Accounting Policies of India Power Corporation Ltd. Company
Mar 31, 2023
SIGNIFICANT ACCOUNTING POLICIES
2.1 Statement of Compliance
This separate financial statements have been prepared
in accordance with Indian Accounting Standard (Ind
AS) as prescribed under section 133 of the Companies
Act 2013 ("the Act") ("to the extent notified") and the
Regulations issued from time to time by "West Bengal
Electricity Regulatory Commission" (WBERC) under
the Electricity Act, 2003 (Tariff Regulations). Ind AS
are prescribed under section 133 of the Act read with
rule 3 of the Companies ( Indian Accounting Standard
) Rules 2015 and the relevant amendment rules issued
there after.
Accounting Policy has been consistently applied except
where a newly introduced Accounting Standard is
initially adopted or a revision to an existing accounting
standard requires a change in accounting policy
hitherto in use.
2.2 Basis of Preparation
The financial statements have been prepared on
historical cost convention on accrual basis except for
certain financial instruments, that are measured in
terms of relevant Ind AS at fair value/amortised cost
at the end of each reporting period, as explained in
accounting policy below. Historical cost convention is
generally based on fair value of the consideration given
in exchange for goods and services. Fair value is the
price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between
market participants at the measurement date.
As the operating cycle cannot be identified in normal
course, the same has been assumed to have duration
of 12 months. All Assets and Liabilities have been
classified as current or non-current as per the
operating cycle and other criteria set out in Ind AS-1
âPresentation of Financial Statements'' and Schedule
III to the Companies Act, 2013.
The Standalone Financial Statements are presented
in Indian Rupees and all values are rounded off to the
nearest two decimal lakhs except otherwise stated.
2.3 Fair Value Measurement
Fair value is the price that would be received to sell
an asset or paid to transfer a liability in an orderly
transaction between market participants at the
measurement date under current market conditions.
The Company categorizes assets and liabilities
measured at fair value into one of three levels
depending on the ability to observe inputs employed
for such measurement:
(a) Level 1 : quoted prices (unadjusted) in active
markets for identical assets or liabilities.
(b) Level 2 : inputs other than quoted prices included
within level 1 that are observable either directly or
indirectly for the asset or liability
(c) Level 3 : inputs for the asset or liability which are
not based on observable market data.
2.4 Property, Plant and Equipment (PPE)
(i) PPE except land are stated at their cost of
acquisition or construction and is net of
accumulated depreciation. Carrying value of PPE
on the date of transition has been considered to
be deemed cost. The cost comprises purchase
price, borrowing cost if capitalization criteria are
met and directly attributable cost of bringing the
asset to its working condition for the intended use.
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. All other repair and
maintenance costs are recognised in Statement
of Profit and Loss as incurred. The land assets of
the Company are stated as per revaluation model.
(ii) All project related expenses viz civil works,
machinery under erection, construction and
erection materials, pre-operative expenditure
net of revenue incidental / attributable to the
construction of project, borrowing cost incurred
prior to the date of commercial operations are
shown under Capital Work -In-Progress (CWIP).
(iii) Depreciation on property plant and equipment
commences when the assets are ready for their
intended use.
(iv) Depreciation on PPE is provided on the straight¬
line method at the rates specified in the Tariff
Regulation for regulated assets and for others on
2.5 Intangible Assets
Recognition and initial measurement
Intangible assets are stated at cost comprising of
purchase price inclusive of duties and taxes less
accumulated amount of amortization and impairment
losses. Such assets are amortised over the useful life
using straight line method and assessed for impairment
whenever there is an indication of the same.
Accordingly, cost of computer software packages (ERP
and others) has been amortised over a period of 5 years
on straight line basis
2.6 Derecognition of Tangible and Intangible Assets
An item of PPE is de-recognised upon disposal or when
no future economic benefits are expected to arise from
its use or disposal. Gain or loss arising on the disposal
of an item of PPE is determined as the difference
between the sale proceeds and the carrying amount
of the asset and is recognised in the Statement of Profit
and Loss.
2.7 Impairment of Tangible and Intangible Assets
Tangible and Intangible assets are reviewed at each
balance sheet date for impairment. In case events and
circumstances indicate any impairment, recoverable
amount of assets is determined. An impairment
loss is recognized in the Statement of Profit and
Loss, whenever the carrying amount of assets either
belonging to Cash Generating Unit (CGU) or otherwise
exceeds recoverable amount. The recoverable amount
is the higher of assets fair value less cost of disposal
and its value in use. In assessing value in use, the
estimated future cash flows from the use of the assets
are discounted to their present value at appropriate
rate.
Impairment losses recognized earlier may no longer
exist or may have come down. Based on such
assessment at each reporting period the impairment
loss is reversed and recognized in the Statement of
Profit and Loss. In such cases the carrying amount of
the asset is increased to the lower of its recoverable
amount and the carrying amount that have been
determined, net of depreciation, had no impairment
loss been recognized for the asset in prior years.
2.8 Leases
The Company recognises right-of-use asset
representing its right to use the underlying asset for the
lease term at the lease commencement date. The cost
of the right-of-use assets measured at inception shall
comprise of the amount of the initial measurement
of the lease liability adjusted for any lease payments
made at or before the commencement date less any
lease incentives received, plus any initial direct costs
incurred and an estimate of costs to be incurred by
the lessee in dismantling and removing the underlying
asset or restoring the underlying asset or site on which
it is located. The right-of-use assets is subsequently
measured at cost less any accumulated depreciation,
accumulated impairment losses, if any and adjusted
for any remeasurement of the lease liability. The
right-of-use assets is depreciated using the straight¬
line method from the commencement date over the
shorter of lease term or useful life of right-of-use asset.
The estimated useful lives of right-of-use assets are
determined on the same basis as those of property,
plant and equipment.
Right-of-use assets are tested for impairment
whenever there is any indication that their carrying
amounts may not be recoverable. Impairment loss, if
any, is recognised in the Statement of Profit and Loss.
The Company measures the lease liability at the present
value of the lease payments that are not paid at the
commencement date of the lease. The lease payments
are discounted using the interest rate implicit in the
lease, if that rate can be readily determined. If that
rate cannot be readily determined, the Company
uses incremental borrowing rate. For leases with
reasonably similar characteristics, the Company, on a
lease by lease basis, may adopt either the incremental
borrowing rate specific to the lease or the incremental
borrowing rate for the portfolio as a whole. The lease
payments shall include fixed payments, variable lease
payments, residual value guarantees, exercise price of
a purchase option where the Company is reasonably
certain to exercise that option and payments of
penalties for terminating the lease, if the lease term
reflects the lessee exercising an option to terminate the
lease. The lease liability is subsequently remeasured
by increasing the carrying amount to reflect interest
on the lease liability, reducing the carrying amount
to reflect the lease payments made and remeasuring
the carrying amount to reflect any reassessment or
lease modifications or to reflect revised in-substance
fixed lease payments. The company recognises the
amount of the re-measurement of lease liability due
to modification as an adjustment to the right-of-use
asset and statement of profit and loss depending upon
the nature of modification. Where the carrying amount
of the right-of-use asset is reduced to zero and there
is a further reduction in the measurement of the lease
liability, the Company recognises any remaining amount
of the re-measurement in statement of profit and loss.
2.9 Financial Assets and Financial Liabilities
Financial assets and financial liabilities (together
known as financial instruments) are recognized
when 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 (other than
financial assets and financial liabilities at fair value
through profit or loss) 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 recognized immediately in the Statement of
Profit and Loss.
The financial assets and financial liabilities are
classified as current if they are expected to be realised
or settled within operating cycle of the Company or
otherwise these are classified as non current.
The financial instruments are classified to be measured
at Amortized Cost, at Fair Value Through Profit and Loss
(FVTPL) or at Fair Value Through Other Comprehensive
Income (FVTOCI) and such classification depends on
the objective and contractual terms to which they
relate. Classification of financial instruments are
determined on initial recognition.
(i) Cash and cash equivalents
All highly liquid financial instruments, which are
readily convertible into known amounts of cash
and which are subject to an insignificant risk of
change in value and are having original maturities
of three months or less from the date of purchase,
are considered as cash equivalents. Cash and
cash equivalents includes balances with banks
which are unrestricted for withdrawal and usage.
(ii) Financial Assets and Financial Liabilities
measured at amortized cost
Financial Assets 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
are measured at amortized cost.
The above Financial Assets and Financial
Liabilities subsequent to initial recognition are
measured at amortized cost using Effective
Interest Rate (EIR) method.
The effective interest rate is the rate that exactly
discounts estimated future cash payments or
receipts (including all fees and points paid or
received, transaction costs and other premiums
or discounts) through the expected life of the
Financial Asset or Financial Liability to the gross
carrying amount of the financial asset or to the
amortised cost of financial liability, or, where
appropriate, a shorter period, to the net carrying
amount on initial recognition.
(iii) Financial Asset at Fair Value through Other
Comprehensive Income (FVTOCI)
Financial assets are measured at fair value
through other comprehensive income if these
financial assets are held within a business
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. Subsequent
to initial recognition, they are measured at fair
value and changes therein are recognised directly
in other comprehensive income.
(iv) For the purpose of para (ii) and (iii) above, the
principal is considered to be fair value of the
financial asset at initial recognition and interest
consists of consideration for the time value of
money and associated credit risk.
(v) Financial Assets or Liabilities at Fair value
through profit or loss (FVTPL)
Financial Instruments which do not meet the
criteria of amortized cost or fair value through
other comprehensive income are classified as Fair
Value through Profit or loss. These are recognised
at fair value and changes therein are recognized
in the Statement of Profit and Loss.
2.10 Financial Guarantee Contracts
Financial guarantee contracts other than those which
are in the nature of Insurance are those contracts
that require a payment to be made to reimburse the
holder for a loss it incurs because the specified party
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 expected loss allowance determined as
per impairment requirements of Ind-AS 109 and the
amount recognised less cumulative amortization.
2.11 Impairment of Financial Assets
A financial asset is assessed for impairment at each
reporting date. A financial asset is considered to be
impaired if objective evidence indicates that one or
more events have a negative effect on the estimated
future cash flows of that asset.
The Company measures the loss allowance for a
financial instrument at an amount equal to the lifetime
expected credit losses if the credit risk on that financial
instrument has increased significantly since initial
recognition. If the credit risk on a financial instrument
has not increased significantly since initial recognition,
the Company measures the loss allowance for that
financial instrument.
However, for trade receivables or contract assets
that result in relation to revenue from contracts with
customers, the Company measures the loss allowance
at an amount equal to lifetime expected credit losses.
For the purpose of classification of financial asset
including trade receivable as credit impaired, a period
of three years is considered by the Management.
2.12 De-recognition of financial instruments
The Company derecognizes a financial asset or a group
of financial assets when the contractual rights to the
cash flows from the asset expire, or when it transfers
the financial asset and substantially all the risks and
rewards of ownership of the asset to another party.
On derecognition of a financial asset (except for equity
instruments designated as FVTOCI), the difference
between the asset''s carrying amount and the sum
of the consideration received and receivable are
recognized in Statement of Profit and Loss.
On derecognition of assets measured at FVTOCI
the cumulative gain or loss previously recognised
in other comprehensive income is reclassified from
OCI to statement of profit or loss as a reclassification
adjustment unless the asset represents an equity
investment, in which case the cumulative fair value
adjustments previously recognised in OCI are
reclassified with equity .
Financial liabilities are derecognized if the Company''s
obligations specified in the contract expire or are
discharged or cancelled. The difference between the
carrying amount of the financial liability derecognized
and the consideration paid and payable is recognized
in Statement of Profit and Loss.
2.13 Inventories
Inventories are valued at lower of cost or net realisable
value
Cost is calculated on weighted average basis and
includes expenditure incurred for bringing such
inventories to their present location and condition.
Adjustments in the carrying amount of obsolete,
defective and slow moving items as may be identified
at the time of physical verification is made where
appropriate, to cover any eventual loss on their ultimate
realisation.
2.14 Foreign Currency Transactions
Presentation currency:
These financial statements are presented in Indian
Rupee, the national currency of India, which is the
functional currency of the Company.
Transactions and balances:
Transactions in foreign currencies are translated
into the functional currency at the exchange rates
prevailing on the date of the transactions. Foreign
currency monetary assets and liabilities at the year-
end are translated at the year-end exchange rates.
Non-monetary items which are carried in terms of
historical cost denominated in a foreign currency
are reported using the exchange rate at the date of
transaction. The loss or gain thereon and also on the
exchange differences on settlement of the foreign
currency transactions during the year are recognized as
income or expense in the Statement of Profit and Loss.
Foreign exchange gain/loss to the extent considered as
an adjustment to interest cost are considered as part
of borrowing cost.
Mar 31, 2021
1 CORPORATE INFORMATION
India Power Corporation Limited is domiciled and incorporated in India and its shares are quoted on National Stock Exchange of India Limited (NSE) and Metropolitan Stock Exchange of India Limited (MSEI). The Registered Office of the Company is at Plot X1- 2&3, Block -EP, Sector-V, Saltlake City, Kolkata- 700091.
The Company is engaged in thermal power generation in the State of West Bengal and wind power generation in the State of Gujarat and Rajasthan. It is licensed to distribute power in and around Asansol region including the area covered under Asansol Municipal Corporation in the State of West Bengal.
2 SIGNIFICANT ACCOUNTING POLICIES
2.1 Statement of Compliance
This separate financial Statements have been prepared in accordance with Indian Accounting Standard (Ind AS) as prescribed under section 133 of the Companies Act 2013 ("the Act") ("to the extent notified") and the Regulations issued from time to time by "West Bengal Electricity Regulatory Commission" (WBERC) under the Electricity Act, 2003 (Tariff Regulations). Ind AS are prescribed under section 133 of the Act read with rule 3 of The Companies ( Indian Accounting Standard ) Rules 2015 and the relevant amendment rules issued thereafter.
Accounting Policy has been consistently applied except where a newly introduced Accounting Standard is initially adopted or a revision to an existing accounting standard requires a change in accounting policy hitherto in use except change in accounting policy as disclosed in note no. 2.4 (vii).
2.2 Basis of Preparation
The financial Statements have been prepared on historical cost convention on accrual basis except for certain financial instruments, that are measured in terms of relevant Ind AS at fair value/amortised cost at the end of each reporting period, as explained in accounting policy below. Historical cost convention is generally based on fair value of the consideration given in exchange for goods and services. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
As the operating cycle cannot be identified in normal course, the same has been assumed to have duration of 12 months. All Assets and Liabilities have been classified as current or non-current as per the operating cycle and other criteria set out in Ind AS-1 ''Presentation of Financial Statements'' and Schedule III to the Companies Act, 2013.
The Standalone Financial Statements are presented in Indian Rupees and all values are rounded off to the nearest two decimal lakhs except otherwise stated.
2.3 Fair Value Measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions.
The Company categorizes assets and liabilities measured at fair value into one of three levels depending on the ability to observe inputs employed for such measurement:
(a) Level 1 : quoted prices (unadjusted) in active markets for identical assets or liabilities.
(b) Level 2 : inputs other than quoted prices included within level 1 that are observable either directly or indirectly for the asset or liability
(c) Level 3 : inputs for the asset or liability which are not based on observable market data.
2.4 Property, Plant and Equipment (PPE)
(i) PPE except land are stated at their cost of acquisition or construction and is net of accumulated depreciation. Carrying value of PPE on the date of transition has been considered to be deemed cost. The cost comprises purchase price, borrowing cost if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. 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. All other repair and maintenance costs are recognised in Statement of Profit and Loss as incurred.
(ii) All project related expenses viz civil works, machinery under erection, construction and erection materials, pre-operative expenditure net of revenue incidental / attributable to the construction of project, borrowing cost incurred prior to the date of commercial operations are shown under Capital Work -In-Progress (CWIP).
(iii) Depreciation on property plant and equipment commences when the assets are ready for their intended use.
