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Notes to Accounts of Reliance Power Ltd.

Mar 31, 2016

1. Aggregate number of bonus shares issued and shares issued for consideration other than cash during the five years immediately preceding the reporting date

During the year ended March 31, 2011, the Company had issued 408,282,606 equity shares of Rs. 10 each fully paid to the shareholders of Reliance Natural Resources Limited as a consideration for transfer of business undertaking from Reliance Natural Resources Limited under the composite scheme of arrangement sanctioned by High Court of Bombay on October 15, 2010.

2. Pursuant to the composite scheme of arrangement with Reliance Natural Resources Limited, the Company has 596,696 Global Depository Receipts which are listed on Euro MTF Market of the Luxembourg Stock Exchange since May 17, 2011.

3. Nature of security for term loans

a) Rupee loans from banks of Rs. 32,000 lakhs (Previous Year Rs. 32,000 lakhs) are secured by first charge over long term loans and advances of the Company on pari passu basis.

b) Rupee loans from banks of Rs. 1 9,288 lakhs (Previous Year Rs. 19,695 lakhs) and foreign currency loan of Rs. 12,568 lakhs (Previous Year Rs. 13,124 lakhs) are secured / to be secured by first charge on all the immovable and movable assets of the 45 MW wind power project at Vasphet on pari passu basis.

c) Rupee loans from banks of Rs. 20,000 lakhs (Previous Year Rs. Nil) are secured by first pari passu charge over current assets of the Company including receivable excluding the assets acquired under scheme of amalgamation with erstwhile Reliance Clean Power Private Limited.

d) Current maturities of long term borrowings have been classified as other current liabilities (refer note 3.7)

4. Terms of Repayment and Interest

a) Rupee term loans from bank of Rs. 32,000 lakhs (Previous Year Rs. 32,000 lakhs) is repayable in one installment on September 30, 2017 and carry an interest rate of 11.23% per annum payable on a monthly basis.

b) Rupee term loans is repayable in 59 quarterly installments commencing from March 2015 and carry an interest rate of 11.75% per annum payable on a monthly basis. The outstanding balance as at year end is Rs. 19,288 lakhs (Previous Year Rs. 19,695 lakhs).

c) Foreign currency loans is repayable in 42 quarterly installments commencing from September 2013 and carry an interest rate of USD 6 month LIBOR plus 4.5% per annum payable on a half yearly basis. The outstanding balance as at year end is Rs. 1 2,568 lakhs (Previous Year Rs. 13,124 lakhs).

d) Rupee term loans from bank is repayable in 16 quarterly installments commencing from June 2017 and carry an interest rate of 11.80% per annum payable on a monthly basis. The outstanding balance as at year end is Rs. 20,000 lakhs (Previous Year Rs. Nil).

5. Nature of security and terms of repayment

a) Short term rupee loans from bank is secured by first pari passu charge over the current assets of the Company including receivables excluding assets acquired under the merger scheme with erstwhile Reliance Clean Power Private Limited. The loan is repayable in 5 equal monthly installments of Rs. 1,500 lakhs each commencing from April 30, 201 6 and ending on August 31, 2016 and bullet repayment of Rs. 7,500 lakhs on September 30, 2016 and carry an interest rate of 11.65% per annum payable on monthly basis.

b) Working capital loans is secured by first hypothecation and charge on all receivables of the Company (excluding assets acquired under the merger scheme with erstwhile Reliance Clean Power Private Limited), both present and future on pari passu basis and is repayable on demand and carry an interest rate of 12.75% per annum payable on monthly basis.

c) Series II 11.50% listed redeemable non convertible debentures is secured by pledge of 10% of outstanding equity shares of a subsidiary Rosa Power Supply Company Limited outstanding as on March 31, 2015 which is redeemable within a period of 360 Days from the date of allotment (i.e. March 22, 201 6) and carry an interest rate of 11.50% per annum payable on quarterly basis.

Unsecured

a) Unsecured redeemable non convertible debentures are redeemable within a period of one year and carry an interest rate of 10.20% per annum payable on half yearly basis.

b) i. Commercial paper of Rs. 6,000 lakhs have a tenure of 360 days from the date of issue i.e. March 29, 2016 and discount rate of 10.30% per annum.

ii. Commercial paper of Rs. 2,000 lakhs have a tenure of 179 days from the date of issue i.e. January 08, 2016 and discount rate of 11% per annum.

c) Inter corporate deposits from related party are repayable within one year and carry an interest rate of 12.50% per annum.

6. Contingent liabilities and commitments

(a) Guarantees issued for subsidiary companies aggregating to Rs. 266,128 lakhs (Previous year Rs. 275,222 lakhs). Refer note 9(a) with respect to Coastal Andhra Power Limited.

(b) In respect of subsidiaries, the Company has committed/ guaranteed to extend financial support in the form of equity or debt as per the agreed means of finance, in respect of the projects being undertaken by the respective subsidiary, including any capital expenditure for regulatory compliance and to meet shortfall in the expected revenues/debt servicing.

Future cash flows in respect of the above matters can only be determined based on the future outcome of various uncertain factors.

(c) Estimated amount of contracts remaining unexecuted on capital account (net of advances paid) and not provided for Rs. Nil (Previous year Rs. 75 lakhs).

7. Capital reserve (arisen pursuant to scheme):

The Capital reserve of Rs. 59,995 lakhs had arisen pursuant to the scheme of amalgamation with Erstwhile Reliance Clean Energy Private Limited (RCEPL), sanctioned by the Hon''ble High Court of Bombay vide order dated April 05, 2013. The scheme was effective from January 01, 2013.

8. General reserve (arisen pursuant to various schemes):

(a) The General reserve of Rs. 111,503 lakhs had arisen pursuant to the composite scheme of arrangement between the Company, Reliance Natural Resources Limited, erstwhile Reliance Futura Limited and four wholly owned subsidiaries viz. Atos Trading Private Limited, Atos Mercantile Private Limited, Reliance Prima Limited and Coastal Andhra Power Infrastructure Limited. The said scheme has been sanctioned by Hon''ble High Court of Judicature at Bombay vide order dated October 15, 2010.

(b) The General reserve of Rs. 18,707 lakhs had arisen pursuant to the scheme of amalgamation with erstwhile Sasan Power Infraventure Private Limited, sanctioned by the Hon''ble High Court of Bombay vide order dated April 29, 2011. The scheme was effective from January 01, 2011.

(c) The General reserve of Rs. 22,984 lakhs had arisen pursuant to the scheme of amalgamation with erstwhile Sasan Power Infrastructure Limited, sanctioned by the Hon''ble High Court of Bombay, vide order dated December 23, 2011. The scheme was effective from September 01, 2011.

All the above General reserves are reserves which arose pursuant to the above schemes and shall not be and shall not for any purpose be considered to be a reserve created by the Company.

9. Project status of Subsidiaries

(a) Coastal Andhra Power Limited (CAPL)

CAPL, a wholly owned subsidiary, has been set up to develop an Ultra Mega Power Project (UMPP) of 3,960 MW capacity located in Krishnapatnam, District Nellore, based on imported coal.

CAPL had entered into a firm price fuel supply agreement which envisaged supply of coal from Indonesia with Reliance Coal Resources Private Limited (RCRPL), a wholly owned subsidiary of the Company. In view of below mentioned new regulation, RCRPL cannot supply coal at the already agreed price, because of which there is a risk of inability to pass through market linked prices of imported coal for the project, whereas the power needs to be supplied at a pre-agreed tariff as per the terms of Power Purchase Agreement (PPA) dated March 23, 2007. The Government of Indonesia introduced a new regulation in September 2010 which prohibits sale of coal, including sale to affiliate companies, at below Benchmark Price which is linked to international coal prices and requires adjustment of sale price every 12 months. This regulation also mandates to align all existing long-term coal supply contracts with the new regulations within one year i.e. by September 2011. The said issue has been communicated to the power procurers and also to the Government of India through the Association of Power Producers to arrive at a suitable solution to the satisfaction of all the stakeholders.

Since no resolution could be arrived at CAPL invoked the dispute resolution provision of PPA. The procurers have also issued a notice for termination of PPA and have raised a demand for liquidated damages of Rs. 40,000 lakhs (including bank guarantee of Rs. 30,000 lakhs, which has been issued by the holding company on behalf of CAPL).

CAPL has filed a petition before the Hon''ble High Court at Delhi, inter-alia, for interim relief under Section 9 of the Arbitration and Conciliation Act, 1996. The Court vide its order dated March 20, 2012 has prohibited the Procurers from taking any coercive steps against the CAPL. The single judge of the Delhi High Court vide order dated July 2, 2012 dismissed the petition and the appeal filed by CAPL against the said order is pending before the Division Bench of the Delhi High Court. The interim protection against encashing bank guarantees continues to be available.

CAPL has also filed a petition before the Central Electricity Regulatory Commission (CERC) without prejudice to the proceedings pending before the Delhi High Court and the arbitration process has already initiated. During the course of the CERC proceedings, the power procurers contended that the petition could not be taken up for hearing by CERC since the matter was pending at High Court. CAPL, in response contended that both proceedings are different and independent. The CERC petition did not raise issue of notice of termination. Considering appeal is pending before the Delhi High Court, CERC has disposed off the petition vide its order dated 06.08.2015 with a liberty to the Petitioner to approach the Commission at appropriate stage in accordance with law.

Based on the impairment assessment, considering the current status of the project, nature of expenditure incurred and estimated timeline for settlement of this matter, the Company has provided for diminution in the value of equity investments of Rs. 52,500 lakhs as an exceptional item in the Statement of Profit and Loss Account.

(Also refer note 10 (a)).

(b) Samalkot Power Limited (SMPL)

SMPL, a wholly owned subsidiary, is in the process of constructing a gas based power plant at Kakinada, which based on the current circumstances, has planned its construction work and consequential commercial operations thereafter progressively starting from 2017-2018 and it has incurred an aggregated cost of Rs. 920,141 lakhs as at March 31, 2016. SMPL has applied for allocation of gas and Ministry of Petroleum and Gas (MoPNG) is yet to allocate the gas linkage. Considering that the gas availability in the country has dropped significantly and also based on gas availability projected scenarios in subsequent years. SMPL is actively pursuing / making representations with various government authorities to secure the gas linkage / supply and is evaluating alternative arrangements / various approaches to deal with the situation in respect of its 2,262 MW (754 MW X 3) gas based power project.

SMPL is also exploring options for relocating the project, partially or fully, to other countries and in this context the Parent Company has entered into a Memorandum of Understanding with Government of Bangladesh (GoB) for developing gas project of 3,000 MW capacity. Subsequent to the year end, GoB has given an in principle approval for setting up of a 754 MW project at Meghnaghat, together with setting up of a Floating Storage and Regasification Unit (FSRU) based Liquefied Natural Gas (LNG) terminal at Maheshkhali, for which project agreements are being negotiated. In view of the above developments, SMPL is presently continuing with implementation of 1,508 MW (754 MW X 2) at existing location and plans to relocate the balance 754 MW capacity (754 MW X 1) to Bangladesh.

