure to credit risk to be minimal. Tata Power Renewable Energy Limited Notes forming part of Financial Statements
(iii) Liquidity risk management
The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash ₹ Crores Expected maturity for financial Liabilities Up to 2 to 5 5+ Total Carrying Amount 1 year years years
31st March, 2019 Borrowings (including current maturity) 1,159.39 1,284.01 1,797.18 4,240.58 4,210.52 Interest payable on above borrowings 280.79 942.52 610.53 1,833.84 65.73 Trade Payables 24.67 - - 24.67 24.67 Other Financial Liabilities 1,475.38 6.64 - 1,482.02 1,482.02
31st March, 2018 Borrowings (including current maturity) 516.69 1,470.29 1,358.67 3,345.65 3,341.25 Interest payable on above borrowings 241.88 1,036.68 382.14 1,660.70 65.37 Trade Payables 20.17 - - 20.17 20.17 Other Financial Liabilities 370.30 - - 370.30 370.30
01st April, 2017 Borrowings (including current maturity) 807.88 304.40 1,356.90 2,469.18 2,469.18 Interest payable on above borrowings 145.97 564.70 374.94 1,085.61 24.38 Trade Payables 12.96 - - 12.96 12.96 Other Financial Liabilities 881.70 - - 881.70 881.70
The table has been drawn up based on the undiscounted contractual maturities of the financial liabilities including interest that will be paid on those liabilities upto the maturity of the instruments, ignoring the call and refinancing options available with the Company. The amounts included above for variable interest rate instruments for non-derivative 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.
The amounts included above for variable interest rate instruments for non-derivative 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.
The amounts excludes financial guarantee contracts the Company could be forced to settle under the 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 an amount will not be payable under the arrangement. However, this estimate is subject to change depending on the probability of the counterparty claiming under the guarantee which is a function of the likelihood that the financial receivables held by the counterparty which are guaranteed suffer credit losses.
(iv) Financing facilities For the year ended For the year ended For the year ended 31st March, 2019 31st March, 2018 01st April, 2017 ₹ Crores ₹ Crores ₹ Crores Unsecured bank overdraft, reviewed annually and payable at call: Amount used - - 0.51 Amount unused 60.00 60.00 59.49 Tata Power Renewable Energy Limited Notes forming part of Financial Statements
32 Restated Financial Statements for the year ended 31st March, 2018 and 1st April, 2017 32.1 Restated Balance Sheet as at 31st March, 2018 All amount are in ₹ crores unless otherwise stated Reported amount Refer Note Restatements / Restated amount as Particulars as at 31st March, below Regrouping at 31st March, 2018 2018
ASSETS Non-current Assets (a) Property, plant and equipment 1 3,754.32 (47.36) 3,706.96 (b) Capital Work-in-Progress 699.75 - 699.75 (c) Financial Assets (i) Investments 3,818.01 - 3,818.01 (ii) Loans 2 261.96 0.81 262.77 (iii) Other Financial Assets 2 8.84 (0.81) 8.03 (d) Deferred Tax Asset 3 - 19.57 19.57 (e) Non-current Tax Assets (Net) 11.38 - 11.38 (f) Other Non-current Assets 22.01 - 22.01 Total Non-current Assets 8,576.27 (27.79) 8,548.48
Current Assets (a) Financial Assets (i) Investments 33.27 - 33.27 (ii) Trade Receivables 60.54 - 60.54 (iii) Unbilled Revenue 58.60 - 58.60 (iv) Cash and cash Equivalents 27.41 - 27.41 (v) Bank Balances other than (iv) above 0.01 - 0.01 (vi) Loans 8.06 - 8.06 (vii) Other financial assets 107.62 - 107.62 (b) Other Current Assets 1.80 - 1.80 Total Current Assets 297.31 - 297.31
TOTAL ASSETS 8,873.57 (27.79) 8,845.78
EQUITY AND LIABILITIES Equity (a) Equity Share Capital 1,045.11 - 1,045.11 (b) Unsecured Perpetual Securities 3,895.00 - 3,895.00 (c) Other Equity 160.49 57.76 102.73 Total Equity 5,100.60 57.76 5,042.84
LIABILITIES Non-current Liabilities (a) Financial Liabilities (i) Borrowings 2,826.91 - 2,826.91 (b) Provisions 3.84 - 3.84 (c) Deferred Tax Liabilities (Net) 3 5.36 5.36 - (d) Other Non-current Liabilities 1 & 3 45.65 (37.05) 82.70 Total Non-current Liabilities 2,881.76 (31.69) 2,913.45
Current Liabilities (a) Financial Liabilities (i) Borrowings 495.60 - 495.60 (ii) Trade Payables (a) Total outstanding dues of micro enterprises and small enterprises - - - (b) Total outstanding dues of creditors other than micro enterprises and small 20.17 - 20.17 (iii) Otherenterprises Financial Liabilities 370.30 - 370.30 (b) Provisions 0.11 - 0.11 (c) Other Current Liabilities 1 5.03 1.71 3.32 Total Current Liabilities 891.21 1.71 889.50 Total Liabilities 3,772.97 (29.98) 3,802.95
TOTAL EQUITY AND LIABILITIES 8,873.57 27.79 8,845.79 Tata Power Renewable Energy Limited Notes forming part of Financial Statements
32.2 Restated Balance Sheet as at 1st April, 2017 All amount are in ₹ crores unless otherwise stated
Reported amount Restated amount Refer Note Restatements / Particulars as at 1st April, as at 1st April, below Regrouping 2017 2017
ASSETS Non-current Assets (a) Property, plant and equipment 2,532.48 - 2,532.48 (b) Capital Work-in-Progress 747.87 - 747.87 (c) Financial Assets (i) Investments 3,887.92 - 3,887.92 (ii) Loans 2 - 0.21 0.21 (iii) Other Financial Assets 2 0.21 (0.21) - (d) Deferred Tax Asset 3 - 0.23 0.23 (e) Non-current Tax Assets (Net) 7.14 - 7.14 (f) Other Non-current Assets 16.91 - 16.91 Total Non-current Assets 7,192.53 0.23 7,192.76
Current Assets (a) Financial Assets (i) Investments 266.55 - 266.55 (ii) Trade Receivables 39.40 - 39.40 (iii) Unbilled Revenue 37.32 - 37.32 (iv) Cash and cash Equivalents 72.44 - 72.44 (v) Bank Balances other than (iv) above 51.11 - 51.11 (vi) Loans 410.90 - 410.90 (vii) Other financial assets 88.12 - 88.12 (b) Other Current Assets 0.95 - 0.95 Total Current Assets 966.79 - 966.79
TOTAL ASSETS 8,159.32 0.23 8,159.55
EQUITY AND LIABILITIES Equity (a) Equity Share Capital 566.11 - 566.11 (b) Share Application Money Pending Allotment 168.00 - 168.00 (c) Unsecured Perpetual Securities 3,895.00 - 3,895.00 (d) Other Equity 3 114.12 47.52 66.60 Total Equity 4,743.23 (47.52) 4,695.71
LIABILITIES Non-current Liabilities (a) Financial Liabilities (i) Borrowings 1,661.30 - 1,661.30 (b) Deferred Tax Liabilities (Net) 3 19.20 19.20 - (c) Other Non-current Liabilities 1 & 3 - (66.95) 66.95 Total Non-current Liabilities 1,680.50 (47.75) 1,728.25
Current Liabilities (a) Financial Liabilities (i) Borrowings 794.76 - 794.76 (ii) Trade Payables (a) Total outstanding dues of micro enterprises and small enterprises - - - (b) Total outstanding dues of creditors other than micro enterprises and small enterprises 12.96 - 12.96 (iii) Other Financial Liabilities 919.19 - 919.19 (b) Other Current Liabilities 8.68 - 8.68 Total Current Liabilities 1,735.59 - 1,735.59 Total Liabilities 3,416.09 (47.75) 3,463.84
TOTAL EQUITY AND LIABILITIES 8,159.32 (0.23) 8,159.55 Tata Power Renewable Energy Limited Notes forming part of Financial Statements
32.3 Restated Statement of Profit and Loss for the year ended 31st March, 2018 All amount are in ₹ crores unless otherwise stated
Reported amount Restated amount for the Particulars Refer Note for the year ended Restatements year ended 31st March, 31st March, 2018 2018
I Revenue from operations 1 & 3 494.39 (8.29) 486.10 II Other Income 173.46 - 173.46 III Total Income (I + II) 667.85 (8.29) 659.56
IV Expenses Employee Benefits Expense 5.68 - 5.68 Finance Costs 3 200.50 8.38 208.88 Depreciation and Amortisation Expenses 1 208.91 (0.92) 207.99 Other Expenses 47.75 - 47.75 Total Expenses 462.84 7.46 470.30
V Profit Before Tax (III + IV) 205.01 (15.75) 189.26
VI Tax Expense Current Tax 17.60 - 17.60 MAT Credit (43.88) - (43.88) Deferred Tax 3 29.88 (5.50) 24.38 Total Tax Expense 3.60 (5.50) (1.90)
VII Profit For The Period (V - VI) 201.41 (10.25) 191.16
VIII Other Comprehensive Income Add/(Less): (i) Items that will not be reclassified to profit and loss (a) Remeasurement of the Defined Benefit Plans 0.47 - 0.47 (ii) Tax relating to items that will not be reclassified to profit or loss (a) Current Tax - - - (b) Deferred Tax 0.16 - 0.16 Total Other Comprehensive Income 0.31 - 0.31
IX Total Comprehensive Income for the period (VII + VIII) 201.72 (10.25) 191.47
32.4 Reconciliation of Total Equity as at 31st March, 2018 and as at 1st April, 2017
As at As at 31st March, 2018 01st April, 2017 ₹ Crores ₹ Crores Equity as per Reported Financial Statements (a) Equity Share Capital 1,045.11 566.11 (b) Other Equity 160.49 114.12 (c ) Share Application money pending allotment - 168.00 (d ) Unsecured Perpetual Securities 3,895.00 3,895.00 5,100.60 4,743.23
Impact of Ind AS 115 (d) Revenue (57.46) (50.09) (e) Finance Cost (25.24) (16.86) (f) Tax expense 24.94 19.43 Equity as per Restated Financial Statements 5,042.84 4,695.71
Notes:
1 The Company was disclosing Government grant as non-financial liability till 31st March, 2018. Considering the amendment in Ind-AS 20, the Company has netted off the government grant from carrying value of property, plant and equipment retrospectively. This has resulted in to reduction in property, plant and equipment by ₹ 47.36 Crores as at 31st March, 2018 (1st April, 2017 – ₹ Nil). The corresponding reduction in current liability is ₹ 1.71 Crores (1st April, 2017 - ₹ Nil) and the reduction in non-current liability is ₹ 45.65 Crores (1st April, 2017 – ₹ Nil). The revenue from operations and depreciation has reduced by ₹ 0.92 Crores for the year ended 31st March, 2018.
2 The Company has reclassified the security deposits ₹ 0.81 Crores (1st April, 2017 – ₹ 0.21 Crores) amount from other financial asset to Loans as per schedule III of the Companies Act, 2013.
3 Effective 1st April, 2018, the Company has adopted Ind AS 115 ‘Revenue from contract with customers’ using full retrospective method. The application of Ind AS 115 has impacted recognition of power supply revenue.
On application of Ind-AS 115, the retained earnings is lower by ₹ 47.52 Crores, net of tax effect. The impact on the financial statements of the Company vis-à-vis the financial statements originally published for the year ended is as follows:
Amount in ₹ Crores Particulars For the year ended 31st March, 2018 Revenue (7.37) Finance Cost 8.38 Tax (5.50) Profit After Tax (10.25) Changes in Basic Earnings per Share (0.12) Changes in Diluted Earnings per Share (0.11)
The impact on balance sheet as at 31st March 2018 and 31st March 2017 is as follows: Amount in ₹ Crores As at As at Particulars 31st March, 2018 1st April, 2017 Deferred revenue liability 82.70 66.95 Deferred tax asset 19.57 0.23 Deferred tax Liability - (19.20) *figures in bracket signify negative impact on the respective line items. Tata Power Renewable Energy Limited Notes forming part of Financial Statements
33. Micro and small enterprises under the Micro, Small and Medium Enterprises Development Act, 2006 have been determined based on the information available with the Company and the required disclosures are given below:
31st March, 2019 31st March, 2018 01st April, 2017 ₹ Crores ₹ Crores ₹ Crores
(a) Principal amount remaining unpaid as on 31st March 0.03 - - (b) Interest due thereon as on 31st March - - - (c) The amount of Interest paid along with the amounts of the payment - - - made to the supplier beyond the appointed day * (d) The amount of Interest due and payable for the year * - - - (e) The amount of Interest accrued and remaining unpaid as at 31st - - - March *
(f) The amount of further interest due and payable even in the - - - succeeding years, until such date when the interest dues as above are actually paid *
Dues to Micro and small enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors. * Amounts unpaid to Micro and small enterprises vendors on account of retention money have not been considered for the purpose of interest calculation.
34. Operating Segments: The Company generates electric power from wind and solar energy which is considered to be a single segment and there are no other reportable segment as per IND AS 108 - Operating Segments.
35. During the year, Andhra Pradesh Regulatory Electricity Commission (APERC) vide its order dated 28th July 2018 allowed the DISCOMs to deduct the amount of Generation Based Incentive (GBI) out of monthly bills paid to wind power generators. The Company has filed a writ petition with Hyderabad High Court against this order and obtained a stay on the order passed by APERC. Based on the legal opinion obtained, the Company believes it has a strong case on merit and has accordingly continued to recognise GBI revenue amounting to ₹ 19.56 crores (including ₹ 9.99 crores for the current financial year) in the financial statements.
36. MAT credit for the year ended 31st March, 2019 is net off reversal of earlier year of ₹ 10.90 crore. MAT credit for the year ended 31st March, 2018 includes ₹ 28.66 crore relating to earlier years.
37. The Board of Directors of the Company at its meeting held on 24th July, 2017 has considered and approved the "Scheme of Amalgamation"(“the Scheme”) under Section 232 and other applicable provisions, if any, of the Companies Act, 2013 between Tata Power Renewable Energy Limited ("transferee company”, "holding company") for transfer of the entire business and the whole of the undertaking of the Indo Rama Renewables Jath Limited ("subsidiary company") on a going concern basis to the transferee company with effect from 01st April, 2017 (appointed date). As on 31st March, 2019, the subsidiary company has net fixed assets of ₹ 133.83 crore, net worth ₹ 59.58 crore and total income ₹ 37.41 crores, profit after tax ₹ 4.51 crore for the period ended 31st March, 2019. The Company is in the process of filing the Scheme with National Company Law Tribunal (NCLT). Accordingly, no effect of the proposed Scheme has been given in the financial statements. Tata Power Renewable Energy Limited Notes forming part of Financial Statements
38. The Board of Directors of the Company at its meeting held on 17th December, 2015 & 15th May, 2017 has considered and approved the "Scheme of Amalgamation"(“the Scheme”) under Section 232 and other applicable provisions, if any, of the Companies Act, 2013 for transfer of 379.5 MW renewable assets as a going concern on a Slump Sale basis from The Tata Power Company Ltd ("transferor company”, "holding company") to the Company and its wholly owned subsidiaries ("transferee companies”, "subsidiary companies") with effect from the date when Scheme is approved by the competent authority. The Company has filed the necessary petition before the National Company Law Tribunal (NCLT).
39. Events occurring after reporting period: There was no significant event after the end of the reporting period which require any adjustment or disclosure in the financial statement.
40. Approval of Financial Statements The financial statements were approved by the Board of Directors on 24th April, 2019.
For S R B C & Co LLP For and on behalf of the Board, Chartered Accountants ICAI Firm registration number: 324982E/E300003
per Abhishek Agarwal Ashish Khanna Ramesh Subramanyam Partner Director Director Membership No.: 112773
Mahesh Paranjpe Gautam Attravanam Mona Purandare Chief Executive Officer Chief Financial Officer Company Secretary
Mumbai, 24th April, 2019 Mumbai, 24th April, 2019 TATA POWER RENEWABLE ENERGY LIMITED
INDEPENDENT AUDITOR’S REPORT
To the Members of Tata Power Renewable Energy Limited
Report on the Audit of the Consolidated Ind AS Financial Statements
Opinion
We have audited the accompanying consolidated Ind AS financial statements of Tata Power Renewable Energy Limited (hereinafter referred to as “the Holding Company”) and its subsidiaries (the Holding Company and its subsidiaries together referred to as “the Group”) comprising of the consolidated Balance sheet as at March 31, 2019, the consolidated Statement of Profit and Loss, including other comprehensive income, the consolidated Cash Flow Statement and the consolidated Statement of Changes in Equity for the year then ended, and notes to the consolidated Ind AS financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as “the consolidated Ind AS financial statements”). In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of reports of other auditors on separate financial statements and on the other financial information of the subsidiaries, the aforesaid consolidated Ind AS financial statements give the information required by the Companies Act, 2013, as amended (“the Act”) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the consolidated state of affairs of the Group, as at March 31, 2019, their consolidated profit including other comprehensive income, their consolidated cash flows and the consolidated statement of changes in equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the consolidated Ind AS financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ‘Auditor’s Responsibilities for the Audit of the Consolidated Ind AS Financial Statements’ section of our report. We are independent of the Group in accordance with the ‘Code of Ethics’ issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the consolidated Ind AS financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated Ind AS financial statements for the financial year ended March 31, 2019. These matters were addressed in the context of our audit of the consolidated Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the consolidated Ind AS financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the consolidated Ind AS financial statements. The results of audit procedures performed by us, including those procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying consolidated Ind AS financial statements.
TATA POWER RENEWABLE ENERGY LIMITED
Key audit matters How our audit addressed the key audit matter Recognition and recoverability of tax credit (as described in note 11 of the consolidated Ind AS financial statements) The Group has recognized Minimum Alternate Our audit procedures included considering the Tax (MAT) credit receivable of Rs. 291.10 Group's accounting policies with respect to crores as at March 31, 2019. recognition of MAT credits in accordance with Ind AS 12 “Income Taxes”
The recognition of MAT credit is a key audit We performed test of controls over recognition of matter as the recoverability of such MAT credits MAT credits through inspection of evidence of within the allowed time frame involves performance of these controls. significant estimate of the financial projections, availability of sufficient taxable income in the We performed the following tests of details: future and significant judgements in the We discussed the financial projections and interpretation of tax regulations and tax future business plans with the management positions adopted by the Group. We assessed the key assumptions used in the financial projections by comparing it to the approved business plan and projections used for impairment assessment where applicable We involved our tax specialists who evaluated the reasonableness of the Group’s tax positions by comparing it with prior years and past precedents Tested the arithmetical accuracy of the tax computations, future projections of taxable profits including its correlation with the annual business plans approved by the respective Board of Directors
We verified the adequacy of disclosures in accordance with the requirements of Ind AS 12 “Income Taxes”
Impairment of Assets (as described in note 4, 5a and 5b of the consolidated Ind AS financial statements)
The Group tests the Goodwill acquired in Our audit procedures included considering the business combination for impairment annually Group's accounting policies with respect to and for other assets, the Group assesses at the impairment in accordance with Ind AS 36 end of every reporting period, whether there is “Impairment of assets” any indication that an asset or cash generating unit (CGU) may be impaired. If any such We performed test of controls over impairment indication exists, the Group estimates the process through inspection of evidence of recoverable amount of such asset or CGU. performance of these controls.
The determination of recoverable amount, We performed the following tests of details: being the higher of fair value less costs to sell We obtained the management’s impairment and value-in-use involves significant estimates, assessment assumptions and judgements of the long term We evaluated the key assumptions including financial projections. projected generation and weighted average cost of capital by comparing them with prior The Group is carrying Goodwill of Rs. 1,636.03 years and external data, where available. crores relating to acquisition of renewable We discussed the future business plans and energy businesses. During the year the Group financial projections with the management. has reassessed its impairment assessment. We evaluated the sensitivity analysis prepared by the Group
TATA POWER RENEWABLE ENERGY LIMITED Impairment of assets and goodwill is a key audit We assessed the disclosures in accordance with matter considering the significance of the Ind AS 36 “Impairment of assets”. carrying value, long term estimation and the significant judgements involved in the impairment assessment.
Disputes with customers (as described in note 15 and 43 of the consolidated Ind AS financial statements) The Group sells power to various customers in Our audit procedures included the following: accordance with the long term Power Purchase We read the relevant PPAs with the customer Agreements (PPA) entered with them and evaluated relevant clauses to understand terms of PPA. The Group has certain disputes with its With respect to the disputed matters, we have customers. In a subsidiary Company of the obtained and read the case documents Group, the customer is not making payment for including petitions filed, grounds of appeal, energy supplied in excess of 19% capacity respondent claims, any orders of the lower utilization factor (CUF). The total amount not Courts or authorities including any similar paid by the customer on this account amounts cases. to Rs. 47.84 crores as at March 31, 2019. We have read the legal opinions obtained by Further in case of the Holding Company, the the management relating to the dispute to customer is deducting the amount of Generation obtain understanding of the management’s Based Incentives (GBI) while making payment assessment of realization of disputed of power invoices. The total amount deducted receivables on this account till March 31, 2019 is Rs. 19.56 We assessed the disclosure of the disputed crores. matters in the financial statements.
Disputes with customers is a key audit matter considering the significance of the amount and the judgement involved in assessing the realizability of trade receivables.