(iv) Depreciation on PPE is provided on the straight-line method at the rates specified in the Tariff Regulation for regulated assets and for others on the basis of useful lives prescribed in Schedule II to the Companies Act, 2013. The useful life of assets considered for depreciation as above are as follows:
|
Category |
Useful life (years) |
|
Building |
15 to 50 |
|
Plant & Equipment |
5 to 25 |
|
Mains, meters & transformers |
7 to 35 |
|
Vehicles |
5 to 10 |
|
Furniture & fixtures |
7 to15 |
|
Office equipments |
7 to 15 |
(v) The residual values, useful lives and method of depreciation are reviewed at each financial year end and adjusted prospectively, if appropriate.
(vi) Cost of leasehold lands including revaluation are amortised under the straight line method over the related lease period.
(vii) During the year ended 31st March,2020, the Company has revalued its Land Assets by adopting revaluation model as approved by the Board of Directors w.e.f 1st April, 2019, which before that was valued on cost model.
2.5 Intangible Assets
Recognition and initial measurement
Intangible assets are stated at cost comprising of purchase price inclusive of duties and taxes less accumulated amount of amortization and impairment losses. Such assets are amortised over the useful life using straight line method and assessed for impairment whenever there is an indication of the same.
Accordingly, cost of computer software packages (ERP and others) has been amortised over a period of 5 years on straight line basis.
2.6 Derecognition of Tangible and Intangible Assets
An item of PPE is de-recognised upon disposal or when no future economic benefits are expected to arise from its use or disposal. Gain or loss arising on the disposal of an item of PPE is determined as the difference between the sale proceeds and the carrying amount of the asset and is recognised in the Statement of Profit and Loss.
2.7 Impairment of Tangible and Intangible Assets
Tangible and Intangible assets are reviewed at each balance sheet date for impairment. In case events and circumstances indicate any impairment, recoverable amount of assets is determined. An impairment loss is recognized in the Statement of Profit and Loss, whenever the carrying amount of assets either belonging to Cash Generating Unit (CGU) or otherwise exceeds recoverable amount. The recoverable amount is the higher of assets fair
value less cost of disposal and its value in use. In assessing value in use, the estimated future cash flows from the use of the assets are discounted to their present value at appropriate rate.
Impairment losses recognized earlier may no longer exist or may have come down. Based on such assessment at each reporting period the impairment loss is reversed and recognized in the Statement of Profit and Loss. In such cases the carrying amount of the asset is increased to the lower of its recoverable amount and the carrying amount that have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years.
2.8 Leases
The Company recognises right-of-use asset representing its right to use the underlying asset for the lease term at the lease commencement date. The cost of the right-of-use asset measured at inception shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the commencement date less any lease incentives received, plus any initial direct costs incurred and an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset or restoring the underlying asset or site on which it is located. The right-of-use assets is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability. The right-of-use assets is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use asset. The estimated useful lives of right-of-use assets are determined on the same basis as those of property, plant and equipment.
Right-of-use assets are tested for impairment whenever there is any indication that their carrying amounts may not be recoverable. Impairment loss, if any, is recognised in the statement of profit and loss.
The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of the lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses incremental borrowing rate. For leases with reasonably similar characteristics, the Company, on a lease by lease basis, may adopt either the incremental borrowing rate specific to the lease or the incremental borrowing rate for the portfolio as a whole. The lease payments shall include fixed payments, variable lease payments, residual value guarantees, exercise price of a purchase option where the Company is reasonably certain to exercise that option and payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease. The lease liability is subsequently remeasured by increasing
the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised insubstance fixed lease payments. The company recognises the amount of the re-measurement of lease liability due to modification as an adjustment to the right-of-use asset and statement of profit and loss depending upon the nature of modification. Where the carrying amount of the right-of-use asset is reduced to zero and there is a further reduction in the measurement of the lease liability, the Company recognises any remaining amount of the re-measurement in statement of profit and loss.
The Company has adopted Ind AS 116, effective annual reporting period beginning April 1, 2019 and applied the standard to its leases, using modified retrospective approach, under which the cumulative effect of initial application is recognised as at 1st April, 2019.
On transition, the Company recognised a Right to use asset and lease liability measured at the present value of the remaining lease payments and discounted using the lessee''s incremental borrowing rate as at April 1, 2019. Accordingly, a right-of-use asset of 3,956.26 lakhs and a corresponding lease liability has been recognized by considering incremental rate borrowing @ 10.92 percent.
The Company has leases that were classified as finance leases applying Ind AS 17. For such leases, the carrying amount of the right-of-use asset and the lease liability at the date of initial application of Ind AS 116 is the carrying amount of the lease asset and lease liability on the transition date i.e. 1st April,2019 as measured applying Ind AS 17. An amount of '' 22.18 lakhs has been reclassified from Non Current Financial Liabilities -Borrowings to Non Current Financial Liabilities -lease liability.
2.9 Financial Assets and Financial Liabilities
Financial assets and financial liabilities (together known as financial instruments) are recognized when 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 (other than financial assets and financial liabilities at fair value through profit or loss) 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 recognized immediately in the Statement of Profit and Loss.
The financial assets and financial liabilities are classified as current if they are expected to be realised or settled
within operating cycle of the Company or otherwise these are classified as non current.
The financial instruments are classified to be measured at Amortized Cost, at Fair Value Through Profit and Loss (FVTPL) or at Fair Value Through Other Comprehensive Income (FVTOCI) and such classification depends on the objective and contractual terms to which they relate. Classification of financial instruments are determined on initial recognition.
(i) Cash and cash equivalents
All highly liquid financial instruments, which are readily convertible into known amounts of cash and which are subject to an insignificant risk of change in value and are having original maturities of three months or less from the date of purchase, are considered as cash equivalents. Cash and cash equivalents includes balances with banks which are unrestricted for withdrawal and usage.
(ii) Financial Assets and Financial Liabilities measured at amortized cost
Financial Assets 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 are measured at amortized cost.
The above Financial Assets and Financial Liabilities subsequent to initial recognition are measured at amortized cost using Effective Interest Rate (EIR) method.
The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts (including all fees and points paid or received, transaction costs and other premiums or discounts) through the expected life of the Financial Asset or Financial Liability to the gross carrying amount of the financial asset or to the amortised cost of financial liability, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.
(iii) Financial Asset at Fair Value through Other Comprehensive Income (FVTOCI)
Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business 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. Subsequent to initial recognition, they are measured at fair value
and changes therein are recognised directly in other comprehensive income.
(iv) For the purpose of para (ii) and (iii) above, the principal is considered to be fair value of the financial asset at initial recognition and interest consists of consideration for the time value of money and associated credit risk.
(v) Financial Assets or Liabilities at Fair value through profit or loss (FVTPL)
Financial Instruments which do not meet the criteria of amortized cost or fair value through other comprehensive income are classified as Fair Value through Profit or loss. These are recognised at fair value and changes therein are recognized in the Statement of Profit and Loss.
2.10 Financial guarantee contracts
Financial guarantee contracts other than those which are in the nature of Insurance are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified party 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 expected loss allowance determined as per impairment requirements of Ind-AS 109 and the amount recognised less cumulative amortization.
2.11 Impairment of Financial Assets
A financial asset is assessed for impairment at each reporting date. A financial asset is considered to be impaired if objective evidence indicates that one or more events have a negative effect on the estimated future cash flows of that asset.
The Company measures the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition. If the credit risk on a financial instrument has not increased significantly since initial recognition, the Company measures the loss allowance for that financial instrument.
However, for trade receivables or contract assets that result in relation to revenue from contracts with customers, the Company measures the loss allowance at an amount equal to lifetime expected credit losses.
For the purpose of classification of financial asset including trade receivable as credit impaired, a period of three years is considered by the Management.
2.12 De-recognition of financial instruments
The Company derecognizes a financial asset or a group of financial assets when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.
On derecognition of a financial asset (except for equity instruments designated as FVTOCI), the difference between the asset''s carrying amount and the sum of the consideration received and receivable are recognized in Statement of Profit and Loss.
On derecognition of assets measured at FVTOCI the cumulative gain or loss previously recognised in other comprehensive income is reclassified from OCI to statement of profit or loss as a reclassification adjustment unless the asset represents an equity investment, in which case the cummulative fair value adjustments previously recognised in OCI are reclassified within equity.
Financial liabilities are derecognized if the Company''s obligations specified in the contract expire or are discharged or cancelled. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in Statement of Profit and Loss.
2.13 Inventories
Inventories are valued at lower of cost or net realisable value.
Cost is calculated on weighted average basis and includes expenditure incurred for bringing such inventories to their present location and condition. Adjustments in the carrying amount of obsolete, defective and slow moving items as may be identified at the time of physical verification is made where appropriate, to cover any eventual loss on their ultimate realisation.
2.14 Foreign Currency Transactions Presentation currency:
These financial statements are presented in Indian Rupee, the national currency of India, which is the functional currency of the Company.
Transactions and balances:
Transactions in foreign currencies are translated into the functional currency at the exchange rates prevailing on the date of the transactions. Foreign currency monetary assets and liabilities at the year-end are translated at the year-end exchange rates. Non-monetary items which are carried in terms of historical cost denominated in a
foreign currency are reported using the exchange rate at the date of transaction. The loss or gain thereon and also on the exchange differences on settlement of the foreign currency transactions during the year are recognized as income or expense in the statement profit and loss. Foreign exchange gain/loss to the extent considered as an adjustment to Interest Cost are considered as part of borrowing cost.
2.15 Provision, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement are recognized when there is a legal or constructive obligation as a result of past events and it is probable that there will be an outflow of resources and a reliable estimate can be made of the amount of obligation. Provisions are not recognized for future operating losses. The amount recognized 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.
Contingent liabilities is not recognized and are disclosed by way of notes to the financial statements when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the control of the Company or when there is a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the same or a reliable estimate of the amount in this respect cannot be made.
Contingent Assets are disclosed in the financial statements by way of notes to accounts when an inflow of economic benefits is probable.
2.16 Employee Benefits
The Company makes contributions to Gratuity fund which is administered through duly constituted and approved Trust. Provident Fund contributions are in the nature of defined contribution scheme. Provident funds are deposited with the Government and recognised as expense. The cost of providing benefits under the defined benefit obligation is calculated by independent actuary using the projected unit credit method. Service costs and net interest expense or income is reflected in the Statement of Profit and Loss. Gain or Loss on account of remeasurements are recognised immediately through other comprehensive income in the period in which they occur. The employees of the Company are entitled to compensated leave for which the Company records the liability based on actuarial valuation computed using projected unit credit method. These benefits are unfunded except Gratuity.
2.17 Revenue Recognition
Revenue from contracts with customers is recognised on supply of electricity or when services are rendered to the customers at an amount that reflects the consideration to which the Company is entitled under appropriate regulatory framework.
Revenue to be earned from sale of electricity supplied from regulated business is accounted for on basis of monthly billing with specified due dates to consumers at rates approved by WBERC based on relevant tariff order and Company''s understanding of the applicable available regulatory provisions. Sales are net of rebates and do not include electricity duty collected from consumers and payable to the State Government.
Sale of electricity other than above is billed monthly with specified due dates and accounted for at rates agreed with respective consumers.
Regulatory income and expense for the year recognised as per Regulations issued by WBERC are shown separately in the Statement of Profit and Loss.
2.18 Interest, Dividend and Claims
Dividend income is recognized when the right to receive payment is established. Interest has been accounted using effective interest rate method. Insurance claims/ other claims are accounted as and when admitted / settled.
2.19 Borrowing Costs
Borrowing cost comprises of interest and other costs incurred in connection with the borrowing of the funds. All borrowing costs are recognized in the Statement of Profit and Loss using the effective interest method except to the extent attributable to qualifying Property Plant Equipment (PPE) which are capitalized to the cost of the related assets. A qualifying PPE is an asset, that necessarily takes a substantial period of time to get ready for its intended use or sale. Borrowing cost also includes exchange differences to the extent considered as an adjustment to the borrowing costs.
2.20 Income Tax
Current tax represents the amount payable based on computation of tax as per prevailing taxation laws under the Income Tax Act, 1961. Provision for deferred taxation is made using liability method on temporary difference arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled. Deferred Tax Assets are recognized subject to the
consideration of prudence and are periodically reviewed to reassess realization thereof. Deferred Tax Liability or Asset will give rise to actual tax payable or recoverable at the time of reversal thereof. Current and Deferred tax relating to items recognised outside profit or loss, that is either in other comprehensive income (OCI) or in equity, is recognised along with the related items.
2.21 Earnings per equity share
Basic earnings per share including regulatory income/ expense is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events including a bonus issue.
Basic earnings per share excluding regulatory income/ expense is calculated by dividing the net profit or loss for the period before regulatory income/expense attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events including a bonus issue.
For the purpose of calculating diluted earnings per share including regulatory income/expense, the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
For the purpose of calculating diluted earnings per share excluding regulatory income/expense, the net profit or loss for the period before regulatory income/expense attributable to equity shareholders (after deducting attributable taxes) and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
2.22 Regulatory Assets and Liabilities
Regulatory assets and liabilities shown as Regulatory Deferral Account Balance are recognised based on process defined in Tariff Regulations issued by WBERC. Any adjustment there of are recognised in the year in which order of WBERC are received. It includes amount recoverable from/ refundable to consumers on account of Fuel and Power Purchase Cost Adjustment (FPPCA), and other adjustments based on tariff regulations and orders. Consequential adjustments are given effect to upon confirmation by the relevant authorities.
3 CRITICAL ACCOUNTING JUDGEMENTS, ASSUMPTIONS AND KEY SOURCES OF ESTIMATION AND UNCERTAINTY
The preparation of the financial statements in conformity with IND AS requires management to make estimates, judgments and assumptions. These estimates, judgements and assumptions affect the application of accounting policies and the reported amount of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amount of revenues and expenses during the period. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Differences between the actual results and estimates are recognised in the year in which the results are known / materialized and, if material, their effects are disclosed in the notes to the financial statements.
Application of accounting policies that require significant areas of estimation, uncertainty and critical judgments and the use of assumptions in the financial statements have been disclosed below. The key assumptions and other key sources of estimation and uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year have also been discussed below:
a) Regulatory Deferral Account Balances
Regulatory Deferral account balances consists of Fuel and Power Purchase Cost Adjustment (FPPCA) and other accruals as per the tariff Regulation as recognised in the accounts have been considered on the basis of available tariff order and as per the norms and formula prescribed in the regulations; this may vary requiring adjustments on determination by the regulator.
b) Fair Valuation of Financial assets
Beneficial interest in Power Trust have been evaluated and considered based on the valuation of underlying securities and the projected inflows of the Investee entities as estimated by the respective management and evaluated by an independent valuer. Variation arising with respect to actual numbers in future may require adjustment effecting other comprehensive income.
Investment in unlisted equity are carried at fair value through other comprehensive income based on latest available audited financial statement.
c) Income taxes
Significant judgment is required in determination of taxability of certain income and deductibility of certain expenses during the estimation of the provision for income taxes. Accordingly, such provision has been made considering concession/allowances including those based on expert advice/judicial pronouncements.
d) Contingencies
Management judgement is required for estimating the possible outflow of resources, if any, in respect of contingencies/claim/litigations as it is not possible to predict the outcome of pending matters with accuracy.
e) Impairment loss on trade receivables
The Company evaluates whether there is any objective evidence that trade receivables are impaired and determines the amount of impairment loss as a result of the inability of the debtors to make required payments. The Company bases the estimates on the ageing of the trade receivables balance, creditworthiness of the trade receivables and historical write-off experience. If the financial conditions of the trade receivable vary, it may effect the amount of actual write-offs as estimated.
f) Defined benefit obligation (DBO)
Management''s estimate of the DBO is based on a number of critical underlying assumptions such as standard rates of inflation, cost trends, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may impact the DBO amount and the annual defined benefit expenses.