Based on the business plans and valuation assessment done by the management of SMPL, it is confident that the carrying value of net assets of SMPL is appropriate and consequently, there is no diminution in the value of investment made by the Company..

(c) Jharkhand Integrated Power Limited (JIPL)

JIPL, a wholly owned subsidiary, has been set up to develop Ultra Mega Power Project (UMPP) of 3960 MW capacity located in Tilaiya, Hazaribagh District, Jharkhand. The project being developed by JIPL was awarded to the Company through International Competitive Bidding (ICB), under the UMPP regime. Consequently JIPL was handed over to Company on August 7, 2009 by Power Finance Corporation (PFC). JIPL has signed Power Purchase Agreement (PPA) with 18 procurers in 10 states for 25 years. For fuel security, the project was allocated Kerendari BC captive coal mine block.

As per the Power Purchase Agreement (PPA) between JIPL and the Procurers, the Procurers were obligated to comply with conditions subsequent to entering the PPA which inter-alia required providing requisite land for the Project within 6 months of the Project Transfer. Considering the status of the project and updates from the procurers, the Company terminated the PPA on April 28, 2015 as per the option available therein. The procurers have also agreed to the termination of the PPA by JIPL and have agreed to pay certain expenditure incurred by JIPL on the project pursuant to the minutes of the meeting held on November 03, 2015. It has also been agreed that the shares held by the Company in JIPL would be transferred to the Procurers upon completion of the final settlement.

Considering the said settlement process, the Company has taken over the balance expenditure of Rs. 13,186 lakhs in the books of JIPL and charged off the same in the Statement of Profit and Loss Account as an exceptional item. Also refer note 10(a) below.

10. Exceptional Items

a) Pursuant to the Scheme of Amalgamation sanctioned by the High Court of Bombay on April 05, 201 3 (refer note 7 above), the Company is permitted to offset any exceptional / extraordinary items, as determined by the Board of Directors, debited in the Statement of Profit and Loss by a corresponding withdrawal from General Reserve.

During the year ended March 31, 2016 the Board of Directors of the Company, in terms of the aforesaid Scheme, have identified expenditure write off of Rs. 13,186 lakhs in relation to Tilaiya Ultra mega Power Project (TUMPP) (Refer note 9(c) above) and provision for diminution in the value of the equity investments by Rs. 52,500 lakhs made in CAPL (Refer note 9(a) above) as an exceptional items, which have been debited to Statement of Profit and Loss and withdrew an equivalent amount from General Reserve and credited to the Statement of Profit and Loss.

b) Similarly, pursuant to the Scheme of Amalgamation sanctioned by the High Court of Bombay on October 26, 2010 (refer note 8(a) above), the Company is permitted to offset any expense or loss which in the opinion of the Board of Directors is related to factors such as variation in exchange rates which are beyond the control of the Company, debited in the Statement of Profit and Loss by a corresponding withdrawal from General Reserve.

During the year ended March 31, 2016, the Board of Directors of the Company, in terms of the aforesaid Scheme has identified the write down in the value of advance by Rs. 9,801 lakhs given to ESOS trust for purchase of shares (Refer note 12 below) as an exceptional item, which is beyond the control of the Company, which have been debited to Statement of Profit and Loss and withdrew an equivalent amount from General Reserve (arisen pursuant to the Composite Scheme of Arrangement) and credited to the Statement of Profit and Loss.

Had such withdrawal not been done, the Company would have incurred a loss before tax of Rs. 35,074 lakhs and General Reserve would be higher by Rs. 65,686 lakhs and General Reserve (arisen pursuant to the Composite Scheme of Arrangement) would be higher by Rs. 9,801 lakhs. The above treatment prescribed by the above Schemes overrides the relevant provisions of Accounting Standard 5 (AS-5) Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies''.

11. Applicability of NBFC Regulations

The Company, based on the objects given in the Memorandum of Association, its role in construction and operation of power plants through subsidiaries and other considerations, has been legally advised that the Company is not covered under the provisions of Non-Banking Financial Company as defined in Reserve Bank of India Act, 1 934 and accordingly is not required to be registered under section 45 IA of the said Act.

12. Employee Stock Option Scheme (ESOS)

Pursuant to the approval accorded by the Shareholders on September 30, 2007 under Section 81(1A) of the Companies Act,1 956, the Company has administered and implemented Employee Stock Option Scheme (ESOS) in terms of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014. The Board of Directors of the Company has constituted its ESOS compensation committee to operate and monitor the ESOS scheme which is administered through Reliance Power ESOS Trust ("RPET").

The ESOS compensation committee of the Board of Directors of the Company approved a grant of 20,000,000 stock options to the eligible employees of the Company and its subsidiaries on May 8, 2010. The options are granted to the employees of the Company and its subsidiaries on satisfying the performance and other eligibility criteria set out in ESOS Plan. In accordance with the scheme, each option entitles the employee to apply for one fully paid equity share of Rs. 10 each of the Company at an exercise price of Rs. 162 per share. Pursuant to the amendments made to the ESOS Scheme as approved by the ESOS Compensation Committee of the Board, effective from April 01, 2014, the Independent Directors of the Company shall not be eligible to participate in the Scheme. Further, the exercise period of the vested options may be different for different plans and shall not be longer than ten years from the date of vesting.

The Company has opted for accounting the Compensation expenses under ''Intrinsic Value Method''. The closing market price on the date of grant was Rs. 140.20 per share at National Stock Exchange (being the latest trading price with highest trading volume).

The Company had in earlier years given an advance of Rs. 14,000 lakhs to RPET for purchase of its shares from the open market, as per the ESOS plan of the Company. RPET had, in turn in earlier years purchased 8,500,000 equity shares of the Company. In accordance with SEBI (ESOS and ESPS) Guidelines, 1999 and as per the opinion issued in January 2014 by Expert Advisory Committee (EAC) of the Institute of Chartered Accountants of India ("ICAI"), the Company had consolidated financial statement of RPET with the Company''s financial statement as at March 31, 2014. Pursuant to revised guidelines issued by SEBI on ESOS- Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 dated October 28, 2014, accounting for shared based schemes should be done based on the requirements of Guidance Note on Accounting for Share based Payments wherein consolidation of trust is prohibited. Consequently, considering the regulatory change, the Company has changed its accounting policy with respect to consolidation of RPET and restated the face value of equity shares (held by RPET) which was deducted from the paid up share capital and balance Rs. 13,082 lakhs (net of bank balance of RPET) which was grouped under the securities premium account, with a corresponding adjustment to "Advance to RPET" in the previous year.

Further, considering the current market value of the shares, option exercise price and other factors, the Company has written down the value of advances given to the RPET by Rs. 9,801 lakhs in the Statement of Profit and Loss Account as an exceptional item (Refer Note 10 (b)).

13. Status of Dadri Project

The Company proposed developing a 7,480 MW gas-fired power project to be located at the Dhirubhai Ambani Energy City in Dehra village, Dadri, Uttar Pradesh in the year 2003. The state of Uttar Pradesh (The State) in the year 2004 acquired 2,100 acres of land and conveyed the same to the Company in the year 2005. The acquisition of land by the state for the project was challenged by certain land owners in the Allahabad High Court. The High Court quashed a part of acquisition proceedings by the State and directed them to fulfill certain compliances. Subsequent to the judgement of High Court on compliances and procedures relating to land acquisition the Company filed an appeal before Supreme Court. Before the pronouncement of judgement by the Supreme Court, the Company submitted an affidavit stating its inability to continue with the project because of the difficulty in securing the gas supply for the project. The Supreme Court in its order disposed off the appeal and upheld the right of the Company to recover the amount paid towards the land acquired and conveyed to it by the state on its return to the state.

The Company has already conveyed its intent to return the acquired land to Government of Uttar Pradesh and raised the claim for the cost incurred on the land acquisition as well as other incidental expenditure thereto.

The Company has realized amount of Rs. 2,522 lakhs from the Government of Uttar Pradesh and the balance amount is expected to be recovered in the future.

Considering the above facts, the Company has classified assets related to Dadri project under ''other current assets'' as ''assets held for sale'' and ''advance recoverable towards land''.

14. Disclosure under Accounting Standard 15 (revised 2005) "Employee Benefits" (AS-15)

The Company has classified various employee benefits as under:

Defined contribution plans

(a) Provident fund

(b) Superannuation fund

(c) State defined contribution plans

- Employees'' Pension Scheme 1995

The provident fund and the state defined contribution plan are operated by the regional provident fund commissioner and the superannuation fund is administered by the trust. Under the schemes, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits.

15. Segment reporting:

The Company operates in two business segments i.e. Power generation and Associated business activities (termed as "Others"). Associated business activities include project management, supervision and support services for generation and allied processes. Business segments have been identified as reportable primary segment in accordance with Accounting Standard 17 ''Segment Reporting'' as prescribed under the Companies (Accounting Standards) Rules, 2006, taking into account the organisational and internal reporting structure as well as evaluation of risk and return for these segments. Segment reporting policies are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included as "un-allocable".

Geographical Segments: The Company''s operations are mainly confined within India and as such there are no reportable geographical segments.

16. Conversion of Debentures

The wholly owned subsidiary CAPL, based on approval of its Board of Directors and on the basis of approval of Board of Directors of the Company at the meeting held on March 25, 201 6, has converted 10,000 Secured Debentures of Rs. 1,000,000 each amounting to Rs. 100,000 lakhs into 5,500 fully paid equity shares of Rs. 10 each and balance Rs. 45,000 lakhs as Interest free Inter Corporate Deposits payable to the Company.

The wholly owned subsidiary CPPL, based on approval of its Board of Directors and on the basis of approval of Board of Directors of the Company at the meeting held on March 30, 2016, has converted 1 2,700 Compulsory Convertible Unsecured Debentures of Rs. 1,000,000 each into Interest free Interest Corporate Deposit payable to the Company.

17. Exchange Difference on Long Term Monetary Items

In respect of exchange difference arising on long term foreign currency monetary items, the Company has availed the option available in the Companies (Accounting Standard) (Second Amendment) Rules, 2011, vide notification dated December 29, 2011 issued by Ministry of Corporate Affairs. Accordingly, the Company has accumulated a gain of Rs. 27,857 lakhs (Previous year Rs. 28,384 lakhs) to "Foreign currency monetary item translation difference account" towards exchange variation on revaluation of long term monetary items other than on account of depreciable assets and the Company has adjusted the value of Plant and equipment by Rs. 768 lakhs (Previous year Rs. 558 lakhs) towards the exchange difference arising on long term foreign currency monetary liabilities towards depreciable assets.