Information Other than the Financial Statements and Auditor’s Report Thereon
The Holding Company’s Board of Directors is responsible for the other information. The other information comprises the information included in the Director’s report, but does not include the consolidated Ind AS financial statements and our auditor’s report thereon.
Our opinion on the consolidated Ind AS financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated Ind AS financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management for the Consolidated Ind AS Financial Statements
The Holding Company’s Board of Directors is responsible for the preparation and presentation of these consolidated Ind AS financial statements in terms of the requirements of the Act that give a true and fair view of the consolidated financial position, consolidated financial performance including other comprehensive income, consolidated cash flows and consolidated statement of changes in equity of the Group in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian TATA POWER RENEWABLE ENERGY LIMITED
Accounting Standards) Rules, 2015, as amended. The respective Board of Directors of the companies included in the Group are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Group and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the consolidated Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated Ind AS financial statements by the Directors of the Holding Company, as aforesaid. In preparing the consolidated financial statements, the respective Board of Directors of the companies included in the Group are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Those respective Board of Directors of the companies included in the Group are also responsible for overseeing the financial reporting process of the Group.
Auditor’s Responsibilities for the Audit of the Consolidated Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated Ind AS financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated Ind AS financial statements. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the consolidated Ind AS financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Holding Company has adequate internal financial controls system in place and the operating effectiveness of such controls. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Group to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated Ind AS financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. TATA POWER RENEWABLE ENERGY LIMITED
• Evaluate the overall presentation, structure and content of the consolidated Ind AS financial statements, including the disclosures, and whether the consolidated Ind AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation. • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group of which we are the independent auditors and whose financial information we have audited, to express an opinion on the consolidated Ind AS financial statements. We are responsible for the direction, supervision and performance of the audit of the financial statements of such entities included in the consolidated financial statements of which we are the independent auditors. For the other entities included in the consolidated financial statements, which have been audited by other auditors, such other auditors remain responsible for the direction, supervision and performance of the audits carried out by them. We remain solely responsible for our audit opinion. We communicate with those charged with governance of the Holding Company and such other entities included in the consolidated Ind AS financial statements of which we are the independent auditors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated Ind AS financial statements for the financial year ended March 31, 2019 and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Other Matter
(a) We did not audit the financial statements and other financial information, in respect of 3 subsidiaries, whose Ind AS financial statements include total assets of Rs. 0.11 crores as at March 31, 2019, and total revenues of Rs. Nil and net cash outflows of Rs. 0.02 crores for the year ended on that date. These Ind AS financial statement and other financial information have been audited by other auditors, which financial statements, other financial information and auditor’s reports have been furnished to us by the management. Our opinion on the consolidated Ind AS financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, and our report in terms of sub-sections (3) of Section 143 of the Act, in so far as it relates to the aforesaid subsidiaries, is based solely on the reports of such other auditors.
(b) The comparative Ind AS financial information of the Company for the corresponding year as at April 1, 2017 included in these Ind AS Financial Statements, were audited by the predecessor auditor whose report for the year ended March 31, 2017 dated May 15, 2017 expressed an unmodified opinion on those Ind AS financial statements. The comparative financial information is based on the previous Ind AS financial statements prepared in accordance with the principles laid down in the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Companies Act, 2013, read with relevant rules issued thereunder and other accounting principles generally accepted in India, and is adjusted for the differences as explained in note 36.1 of these Ind AS financial statements, which have been audited by us. Our opinion above on the consolidated Ind AS financial statements, and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors and the financial statements and other financial information certified by the Management.
TATA POWER RENEWABLE ENERGY LIMITED
Report on Other Legal and Regulatory Requirements
As required by Section 143(3) of the Act, based on our audit and on the consideration of report of the other auditors on separate financial statements and the other financial information of subsidiaries, as noted in the ‘other matter’ paragraph we report, to the extent applicable, that:
(a) We/the other auditors whose report we have relied upon have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated Ind AS financial statements;
(b) In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidation of the financial statements have been kept so far as it appears from our examination of those books and reports of the other auditors;
(c) The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Consolidated Cash Flow Statement and Consolidated Statement of Changes in Equity dealt with by this Report are in agreement with the books of account maintained for the purpose of preparation of the consolidated Ind AS financial statements;
(d) In our opinion, the aforesaid consolidated Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of the written representations received from the directors of the Holding Company as on March 31, 2019 taken on record by the Board of Directors of the Holding Company and the reports of the statutory auditors who are appointed under Section 139 of the Act, of its subsidiary companies, none of the directors of the Group’s companies, incorporated in India is disqualified as on March 31, 2019 from being appointed as a director in terms of Section 164 (2) of the Act;
(f) With respect to the adequacy and the operating effectiveness of the internal financial controls over financial reporting with reference to these consolidated Ind AS financial statements of the Holding Company and its subsidiary companies, incorporated in India, refer to our separate Report in “Annexure 1” to this report;
(g) In our opinion and based on the consideration of reports of other statutory auditors of the subsidiaries incorporated in India, the managerial remuneration for the year ended March 31, 2019 has been paid / provided by the Holding Company and its subsidiaries incorporated in India to their directors in accordance with the provisions of section 197 read with Schedule V to the Act;
(h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us and based on the consideration of the report of the other auditors on separate financial statements as also the other financial information of the subsidiaries, as noted in the ‘Other matter’ paragraph:
i. The consolidated Ind AS financial statements disclose the impact of pending litigations on its consolidated financial position of the Group, in its consolidated Ind AS financial statements – Refer Note 31 to the consolidated Ind AS financial statements;
ii. Provision has been made in the consolidated Ind AS financial statements, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts – Refer Note 20 to the consolidated Ind AS financial statements in respect of such items as it relates to the Group,
TATA POWER RENEWABLE ENERGY LIMITED
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Holding Company and its subsidiaries incorporated in India during the year ended March 31, 2019.
For S R B C & CO LLP Chartered Accountants ICAI Firm Registration Number: 324982E/E300003
______per Abhishek Agarwal Partner Membership Number: 112773 Place of Signature: Mumbai Date: April 24, 2019
TATA POWER RENEWABLE ENERGY LIMITED
ANNEXURE 1 TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE CONSOLIDATED FINANCIAL STATEMENTS OF TATA POWER RENEWABLE ENERGY LIMITED
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)
In conjunction with our audit of the consolidated financial statements of Tata Power Renewable Energy Limited as of and for the year ended March 31, 2019, we have audited the internal financial controls over financial reporting of Tata Power Renewable Energy Limited (hereinafter referred to as the “Holding Company”) and its subsidiary companies, which are companies incorporated in India, as of that date.
Management’s Responsibility for Internal Financial Controls
The respective Board of Directors of the Holding Company and its subsidiary companies, which are companies incorporated in India, are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Holding Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the respective company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
Auditor’s Responsibility
Our responsibility is to express an opinion on the company's internal financial controls over financial reporting with reference to these consolidated financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, both, issued by Institute of Chartered Accountants of India, and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting with reference to these consolidated financial statements was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls over financial reporting with reference to these consolidated financial statements and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting with reference to these consolidated financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditors in terms of their reports referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls over financial reporting with reference to these consolidated financial statements.
Meaning of Internal Financial Controls Over Financial Reporting With Reference to these Consolidated Financial Statements
A company's internal financial control over financial reporting with reference to these consolidated financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting with reference to these consolidated financial statements includes those policies and procedures that TATA POWER RENEWABLE ENERGY LIMITED (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting With Reference to these Consolidated Financial Statements
Because of the inherent limitations of internal financial controls over financial reporting with reference to these consolidated financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting with reference to these consolidated financial statements to future periods are subject to the risk that the internal financial control over financial reporting with reference to these consolidated financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Holding Company and its subsidiary companies, which are companies incorporated in India, have, maintained in all material respects, adequate internal financial controls over financial reporting with reference to these consolidated financial statements and such internal financial controls over financial reporting with reference to these consolidated financial statements were operating effectively as at March 31, 2019, based on the internal control over financial reporting criteria established by the Holding Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
Other Matters
Our report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting with reference to these consolidated financial statements of the Holding Company, insofar as it relates to these 3 subsidiary companies, which are companies incorporated in India, is based on the corresponding reports of the auditors of such subsidiary incorporated in India.
For S R B C & CO LLP Chartered Accountants ICAI Firm Registration Number: 324982E/E300003
______per Abhishek Agarwal Partner Membership Number: 112773 Place of Signature: Mumbai Date: April 24, 2019
Tata Power Renewable Energy Limited Consolidated Balance Sheet as at 31st March, 2019
As at As at As at Notes 31st March, 2019 31st March, 2018 * 1st April, 2017 * ₹ crore ₹ crore ₹ crore ASSETS Non-current Assets (a) Property, Plant and Equipments 4 10,257.36 9,667.74 8,579.30 (b) Capital Work-in-Progress 1,569.53 709.03 793.71 (c) Goodwill 5a 1,636.03 1,636.03 1,648.03 (d) Other Intangible Assets 5b 1,227.76 1,286.33 1,348.51 (e) Financial Assets (i) Other Investments 6 - - - (ii) Loans 7 84.30 80.51 0.47 (iii) Finance Lease Receivables 8 11.35 - - (iv) Other Financial Assets 9 310.18 272.74 246.85 (f) Non-current Tax Assets (Net) 10 47.99 40.53 26.80 (g) Deferred Tax Assets (Net) 11a 80.85 108.63 118.29 (h) Other Non-current Assets 12 85.18 55.09 67.61 Total Non-current Assets 15,310.53 13,856.63 12,829.57
Current Assets (a) Inventories 13 19.55 13.20 13.75 (b) Financial Assets (i) Investments 14 89.43 73.26 414.63 (ii) Trade Receivables 15 650.00 333.43 429.79 (iii) Unbilled Revenue 187.29 169.94 39.64 (iv) Cash and Cash Equivalents 16a 65.56 72.46 86.11 (v) Bank Balances other than (iv) above 16b 22.06 0.08 67.81 (vi) Loans 7 90.05 30.71 5.82 (vii) Finance Lease Receivables 8 0.32 - - (viii) Other Financial Assets 9 179.09 54.41 78.09 (c) Current Tax Assets (Net) 10 1.48 14.77 28.68 (d) Other Current Assets 12 11.34 18.13 14.38 Total Current Assets 1,316.17 780.39 1,178.70
Assets Classified as Held For Sale 16 131.27 - -
TOTAL ASSETS 16,757.97 14,637.02 14,008.27
EQUITY AND LIABILITIES Equity (a) Equity Share Capital 17a 1,045.11 1,045.11 566.11 (b) Share Application Money Pending Allotment - - 168.00 (c) Unsecured Perpetual Securities 17b 3,895.00 3,895.00 3,895.00 (d) Other Equity 18 486.72 224.84 122.54 Equity attributable to Shareholders of the Company 5,426.83 5,164.95 4,751.65 Non-controlling Interests - - 21.09 Total Equity 5,426.83 5,164.95 4,772.74
LIABILITIES Non-current Liabilities (a) Financial Liabilities (i) Borrowings 19 7,466.79 7,161.00 5,682.57 (ii) Other Financial Liabilities 20 6.64 - - (b) Deferred Tax Liabilities (Net) 11b 250.12 232.77 271.15 (c) Provisions 22 7.00 8.34 0.65 (d) Other Non-current Liabilities 23 205.10 167.62 140.72 Total Non-current Liabilities 7,935.65 7,569.73 6,095.09 Current Liabilities (a) Financial Liabilities (i) Borrowings 24 1,103.91 875.93 839.94 (ii) Trade Payables (a) Total outstanding dues of micro and small 1.11 - - enterprises (b) Total outstanding dues of creditors other than 59.46 65.47 38.11 micro and small enterprises (iii) Other Financial Liabilities 20 2,206.84 920.46 2,239.17 (b) Current Tax Liabilities (Net) 21 2.40 7.45 1.52 (c) Provisions 22 0.32 0.46 0.22 (d) Other Current Liabilities 23 21.45 32.57 21.48 Total Current Liabilities 3,395.49 1,902.34 3,140.44
TOTAL EQUITY AND LIABILITIES 16,757.97 14,637.02 14,008.27
* Restated (Refer Note 2.1, 36 and 36.1)
See accompanying notes to the Consolidated Financial Statements
As per our report of even date For and on behalf of the Board,
For S R B C & CO LLP Ashish Khanna Ramesh Subramanyam Chartered Accountants Director Director ICAI Firm Registration No: 324982E/E300003 DIN: 06699527 DIN: 02421481
per Abhishek Agarwal Mahesh Paranjpe Gautam Attravanam Mona Purandare Partner Chief Executive Officer Chief Financial Officer Company Secretary Membership No. 112773
Mumbai, 24th April, 2019 Mumbai, 24th April, 2019 Tata Power Renewable Energy Limited Consolidated Statement of Profit and Loss for the year ended 31st March, 2019
For the year ended For the year ended Notes 31st March, 2019 31st March, 2018 * ₹ crore ₹ crore
I Revenue from Operations 25 2,045.77 1,745.30 II Other Income 26 46.90 41.70 III Total Income 2,092.67 1,787.00 IV Expenses Employee Benefits Expenses (Net) 27 27.90 25.32 Finance Costs 28 773.66 697.89 Depreciation and Amortisation Expenses 5b. 606.20 543.77 Other Expenses 29 181.02 150.34 Total Expenses 1,588.78 1,417.32
V Profit Before Exceptional Items and Tax 503.89 369.68 Less: Exceptional Items Impairment Charge on Goodwill - 12.00
VI Profit Before Tax 503.89 357.68
VII Tax Expense Current Tax 30 130.52 113.30 Deferred Tax 44.92 (28.89) 175.44 84.41
VIII Profit for the Year 328.45 273.27
IX Other Comprehensive Income/(Expenses) A Add/(Less): (i) Items that will not be reclassified to profit or loss Remeasurement of the Defined Benefit Plans 22 1.11 0.62 (ii) Income tax relating to items that will not be reclassified to profit or loss (a) Current Tax (0.12) - (a) Deferred Tax 11b (0.20) (0.15)
0.79 0.47
X Total Comprehensive Income for the Year 329.24 273.74 Profit for the year attributable to: - Owners of the Company 328.45 271.59 - Non-controlling interest - 1.68 328.45 273.27 Other Comprehensive Income for the year attributable to: - Owners of the Company 0.79 0.47 - Non-controlling interest - - 0.79 0.47 Total Comprehensive Income for the year attributable to: - Owners of the Company 329.24 272.06 - Non-controlling interest - 1.68 329.24 273.74 XI Basic and Diluted Earnings Per Equity Share (of ₹ 1/- each) (₹) 33 (i) Basic (₹) 3.14 3.18 (ii) Diluted (₹) 3.14 3.03
* Restated (Refer Note 2.1 & 37)
See accompanying notes to the Consolidated Financial Statements
As per our report of even date For and on behalf of the Board,
For S R B C & CO LLP Chartered Accountants Ashish Khanna Ramesh Subramanyam ICAI Firm Registration No: 324982E/E300003 Director Director DIN: 06699527 DIN: 02421481
per Abhishek Agarwal Mahesh Paranjpe Gautam Attravanam Mona Purandare Partner Chief Executive Officer Chief Financial Officer Company Secretary Membership No. 112773
Mumbai, 24th April, 2019 Mumbai, 24th April, 2019 Tata Power Renewable Energy Limited Consolidated Statement of Cash Flows for the year ended 31st March, 2019 For the year ended For the year ended 31st March, 2019 31st March, 2018* ₹ crore ₹ crore A. Cash Flow from Operating Activities
Profit before tax 503.89 357.68
Adjustments to reconcile Profit Before Tax to Net Cash Flows: Depreciation and Amortisation Expense 606.20 543.77 Impairment in respect of Goodwill - 12.00 (Gain)/Loss on Disposal of Property, Plant and Equipment (Net) 4.82 3.53 Finance Cost (Net of Capitalisation) 773.66 697.89 Interest Income (21.43) (4.52) Finance Income from Service Concession arrangement (39.96) - Other Non operating Income (16.01) - Gain on Sale/Fair Value of Current Investments measured at FVTPL (19.92) (25.87) Allowances for Doubtful Debts and Advances (Net) 2.76 2.05 Amortization of Premium Paid on Leasehold Land 2.58 2.15 Amortisation of deferred revenue 6.76 - Amortisation of deferred expense and income (2.82) - 1,296.64 1,231.00 1,800.53 1,588.68 Working Capital Adjustments: Adjustments for (increase)/decrease in Assets: Inventories (6.35) 0.55 Trade Receivables (319.46) 95.92 Unbilled Revenue (17.34) (130.30) Finance Lease Receivables (11.67) - Other Current Assets 6.26 (5.43) Other Non-current Assets (20.45) (5.34) Other Financial Assets - Current 12.14 28.45 Other Financial Assets - Non-Current (16.89) (19.84) Current Loan (0.28) - Non current Loan (0.08) - Movement in Operating Asset (374.12) (35.99)
Adjustments for (increase)/decrease in Liabilities: Trade Payables 2.92 27.36 Other Current Liabilities 0.27 2.03 Other Non-current Liabilities 18.58 5.03 Other Financial Liabilities - Current (73.43) (8.59) Current Provisions 0.47 0.24 Non-current Provisions 0.51 7.69 Movement in Operating Liability (50.68) 33.76 Cash Flow from Operations 1,375.73 1,586.45 Income-tax Paid (132.51) (107.04) Net Cash Flow from Operating Activities A 1,243.22 1,479.41 B. Cash Flow from Investing Activities Capital expenditure on Property, Plant and Equipment (including capital advances) (984.25) (2,018.07) Acquisition of lease hold land (0.39) 3.06 Insurance claim received 6.23 - Purchase of Current Investments (5,350.22) (6,533.33) Proceeds from sale of Current Investments 5,313.66 6,900.58 Consideration transferred on business combinations - (51.63) Inter-corporate Deposits (Net) (60.01) (104.51) Interest Received 7.81 2.02 Finance Income from Service Concession arrangement 39.96 - Interest on income tax refund 1.81 - Other Non operating Income 5.50 - Loans given to Holding company 402.10 - Repayment of loan by Holding company (402.10) - Bank Balance not considered as Cash and Cash Equivalents (21.99) 67.73 Net Cash Flow used in Investing Activities B (1,041.89) (1,734.15)
C. Cash Flow from Financing Activities Proceeds from Issue of Shares including shares issued to Minority Shareholders - 311.00 Proceeds from Non-current Borrowings 1,722.81 5,208.33 Repayment of Non-current Borrowings (1,338.63) (4,501.77) Proceeds from Current Borrowings 5,671.85 8,061.40 Repayment of Current Borrowings (5,516.90) (8,017.81) Proceeds from Subordinated Loan from Holding Company 295.00 - Repayment of Subordinated Loan from Holding Company (295.00) - Finance Cost Paid (619.45) (704.20) Dividend Paid (111.63) (95.84) Additional Income-tax on Dividend Paid (21.21) (19.51) Net Cash Flow from/(used in) Financing Activities C (213.16) 241.60
Net Increase in Cash and Cash Equivalents (A+B+C) (11.83) (13.14)
Cash and Cash Equivalents as at 1st April (Opening Balance) 72.46 85.60
Cash and Cash Equivalents as at 31st March (Closing Balance) 60.63 72.46 Tata Power Renewable Energy Limited Consolidated Statement of Cash Flows for the year ended 31st March, 2019 (Contd.)