4 AMALGAMATION OF INDIA POWER CORPORATION LIMITED
Pursuant to the scheme of arrangement and amalgamation
(''the scheme'') sanctioned by the Hon''ble Calcutta High Court vide its order dated 17th April, 2013, erstwhile India Power Corporation Limited ( IPCL), has been amalgamated with the Company with effect from 1st October 2011(the appointed date). The scheme was therefore given effect to in the financial Statements for the year ended 31st March 2013.
4.1 Consequent to the amalgamation as above:
The shareholders of erstwhile IPCL (the Transferor Company) are entitled to 11 equity shares of the Company (the Transferee Company) against every 100 equity shares held by them. Accordingly 1,12,02,75,823 equity shares of '' 1 each of the Company aggregating to '' 11,202.75 lakhs are to be issued to the shareholders of erstwhile IPCL. Erstwhile IPCL being the Amalgamating / Transferor Company, its shareholding of 51,61,32,374 equity shares of '' 1 each aggregating to '' 5,161.32 lakhs in the Company shall stand cancelled in terms of the scheme approved by the High Court leaving 38,95,15,856 equity shares held by Power Trust. The above referred allotment and cancellation has not been given effect due to certain pending clearance(s)/approval(s) from the Stock Exchanges in view of interim order relating to minimum public shareholding passed by SEBI. Pending this, a net amount of '' 6,041.43 lakhs, being the differential amount with respect to the equity shares to be allotted and to be cancelled as stated herein above, has continued to be shown as share capital suspense account.
In terms of the Orders dated 27th January, 2017 , 25th August, 2017 and 18th May, 2018 of Hon''ble Calcutta High Court, Power Trust transferred/sold off through Offer for Sale 6,57,70,691 equity shares of the Company. Therefore, Power Trust holds 32,37,45,165 equity shares of the Company as on 31st March, 2021.
Mar 31, 2018
1. CORPORATE INFORMATION
India Power Corporation Limited is domiciled and incorporated in India and its shares are quoted on National Stock Exchange of India Limited (NSE) , The Calcutta Stock Exchange Limited (CSE) and Metropolitan Stock Exchange of India Limited (MSEI). The Registered Office of the Company is at Plot X1 2&3, Block -EP, Sector-V, Saltlake City, Kolkata- 700091.
The Company is engaged in thermal power generation in the state of West Bengal and wind power generation in the state of Gujarat, Karnataka and Rajasthan. It is licensed to distribute power in and around Asansol region including the area covered under Asansol Municipal Corporation in the state of West Bengal.
2. SIGNIFICANT ACCOUNTING POLICIES
2.1 Statement of Compliance
The financial statements have been prepared in accordance with Indian Accounting Standard (Ind AS) as prescribed under section 133 of the Companies Act 2013 ("the Act") ("to the extent notified") and the Regulations issued from time to time by "West Bengal Electricity Regulatory Commission" (WBERC) under the Electricity Act, 2003 (Tariff Regulations). Ind AS are prescribed under section 133 of the Act read with rule 3 of The Companies ( Indian Accounting Standard ) Rules 2015 and the relevant amendment rules issued thereafter.
Effective April 1, 2016, the Company has adopted the Ind AS Standards and the adoption was carried out in accordance with Ind AS 101 "First time adoption of Indian Accounting Standards" with effect from April 1, 2015 as the transition date. The transition was carried out from Indian Accounting Principles generally accepted in India as prescribed under section 133 of the Act, read with Rule 7 of the Companies (Account) Rules, 2014 (IGAAP), which was the previous GAAP.
Accounting Policy has been consistently applied except where a newly introduced accounting standard is initially adopted or a revision to an existing accounting standard requires a change in accounting policy hitherto in use.
2.2 Recent Pronouncements
Appendix B to Ind AS 21, "Foreign currency transactions and advance consideration:" On March 28, 2018, Ministry of Corporate Affairs ("MCA") has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. The amendment will come into force from April 1, 2018. The Company is evaluating the effect of this on the financial statements.
Ind AS 115- "Revenue from Contract with Customers:" On March 28, 2018, Ministry of Corporate Affairs ("MCA") has notified the Ind AS 115, Revenue from Contract with Customer. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity''s contracts with customer.
The standard permits two possible methods of transition:
- Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8- Accounting Policies, Changes in Accounting Estimates and Errors.
- Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch - up approach).
The effective date for adoption of Ind AS 115 is financial periods beginning on or after April 1, 2018. The Company is evaluating the requirement of amendment and impact on financial statements. The effect on adoption of Ind AS 115 is expected to be insignificant.
2.3 Basis of Preparation
The financial statements have been prepared on historical cost convention on accrual basis except for certain financial instruments, that are measured in terms of relevant Ind AS at fair value/amortised cost at the end of each reporting period, as explained in accounting policy below. Historical cost convention is generally based on fair value of the consideration given in exchange for goods and services. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
As the operating cycle cannot be identified in normal course, the same has been assumed to have duration of 12 months. All Assets and Liabilities have been classified as current or noncurrent as per the operating cycle and other criteria set out in Ind AS-1 ''Presentation of Financial Statements'' and Schedule III to the Companies Act, 2013.
The Standalone Financial Statements are presented in Indian Rupees (f) and all values are rounded off to the nearest two decimal lakhs except otherwise stated.
Financials for the year ended March 31, 2017 and as at March 31, 2017 has been audited by previous auditors.
2.4 Fair Value Measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions.
The Company categorizes assets and liabilities measured at fair value into one of three levels depending on the ability to observe inputs employed for such measurement:
(a) Level 1 : quoted prices (unadjusted) in active markets for identical assets or liabilities.
(b) Level 2 : inputs other than quoted prices included within level 1 that are observable either directly or indirectly for the asset or liability.
(c) Level 3 : inputs for the asset or liability which are not based on observable market data.
2.5 Property, Plant and Equipment (PPE)
(i) Freehold land is carried at historical cost. All other items of PPE are stated at their cost of acquisition or construction and is net of accumulated depreciation. Carrying value of PPE on the date of transition has been considered to be deemed cost. The cost comprises purchase price, borrowing cost if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. 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. All other repair and maintenance costs are recognised in Statement of Profit or Loss as incurred.
(ii) All project related expenses via civil works, machinery under erection, construction and erection materials, pre-operative expenditure net of revenue incidental / attributable to the construction of project, borrowing cost incurred prior to the date of commercial operations are shown under Capital Work-In-Progress (CWIP).
(iii) Depreciation on property plant and equipment commences when the assets are ready for their intended use.
(vii) Assets constructed/acquired in relation to assets taken on operating lease are amortised over the primary period of lease.
2.6 Intangible Assets
Recognition and initial measurement
Intangible assets are stated at cost comprising of purchase price inclusive of duties and taxes less accumulated amount of amortization and impairment losses. Such assets, are amortised over the useful life using straight line method and assessed for impairment whenever there is an indication of the same.
Accordingly, cost of computer software packages (ERP and others) has been allocated / amortised over a period of 5 years on straight line basis.
2.7 Derecognition of Tangible and Intangible Assets
An item of PPE is de-recognised upon disposal or when no future economic benefits are expected to arise from its use or disposal. Gain or loss arising on the disposal or retirement of an item of PPE is determined as the difference between the sale proceeds and the carrying amount of the asset and is recognised in the Statement of Profit and Loss.
2.8 Impairment of Tangible and Intangible Assets
Tangible and Intangible assets are reviewed at each balance sheet date for impairment. In case events and circumstances indicate any impairment, recoverable amount of assets is determined. An impairment loss is recognized in the Statement of Profit and Loss, whenever the carrying amount of assets either belonging to Cash Generating Unit (CGU) or otherwise exceeds recoverable amount. The recoverable amount is the higher of assets fair value less cost of disposal and its value in use. In assessing value in use, the estimated future cash flows from the use of the assets are discounted to their present value at appropriate rate.
Impairment losses recognized earlier may no longer exist or may have come down. Based on such assessment at each reporting period the impairment loss is reversed and recognized in the Statement of Profit and Loss. In such cases the carrying amount of the asset is increased to the lower of its recoverable amount and the carrying amount that have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years.
2.9 Leases
Leases are classified as finance leases whenever in terms of the lease all the risks and rewards incidental to the ownership of an asset are substantially transferred to the Company. All other leases are classified as operating leases.
Finance leases are capitalized at the inception of the lease at lower of its fair value and the present value of the minimum lease payments and a liability is recognized for an equivalent amount.
(v) The residual values, useful lives and method of depreciation are reviewed at each financial year end and adjusted prospectively, if appropriate.
(vi) Cost of leasehold lands are amortised under the straight line method over the related lease period.
Any initial direct cost of the lessee is added to the amount recognized as an asset. Each Lease payment is apportioned between finance charge and reduction of the lease liability. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the outstanding amount of the liabilities.
Payments made under operating leases are recognized as expenses on a straight-line basis over the term of the lease unless the lease arrangement are structured to increase in the payments in line with expected general inflation or another systematic basis which is more representative of the time pattern of the benefits availed. Contingent rentals, if any, arising under operating leases are recognized as an expense in the period in which they are incurred.
2.10 Financial Assets and Liabilities
Financial assets and financial liabilities (financial instruments) are recognized when 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 (other than financial assets and financial liabilities at fair value through profit or loss) 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 recognized immediately in the Statement of Profit and Loss.
The financial assets and financial liabilities are classified as current if they are expected to be realised or settled within operating cycle of the Company or otherwise these are classified as non-current.
The financial instruments are classified to be measured at Amortized Cost, at Fair Value Through Profit and Loss (FVTPL) or at Fair Value Through Other Comprehensive Income (FVTOCI) and such classification depends on the objective and contractual terms to which they relate. Classification of financial instruments are determined on initial recognition.
(i) Cash and cash equivalents
All highly liquid financial instruments, which are readily convertible into determinable amounts of cash and which are subject to an insignificant risk of change in value and are having original maturities of three months or less from the date of purchase, are considered as cash equivalents. Cash and cash equivalents includes balances with banks which are unrestricted for withdrawal and usage.
(ii) Financial Assets and Financial Liabilities measured at amortized cost
Financial Assets 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 are measured at amortized cost.
The above Financial Assets and Financial Liabilities subsequent to initial recognition are measured at amortized cost using Effective Interest Rate (EIR) method.
The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts (including all fees and points paid or received, transaction costs and other premiums or discounts) through the expected life of the Financial Asset or Financial Liability to the gross carrying amount of the financial asset or to the amortised cost of financial liability, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.
(iii) Financial Asset at Fair Value through Other Comprehensive Income (FVTOCI)
Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business 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. Subsequent to initial recognition, they are measured at fair value and changes therein are recognised directly in other comprehensive income.
(iv) For the purpose of para (ii) and (iii) above, the principal is considered to be fair value of the financial asset at initial recognition and interest consists of consideration for the time value of money and associated credit risk.
(v) Financial Assets or Liabilities at Fair value through profit or loss (FVTPL)
Financial Instruments which do not meet the criteria of amortized cost or fair value through other comprehensive income are classified as Fair Value through Profit or loss. These are recognised at fair value and changes therein are recognized in the Statement of Profit and Loss.
2.11 Financial guarantee contracts
Financial guarantee contracts other than those which are in the nature of Insurance are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified party 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 expected loss allowance determined as per impairment requirements of Ind-AS 109 and the amount recognised less cumulative amortization.
2.12 Impairment of Financial Assets
A financial asset is assessed for impairment at each reporting date. A financial asset is considered to be impaired if objective evidence indicates that one or more events have a negative effect on the estimated future cash flows of that asset.
The Company measures the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition. If the credit risk on a financial instrument has not increased significantly since initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month expected credit losses.
However, for trade receivables or contract assets that result in relation to revenue from contracts with customers, the Company measures the loss allowance at an amount equal to lifetime expected credit losses.
2.13 De-recognition of financial instruments
The Company derecognizes a financial asset or a group of financial assets when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.
On derecognition of a financial asset (except for equity instruments designated as FVTOCI), the difference between the asset''s carrying amount and the sum of the consideration received and receivable are recognized in Statement of Profit and Loss.
On derecognition of assets measured at FVTOCI the cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment.
Financial liabilities are derecognized if the Company''s obligations specified in the contract expire or are discharged or cancelled. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in Statement of Profit and Loss.
2.14 Inventories
Inventories are valued at lower of cost or net realisable value.
Cost is calculated on weighted average basis and includes expenditure incurred for bringing such inventories to their present location and condition. Adjustments in the carrying amount of obsolete, defective and slow moving items as may be identified at the time of physical verification is made where appropriate, to cover any eventual loss on their ultimate realisation.
2.15 Foreign Currency Transactions
Presentation currency:
These financial statements are presented in Indian Rupee, the
national currency of India, which is the functional currency of the Company.
Transactions and balances:
Transactions in foreign currencies are translated into the functional currency at the exchange rates prevailing on the date of the transactions. Foreign currency monetary assets and liabilities at the year-end are translated at the year-end exchange rates. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of transaction. The loss or gain thereon and also on the exchange differences on settlement of the foreign currency transactions during the year are recognized as income or expense in the profit and loss account. Foreign exchange gain/loss to the extent considered as an adjustment to Interest Cost are considered as part of borrowing cost.
2.16 Provision, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement are recognized when there is a legal or constructive obligation as a result of past events and it is probable that there will be an outflow of resources and a reliable estimate can be made of the amount of obligation. Provisions are not recognized for future operating losses. The amount recognized 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.
Contingent liabilities is not recognized and are disclosed by way of notes to the financial statements when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or when there is a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the same or a reliable estimate of the amount in this respect cannot be made.
Contingent Assets are disclosed in the financial statements by way of notes to accounts when an inflow of economic benefits is probable.
2.17 Post-employment, long term and short term employee benefits
Defined contribution plans Provident Fund
The Company pays provident fund contributions to publicly administered provident funds as per local regulations. The Company has no further payment obligations once the contributions have been paid. The contributions are accounted for as defined contribution plans and the contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.
Defined benefit plans Gratuity (Funded)
Gratuity is a post-employment benefit and is in the nature of a defined benefit plan. The liability recognised in the financial statement in respect of gratuity is the present value of the defined benefit obligation at the reporting date less the fair value of plan assets, together with adjustments for unrecognized actuarial gains or losses and past service costs. The defined benefit/obligation is calculated at or near the reporting date by an independent actuary using the projected unit credit method.
Actuarial gains and losses arising from past experience and changes in actuarial assumptions are credited or charged to Other Comprehensive Income in the year in which such gains or losses are determined.
Superannuation (Funded)
The Company''s superannuation scheme, a defined benefit plan, covers certain category of employees and is administered through a trust fund. Investments of the fund are managed by LIC. Upon retirement, death or cessation of employment Superannuation Fund purchases annuity policies in favour of vested employees or their spouses to secure periodic pension. Such superannuation benefits are based on respective employee''s tenure of employment and salary.
Actuarial gains and losses arising from past experience and changes in actuarial assumptions are credited or charged to Other Comprehensive Income in the year in which such gains or losses are determined.
Lump sum payment (Unfunded)
The Company has a defined benefit plan which covers certain categories of employees for providing a lump sum amount at various scales to the vested employee or his nominee upon retirement, death or cessation of service based on tenure of employment. Vesting occurs upon completion of 20 years of service.
Actuarial gains and losses arising from past experience and changes in actuarial assumptions are credited or charged Other Comprehensive Income in the year in which such gains or losses are determined.
Compensated absences
Liability in respect of compensated absences becoming due or expected to be availed within one year from the balance sheet date is recognised on the basis of undiscounted value of estimated amount required to be paid or estimated value of benefit expected to be availed by the employees. Liability in respect of compensated absences becoming due or expected to be availed more than one year after the balance sheet date is estimated on the basis of an actuarial valuation performed by an independent actuary using the projected unit credit method.
Actuarial gains and losses arising from past experience and changes in actuarial assumptions are charged to Statement of Profit and Loss in the year in which such gains or losses are determined.
Short Term Employee Benefits
Recognised at the undiscounted amount as expense for the year in which the related service is provided.