18. Corporate social responsibility (CSR)

As per the section 135 of the Companies Act, 2013, the Company is required to spend Rs. 402 lakhs (Previous year: Rs. 318 lakhs), being 2% of the average net profit during the three immediately preceding financial years, towards CSR activity. The Company has made a contribution of Rs. 402 lakhs (previous year Rs. 587 lakhs) to a Non-profit organization to facilitate the setting up of day care oncology centers in different districts of Maharashtra.

19. The Company''s wind power project at Vashpet is eligible for a tax holiday under Section 80- IA of Income Tax Act, 1961. The Company has recognized deferred liability of Rs. 139 lakhs on account of timing difference originating as on the date and reversing after the tax holiday period with respect to depreciation on assets relating to wind power project. Considering the principles of virtual certainty, the Company has not recognised deferred tax asset on accumulated business loss as per the Income Tax Act, 1961.

20. The Company has paid maiden interim dividend of Re.1 per equity share of Rs. 10 each. The Board of Directors have confirmed the above as the final dividend for the year 2015-16. The dividend is subject to approval of Shareholders in the ensuing Annual General Meeting.

28) Disclosure under Micro, Small and Medium Enterprises Development Act, 2006

Disclosure of amounts payable to vendors as defined under the "Micro, Small and Medium Enterprise Development Act, 2006" is based on the information available with the Company regarding the status of registration of such vendors under the said Act. There are no overdue principal amounts / interest payable amounts for delayed payments to such vendors at the Balance Sheet date. There are no delays in payment made to such suppliers during the year or for any earlier years and accordingly there is no interest paid or outstanding interest in this regard in respect of payments made during the year or brought forward from previous years.

21. The figures for the previous year are re-classified / re-grouped, wherever considered necessary.


Mar 31, 2015

1) Contingent liabilities and commitments:

(a) Guarantees issued for subsidiary companies aggregating to Rs. 275,222 lakhs (Previous year: Rs. 236,1 29 lakhs). Refer note 1 2 (a) with respect to Coastal Andhra Power Limited

(b) In respect of subsidiaries, the Company has committed/ guaranteed to extend financial support in the form of equity or debt as per the agreed means of finance, in respect of the projects being undertaken by the respective subsidiary including any capital expenditure for regulatory compliance and to meet shortfall in the expected revenues/ debt servicing. Future cash flows in respect of the above matters can only be determined based on the future outcome of various uncertain factors

(c) Estimated amount of contracts remaining unexecuted on capital account (net of advances paid) and not provided for Rs. 75 lakhs (Previous year: Rs. 59 lakhs)

2) Capital reserve (arisen pursuant to scheme):

The Capital reserve of Rs. 59,995 lakhs had arisen pursuant to the scheme of amalgamation with erstwhile Reliance Clean Energy Private Limited (RCEPL), sanctioned by the Hon'ble High Court of Bombay vide order dated April 5, 201 3. The scheme was effective from January 1, 201 3,

3) General reserve (arisen pursuant to various schemes):

(a) The General reserve of Rs. 11 1,503 lakhs had arisen pursuant to the composite scheme of arrangement between the Company, Reliance Natural Resources Limited, erstwhile Reliance Futura Limited and four wholly owned subsidiaries viz., Atos Trading Private Limited, Atos Mercantile Private Limited, Reliance Prima Limited and Coastal Andhra Power Infrastructure Limited. The said scheme has been sanctioned by Hon'ble High Court of Judicature at Bombay vide order dated October 1 5, 201 0.

(b) The General reserve of Rs. 1 8,707 lakhs had arisen pursuant to the scheme of amalgamation with erstwhile Sasan Power Infraventure Private Limited, sanctioned by the Hon'ble High Court of Bombay vide order dated April 29, 201 1. The scheme was effective from January 1, 2011

(c) The General reserve of Rs. 22,984 lakhs had arisen pursuant to the scheme of amalgamation with erstwhile Sasan Power Infrastructure Limited, sanctioned by the Hon'ble High Court of Bombay, vide order dated December 23, 201 1. The scheme was effective from September 1, 201 1

All the above General Reserves are reserves which arose pursuant to the above schemes and shall not be and shall not for any purpose be considered to be a reserve created by the Company

4) Scheme of amalgamation between Company and Reliance Clean Power Private Limited

Reliance Clean Power Private Limited (RCPPL), a wholly owned subsidiary in business of development and operation of 45 MW wind power project at Vashpet, was amalgamated with the Company pursuant to the Scheme of Amalgamation (Scheme) sanctioned by the Hon'ble High Court of Judicature at Bombay vide its order dated May 9, 201 4 with an appointed date of April 1, 2012.

5) Employee stock option scheme (ESOS)

Pursuant to the approval accorded by the Shareholders on September 30, 2007 under Section 81(1 A) of the Companies Act,1 956, the Company has administered and implemented Employee Stock Option Scheme (ESOS) in terms of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,1 999 (Guidelines). The Board of Directors of the Company has constituted its ESOS compensation committee to operate and monitor the ESOS scheme which is administered through Reliance Power ESOS Trust ("RPET")

The ESOS compensation committee of the Board of Directors of the Company approved a grant of 20,000,000 stock options to the eligible employees of the Company and its subsidiaries on May 8, 201 0. The options are granted to the employees of the Company and its subsidiaries on satisfying the performance and other eligibility criteria set out in ESOS plan. In accordance with the scheme, each option entitles the employee to apply for one fully paid equity share of Rs. 1 0 each of the Company at an exercise price of Rs.1 62 per share. Pursuant to the amendments made to the ESOS Scheme as approved by the ESOS compensation committee of the Board, effective from April 1, 201 4, the Independent Directors of the Company shall not be eligible to participate in the Scheme. Further, the exercise period of the vested options may be different for different plans and shall not be longer than ten years from the date of vesting.

The Company has opted for accounting the Compensation expenses under "Intrinsic Value Method". The closing market price on the date of grant was Rs.1 40.20 per share at National Stock Exchange (being the latest trading price with highest trading volume). As the exercise price of the share is more than market price, the Company has not accounted for any compensation cost.

The Company had in earlier years given an advance of Rs.1 4,000 lakhs to RPET for purchase of its shares from the open market, as per the ESOS plan of the Company. RPET had, in turn in earlier years purchased 8,500,000 equity shares of the Company In accordance with SEBI (ESOS and ESPS) Guidelines, 1 999 and as per the opinion issued in January, 2014 by Expert Advisory Committee (EAC) of the Institute of Chartered Accountants of India ("ICAI"), the Company had consolidated financial statement of RPET with the Company's financial statement as at March 31, 2014 and consequently as of and for the year ended March 31, 2014, face value of equity shares (held by RPET) was deducted from the paid up share capital and balance Rs.1 3,082 lakhs (net of bank balance of RPET) was grouped under the securities premium account, with a corresponding adjustment to "Advance to RPET".

Pursuant to revised guidelines issued by SEBI on ESOS - Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 dated October 28, 2014, accounting for shared based schemes should be done based on the requirements of Guidance Note on Accounting for Share based Payments wherein consolidation of trust is prohibited Consequently, considering the regulatory change, the Company has changed its accounting policy with respect to consolidation of RPET and restated the face value of equity shares (held by RPET) which was deducted from the paid up share capital and balance Rs. 13,082 lakhs (net of bank balance of RPET) which was grouped under the securities premium account, with a corresponding adjustment to "Advance to RPET",

6) Status of Dadri Project

The Company proposed developing a 7,480 MW gas-fired power project to be located at the Dhirubhai Ambani Energy City in Dehra village, Dadri, Uttar Pradesh. The State of Uttar Pradesh in the year 2004 had acquired 2,100 acres of land and conveyed the same to the Company in the year 2005. The acquisition of further 400 acres of land by the state for the project was challenged by the land owners in the Allahabad High Court. Subsequent to the judgement of High Court on compliances and procedures relating to land acquisition the Company had filed an appeal with the Supreme Court. Before the pronouncement of judgement by the Supreme Court, the Company submitted an affidavit stating its inability to continue with the project because of the difficulty in securing gas. The Supreme Court in its order has disposed off the appeal and upheld the right of the Company to recover the amount paid towards the acquired land on its return to the state

The Company has already conveyed its intent to return the acquired land to Government of Uttar Pradesh and raised the claim for the cost incurred on the land acquisition as well as other incidental expenditure thereto

Considering the above facts, the Company has classified assets related to Dadri project under 'other current assets' as 'assets held for sale' and 'advance recoverable towards land', which were earlier shown as 'fixed assets' and 'capital advance', respectively

7) Project status of subsidiaries

(a) Coastal Andhra Power Limited (CAPL)

CAPL, a wholly owned subsidiary, has been set up to develop an Ultra Mega Power Project (UMPP) of 3,960 MW located in Krishnapatnam, District Nellore, based on imported coal

CAPL had entered into a firm price fuel supply agreement with Reliance Coal Resources Private Limited (RCRPL), a wholly owned subsidiary of the Company. In view of below mentioned new regulation, RCRPL cannot supply coal at the already agreed price, because of which an element of uncertainty has arisen in the fuel supply for the CAPL project, whereas the power needs to be supplied at a pre-agreed tariff as per the terms of Power Purchase Agreement (PPA) dated March 23, 2007. The Government of Indonesia introduced a new regulation in September, 201 0 which prohibits sale of coal, including sale to affiliate companies, at below Benchmark Price which is linked to international coal prices and requires adjustment of sale price every 1 2 months. This regulation also mandates to align all existing long-term coal supply contracts with the new regulations within one year i.e. by September, 2011. The said issue has been communicated to the power procurers and also to the Government of India through the Association of Power Producers to arrive at a suitable solution to the satisfaction of all the stakeholders.

Since no resolution could be arrived at CAPL invoked the dispute resolution provision of PPA. The procurers have also issued a notice for termination of PPA and have raised a demand for liquidated damages of Rs. 40,000 lakhs (including bank guarantee of Rs. 30,000 lakhs, which has been issued by the holding company on behalf of CAPL)

CAPL has filed a petition before the Hon'ble High Court at Delhi inter-alia for interim relief under Section 9 of the Arbitration and Conciliation Act, 1 996. The Court vide its order dated March 20, 201 2 has prohibited the procurers from taking any coercive steps against the Company. The single judge of the Delhi High Court vide order dated July 2, 2012 dismissed the petition and the appeal filed by CAPL against the said order is pending before the Division Bench of the Delhi High Court. The interim protection against encashing bank guarantees continues to be available

CAPL has also filed a petition before the Central Electricity Regulatory Commission without prejudice to the proceedings pending before the Delhi High Court and the arbitration process has already been initiated. The Commission adjourned the Petition sine a die with permission to mention the matter after disposal of the appeal pending before the Division Bench of the Delhi High Court.