Note:
1. Cash and cash equivalents include: As at As at 31st March, 2019 31st March, 2018* ₹ crore ₹ crore (a) Cheques on Hand - - (b) Balance with banks (i) In Current Accounts 48.00 72.44 (ii) In deposit accounts (with original maturity of three months or less) 17.56 0.02 (c) Bank Overdraft (4.93) -
Total 60.63 72.46
* Restated
See accompanying notes to the Consolidated Financial Statements
Reconciliation of liabilities from financing activities:
₹ crore Cash Flows Non-cash Particulars As at 1st April, Foreign As at 31st Changes / 2018 Additions Repayments Exchange March, 2019 Amortisation Long term borrowings (including current maturity of long term borrowings) 7,661.92 1,722.81 (1,338.63) 32.80 5.45 8,084.35 Short term borrowings (excluding bank overdraft) 875.93 5,966.85 (5,811.90) - 68.10 1,098.98 Total 8,537.85 7,689.66 (7,150.53) 32.80 73.55 9,183.33
Cash Flows Non-cash Particulars As at 1st April, Foreign As at 1st Reclass Changes / 2017 Additions Repayments Exchange April, 2018 Amortisatio Long term borrowings (including current maturity of long term borrowings) 6,918.37 5,208.33 (4,501.77) 4.61 34.38 (2.00) 7,661.92 Short term borrowings (excluding bank overdraft) 839.43 8,061.40 (8,017.58) - (34.38) 27.06 875.93 Total 7,757.80 13,269.73 (12,519.35) 4.61 - 25.06 8,537.85
As per our report of even date For and on behalf of the Board,
For S R B C & CO LLP Chartered Accountants Ashish Khanna Ramesh Subramanyam ICAI Firm Registration No: 324982E/E300003 Director Director DIN: 06699527 DIN: 02421481
per Abhishek Agarwal Mahesh Paranjpe Gautam Attravanam Mona Purandare Partner Chief Executive Officer Chief Financial Officer Company Secretary Membership No. 112773
Mumbai, 24th April, 2019 Mumbai, 24th April, 2019 Tata Power Renewable Energy Limited Consolidated Statement of Changes in Equity
A. Equity Share Capital ₹ crore No. of Shares Amount
Balance as at 1st April, 2017 56,61,07,715 566.11 Issued during the year 47,90,00,000 479.00 Balance as at 31st March, 2018 104,51,07,715 1,045.11 Issued during the period - - Balance as at 31st March, 2019 104,51,07,715 1,045.11
B. Unsecured Perpetual Securities ₹ crore Amount
Balance as at 1st April, 2017 3,895.00 Issued during the year - Balance as at 31st March, 2018 3,895.00 Issued during the period - Balance as at 31st March, 2019 3,895.00
C. Other Equity ₹ crore Description Reserves and Surplus Deemed Total Non- Total Other Equity Attributable controlling Equity Contribution to Owners of Interests Debenture Capital Retained the Group Redemption Reserve Earnings Reserve
Balance as at 1st April, 2017 * 47.59 8.08 57.94 8.93 122.54 21.09 143.63
Profit for the year - - 271.59 - 271.59 1.68 273.27 Other Comprehensive Income for the year (Net of Tax) - - 0.47 - 0.47 - 0.47 Total Comprehensive Income - - 272.06 - 272.06 1.68 273.74
Dividend paid (including tax on dividend)- Interim and final - - (180.54) - (180.54) - (180.54) Non-controlling interest on acquisition of Subsidiaries - 10.78 - - 10.78 (22.77) (11.99) Transfer to Debenture Redemption Reserve 59.16 - (59.16) - - - - Balance as at 31st March, 2018 * 106.75 18.86 90.30 8.93 224.84 - 224.84
Balance as at 31st March, 2018 * 106.75 18.86 90.30 8.93 224.84 - 224.84
Profit for the year - - 328.45 - 328.45 - 328.45 Other Comprehensive Income for the year (Net of Tax) - - 0.79 - 0.79 - 0.79 Total Comprehensive Income - - 329.24 - 329.24 - 329.24
Dividend paid (including tax on dividend)- Interim and final - - (67.36) - (67.36) - (67.36) Transfer to Debenture Redemption Reserve 105.44 - (105.44) - - - - Balance as at 31st March, 2019 212.19 18.86 246.74 8.93 486.72 - 486.72
* Restated (Refer Note 2.1, 36 and 36.1)
See accompanying notes to the Consolidated Financial Statements
As per our report of even date For and on behalf of the Board,
For S R B C & CO LLP Chartered Accountants Ashish Khanna Ramesh Subramanyam ICAI Firm Registration No: 324982E/E300003 Director Director DIN: 06699527 DIN: 02421481
per Abhishek Agarwal Mahesh Paranjpe Gautam Attravanam Mona Purandare Partner Chief Executive Officer Chief Financial Officer Company Secretary Membership No. 112773
Mumbai, 24th April, 2019 Mumbai, 24th April, 2019 Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
1. Corporate Information: The Tata Power Renewable Energy Ltd ("the Company"),a wholly owned subsidiary of The Tata Power Company Limited ("the Holding Company") is incorporated and domiciled in India and has its registered office at C/o The Tata Power Company Limited, Corporate Center B, 34 Sant Tukaram Road, Carnac Bunder Mumbai City - 400009.
The Company and its subsidiaries (collectively referred to as 'the Group') are engaged in business of generation and sale of electricity from renewable sources. Total generating capacity as at 31st March, 2019 is given below:
Company At at 31st March 2019 (in MW) At at 31st March 2018 (in MW) Solar Wind * Total Solar Wind Total Tata Power Renewable Energy Limited 472.77 354.20 826.97 270.00 354.20 624.20 Walwhan Renewable Energy Limited 864.00 146.00 1,010.00 864.00 146.00 1,010.00 and its subsidiaries Indo Rama Renewables Jath Limited - 30.00 30.00 - 30.00 30.00 Vagarai Windfarm Limited - 21.00 21.00 - 21.00 21.00 Total 1,336.77 551.20 1,887.97 1,134.00 551.20 1,685.20 * Including wind asset of 32 MW classfied as held for sale
400 MW of additional solar capacity is under construction. Power generated from operating assets is generally sold under long term power sale agreements to central and state power procurement companies as well as to the holding company.
The financial statements are prepared in Indian Rupees.
2.1 Statement of compliance The consolidated Ind AS financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as notified under the Companies (Indian Accounting Standards) Rules, 2015 read with section 133 of the Companies Act, 2013 (the Act) (as amended from time to time). The accounting policies adopted are consistent with those of the previous financial year except for adoption of Ind AS 115 Revenue from contract with customers and Ind AS 20 Accounting of government grant as given below:
2.1.1 Adoption of Ind AS 115 Revenue from Contract with Customers
The Group adopted Ind AS 115 ‘Revenue from contract with customers’ (Ind AS 115) effective 1st April 2018 using full retrospective method. Under the previous standard, the Group recognised revenue for power supplied at contracted rate as per power purchase agreement (PPA). The contracted rates are not even throughout the term of PPA in certain cases.
Under Ind AS 115, the Group has straight-lined the revenue recognition over the term of the PPA and has made adjustment for appropriate financing component.
On application of Ind AS 115, the retained earnings as at 1st April 2017 is lower by ₹ 67.09 crore, net of tax effect. The impact on the Statment of Profit and Loss for year ended is as follows:
Amount in ₹ Crores Particulars For the Year ended 31st March, 2018 Revenue from operations 17.61 Other Income 6.18 Finance Cost (17.02) Other expenses (13.77) Tax 1.78 Profit after tax (5.22) Change in Basic Earning per share 0.06 Change in Diluted Earning per share 0.06
Impact on the Equity of the Company Amount in ₹ Crores Particulars As at 31st As at 1st March, 2018 April, 2017 Equity as per reported financial statement 5,237.26 4,839.83
Impact under IND AS 115 Revenue straightlining and financing component (104.80) (97.82) Impact of tax on above 32.49 30.73
Equity as per restated financial statement 5,164.95 4,772.74
2.1.2 Ind AS 20 - Accounting for Government Grants and Disclosure
The Group was disclosing Government grant as non-financial liability till 31st March 2018. Considering the amendment in Ind-AS 20, the Group has netted off the government grant from carrying value of property, plant and equipment retrospectively. This has resulted in to reduction in property, plant and equipment by ₹ 53.91 crore as at 31st March 2018 (1st April, 2017 - ₹ 6.85 crore) with the corresponding reduction in current liability and non-current liability. The revenue from operations of ₹ 0.92 crore, other income of ₹ 0.30 crore and depreciation has reduced by ₹ 1.22 crore for the year ended 31st March 2018. 2.2 Basis of preparation and presentation The consolidated Ind AS financial statements have been prepared on a historical cost basis, except for the following assets and liabilities which have been measured at fair value - derivative financial instruments, - certain financial assets and liabilities measured at fair value (refer accounting policy regarding financial instruments). - employee benefit provision (refer accounting policy regarding Employee benefits)
2.3 Basis of Consolidation: The Company consolidates all entities which are controlled by it. The consolidated financial statements comprise the financial statements of the Company and its subsidiaries. Control exists when the parent has power over the entity, is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns by using its power over the entity. Power is demonstrated through existing rights that give the ability to direct relevant activities, those which significantly affect the entity’s returns. The entities are consolidated from the date control commences until the date control ceases.
The consolidated financial statements of the Group companies are consolidated on a line-by-line basis and intra- group balances and transactions including unrealised gain/loss from such transactions are eliminated upon consolidation. These consolidated financial statements are prepared by applying uniform accounting policies in use at the Group. Profit or loss on each component of other comprehensive income (OCI) are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controliing interest having a deficit balance. Changes in the Company’s interests in subsidiaries that do not result in a loss of control are accounted for as equity transactions. The carrying amount of the Company’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non- controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the Company.
2.4 Business Combinations and Goodwill The Group accounts for its business combinations under acquisition method of accounting. Acquisition related costs are recognised in statement of profit and loss as incurred. The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the condition for recognition are recognised at their fair values at the acquisition date. Purchase consideration paid in excess of the fair value of net assets acquired is recognised as goodwill. Where the fair value of identifiable assets and liabilities exceed the cost of acquisition, after reassessing the fair values of the net assets and contingent liabilities, the excess is recognised as capital reserve. The interest of non-controlling shareholders is initially measured either at fair value or at the non-controlling interests’ proportionate share of the acquiree’s identifiable net assets. The choice of measurement basis is made on an acquisition-by-acquisition basis. Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests’ share of subsequent changes in equity of subsidiaries. Business combinations arising from transfers of interests in entities that are under the common control are accounted at historical costs. The difference between any consideration given and the aggregate historical carrying amounts of assets and liabilities of the acquired entity are recorded in shareholders’ equity. Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in other comprehensive income (OCI) and accumulated in equity as capital reserve. However, if there is no clear evidence of bargain purchase, the entity recognises the gain directly in equity as capital reserve, without routing the same through OCI.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. A cash generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised in profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods. Tata Power Renewable Energy Limited
Notes to the Consolidated Financial Statements
2.5 Details of the Group's subsidiaries at the end of the reporting period considered in the preparation of the Consolidated Financial Statements are as follows: Name Country of % voting power % voting power % voting power Incorporation held as at held as at held as at 31st March, 2019 31st March, 2018 31st March, 2017 Subsidiaries (Direct) Tata Power Green Energy Ltd. (TPGEL) * India - - 100 Walwhan Renewable Energy Ltd (WREL) (formerly known as Walwhan India 100 100 99.99 Renewable Energy Private Limited and Welspun Renewables Energy Private Limited) Indo Rama Renewables Jath Ltd. (IRRJL) India 100 100 100 Supa Windfarm Ltd. (SWL) India 100 100 100 Poolavadi Windfarm Ltd. (PWL) India 100 100 100 Nivade Windfarm Ltd. (NWL) India 100 100 100 Vagarai Windfarm Limited (VWL) # India 72 72 100
Subsidiaries (Indirect) Clean Sustainable Solar Energy Private Limited (CSSEPL) @ India 99.99 99.99 99.99 Dreisatz Mysolar24 Private Limited (DMPL) @ India 100 100 100 MI Mysolar24 Private Limited (MIMPL) @ India 100 100 74 Northwest Energy Private Limited (NEPL) @ India 100 100 100 Solarsys Renewable Energy Private Limited (SREPL) @ India 100 100 72.5 Walwhan Solar Energy GJ Limited India 100 100 74 (formerly known as Walwhan Solar Energy GJ Private Limited and Unity Power Private Limited) @ Walwhan Solar Raj Limited India 100 100 100 (formerly known as Walwhan Solar Raj Private Limited and Viraj Renewables Energy Private Limited) @ Walwhan Solar BH Limited India 100 100 100 (formerly known as Walwhan Solar BH Private Limited and formerly known as Welspun Energy Jharkhand Private Limited) @ Walwhan Solar MH Limited India 100 100 100 (formerly known as Walwhan Solar MH Private Limited and Welspun Energy Maharashtra Private Limited) @ Walwhan Wind RJ Limited India 100 100 100 (formerly known as Walwhan Wind RJ Private Limited and Welspun Energy Rajasthan Private Limited) @ Walwhan Solar AP Limited India 100 100 100 (formerly known as Walwhan Solar AP Private Limited and Welspun Solar AP Private Limited) @ Walwhan Solar KA Limited India 100 100 100 (formerly known as Walwhan Solar KA Private Limited and Welspun Solar Kannada Private Limited) @ Walwhan Solar MP Limited India 100 100 100 (formerly known as Walwhan Solar MP Private Limited and Welspun Solar Madhya Pradesh Private Limited) @ Walwhan Solar PB Limited India 100 100 100 (formerly known as Walwhan Solar PB Private Limited and Welspun Solar Punjab Private Limited) @ Walwhan Energy RJ Limited India 100 100 100 (formerly known as Walwhan Energy RJ Private Limited and Welspun Solar Rajasthan Private Limited) @ Walwhan Solar TN Limited India 100 100 100 (formerly known as Walwhan Solar TN Private Limited and Welspun Solar Tech Private Limited) @ Walwhan Solar RJ Limited India 100 100 100 (formerly known as Walwhan Solar RJ Private Limited and Welspun Solar UP Private Limited) @ Walwhan Urja Anjar Limited India 100 100 100 (formerly known as Walwhan Urja Anjar Private Limited and Welspun Urja Gujarat Private Limited) @ Walwhan Urja India Limited (formerly known as Welspun Urja India India 100 100 100 Limited (WUIL)) @
# The group has 72% of shareholding and voting power in Vagarai Windfarm Limited. However, as per the shareholder agreement, the group has a call option to buy shares from the captive consumers at the face value of the shares. Accordingly, non controlling interest has not been considered for the purpose of consolidation. @ Consolidated with Walwhan Renewable Energy Limited (WREL) *Has been sold to Tata Power Company Limited during the year.
Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
3 Other Signifiant Accounting Policies
3.1 Foreign Currencies The Group’s consolidated financial statements are presented in Indian Rupee, which is also the parent company’s functional currency. For each entity the Group determines the functional currency and items included in the financial statements of each entity are measured using that functional currency. Transactions in foreign currencies are initially recorded by the Group’s entities at their respective functional currency spot rates at the date the transaction first qualifies for recognition. However, for practical reasons, the group uses an average rate if the average approximates the actual rate at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognised in OCI or profit or loss are also recognised in OCI or profit or loss, respectively).
3.2 Current versus non-current classification The Group presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is treated as current when it is: - expected to be realised or intended to be sold or consumed in normal operating cycle, - held primarily for the purpose of trading, - expected to be realised within twelve months after the reporting period, or - Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. All other assets are classified as non-current. A liability is current when: - it is expected to be settled in normal operating cycle, - it is held primarily for the purpose of trading, - it is due to be settled within twelve months after the reporting period, or - there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. The Group classifies all other liabilities as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities. The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Group has identified twelve months as its operating cycle. 3.3 Warranties Provisions for the expected cost of warranty obligations under local sale of goods legislation are recognised at the date of sale of the relevant products, at the Group's best estimate of the expenditure required to settle the Group's obligation. 3.4 Financial Instruments A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the instruments. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in statement of profit and loss. 3.5 Financial Assets All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the market place.
All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.
3.5.1 Financial assets at amortised cost Financial assets are subsequently measured at amortised cost if these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
3.5.2 Financial assets at fair value through other comprehensive income A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
On initial recognition, the Group makes an irrevocable election on an instrument-by-instrument basis to present the subsequent changes in fair value in other comprehensive income pertaining to investments in equity instruments, other than equity investment which are held for trading. Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognised in other comprehensive income and accumulated in the 'Reserve for equity instruments through other comprehensive income'. The cumulative gain or loss is not reclassified to statement of profit and loss on disposal of the investments.
3.5.3 Financial assets at fair value through profit or loss (FVTPL) Investments in equity instruments are classified as at FVTPL, unless the Group irrevocably elects on initial recognition to present subsequent changes in fair value in other comprehensive income for investments in equity instruments which are not held for trading. Other financial assets are measured at fair value through profit or loss unless it is measured at amortised cost or at fair value through other comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognised in statement of profit and loss. Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
3.5.4 Derecognition 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 Group’s balance sheet) when: - the right to receive cash flows from the asset have expired, or - the Group has transferred its right to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Group has transferred its right to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Group continues to recognise the transferred asset to the extent of the Group’s continuing involvement. In that case, the Group also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained. 3.5.5 Impairment of financial assets The Group assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance. The Group recognises lifetime expected losses for all contract assets and/or all trade receivables that do not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to the 12 month expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition.
3.6 Financial liabilities and equity instruments 3.6.1 Classification as debt or equity Debt and equity instruments issued by a Group are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
3.6.2 Equity Instruments An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by a Group entity are recognised at the proceeds received, net of direct issue costs.
3.6.3 Financial liabilities All financial liabilities are subsequently measured at amortised cost using the effective interest rate method.Gains and losses are recognised in statement of profit and loss when the liabilities are derecognised as well as through the effective interest rate (EIR) amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss.
3.6.4 Derecognition A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit and loss.
3.6.5 Financial guarantee contracts Financial guarantee contracts issued by the Group 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, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. 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.
3.7 Derivative financial instruments The Group enters into a variety of derivative financial instruments to manage its exposure to foreign exchange rate risks, including foreign exchange forward contracts and cross currency swaps.
Derivatives are initially recognised at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in statement of profit and loss immediately.
3.8 Reclassification of financial assets and liabilities The Group determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. The Group’s senior management determines change in the business model as a result of external or internal changes which are significant to the Group’s operations. Such changes are evident to external parties. A change in the business model occurs when the Group either begins or ceases to perform an activity that is significant to its operations. If the Group reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model. The Group does not restate any previously recognised gains, losses (including impairment gains or losses) or interest.
3.9 Offsetting of financial instruments Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
3.10 Leasing arrangement The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.
Rental expense from operating leases is generally recognised on a straight-line basis over the term of the relevant lease. Where the rentals are structured solely to increase in line with expected general inflation to compensate for the lessor’s expected inflationary cost increases, such increases are recognised in the year in which such benefits accrue. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred. Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
3.11 Government Grant Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions attaching to them and that the grant will be received.
Government grants relating to income are determined and recognised in the statement of profit and loss over the period necessary to match them with the cost that they are intended to compensate and presented within other income. Government grants relating to the purchase of property, plant and equipment are reduced from the cost of the assets.
The benefit of a Government loan at a below market rate of interest is treated as a Government grant, measured as the difference between proceeds received and the fair value of loan based on prevailing market interest rates.
Amendment to Ind AS-20 Government Grant The Ministry of Corporate Affairs (MCA) notified the Companies (Indian Accounting Standards) Second Amendment Rules, 2018 (the ‘Rules’) on 20 September 2018. The Rules amend Ind AS 20 Accounting for Government Grants and Disclosure of Government Assistance to allow entities the option of recording non-monetary government grants at a nominal amount and presenting government grants related to assets by deducting the grant from the carrying amount of the asset.This amendment has been given effect by the group.
3.12 Dividend distribution to equity shareholders of the Parent Company The Parent Company recognises a liability to make dividend distributions to its equity holders when the distribution is authorised and the distribution is no longer at its discretion. As per the corporate laws in India, a distribution is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity.
3.13 Service Concession Agreement (SCA) A Group entity has entered into contract for design, part finance, engineering, manufacture, supply, erection, testing, commissioning and operation and maintenance for 25 years of Grid Interactive Solar Power Project through Public Private Partnership with a public sector power generator (PSU). The PSU has paid part of the project cost to the Group on commissioning of plant/Handover of Project. Remaining cost and the operations and maintenance cost is being recovered over the period of the project in accordance with the agreement with the PSU.
Ind AS 115 establishes a five-step model to account for revenue arising from contracts with customers and requires that revenue be recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. It requires entities to exercise judgement, taking into consideration all of the relevant facts and circumstances when applying each step of the model to contracts with their customers.
As per the arrangement, the share of electricity revenue is divided into three parts i.e. towards deferred payment, interest income and operation and maintenance revenue. The Group has initially measured financial asset at fair value and subsequently at amortized cost by recognizing share of electricity sale revenue first towards operation and maintenance revenue. Subsequent thereto, amount is recognised as interest income at computed Internal Rate of Return (IRR) on opening balance of the financial asset. Further, surplus of revenue share over and above operation and maintenance revenue and interest income is recognized as recovery of the financial asset. 3.14 Standards issued but not yet effective The amendments to standards that are issued, but not yet effective, upto the date of issuance of the Group’s financial statements are disclosed below. The Group intends to adopt these standards, if applicable, when they become effective.
Ind AS 116- Leases Ind AS 116 Leases was notified in March 2019 and it replaces Ind AS 17 Leases. Ind AS 116 is effective for annual periods beginning on or after 1st April, 2019. It sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under Ind AS 17. Lessor accounting under Ind AS 116 is substantially unchanged from today’s accounting under Ind AS 17. Ind AS 116 requires lessees and lessors to make more extensive disclosures than under Ind AS 17. The Group is in the process of evaluating the requirements of the standard and its impact on its financial statements.
Ind AS 12 – Income taxes (amendments relating to income tax consequences of dividend and uncertainty over income tax treatments)
The amendment relating to income tax consequences of dividend clarify that an entity shall recognise the income tax consequences of dividends in statement of profit or loss, other comprehensive income or equity according to where the entity originally recognised those past transactions or events. The Group does not expect any impact from this pronouncement. It is relevant to note that the amendment does not amend situations where the entity pays a tax on dividend which is effectively a portion of dividends paid to taxation authorities on behalf of shareholders. Such amount paid or payable to taxation authorities continues to be charged to equity as part of dividend, in accordance with Ind AS 12.
The amendment to Appendix C of Ind AS 12 specifies that the amendment is to be applied to the determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates, when there is uncertainty over income tax treatments under Ind AS 12. It outlines the following: (1) the entity has to use judgement, to determine whether each tax treatment should be considered separately or whether some can be considered together. The decision should be based on the approach which provides better predictions of the resolution of the uncertainty (2) the entity is to assume that the taxation authority will have full knowledge of all relevant information while examining any amount (3) entity has to consider the probability of the relevant taxation authority accepting the tax treatment and the determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates would depend upon the probability. The Group does not expect any significant impact of the amendment on its financial statements.