Voluntary Retirement Scheme
Expenditure on voluntary retirement scheme (VRS) is being charged to Statement of Profit and Loss Account as incurred.
2.18 Revenue Recognition
Sale of Energy
Sale of energy on account of electricity supplied from regulated business is accounted for on the basis of billing to consumers at rates approved by WBERC and is net of rebate.
Sale of energy other than above
is billed and accounted for at rates agreed with respective consumers.
Regulatory income and expense for the year recognised as per Regulations issued by WBERC are shown separately in the Statement of Profit and Loss.
Interest, Dividend and Claims
Dividend income is recognized when the right to receive payment is established. Interest has been accounted using effective interest rate method. Insurance claims/ other claims are accounted as and when admitted / settled.
2.19 Borrowing Costs
Borrowing cost comprises of interest and other costs incurred in connection with the borrowing of the funds. All borrowing costs are recognized in the Statement of Profit and Loss using the effective interest method except to the extent attributable to qualifying Property Plant Equipment (PPE) which are capitalized to the cost of the related assets. A qualifying PPE is an asset, that necessarily takes a substantial period of time to get ready for its intended use or sale. Borrowing cost also includes exchange differences to the extent considered as an adjustment to the borrowing costs.
2.20 Income Tax
Income tax expense representing the sum of current tax expenses and the net charge of the deferred taxes is recognized in Statement of Profit and Loss except to the extent that it relates to items recognized directly in equity or other comprehensive income.
Current income tax is provided on the taxable income and recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. Taxable Income differs from ''profit before tax'' as reported in the Statement of Profit and Loss because of items of income or expense taxable on the basis different than that considered for recognition in the accounts and also due to the items that are taxable or deductible in other years and items that are never taxable or deductible.
Deferred tax is recognized 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 recognized for all taxable temporary differences. Deferred tax assets are generally recognized 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.
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.
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 deferred tax asset to be utilised.
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 recognized 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 asset will be realised.
2.21 Earnings per share
Basic earnings per share including regulatory income/expense is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events including a bonus issue.
Basic earnings per share excluding regulatory income/expense is calculated by dividing the net profit or loss for the period before regulatory income/expense attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events including a bonus issue.
For the purpose of calculating diluted earnings per share including regulatory income/expense, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
For the purpose of calculating diluted earnings per share excluding regulatory income/expense, the net profit or loss for the period before regulatory income/expense attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
2.22 Regulatory Assets and Liabilities
Regulatory assets and liabilities shown as Regulatory Deferral Account Balance are recognised based on process defined in Tariff Regulations issued by WBERC. Any adjustment thereof are recognised in the year in which order of WBERC are received. It includes amount recoverable from/ refundable to consumers on account of Fuel and Power Purchase Cost Adjustment (FPPCA), and other adjustments based on tariff regulations and orders. Consequential adjustments are given effect to upon confirmation by the relevant authorities.
Mar 31, 2017
// CORPORATE INFORMATION
India Power Corporation Limited is domiciled and incorporated in India and its shares are quoted on National Stock Exchange of India Limited [''NSE''], The Calcutta Stock Exchange Limited [''CSE''] and Metropolitan Stock Exchange of India Limited [''MSEI'']. The registered office of the Company is at Plot XI 2&3, Block-EP, Sector-V, Saltlake City, Kolkata-700091.
The Company is engaged in thermal power generation in the state of West Bengal and wind power generation in the state of Gujarat, Karnataka and Rajasthan. It is licensed to distribute power in and around Asansol region including the area covered under Asansol Municipal Corporation in the State of West Bengal.
2// STATEMENT OF COMPLIANCE AND RECENT PRONOUNCEMENTS 2.1 Statement of Compliance
The Company has adopted Indian Accounting Standards (referred to as "Ind AS") notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended) read with Section 133 of the Companies Act, 2013 ("the Act") with effect from April 1, 2016 and therefore Ind AS issued, notified and made effective till the financial statements are authorized and the Regulations issued from time to time by West Bengal Electricity Regulatory Commission (WBERC) under the Electricity Act, 2003 (Tariff Regulations) have been considered for the purpose of preparation of these financial statements.
These are the Company''s first Ind AS Standalone Financial Statements and the date of transition to Ind AS as required has been considered to be April 1, 2015.
The financial statement upto the year ended March 31, 2016, were prepared as per the previous GAAP under the historical cost convention on accrual basis in accordance with the Generally Accepted Accounting Principles and Accounting Standards as prescribed under the provisions of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 then applicable to the Company and the Regulations issued from time to time by West Bengal Electricity Regulatory Commission (WBERC) under the Electricity Act, 2003 (Tariff Regulations). Previous GAAP figures in the financial statements have now been restated in compliance to Ind AS and regulatory requirements of WBERC.
In accordance with Ind AS 101 "First time adoption of Indian Accounting Standards", the Company has presented within Note 53.1(a) reconciliation of Shareholders'' equity as given earlier under previous GAAP and those considered in these accounts as per Ind AS as at March 31, 2016, and April 1, 2015 and also the Net Profit as per previous GAAP and that arrived including Other Comprehensive Income under Ind AS for the year ended March 31, 2016. The mandatory exceptions and optional exemptions availed by the Company on first-time adoption have been detailed in Note 53.2 of the financial statement.
2.2 Recent Pronouncements
In March 2017, Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to the Ind AS 7 ''Statement of cash flows'' and Ind AS 102, ''Share - based payment'' which are applicable w.e.f. April 1, 2017.
The amendment to Ind AS 7 "Statement of cash flows" requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes. The effect of this amendment on the financial statements of the Company is being evaluated.
The amendment to Ind AS 102 "Share-based payment" provides specific guidance to measurement of cash-settled share-based payment transaction and share-based payment transaction with a net settlement feature for withholding tax obligations. As the Company has not issued any stock options plans this amendment does not have any impact on the financial statements of the Company.
3// SIGNIFICANT ACCOUNTING POLICIES 3.1 Basis of Preparation
The financial statements have been prepared on historical cost convention on accrual basis, except for certain financial instruments that are measured in terms of relevant Ind AS at fair values/amortized cost at the end of each reporting period.
Historical cost convention is generally based on fair value of the consideration given in exchange for goods and services.
As the operating cycle cannot be identified in normal course, the same has been assumed to have duration of 12 months. All Assets and Liabilities have been classified as current or non-current as per the operating cycle and other criteria set out in Ind AS 1 ''Presentation of Financial Statements'' and Schedule III to the Companies Act, 2013.
The standalone financial statements are presented in Indian Rupees and all values are rounded off to the nearest two decimal lakhs except otherwise stated.
3.2 Fair Value Measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions.
The Company categorizes assets and liabilities measured at fair value into one of three levels depending on the ability to observe inputs employed for such measurement:
(a) Level 1 : quoted prices (unadjusted) in active markets for identical assets or liabilities.
(b) Level 2 : inputs other than quoted prices included within level 1 that are observable either directly or indirectly for the asset or liability
(c) Level 3 : inputs for the asset or liability which are not based on observable market data.
3.3 Property, Plant and Equipment (PPE)
(i) Freehold land is carried at historical cost. All other items of PPE are stated at their cost of acquisition or construction and is net of accumulated depreciation. Carrying value of PPE on the date of transition has been considered to be deemed cost. The cost comprises purchase price, borrowing cost if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. 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. All other repair and maintenance costs are recognized in statement of profit and loss as incurred.
(ii) All project related expenses viz civil works, machinery under erection, construction and erection materials, pre-operative expenditure net of revenue incidental/attributable to the construction of project, borrowing cost incurred prior to the date of commercial operations are shown under Capital Work In Progress (CWIP).
(iii) Depreciation on property, plant and equipment commences when the assets are ready for their intended use.
(v) The residual values, useful lives and method of depreciation are reviewed at each financial year end and adjusted prospectively, inappropriate.
(vi) Cost of leasehold lands are amortized under the straight line method over the related lease
period.
(vii) Assets constructed/acquired in relation to assets taken on operating lease are amortized over the primary period of lease.
3.4 Intangible Assets
Recognition and initial measurement
Intangible assets are stated at cost comprising of purchase price inclusive of duties and taxes less accumulated amount of amortization and impairment losses. Such assets, are amortized over the useful life using straight line method and assessed for impairment whenever there is an indication of the same.
Accordingly, cost of computer software packages (ERP and others) has been allocated/amortized over a period of 5 years on straight line basis.
3.5 Derecognition of Tangible and Intangible Assets
An item of PPE is de-recognized upon disposal or when no future economic benefits are expected to arise from its use or disposal. Gain or loss arising on the disposal or retirement of an item of PPE is determined as the difference between the sale proceeds and the carrying amount of the asset and is recognized in the statement of profit and loss.
3.6 Impairment of Tangible and Intangible Assets
Tangible and Intangible assets are reviewed at each balance sheet date for impairment. In case events and circumstances indicate any impairment, recoverable amount of assets is determined. An impairment loss is recognized in the statement of profit and loss, whenever the carrying amount of assets either belonging to Cash Generating Unit (CGU) or otherwise exceeds recoverable amount. The recoverable amount is the higher of assets fair value less cost of disposal and its value in use. In assessing value in use, the estimated future cash flows from the use of the assets are discounted to their present value at appropriate rate.
Impairment losses recognized earlier may no longer exist or may have come down. Based on such assessment at each reporting period the impairment loss is reversed and recognized in the statement of profit and loss. In such cases the carrying amount of the asset is increased to the lower of its recoverable amount and the carrying amount that have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years.
3.7 Leases
Leases are classified as finance leases whenever in terms of the lease all the risks and rewards incidental to the ownership of an asset are substantially transferred to the Company. All other leases are classified as operating leases.
Finance leases are capitalized at the inception of the lease at lower of its fair value and the present value of the minimum lease payments and a liability is recognized for an equivalent amount. Any initial direct cost of the lessee is added to the amount recognized as an asset. Each lease payment is apportioned between finance charge and reduction of the lease liability. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the outstanding amount of the liabilities.
Payments made under operating leases are recognized as expenses on a straight-line basis over the term of the lease unless the lease arrangement are structured to increase in the payments in line with expected general inflation or another systematic basis which is more representative of the time pattern of the benefits availed. Contingent rentals, if any, arising under operating leases are recognized as an expense in the period in which they are incurred.
3.8 Financial Assets and Liabilities
Financial assets and financial liabilities (financial instruments) are recognized when 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 (other than financial assets and financial liabilities at fair value through profit or loss) 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 recognized immediately in the statement of profit and loss.
The financial assets and financial liabilities are classified as current if they are expected to be realized or settled within operating cycle of the company or otherwise these are classified as non-current.
The financial instruments are classified to be measured at Amortized Cost, at Fair Value Through Profit and Loss (FVTPL) or at Fair Value Through Other Comprehensive Income (FVTOCI) and such classification depends on the objective and contractual terms to which they relate. Classification of financial instruments are determined on initial recognition.
(i) Cash and cash equivalents
All highly liquid financial instruments, which are readily convertible into determinable amounts of cash and which are subject to an insignificant risk of change in value and are having original maturities of three months or less from the date of purchase, are considered as cash equivalents. Cash and cash equivalents includes balances with banks which are unrestricted for withdrawal and usage.
(ii) Financial Assets and Financial Liabilities measured at amortized cost
Financial Assets 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 are measured at amortized cost.
The above financial assets and financial liabilities subsequent to initial recognition are measured at amortized cost using Effective Interest Rate (EIR) method.
The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts (including all fees and points paid or received, transaction costs and other premiums
or discounts) through the expected life of the financial asset or financial liability to the gross carrying amount of the financial asset or to the amortized cost of financial liability, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.
(iii) Financial Asset at Fair Value through Other
Comprehensive Income (FVTOCI)
Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business 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. Subsequent to initial recognition, they are measured at fair value and changes therein are recognized directly in other comprehensive income.
(iv) For the purpose of para (ii) and (iii) above, the principal is considered to be fair value of the financial asset at initial recognition and interest consists of consideration for the time value of money and associated credit risk.
(v) Financial Assets or Liabilities at Fairdale Through Profit or Loss (FVTPL)
Financial Instruments which do not meet the criteria of amortized cost or fair value through other comprehensive income are classified as Fair Value through Profit or loss. These are recognized at fair value and changes therein are recognized in the statement of profit and loss.
3.9 Financial Guarantee Contracts
Financial guarantee contracts other than those which are in the nature of insurance are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified party fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognized 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 expected loss allowance determined as per impairment requirements of Ind AS 109 and the amount recognized less cumulative amortization.
3.10 Impairment of Financial Assets
A financial asset is assessed for impairment at each reporting date. A financial asset is considered to be impaired if objective evidence indicates that one or more events have a negative effect on the estimated future cash flows of that asset.
The company measures the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition. If the credit risk on a financial instrument has not increased significantly since initial recognition, the company measures the loss allowance for that financial instrument at an amount equal to 12-month expected credit losses.
However, for trade receivables or contract assets that result in relation to revenue from contracts with customers, the company measures the loss allowance at an amount equal to lifetime expected credit losses.
3.11 De-recognition of financial instruments
The Company derecognizes a financial asset or a group of financial assets when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.
On derecognition of a financial asset (except for equity instruments designated as FVTOCI), the difference between the asset''s carrying amount and the sum of the consideration received and receivable are recognized in statement of profit and loss.
On derecognition of assets measured at FVTOCI the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment.
Financial liabilities are derecognized if the Company''s obligations specified in the contract expire or are discharged or cancelled. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in statement of profit and loss.
3.12 Inventories
Inventories are valued at lower of cost or net realizable value.
Cost is calculated on weighted average basis and includes expenditure incurred for bringing such inventories to their present location and condition. Adjustments in the carrying amount of obsolete, defective and slow moving items as may be identified at the time of physical verification is made where appropriate, to cover any eventual loss on their ultimate realization.
3.13 Foreign Currency Transactions Presentation currency:
These financial statements are presented in Indian Rupee, the national currency of India, which is the functional currency of the company.
Transactions and balances:
Transactions in foreign currencies are translated into the functional currency at the exchange rates prevailing on the date of the transactions. Foreign currency monetary assets and liabilities at the year-end are translated at the year-end exchange rates. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of transaction. The loss or gain thereon and also on the exchange differences on settlement of the foreign currency transactions during the year are recognized as income or expense in the profit and loss account. Foreign exchange gain/loss to the extent considered as an adjustment to Interest Cost are considered as part of borrowing cost.
3.14 Provision, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement are recognized when there is a legal or constructive obligation as a result of past events and it is probable that there will be an outflow of resources and a reliable estimate can be made of the amount of obligation. Provisions are not recognized for future operating losses. The amount recognized 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.
Contingent liabilities is not recognized and are disclosed by way of notes to the financial statements when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or when there is a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the same or a reliable estimate of the amount in this respect cannot be made.
Contingent Assets are disclosed in the financial statements by way of notes to accounts when an inflow of economic benefits is probable.
3.15 Post-employment, long term and short term employee benefits Defined contribution plans
Provident Fund
The Company pays provident fund contributions to publicly administered provident funds as per local regulations. The Company has no further payment obligations once the contributions have been paid. The contributions are accounted for as defined contribution plans and the contributions are recognized as employee benefit expense when they are due. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in the future payments is available.
Defined benefit plans
Gratuity (Funded)
Gratuity is a post-employment benefit and is in the nature of a defined benefit plan. The liability recognized in the financial statement in respect of gratuity is the present value of the defined benefit obligation at the reporting date less the fair value of plan assets, together with adjustments for unrecognized actuarial gains or losses and past service costs. The defined benefit/obligation is calculated at or near the reporting date by an independent actuary using the projected unit credit method.
Actuarial gains and losses arising from past experience and changes in actuarial assumptions are credited or charged to the statement of OCI in the year in which such gains or losses are determined.
Superannuation (Funded)
The Company''s superannuation scheme, a defined benefit plan, covers certain category of employees and is administered through a trust fund. Investments of the fund are managed by LIC. Upon retirement, death or cessation of employment Superannuation Fund purchases annuity policies in favour of vested employees or their spouses to secure periodic pension. Such superannuation benefits are based on respective employee''s tenure of employment and salary.