Based on the legal opinion obtained with regard to applicability of force majeure clause for the change in law in Indonesia and other impacts thereof on the implementation of the project and considering the nature of expenditure incurred till date at the project and its valuation done by the management of CAPL, no provision for diminution is considered in respect of investment made by the Company and demands raised by the procurers of power

(b) Samalkot Power Limited (SMPL)

SMPL, a wholly owned subsidiary, is in the process of constructing a 2,262 MW (754 MW x 3) gas based power plant at Kakinada, which based on the current circumstances, has planned its construction work and consequential commercial operations thereafter progressively starting from 201 6 - 201 7, and it has incurred an aggregated cost of Rs. 868,791 lakhs as at March 31, 201 5. SMPL has applied for allocation of gas and Ministry of Petroleum and Gas (MoPNG) is yet to allocate the gas linkage. Considering that the gas availability in the country has dropped significantly and also based on gas availability projected scenarios in subsequent years, SMPL is actively pursuing/ making representations with various government authorities to secure the gas linkage/ supply and is evaluating alternative arrangements/ various approaches to deal with the situation. Based on the business plans and valuation assessment done by the management of SMPL, it is confident that the carrying value of the net assets of SMPL is appropriate and consequently, there is no diminution in the value of investment made by the Company

(c) Jharkhand Integrated Power Limited (JIPL)

JIPL, a wholly owned subsidiary, has been set up to develop Ultra Mega Power Project of 3,960 MW located in Tilaiya Hazaribagh District, Jharkhand. 3,960 MW Tilaiya Ultra Mega Power Project (UMPP) the project being developed by JIPL was awarded to the Company through International Competitive Bidding (ICB), under the UMPP regime. Consequently JIPL was handed over to Company on August 7, 2009 by Power Finance Corporation (PFC). JIPL has signed Power Purchase Agreement (PPA) with 18 procurers in 10 states for 25 years. For fuel security, the project was allocated Kerendari BC captive coal mine block.

As per the Power Purchase Agreement (PPA) between JIPL and procurers, the procurers were obligated to comply with conditions subsequent to entering the PPA which inter-alia required providing requisite land for the project within 6 months of the Project Transfer. The Company has not been handed over the possession of the land as stipulated in the PPA even after the lapse of more than 5 years and persistent efforts of the Company since the transfer of project. Considering the updates from the procurers at the meeting held after the year end and their failure to fulfill their obligation under PPA, the Company terminated the PPA on April 28, 201 5 as per the option available therein

Considering the nature of expenditure incurred till date at the project and internal assessment done by management of JIPL, no adjustments to the value of investments is considered necessary

8) Disclosure under Accounting Standard 15 (revised 2005) "Employee Benefits" (AS-1 5)

The Company has classified various employee benefits as under: Defined contribution plans:

(a) Provident fund

(b) Superannuation fund

(c) State defined contribution plans

- Employees' Pension Scheme, 1995

The provident fund and the state defined contribution plan are operated by the regional provident fund commissioner and the superannuation fund is administered by the trust. Under the schemes, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits

The Company has recognised the following amounts in the Statement of Profit and Loss for the year:

9) Segment reporting:

The Company operates in two business segments i.e. Power generation and Associated business activities (termed as "Others") Associated business activities include project management, supervision and support services for generation and allied processes Business segments have been identified as reportable primary segment in accordance with Accounting Standard 1 7 'Segment Reporting' as prescribed under Companies (Accounting Standards) Rules, 2006, taking into account the organisational and internal reporting structure as well as evaluation of risk and return for these segments. Segment reporting policies are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included as "un-allocable".

Geographical Segments: The Company's operations are mainly confined within India and as such there are no reportable geographical segments.

10) Related party transactions:

As per Accounting Standard-1 8 'Related Party Disclosures' as prescribed under Companies (Accounting Standards) Rules, 2006 the Company's related parties and transactions are disclosed below:

A. Parties where control exists:

Subsidiaries (Direct and step-down subsidiaries):

1. Sasan Power Limited (SPL)

2. Rosa Power Supply Company Limited (RPSCL)

3. Maharashtra Energy Generation Limited (MEGL)

4. Vidarbha Industries Power Limited (VIPL)

5. Tato Hydro Power Private Limited (THPPL)

6. Siyom Hydro Power Private Limited (SHPPL)

7. Chitrangi Power Private Limited (CPPL)

8. Urthing Sobla Hydro Power Private Limited (USHPPL)

9. Kalai Power Private Limited (KPPL)

10. Coastal Andhra Power Limited (CAPL)

11. Reliance Coal Resources Private Limited (RCRPL)

12. Amulin Hydro Power Private Limited (AHPPL)

13. Emini Hydro Power Private Limited (EHPPL)

14. Mihundon Hydro Power Private Limited (MHPPL)

15. Jharkhand Integrated Power Limited (JIPL)

16. Reliance CleanGen Limited (RCGL)

17. Rajasthan Sun Technique Energy Private Limited (RSTEPL)

18. Dhursar Solar Power Private Limited (DSPPL)

19. Moher Power Limited (MPL)

20. Samalkot Power Limited (SMPL)

21. Reliance Prima Limited (RPrima)

22. Atos Trading Private Limited (ATPL)

23. Atos Mercantile Private Limited (AMPL)

24. Coastal Andhra Power Infrastructure Limited (CAPIL)

25. Reliance Power Netherlands BV (RPN)

26. PT Heramba Coal Resources (PTH)

27. PT Avaneesh Coal Resources (PTA)

28. Reliance Natural Resources Limited (RNRL)

29. Reliance Natural Resources (Singapore) Pte. Limited (RNRL- Singapore)

30. Reliance Solar Resources Power Private Limited (RSRPPL)

31. Erstwhile Reliance Clean Power Private Limited (RCPPL) (Refer note 9)

32. Reliance Wind Power Private Limited (RWPPL)

33. Reliance Green Power Private Limited (RGPPL)

34. PT Sumukha Coal Services (PTS)

35. PT Brayan BintangTiga Energi (BBE)

36. PT Sriwijiya BintangTiga Energi (SBE)

37. Shangling Hydro Power Private Limited (SPPL)

38. Sumte Kothang Hydro Power Private Limited (SKPL)

39. Teling Hydro Power Private Limited (TPPL)

40. Lara Sumta Hydro Power Private Limited (LHPPL)

41. Purthi Hydro Power Private Limited (PHPPL)

42. Reliance Geothermal Power Private Limited (RGTPPL) (w.e.f January 17, 2015)

B (I). Investing parties/ promoters having significant influence on the Company directly or indirectly Companies

Reliance Infrastructure Limited (R Infra) Individual Shri Anil D Amban B (II). Other related parties with whom transactions have taken place during the year:

(i) Key Management Personnel:

1. Shri J P Chalasani (Chief Executive Officer) (upto October 31, 201 3)

2. Shri Ramaswami Kalidas (Company Secretary and Manager)

3. Shri Venugopala Rao (Chief Financial Officer) (up to September 26, 2014)

4. Shri Ashutosh Agarwala (Chief Financial Officer) (w.e.f. September 26, 201 4) (ii) Enterprises over which individual described in clause B (I) above have control:

1. Reliance Infocomm Infrastructure Limited (RIIPL)

2. Reliance General Insurance Company Limited (RGICL)

3. Reliance Communication Infrastructure Limited (RCIL)

4. Reliance Capital Limited (RCL)

5. Reliance Communication Limited (RCom)

(iii) Other transactions:

(a) As per the terms of sponsor support agreement entered for the purpose of security of term loans availed by subsidiaries, the Company is required to pledge following percentage of its shareholding in the respective subsidiaries

- 100% of equity shares of Sasan Power Limited

- 100% of equity shares of Dhursar Solar Power Private Limited

- 100% of equity shares of Rajasthan Sun Technique Energy Private Limited

- 100% of preference shares of Sasan Power Limited

- 100% of preference shares of Dhursar Solar Power Private Limited

- 100% of preference shares of Rajasthan Sun Technique Energy Private Limited

(b) The Company has given commitments/ guarantees for loans taken by SPL, SMPL, VIPL, DSPL and RSTEPL, (Refer note 4 (b)).

(c) During the previous year, Company has sold (at estimated fair value) 892,000 7.5% 1 5 years Non Cumulative Non Convertible Redeemable Preference Shares (NCRPS) issued by one wholly owned subsidiary to another wholly owned subsidiary. The Preference Shares have been sold for Rs. 3,648 lakhs and the resultant loss of Rs. 4,798 lakhs on sale of Investment has been charged off to the Statement of Profit and Loss account. This loss has no impact on the consolidated accounts of the Company

(iv) The above disclosures do not include transactions with public utility service providers, viz., electricity, telecommunications in the normal course of business.

11) Disclosure under Micro, Small and Medium Enterprises Development Act, 2006

Disclosure of amounts payable to vendors as defined under the "Micro, Small and Medium Enterprise Development Act, 2006" is based on the information available with the Company regarding the status of registration of such vendors under the said Act, There are no overdue principal amounts/ interest payable amounts for delayed payments to such vendors at the Balance Sheet date. There are no delays in payment made to such suppliers during the year or for any earlier years and accordingly there is no interest paid or outstanding interest in this regard in respect of payments made during the year or brought forward from previous years,

12) Exchange Difference on Long-term Monetary Items

In respect of exchange difference arising on Long-term foreign currency monetary items, the Company has availed the option available in the Companies (Accounting Standard) (Second Amendment) Rules, 201 1, vide notification dated December 29 2011 issued by Ministry of Corporate Affairs. Accordingly, the Company has accumulated a gain ofRs. 28,384 lakhs (Previous year: Rs. 29,407 lakhs) to "Foreign currency monetary item translation difference account" towards exchange variation on revaluation of Long-term monetary items other than on account of depreciable assets and the Company has adjusted the value of Plant and equipment by Rs. 558 lakhs (Previous year: Rs. 1,1 1 5 lakhs) towards the exchange difference arising on Long-term foreign currency monetary liabilities towards depreciable assets,

13) Corporate social responsibility (CSR)

The Company is under obligation to incur an expenditure of Rs.31 8 lakhs, being 2% of the average net profits during the three immediately preceding financial years, towards CSR calculated in the manner as stated in the Act. Accordingly, the Company has made a contribution of Rs. 587 lakhs to a Non-profit organization to facilitate the setting up of day care oncology centers in different districts of Maharashtra

14) Consequent to the Act, being effective from April 1, 2014, the Company has provided depreciation based on useful life as prescribed under Part A and Part C of Schedule II of the Act. Had the Company continued the earlier accounting policy, depreciation for the year would have been lower by Rs. 11 3 lakhs and profit would have been higher by an equivalent amount,

15) The Company's wind power project at Vashpet is eligible for a tax holiday under Section 80- IA of Income Tax Act, 1 961 Considering the principles of prudence and virtual certainty, the Company has not recognised a net deferred tax asset amounting to Rs. 85 lakhs.