Ind AS 109 – Prepayment Features with Negative Compensation
The amendments relate to the existing requirements in Ind AS 109 regarding termination rights in order to allow measurement at amortised cost (or, depending on the business model, at fair value through other comprehensive income) even in the case of negative compensation payments. The Group does not expect this amendment to have any impact on its financial statements.
Ind AS 19 – Plan Amendment, Curtailment or Settlement The amendments clarify that if a plan amendment, curtailment or settlement occurs, it is mandatory that the current service cost and the net interest for the period after the re-measurement are determined using the assumptions used for the re-measurement. In addition, amendments have been included to clarify the effect of a plan amendment, curtailment or settlement on the requirements regarding the asset ceiling. The Group does not expect this amendment to have any significant impact on its financial statements.
Ind AS 23 – Borrowing Costs The amendments clarify that if any specific borrowing remains outstanding after the related asset is ready for its intended use or sale, that borrowing becomes part of the funds that an entity borrows generally when calculating the capitalisation rate on general borrowings. The Group does not expect any impact from this amendment. Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
3.15 Changes in accounting policies and disclosures New and amended standards and interpretations The Group applied for the first time certain amendments to the standards, which are effective for annual periods beginning on or after 1st April, 2017. The nature and the impact of each amendment is described below:
Ind AS 115 Revenue from Contracts with customers
Ind AS 115 supersedes Ind AS 11 Construction Contracts, Ind AS 18 Revenue and related interpretations and it applies, with limited exceptions, to all revenue arising from contracts with its customers. Ind AS 115 establishes a five-step model to account for revenue arising from contracts with customers and requires that revenue be recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. Ind AS 115 requires entities to exercise judgement, taking into consideration all of the relevant facts and circumstances when applying each step of the model to contracts with their customers. The standard also specifies the accounting for the incremental costs of obtaining a contract and the costs directly related to fulfilling a contract. In addition, the standard requires relevant disclosures. The Company adopted Ind AS 115 using the full retrospective method of adoption. The effect of the transition on the current period has not been disclosed as the standard provides an optional practical expedient. The Company did not apply any of the other available optional practical expedients.
This has an impact on Revenue, Interest, Deferred Revenue and Deferred Tax. Refer Note 2.1 3.16 Critical accounting estimates and judgements In the application of the Group's accounting policies, the Management is required to make judgements, estimates and assumptions about the carrying amounts 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.
The estimates and underlying 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 periods if the revision affects both current and future periods. Detailed information about each of these estimates and judgements is included in relevant notes together with information about the basis of calculation for each affected line item in the consolidated financial statements.
The areas involving critical estimates or judgements are:
Estimates used for useful life amd impairment of property, plant and equipment - Note 4 Estimation for impairment of goodwill - Note 5 a. Estimation of current and deferred tax expense- Note 11 Estimation of defined benefit obligation - Note 22
Estimation of value of contingent liability- Note 31 Estimates and judgement are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the group and that are believed to be reasonable under the circumstances. Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
4. Property, Plant and Equipments
Accounting Policy
Property, plant and equipment is stated at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes purchase price (net of trade discount and rebates) and any directly attributable cost of bringing the asset to its working condition for its intended use and for qualifying assets, borrowing costs capitalised in accordance with the Group accounting policy. Capital work in progress is stated at cost, net of accumulated impairment loss, if any. Cost includes the cost of replacing part of the plant and equipment and borrowing costs for long-term construction projects if the recognition criteria are met. When significant parts of plant and equipment are required to be replaced at intervals, the Group depreciates them separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in statement of profit and loss as incurred.
Depreciation
Depreciation commences when an asset is ready for its intended use. Freehold land and assets held for sale are not depreciated.
Depreciation is recognised on the cost of assets (other than freehold land and properties under construction) less their residual values over their estimated useful lives, using the straight-line method.
Depreciation on assets which are governed by the Feed-in-tariff regime, has been provided using the rates as well as methodology prescribed under the Central Electricity Regulatory Commission (CERC) Regulations and relevant State Commission Tariff Orders. For the assets on bid tariff have been depreciated based on the useful lives of the assets on straight line method. For the assets under Group Captive business model are depreciated over the useful life based on diminishing value method.
The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. Estimated useful lives of the assets are as follows:
Type of asset Useful lives Buildings-Others 25 years Roads 5 years Plant and Equipments 22 years to 25 years Transmission Lines and Cable Network 25 years Furniture and Fixtures 10 years Office Equipments 5 years Computer and networking equipments 3 years Motor Cars 10 years
Decapitalisation
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in statement of profit and loss.
Impairment
Impairment of tangible and intangible assets
The Group assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or Cash-generating unit’s (CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets of the Group.
When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
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. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.
The Group bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for each of the Group’s CGUs to which the individual assets are allocated. These budgets and forecast calculations generally cover Power Purchase agreement period. Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements 4. Property, Plant and Equipments (Contd. ) ₹ crore Description Freehold Buildings Roads Plant and Transmission Furniture Office Motor Total Land Equipments lines and cable and Equipments Vehicles network Fixtures
Cost Balance as at 1st April, 2018 258.10 170.41 3.62 10,125.99 138.29 0.97 2.20 0.30 10,699.88 Additions 58.48 18.12 2.81 1,145.97 45.83 0.31 - 0.03 1,271.55 Disposals - - - (10.52) - - (0.05) - (10.57) Reclassified to held for sale (3.17) - - (188.55) - - - - (191.72) Balance as at 31st March, 2019 313.41 188.53 6.43 11,072.89 184.12 1.28 2.15 0.33 11,769.14
Accumulated depreciation and impairment Balance as at 1st April, 2018 - 10.98 0.89 1,009.64 9.83 0.20 0.54 0.06 1,032.14 Depreciation expense - 7.41 0.48 527.35 7.23 0.40 - 0.05 542.92 Eliminated on disposal of assets - - - (2.50) - - (0.04) - (2.54) Reclassified to held for sale - - - (60.74) - - - - (60.74) Balance as at 31st March, 2019 - 18.39 1.37 1,473.75 17.06 0.60 0.50 0.11 1,511.78 Net carrying amount As at 31st March, 2019 313.41 170.14 5.06 9,599.14 167.06 0.68 1.65 0.22 10,257.36 As at 31st March, 2018 258.10 159.43 2.73 9,116.35 128.46 0.77 1.66 0.24 9,667.74 Note: 1. Amount of borrowing cost capitalised Rs.15.92 crore for the year ended 31st March, 2019. 2. The Group has created charge on certain assets in favour of lenders. Refer note 21. ₹ crore Description Freehold Buildings Roads Plant and Transmission Furniture Office Motor Total Land Equipments lines and cable and Equipments Vehicles network Fixtures
Cost Balance as at 1st April, 2017 247.01 134.92 1.74 8,700.23 43.71 1.04 2.07 0.25 9,130.97 Additions 11.09 37.41 1.88 1,431.02 94.58 - 0.24 0.05 1,576.27 Disposals - (1.92) - (5.26) - (0.07) (0.11) - (7.36) Balance as at 31st March, 2018 258.10 170.41 3.62 10,125.99 138.29 0.97 2.20 0.30 10,699.88
Accumulated depreciation and impairment Balance as at 1st April, 2017 - 4.78 0.47 540.40 5.72 0.08 0.20 0.02 551.67 Depreciation Expense - 6.22 0.42 469.90 4.11 0.13 0.42 0.04 481.24 Eliminated on disposal of assets - (0.02) - (0.66) - (0.01) (0.08) - (0.77) Balance as at 31st March, 2018 - 10.98 0.89 1,009.64 9.83 0.20 0.54 0.06 1,032.14 Net carrying amount As at 31st March, 2018 258.10 159.43 2.73 9,116.35 128.46 0.77 1.66 0.24 9,667.74 As at 1st April, 2017 247.01 130.14 1.27 8,159.83 37.99 0.96 1.87 0.23 8,579.30 Note: 1. Amount of borrowing cost capitalised Rs.40.10 crore for the year ended 31st March, 2018. 2. The Group has created charge on certain assets in favour of lenders. Refer note 19. Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
5a. Goodwill
As at As at As at 31st March, 2019 31st March, 2018 1st April, 2017 ₹ crore ₹ crore ₹ crore Cost Balance at beginning of year 1,636.03 1,648.03 1,648.03 Additional amounts recognised from business combinations occurring during the year - - - Less: Impairment during the year - (12.00) - Balance at end of year 1,636.03 1,636.03 1,648.03
During the year ended 31st March, 2017, the Group had acquired Walwhan Renewable Energy Ltd. along with it’s subsidiaries for a consideration of ₹ 3,782.30 crore. The goodwill was provisionally determined at ₹ 1,713.84 crore. As per the share purchase agreement, the provisional consideration was to be adjusted for certain events existing at the closing date. During the previous year, the Group had adjusted the fair value of consideration by ₹ 70.22 crore being the measurement period adjustment. During the year ended 31st March, 2017, the Group also acquired Walwhan Solar Raj Ltd. and a goodwill of ₹ 11.42 crore was recorded. During the previous year, the Group made a measurement period adjustment of ₹ 8.69 crore consequent to recognition of deferred tax asset on reassessment.
In accordance with Ind AS 36 “Impairment of Assets” the Group performed impairment testing of Goodwill assigned to each Cash Generating Unit (CGU) as at 31st March, 2019 applying value in use approach across all the CGUs i.e. using cash flow projections based on financial budgets covering contracted power sale agreements with procurers (15 to 20 years) considering a discount rate (pre-tax) in the range of 10.25% to 10.70% per annum. The Group has used financial projections for 15 to 20 years as the tariff rates are fixed as per PPA.
Based on the results of the Goodwill impairment test, the estimated value in use in all CGUs were higher than their respective carrying amount, hence impairment provision recorded during the current year is ₹ Nil (31st March 2018 - ₹ 12.00 crore). Management believes that any reasonably possible change in the key assumptions on which recoverable amount is based would not cause the aggregate carrying amount to exceed the aggregate recoverable amount of the Goodwill.
The key assumptions used in the value in use calculations for the power cash-generating unit are as follows:
O&M cost inflation O&M cost escalation of 5%
Discount Rate 10.25% to 10.70% Pre-Tax Discount rate has been derived based on current cost of borrowing and equity rate of return in line with the current market expectations. Plant load factor (PLF) Plant load factor is estimated for each CGU based on past trend of PLF and expected PLF in future years.
5b. Other Intangible Assets Accounting Policy
Intangible assets acquired separately
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses if any.
Derecognition of Intangible assets
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from 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 statement of profit and loss when the asset is derecognised.
Useful lives of intangible assets
Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit and loss unless such expenditure forms part of carrying value of another asset. Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
5b. Other Intangible Assets (Contd.)
Estimated useful lives of the intangible assets are as follows:
Type of asset Useful lives Customer Contracts acquired under business combination 22 to 25 years Computer Software 3 to 5 years
₹ crore Description Customer Contracts Computer Software Total acquired under business combination
Cost
Balance as at 1st April, 2018 1,385.50 0.35 1,385.85 Additions - 4.71 4.71 Disposal - - - Balance as at 31st March, 2019 1,385.50 5.06 1,390.56
Accumulated amortisation and impairment
Balance as at 1st April, 2018 99.51 0.01 99.52 Amortisation expense 62.41 0.87 63.28 Balance as at 31st March, 2019 161.92 0.88 162.80
Net carrying amount As at 31st March, 2019 1,223.58 4.18 1,227.76 As at 31st March, 2018 1,285.99 0.34 1,286.33
₹ crore Description Customer Contracts Computer Software Total acquired under business combination
Cost
Balance as at 1st April, 2017 1,385.50 - 1,385.50 Additions - 0.35 0.35 Acquistion through business combinations - - - Disposal - - - Balance as at 31st March, 2018 1,385.50 0.35 1,385.85
Accumulated amortisation and impairment
Balance as at 1st April, 2017 36.99 - 36.99 Amortisation expense 62.52 0.01 62.53 Balance as at 31st March, 2018 99.51 0.01 99.52
Net carrying amount As at 31st March, 2018 1,285.99 0.34 1,286.33 As at 1st April, 2017 1,348.51 - 1,348.51
Depreciation/Amortisation: For the year ended For the year ended 31st March, 2019 31st March, 2018 ₹ crore ₹ crore Depreciation on Tangible Assets 542.92 481.24 Add: Amortisation on Intangible Assets 63.28 62.53 Total 606.20 543.77 Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
6. Other Investments
As at As at As at Face Value As at As at As at 31st March, 2019 31st March, 2018 1st April, 2017 (in ₹ unless 31st March, 2019 31st March, 2018 1st April, 2017 stated Quantity Quantity Quantity otherwise) ₹ crore ₹ crore ₹ crore
I Investments carried at Amortised Cost Investment in Equity Shares fully paid-up Unquoted SVC Co-operative Bank Limited 50 - - 25.00 * - - - - - * The total amount is ₹ 1250 Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
7. Loans As at As at As at 31st March, 2019 31st March, 2018 1st April, 2017 ₹ crore ₹ crore ₹ crore Non-current (At Amortised Cost) (i) Security Deposits Considered Good - Unsecured 4.72 1.00 0.47 Credit Impaired 0.06 0.01 0.51 4.78 1.01 0.98 Less: Provision for Doubtful Deposits 0.06 0.01 0.51 4.72 1.00 0.47
(ii) Loans to Related Parties Considered Good - Unsecured 79.50 79.51 -
(iii) Other Loans Considered Good - Unsecured Loans to Employees 0.08 - -
84.30 80.51 0.47 Current (At Amortised Cost) (i) Security Deposits Considered Good - Unsecured 5.04 5.71 5.82 Credit Impaired 1.32 - - 6.36 5.71 5.82 Less: Provision for Doubtful Deposits 1.32 - - 5.04 5.71 5.82
(ii) Loans to Related Parties Considered Good - Unsecured 85.01 25.00 -
90.05 30.71 5.82
8. Finance Lease Receivable (At Amortised Cost) (Unsecured unless otherwise stated) Accounting Policy
Leasing arrangement
The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.
The Group as lessor
Leases in which the Group does not transfer substantially all the risks and rewards of ownership of an asset are classified as operating leases. Rental income from operating lease is recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned.
Leases are classified as finance leases when substantially all of the risks and rewards of ownership transfer from the Group to the lessee. Amounts due from lessees under finance leases are recorded as receivables at the Group's net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the net investment outstanding in respect of the lease. As at As at As at 31st March, 2019 31st March, 2018 1st April, 2017 ₹ crore ₹ crore ₹ crore
Finance Lease Receivable - Non-current 11.35 - - Finance Lease Receivable - Current 0.32 - - Total 11.67 - -
8.1 Leasing Arrangements
The Group has entered into Power Purchase Agreements (PPA) with various customers for its rooftop solar assets located across various locations. As this arrangement is dependent on the use of a specific asset (the solar plant) and conveys a right to use on the customer, it qualifies as a lease. As these are long tenor PPAs spread over a major part of the economic life of the asset, this arrangement has been categorized as a finance lease. Ind AS 17.47 (f), Ind AS 107.7
8.2 Amount receivable under Finance Lease Minimum Lease Payments Present value of Mimimum Lease Payments As at As at As at As at As at As at 31st March, 2019 31st March, 2018 1st April, 2017 31st March, 2019 31st March, 2018 1st April, 2017 ₹ crore ₹ crore ₹ crore ₹ crore ₹ crore ₹ crore Not later than one year 1.61 - - 0.32 - - Later than one year and not later than five years 7.91 - - 2.03 - - Later than five years 18.05 - - 9.32 - - 27.57 - - 11.67 - - Ind AS 17.47 (b) Unearned finance income 15.90 - - - - - Present value of mimimum lease payments receivable 11.67 - - 11.67 - - Ind AS 17.47 (d) Allowance for uncollectible lease payments ------Total 11.67 - - 11.67 - -
The interest rate inherent in the leases is constant in the contract for the entire lease term. The average effective interest rate contracted is approximately in the range of 9.00% - 13.00% per annum. Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements 9. Other Financial Assets
As at As at As at 31st March, 2019 31st March, 2018 1st April, 2017 ₹ crore ₹ crore ₹ crore Non-current (At Amortised Cost)
(i) Receivables under Service Concession Agreement 199.81 201.89 203.94
(ii) Unbilled Revenue 81.11 62.83 42.91
(iii) Government Grants Receivables * 29.17 8.02 -
(iv) Others Unsecured, considered good In Deposit Accounts (with maturity more than twelve months) 0.09 - -
310.18 272.74 246.85
*One of the subsidiary of the Group is eligible for government grant for certain solar projects. The subsidiary company is in the process of creating charge on prject assets in favour of Solar EnergyCorporation of India. Once the charge is created, the subsidiary company will file application for release of the grant.
Current (At Amortised Cost, unless otherwise stated) (i) Accruals Unsecured, considered good Interest Accrued on Bank Deposits 0.26 0.04 0.39 Interest Accrued on Loans to Related Parties 6.03 2.85 - 6.29 2.89 0.39
(ii) Receivables under Service Concession Agreement 2.64 2.52 4.48
(iii) Government Grants Receivables 58.05 40.25 -
(iv) Others Unsecured, considered good
Derivative Contracts (At Fair Value through Profit and Loss) 1.54 2.16 - Receivable on sale of Current Investments 39.73 - - Insurance Claims Receivable 2.88 6.47 - Receivable from vendor - 0.12 72.59 Other Advances 67.96 - 0.63 Unsecured, considered doubtful Other Advances 0.22 - -
Less: Allowances for Bad and Doubtful Advances (0.22) - - 112.11 8.75 73.22
179.09 54.41 78.09
10. Tax Assets As at As at As at 31st March, 2019 31st March, 2018 1st April, 2017 ₹ crore ₹ crore ₹ crore Non-current Tax Assets Advance Income-tax (Net) 47.99 40.53 26.80 47.99 40.53 26.80 Current Tax Assets Advance Income-tax (Net) 1.48 14.77 28.68 1.48 14.77 28.68 Tata Power Renewable Energy Limited Notes forming part of the Condensed Consolidated Financial Statements 11. Deferred Tax
Accounting Policy
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or an assets and liabilities in a transaction that is not a business combination and, at the time of the transaction, affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that furture taxable profits will allow the deferred tax asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the relevant entity intends to settle its current tax assets and liabilities on a net basis. Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. Deferred tax assets include Minimum Alternative Tax (MAT) paid in accordance with the tax laws in India, which is likely to give future economic benefits in the form of availability of set off against future income tax liability. Accordingly, MAT is recognised as deferred tax asset in the balance sheet when the asset can be measured reliably and it is probable that the future economic benefit associated with the asset will be realised. The Company reviews the “MAT credit entitlement” asset at each reporting date and writes down the asset to the extent that it is no longer probable that it will pay normal tax during the specified period.
In the situations where one or more units of the Company are entitled to a tax holiday under the tax law, no deferred tax (asset or liability) is recognized in respect of temporary differences which reverse during the tax holiday period, to the extent the concerned unit’s gross total income is subject to the deduction during the tax holiday period. Deferred tax in respect of temporary differences which reverse after the tax holiday period is recognized in the year in which the temporary differences originate. However, the Company restricts recognition of deferred tax assets to the extent it is probable that sufficient future taxable income will be available against which such deferred tax assets can be realized. For recognition of deferred taxes, the temporary differences which originate first are considered to reverse first.
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.