Actuarial gains and losses arising from past experience and changes in actuarial assumptions are credited or charged to the statement of OCI in the year in which such gains or losses are determined.
Lump sum payment (Unfunded)
The Company has a defined benefit plan which covers certain categories of employees for providing a lump sum amount at various scales to the vested employee or his nominee upon retirement, death or cessation of service based on tenure of employment. Vesting occurs upon completion of 20 years of service.
Actuarial gains and losses arising from past experience and changes in actuarial assumptions are credited or charged to the statement of OCI in the year in which such gains or losses are determined.
Compensated absences
Liability in respect of compensated absences becoming due or expected to be availed within one year from the balance sheet date is recognized on the basis of undiscounted value of estimated amount required to be paid or estimated value of benefit expected to be availed by the employees. Liability in respect of compensated absences becoming due or expected to be availed more than one year after the balance sheet date is estimated on the basis of an actuarial valuation performed by an independent actuary using the projected unit credit method.
Actuarial gains and losses arising from past experience and changes in actuarial assumptions are charged to statement of profit and loss in the year in which such gains or losses are determined.
ShortTerm Employee Benefits
Recognized at the undiscounted amount as expense for the year in which the related service is provided.
Voluntary Retirement Scheme
Expenditure on voluntary retirement scheme (VRS) is being charged to statement of profit and loss account as incurred.
3.16 Revenue Recognition Sale of Energy
Sale of energy on account of electricity supplied from regulated business is accounted for on the basis of billing to consumers at rates approved by WBERC and is net of rebate.
Sale of energy other than above is billed and accounted for at rates agreed with respective consumers.
Regulatory income and expense for the year recognized as per Regulations issued by WBERC are shown separately in the statement of profit and loss.
Interest, Dividend and Claims
Dividend income is recognized when the right to receive payment is established. Interest has been accounted using effective interest rate method. Insurance claims/ other claims are accounted as and when admitted/ settled.
3.17 Borrowing Costs
Borrowing costs comprises of interest and other costs incurred in connection with the borrowing of the funds. All borrowing costs are recognized in the statement of profit and loss using the effective interest method except to the extent attributable to qualifying property, plant and equipment (PPE) which are capitalized to the cost of the related assets. A qualifying PPE is an asset, that necessarily takes a substantial period of time to get ready for its intended use or sale. Borrowing costs also includes exchange differences to the extent considered as an adjustment to the borrowing costs.
3.18 Income Tax
Income tax expense representing the sum of current tax expenses and the net charge of the deferred taxes is recognized in the income statement except to the extent that it relates to items recognized directly in equity or other comprehensive income.
Current income tax is provided on the taxable income and recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. Taxable Income differs from ''profit before tax'' as reported in the statement of profit and loss because of items of income or expense taxable on the basis different than that considered for recognition in the accounts and also due to the items that are taxable or deductible in other years and items that are never taxable or deductible.
Deferred tax is recognized 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 recognized for all taxable temporary differences. Deferred tax assets are generally recognized 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 utilized.
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 realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
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 deferred tax asset to be utilized.
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 recognized 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 asset will be realized.
3.19 Earnings per share
Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events including a bonus issue.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
3.20 Regulatory Assets and Liabilities
Regulatory assets and liabilities shown as Regulatory Deferral Account Balance are recognized based on process defined in Tariff Regulations issued by WBERC. Any adjustment thereof are recognized in the year in which order of WBERC are received. It includes amount recoverable from/refundable to consumers on account of Fuel and Power Purchase Cost Adjustment (FPPCA), and other adjustments based on tariff regulations and orders. Consequential adjustments are given effect to upon confirmation by the relevant authorities.
4// CRITICAL ACCOUNTING JUDGEMENTS, ASSUMPTIONS AND KEY SOURCES OF ESTIMATION AND UNCERTAINTY
The preparation of the financial statements in conformity with IND AS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Differences between the actual results and estimates are recognized in the year in which the results are known/materialized and, if material, their effects are disclosed in the notes to the financial statements.
Application of accounting policies that require significant areas of estimation, uncertainty and critical judgments and the use of assumptions in the financial statements have been disclosed below. The key assumptions and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year have also been discussed below:
a) Regulatory Deferral Account Balances
Regulatory Deferral consists of Fuel and Power Purchase Cost Adjustment (FPPCA) and other accruals as per the Tariff Regulation as recognized in the accounts have been considered on the basis of available tariff order and as per the norms and formula prescribed in the regulations; this may vary requiring adjustments on determination by the regulator.
b) Fair Valuation of Financial assets - Beneficial interest in Power Trust
Beneficial interest in Power Trust have been evaluated and considered considering the valuation of underlying securities of the projected inflows of the Investee entities as estimated by the respective management and evaluated by an independent valuer. Variation arising with respect to actual numbers in future may require adjustment effecting other comprehensive income.
c) Income taxes
Significant judgment is required in determination of taxability of certain income and deductibility of certain expenses during the estimation of the provision for income taxes. Accordingly, such provision has been made considering concession/ allowances including those based on expert advice/ judicial pronouncements.
d) Contingencies
Management judgment is required for estimating the possible outflow of resources, if any, in respect of contingencies/claim/litigations as it is not possible to predict the outcome of pending matters with accuracy.
e) Impairment loss on trade receivables
The Company evaluates whether there is any objective evidence that trade receivables are impaired and determines the amount of impairment loss as a result of the inability of the debtors to make required payments. The Company bases the estimates on the ageing of the trade receivables balance, credit-worthiness of the trade receivables and historical write-off experience. If the financial conditions of the trade receivable vary, it may affect the amount of actual write-offs as estimated.
f) Determining whether an arrangement contain leases and classification of leases
The determination of lease and classification of the service/hiring arrangement as a finance lease or operating lease is based on an assessment of several factors, including, but not limited to, transfer of ownership of leased asset at end of lease term, lessee''s option to purchase and estimated certainty of exercise of such option, proportion of lease term to the asset''s economic life, proportion of present value of minimum lease payments to fair value of leased asset and extent of specialized nature of the leased asset.
g) Defined benefit obligation (DBO)
Management''s estimate of the DBO is based on a number of critical underlying assumptions such as standard rates of inflation, cost trends, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may impact the DBO amount and the annual defined benefit expenses.
5// AMALGAMATION OF INDIA POWER CORPORATION LIMITED
Pursuant to the scheme of arrangement and amalgamation (''the scheme'') sanctioned by the Hon''ble Calcutta High Court vide its order dated 17th April, 2013, erstwhile India Power Corporation Limited (IPCL), has been amalgamated with the Company with effect from October 1, 2011 (the appointed date). The scheme was therefore given effect to in the financial statements for the year ended March 31, 2013.
5.1 Consequent to the amalgamation as above:
The shareholders of erstwhile IPCL (the Transferor Company) are entitled to 11 equity shares of the Company (the Transferee Company) against every 100 equity shares held by them. Accordingly 1,120,275,823 equity shares of '' 1 each of the Company aggregating to '' 11,202.75 lakhs are to be issued to the shareholders of erstwhile IPCL. Erstwhile IPCL being the Amalgamating/ Transferor Company, its shareholding of 516,132,374 equity shares of '' 1 each aggregating to '' 5,161.32 lakhs in the Company shall stand cancelled in terms of the scheme approved by the High Court leaving 389,515,829 equity shares being held by Power Trust (including 149,087,194 equity shares of '' 1 each in terms of the said scheme which has now been transferred to said Trust on March 30, 2017 and 63,199,293 shares have been transferred on said date pursuant to the order of Hon''ble Calcutta High Court dated January 27, 2017). The above referred allotment and cancellation has been kept in abeyance in line with the order of SEBI pending adherence to requirement of minimum public shareholding by selling/transfer of shares of the Company held by Power Trust as required in terms of the order dated January 27, 2017 of Hon''ble Calcutta High Court. Pending this, a net amount of '' 6,041.43 lakhs, being the differential amount with respect to the equity shares to be issued and to be cancelled has continued to be shown as share capital suspense account.
5.2 In terms of the scheme, the Reserves arising pursuant to amalgamation constitutes free reserves available to the Amalgamated Company for such purpose including but not limited to declaration of dividend, issuance of Bonus shares etc. as the Board of Directors of the Amalgamated Company may consider appropriate. Accordingly as per the Board resolution, the reserve of '' 20,079.84 lakhs arising on amalgamation has been shown under the General Reserve of the Company.
5.3 Pursuant to the Scheme, the name of the Company has been changed to India Power Corporation Limited with effect from August 27, 2013.
8.3 306,454,224 number of CCPS amounting to '' 30,645.42 lakhs have been pledged with lenders of IPC(H)L.
8.4 3,811,506,509 equity shares of Meenakshi Energy Limited are pledged with lenders of Meenakshi Energy Limited.
8.5 The company has sold fully and compulsorily convertible debenture [FCCD] of '' 49,046.07 lakhs to Power Trust along with encumbrances for which necessary approvals need to be obtained. Consequent to sale of FCCD, India Power Corporation (Haldia) Limited (IPC(H)L) has ceased to be a subsidiary w.e.f. March 31, 2017 and has become an associate. Investments in the said company have accordingly been treated and given effect to as required in terms of IND AS. Further the Company currently does not have any equity holdings in IPC(H)L and proportion of holding as disclosed represents potential voting rights against CCPS.
8.6 Consequent upon sale of equity shares, Matsya Shipping and Ports Pvt. Ltd. has ceased to be a subsidiary of the Company with effect from March 27, 2017 and has become a joint venture of the Company.
8.7 Consequent upon sale of equity shares, India Uniper Power Services Pvt. Ltd. has ceased to be a subsidiary of the Company with effect from January 6, 2017 and has become a joint venture of the Company.
8.8 Statement of investment in Subsidiaries, Joint ventures and Associate
10.1 (a) Includes Nil (Rs, 2.40 lakhs as on March 31, 2016 and Rs, 0.15 lakhs as on April 1, 2015) kept as margin money with bank and Rs, 211.06 lakhs (Rs, 276.72 lakhs as on March 31, 2016 and Nil as on April 1, 2015) kept with bank as lien against repayment of term loans.
(b) Includes Rs, 62.00 lakhs (Rs, 109.36 lakhs as on March 31, 2016 and Nil as on April 1, 2015) being investment against unforeseen exigencies fund and Rs, 2.85 lakhs (Rs, 124.09 lakhs as on March 31, 2016 and Nil as on April 1, 2015) being investment against unforeseen exigencies interest fund.
10.2 Beneficial interest in Power Trust represent investments in Company''s shares, associates and other unlisted companies net off borrowings and liabilities pertaining to investment division of erstwhile IPCL transferred to the said Power Trust in terms of the scheme of amalgamation (refer note 5). Considering that the Company''s shares are held by an independent trust and are meant for sale in terms of Hon''ble Calcutta High Court order the beneficial interest (including Company''s shares) has been treated as financial assets and fair valuation as required in terms of Ind AS 109 has been carried out by an independent firm of chartered accountant and the resultant decrease of Rs, 22.80 lakhs (? 1.83 lakhs as on March 31, 2016 and increase of Rs, 16.65 lakhs as on April 1, 2015) in value thereof, has been adjusted from other comprehensive income.
11.1The Company has appointed a facilitation agent to facilitate identification of an Asset Reconstruction Company (ARC) who intends to acquire the financial assets (debt and the security interests) of a power project from its lenders and ensure appointment of the Company as exclusive resolution agent for the said financial asset. In terms of the said arrangement the company has paid a security deposit of Rs, 4,202.55 lakhs including Rs, 1,652.55 lakhs paid during the year and maintenance amount of Rs, 407.32 lakhs including Rs, 167.92 lakhs paid during the year to the facilitation agent to facilitate the ARC to procure the financial assets of the said project. The security deposit and other amounts recoverable from the facilitation agent are secured with the exclusive charge on certain receivables of the facilitation agent from the ARC. Similarly in terms of an arrangement arrived at with an (ARC), the Company has been appointed as resolution agent for resolution of the financial assets (loan and the security interest) towards a power project acquired/to be acquired by the said ARC from a lender. Pending completion of the transaction and settlement with the lenders by ARC, further maintenance amount of Rs,446.50 lakhs has been paid as part of recoveries in this connection. Consequential adjustments shall be carried out by the Company on resolution of financial assets and shall be accounted for on determination of amount thereof.
15.1 (a) Includes Rs, 919.98 lakhs (Rs, 255.18 lakhs as on March 31, 2016 and Rs, 267.30 lakhs as on April 1, 2015) kept as margin money with bank and Rs, 492.26 lakhs (Rs, 129.03 lakhs as on March 31, 2016 and Rs, 400.68 lakhs as on April 1, 2015) kept with bank as lien against repayment of term loans.
(b) Includes Rs, 189.24 lakhs (nil as on March 31, 2016 and Rs, 50.23 lakhs as on April 1, 2015) being investment against unforeseen exigencies fund and Rs, 153.59 lakhs (Rs, 4.25 lakhs as on March 31, 2016 and Rs, 55.71 lakhs as on April 1, 2015) being investment against unforeseen exigencies interest fund.
(c) Includes Rs, 4,523.40 lakhs (previous year nil) kept as margin money against Bank guarantee issued in favour of lenders of Meenakshi Energy limited.
17.1 The lease of Chinakuri Power Station (CPS) with Eastern Coal Fields limited (ECL) has expired on March 31, 2012 and in terms of lease agreement ECL is required to take over all assets at respective Written Down Value as on the date of termination ofthe lease. In terms of the arbitration order passed by Arbitration Tribunal, handing/taking over of vacant and peaceful possession of CPS has been completed on October 6, 2016, and thereby the resultant amount of Rs, 2,468.10 lakhs has been shown as recoverable from ECL.
17.2 The CompanyRs,s claim/counter claim of Rs, 56,053 lakhs from ECL with respect to above and ECL''s claim of Rs, 23,536 lakhs against the Company in this respect are under arbitration pursuant to the order of Hon''ble Supreme Court of India. Adjustment in this respect will be given effect to as and when determined.
19.1 Tariff regulations, risks and uncertainties
In the State of West Bengal tariff for electricity are determined by West Bengal Electricity Regulatory Commission (WBERC/Commission).
(a) Multi year tariff (MYT) proposal giving therein details for appropriate capital structure to meet the capital investment plan with details of cost of financing including interest cost on debt and return on equity, expected sales for the years and the ''Annual Revenue Requirement'' (ARR) covering both variable and fixed cost is submitted to WBERC. Commission examines the MYT proposals thereafter and tariff is determined for different categories of consumers. At the end of the financial year, "Annual Performance Review" (APR) petition for fixed cost and Fuel and Power Purchase Cost Adjustment (FPPCA) for variable cost is submitted to WBERC. WBERC reviews cost incurred under two categories as defined in Tariff regulation as "Controllable" and "Uncontrollable". In case of Uncontrollable cost all increase are allowed on actual basis and for Controllable cost, the commission may disallow any increase if these are not considered to be justifiable.
(b) The tariff regulation prescribes various normative operational and financial parameters for the Company. Any variation thereof may lead to disallowances. The Company is exposed to regulatory risk to the extent accruals are disallowed on assessment.
(c) As per the Tariff Regulation any increase in Variable cost is allowed to be recovered from consumers based on formula prescribed in the tariff regulation for "Fuel and Power Purchase Cost Adjustment" (FPPCA) as ''monthly variable cost adjustment'' (MVCA). FPPCA recoverable/ refundable, reliability incentive etc is accounted for as regulatory income/(expense) in the statement of profit and loss
(d) Regulatory deferral balances relate to FPPCA and Reliability incentives created on the basis of latest declared tariff order. Accruals on account of FPPCA and reliability incentives etc. are recognized in books as per formula prescribed in Tariff Regulation Reversal/accrual are carried out in the year in which Tariff, FPPCA and APR orders are received. Recovery of the regulatory deferral balances are carried out in the manner and installments as allowed by WBERC.