16) The figures for the previous year are re-classified/ re-grouped, wherever considered necessary


Mar 31, 2014

1) General information

Reliance Power Limited ("the Company") together with its subsidiaries ("Reliance Power group") is primarily engaged in the business of generation of power. The projects under development include coal, gas, hydro, wind and solar based energy projects. During the year, pursuant to the Scheme of Amalgamation with Reliance Clean Power Private Limited, the Company has taken over 45 MW wind power project at Vashpet, which has declared commercial operations with effect from June 30, 2013 (Refer note 9). The portfolio of the Reliance Power group also includes three ultra mega power projects (UMPP) of 3,960 MW each.

1.1.1 Terms/ rights attached to equity shares

The Company has only one class of equity shares having face value of Rs.10 per share. Each holder of the equity share is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts.

1.1.2 Aggregate number of bonus shares issued and shares issued for consideration other than cash during the fi ve years immediately preceding the reporting date

a) During the year ended March 31, 2009, the Company had issued 136,800,000 equity shares of Rs.10 each as fully paid bonus shares by capitalisation of Rs.13,680 lakhs from securities premium account.

b) During the year ended March 31, 2011, the Company had issued 408,282,606 equity shares of Rs.10 each fully paid to the shareholders of Reliance Natural Resources Limited as a consideration for transfer of business undertaking from Reliance Natural Resources Limited under the composite scheme of arrangement sanctioned by High Court of Bombay on October 15, 2010.

1.1.4 Nature of security for term loans

The term loans had been obtained by Erstwhile Reliance Clean Power Private Limited (Refer note 9) to set up the 45 MW wind power project at Vashpet ("Project"). The term loans are secured pari passu among the lenders by first ranking mortgage / hypothecation / charge on:

a) All the immovable properties and assets of the Project, present and future.

b) All the movable properties and assets of the Project, present and future.

c) All the intangible assets of the Project, present and future.

d) All the bank accounts in relation to the Project, present and future.

e) Assignment by way of security of :

- All rights, titles and interest of the Project in, to and under all other assets of the Project.

- The Project''s rights under each of the project documents, insurance policies and clearances related to the Project.

f) All the Project''s rights and interests under letter of credit, corporate guarantees, performance bonds or any such other security provided by any of the contractor or any other person under the power purchase agreement or any other project documents or otherwise in favour of the Project.

1.1.5 Terms of repayment

Rupee term loan is repayable in 47 quarterly instalments commencing from September 2013.

Foreign currency term loan is repayable in 42 quarterly instalments commencing from September 2013.

1.1.6 Interest

Rupee term loan carried an interest rate of State Bank of India (SBI) base rate plus 2.5% per annum, payable on a monthly basis upto the date of commencement of commercial operations. Post commencement of commercial operations, the rupee term loan carries an interest rate of SBI base rate plus 2.25% per annum.

Foreign curreny loan carries an interest rate of USD 6 month LIBOR plus 4.5% per annum.

1.1.7 Other long-term borrowings

Nature of security, terms of repayment and interest of current maturities of long-term borrowings:

The Company has obtained long term loan from banks (classifi ed as current maturities of long term borrowings. Refer note 3.8) which is secured by first pari passu charge over the current assets of the Company including receivables. The loan is repayable after a tenure of 14 months from the date of first disbursement (i.e. July 31, 2013). The loan carries an interest rate of Axis bank base rate plus 2% per annum.

1.1.8 Unsecured debentures

Long term borrowing of the Company includes debentures issued to a related party (classifi ed as current maturities of long term borrowings. Refer note 3.8) redeemable after a period of 366 days from the date of issue. The debentures carry an interest rate of 10.50% per annum payable at redemption.

1.1.9 Terms of repayment and interest

- Working capital loan carries an interest rate of IDBI base rate plus 2.50% per annum and is repayable on demand.

- Non-convertible debenture carries an interest rate of 10.20 % per annum payable on half yearly basis. These debentures are redeemable at par on June 12, 2014.

- Commercial paper were issued at a discount of 10.50% and have a tenure of 180 days.

4) (a) Contingent liabilities

- Counter guarantees / Bank guarantees issued on behalf of subsidiary companies aggregating to Rs. 236,129 lakhs (Previous year Rs. 240,355 lakhs).

– Refer note 12 (a) with respect to Coastal Andhra Power Limited.

(b) Capital commitments

Estimated amount of contracts remaining unexecuted on capital account (net of advances paid) and not provided for Rs. 59 lakhs (Previous year Rs. 136 lakhs).

(c) Other commitments

The Company has ongoing commitments given to lenders or procurers of power or other regulatory authorities to extend support and provide equity in respect of various projects undertaken by the respective subsidiaries, wherein the amounts of investment would vary considering the project cost and debt equity ratio agreed with the respective lenders.

7) Capital reserve (arisen pursuant to scheme):

The Capital reserve of Rs. 59,995 lakhs had arisen pursuant to the scheme of amalgamation with erstwhile Reliance Clean Energy Private Limited (RCEPL), sanctioned by the Hon''ble High Court of Bombay vide order dated April 5, 2013. The Scheme was effective from January 1, 2013. As per the Scheme, the investment of Rs. 60,001 lakhs of the Company in 6,010,000 equity shares of RCEPL had been cancelled and written off in the Statement of profit and Loss. The Company has taken over all the assets aggregating to Rs. 60,000 lakhs and liabilities aggregating to Rs. 5 lakhs at their respective book values, further an equivalent amount of Rs. 60,001 lakhs has been withdrawn from the general reserve and credited to the Statement of profit and Loss in the previous year. The difference aggregating to Rs. 59,995 lakhs being the excess arising on transfer of assets and liabilities has been treated as capital reserve (arising pursuant to the Scheme).

8) General reserve (arisen pursuant to various schemes):

a) The General reserve of Rs. 111,503 lakhs had arisen pursuant to the composite scheme of arrangement between the Company, Reliance Natural Resources Limited, erstwhile Reliance Futura Limited and four wholly owned subsidiaries viz. Atos Trading Private Limited, Atos Mercantile Private Limited, Reliance Prima Limited and Coastal Andhra Power Infrastructure Limited. The said Scheme has been sanctioned by Hon''ble High Court of Judicature at Bombay vide order dated October 15, 2010.

b) The General reserve of Rs. 18,707 lakhs had arisen pursuant to the scheme of amalgamation with erstwhile Sasan Power Infraventure Private Limited, sanctioned by the Hon''ble High Court of Bombay vide order dated April 29, 2011. The Scheme was effective from January 1, 2011.

c) The General reserve of Rs. 22,984 lakhs had arisen pursuant to the scheme of amalgamation with erstwhile Sasan Power Infrastructure Limited, sanctioned by the Hon''ble High Court of Bombay, vide order dated December 23, 2011. The Scheme was effective from September 1, 2011.

All the above General Reserves are reserves which arose pursuant to the above schemes and shall not be and shall not for any purpose be considered to be a reserve created by the Company.

9) Scheme of amalgamation between the Company and Reliance Clean Power Private Limited

Reliance Clean Power Private Limited (RCPPL), a wholly owned subsidiary in business of development and operation of 45 MW wind power project at Vashpet, was amalgamated with the Company pursuant to the Scheme of Amalgamation (Scheme), as on and from April 1, 2012, being the appointed date pursuant to the approval of Board of Directors of the Company and sanctioned by the Hon''ble High Court of Judicature at Bombay vide its order dated May 9, 2014 which was filed with the Registrar of Companies on May 16, 2014.

The Company has carried out the accounting treatment prescribed in the Scheme as approved by the Hon''ble High Court of Judicature at Bombay. The required disclosures for accounting of Scheme as per the "Purchase Method" as given under Accounting Standard 14 (AS 14) ''Accounting for Amalgamations'' as prescribed under the Companies (Accounting Standards) Rules, 2006 has been provided.

Hence, in accordance with the Scheme:

a) The Company has taken over all the assets aggregating to Rs.18,875 lakhs and liabilities aggregating to Rs. 8,617 lakhs of RCPPL, based on fair valuation performed by an independent valuer, for assets existing as on the appointed date. The net assets taken over as of April 1, 2012 include:

The Scheme is effective on May 16, 2014 with an appointed date of April 1, 2012. As the financial statements for previous year ended March 31, 2013 have been already approved by the shareholders of the Company, the previous year balances have not been restated and all the relevant accounting entries with respect to the Scheme have been accounted for on April 1, 2013 and consequently, the surplus in the Statement of profit and Loss as on March 31, 2013 has been transferred to the opening reserve (Refer note 3.2.8) of the Company.

b) The entire issued, subscribed and paid up share capital of the RCPPL held and will be held by the Company after the appointed date shall be cancelled. Accordingly, investments by the Company in RCPPL amounting to Rs.10,261 lakhs have been cancelled.

c) No consideration is payable or receivable on implementation of the Scheme as the Scheme involves a wholly owned subsidiary.

d) The excess of fair valuation of assets over the liabilities after adjusting value of the investments in RCPPL as of April 1, 2012, amounting to Rs. 3 lakhs has been recognised as goodwill.

Further the security charge on the 45 MW wind power project at Vashpet towards borrowing would continue on the Scheme being effective.

10) Employee Stock Option Scheme (ESOS)

Pursuant to the approval accorded by the Shareholders on September 30, 2007 under Section 81(1A) of the Companies Act,1956, the Company has administered and implemented Employee Stock Option Scheme (ESOS) in terms of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,1999 (Guidelines). The Board of Directors of the Company has constituted its ESOS compensation committee to operate and monitor the ESOS scheme which is administered through Reliance Power ESOS Trust ("RPET").

The ESOS compensation committee of the Board of Directors of the Company approved a grant of 20,000,000 stock options to the eligible employees of the Company and its subsidiaries on May 8, 2010. The options are granted to the employees of the Company and its subsidiaries on satisfying the performance and other eligibility criteria set out in ESOS Plan. In accordance with the scheme, each option entitles the employee to apply for one fully paid equity share of Rs. 10 of the Company at an exercise price of Rs.162 per share. The vesting period of options will commence on expiry of one year from the grant date and all the options granted shall vest immediately. The vested options can be exercised by the eligible employees over a period of nine years from the date of vesting.

The Company has opted for accounting the compensation expenses under ''Intrinsic Value Method''. The closing market price on the date of grant was Rs.140.20 per share at National Stock Exchange (being the latest trading price with highest trading volume). As the exercise price of the share is more than market price, the Company has not accounted for any compensation cost.

The expected volatility was determined based on the volatility of the equity share for the period of one year prior to issue of the option.