11a Deferred Tax Assets
As at As at As at 31st March, 2019 31st March, 2018 1st April, 2017 ₹ crore ₹ crore ₹ crore
Deferred Tax Assets (Refer Note 44) 280.42 392.74 509.76 Deferred Tax Liabilities 199.57 284.11 391.47 Total - Net Deferred Tax Assets 80.85 108.63 118.29
Opening Balance Tranfer to Recognised in Recognised in Closing Balance Deferred Profit or Loss Other 2018-19 Tax liability Comprehensive Income Deferred Tax Assets in relation to: Carry Forward Losses 198.28 - (44.81) - 153.47 MAT Credit Entitlement 168.41 (63.31) (3.78) - 101.32 Others 26.05 (6.43) 6.01 25.63 392.74 (69.74) (42.58) - 280.42 Deferred Tax Liabilities in relation to: Property, Plant and Equipment 265.99 (44.09) (24.61) - 197.29 Others 18.12 (6.08) (9.76) - 2.28 284.11 (50.17) (34.37) - 199.57
Net Deferred Tax Assets 108.63 (8.21) - 80.85
Opening Balance Recognised in Recognised in Closing Balance Profit or Loss Other 2017-18 Comprehensive Income Deferred Tax Assets in relation to: Unabsorbed Depreciation 25.23 (25.23) - - Carry Forward Losses 389.65 (191.37) - 198.28 MAT Credit Entitlement 78.50 89.91 - 168.41 Others 16.38 9.67 - 26.05 509.76 (117.02) - 392.74 Deferred Tax Liabilities in relation to: Property, Plant and Equipment 386.50 (120.51) - 265.99 Others 4.97 13.00 0.15 18.12 391.47 (107.51) 0.15 284.11
Net Deferred Tax Assets 118.29 (9.51) (0.15) 108.63 Tata Power Renewable Energy Limited Notes forming part of the Condensed Consolidated Financial Statements
11. Deferred Tax (Contd.)
11b Deferred Tax Liabilities As at As at As at 31st March, 2019 31st March, 2018 1st April, 2017 ₹ crore ₹ crore ₹ crore
Deferred Tax Assets 213.73 41.40 19.73 Deferred Tax Liabilities 463.85 274.17 290.88 Total - Net Deferred Tax Liabilities 250.12 232.77 271.15
Opening Balance Transfer Recognised in Recognised in Closing Balance from Profit or Loss Other 2018-19 Deferred tax Comprehensive Assets Income Deferred tax liabilities in relation to Property, Plant and Equipments 48.80 44.09 131.48 - 224.37 Fair value upliftment on Business Combination 212.56 - (9.64) - 202.92 Others 12.81 6.08 17.47 0.20 36.56 274.17 50.17 139.31 0.20 463.85
Deferred tax assets in relation to Unabsorbed depreciation - - 2.29 - 2.29 Carry forward loss 1.52 - (1.52) - - MAT Credit Entitlement 31.94 63.31 94.53 - 189.78 Others 7.94 6.43 7.29 - 21.66 41.40 69.74 102.59 - 213.73
Net Deferred Tax Liabilities 232.77 (19.57) 36.72 0.20 250.12
Opening Balance Transfer Recognised in Recognised in Closing Balance from Profit or Loss Other 2017-18 Deferred tax Comprehensive Assets Income Deferred Tax Liabilities in relation to: Property, Plant and Equipments 44.52 - 4.28 - 48.80 Fair value upliftment on Business Combination 220.78 - (8.22) - 212.56 Others 25.58 - (12.77) - 12.81 290.88 - (16.71) - 274.17
Deferred Tax Assets in relation to : Carry forward loss - - 1.52 - 1.52 MAT Credit Entitlement 11.06 - 20.88 - 31.94 Others 8.67 - (0.73) - 7.94 19.73 - 21.67 - 41.40
Net Deferred Tax Liabilities 271.15 - (38.38) - 232.77
11c. Reconciliation of Deferred Tax Expense amount recognised in profit or loss and Other Comprehensive Income
Recognised in profit or loss Recognised in Other Comprehensive Income For the year ended For the year ended For the year ended For the year ended 31st March, 31st March, 2018 2019 31st March, 2019 31st March, 2018 ₹ crore ₹ crore ₹ crore ₹ crore
Deferred Tax Assets (Net) - (Refer Note 12 a.) Net (increase)/decrease in Deferred Tax Assets 8.21 9.51 - (0.15)
Deferred Tax Liabilities (Net) - (Refer Note 12 b.) Net increase/(decrease) in Deferred Tax Liabilities 36.71 (38.40) (0.20) -
Deferred Tax Expense (Net) 44.92 (28.89) (0.20) (0.15) Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
12. Other Assets
As at As at As at 31st March, 2019 31st March, 2018 1st April, 2017 ₹ crore ₹ crore ₹ crore Non-current (i) Capital Advances Secured, considered good 17.21 1.40 1.40 Unsecured, considered good 0.04 15.71 Doubtful 0.04 - - 17.29 1.40 17.11 Less: Allowance for Bad and Doubtful Advances 0.04 - - 17.25 1.40 17.11
(ii) Balances with Government Authorities Unsecured, considered good Amount Paid Under Protest 2.24 - - VAT/Sales Tax Receivable 3.57 3.16 2.71 5.81 3.16 2.71 (iii) Unamortised Premium for Leasehold Land Unsecured, considered good 34.88 37.07 38.27
(iv) Deferred Rent Expense Unsecured, considered good 26.50 11.75 9.51
(v) Others Unsecured, considered good Prepaid Expenses 0.74 1.71 0.01
85.18 55.09 67.61
Current
(i) Balances with Government Authorities Unsecured, considered good Advances 0.30 - - VAT/Sales Tax Receivable 0.25 7.94 7.01 0.55 7.94 7.01
(ii) Unamortised Premium for Leasehold Land Unsecured, considered good 1.90 1.90 1.89
(iii) Other Loans and Advances Unsecured, considered good Prepaid Expenses 3.77 3.55 3.18 Advances to Vendors 0.36 0.22 - Deferred Rent Expense 0.89 0.24 0.14 Other Advances 3.87 0.57 1.95 Others- Receivables - 3.71 0.21 Doubtful 1.68 1.68 - 10.57 9.97 5.48 Less: Allowance for Doubtful Advances 1.68 1.68 - 8.89 8.29 5.48
11.34 18.13 14.38 Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
13. Inventories Accounting Policy
Inventories are stated at the lower of cost and net realisable value. Cost of inventory includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Costs of inventories are determined on weighted average basis. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale. Unserviceable/damaged stores and spares are identified and written down based on technical evaluation.
As at As at As at 31st March, 2019 31st March, 2018 1st April, 2017 ₹ crore ₹ crore ₹ crore
Inventories (lower of cost and net realisable value)
(a) Stores and Spares Stores and Spare Parts 19.45 13.20 13.75
(b) Loose Tools 0.10 - -
19.55 13.20 13.75
14. Current Investments
As at As at As at 31st March, 2019 31st March, 2018 1st April, 2017 ₹ crore ₹ crore ₹ crore
Investments carried at Fair Value through Profit and Loss Investment in Mutual Funds (Quoted) 85.39 73.26 414.63 Investment in Mutual Funds (Unquoted) 4.04 - - Total 89.43 73.26 414.63
Notes: 1 Aggregate Market Value of Quoted Investments 85.39 73.26 414.63 2 Aggregate Carrying Value of Quoted Investments 85.39 73.26 414.63 3 Aggregate Carrying Value of Unquoted Investments 4.04 - - Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
15. Trade Receivables (Unsecured unless otherwise stated) As at As at As at 31st March, 2019 31st March, 2018 1st April, 2017 ₹ crore ₹ crore ₹ crore Current Trade Receivables Considered Good 650.00 333.43 429.79 Credit Impaired 1.46 0.44 - 651.46 333.87 429.79 Less: Allowance for Doubtful Trade Receivables 1.46 0.44 - 650.00 333.43 429.79
15.1 Trade Receivables 1) (a) The average credit period range between 7 to 60 days in respect of receivables pertaining to sale of power. No interest is charged on trade receivables from date of receipt of invoice by customers till the end of the credit period defined in the Power Purchase Agreement (PPA). Thereafter, interest is charged at the rates prescribed under the PPA on the outstanding balance but this interest is recognised upon an assessment of certainity of relisation.
1) (b) In respect of Generation Benefit Incentive (GBI), receivables for Indian Renewable Energy Development Authority (IREDA) there is no specified credit period and the amounts are received by the Group as and when funds are disbursed to IREDA by Government of India.
2) The Group generally supplies power to various center and state power pocurement companies as well as to the holding company under long term PPAs between the Group and procurers. GBI is directly billed to IREDA as per GBI policy. 3) Walwhan Renewable Energy Limited and its Subsidiary Walwhan Solar TN Limited, with a combined capacity of 249 MW (5 plants), supply solar power to Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO) against long term Power Purchase Agreements (PPAs). As per the said PPAs, the Group is entitled to receive consideration for all energy units supplied and billed. However, whilst effecting payments to all solar power producers (including the Group) TANGEDCO is not making payment for energy units supplied and billed in excess of 19% Capacity Utilisation Factor (CUF) in accordance with its internal circular. National Solar Energy Federation of India (NSEFI) has filed the writ petition with Madras High Court challenging the said circular issued by TANGEDCO on behalf of generators who have commissioned solar power plants and impacted by the said circular. The Tata Power Company Limited, ultimate holding company of the group, is also a Member of NSEFI. The said petition has been admitted. On the basis of an independent legal opinion and the latest Tamil Nadu Electricity Regulatory Commission (TNERC) order issued on March 25, 2019 on backing down/curtailment instruction to solar power plants, the Group is confident that said circular issued by TANGEDCO is unilateral action and not tenable legally. Hence, Group considers that it is highly probable that the consideration for energy units supplied in excess of 19% CUF would be realized. Accordingly, the Group continues to recognize the revenue for such energy units during the current year amounting to ₹ 35.98 crores. Further, on the basis of this assessment, the Group has also recognized revenue pertaining to previous year amounting to ₹ 4.20 crores relating to two of such plants for which arbitrary adjustments were made in the Joint Meter Reading by TANGEDCO. The Group believes that receivable amounting to ₹ 47.84 crores as at March 31, 2019 is fully recoverable and no provision has been recognized in the financial statements.
4) ) Trade Receivables include ₹ 309 Crores receivable from TANGEDCO (including ₹ 290 crores relating to current financial year) including outstanding amount of ₹ 47.84 crores withheld towards energy units supplied in excess of 19% CUF as mentioned in above note. The Group is of the view that these receivables have been accumulated as TANGEDCO is facing temporary financial difficulties and it is fully recoverable. In accordance with the PPAs, the Group is entitled to receive interest on delayed payment, however it is recognized, on prudence grounds, only when recovered based on prudence. The Group is of the view that there is no loss account of credit loss as well as time value money as TANGEDCO is one of the State Electricity Distribution Company and the outstanding amounts would be recovered along with the interest. Hence, no provision for Expected Credit Loss in accordance with IND AS 109 has been recognized in the financial statements.
Age of receivables As at As at As at 31st March, 2019 31st March, 2018 1st April, 2017 ₹ crore ₹ crore ₹ crore Within the credit period 161.28 123.57 234.81 1-90 days past due 173.70 109.07 103.26 91-182 days past due 136.20 57.64 76.62 More than 182 days past due 178.82 43.15 15.10 650.00 333.43 429.79 Movement in the allowance for doubtful trade receivables As at As at As at 31st March, 2019 31st March, 2018 1st April, 2017 ₹ crore ₹ crore ₹ crore Balance at the beginning of the year 0.44 - - Add: Expected credit loss allowance on trade receivables calculated at lifetime expected credit losses for the year 1.02 - - Add/(Less): Special allowance on trade receivables for the year 0.44 - Balance at the end of the year 1.46 0.44 -
The concentration of credit risk is very limited due to the fact that the large customers are mainly government entities and remaining customers base is large and widely dispersed and secured with adequate security deposit.
15.2 Contract Balances
As at As at As at 31st March, 2019 31st March, 2018 1st April, 2017 ₹ crore ₹ crore ₹ crore Contract liabilities Deferred revenue from customers 205.10 167.62 140.72 Total Contract Liabilities 205.10 167.62 140.72 Receivables Trade receivables (Gross) 651.46 333.87 429.79 Unbilled revenue 187.29 169.94 39.64 Less : Allowances for doubtful trade recievable 1.46 0.44 - Net receivables 837.29 503.37 469.43
Contract asset is the right to consideration in exchange for goods or services transferred to the customer. Contract liability is the entity's obligation to transfer goods or services to a customer for which the entity has received consideration from the customer in advance. Contract assets are transferred to receivables when the rights become unconditional and contract liabilities are recognized as and when the performance obligation is satisfied.
Significant changes in the contract assets and the contract liabilities balances during the year are as follows:
₹ crore
For the year ended 31st March, 2019 For the year ended 31st Mach, 2018 Contract Liabilities Contract Liabilities Opening Balance 167.62 140.72 Add : Advance received during the 6.76 7.37 year not recognized as revenue Add: Interest income for the year 20.56 17.02 Add: Revenue in respect of earlier 14.03 years recognized during the year 21.44 Less: Electricity Consumption 11.28 11.52 Closing balance 205.10 167.62
Disaggregation of Revenue The Company has a single stream of revenue i.e. sale of power Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
16a. Cash and Cash Equivalents
Accounting Policy Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value. Cash and cash equivalents include balances with banks which are unrestricted for withdrawal and usage. For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Group cash management. As at As at As at 31st March, 2019 31st March, 2018 1st April, 2017 ₹ crore ₹ crore ₹ crore
(i) Balances with Banks: In Current Accounts 48.00 72.44 21.16 In Deposit Accounts (with original maturity of less than three months) 17.56 0.02 64.90 (ii) Cheques on Hand - - 0.05 Cash and Cash Equivalents as per Balance Sheet 65.56 72.46 86.11
Bank Overdraft (Refer Note 24) (4.93) - (0.51)
Cash and Cash Equivalents as per Statement of Cash Flows 60.63 72.46 85.60
16b. Other Balances with Banks
As at As at As at 31st March, 2019 31st March, 2018 1st April, 2017 ₹ crore ₹ crore ₹ crore
(a) In Deposit Accounts 11.76 0.03 16.69 (b) In Deposit Escrow Accounts * - - 45.21 (c) In Earmarked Accounts ** 10.30 0.05 5.91 22.06 0.08 67.81 * Pertaining to acquisition of 100% shares of Walwhan Renewable Energy Limited (fromely; Welspun Renewables Eenergy Limited) ** Deposits kept as margin money against borrowings Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
16. Assets Classified as Held For Sale
Accounting Policy
Non-current assets or disposal group are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sale of such asset and its sale is highly probable. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification. As at each balance sheet date, the management reviews the appropriateness of such classification. Non-current assets or disposal group classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. The group treats sale/ distribution of the asset or disposal group to be highly probable when: - the appropriate level of management is committed to a plan to sell the asset (or disposal group), - an active programme to locate a buyer and complete the plan has been initiated (if applicable), - the asset (or disposal group) is being actively marketed for sale at a price that is reasonable in relation to its current fair value, - the sale is expected to qualify for recognition as a completed sale within one year from the date of classification , and - actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Property, plant and equipment and intangible assets once classified as held for sale/distribution to owners are not depreciated or amortised.
As at As at As at 31st March, 2019 31st March, 2018 1st April, 2017 ₹ crore ₹ crore ₹ crore
Property, Plant and Equipment (Refer Note-1) 130.98 - - Leasehold land 0.29 - - Total 131.27 - -
Note 1 During the year, the Company signed a binding term sheet for sale of its 32 MW wind project in Maharashtra. Subsequent to the year end, the Company signed a Business Transfer Agreement on 18th April, 2019 with the buyer. The sale transaction is likely to be concluded within next one year. No impairment loss has been recognised on reclassification as the Gorup expects that the fair value less cost to sale is higher then the carrying amount as at 31st March, 2019 Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
17a. Equity Share Capital
As at 31st March, 2019 As at 31st March, 2018 As at 1st April, 2017 Number ₹ crore Number ₹ crore Number ₹ crore Authorised Equity Shares of ₹ 10/- each 139,25,00,000 1,392.50 139,25,00,000 1,392.50 139,25,00,000 1,392.50
1,392.50 1,392.50 1,392.50 Issued, Subscribed and Paid-up Equity shares of ₹ 10 each 104,51,07,715 1,045.11 104,51,07,715 1,045.11 56,61,07,715 566.11 Total Issued, Subscribed and Paid-up Share Capital 1,045.11 1,045.11 566.11
(i) Reconciliation of the shares outstanding at the beginning and at the end of the reporting period As at 31st March, 2019 As at 31st March, 2018 As at 1st April, 2017 Number ₹ crore Number ₹ crore Number ₹ crore Equity Shares At the beginning of the year 104,51,07,715 1,045.11 56,61,07,715 566.11 50,61,07,715 506.11 Issued during the year - - 47,90,00,000 479.00 6,00,00,000 60.00 Outstanding at the end of the year 104,51,07,715 1,045.11 104,51,07,715 1,045.11 56,61,07,715 566.11
(ii) Terms/rights attached to Equity Shares The Company has issued only one class of Equity Shares having a par value of ₹ 10/- per share. Each holder of Equity Shares is entitled to one vote per share. The final dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of Equity Shares held by the shareholders.
(iii) Details of shareholders holding more than 5% shares in the Company and shares held by the holding Company The entire share capital of the Company is held by The Tata Power Company Limited, the holding Company.
17b. Unsecured Perpetual Securities As at As at As at 31st March, 2019 31st March, 2018 1st April, 2017 ₹ crore ₹ crore ₹ crore
At the beginning of the year 3,895.00 3,895.00 3,895.00 Add: Movement during the year - - - Total 3,895.00 3,895.00 3,895.00
The Tata Power Company Limited (Ultimate Holding Company) has given ₹ 3,895.00 crore to Tata Power Renewable Energy Limited (Holding Company) by way of unsecured perpetual securities. The securities is perpetual in nature with no maturity/redemption terms and is repayable only at the option of the Holding Company. The interest on the perpetual securities is non-cumulative in nature. The distribution on these securities is subject to the availability of profits and the consolidated Debt to equity ratio of the Holding Company as per latest audited financial statements is less than 2.33 without considering this perpetual securities. Such distribution would be at the rate at which dividend has been declared by the Holding Company on equity shares for the relevant financial year. If no dividend is declared by the Holding Company on equity shares in a given financial year, no interest shall be accrued, due or payable by the Holding Company to Ultimate Holding Company for such financial year. As these securities are perpetual in nature and ranked senior only to the share capital of the Holding Company and do not have any redemption obligation, these are considered to be in the nature of equity instruments. Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
18. Other Equity
As at As at 31st March, 2019 31st March, 2018 ₹ crore ₹ crore
a. Debenture Redemption Reserve Opening Balance 106.75 47.59 Add: Amount transferred from Retained Earnings (Net) 105.44 59.16 Closing Balance 212.19 106.75
b. Capital Reserve Opening Balance 18.86 8.08 Add: Movement during the year - 10.78 Closing Balance 18.86 18.86
c. Retained Earnings Opening balance (Refer Note 36 and 36.1) 90.30 57.94 Add: Profit for the year 328.45 271.59 Other Comprehensive Income arising from Remeasurement of Defined Benefit Obligation (Net of Tax) 0.79 0.47 Less: Other Appropriations: Payment of dividend - Final 14.00 125.33 Payment of dividend- Interim 40.35 24.92 Tax on Dividend 13.01 30.29 Transfer to Debenture Redemption Reserve 105.44 59.16 246.74 90.30
d. Deemed equity contribution Opening Balance 8.93 8.93 Add: Movement during the year - - Closing Balance 8.93 8.93
Total 486.72 224.84
Nature and purpose of reserves
Debenture Redemption Reserve The respective subsidaires of the Group is required to create a Debenture Redemption Reserve (DRR) out of the profits which is available for payment of dividend for the purpose of redemption of debentures. DRR cannot be utilised for the distribution of dividend.
Capital Reserve The opening balance of capital reserve is created consequent to scheme of amalgamation between Newgen Saurashtra Windfarm Ltd (NSW) and Tata Power Renewal Energy Limited (TPREL). The addition is towards acquisition of minority interest in subsidary companies of WREL.
Retained Earnings Retained Earnings are the profits of the Group earned till date net of appropriations.
Deemed equity contribution The Holding Company has provided corporate guarantees for Non-convertible Debentures (NCD) and Commercial Papers issued by the Group and as per requirement of Ind AS 113 "Fair Value Measurement" the fair value of corporate gurantees of ₹ 8.93 crore has been recognised as deemed equity contribution in consolidated Ind AS financial statements. Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
19. Non-current Borrowings
As at 31st March, 2019 As at 31st March, 2018 As at 1st April, 2017 Current Current Current Non-current Maturities * Non-current Maturities * Non-current Maturities * ₹ crore ₹ crore ₹ crore ₹ crore ₹ crore ₹ crore
(i) Unsecured - At Amortised Cost
Debentures Redeemable Non-Convertible Debentures (Refer Note 1) 2,265.97 - 2,686.07 - 2,189.32 -
Term Loans From Banks 467.45 30.00 497.11 - 298.85 -
Others Buyer's credit - 223.99 - - - -
2,733.42 253.99 3,183.18 - 2,488.17 -
(ii) Secured - At Amortised Cost
Term Loans (Refer Note 2) From Banks 4,212.66 212.52 3,104.84 498.95 1,499.12 1,234.03 From Others 520.71 7.28 527.80 1.97 197.51 1.77
Others (Refer Note 3) Buyer's Credit - 143.77 345.18 - 1,497.77 -
4,733.37 363.57 3,977.82 500.92 3,194.40 1,235.80
Total 7,466.79 617.56 7,161.00 500.92 5,682.57 1,235.80
* Amount disclosed under Other Current Financial Liabilities (Refer Note 20)
Securities
Note 1: The Holding Company has given unconditional and irrevocable Corporate Guarantee (CG) for all amounts due including but not limited to interest, principal amount, penal interest and any other costs/charges under the issue. CG shall remain valid till the issue is completely redeemed.
Note 2: Secured term loans including buyers credit availed by various entities of the group from the banks and others are secured by pari pasu charge on all present and future movable, immovable assets, intangibles, current assets, rights under project documents, project cashflow, rights of the respective entities and accounts including DSRA accounts (wherever applicable) of the respective entities and some of them are additionally secured by pledge of shares of subsidiaries held by their respective holding companies, minimum shareholding undertaking (wherever applicable) and corporate guarantee by the Walwhan Renewable Energy Limited, The Tata Power Company Limited or Tata Power Renewable Energy Limited.