19.2 Payable on account of FPPCA of Rs, 3,077.57 lakhs for the year has been recognized on the basis of formulae prescribed under the applicable Tariff Regulations, and is net of Rs, 2,012.55 lakhs provisionally receivable from consumers on account of under recovery of fixed costs. The Company is entitled for incentive and gains including incentive for reliability in power supply and accordingly based on applicable norms as per Tariff regulation, Rs, 720.41 lakhs have been recognized. Adjustments in these respects are carried out and given effect to from time to time based on the order of West Bengal Electricity Regulatory Commission or directions from appropriate authorities.
21.1 Based on expert opinion obtained, considering that capital contribution from consumers toward service lines are not refundable to the consumers even after they cease to be consumers and the underlying assets there against being under ownership of the Company, such contribution are being treated as Capital Reserve.
21.2 Reserve arising on amalgamation of Associated Power Company Limited with the Company in the year 1978 has been shown as other capital reserve.
21.3 Debenture Redemption Reserve is required to be created out of the profits available for payment of dividend in terms of Section 71 of the Companies Act, 2013 which is equal to 25% of the face value of the debentures issued and outstanding. The reserve will be released on redemption ofthe debentures.
21.4 (a) The general reserve is created from time to time by
appropriating profits from retained earnings at the discretion ofthe company. As the general reserve is created by a transfer from one component of equity to another, and accordingly it is not reclassified to the statement of profit and loss.
21.4 (b) General Reserve include Rs, 56,887.09 lakhs being General Reserve of amalgamating company. In terms of Note 5. Further, reserve of Rs, 20,079.84 lakhs arising on amalgamation as stated in note
5.2 has also been included therein.
21.5 Reserve for unforeseen exigencies are created in terms of the Tariff Regulation issued by West Bengal Electricity Regulatory Commission. The sum appropriated to ''Reserve for unforeseen exigencies'' are to be invested in specified securities and financial instruments (fixed deposit) at Nationalized bank. The interest accrued from such investment is reinvested and kept under -''Reserve for unforeseen exigencies Interest fund''. The aforesaid reserves or fund shall be drawn upon only to meet such charges as the Commission may approve.
21.6 Retained Earnings generally represent the undistributed profits/amount of accumulated earnings of the Company.
21.7 Dividend Distribution
The amount that can be distributed by the Company as dividends to its equity shareholders is determined considering the requirements of the Companies Act, 2013 and the dividend distribution policy of the Company.
On September 10, 2016 a dividend pertaining to the financial year 2015-2016 of Rs,0.05 per equity shares aggregating to Rs, 154.29 Lakhs and the dividend distribution tax of Rs, 31.40 lakhs has been approved for payment to equity shareholders of the Company.
In respect of the year ended March 31, 2017, the Board of Directors has recommended a dividend of Rs, 0.05 per share to be paid on fully paid equity shares . This equity dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements. The total estimated equity dividend to be paid is Rs, 788.97 lakhs and the dividend distribution tax thereon amounts to Rs, 160.62 lakhs.
21.8 (a) OCI represent actuarial gains and losses on defined benefit obligations and
22.1(a) Includes 10.75% Secured Redeemable Non Convertible Debentures aggregating to Rs, 7,848.72 lakhs (Rs, 9,774.04 lakhs as on March 31, 2016 and Rs, 9,699.76 lakhs as on April 1, 2015) redeemable in five installments at the end of 6th, 7th, 8th, 9th and 10th year from the date of allotment i.e. November 3, 2010 and secured by mortgage of immovable properties consisting of
1.0749 acres of land and all the buildings including
(b) The company has elected to recognize changes in the fair value of certain investments in equity instruments in other comprehensive income. This reserve represents the cumulative gains and losses arising on the revaluation of equity instruments measured at fair value through other comprehensive income. The company transfers amounts from this reserve to retained earnings when the relevant equity securities are disposed. This will not be reclassified to statement of profit and loss.
21.9 Refer Statement of Changes in Equity for movement in balances of reserves.
all structure, there on, fixed plant and machinery, furniture & fittings, present and future at Plot Xl-3, Block EP, Salt lake, Kolkata and 1731.82 sq mtr land at Iswarpura (Gujarat).
22.1(b) Includes 12% Secured Redeemable Non Convertible Debentures aggregating to Rs, 2,000 lakhs redeemable in five installments at the end of 6th, 7th, 8th, 9th and 10th year from the date of allotment i.e. September 19, 2012 and secured by mortgage of immovable properties consisting of land measuring 20.74 acres and building at Kaithi and Seebpore Mouza at Burdwan District including Bungalows, Quarters, Offices etc. at Luchipur Receiving Station area of 56,633.94 sqft under Seebpore circle.
22.2 (a) Includes term loan of Rs, 2,649.12 lakhs (Rs, 3,087.95 lakhs as on March 31, 2016 and Rs, 3,526.22 lakhs as on April 1, 2015 at bank base rate plus 2.5% and is repayable after moratorium of two years from 1st April, 2012 in 9 years in thirty six equal quarterly instalments and is secured by exclusive charge on assets of 1x12 MW plant project and immovable property consisting of Land of 20.10 acres at Dishergarh, District Burdwan and second pari passu charge on assets charged to secure Non Convertible Debentures of Rs, 10,000 lakhs given in note 22.1 (a).
22.2 (b) Includes term loan of Rs, 6,819.43 lakhs (Rs, 7,454.12 lakhs as on March 31, 2016 and Rs, 7,447.71 lakhs as on April 1, 2015) at MCLR plus 1.9% and is repayable in 9 years from revised date i.e. 10th September 2016 in equal quarterly instalments and is secured by pari passu charge of entire fixed assets pertaining to 220/33 kv sub-station at J.K Nagar, Burdwan, both present and future.
22.2 (c) Includes term loan of Rs, Nil (Rs, 1,999.99 lakhs as on
March 31, 2016 and Rs, 4,000 lakhs as on April 1, 2015) at bank base rate plus 0.75% and is repayable in nine quarterly instalment of Rs, 500 lakhs each with effect from January 30, 2015 with annual put and call option and is secured by hypothecation by way of exclusive first charge on certain movable fixed assets of 29 kv Dishergarh Distribution network and 11 kv Seebpore distribution network.
22.2(d) Includes loan of Rs, 22,687.31 lakhs (Rs, 22,705.03 lakhs as on March 31, 2016 and Nil as on April 1, 2015) availed as renewal cum sanction of working capital facilities at bank base rate plus 1.15% renewable every year for a period upto seven years and is secured by subservient charge on the movable fixed assets and current assets of the Company except such assets which are exclusively charged/to be exclusively charged to any other bank or financial institution.
22.2 (e) Includes term loan of Rs, 4,750 lakhs (Rs, 5,000 lakhs
as on March 31, 2016 and Nil as on April 1, 2015) at bank base rate repayable in 16 quarterly instalments with effect from December 8, 2016 and is secured by exclusive first charge on movable and other fixed assets of Dishergarh Receiving Station, Parbelia Substation and Dishergarh Power Station of the Company both present and future and negative lien on certain immovable fixed assets.
22.2 (f) Includes term loan of Rs, 745.74 lakhs (Rs, 850.30
lakhs as on March 31, 2016 and Nil as on April 1, 2015) at bank base rate plus 1.25% repayable in 40 instalments with effect from March 31, 2016 and is secured by first pari passu charge with other financing banks/financial institution on the assets created/to be created out of the term loan, both present and future and exclusive fixed charge on certain fixed assets of the Company.
22.2 (g) Includes term loan of Nil (Nil as on March 31, 2016
and Rs, 16.83 lakhs as on April 1, 2015) at the rate of 10.25% repayable in 35 monthly instalments of Rs, 2.49 lakhs each and is secured against asset purchased out of the loan.
23.1 Includes Rs, 2,168.78 lakhs accounted for on the basis of tariff rates (including fuel cost adjustments) charged by DVC on a provisional basis, Pending issuance of revised tariff order by the Hon''ble Central Electricity Regulatory Commission (CERC) for the years 2006-07 to 2008-09, in terms of the directions issued by the Hon''ble Appellate Tribunal for Electricity (ATE). The Tariff fixed by CERC and the directions issued by the Hon''ble ATE has been challenged by DVC before the Hon''ble Supreme Court of India.
26.1 Other adjustment represents MAT credit utilisation against regular income tax liability.
28.1 (a) Includes Rs, 2,981.49 lakhs (Rs, 2,808.80 lakhs as on
March 31, 2016 and Rs,470.76 lakhs as on April 1, 2015) secured by first pari passu charge on current assets both present and future and second pari-passu charge on fixed assets of the company charged against Non Convertible Debentures of Rs, 10,000 lakhs as given in note 22.1 (a).
28.1 (b) Includes Rs, 2,652.70 lakhs (Rs, 3,646.31 lakhs as on
March 31, 2016 and Rs, 2,164.92 lakhs as on April 1, 2015) secured by first charge, ranking pari passu on current assets both present and future.
28.1 (c) Includes Rs, 2,894.46 lakhs (Rs, 1,066.17 lakhs as on
March 31, 2016 and Rs, 130.39 lakhs as on April 1, 2015) secured by first pari passu charge on current assets both present and future.
28.1 (d) Includes Rs, 100.64 lakhs (Rs, 707.85 lakhs as on March
31, 2016 and Rs, 62.59 lakhs as on April 1, 2015) secured by first pari passu charge on current assets both present and future and exclusive charge on certain movable fixed assets of Dhasal sub-station.
28.2 (a) Includes Rs, 2,500 lakhs (Rs, 2,500 lakhs as on March
31, 2016, Rs, 5,000 lakhs as on April 1, 2015) towards working capital demand loan repayable after 6 months from disbursement i.e. January 3, 2017 and is secured by first pari passu charge on current assets of the company both present & future.
28.2 (b) Includes Rs, Nil (Nil as on March 31, 2016, Rs, 3,500
lakhs as on April 1, 2015) towards working capital demand loan repayable after 92 days from disbursement i.e. March 24, 2015 and is secured by first pari passu charge on entire current assets of the company.
28.3 Includes Rs, Nil (Nil as on March 31, 2016, Rs, 454.40 lakhs as on April 1, 2015) is secured by lien on fixed deposit of Rs, 500 lakhs of IPCL Power Trading Pvt. Limited, a subsidiary ofthe Company.
29.1 Dues to Micro Small and Medium Enterprise
The details of amount outstanding to micro enterprise and small enterprises are based on information available with the Company. There are no delays in payment made to such suppliers. There is no overdue amount outstanding as at the balance sheet date.
Mar 31, 2016
1 // SIGNIFICANT ACCOUNTING POLICIES
(a) General:
The Financial Statements have been prepared under the historical cost convention on a going concern basis and in compliance with the relevant accounting standards and provisions as specified under the Companies Act, 2013, the Regulations issued from time to time by West Bengal Electricity Regulatory Commission (WBERC) under the Electricity Act, 2003 (Tariff Regulations).
(b) Use of Estimate:
The preparation and presentation of financial statements requires estimates and assumptions to be made that effect the reported amount of assets and liabilities and disclosures of contingent liabilities as on date of the financial statements and reported amount of revenue and expenses during the reporting period. Difference between the actual results and estimates is recognised in the period in which the results are known / materialized.
(c) Fixed Assets:
(i) Fixed Assets (both tangible and intangible) are stated at cost of acquisition or construction including any cost attributable to bringing the assets to their working condition.
(ii) All project related expenses via civil works, machinery under erection, construction and erection materials, pre-operative expenditure net of revenue incidental/attributable to the construction of project, borrowing cost incurred prior to the date of commercial operations are shown under Capital Work -In-Progress (CWIP).
(iii) Impairment loss is recognized wherever the carrying amount of fixed assets of a cash generating unit exceeds its recoverable amount, i.e. net selling price or value in use, whichever is higher.
(d) Depreciation/ Amortization:
(i) Depreciation of fixed assets is computed on straight line method either at the rates specified in the Tariff Regulation or as per Schedule II of the Companies Act, 2013 as the case may be.
(ii) Cost of leasehold lands are amortized under the straight line method over the related lease period.
(iii) Cost of Intangible assets (Computer software) is amortized under straight line method over 5 years.
(iv) Assets constructed/acquired in relation to assets taken on operating lease are amortized over the primary period of lease.
(e) Operating Lease:
Lease payments under operating leases are recognized as expense in the Statement of Profit and Loss as per terms of lease agreements.
(f) Investments:
Current investments are stated at lower of cost or fair value and Long term investments are stated at cost. Provision is made where there is a decline, other than temporary, in the value of long term investments.
(g) Inventories:
Inventories are valued at lower of cost or net realizable value.
Cost is calculated on weighted average basis and includes expenditure incurred for bringing such inventories to their present location and condition. Adjustments in the carrying amount of obsolete, defective and slow moving items as may be identified at the time of physical verification is made where appropriate, to cover any eventual loss on their ultimate realization.
(h) Foreign Currency Transactions:
Transactions in foreign currencies are accounted for at the exchange rate prevailing on the date of the transaction. Foreign currency monetary assets and liabilities at the yearend are translated at the yearend exchange rates. Non-monetary items other than fixed assets, which are carried in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction. The loss or gain thereon and also on the exchange differences on settlement of the foreign currency transactions during the year are recognized as revenue or expense and are shown in the statement of profit and loss.
Exchange differences arising with respect to forward contracts other than those entered into, to hedge foreign currency risk on unexecuted firm commitments or of highly probable forecast transactions are recognized in the period in which they arise and the difference between the forward rate and exchange rate at the date of transaction is recognized as revenue/expense over the life of the contract.
(i) Taxation:
Provision for tax is made for current and deferred taxes. Current tax is provided on the taxable revenue using the applicable tax rates and tax laws. Deferred tax assets and liabilities arising out of timing difference, which are capable of reversal in subsequent periods are recognized using rates and tax laws, which have been enacted or subsequently enacted. Deferred tax assets are recognized only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets will be realized. In case of carry forward of unabsorbed depreciation and tax losses, deferred tax assets are recognized only if there is "virtual certainty" that such deferred tax assets can be realized against future taxable profits.
Entitlement Credit in respect of Minimum Alternate Tax is recognized only if there is convincing evidence of realization of the same.
(j) Revenue Recognition:
Sale of energy on account of electricity supplied from regulated business is accounted for on the basis of billing to consumers at rates approved by WBERC and is net of rebate. It includes amount recoverable from/refundable to consumers on account of Fuel and Power Purchase Cost Adjustment (FPPCA), and other adjustments based on tariff regulations and orders and are shown as Tariff Adjustment Account under Short-term loans and advances. Consequential adjustments are given effect to upon confirmation by the relevant authorities.
Sale of energy other than above is billed and accounted for at rates agreed with respective consumers.
(k) Borrowing Costs:
Borrowing costs that are attributable to the acquisition or construction of qualifying assets (being an asset that necessarily takes substantial period of time to get ready for intended use) are capitalised as part of the cost of such assets. All other borrowing costs are charged to revenue.
(l) Employee Benefits:
(i) Short Term Employee Benefits:
Recognized at the undiscounted amount as expense for the year in which the related service is rendered.
(ii) Post Employment Benefit Plans: Contribution under Defined Contribution Plans payable in keeping with the related schemes are recognized as expenditure for the year.
In case of Defined Benefit Plans, the cost of providing the benefit is determined using the Projected Unit Credit Method with the actuarial valuation being carried out at each Balance Sheet date. Actuarial gains and losses are recognized in full in the Statement of Profit and Loss for the period in which they occur.
(iii) Other Long Term Employee Benefits (Unfunded):
The cost of providing long -term employee benefits is determined using Projected Unit Credit Method with actuarial valuation being carried out at each Balance Sheet date. Actuarial gains and losses and past service cost are recognized immediately in the Statement of Profit and Loss for the period in which they occur. Other long term employee benefit obligation recognized in the Balance Sheet represents the present value of related obligation.