The Company had in earlier years given an advance of Rs 14,000 lakhs to RPET for purchase of its shares from the open market, as per the ESOS plan of the Company. RPET had, in turn in earlier years purchased 8,500,000 equity shares of the Company. In accordance with SEBI (ESOS and ESPS) Guidelines, 1999 and as per the recent opinion of the Expert Advisory Committee (EAC) of the Institute of Chartered Accountants of India ("ICAI"), the Company has consolidated financial statement of RPET with the Company''s financial statement as at March 31, 2014. Accordingly, face value of equity shares (held by RPET) has been deducted from the paid up share capital and balance Rs. 13,082 lakhs (net of bank balance of RPET) has been grouped under the securities premium account, with a corresponding adjustment to "Advance to RPET". Consequently, provision of Rs.3,450 lakhs towards diminution in value of advance, made in earlier years has been reversed during the year.

11) Status of Dadri Project

a) The Company proposed developing a 7,480 MW gas-fi red power project to be located at the Dhirubhai Ambani Energy City in Dehra village, Dadri, Uttar Pradesh. The State of Uttar Pradesh in the year 2004 had acquired 2,100 acres of land and conveyed the same to the Company in the year 2005. While the State was in the process of acquiring further 400 acres of land for the project, a few land owners had filed writ petitions before the Allahabad High Court challenging the acquisition process under the Land Acquisition Act, 1894 ("the Act"). The Allahabad High Court has disposed of the writ petitions upholding the Section 4 notifi cation and directed compliance with certain procedures relating to land acquisition that were left out earlier by the State Government. The Company has filed appeals against the Allahabad High Court order which are now pending before Supreme Court. Few land owners have also filed appeals/petitions before the Supreme Court challenging Allahabad High Court''s order upholding the Section 4 notifi cation and alleging highhanded and forceful actions during the acquisition process, which are pending.

b) The construction and other allied activities at Dadri project will be commenced as soon as the gas supply is fi rmed up and on settlement of land issues. During the year there is no change in the status of project.

12) Project status of Subsidiaries

a) Coastal Andhra Power Limited (CAPL)

CAPL, a wholly owned subsidiary, has been set up to develop an Ultra Mega Power Project (UMPP) of 3,960 MW located in Krishnapatnam, District Nellore, based on imported coal. exercise price of Rs.162 per share. The vesting period of options will commence on expiry of one year from the grant date and all the options granted shall vest immediately. The vested options can be exercised by the eligible employees over a period of nine years from the date of vesting.

The Company has opted for accounting the compensation expenses under ''Intrinsic Value Method''. The closing market price on the date of grant was Rs.140.20 per share at National Stock Exchange (being the latest trading price with highest trading volume). As the exercise price of the share is more than market price, the Company has not accounted for any compensation cost.

The expected volatility was determined based on the volatility of the equity share for the period of one year prior to issue of the option.

The Company had in earlier years given an advance of Rs 14,000 lakhs to RPET for purchase of its shares from the open market, as per the ESOS plan of the Company. RPET had, in turn in earlier years purchased 8,500,000 equity shares of the Company. In accordance with SEBI (ESOS and ESPS) Guidelines, 1999 and as per the recent opinion of the Expert Advisory Committee (EAC) of the Institute of Chartered Accountants of India ("ICAI"), the Company has consolidated financial statement of RPET with the Company''s financial statement as at March 31, 2014. Accordingly, face value of equity shares (held by RPET) has been deducted from the paid up share capital and balance Rs. 13,082 lakhs (net of bank balance of RPET) has been grouped under the securities premium account, with a corresponding adjustment to "Advance to RPET". Consequently, provision of Rs.3,450 lakhs towards diminution in value of advance, made in earlier years has been reversed during the year.

11) Status of Dadri Project

a) The Company proposed developing a 7,480 MW gas-fi red power project to be located at the Dhirubhai Ambani Energy City in Dehra village, Dadri, Uttar Pradesh. The State of Uttar Pradesh in the year 2004 had acquired 2,100 acres of land and conveyed the same to the Company in the year 2005. While the State was in the process of acquiring further 400 acres of land for the project, a few land owners had filed writ petitions before the Allahabad High Court challenging the acquisition process under the Land Acquisition Act, 1894 ("the Act"). The Allahabad High Court has disposed of the writ petitions upholding the Section 4 notifi cation and directed compliance with certain procedures relating to land acquisition that were left out earlier by the State Government. The Company has filed appeals against the Allahabad High Court order which are now pending before Supreme Court. Few land owners have also filed appeals/petitions before the Supreme Court challenging Allahabad High Court''s order upholding the Section 4 notifi cation and alleging highhanded and forceful actions during the acquisition process, which are pending.

b) The construction and other allied activities at Dadri project will be commenced as soon as the gas supply is fi rmed up and on settlement of land issues. During the year there is no change in the status of project.

12) Project status of Subsidiaries

a) Coastal Andhra Power Limited (CAPL)

CAPL, a wholly owned subsidiary, has been set up to develop an Ultra Mega Power Project (UMPP) of 3,960 MW located in Krishnapatnam, District Nellore, based on imported coal.

CAPL had entered into a fi rm price fuel supply agreement with Reliance Coal Resources Private Limited (RCRPL), a wholly owned subsidiary of the Company. In view of below mentioned new regulation, RCRPL cannot supply coal at the already agreed price, because of which an element of uncertainty has arisen in the fuel supply for the CAPL project, whereas the power needs to be supplied at a pre-agreed tariff as per the terms of Power Purchase Agreement (PPA) dated March 23, 2007. The Government of Indonesia introduced a new regulation in September 2010 which prohibits sale of coal, including sale to affi liate companies, at below Benchmark Price which is linked to international coal prices and requires adjustment of sale price every 12 months. This regulation also mandates to align all existing long-term coal supply contracts with the new regulations within one year i.e. by September 2011. The said issue has been communicated to the power procurers and also to the Government of India through the Association of Power Producers to arrive at a suitable solution to the satisfaction of all the stakeholders.

Since no resolution could be arrived at CAPL invoked the dispute resolution provision of PPA. The procurers have also issued a notice for termination of PPA and have raised a demand for liquidated damages of Rs.40,000 Lakhs (including bank guarantee of Rs. 30,000 Lakhs, which has been issued by the holding company on behalf of CAPL).

CAPL has filed a petition before the Hon''ble High Court at Delhi inter alia for interim relief under Section 9 of the Arbitration and Conciliation Act, 1996. The Court vide its order dated March 20, 2012 has prohibited the Procurers from taking any coercive steps against the Company. The single judge of the Delhi High Court vide order dated July 2, 2012 dismissed the petition and the appeal filed by CAPL against the said order is pending before the Division Bench of the Delhi High Court. The interim protection against encashing bank guarantees continues to be available.

CAPL has also filed a petition before the Central Electricity Regulatory Commission without prejudice to the proceedings pending before the Delhi High Court and the arbitration process already initiated. The Commission adjourned the Petition sine a die with permission to mention the matter after disposal of the appeal pending before the Division Bench of the Delhi High Court.

Based on the legal opinion obtained with regard to applicability of force majeure clause for the change in law in Indonesia and other impacts thereof on the implementation of the project and considering the nature of expenditure incurred till date at the project and its valuation done by the management of CAPL, no provision for diminution is considered in respect of investment made by the Company and demands raised by the procurers of power.

b) Samalkot Power Limited (SMPL)

SMPL, a wholly owned subsidiary, is in the process of constructing a 2,262 MW (754 MW x 3) gas based power plant at Kakinada, which based on the current circumstances, has planned its construction work and consequential commercial operations thereafter progressively starting from 2015 - 2016, and it has incurred an aggregated cost of Rs 823,353 lakhs as at March 31, 2014. SMPL has applied for allocation of gas and Ministry of Petroleum and Gas (MoPNG) is yet to allocate the gas linkage. Considering that the gas availability in the country has dropped significantly and also based on gas availability projected scenarios in subsequent years, SMPL is actively pursuing / making representations with various government authorities to secure the gas linkage / supply and is evaluating alternative arrangements / various approaches to deal with the situation. Based on the business plans and valuation assessment done by the management of SMPL, it is confi dent that the carrying value of the net assets of SMPL is appropriate and consequently, there is no diminution in the value of investment made by the Company.

13) Disclosure under Accounting Standard 15 (revised 2005) "Employee Benefits" (AS-15)

The Company has classifi ed various employee benefits as under:

defined contribution plans

(a) Provident fund

(b) Superannuation fund

(c) State defined contribution plans

- Employees'' Pension Scheme 1995

The provident fund and the state defined contribution plan are operated by the regional provident fund commissioner and the superannuation fund is administered by the trust. Under the schemes, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits.

The Company has recognised the following amounts in the Statement of profit and Loss for the year:

defined benefit plans

(a) Gratuity

(b) Leave encashment

Leave encashment is payable to eligible employees who have earned leave, during the employment and/or on separation as per the Company''s policy.

Valuations in respect of gratuity and leave encashment have been carried out by an independent actuary, as at the Balance Sheet date, based on the following assumptions:

The estimate of rate of escalation in salary considered in actuarial valuation, takes into account infl ation, seniority, promotion and other relevant factors including supply and demand in the employment market.

14) Segment reporting:

The Company operates in two business segments i.e. Power generation and Associated business activities (termed as "Others"). Associated business activities include project management, supervision and support services for generation and allied processes. Business segments have been identifi ed as reportable primary segment in accordance with Accounting Standard 17 ''Segment Reporting'' as prescribed under Companies (Accounting Standards) Rules, 2006, taking into account the organisational and internal reporting structure as well as evaluation of risk and return for these segments. Segment reporting policies are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identifi ed to segments on the basis of their relationship to the operating activities of the segment. Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included as "un-allocable".

Geographical Segments: The Company''s operations are mainly confi ned within India and as such there are no reportable geographical segments.