Note 3: In one of the Subsidiary, i.e. Walwhan Solar BH Limited, buyers credit are secured by pari pasu charges on all present and future movable, immovable assets, intangibles, uncalled capital, receivables, current assets, rights under project documents, project cash flow and accounts and pledge of shares. Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
19 Non-current Borrowings (Contd.)
Terms of Repayment ₹ crore Particulars Amount Financial Year Outstanding as at 31st March, 2019 FY 19-20 FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-29 FY 29-30 and onwards
(i) Unsecured - At Amortised Cost
Debentures Redeemable Non-Convertible Debentures 2,275.00 - 70.00 1,270.00 535.00 70.00 330.00 -
Term Loans From Banks 500.00 30.00 30.00 47.55 47.55 47.55 297.35 -
Others Buyer's credit 223.99 223.99 ------
(ii) Secured - At Amortised Cost
Term Loans From Banks 4,443.86 212.52 261.00 285.35 314.88 309.54 1,634.86 1,425.71 From Others 528.00 7.28 7.50 7.71 38.55 38.82 211.39 216.74
Others Buyers Credit 143.77 143.77 ------
8,114.62 617.56 368.50 1,610.61 935.98 465.91 2,473.60 1,642.45
Less: Impact of recognition of borrowing at 30.27 amortised cost
Total 8,084.35
Notes: Range of interest rates for: 1. Debentures - 8.00% to 9.38% 2. Term loan from banks - 5.99% to 10.10% 3. Term loan from others and Buyer's credit - 8.50% to 9.45% Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
20. Other Financial Liabilities
As at As at As at 31st March, 2019 31st March, 2018 1st April, 2017 ₹ crore ₹ crore ₹ crore Non-current At Amortised Cost Payables for Capital Supplies and Services 6.64 - -
6.64 - -
Current At Amortised Cost, unless otherwise stated (a) Current Maturities of Non Current Borrowings (Refer Note 19) 617.56 500.92 1,235.80 (b) Interest accrued but not due on Borrowings 90.78 87.96 58.28 (c) Interest accrued but not due on Borrowings-Holding Company 0.22 1.61 - (d) Other Payables Payables for Capital Supplies and Services 1,446.84 192.44 759.53 Derivative Contracts (net) (Fair Value through Profit and Loss) 8.86 21.45 69.60 Corporate Guarantee Commission to Holding Company - 5.95 - Dividend payable to Holding Company - 54.41 - Contingent Consideration (Refer Note below) 42.57 55.71 107.34 Other Financial Liabilities 0.01 0.01 8.62 2,206.84 920.46 2,239.17
Note: Contingent Consideration has been valued using the discounted cash flow which considers the present value of expected payments, discounted using an appropriate discount rate. The expected payment is determined by considering the possible scenarios of forecasted payments, the amount to be paid under each scenario and the probability of each scenario. The key inputs used to measure the contingent consideration includes forecasted payments which majorly comprise of contingent tax payments, discount rate of 10.75%-11.25%.
21. Tax Liabilities As at As at As at 31st March, 2019 31st March, 2018 1st April, 2017 ₹ crore ₹ crore ₹ crore Current Tax Liabilities Income-tax Payable (Net) 2.40 7.45 1.52
Total 2.40 7.45 1.52 Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
22. Provisions Accounting Policy
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
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).
Present obligations arising under onerous contracts are recognised and measured as provisions with charge to statement of profit and loss. An onerous contract is considered to exist where the Group has a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received from the contract.
Defined contribution plans Payments to defined contribution retirement benefit plans are recognised as an expense when employees have rendered service entitling them to the contributions.
Defined benefits plans The cost of providing benefits under the defined benefit plan is determined using the projected unit credit method. Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through other comprehensive income (OCI) in the period in which they occur. Remeasurements are not reclassified to statement of profit and loss in subsequent periods. Past service costs are recognised in statement of profit and loss on the earlier of: - the date of the plan amendment or curtailment, and - the date that the Group recognises related restructuring costs Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Group recognises the following changes in the net defined benefit obligation as an expense in the consolidated statement of profit and loss: - service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine settlements; and - net interest expense or income. A liability for a termination benefit is recognised at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognises any related restructuring costs. The cost of the defined benefit gratuity plan and other post-employment medical benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds. The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates.
Current and other non-current employee benefits A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service. Liabilities recognised in respect of current employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service. Liabilities recognised in respect of other non-current employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Group in respect of services provided by employees up to the reporting date.
As at As at As at 31st March, 2019 31st March, 2018 1st April, 2017 ₹ crore ₹ crore ₹ crore
Non-current Provision for Employee Benefits Compensated Absences 2.06 1.76 - Gratuity (Net) [Refer Note 22 (2.3)] 3.84 5.32 0.65 Post-Employment Medical Benefits [Refer Note 22 (2.3)] 0.45 0.50 - Other Defined Benefit Plans [Refer Note 22 (2.3)] 0.21 0.17 - Other Employee Benefits 0.44 0.59 - Total 7.00 8.34 0.65
Current Provision for Employee Benefits Compensated Absences - 0.13 0.14 Gratuity (Net) [Refer Note 22 (2.3)] 0.10 0.22 0.08 Post-Employment Medical Benefits [Refer Note 22 (2.3)] 0.01 - - Other Defined Benefit Plans [Refer Note 22 (2.3)] 0.19 0.05 - Other Employee Benefits 0.02 0.06 - 0.32 0.46 0.22 Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
22. Provisions (Contd.)
Employee benefit plan 1. Defined Contribution plan The Group makes Provident Fund and Superannuation Fund contributions to defined contribution plans for eligible employees. Under the schemes, the Group is required to contribute a specified percentage of the payroll costs. The provident fund contributions as specified under the law are paid to the Governmment approved provident fund trust or statutory provident fund authorities. The Group has no obligation, other than the contribution payable to the respective fund. The Group recognizes such contribution payable to the respective fund scheme as an expense, when an employee renders the related service.
The Group has recognised ₹ 0.75 crore (31st March, 2018 - ₹ 1.03 crore) for provident fund contributions and ₹ 0.17 crore (31st March, 2018 - ₹ 0.08 crore) for superannuation contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Group are at rates specified in the rules of the schemes.
2. Defined benefit plans 2.1 The Group operates the following unfunded/funded defined benefit plans: Funded: Provident Fund The Group makes Provident Fund contributions to defined benefit plans for eligible employees. Under the scheme, the Group is required to contribute a specified percentage of the payroll costs to fund the benefits. The contributions as specified under the law are paid to the provident fund set up as a trust by the Group. The Group is generally liable for annual contributions and any shortfall in the fund assets based on the government specified minimum rates of return and recognises such contributions and shortfall, if any, as an expense in the year it is incurred. Having regard to the assets of the fund and the return on the investments, the Group does not expect any shortfall in the foreseeable future.
In terms of guidance note issued by the Institute of Actuaries of India, the Actuary has provided a valuation of Provident fund liability based on the assumptions listed and determined that there is no shortfall as at 31st March, 2019.
The significant assumptions used for the purpose of the actuarial valuations were as follows: Particulars 31st March, 2019 31st March, 2018 Interest rate 7.40% p.a. 8.55% p.a. Contribution during the year (₹ crore) 0.55 0.72
Unfunded: Post Employment Medical Benefits The Group provides certain post-employment health care benefits to superannuated employees at some of its locations. In terms of the plan, the retired employees can avail free medical check-up and medicines at Group's facilities.
Pension (including Director pension) The Group operates a defined benefit pension plan for employees who have completed 15 years of continuous service. The plan provides benefits to members in the form of a pre-determined lumpsum payment on retirement. Executive Director, on retirement, is entitled to pension payable for life including HRA benefit. The level of benefit is approved by the Board of Directors of the Group from time to time.
Ex-Gratia Death Benefit The Group has a defined benefit plan granting ex-gratia in case of death during service. The benefit consists of a pre-determined lumpsum amount alongwith a sum determined based on the last drawn basic salary per month and the length of service.
Retirement Gift The Group has a defined benefit plan granting a pre-determined sum as retirement gift on superannuation of an employee. Funded/Unfunded: Gratuity The Group has a defined benefit gratuity plan. The gratuity plan is primarily governed by the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of five years are eligible for gratuity. The level of benefits provided depends on the member's length of service and salary at the retirement date. The gratuity plan is a combination of funded plan and unfunded plan for various companies in the Group. In case of funded plan, the fund has the form of a trust and is governed by Trustees appointed by the Group. The Trustees are responsible for the administration of the plan assets and for the definition of the investment strategy in accordance with the regulations. The funds are deployed in recognised insurer managed funds in India. The Group does not fully fund the liability and maintains a target level of funding to be maintained over a period of time based on estimates of expected gratuity payments.
2.2 The principal assumptions used for the purposes of the actuarial valuations were as follows: Valuation as at 31st March, 2019 31st March, 2018 1st April, 2017 Discount Rate/Expected Rate of Return on Plan Assets 7.40% p.a. 7.70 % p.a. 7.36% p.a. Salary Growth Rate 5.00% to 7.00% p.a. 5.00% to 7.00% p.a. 8.00 % p.a. Turnover Rate 0.50% to 2.50% p.a. 0.50% to 2.50% p.a. 1.00% to 3.00% p.a. Mortality Table Indian Assured Lives Indian Assured Lives Indian Assured Lives Mortality (2006-08) Mortality (2006-08) Mortality (2006-08) (modified) Ult (modified) Ult (modified) Ult Annual Increase in Healthcare Cost 8.00 % p.a. 8.00 % p.a. 8.00 % p.a. Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
22. Provisions (Contd.)
2.3 The amounts recognised in the financial statements and the movements in the net defined benefit obligations over the year are as follows:
Unfunded Plan - Gratuity and Other Defined Benefit Plans: Gratuity Other Defined Benefit Plans
Amount Amount ₹ crore ₹ crore Balance as at 1st April, 2017 0.73 - Current service cost 0.35 0.06 Past service cost - 0.18 Interest Cost 0.18 0.02 Amount recognised in Statement of Profit and Loss 0.53 0.26 Remeasurement (gains)/losses Actuarial (gains)/losses arising from changes in demographic assumptions 0.17 - Actuarial (gains)/losses arising from changes in financial assumptions (0.93) 0.01 Actuarial (gains)/losses arising from experience 0.28 (0.15) Amount recognised in Other Comprehensive Income (0.48) (0.14) Benefits paid (0.25) - Acquisitions credit/(cost) 5.01 0.60 Balance as at 31st March, 2018 5.54 0.72
Balance as at 31st March, 2018 5.54 0.72 Current service cost 0.51 0.14 Past service cost - - Interest Cost 0.02 0.05 Amount recognised in Statement of Profit and Loss 0.53 0.19 Remeasurement (gains)/losses Actuarial (gains)/losses arising from changes in demographic assumptions - - Actuarial (gains)/losses arising from changes in financial assumptions 0.22 (0.05) Actuarial (gains)/losses arising from experience (1.26) (0.02) Amount recognised in Other Comprehensive Income (1.04) (0.07) Benefits paid (0.40) (0.06) Acquisitions credit/(cost) (0.69) 0.08 Balance as at 31st March, 2019 3.94 0.86 Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
22. Provisions (Contd.)
2.4 Sensitivity analysis The sensitivity of the defined benefit obligations to changes in the weighted principal assumptions is: Change in assumption Increase in assumption Decrease in assumption 31st March, 31st March, 31st March, 31st March, 31st March, 31st March, 2019 2018 2019 2018 2019 2018 Assumption ₹ crore ₹ crore ₹ crore ₹ crore ₹ crore ₹ crore
Discount rate 0.50% 0.50% Decrease by 0.45 0.40 Increase by 0.50 0.45
Salary/Pension growth rate 0.50% 0.50% Increase by 0.41 0.40 Decrease by 0.38 0.37
Mortality rates 1 year 1 year Decrease by 0.06 0.01 Increase by 0.05 0.01
Healthcare cost 0.50% 0.50% Increase by 0.04 0.05 Decrease by 0.04 0.04
The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The method and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
2.5 The expected maturity analysis of undiscounted defined benefit obligation (Funded and Unfunded) is as follows: 31st March, 31st March, 2019 2018 ₹ crore ₹ crore Within 1 year 0.14 0.28 Between 1 - 2 years 0.17 0.13 Between 2 - 3 years 0.22 0.16 Between 3 - 4 years 0.23 0.21 Between 4 - 5 years 0.28 0.55 Beyond 5 years 3.02 2.79
The weighted average duration of the defined benefit obligation is approximately 8.1 years (31st March, 2018 - 8.1 years ).
2.6 Risk exposure: Through its defined benefit plans, the Group is exposed to a number of risks, the most significant of which are detailed below: Asset volatility: The plan liabilities are calculated using a discount rate set with reference to government bond yield. If plan assets underperform this yield, it will result in deficit. These are subject to interest rate risk. To offset the risk, the plan assets have been deployed in high grade insurer managed funds. Inflation rate risk: Higher than expected increase in salary and medical cost will increase the defined benefit obligation. Demographic risk: This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligations is not straight forward and depends upon the combination of salary increase, discount rate and vesting criterion. Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
23. Other Liabilities As at As at As at 31st March, 2019 31st March, 2018 1st April, 2017 ₹ crore ₹ crore ₹ crore Non-current Deferred Revenue 205.10 167.62 140.72
Total 205.10 167.62 140.72
Current Statutory Liabilities 21.18 32.56 20.99 Other Liabilities 0.27 0.01 0.49
21.45 32.57 21.48
24. Current Borrowings
As at As at As at 31st March, 2019 31st March, 2018 1st April, 2017 ₹ crore ₹ crore ₹ crore
(i) Unsecured - At Amortised Cost From Banks (a) Bank Overdraft 4.93 - 0.51
From Others (a) From Related Parties (Refer Note 2) 165.00 35.00 - (b) Commercial Papers 933.98 840.93 794.24
1,103.91 875.93 794.75
(ii) Secured - At Amortised Cost From Banks (a) Short-term Loans - - 34.61 (b) Repayable on demand - - 10.58
- - 45.19
1,103.91 875.93 839.94
Security Note 1:The secured loan availed by subsidiaries are secured by Corporate Guarantee given by the Group. Note 2: The Group have entered into Inter-Corporate depost (ICD) with the Holding Company for a period of 30 days at an interest rate of 8.15%. The principal is payable on maturity along with interest. This ICD is unsecured. Tata Power Renewable Energy Limited Notes to the Financial Statements
25. Revenue from Operations
Revenue recognition
Accounting Policy
A. Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services.
Description of performance obligations are as follows :
(i) Sale of Power Revenue from sale of power is recognised net of cash discount over time for each unit of electricity delivered at the contracted rate. The transaction price is adjusted for significant financing component, if any and the adjustment is accounted as finance cost. The Group has identified supply of power over the term of PPA as a single performance obligation and is recognizing revenue over time using a single measure of progress.
B. Delayed payment charges Delayed payment charges were hitherto recognized only when they are realised/recovered. With effect from 01st April, 2018, the Group has revised its accounting policy to recognize Delayed Payment Charges (DPC) on accrual basis based on contractual terms and an assessment of certainty of realisation. Revenue in respect of delayed payment charges and interest on delayed payment charges leviable as per the relevant contracts are recognised on actual realisation or accured based on an assessment of certainity of realisation. Management believes that this policy results in the Consolidated Ind AS financial statements providing reliable and more relevant information about the effects of transaction on the Group's financial position and performance. The revision in accounting policy has been applied retrospectively and does not have any significant impact on current year and previous year statement of profit and loss and retained earnings as at March 31, 2017.
C. Unbilled Revenue Unbilled revenue represents services rendered by the Group but not invoiced as at the balance sheet date. Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
25. Revenue from Operations (Contd.) For the year ended For the year ended 31st March, 2019 31st March, 2018 ₹ crore ₹ crore
(a) Revenue from Power Supply and Transmission Charges 1,949.73 1,639.92 Less: Cash Discount (15.65) (8.73)
1,934.08 1,631.19
(b) Project/Operation Management Services Others - 2.39
- 2.39
(c) Income from Finance Lease 40.52 -
(d) Other Operating Revenue Generation based incentive and carbon credit (Refer Note 43) 45.23 40.92 Income in respect of Services Rendered 2.17 41.78 Compensation 6.83 23.79 Amortisation of Capital Grants 2.82 0.04 Miscellaneous Revenue and Sundry Credits 14.12 4.11 Sale of Carbon Credits - 1.08 71.17 111.72
Total 2,045.77 1,745.30 Details of revenue from contract with customers
Revenue recognised from contract with customers: Revenue from Power Supply and Transmission Charges 1,934.08 1,631.19 Income in respect of Services Rendered 2.17 41.78 Amortisation of Capital Grants 2.82 0.04 Sale of Carbon Credits - 1.08 Total 1,939.07 1674.09 Add : Significant financing component 12.15 10.82 Add : Cash Discount/Rebates etc. 15.65 8.73 Contracted revenue 1,966.87 1,693.64
Transaction Price - Remaining Performance Obligation The remaining performance obligation disclosure provides the aggregate amount of the transaction price yet to be recognized as at the end of the reporting period and an explanation as to when the Group expects to recognize these amounts in revenue. Applying the practical expedient as given in Ind AS 115, the Company has not disclosed the remaining performance obligation related disclosures for contracts as the revenue recognized corresponds directly with the value to the customer of the entity's performance completed to date. Disclosure on Transaction Price - Remaining Performance Obligation
Revenue from Power Supply to be recognised Within one year 272.71 272.78 Beyond one year 5,172.27 5,444.98 Total 5,444.98 5,717.76 Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
26. Other Income Accounting Policy Interest income Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Group and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount on initial recognition.
For the year ended For the year ended 31st March, 2019 31st March, 2018 ₹ crore ₹ crore (a) Interest Income (i) Financial Assets held at Amortised Cost Interest on Banks Deposits 0.67 1.98 Interest on Loans to Subsidiaries 10.45 3.20 Interest on Loans and Advances 8.42 6.20
19.54 11.38 (ii) Others Interest on Income-tax Refund 1.90 2.58
21.44 13.96 (b) Gain/(Loss) on Investments Gain on Sale of Current Investment measured at FVTPL 19.92 25.88 19.92 25.88 (c) Other Non-operating Income Provision for doubtful debt written back - 0.50 Delayed Payment Charges - 0.36 Other Income - 1.00 Miscellaneous Income 5.54 - 5.54 1.86
Total 46.90 41.70 Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
27. Employee Benefits Expenses
For the year ended For the year ended 31st March, 2019 31st March, 2018 ₹ crore ₹ crore
Salaries and Wages 24.13 22.87 Contribution to Provident Fund [Refer Note 22 (2.1)] 0.75 1.03 Contribution to Superannuation Fund 0.16 0.08 Gratuity [Refer Note 22 (2.3)] 0.78 0.53 Leave Encashment Scheme 0.52 0.06 Pension 0.24 - Staff Welfare Expenses 1.96 0.75 28.54 25.32 Less: Employee Cost Capitalised 0.64 - 0.64 -
Total 27.90 25.32
28 Finance Costs Accounting Policy
Borrowing Costs Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are recognised in statement of profit and loss in the period in which they are incurred.
For the year ended For the year ended 31st March, 2019 31st March, 2018 ₹ crore ₹ crore (a) Interest Expense: On Borrowings (Carried at Amortised Cost) Interest on Debentures 203.15 219.68 Interest on Loans - Banks & Financial Institutions 448.17 366.06 Interest on Commercial Papers 74.54 27.30 Interest paid to Holding Company 6.62 2.14 Interest paid to fellow subsidiary 5.24 - Interest on borrowings from related parties - 16.06 Others Other Interest and Commitment Charges 0.62 0.02 738.34 631.26
Less: Interest Capitalised 15.88 39.94
722.46 591.32 (b) Other Borrowing Costs: Other Finance Costs 46.37 88.51 Foreign Exchange Loss/(Gain) on Borrowings (Net) 4.87 18.22
Less: Finance Charges Capitalised 0.04 0.16
51.20 106.57
773.66 697.89 Note: The weighted average capitalisation rate on the Group general borrowings is in the range of 8.28% per annum (31st March, 2018 - 8.12% per annum). Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
29. Other Expenses
For the year ended For the year ended 31st March, 2019 31st March, 2018 ₹ crore ₹ crore
Consumption of Stores, Oil, etc. 1.09 1.43 Rental of Land, Buildings, Plant and Equipment, etc. 3.64 2.49 Repairs and Maintenance - (i) To Buildings and Civil Works 1.15 - (ii) To Machinery and Hydraulic Works 67.57 27.71 (iii) To Furniture, Vehicles, etc. 0.54 0.34 Rates and Taxes 5.35 9.69 Insurance 6.70 7.05 Other Operation Expenses 41.74 43.88 Loss on Disposal of Property, Plant and Equipment 4.82 3.53 Travelling and Conveyance Expenses 4.01 3.20 Consultants' Fees 3.61 8.10 Auditors' Remuneration 1.68 2.42 Cost of Services Procured 24.89 29.78 Allowance for Doubtful Debts and Advances (Net) 2.76 2.55 Amortisation of Leasehold Land 1.48 0.35 Legal Charges 1.78 1.00 Corporate Social Responsibility Expenses 5.03 3.91 Marketing expenses 0.01 - Miscellaneous Expenses 3.17 2.91 181.02 150.34 Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
30 Income taxes
Current Tax Accounting Policy
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date in the countries where the respective subsidiary companies operates and generates taxable income.