(iv) Employee separation costs :
Compensation to employees opting for voluntary retirement scheme of the Company is charged in the year of exercise of option.
(m) Provision, Contingent Liabilities and Contingent Assets:
A provision is recognized when the Company has a present obligation as a result of past event and it is probable that outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognized but are disclosed in the notes to financial statements. Contingent Assets are neither recognized nor disclosed in the financial statements.
(n) Operating Cycle:
Considering the nature of business and prevailing practice current and noncurrent classification of assets and liabilities have been based on the operating cycle of 12 months.
Mar 31, 2015
(a) General:
The Financial Statements have been prepared under the historical cost
convention on a going concern basis and in compliance with the relevant
accounting standards and provisions as specified under the Companies
Act, 2013, the Regulations issued from time to time by West Bengal
Electricity Regulatory Commission (WBERC) under the Electricity Act,
2003 (Tariff Regulations).
(b) Use of Estimate :
The preparation and presentation of financial statements requires
estimates and assumptions to be made that effect the reported amount of
assets and liabilities and disclosures of contingent liabilities as on
date of the financial statements and reported amount of revenue and
expenses during the reporting period. Difference between the actual
results and estimates is recognised in the period in which the results
are known / materialised.
(c) Fixed Assets:
(i) Fixed Assets (both tangible and intangible) are stated at cost of
acquisition or construction including any cost attributable to bringing
the assets to their working condition.
(ii) All project related expenses via civil works, machinery under
erection, construction and erection materials, pre- operative
expenditure net of revenue incidental / attributable to the
construction of project, borrowing cost incurred prior to the date of
commercial operations are shown under Capital Work-In-Progress (CWIP).
(iii) Impairment loss is recognised wherever the carrying amount of
fixed assets of a cash generating unit exceeds its recoverable amount,
i.e. net selling price or value in use, whichever is higher.
(d) Depreciation/ Amortisation:
(i) Depreciation of fixed assets is computed on straight line method
either at the rates specified in the Tariff Regulation or as per
Schedule II of the Companies Act, 2013 as the case may be.
(ii) Cost of leasehold lands are amortised under the straight line
method over the related lease period.
(iii) Cost of Intangible assets (Computer software) is amortised under
straight line method over 5 years.
(iv) Assets constructed/acquired in relation to assets taken on
operating lease are amortised over the primary period of lease.
(e) Operating Lease :
Lease payments under operating leases are recognised as expense in the
Statement of Profit and Loss as per terms of lease agreements.
(f) Investments:
Current investments are stated at lower of cost or fair value and Long
term investments are stated at cost. Provision is made where there is a
decline, other than temporary, in the value of long term investments.
(g) Inventories:
Inventories are valued at lower of cost or net realisable value
Cost is calculated on weighted average basis and includes expenditure
incurred for bringing such inventories to their present location and
condition. Adjustments in the carrying amount of obsolete, defective
and slow moving items as may be identified at the time of physical
verification is made where appropriate, to cover any eventual loss on
their ultimate realisation.
(h) Taxation:
Provision for tax is made for current and deferred taxes. Current tax is
provided on the taxable revenue using the applicable tax rates and tax
laws. Deferred tax assets and liabilities arising out of timing
difference, which are capable of reversal in subsequent periods are
recognised using rates and tax laws, which have been enacted or
subsequently enacted. Deferred tax assets are recognised only to the
extent that there is a reasonable certainty that sufficient future
taxable income will be available against which such deferred tax assets
will be realised. In case of carry forward of unabsorbed depreciation
and tax losses, deferred tax assets are recognised only if there is
"virtual certainty" that such deferred tax assets can be realised
against future taxable profits.
Entitlement Credit in respect of Minimum Alternate Tax is recognised
only if there is convincing evidence of realisation of the same.
(i) Revenue Recognition:
Sale of energy on account of electricity supplied from regulated
business is accounted for on the basis of billing to consumers at rates
approved by WBERC and is net of rebate. It includes amount recoverable
from/ refundable to consumers on account of Fuel and Power Purchase
Cost Adjustment (FPPCA), and other adjustments based on tariff
regulations and orders and are shown as Tariff Adjustment Account under
Short-term loans and advances. Consequential adjustments are given
effect to upon confirmation by the relevant authorities.
Sale of energy other than above is billed and accounted for at rates
agreed with respective consumers.
(j) Borrowing Costs :
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets (being an asset that necessarily
takes substantial period of time to get ready for intended use) are
capitalised as part of the cost of such assets. All other borrowing
costs are charged to revenue.
(k) Employee Benefits:
(i) Short Term Employee Benefits:
Recognised at the undiscounted amount as expense for the year in which
the related service is rendered.
(ii) Post Employment Benefit Plans:
Contribution under Defined Contribution Plans payable in keeping with
the related schemes are recognised as expenditure for the year.
In case of Defined Benefit Plans, the cost of providing the benefit is
determined using the Projected Unit Credit Method with the actuarial
valuation being carried out at each Balance Sheet date. Actuarial gains
and losses are recognised in full in the Statement of Profit and Loss
for the period in which they occur.
(iii) Other Long Term Employee Benefits (Unfunded):
The cost of providing Long-term employee benefits is determined using
Projected Unit Credit Method with actuarial valuation being carried out
at each Balance Sheet date. Actuarial gains and losses and past service
cost are recognised immediately in the Statement of Profit and Loss for
the period in which they occur. Other long term employee benefit
obligation recognised in the Balance Sheet represents the present value
of related obligation.
(iv) Employee separation costs :
Compensation to employees opting for voluntary retirement scheme of the
Company is charged in the year of exercise of option.
(l) Provision, Contingent Liabilities and Contingent Assets :
A provision is recognised when the company has a present obligation as
a result of past event and it is probable that outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to their
present value and are determined based on best estimate required to
settle the obligation at the Balance Sheet date. These are reviewed at
each Balance Sheet date and adjusted to reflect the current best
estimates. Contingent liabilities are not recognised but are disclosed
in the notes to financial statements. Contingent Assets are neither
recognised nor disclosed in the financial statements.
(m) Operating Cycle:
Considering the nature of business and prevailing practice current and
non-current classification of assets and liabilities have been based on
the operating cycle of 12 months.
Mar 31, 2014
(a) General:
The Financial Statements have been prepared under the historical cost
convention on a going concern basis and in compliance with the relevant
provisions of the Companies Act,1956 read with the general circular
15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs
in respect of section 133 of the Companies Act, 2013, the Regulations
issued from time to time by West Bengal Electricity Regulatory
Commission (WBERC) under the Electricity Act, 2003.
(b) Use of Estimate :
The preparation and presentation of financial statements requires
estimates and assumptions to be made that effect the reported amount of
assets and liabilities and disclosures of contingent liabilities as on
date of the financial statements and reported amount of revenue and
expenses during the reporting period. Difference between the actual
results and estimates is recognised in the period in which the results
are known / materialised.
(c) Fixed Assets:
(i) Fixed Assets (both tangible and intangible) are stated at cost of
acquisition or construction including any cost attributable to bringing
the assets to their working condition.
(ii) All project related expenses via civil works, machinery under
erection, construction and erection materials, pre-operative
expenditure net of revenue incidental / attributable to the
construction of project, borrowing cost incurred prior to the date of
commercial operations are shown under Capital Work-in-Progress (CWIP).
(iii) Impairment loss is recognised wherever the carrying amount of
fixed assets of a cash generating unit exceeds its recoverable amount,
i.e. net selling price or value in use, whichever is higher.
(d) Depreciation/ Amortisation:
(i) Depreciation of fixed assets is computed on straight line method
either at the rates specified in the Tariff Regulation or as per
Schedule XIV of the Companies Act, 1956 as the case may be.
(ii) Cost of leasehold lands are amortised under the straight line
method over the related lease period.
(iii) Cost of Intangible assets (Computer software) is amortised under
straight line method over 5 years.
(iv) Assets constructed/acquired in relation to assets taken on
operating lease are amortised over the primary period of lease.
(e) Operating Lease :
Lease payments under operating leases are recognised as expense in the
Statement of Profit and Loss as per terms of lease agreements.
(f) Investments:
Current investments are stated at lower of cost or fair value and long
term investments are stated at cost. Provision is made where there is a
decline, other than temporary, in the value of long term investments.
(g) Inventories:
Inventories are valued at lower of cost or net realisable value
Cost is calculated on weighted average basis and includes expenditure
incurred for bringing such inventories to their present location and
condition. Adjustments in the carrying amount of obsolete, defective
and slow moving items as may be identified at the time of physical
verification is made where appropriate, to cover any eventual loss on
their ultimate realisation.
(h) Taxation:
Provision for tax is made for current and deferred taxes. Current tax
is provided on the taxable revenue using the applicable tax rates and
tax laws. Deferred tax assets and liabilities arising out of timing
difference, which are capable of reversal in subsequent periods are
recognised using rates and tax laws, which have been enacted or
subsequently enacted. Deferred tax assets are
recognised only to the extent that there is a reasonable certainty that
sufficient future taxable income will be available against which such
deferred tax assets will be realised. In case of carry forward of
unabsorbed depreciation and tax losses, deferred tax assets are
recognised only if there is "virtual certainty" that such deferred tax
assets can be realised against future taxable profits.
Entitlement Credit in respect of Minimum Alternate Tax is recognised
only if there is convincing evidence of realisation of the same.
(i) Revenue Recognition:
Sale of energy on account of electricity supplied from regulated
business is accounted for on the basis of billing to consumers at rates
approved by West Bengal Electricity Regulatory Commission (WBERC) and
is net of rebate. It includes amount recoverable from/ refundable to
consumers on account of Fuel and Power Purchase Cost Adjustment (FPPCA)
and other cost adjustments based on the prescribed formulae and are
shown as Tariff Adjustment account under Short-term Loans and Advances.
Consequential adjustments are given effect to upon confirmation by the
relevant authorities.
Sale of energy other than above is billed and accounted for at rates
agreed with respective consumers.
(j) Borrowing Costs :
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets (being an asset that necessarily
takes substantial period of time to get ready for intended use) are
capitalised as part of the cost of such assets. All other borrowing
costs are charged to revenue.
(k) Employee Benefits:
(i) Short Term Employee Benefits:
Recognised at the undiscounted amount as expense for the year in which
the related service is rendered.
(ii) Post Employment Benefit Plans:
Contribution under Defined Contribution Plans payable in keeping with
the related schemes are recognised as expenditure for the year.
In case of Defined Benefit Plans, the cost of providing the benefit is
determined using the projected Unit Credit Method with the actuarial
valuation being carried out at each Balance Sheet date. Actuarial gains
and losses are recognised in full in the Statement of Profit and Loss
for the period in which they occur.
(iii) Other Long Term Employee Benefits (Unfunded):
The cost of providing long -term employee benefits is determined using
Projected Unit Credit Method with actuarial valuation being carried out
at each Balance Sheet date. Actuarial gains and losses and past service
cost are recognised immediately in the Statement of Profit and Loss for
the period in which they occur. Other long term employee benefit
obligation recognised in the Balance Sheet represents the present value
of related obligation.
(iv) Employee separation costs :
Compensation to employees opting for voluntary retirement scheme of the
Company is charged in the year of exercise of option.
(l) Provision, Contingent Liabilities and Contingent Assets :
A provision is recognised when the Company has a present obligation as
a result of past event and it is probable that outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to their
present value and are determined based on best estimate required to
settle the obligation at the Balance Sheet date. These are reviewed at
each Balance Sheet date and adjusted to reflect the current best
estimates. Contingent liabilities are not recognised but are disclosed
in the notes to financial statements. Contingent Assets are neither
recognised nor disclosed in the financial statements.
(m) Operating Cycle:
Considering the nature of business and prevailing practice current and
non current classification of assets and liabilities have been based on
the operating cycle of 12 months.
Mar 31, 2013
(a) General:
The Financial Statements have been prepared under the historical cost
convention on a going concern basis and in compliance with the relevant
provisions of the Companies Act, 1956, the Regulations under the
Electricity Act,2003 and the provisions of West Bengal Electricity
Regulatory Commission (WBERC) (Terms & Conditions of Tariff)
Regulations, 2007.
(b) Use of Estimate:
The preparation and presentation of financial statements requires
estimates and assumptions to be made that effect the reported amount of
assets and liabilities and disclosures of contingent liabilities as on
date of the financial statements and reported amount of revenue and
expenses during the reporting period. Difference between the actual
results and estimates is recognised in the period in which the results
are known / materialised.
(c) Fixed Assets:
(i) Fixed Assets (both tangible and intangible) are stated at cost of
acquisition or construction including any cost attributable to bringing
the assets to their working condition.
(ii) All project related expenses viz civil works, machinery under
erection, construction and erection materials, pre- operative
expenditure net of revenue incidental / attributable to the
construction of project, borrowing cost incurred prior to the date of
commercial operations are shown under Capital Work -In-Progress (CWIP).
(iii) Impairment loss is recognised wherever the carrying amount of
fixed assets of a cash generating unit exceeds its recoverable amount,
i.e., net selling price or value in use, whichever is higher.
(d) Depreciation/Amortisation:
(i) Depreciation of fixed assets is computed on straight line method
either at the rates specified in the Tariff Regulation or as per
schedule XIV of the Companies Act,1956 as the case may be.
(ii) Cost of leasehold lands are amortised under the straight line
method over the related lease period.
(iii) Cost of Intangible assets (Computer software) is amortized under
straight line method over 5 years.
(iv) Assets constructed/acquired in relation to assets taken on
operating lease are amortised over the primary period of lease.
(e) Operating Lease:
Lease payments under operating leases are recognised as expense in the
statement of Profit and loss as per terms of lease agreements.
(f) Investments:
Current investments are stated at lower of cost or fair value and Long
term investments are stated at cost. Provision is made where there is a
decline, other than temporary, in the value of long term investments.
(g) Inventories:
Inventories are valued at lower of cost or net realisable value.
Cost is calculated on weighted average basis and includes expenditure
incurred for bringing such inventories to their present location and
condition. Adjustments in the carrying amount of obsolete, defective
and slow moving items as may be identified at the time of physical
verification is made where appropriate, to cover any eventual loss on
their ultimate realisation.
(h) Taxation:
Provision for tax is made for current and deferred taxes. Current tax
is provided on the taxable revenue using the applicable tax rates and
tax laws. Deferred tax assets and liabilities arising out of timing
difference, which are capable of reversal in subsequent periods are
recognised using rates and tax laws, which have been enacted or
subsequently enacted. Deferred tax assets are recognised only to the
extent that there is a reasonable certainty that sufficient future
taxable income will be available against which such deferred tax assets
will be realised. In case of carry forward of unabsorbed depreciation
and tax losses, deferred tax assets are recognised only if there is
"virtual certainty" that such deferred tax assets can be realised
against future taxable profits.
Entitlement Credit in respect of Minimum Alternate Tax is recognised
only if there is convincing evidence of realisation of the same.
(i) Revenue Recognition:
Sale of energy on account of electricity supplied from regulated
business is accounted for on the basis of billing to consumers at rates
approved by West Bengal Electricity Regulatory Commission (WBERC) and
is net of rebate. It includes amount recoverable from/ refundable to
consumers on account of Fuel and Power Purchase Cost Adjustment (FPPCA)
and other cost adjustments based on the prescribed formulae and are
shown as Tariff Adjustment account under Current Loans and Advances.
Consequential adjustments are given effect to upon confirmation by the
relevant authorities.
Sale of energy other than above is billed and accounted for at rates
agreed with respective consumers.
(j) Borrowing Costs:
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets (being an asset that necessarily
takes substantial period of time to get ready for intended use) are
capitalised as part of the cost of such assets. All other borrowing
costs are charged to revenue.
(k) Employee Benefits:
(i) Short Term Employee Benefits:
Recognised at the undiscounted amount as expense for the year in which
the related service is rendered.
(ii) Post Employment Benefit Plans:
Contribution under Defined Contribution Plans payable in keeping with
the related schemes are recognised as expenditure for the year.