15) Related party transactions:

As per accounting standard-18 ''Related Party Disclosures'' as prescribed under Companies (Accounting Standards) Rules, 2006, the Company''s related parties and transactions are disclosed below:

A. Parties where control exists:

Subsidiaries: (Direct and step-down subsidiaries)

1. Sasan Power Limited (SPL)

2. Rosa Power Supply Company Limited (RPSCL)

3. Maharashtra Energy Generation Limited (MEGL)

4. Vidarbha Industries Power Limited (VIPL)

5. Tato Hydro Power Private Limited (THPPL)

6. Siyom Hydro Power Private Limited (SHPPL)

7. Chitrangi Power Private Limited (CPPL)

8. Urthing Sobla Hydro Power Private Limited (USHPPL)

9. Kalai Power Private Limited (KPPL)

10. Coastal Andhra Power Limited (CAPL)

11. Reliance Coal Resources Private Limited (RCRPL)

12. Erstwhile Maharashtra Energy Generation Infrastructure Limited (Erstwhile MEGIL)

13. Amulin Hydro Power Private Limited (AHPPL)

14. Emini Hydro Power Private Limited (EHPPL)

15. Mihundon Hydro Power Private Limited (MHPPL)

16. Jharkhand Integrated Power Limited (JIPL)

17. Reliance CleanGen Limited (RCGL)

18. Rajasthan Sun Technique Energy Private Limited (RSTEPL)

19. Erstwhile Reliance Clean Energy Private Limited (Erstwhile RCEPL) (Refer note 7)

20. Dhursar Solar Power Private Limited (formerly known as Dahanu Solar Power Private Limited) (DSPPL)

21. Moher Power Limited (formerly known as Bharuch Power Limited) (MPL)

22. Samalkot Power Limited (SMPL)

23. Reliance Prima Limited (RPrima)

24. Atos Trading Private Limited (ATPL)

25. Atos Mercantile Private Limited (AMPL)

26. Coastal Andhra Power Infrastructure Limited (CAPIL)

27. Reliance Power Netherlands BV (RPN)

28. PT Heramba Coal Resources (PTH)

29. PT Avaneesh Coal Resources (PTA)

30. Reliance Natural Resources Limited (RNRL)

31. Erstwhile Reliance Fuel Resources Limited (Erstwhile RFRL)

32. Reliance Natural Resources (Singapore) Pte Limited (RNRL- Singapore)

33. Reliance Solar Resources Power Private Limited (RSRPPL)

34. Erstwhile Reliance Clean Power Private Limited (RCPPL) (Refer note 9)

35. Reliance Wind Power Private Limited (RWPPL)

36. Reliance Green Power Private Limited (RGPPL)

37. PT Sumukha Coal Services (PTS)

38. PT Brayan Bintang Tiga Energi (BBE)

39. PT Sriwijiya Bintang Tiga Energi (SBE)

40. Shangling Hydro Power Private Limited (SPPL)

41. Sumte Kothang Hydro Power Private Limited (SKPL)

42. Teling Hydro Power Private Limited (TPPL)

43. Lara Sumta Hydro Power Private Limited (LHPPL)

44. Purthi Hydro Power Private Limited (PHPPL)

B. (I). Investing parties/promoters having signifi cant infl uence on the Company directly or indirectly Companies

Reliance Infrastructure Limited (R Infra)

AAA Project Ventures Private Limited (APVPL) (upto December 19, 2012)

Individual

Shri Anil D Ambani

(II). Other related parties with whom transactions have taken place during the year:

(i) Key Management Personnel:

1. Shri J P Chalasani (Chief Executive Officer) (upto October 31, 2013)

2. Shri Ramaswami Kalidas (Manager)

(ii) Enterprises over which individual described in clause B (I) above have control:

1. Reliance Infocomm Infrastructure Private Limited (RIIPL)

2. Reliance General Insurance Company Limited (RGICL)

3. Reliance Communication Infrastructure Limited (RCIL)

4. Reliance Capital Limited (RCL)

5. Reliance Communication Limited (RCom)

(iii) Other transactions:

a) As per the terms of sponsor support agreement entered for the purpose of security of term loan availed by subsidiaries, the Company is required to pledge following percentage of its shareholding in the respective subsidiaries.

i) 100% of equity shares of Sasan Power Limited. ii) 100% of equity shares of Dhursar Solar Power Private Limited. iii) 100% of equity shares of Rajasthan Sun Technique Energy Private Limited. iv) 100% of preference shares of Sasan Power Limited. v) 100% of preference shares of Dhursar Solar Power Private Limited. vi) 100% of preference shares of Rajasthan Sun Technique Energy Private Limited.

b) The Company has given equity support undertaking/financial support undertaking towards cost overrun to financial institutions/banks for rupee/foreign currency loans taken by Rosa Power Supply Company Limited, Sasan Power Limited, Vidarbha Industries Power Limited, Samalkot Power Limited, Dhursar Solar Power Private Limited and Rajasthan Sun Technique Energy Private Limited.

c) During the year, Reliance Clean Power Private Limited has been amalgamated with the Company, pursuant to the scheme of amalgamation approved by the Hon''ble High Court of Bombay. (Refer note 9 above for transactions pursuant to the scheme).

d) During the year, Company has sold (at estimated fair value) 892,000 7.5% 15 years Non Cumulative Non Convertible Redeemable Preference Shares (NCRPS) issued by one wholly owned subsidiary to another wholly owned subsidiary. The Preference Shares have been sold for Rs. 3,648 Lakhs and the resultant loss of Rs. 4,798 lakhs on sale of Investment has been charged off to the Statement of profit and loss account. This loss has no impact on the consolidated accounts of the Company.

The above disclosures do not include transactions with public utility service providers, viz, electricity, telecommunications in the normal course of business.

20) Disclosure under Micro, Small and Medium Enterprises Development Act, 2006 Disclosure of amounts payable to vendors as defined under the "Micro, Small and Medium Enterprise Development Act, 2006" is based on the information available with the Company regarding the status of registration of such vendors under the said Act. There are no overdue principal amounts / interest payable amounts for delayed payments to such vendors at the Balance Sheet date. There are no delays in payment made to such suppliers during the year or for any earlier years and accordingly there is no interest paid or outstanding interest in this regard in respect of payments made during the year or brought forward from previous years.

21) Exchange Difference on Long Term Monetary Items

In respect of exchange difference arising on long term foreign currency monetary items, the Company has availed the option available in the Companies (Accounting Standard) (Second Amendment) Rules, 2011, vide notifi cation dated December 29 2011 issued by Ministry of Corporate Affairs. Accordingly, the Company has accumulated a gain of Rs. 29,409 lakhs (Previous year Rs. 20,999 lakhs) to "Foreign currency monetary item translation difference account" towards exchange variation on revaluation of long term monetary items other than on account of depreciable assets and the Company has adjusted the value of Plant and equipment by Rs. 1,115 lakhs towards the exchange difference arising on long term foreign currency monetary liabilities towards depreciable assets.

22) The management has been legally advised that the Company is considered to be established with the object of providing infrastructural facilities and accordingly, Section 372A of the Companies Act, 1956 is not applicable to the Company.

23) RPSCL, a wholly owned subsidiary, has obtained term loan from bank for investing in infrastructure projects undertaken/to be undertaken by the Company, either directly or through special purpose vehicles. Accordingly, the proceeds of the loan have, at the request of the Company, been invested by RPSCL in equity and preference shares of subsidiaries of the Company. Based on the Memorandum of Understanding, the Company has agreed to reimburse the interest cost amounting to Rs. 5,501 lakhs on the aforesaid term loan.

24) The figures for the previous year are re-classified / re-grouped, wherever considered necessary.


Mar 31, 2013

1) General information

Reliance Power Limited ("the Company") together with its subsidiaries ("Reliance Power group") is primarily engaged in the business of generation of power. The projects under development include coal, gas, hydro, wind and solar based energy projects. The portfolio of the Reliance Power group also includes three ultra mega power projects (UMPP) of 3,960 MW each.

2) Abridged financial statement

The abridged financial statements have been prepared pursuant to Rule 7A of the Companies (Central Government''s) General Rules and Forms, 1956 as per notification F. No. 17/51/2012-CL-V, dated May 31, 2012 and are based on the annual financial statements for the year ended March 31, 2013 approved by the Board of Directors at their meeting held on May 13, 2013.

3) (Note 4 of notes to financial statements)

(a) Contingent liabilities

- Counter guarantees / Bank guarantees issued on behalf of subsidiary companies aggregating to Rs. 240,355 lakhs (Previous year Rs. 251,225 lakhs).

- Refer note 12 with respect to Coastal Andhra Power Limited.

(b) Capital commitments

Estimated amount of contracts remaining unexecuted on capital account (net of advances paid) and not provided for Rs. 136 lakhs (Previous year Rs. 174 lakhs).

(c) Other commitments

The Company has ongoing commitments given to lenders or procurers of power or other regulatory authorities to extend support and provide equity in respect of various projects undertaken by the respective subsidiaries, wherein the amounts of investment would vary considering the project cost and debt equity ratio agreed with the respective lenders.

4) (Note 8 of notes to financial statements)

General reserve (arisen pursuant to various schemes):

a) The General reserve of Rs. 1 1 1,503 lakhs had arisen pursuant to the composite scheme of arrangement between the Company, Reliance Natural Resources Limited, Erstwhile Reliance Futura Limited and four wholly owned subsidiaries viz. Atos Trading Private Limited, Atos Mercantile Private Limited, Reliance Prima Limited and Coastal Andhra Power Infrastructure Limited. The said scheme has been sanctioned by Hon''ble High Court of Judicature at Bombay vide order dated October 15, 2010.

b) The General reserve of Rs. 18,707 lakhs had arisen pursuant to the scheme of amalgamation with Erstwhile Sasan Power Infraventure Private Limited, sanctioned by the Hon''ble High Court of Bombay vide order dated April 29, 201 1. The scheme was effective from January 1, 2011.

c) The General reserve of Rs. 22,984 lakhs had arisen pursuant to the scheme of amalgamation with Erstwhile Sasan Power Infrastructure Limited, sanctioned by the Hon''ble High Court of Bombay, vide order dated December 23, 201 1. The scheme was effective from September 1, 2011

All the above General Reserves are reserves which arose pursuant to the above schemes and shall not be and shall not for any purpose be considered to be a reserve created by the Company

5) (Note 9 of notes to financial statements)

Scheme of amalgamation between Company and Reliance Clean Energy Private Limited

Reliance Clean Energy Private Limited (RCEPL), a wholly owned subsidiary of the company, incorporated with the main object to operate, install, develop, promote and maintain projects in infrastructure sectors including setting up power plants etc., was amalgamated into the Company pursuant to the Scheme of Amalgamation (Scheme), as on and from January 1, 2013, being the appointed date pursuant to the approval of Board of Directors of the Company and sanctioned by the Hon''ble High Court of Judicature at Bombay vide its order dated April 5, 2013 which was filed with the Registrar of Companies on April 20, 2013.

The Company has carried out the accounting treatment prescribed in the Scheme as approved by the Hon''ble High Court of Judicature at Bombay. The required disclosures for accounting of Schemes as per the "Pooling of Interest Method" as given under Accounting Standard 14 (AS 14) ''Accounting for Amalgamations'' as prescribed under the Companies (Accounting Standards) Rules, 2006 has been provided.

Hence, in accordance with the Scheme:

a) The Company has taken over all the assets aggregating to Rs. 60,000 lakhs and liabilities aggregating to Rs. 5 lakhs at their respective book values. The difference aggregating to Rs. 59,995 lakhs being the excess arising on transfer of assets and liabilities has been treated as capital reserve (arising pursuant to the Scheme).

b) No consideration is payable or receivable on implementation of the Scheme as the Scheme involves a wholly owned subsidiary

c) As a consequence of and as per the Scheme the investment of Rs. 60,001 lakhs of the Company in 6,010,000 equity shares of RCEPL has been cancelled and in accordance with the Scheme the consequential write off has been made in the Statement of Profit and Loss. As permitted by the Scheme a corresponding amount of Rs. 60,001 lakhs has been withdrawn from the general reserve so that there is no impact on the profit for the year.