Current income tax relating to items recognised outside statement of profit and loss is recognised outside statement of profit and loss (either in other comprehensive income or in equity). Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Income taxes recognised in statement of profit and loss 31st March, 2019 31st March, 2018 ₹ crore ₹ crore Current tax 130.52 113.30 Deferred tax 44.92 (28.89) Total income tax expense recognised in the current year 175.44 84.41
The income tax expense for the year can be reconciled to the accounting profit as follows: 31st March, 2019 31st March, 2018 ₹ crore ₹ crore
Profit/(Loss) before tax considered for tax working 503.89 357.68
Income tax expense 176.08 123.79 Add/(Less) tax effect on account of : Unused tax credit (MAT) pertaining to earlier years recognized in the current year - (28.66) Effect of tax on MAT reversal 12.01 - Effect of additional tax on account of Minimum Alternate Tax (MAT) applicability 1.72 - Effect of movement of tax on which no deferred tax was recognised 1.90 (26.50) Deduction during tax holiday period (6.15) (4.02) Effect of non-taxable income (0.87) (17.98) Profit taxable at difference tax rates for certain subsidiaries (16.33) (11.37) Reversal of deferred tax during tax holiday period (0.46) - Effect of expenses that are not deductible in determining taxable profit 10.94 33.76 Changes in income tax rate - 1.11 Undistributed Profits - (2.38) Other Items (including true up impact basis income tax returns) (3.40) 16.66 Income tax expense recognised in statement of profit and loss 175.44 84.41
Income tax expense recognised in statement of profit and loss 175.44 84.41 Notes: a. The tax rate used for the years 2018-19 and 2017-18 reconciliations above is the coporate tax rate of 34.944% and 34.608% respectively payable by the corporate entities in India on taxable profits under the Indian tax law. b. The Indian Companies have to pay taxes based on the higher of Income-tax profit of the company or MAT at 21.549% and 21.3416% of book profit for the year 2018-19 and 2017-18 respectively. c. The rate used for calculation of deferred tax is 34.944% for 2017-18 and 2018-19. Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
31 Contingent Liabilities: Accounting Policy
Contingent liabilities are disclosed in the Ind AS consolidated financial statements by way of notes to accounts, unless possibility of an outflow of resources embodying economic benefit is remote.
(a) As at 31st March, 2019 - ₹ NIL - in respect of Income tax disputes (31st March, 2018 ₹ NIL; 1st April, 2017 ₹ 5.88 crore) and in respect of VAT ₹ 0.55 crore as on 31st March, 2019 (31st March, 2018 ₹ 0.91 crore; 1st April, 2017 ₹ 0.36 crore).
The department has disallowed ₹ 0.67 crore of refund due to the company for VAT Assessment for FY 2014-15. The Group is in the process of filing appeal against this order.
(b) During the year ended 31st March, 2019, service tax audit for the year 2013-14 to 2016-17 was carried out by GST audit department. Group has received an observation letter from the department with a service tax demand of ₹ 6.11 crore for the said year. Out of this, the Group has already accounted and paid ₹ 3.97 crore pertaining to FY 2015-16 to 2016-17 in respective years. It has paid the balance amount of ₹ 2.14 crore under protest to the department.
(c) There are numerous interpretative issues relating to the Supreme Court (SC) judgement dated 28th February, 2019 on Provident Fund (PF) on the inclusion of allowances for the purpose of PF contribution as well as its applicability of effective date. The Group is consulting Legal counsel for further clarity and evaluating its impact on its financial statement.
32 Commitment : Estimated amount of contracts remaining to be executed (net of capital advance) on Capital account and not provided for ₹ 292.79 crore (31st March, 2018 ₹ 39.02 crore; 1st April, 2017 ₹ 288.98 crore).
33 Earnings per Share:
Accounting Policy
Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the group by the weighted average number of equity shares outstanding during the period. Diluted earnings per equity share is computed by dividing the net profit attributable to the equity holders of the Group (after adjustment for income in respect of dilutive potential ordinary shares) by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the proceeds receivable had the equity shares been actually issued at fair value (i.e. the average market value of the outstanding equity shares). Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.
The number of equity shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for any share splits and bonus shares issues including for changes effected prior to the approval of the financial statements by the Board of Directors.
Particulars For the Year ended For the Year ended 31st March, 2019 31st March, 2018
Basic Net profit for the year attributable to equity shareholders (₹ crore) 328.45 271.59 Weighted Average Number of Equity Shares for Basic Earning Per Share (Nos) 1,04,51,07,715 85,44,06,345 Par value per equity share (₹) 10.00 10.00 Basic Earnings Per Share (₹) 3.14 3.18
Diluted Net profit for the year attributable to equity shareholders (₹ crore) 328.45 271.59 The weighted average number of equity shares for Basic Earning Per Share (Nos) 1,04,51,07,715 85,44,06,345 Add: Effect of Share application money received in advance pending allotment - 4,04,60,274 Weighted average number of equity shares for Diluted Earning Per Share (Nos) 1,04,51,07,715 89,48,66,619 Par value per equity share (₹) 10.00 10.00 Diluted Earnings Per Share (₹) 3.14 3.03 34 Disclosure as required by Indian Accounting Standard 24 (IND AS-24) "Related Party Disclosures" as notified under the Companies (Accounts) Rules, 2014 is as follows:
(a) Names of the related parties and description of relationship:
Name of the Related Party
Holding Company / Ultimate Holding Company The Tata Power Company Limited (TPCL)
Fellow Subsidiaries (where transactions have taken place) Tata Power Solar Systems Limited (TPSSL) Tata Power Trading Company Limited (TPTCL) Maithon Power Limited (MPL) Chirasthaayee Saurya Limited (CSL) Af-Taab Investment Company Limited (Aftaab)
Others Tata Sons Private Limited (TATA Sons) (Promoter of Holding Company) Tata AIG General Insurance Company Limited (TATA AIG) (Joint venture of Tata Sons Private Limited)
Key Management Personnel Mahesh Paranjpe (CEO, with effect from 21st June, 2018) Rahul Shah (Director, resigned with effect from 30th June,2018) Jinendra Patil (CFO, resigned with effect from 05th November, 2018) Gautam Attravanam (CFO, with effect from 05th November, 2018) Mona Purandare (CS) Nawshir Mirza (Independent Director) Sanjay Bhandarkar (Independent Director) Anjali Kulkarni (Director, resigned with effect from 05th July,2018) Anjali Bansal (Independent Director with effect from 19th July, 2018)
(b) Details of Transactions / Balances Outstanding: ₹ crore Key TATA Particulars TPCL TPSSL TPTCL Aftaab MPL CSL Management TATA AIG Sons Personnel
Operation / Project Management Service 2019 3.54 - 0.31 ------2018 9.26 - 0.08 ------
Receiving of Services 2019 3.05 19.24 - - 0.02 - - 4.86 - 2018 4.16 6.29 0.02 - 0.24 - - 6.11 -
Insurance Claim Received 2019 ------1.50 - 2018 ------
Rendering of Services 2019 2.03 0.04 0.02 ------2018 ------
Purchase of Fixed asset 2019 - 1,899.67 ------2018 - 1,298.37 ------
Guarantees given including corporate 2019 ------guarantee 2018 3,053.52 ------
Guarantees returned including corporate 2019 500.00 ------guarantee 2018 1,700.00 ------
Fair value of corporate guarantee 2019 ------2018 8.15 ------
Interest Expenditure 2019 6.62 - - 5.24 - - - - - 2018 1.78 ------
Interest Income 2019 2.75 0.81 0.36 - - 6.36 - - - 2018 0.04 - - - - 3.16 - - -
Dividend Paid 2019 54.35 ------2018 150.25 ------34 Related Parties Disclosure (continue..) ₹ crore Key TATA Particulars TPCL TPSSL TPTCL Aftaab MPL CSL Management TATA AIG Sons Personnel Borrowings Received 2019 500.00 - - 250.00 - - - - - 2018 35.00 ------
Borrowings Repaid (including conversion in 2019 495.00 - - 125.00 - - - - - equity) 2018 ------
Equity Contribution (including Share Application Money pending for allotment and 2019 ------conversion of debt) 2018 479.00 ------
Sale of Power 2019 63.61 ------2018 64.07 ------
Cash Discount given 2019 0.78 ------2018 0.83 ------
Loans given or assigned 2019 682.10 296.94 165.00 ------2018 25.00 - - - - 79.50 - - -
Loans given ( received back) 2019 707.10 211.93 165.00 ------2018 ------
Sale of Investment 2019 ------2018 0.02 ------
TATA Brand Equity 2019 ------1.78 2018 ------1.17
Director Sitting Fees 2019 ------2.46 - - 2018 ------2.58 - -
Balance Outstanding Loans taken (including Interest thereon) 2019 40.03 - - 125.22 - - - - - 2018 36.61 ------2017 ------
Perpetual securities outstanding 2019 3,895.00 ------2018 3,895.00 ------2017 3,895.00 ------
Loan given outstanding (including interest 2019 - 85.52 - - - 84.97 - - - accrued thereon) 2018 25.00 - - - - 82.34 - - - 2017 ------
Other Payables 2019 6.86 1,414.79 0.09 - - - - - 1.78 2018 11.44 153.77 0.04 - - - 0.01 - 1.17 2017 6.91 357.23 ------
Other Receivable 2019 6.31 - - - 0.02 - - - - 2018 7.70 - - - 0.24 - - - - 2017 5.19 ------
Dividend Payable 2019 ------2018 54.41 ------2017 ------
Fair value of corporate guarantee 2019 5.00 ------2018 5.00 ------2017 5.00 ------
Guarantees given on behalf of TPREL 2019 2,235.00 ------2018 2,735.00 ------2017 2,225.00 ------
Guarantees given to banks on behalf of group 2019 1,464.99 ------2018 ------2017 ------
Guarantees given on behalf of WREPL 2019 2,052.00 ------2018 2,052.00 ------2017 1,208.48 ------Above related party transactions are in ordinary course of business and are at arm's length.
* Key Managerial Personnel are entitled to post-employment benefits and other long term employee benefits recognised as per Ind AS 19 - ‘Employee Benefits’ in the financial statements. As these employee benefits are lump sum amounts provided on the basis of actuarial valuation, the same is not included above. Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
35 Financial Instruments
35.1 (i) The carrying value of financial instruments by categories as of March 31, 2019 is as follows: ₹ in Crore
Particulars Fair Value through Fair Value through Derivative Amortised Cost Total Carrying Value Total Fair Value Profit and Loss OCI instruments not in hedging relationship
Assets : Cash and Cash Equivalents - - - 65.56 65.56 65.56 Trade Receivables - - - 650.00 650.00 650.00 Unbilled Revenue - - - 187.29 187.29 187.29 Current Investments 89.43 - - - 89.43 89.43 Other balances with banks - - - 22.06 22.06 22.06 Loans & Advances - - - 174.35 174.35 174.35 Finance Lease Receivable - - - 11.67 11.67 11.67 Other financial assets - - 1.54 487.73 489.27 489.27
Total 89.43 - 1.54 1,598.66 1,689.63 1,689.63
Liabilities: Fixed rate borrowings (including current - - - 1,854.15 1,854.15 1,780.70 maturities) Floating rate borrowings (including - - - 7,334.11 7,334.11 7,368.87 current maturities) Trade Payables - - - 60.57 60.57 60.57 Other Financial Liabilities - - 8.86 1,587.06 1,595.92 1,595.92
Total - - 8.86 10,835.89 10,844.75 10,806.06
The carrying value of financial instruments by categories as of March 31, 2018 is as follows: ₹ in Crore
Particulars Fair Value through Fair Value through Derivative Amortised Cost Total Carrying Value Total Fair Value Profit and Loss OCI instruments not in hedging relationship
Assets : Cash and Cash Equivalents - - - 72.46 72.46 72.46 Trade Receivables - - - 333.43 333.43 333.43 Unbilled Revenue - - - 169.94 169.94 169.94 Other balances with banks - - - 0.08 0.08 0.08 Current Investments 73.26 - - - 73.26 73.26 Loans & Advances - - - 111.22 111.22 111.22 Other financial assets - - 2.16 324.99 327.15 327.15
Total 73.26 - 2.16 1,012.12 1,087.54 1,087.54
Liabilities: Fixed rate borrowings (including current - - - 2,224.97 2,224.97 2,197.58 maturities) Floating rate borrowings (including - - - 6,312.89 6,312.89 6,321.42 current maturities) Trade Payables - - - 65.47 65.47 65.47 Other Financial Liabilities - - 21.45 398.09 419.54 419.54
Total - - 21.45 9,001.42 9,022.87 9,004.01
The carrying value of financial instruments by categories as of April 1, 2017 is as follows: ₹ in Crore
Particulars Fair Value through Fair Value through Derivative Amortised Cost Total Carrying Value Total Fair Value Profit and Loss OCI instruments not in hedging relationship
Assets : Cash and Cash Equivalents - - - 86.11 86.11 86.11 Trade Receivables - - - 429.79 429.79 429.79 Unbilled Revenue - - - 39.64 39.64 39.64 Other balances with banks - - - 67.81 67.81 67.81 Current Investments 414.63 - - - 414.63 414.63 Loans & Advances - - - 6.29 6.29 6.29 Other financial assets - - - 324.94 324.94 324.94
Total 414.63 - - 954.58 1,369.21 1,369.21
Liabilities Fixed rate borrowings (including current - - - 1,194.48 1,194.48 1,194.48 maturities) Floating rate borrowings (including - - - 6,563.84 6,563.84 6,573.39 current maturities) Trade Payables - - - 38.11 38.11 38.11 Other Financial Liabilities - - 69.60 933.77 1,003.37 1,003.37
Total - - 69.60 8,730.20 8,799.80 8,809.35 Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
(ii) Fair Value hierarchy
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 prices (unadjusted) in active markets for identical assets or liabilities. • Level 2 — Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). • Level 3 — Inputs are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.
The following table summarises financial assets and liabilities measured at fair value on a recurring basis and financial assets that are not measured at fair value on a recurring basis (but fair value disclosure are required):
₹ in Crore
31st March, 2019 Level 1 Level 2 Level 3 Total
Financial Assets Mutual Fund Investment 85.39 4.04 - 89.43 Derivative Instruments - 1.54 - 1.54 Total 85.39 5.58 - 90.97
Financial Liabilities Fixed rate borrowings (including current 1,650.77 129.93 - 1,780.70 maturity) Floating rate borrowings (including 576.52 6,792.36 - 7,368.87 current maturity) Derivative financial liabilities - 8.86 - 8.86 Total 2,227.29 6,931.15 - 9,158.43
31st March, 2018 Level 1 Level 2 Level 3 Total Financial Assets Mutual Fund Investment 73.26 - - 73.26 Derivative Instruments 2.16 - 2.16 Total 73.26 2.16 - 75.42
Financial Liabilities Fixed rate borrowings (including current 1,664.83 532.75 - 2,197.58 maturity) Floating rate borrowings (including 1,002.38 5,319.04 - 6,321.42 current maturity) Derivative financial liabilities - 21.45 - 21.45 Total 2,667.21 5,873.24 - 8,540.45
31st March, 2017 Level 1 Level 2 Level 3 Total
Financial Assets Mutual Fund Investment 414.63 - - 414.63
Total 414.63 - - 414.63
Financial Liabilities Fixed rate borrowings (including current 1,194.48 - - 1,194.48 maturity) Floating rate borrowings (including 1,002.66 5,570.73 - 6,573.39 current maturity) Derivative financial liabilities - 69.60 - 69.60 Total 2,197.14 5,640.33 - 7,837.47
Valuation technique(s) and key input(s):
Level 1: The fair value of mutual funds and debentures is based on quoted price.
Level 2: Derivative financial instruments are valued based on quoted prices for similar assets and liabilities in active markets or inputs that are directly or indirectly observable in the marketplace.
There has been no transfer between level 1 and level 2 during the year.
35.2 Capital Management and Gearing Ratio:
The Group's capital management is intended to create value for shareholders by facilitating the meeting of its long-term and short-term goals. Its Capital structure consists of net debt (borrowings as detailed in notes below) and total equity.
Gearing ratio : The gearing ratio at the end of the reporting period was as follows: ₹ in Crore As at 31st March, As at 31st March, As at 1st April, 2019 2018 2017 Debt * 9,279.26 8,627.43 7,816.60 Cash and Bank balances 87.62 72.54 153.92 Net debt 9,191.64 8,554.89 7,662.68
Total Equity ** 5,426.83 5,164.95 4,772.74
Net debt to equity ratio (%) 169.37 165.63 160.55 * Debt : Debt is defined as long-term and short-term borrowings including current maturity and interest accrued on the borrowings (excluding derivative, financial guarantee contracts and contingent considerations). ** Equity is defined as Equity share capital, Unsecured perpetual securities and other equity including reserves and surplus and non-controlling interests.
In order to achieve this overall objective, the Group’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period. Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
35.3 Financial Risk Management: The Group’s principal financial liabilities, other than derivatives, comprise borrowings, trade and other payables, financial guarantee contracts and other financial liabilities. The main purpose of these financial liabilities is to finance the Group’s operations and to provide guarantees to support its operations. The Group’s principal financial assets include loans, trade and other receivables, cash and cash equivalents, other bank balances, unbilled receivables, finance lease receivables and other financial assets that derive directly from its operations. The Group also holds FVTPL investments and enters into derivative transactions.
(a) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates (currency risk) and interest rates (interest rate risk), will affect the Group's income or value of it's holding of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.
(i) Foreign currency risk management
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Group is exposed to foreign exchange risk through capital buyers' credit availed in USD for import of solar modules. The results of the Group's operations can be affected as the rupee appreciates/depreciates against this currency. The Group enters into derivative financial instruments such as foreign exchange forward and Currency & Interest Rate Swaps to mitigate the risk of changes in exchange rates on foreign currency exposures.
The following table analyses foreign currency assets and liabilities on balance sheet dates:
Particulars As at 31st March, 2019 As at 31st March, 2018 As at 1st April, 2017 Foreign Currency ₹ crore Foreign Currency ₹ crore Foreign Currency ₹ crore (in million) (in million) (in million)
In USD 53.17 367.63 109.27 709.58 230.61 1,497.77
(ii) Foreign currency sensitivity analysis
The following tables demonstrate the sensitivity to a reasonably possible change in USD exchange rates, with all other variables held constant. The impact on the Group’s profit before tax and pre-tax equity is due to changes in the fair value of monetary assets and liabilities including non-designated foreign currency forward and option contracts given as under :-
As at 31st March, 2019 As at 31st March, 2018 As at 1st April, 2017 Rupee Rupee appreciate Rupee Rupee Rupee Rupee Particulars depreciate by by INR1 against depreciate by appreciate by depreciate by appreciate by INR1 against USD INR1 against INR1 against INR1 against INR1 against USD USD USD USD USD Effect on profit before tax ₹ crore - - 0.03 (0.03) - - Effect on pre-tax equity ₹ crore - - (0.03) 0.03 - -
(iii) Derivative financial instruments
The Group holds derivative financial instruments such as foreign exchange forward and Currency & Interest Rate Swaps to mitigate the risk of changes in exchange rate on foreign currency exposure. The counterparty for these contracts is generally a Bank or a Financial Institution. These derivative financial instrument are valued based inputs that is directly or indirectly observable in the marketplace by an independent expert. The following table gives details in respect of outstanding foreign exchange forward and CIRS contracts: ₹ in Crore As at 31st March, 2019 Foreign currency Nominal Value Fair Value (MTM) Outstanding contracts (in millions)
Forwards contracts 33.18 229.48 (8.86) Currency Interest Rate Swaps (CRIS) contracts 20.00 138.32 1.54
As at 31st March, 2018 Foreign currency Nominal Value Fair Value (MTM) (in millions)
Forwards contracts 36.19 234.72 (21.45) Currency Interest Rate Swaps contracts 73.08 474.86 2.26
As at 1st April, 2017 Foreign currency Nominal Value Fair Value (MTM) (in millions)
Forwards contracts 61.25 397.81 (15.49) Currency Interest Rate Swaps contracts 169.36 1,099.96 (54.11)
Note: Fair valule in bracket denotes liability
(iv) Interest rate risk management
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The capital expenditure of the Group is financed by loans, the shareholders' fund and internal proceeds. The interest bearing loans of the Group comprises of both fixed and floating rate. The Group manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings. To manage this, the Group enters into fixed rate borroiwngs and currency interest rate swaps, in which it agrees to exchange, at specified intervals, the difference between fixed and variable rate interest amounts calculated by reference to an agreed-upon notional principal amount. If the interest rates had been 50 basis points higher or lower and all the other variables were held constant, the effect on Interest expense for the respective financial years and consequent effect on Group's profit in that financial year would have been as below:
For the year ended 31st March, For the year ended 31st March, Particulars 2019 2018 50 bps increase 50 bps decrease 50 bps increase 50 bps decrease Interest expense on loan (+) ₹ 32.75 crore (-) ₹ 31.83 crore (+) ₹ 23.78 crore (-) ₹ 23.78 crore Effect on profit before tax (-) ₹ 32.75 crore (+) ₹ 31.83 crore (-) ₹ 23.78 crore (+) ₹ 23.78 crore Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
(iv) Interest rate swap contracts:
An interest rate swap is an agreement between two counterparties in which one stream of future interest payments is exchanged for another based on a specified principal amount. Interest rate swaps usually involve the exchange of a fixed interest rate for a floating rate, or vice versa, to reduce or increase exposure to fluctuations in interest rates or to obtain a marginally lower interest rate than would have been possible without the swap. Interest rate swaps are the exchange of one set of cash flows for another.
The following table gives details in respect of outstanding receive floating pay fixed contracts: ₹ in Crore Less than 1 year 1 to 5 years 5 years +
31st March 2019 Nominal amounts 138.32 - - Fair value assets 1.54 - - 31st March 2018 Nominal amounts - 474.86 - Fair value assets - 2.26 - 01st April 2017 Nominal amounts - 1,099.96 - Fair value (liabilities) - (54.11) -
(b) Credit risk management
The Group takes on exposure to credit risk, which is the risk that counterparty will default on its contractual obligations resulting in financial loss to the Group.
₹ in Crore Particulars As at 31st As at 31st As at 1st April, March, 2019 March, 2018 2017 Trade receivables 650.00 333.43 429.79 Unbilled revenue 187.29 169.94 39.64 Loans & advances 174.35 111.22 6.29 Finance Lease Receivables 11.67 - - Other financial assets 489.27 327.15 324.94
All of the above are due from the parties under normal course of the business and as such the Group believe exposure to credit risk to be minimal.