In case of Defined Benefit Plans, the cost of providing the benefit is
determined using the projected Unit Credit Method with the actuarial
valuation being carried out at each Balance Sheet date. Actuarial gains
and losses are recognised in full in the Profit and Loss Account for
the period in which they occur.
(iii) Other Long Term Employee Benefits (Unfunded):
The cost of providing long -term employee benefits is determined using
Projected Unit Credit Method with actuarial valuation being carried out
at each Balance Sheet date. Actuarial gains and losses and past service
cost are recognised immediately in the Profit and Loss Account for the
period in which they occur. Other long term employee benefit obligation
recognised in the Balance Sheet represents the present value of related
obligation.
(iv) Employee separation costs:
Compensation to employees opting for voluntary retirement scheme of the
Company is charged in the year of exercise of option.
(I) Provision, Contingent Liabilities and Contingent Assets:
A provision is recognised when the company has a present obligation as
a result of past event and it is probable that outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to their
present value and are determined based on best estimate required to
settle the obligation at the Balance Sheet date. These are reviewed at
each Balance Sheet date and adjusted to reflect the current best
estimates. Contingent liabilities are not recognised but are disclosed
in the notes to financial statements. Contingent Assets are neither
recognised nor disclosed in the financial statements.
(m) Operating Cycle:
Considering the nature of business and prevailing practice current and
non current classification of assets and liabilities have been based on
the operating cycle of 12 months.
Mar 31, 2012
(a) General :
These accounts have been prepared under the historical cost convention
in keeping with applicable provisions of the Companies Act, 1956 and
West Bengal Electricity Regulatory Commission (Terms & Conditions of
Tariff) Regulations, 2007 issued pursuant to the provisions of
Electricity Act, 2003 and amended from time to time (Tariff
Regulations) as applicable for the year.
(b) Use of Estimate:
The preparation and presentation of financial statements requires
management to make estimates and assumptions to be made that affect the
reported amount of assets and liabilities and disclosures of contingent
liabilities as on date of the financial statements and reported amount
of revenue and expenses during the reporting period. Difference between
the actual results and estimates is recognised in the period in which
the results are known / materialised.
(c) Fixed Assets :
(i) Fixed Assets (both tangible and intangible) are stated at cost of
acquisition or construction including any cost attributable to bringing
the assets to their working condition .
(ii) All project related expenses viz civil works, machinery under
erection, construction and erection materials, pre-operative
expenditure incidental / attributable to the construction of project,
borrowing cost incurred prior to the date of commercial operations are
shown under Capital Work-in-Progress (CWIP).
(iii) Impairment loss is recognised wherever the carrying amount of
fixed assets of a cash generating unit exceeds its recoverable amount,
i.e., net selling price or value in use, whichever is higher.
(d) Depreciation / Amortisation :
(i) In compliance with the Tariff Regulations, annual charge towards
depreciation is calculated on straight line method at the rates
specified therein on original cost of the fixed assets.
(ii) Cost of leasehold lands are amortised under the straight line
method over the related lease period.
(iii) Cost of Computer software is amortized under straight Line method
over 5 years.
(e) Investments :
Long term investments are stated at cost. Diminution, other than
temporary, in their carrying amounts is either written down or provided
for. Gain/losses on disposal of investments are recognised as income /
expenditure.
(f) Inventories :
Inventories are valued at lower of cost or net realisable value
Cost is calculated on weighted average basis and includes expenditure
incurred for bringing such inventories to their present location and
condition. Adjustments in the carrying amount of obsolete, defective
and slow moving items as may be identified at the time of physical
verification is made where appropriate to cover any eventual loss on
their ultimate realisation.
(g) Taxation :
Current Tax in respect of taxable income for the year is provided for
as per applicable tax laws. Deferred Tax is recognised subject to the
consideration of prudence in respect of Deferred Tax Asset, on timing
differences, being the differences between taxable income and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods and is measured using tax
rates and laws that have been enacted or substantively enacted by the
Balance Sheet date. Deferred Tax Assets are reviewed at each Balance
Sheet date to reassess readability thereof.
Entitlement Credit in respect of Minimum Alternate Tax is recognised
only if there is convincing evidence of realisation of the same.
(h) Revenue Recognition :
Sale of energy on account of electricity supplied is billed to
consumers at rates approved by West Bengal Electricity Regulatory
Commission (WBERC). Amount recoverable from / refundable to consumers
on account of Fuel and Power Purchase Cost Adjustment (FPPCA) and other
cost adjustments based on the formulae prescribed in the Tariff
Regulations / order is adjusted to sale of energy and are carried
forward as Tariff Adjustment account under Current Loans and Advances.
Consequential adjustments are given effect to on confirmation by the
relevant authorities.
(i) Borrowing Costs:
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets (being an asset that necessarily
takes substantial period of time to get ready for intended use) are
capitalised as part of the cost of such assets. All other borrowing
costs are charged to revenue.
(j) Employee Benefits :
(i) Short Term Employee Benefits :
These are recognised at the undiscounted amount as expense for the year
in which the related service is rendered.
(ii) Post Employment Benefit Plans :
Contribution under Defined Contribution Plans payable in keeping with
the related schemes are recognised as expenditure for the year.
In case of Defined Benefit Plans, the cost of providing the benefit is
determined using the projected Unit Credit Method with the actuarial
valuation being carried out at each Balance Sheet date. Actuarial gains
and losses are recognised in full in the Profit and Loss Account for
the period in which they occur. Past service cost is recognised
immediately to the extent that the benefits are already vested, and
otherwise is amortized on a straight- line basis over the average
period until the benefit become vested. The retirement benefit
obligation recognised in the Balance Sheet represents the present value
of the defined benefit obligation as adjusted for unrecognised past
service cost, if any, and as reduced by the fair value of plan assets,
where funded. Any asset resulting from this calculation is limited to
the present value of any economic benefit available in the form of
refunds from the plan or deductions in future contributions to the
plan.
(iii) Other Long Term Employee Benefits (Unfunded) :
The cost of providing long-term employee benefits is determined using
Projected Unit Credit Method with actuarial valuation being carried out
at each Balance Sheet date. Actuarial gains and losses and past service
cost are recognised immediately in the Profit and Loss Account for the
period in which they occur. Other long term employee benefit obligation
recognised in the Balance Sheet represents the present value of related
obligation.
(k) Provisions, Contingent Liabilities and Contingent Assets :
A provision is recognised when the company has a present obligation as
a result of past event and it is probable that outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to their
present value and are determined based on best estimate required to
settle the obligation at the Balance Sheet date. These are reviewed at
each Balance Sheet date and adjusted to reflect the current best
estimates. Contingent liabilities are not recognised but are disclosed
in the notes to financial statements. Contingent Assets are neither
recognised nor disclosed in the financial statements.
Mar 31, 2011
General:
These accounts have been prepared in keeping with applicable provisions
of the Companies Act, 1956 and West Bengal Electricity Regulatory
Commission
Reserves
Contingencies Reserves was created by appropriation out of revenue of
each year till the year ended 31st March, 2004 in accordance with the
provisions of the Sixth schedule to the erstwhile Electricity
Fixed assets
In compliance with the Tariff regulations, effective 2006-07 annual
charge towards depreciation is calculated on straight line method at
the rates specified there in on original cost of the fixed assets. Based
on a legal opinion obtained by the company, changing of depreciation as
per the provisions of the Tariff Regulations as aforesaid is in
sufficient compliance with the requirements under the provisions of the
companies act, 1956 for declaration of dividend determination of net
profit and computation of managerial remuneration.
Long term investments are stated at Cost. Diminution, other than
temporary, in their carrying amounts is either written down or provided
for. Gain/losses on disposal of investments are recognized as
income/expenditure.
inventories are valued are lower of cost or net realisble value.
Cost is calculated on weighted average basis and includes expenditure
incurred for bringing such inventories to their present location and
condition. Adjustments in the carrying amount on obsolete, defective
and slow moving items as may be identified at the time physical
verification is made appropriate to cover any eventual loss on their
ultimate realiation.
Current tax in respect of taxable income for the year is provided for as
per applicable tax laws. Deferred Tax is recognised subject to the
consideration of purchase in respect of Deferred Tax Asset, on timing
difference, being the difference, between taxable income and accounting
income that originate in one period and are capable of reversal in one
or more subsequent periods and is measured using tax rates and laws a
that have been enacted or subsequently enacted by the Balance sheet
date. Deferred Tax Assets are reviewed at each Balance sheet date to
reassess realisablity there of.
Entitlement Credit in respect of Minimum Alternate Tax is recognised
only is convincing evidence of realisation of the same.
sale of energy on account of Electricity supplied is billed to
consumer at rates approved by West Bengal Electricity Regulatory
Commission
Borrowing Costs:
Borrowing costs that are attributable to the acquisition or construction
of qualifying assets
Short term Employee Benefits:
These are recongnised at the undiscounted amount as expense for the
year in which the related service is rendered
Contribution under Defined Contribution plans payable in keep with the
related schemes are recognised as expenditure of the year.
In case of defined Benefit Plans, the cost of providing the benefit is
determined using the projected unit credit Method with the actuarial
Valuation being carried out at each Balance sheet date. Actuarial gains
and losses are recognised in full in the profit and loss for the period
in which they occur. Past service cost is recognised immediately to the
extent that the benefits are already vested, and other wise is
amortized on a straight - line basis over the average period until the
benefit become vested. the retirement benefit obligation recognised in
the Balance sheet represents the present value of the defined benefit
obligation as adjusted for unrecongnised past service cost,
if any and as reduced by the fair value of plan assets, where funded.
Any asset resulting from this calculation is limited to the present
value of any economic benefit available in the form of refunds the
plan or deductions in future contributions to the plan.
The cost of providing long term employee benefits is determined using
projected Unit Credit Method with actuarial Valuation being carried out
at each Balance sheet. Actuarial gains and losses and past service cost
are recognised immediately in the profit and loss account for the
period in which they occur. Other long term employee benefit obligation
recognised in the Balance sheet represents the present value of related
obligation.
Mar 31, 2010
(a) General:
These accounts have been prepared in keeping with applicable provisions
of the Companies Act, 1956 and West Bengal Electricity Regulatory
Commission (Terms & Conditions of Tariff) Regulations, 2007 issued
pursuant to the provisions of Electricity Act, 2003 and amended from
time to time (Tariff Regulations) as applicable for the year.
(b) Reserves:
Contingencies Reserve was created by appropriation out of revenue of
each year till the year ended 31 st March, 2004 in accordance with the
provisions of the Sixth Schedule to the erstwhile Electricity (Supply)
Act, 1948. As permitted by the Tariff Regulations, an amount not
exceeding 0.25% of the value of gross fixed assets at the beginning of
the year is appropriated to a Reserve for Unforeseen Exigencies each
year effective 2006-07, subject to the overall ceiling that the balance
in this Reserve together with the balance in Contingency Reserve shall
not exceed 5% of the value of gross fixed assets at the beginning of
the year. For the purpose of arriving at such ceiling reinvestment of
interest accrued on Reserve for Unforseen Exegencies Investment
(ascertained seperately) are required to be excluded as pertheTarriff
Regulations.
(c) Fixed Assets:
(i) Fixed Assets (both tangible and intangible) are stated at cost of
acquisition or construction including any cost attributable to bringing
the assets to their working condition. In case of a project, cost also
includes pre- operative expenses, where applicable, and expenditure
during trial run (net of income).
(ii) Impairment loss is recognised wherever the carrying amount of
fixed assets of a cash generating unit exceeds its recoverable amount,
i.e., net selling price or value in use, whichever is higher.
(d) Depreciation/Amortisation:
(i) In compliance with the Tariff Regulations, effective 2006-07,
annual charge towards depreciation is calculated on straight line
method at the rates specified therein on original cost of the fixed
assets. Based on a legal opinion obtained by the Company, charging of
depreciation as per the provisions of the Tariff Regulations as
aforesaid is in sufficient compliance with the requirements under the
provisions of the Companies Act, 1956 for declaration of dividend,
determination of net profit and computation of managerial remuneration.
(ii) Additions to fixed assets made by the Company after commencement
of lease in the leased premises at Chinakuri Power Station (under
operating lease) are depreciated on the basis mentioned in 1 (d)(i)
above. As per the terms of the lease agreement, in the event of
non-renewal of the lease on expiry of the terms, all such additions to
fixed assets owned by the Company would be taken over by the lessor at
their respective written down values as on the date of the termination
of the lease.
(iii) Cost of leasehold lands are amortised overthe related lease
period.
(iv) Cost of Computer software is amortized under straight Line method
over 5 years.
(e) Investments:
Long term investments are stated at cost. Diminution, other than
temporary, in their carrying amounts is either written down or provided
for. Gain / Losses on disposal of investments are recognised as income
/ expenditure.
(f) Inventories:
Items intended for own consumption/use comprising:
(i) Stores and spares are stated at cost or under;
(ii) Other inventory items are stated at cost.
Cost is calculated on weighted average basis and includes expenditure
incurred for bringing such inventories to their present location and
condition. Adjustments in the carrying amount of obsolete, defective
and slow moving items as may be identified at the time of physical
verification is made where appropriate to cover any eventual loss on
their ultimate realisation.
(g) Taxation:
Current Tax in respect of taxable income for the year is provided for
as per applicable tax laws. Deferred Tax is recognised subject to the
consideration of prudence in respect of Deferred Tax Asset, on timing
differences, being the differences between taxable income and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods and is measured using tax
rates and laws that have been enacted or substantively enacted by the
Balance Sheet date. Deferred tax assets are reviewed at each Balance
Sheet date to reassess realisability thereof.
(h) Revenue Recognition:
(i) Sale of energy on account of electricity supplied is billed to
consumers at rates approved by West Bengal Electricity Regulatory
Commission (WBERC). Amount recoverable from / refundable to consumers
on account of Fuel and Power Purchase Cost Adjustment (FPPCA) based on
the approved formulae is considered as a part of sale of energy.
(ii) Dividends on shares held as long term investments are accounted
for when the Companys right to receive payment is established and
interest income from bonds and other securities held as long term
investments are accounted for on accrual basis.
(i) Borrowing Costs:
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets (being an asset that necessarily
takes substantial period of time to get ready for intended use) are
capitalised as part of the cost of such assets. All other borrowing
costs are charged to revenue.
(j) Employee Benefits:
(i) Short Term Employee Benefits:
These are recognised at the undiscounted amount as expense for the year
in which the related service is rendered.
(ii) Post Employment Benefit Plans:
Contribution under Defined Contribution Plans payable in keeping with
the related schemes are recognised as expenditure for the year.
In case of Defined Benefit Plans, the cost of providing the benefit is
determined using the Projected Unit Credit Method with the acturial
valuation being carried out at each Balance Sheet date. Actuarial gains
and losses are recognised in full in the Profit and Loss Account for
the period in which they occur. Past service cost is recognised
immediately to the extent that the benefits are already vested, and
otherwise is amortized on a straight-line basis over the average period
until the benefit become vested. The retirement benefit obligation
recognised in the Balance Sheet represents the present value of the
defined benefit obligations as adjusted for unrecognised past service
cost, if any, and as reduced by the fair value of plan assets, where
funded. Any assets resulting from this calculation is limited to the
present value of any economic benefit available in the form of refunds
from the plan or deductions in future contributions to the plan.
(iii) Other Long Term Employees Benefits (Unfunded):
The cost of providing long-term employee benefits determined using
Projected Unt Credit Method with actuarial valuation being carried out
at each Balance Sheet date. Acturial gains and losses and past service
cost are recognised immediately in the Profit and Loss Account for the
period in which they occur. Other long term employee benefit obligation
recognised in the Balance Sheet represents the present value of related
obligation.
(iv) Payments under Voluntary Retirement Scheme (VRS) is amortised over
the period for which benefit by way of cost reduction is expected to
arise [limited to the lower of - (a) the remaining period of service of
the employee, (b) 5 years and (c) year ending 31 st March 2010]
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