(c) Liquidity risk management
The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. The Group has access to a sufficient variety of sources of funding and debt maturing within 12 months can be rolled over with existing lenders.Having regards to the nature of the business wherein the Group is able to generate fixed cash flows over a period of time and to optimize the cost of funding, the Group, from time to time, funds its long -term investment from short-term sources. The short-term borrowings can be rollforward or, if required, can be refinanced from long term borrowings.
The table below summarizes the maturity profile of the Group’s financial liabilities based on contractual undiscounted payments.
Expected maturity for financial Liabilities Up to 2 to 5 5+ Total Carrying Amount 1 year years years
31st March, 2019 Non-Derivatives Borrowings (including current maturity) 1,737.50 4,496.19 2,984.64 9,218.33 9,188.26 Interest payable on above borrowings 706.73 2,110.90 1,627.60 4,445.22 91.00 Trade Payables 60.57 - - 60.57 60.57 Other Financial Liabilities 1,489.42 - - 1,489.42 1,489.42 Total Non-Derivative Liabilities 3,994.22 6,607.09 4,612.24 15,213.54 10,829.25
Derivatives Other Financial Liabilities 8.86 - - 8.86 8.86 Total Derivative Liabilities 8.86 - - 8.86 8.86
31st March, 2018 Non-Derivatives Borrowings (including current maturity) 1,374.82 3,765.65 3,397.39 8,537.86 8,537.86 Interest payable on above borrowings 600.86 2,154.76 1,269.43 4,025.05 89.57 Trade Payables 65.47 - - 65.47 65.47 Other Financial Liabilities 308.52 - - 308.52 308.52 Total Non-Derivative Liabilities 2,349.67 5,920.41 4,666.82 12,936.90 9,001.42
Derivatives Other Financial Liabilities 21.45 - - 21.45 21.45 Total Derivative Liabilities 21.45 - - 21.45 21.45
1st April, 2017 Non-Derivatives Borrowings (including current maturity) # 2,075.76 2,085.95 3,596.61 7,758.32 7,758.32 Interest payable on above borrowings 322.23 719.05 598.91 1,640.19 58.28 Trade Payables 38.11 - - 38.11 38.11 Other Financial Liabilities 875.49 - - 875.49 875.49 Total Non-Derivative Liabilities 3,311.59 2,805.00 4,195.52 10,312.11 8,730.20
Derivatives Other Financial Liabilities 69.60 - - 69.60 69.60 Total Derivative Liabilities 69.60 - - 69.60 69.60
# The table has been drawn up based on the undiscounted contractual maturities of the financial liabilities including interest that will be paid on those liabilities upto the maturity of the instruments, ignoring the call and refinancing options available with the group. The amounts included above for variable interest rate instruments for non- derivative 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.
The group expects to meet its obligation from operating cash flows and proceeds of maturing financial assets. Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
36 Restated Consolidated Balance Sheet as at 31st March, 2018
Notes Reported amount Restatements / Restated amount as as at 31st March, Regroupings at 31st March, 2018 2018 ₹ crore ₹ crore ₹ crore ASSETS Non-current Assets (a) Property, Plant and Equipments 2.1.2 9,721.65 (53.91) 9,667.74 (b) Capital Work-in-Progress 709.03 - 709.03 (c) Goodwill 1,636.03 - 1,636.03 (d) Other Intangible Assets 1,286.33 - 1,286.33 (e) Financial Assets (i) Loans a. 79.51 1.00 80.51 (ii) Other Financial Assets 2.1.1 and 210.92 61.82 272.74 Note (a) below (f) Non-current Tax Assets (Net) 40.53 - 40.53 (g) Deferred Tax Assets (Net) 2.1.1 82.46 26.17 108.63 (h) Other Non-current Assets 55.09 - 55.09 Total Non-current Assets 13,821.55 35.08 13,856.63
Current Assets (a) Inventories 13.20 - 13.20 (b) Financial Assets (i) Investments 73.26 - 73.26 (ii) Trade Receivables 333.43 - 333.43 (iii) Unbilled Revenue 169.94 - 169.94 (iv) Cash and Cash Equivalents 72.46 - 72.46 (v) Bank Balances other than (iv) above 0.08 - 0.08 (vi) Loans a. 25.00 5.71 30.71 (vii) Other Financial Assets a. 60.12 (5.71) 54.41 (c) Current Tax Assets (Net) 14.77 - 14.77 (d) Other Current Assets 18.13 - 18.13 Total Current Assets 780.39 - 780.39
TOTAL ASSETS 14,601.94 35.08 14,637.02
EQUITY AND LIABILITIES Equity (a) Equity Share Capital 1,045.11 - 1,045.11 (b) Unsecured Perpetual Securities 3,895.00 - 3,895.00 (c) Other Equity 2.1.1 297.15 (72.31) 224.84 Equity attributable to Shareholders of the Company 5,237.26 (72.31) 5,164.95 Non-controlling Interests - - - Total Equity 5,237.26 (72.31) 5,164.95
LIABILITIES Non-current Liabilities (a) Financial Liabilities Borrowings 7,161.00 - 7,161.00 (b) Deferred Tax Liabilities (Net) 2.1.1 239.09 (6.32) 232.77 (c) Provisions 8.34 - 8.34 (d) Other Non-current Liabilities 2.1.2 51.90 115.72 167.62 Total Non-current Liabilities 7,460.33 109.40 7,569.73 Current Liabilities (a) Financial Liabilities (i) Borrowings 875.93 - 875.93 (ii) Trade Payables - (a) Total outstanding dues of micro and small - - - enterprises (b) Total outstanding dues of creditors other than 65.47 - 65.47 micro and small enterprises (iii) Other Financial Liabilities 920.46 - 920.46 (b) Current Tax Liabilities (Net) 7.45 - 7.45 (c) Provisions 0.46 - 0.46 (d) Other Current Liabilities 2.1.1 and 34.58 (2.01) 32.57 2.1.2 Total Current Liabilities 1,904.35 (2.01) 1,902.34
TOTAL EQUITY AND LIABILITIES 14,601.94 35.08 14,637.02 Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
36.1 Restated Consolidated Balance Sheet as at 1st April, 2017
Notes Reported amount Restatements / Restated amount as as at 1st April, 2017 Regroupings at 1st April, 2017 ₹ crore ₹ crore ₹ crore ASSETS Non-current Assets (a) Property, Plant and Equipments 2.1.2 8,586.15 (6.85) 8,579.30 (b) Capital Work-in-Progress 793.71 - 793.71 (c) Goodwill 1,648.03 - 1,648.03 (d) Other Intangible Assets 1,348.51 - 1,348.51 (e) Financial Assets (i) Loans a. - 0.47 0.47 (ii) Other Financial Assets 2.1.1 and 204.41 42.44 246.85 Note (a) below (f) Non-current Tax Assets (Net) 26.80 - 26.80 (g) Deferred Tax Assets (Net) 2.1.1 106.76 11.53 118.29 (h) Other Non-current Assets 67.61 - 67.61 Total Non-current Assets 12,781.98 47.59 12,829.57
Current Assets (a) Inventories 13.75 - 13.75 (b) Financial Assets (i) Investments 414.63 - 414.63 (ii) Trade Receivables 429.79 - 429.79 (iii) Unbilled Revenue 39.64 - 39.64 (iv) Cash and Cash Equivalents 86.11 - 86.11 (v) Bank Balances other than (iv) above 67.81 - 67.81 (vi) Loans a. - 5.82 5.82 (vii) Other Financial Assets a. 83.91 (5.82) 78.09 (c) Current Tax Assets (Net) 28.68 - 28.68 (d) Other Current Assets 14.38 - 14.38 Total Current Assets 1,178.70 - 1,178.70
TOTAL ASSETS 13,960.68 47.59 14,008.27
EQUITY AND LIABILITIES Equity (a) Equity Share Capital 566.11 - 566.11 (b) Share Application Money Pending Allotment 168.00 - 168.00 (c) Unsecured Perpetual Securities 3,895.00 - 3,895.00 (d) Other Equity 2.1.1 189.63 (67.09) 122.54 Equity attributable to Shareholders of the Company 4,818.74 (67.09) 4,751.65 Non-controlling Interests 21.09 - 21.09 Total Equity 4,839.83 (67.09) 4,772.74
LIABILITIES Non-current Liabilities (a) Financial Liabilities Borrowings 5,682.57 - 5,682.57 (b) Deferred Tax Liabilities (Net) 2.1.1 290.35 (19.20) 271.15 (c) Provisions 0.65 - 0.65 (d) Other Non-current Liabilities 2.1.1 and 6.55 134.17 140.72 2.1.2 Total Non-current Liabilities 5,980.12 114.97 6,095.09 Current Liabilities (a) Financial Liabilities (i) Borrowings 839.94 - 839.94 (ii) Trade Payables (a) Total outstanding dues of micro and small - - - enterprises (b) Total outstanding dues of creditors other than 38.11 - 38.11 micro and small enterprises (iii) Other Financial Liabilities 2,239.17 - 2,239.17 (b) Current Tax Liabilities (Net) 1.52 - 1.52 (c) Provisions 0.22 - 0.22 (d) Other Current Liabilities 2.1.1 and 21.77 (0.29) 21.48 2.1.2 Total Current Liabilities 3,140.73 (0.29) 3,140.44
TOTAL EQUITY AND LIABILITIES 13,960.68 47.59 14,008.27
Note: a. The Group has reclassified the security deposit amount from other financial asset to Loans as per schedule III of the Companies Act, 2013. Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
37 Restated Statement of Profit and Loss for the year ended 31st March, 2018
Notes Reported amount for Restatements / Restated amount for the year ended 31st Regroupings the year ended 31st March, 2018 March, 2018 ₹ crore ₹ crore ₹ crore
I Revenue from Operations 2.1.1, 2.1.2 and 1,716.93 28.37 1,745.30 ( b) below II Other Income 2.1.1 , (a) and 43.41 (1.71) 41.70 (b) below III Total Income 1,760.34 26.66 1,787.00 IV Expenses Employee Benefits Expenses (Net) 25.32 - 25.32 Finance Costs 2.1.1 680.87 17.02 697.89 Depreciation and Amortisation Expenses 2.1.2 544.99 (1.22) 543.77 Other Expenses 2.1.1 and ( a) 132.48 17.86 150.34 below Total Expenses 1,383.66 33.66 1,417.32
V Profit Before Exceptional Items and Tax 376.68 (7.00) 369.68 Less: Exceptional Item Impairment Charge on Goodwill 12.00 - 12.00
VI Profit Before Tax 364.68 (7.00) 357.68
VII Tax Expense Current Tax 113.30 - 113.30 Deferred Tax 2.1.1 (27.11) (1.78) (28.89) 86.19 (1.78) 84.41
VIII Profit for the Year 278.49 (5.22) 273.27
IX Other Comprehensive Income/(Expenses) Add/(Less): (i) Items that will not be reclassified to profit or loss Remeasurement of Defined Benefit Plans 0.62 - 0.62 (ii) Income tax relating to items that will not be reclassified to profit or loss Deferred Tax (0.15) - (0.15)
0.47 - 0.47
X Total Comprehensive Income for the Year 278.96 (5.22) 273.74 Profit for the year attributable to: - Owners of the Company 276.81 (5.22) 271.59 - Non-controlling interest 1.68 - 1.68 278.49 (5.22) 273.27 Other comprehensive Income for the year attributable to: - Owners of the Company 0.47 - 0.47 - Non-controlling interest - - - 0.47 - 0.47 Total Comprehensive Income for the year attributable to: - Owners of the Company 277.28 (5.22) 272.06 - Non-controlling interest 1.68 - 1.68 278.96 (5.22) 273.74 Note: a. Loss on disposal of property, plant and equipment amouting to ₹ 3.53 crore is regrouped from other income to other expense being a debit balance. b. The Group has reclassifed certain income amouting to ₹ 11.68 crore from Other Income to Revenue from operations based on the nature of the income earned. Tata Power Renewable Energy Limited Notes to the Consolidated Financial Statements
38 Statement of Net Assets and Profit and Loss attributable to Owners and Non-Controlling Interest
As at and for the year ended March 31, 2019
Name of the Entity Net Assets i.e. total assets Total Income i.e. Revenue Share of Profit or (loss) Share in Other Share in Total minus total libilities Plus Other Income Comprehensive Income Comprehensive Income
As % of Amount As % of Amount As % of Amount As % of Amount As % of Amount consolidated (Rs.crore) consolidated (Rs.crore) consolidated (Rs.crore) consolidated (Rs.crore) consolidated (Rs.crore) net assets profit profit Other Total comprehensive comprehensive income income Tata Power Renewable Energy Ltd. 70.11 5,078.51 37.18 801.99 23.79 92.53 45.57 0.36 23.83 92.89 Subsidiaries Indo Rama Renewables Jath Ltd. 0.82 59.58 1.73 37.41 1.16 4.52 - - 1.16 4.52 Supa Windfarm Ltd. - (0.01) - - (0.01) (0.04) - - (0.01) (0.04) Poolavadi Windfarm Ltd. - (0.01) - - (0.01) (0.04) - - (0.01) (0.04) Nivade Windfarm Ltd. - (0.01) - - (0.01) (0.04) - - (0.01) (0.04) Vagarai Windfarm Ltd. (0.18) (13.30) 1.02 21.93 (2.07) (8.04) - - (2.06) (8.04) Walwhan Renewable Energy Limited 29.25 2,118.78 60.07 1,295.78 77.15 300.10 54.43 0.43 77.10 300.53 (Consolidated) 1 100.00 7,243.54 100.00 2,157.11 100.00 388.99 100.00 0.79 100.00 389.78 Adjustments arising out of consolidation (1,816.71) (64.44) (60.54) - (60.54)
Consolidated amount 5,426.83 2,092.67 328.45 0.79 329.24
Note: 1. Accounts of all subsidiaries of Walwhan Renewable Energy Limited have been consolidated with Walwhan Renewable Energy Limited.
39 The Group has determined its operating segment as generation and selling of power based on the information reported to the chief operating decision maker (CODM) in accordance with the requirements of Indian Accounting Standard 108- 'Operating Segment Reporting', notified under the Companies (Indian Accounting Standards) Rules, 2015.
40 Events occurring after reporting period: There were no significant events after the end of the reporting period which require any adjustment or disclosure in the financial statements except as disclosed in the Consolidated Ind AS financial
41 The Board of Directors of the Group at its meeting held on 17th December, 2015 and 15th May 2017 has considered and approved the Scheme of Amalgamation (“the Scheme”) under Section 232 and other applicable provisions, if any, of the Companies Act, 2013 for transfer of 379.5 MW renewable assets as a going concern on the Slump Sale basis from The Tata Power Group Limited to the Company and its wholly owned subsidiaries with effect from the date when Scheme is approved by the competent authority. The Group has filed the necessary petition before the National Group Law Tribunal (NCLT) for its final order. The effect of the scheme would be recognised on receipt of statutory approvals.
42 The Board of Directors of the Company at its meeting held on 24th July, 2017 has considered and approved the "Scheme of Amalgamation"(“the Scheme”) under Section 232 and other applicable provisions, if any, of the Companies Act, 2013 between Tata Power Renewable Energy Limited ("transferee Company”, "holding Company") for transfer of the entire business and the whole of the undertaking of the Indo Rama Renewables Jath Limited ("subsidiary Company") on a going concern basis to the transferee Company with effect from 01st April, 2017 (appointed date). As on 31st March, 2019, the subsidiary Company has net fixed assets of ₹ 133.83 crore, net worth ₹ 59.58 crore and total income ₹ 37.41 crores, profit after tax ₹ 4.51 crore for the period ended 31st March, 2019. The Group is in the process of filing the Scheme with National Group Law Tribunal (NCLT). Accordingly, no effect of the proposed Scheme has been given in the Consolidated Ind AS financial statements.
43 During the year, Andhra Pradesh Regulatory Electricity Commission (APERC) vide its order dated 28th July 2018 allowed the DISCOMs to deduct the amount of Generation Based Incentive (GBI) out of monthly bills paid to wind power generators. The Group has filed a writ petition with Hyderabad High Court against this order and obtained a stay on the order passed by APERC. Based on the legal opinion obtained, the Group believes it has a strong case on merit and has accordingly continued to recognise GBI revenue amounting to ₹ 19.56 crores (including ₹ 9.99 crores for the current financial year) in the Consolidated Ind AS financial statements.
44 MAT credit for the year ended 31st March, 2019 is net off reversal of earlier year of ₹ 10.90 crore. MAT credit for the year ended 31st March, 2018 includes ₹ 28.66 crore relating to earlier years.
45 WREL had obtained 21.65 acres of land through registered lease deed for 33 years for setting up a solar power plant in Bihar. During the current year, the lease was treated by Collector, Gaya as illegal for entering into lease without order of any competent authority, and was cancelled alongwith recovery of penal rent. WREL filed Writ Petition before Patna High Court against the said Order. Patna High Court, stayed the operations of the Collectors Order and provided certain time to file counter affidavit. The Group is of the view that it is has a good case with likelihood of liability arising out of the said cancellation being remote. Accordingly, pending settlement of the legal dispute, no adjustment has been made in the financials for the year ended 31st March 2019.
46 Approval of Financial Statements The consolidated Ind AS financial statements were approved by the Board of Director’s on 24th April, 2019.
As per our report of even date For S R B C & CO LLP For and on behalf of the Board Chartered Accountants ICAI Firm registration number: 324982E/E300003
Ashish Khanna Ramesh Subramanyam Director Director per Abhishek Agarwal DIN: 06699527 DIN: 02421481 Partner Membership No.: 112773
Mahesh Paranjpe Gautam Attravanam Mona Purandare Chief Financial Officer Chief Financial Officer Company Secretary
Mumbai, 24th April, 2019 Mumbai, 24th April, 2019
TATA POWER RENEWABLE ENERGY LIMITED Registered Office: C/o The Tata Power Company Limited Corporate Center, A Block, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400 009. Tel 91 22 67171000 Extn 1231
PROXY FORM
[Pursuant to section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies (Management and Administration) Rules, 2014]
CIN: U40108MH2007PLC168314
Name of the company: TATA POWER RENEWABLE ENERGY LIMITED
Registered Office: Corporate Centre, 'A' Block, 34, Sant Tukaram Road, Carnac Bunder, Mumbai
Name of the member(s)………………………………….. ….. E-mail:…………………………… Registered address:……………………………………………………………………………………………………… Folio No/Client ID:………………………………………… DP ID:………………………………….
I/We, being the member(s) of……………………………………………………………………………..shares of the above named company, hereby appoint
1) Name:…………………………………………………………………...Email:…………………………… Address:………………………………………………………………………………………………………… Signature:………………………………………….. or falling Him 2) Name:…………………………………………………………………...Email:………………………………….. Address:……………………………………………………………………………………………………………
As my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 12th Annual General Meeting of the company, to be held on Monday, 9th September 2019 at 11.30 a.m. in the Conference Room No 102 on the 1st Floor of Bombay House, 24, Homi Mody Street, Mumbai, 400 001 and at any adjournment thereof in respect of such resolutions as are indicated overleaf.
Resolution Resolution For Against No.
1A) To receive, consider and adopt the Audited Financial Statements of the Company for the financial year ended 31st
March 2019, together with the Reports of the Board of Directors and the Auditors thereon.
1B) To receive, consider and adopt the Audited Consolidated Financial Statements of the Company for the financial year ended 31st March 2019, together with the Report of the Auditors thereon. 2) Appointment of Director in place of Mr. Ramesh Subramanyam (DIN: 02421481), who retires by rotation and is eligible for re- appointment. 3) Appointment of Ms. Anjali Bansal as a Director
4) Ratification of Cost Auditor's Remuneration
Signed this…………………………………. Day of…………………………….2019 Affix Signature of Shareholder………………………………………………………….. Revenue Signature of Proxy holder(s)……………………………………………………... Stamp
Notes:
1. This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the company at 34, Sant Turkaram Road, Carnac Bunder, Mumbai 400009, not less than 48 hours before the commencement of the meeting.
2. Those Members who have multiple folios with different joint holders may use copies of the proxy form.
TATA POWER RENEWABLE ENERGY LIMITED Registered Office: C/o The Tata Power Company Limited Corporate Center, A Block, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400 009. Tel 91 22 67171000 Extn 1231
ATTENDANCE SLIP
12th ANNUAL GENERAL MEETING, MONDAY, 9th SEPTEMBER 2019 AT 11.30 A.M.
Folio No.: DP ID No.: Client ID No.:
I/We hereby record my/our presence at the 12th Annual General Meeting of the Company being held at in the Conference Room No 102 on the 1st Floor of Bombay House, 24, Homi Mody Street, Mumbai, 400 001 on Monday, 9th September 2019 at 11.30 a.m.
Name & Address of the Equity Shareholder: ______
Folio No/ DP ID/ Client ID No: ______
No of Shares held: ______
Name of Proxy Holders/
Authorised Representative: ______
Signatures: ______
Note:
1. Only Member/Proxy holder can attend the Meeting. 2. Please complete the Folio No. /DP ID No. Client ID No. and name of the Member/Proxy holder sign this Attendance Slip and hand it over, duly signed, at the entrance of the Meeting Hall. 3. Member/Proxy holder attending the meeting should bring copy of the Notice for reference at the meeting.