Had the Scheme not prescribed the above accounting treatments and the Company followed the accounting treatment prescribed under AS 14, there would have not been any capital reserve (arisen pursuant to the scheme) and general reserve would have been higher by Rs. 59,995 lakhs.

6) (Note 10 of notes to financial statements)

Employee Stock Option Scheme (ESOS)

Pursuant to the approval accorded by the Shareholders on September 30, 2007 under Section 81(1A) of the Companies Act,1 956, the Company has administered and implemented Employee Stock Option Scheme (ESOS) in terms of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,1999 (Guidelines). The Board of Directors of the Company has constituted its ESOS compensation committee to operate and monitor the ESOS scheme which is administered through ESOS Trust.

The ESOS compensation committee of the Board of Directors of the Company approved a grant of 20,000,000 stock options to the eligible employees of the Company and its subsidiaries on May 8, 2010. The options are granted to the employees of the Company and its subsidiaries on satisfying the performance and other eligibility criteria set out in ESOS Plan. In accordance with the scheme, each option entitles the employee to apply for one fully paid equity share of Rs. 10 of the Company at an exercise price of Rs. 162 per share. The vesting period of options will commence on expiry of one year from the grant date and all the options granted shall vest immediately. The vested options can be exercised by the eligible employees over a period of nine years from the date of vesting.

The Company has opted for accounting the Compensation expenses under ''Intrinsic Value Method''. The closing market price on the date of grant was Rs. 140.20 per share at National Stock Exchange (being the latest trading price with highest trading volume). As the exercise price of the share is more than market price, the Company has not accounted for any compensation cost. The Company has advanced Rs. 14,000 lakhs (disclosed under Note 3.10 Long term loans and advances) to the ESOS trust for purchase of equity shares from the market. The ESOS trust has purchased 8,500,000 shares from the given advance.

7) (Note 11 of notes to financial statements)

Status of Dadri Project:

a) The Company proposed developing a 7,480 MW gas-fired power project to be located at the Dhirubhai Ambani Energy City in Dehra village, Dadri, Uttar Pradesh. The State of Uttar Pradesh in the year 2004 had acquired 2,100 acres of land and conveyed the same to the Company in the year 2005. While the State was in the process of acquiring further 400 acres of land for the project, a few land owners had filed writ petitions before the Allahabad High Court challenging the acquisition process under the Land Acquisition Act, 1894 ("the Act"). The Allahabad High Court has disposed of the writ petitions upholding the Section 4 notification and directed compliance with certain procedures relating to land acquisition that were left out earlier by the State Government. The Company has filed an appeal against the Allahabad High Court order which is now pending before Supreme Court. Few land owners have also filed appeals/petitions before the Supreme Court challenging Allahabad High Court''s order upholding the Section 4 notification and alleging highhanded and forceful actions during the acquisition process, which are pending.

b) The construction and other allied activities at Dadri project will be commenced as soon as the gas supply is firmed up and on settlement of land issues. Considering the delay in the project execution, due to litigation as stated above, the Company as a matter of prudence, has written off the Asset under construction amounting to Rs. 901 lakhs (Previous year: Incidental expenditure of Rs. 2,778 Lakhs) in the Statement of Profit and Loss.

8) (Note 12 of notes to financial statements)

Project status of Coastal Andhra Power Limited (CAPL)

CAPL, a wholly owned subsidiary, has been set up to develop an Ultra Mega Power Project (UMPP) of 3,960 MW located in Krishnapatnam, District Nellore, based on imported coal sourced from Indonesia.

The Government of Indonesia introduced a new regulation in September 2010 which prohibits sale of coal, including sale to affiliate companies, at below Benchmark Price which is linked to international coal prices and requires adjustment of sale price every 12 months. This regulation also mandates to align all existing long-term coal supply contracts with the new regulations within one year i.e. by September 2011. CAPL had entered into a firm price fuel supply agreement with Reliance Coal Resources Private Limited (RCRPL), a wholly owned subsidiary of the Company. In view of this new regulation, RCRPL cannot supply coal at the already agreed price, because of which an element of uncertainty has arisen in the fuel supply for the CAPL project, wherein the power needs to be supplied at a pre-agreed tariff as per the terms of Power Purchase Agreement (PPA) dated March 23, 2007. The said issue has been communicated to the power procurers and also to the Government of India through the Association of Power Producers to arrive at a suitable solution to the satisfaction of all the stakeholders.

CAPL has issued a dispute resolution notice to the procurers of power under the force majeure clause of the PPA, considering the change in Indonesian regulations as an event of force majeure. The procurers have also issued a notice for termination of PPA and have raised a demand for liquidated damages of Rs.40,000 Lakhs (including bank guarantee of Rs. 30,000 Lakhs, which has been issued by the holding company on behalf of CAPL).

CAPL has filed a petition before the Hon''ble High Court at Delhi inter alia for interim relief under Section 9 of the Arbitration and Conciliation Act, 1 996. The Court vide its order dated March 20, 2012 has prohibited the Procurers from taking any coercive steps against the Company. The single judge of the Delhi High Court vide order dated July 2, 2012 dismissed the petition and the appeal filed by CAPL against the said order is pending before the Division Bench of the Delhi High Court and stands included in the regular hearing list. The interim protection against encashing bank guarantees continues to be available.

CAPL has filed a petition before the Central Electricity Regulatory Commission without prejudice to the proceedings pending before the Delhi High Court and the arbitration process already initiated. Hearing on admissibility of the petition before the Central Electricity Regulatory Commission was held in the month of March 2013 and the outcome is awaited

Based on the legal opinion obtained with regard to applicability of force majeure clause for the change in law in Indonesia and other impacts thereof on the implementation of the project and considering the nature of expenditure incurred till date at the project, no provision for impairment is considered in respect of investment made by the Company and demands raised by the procurers of power,

9) (Note 13 of notes to financial statements)

Disclosure under Accounting Standard 15 (revised 2005) "Employee Benefits" (AS-15)

The Company has classified various employee benefits as under:

Defined contribution plans

(a) Provident fund

(b) Superannuation fund

(c) State defined contribution plans

- Employees'' Pension Scheme 1995

The provident fund and the state defined contribution plan are operated by the regional provident fund commissioner and the superannuation fund is administered by the trust. Under the schemes, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits.

10) (Note 14 of notes to financial statements)

Segment reporting:

The Company operates in two business segments i.e. Power generation and Associated business activities (termed as "Others"). Associated business activities include project management, supervision and support services for generation and allied processes. Business segments have been identified as reportable primary segment in accordance with Accounting Standard 17 ''Segment Reporting'' as prescribed under Companies (Accounting Standards) Rules, 2006, taking into account the organisational and internal reporting structure as well as evaluation of risk and return for these segments. Segment reporting policies are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included as "unallocable".

Geographical Segments: The Company''s operations are mainly confined within India and as such there are no reportable geographical segments.

11) (Note 15 of notes to financial statements)

Related party transactions:

As per accounting standard-18 ''Related Party Disclosures'' as prescribed under Companies (Accounting Standards) Rules, 2006, the Company''s related parties and transactions are disclosed below:

A. Parties where control exists:

Subsidiaries: (Direct and step-down subsidiaries)

1. Sasan Power Limited (SPL)

2. Rosa Power Supply Company Limited (RPSCL)

3. Maharashtra Energy Generation Limited (MEGL)

4. Vidarbha Industries Power Limited (VIPL)

5. Tato Hydro Power Private Limited (THPPL)

6. Siyom Hydro Power Private Limited (SHPPL)

7. Chitrangi Power Private Limited (CPPL)

8. Urthing Sobla Hydro Power Private Limited (USHPPL)

9. Kalai Power Private Limited (KPPL)

10. Coastal Andhra Power Limited (CAPL)

11. Reliance Coal Resources Private Limited (RCRPL)

12. Erstwhile Sasan Power Infrastructure Limited (Erstwhile SPIL)

13. Erstwhile Maharashtra Energy Generation Infrastructure Limited (Erstwhile MEGIL) (Refer Note 15 (C) (iii) (c))

14. Amulin Hydro Power Private Limited (AHPPL)

15. Emini Hydro Power Private Limited (EHPPL)

16. Mihundon Hydro Power Private Limited (MHPPL)

17. Jharkhand Integrated Power Limited (JIPL)

18. Reliance CleanGen Limited (RCGL)

19. Rajasthan Sun Technique Energy Private Limited (RSTEPL)

20. Erstwhile Reliance Clean Energy Private Limited (Erstwhile RCEPL) (Refer note 9)

21. Dahanu Solar Power Private Limited (DSPPL)

22. Solar Generation Company (Rajasthan) Private Limited (SGCPL) (upto 03.03.2012)

23. Bharuch Power Limited (BPL)

24. Samalkot Power Limited (SMPL)

25. Reliance Prima Limited (RPrima)

26. Atos Trading Private Limited (ATPL)

27. Atos Mercantile Private Limited (AMPL)

28. Coastal Andhra Power Infrastructure Limited (CAPIL)

29. Reliance Power Netherlands BV (RPN)

30. PT Heramba Coal Resources (PTH)

31. PT Avaneesh Coal Resources (PTA)

32. Reliance Natural Resources Limited (RNRL)

33. Erstwhile Reliance Fuel Resources Limited ( Erstwhile RFRL) (Refer Note 15 (C) (iii) (c))

34. Reliance Natural Resources (Singapore) Pte Limited (RNRL- Singapore)

35. Reliance Renewable Power Private Limited (RRPPL) (upto 03.03.2012)

36. Reliance Biomass Power Private Limited (RBPPL) (upto 03.03.201 2)

37. Reliance Solar Resources Power Private Limited (RSRPPL)

38. Reliance Clean Power Private Limited (RCPPL)

39. Reliance Tidal Power Private Limited (RTPPL) (upto 03.03.2012)

40. Reliance Geothermal Power Private Limited (RGTPPL) (upto 03.03.2012)

41. Reliance Wind Power Private Limited (RWPPL)

42. Reliance Green Power Private Limited (RGPPL) (upto 03.03.2012 and w.e.f. 1 1.08.201 2)

43. PT Sumukha Coal Services (PTS)

44. PT Brayan Bintang Tiga Energi (BBE)

45. PT Sriwijiya Bintang Tiga Energi (SBE)

46. Shangling Hydro Power Private Limited (SPPL)

47. Sumte Kothang Hydro Power Private Limited (SKPL)

48. Teling Hydro Power Private Limited (TPPL)

49. Lara Sumta Hydro Power Private Limited (LHPPL)

50. Purthi Hydro Power Private Limited (PHPPL)

B (I). Investing parties/promoters having significant influence on the Company directly or indirectly Companies

Reliance Infrastructure Limited (R Infra)

AAA Project Ventures Private Limited (APVPL) (upto December 19, 2012)

Individual

Shri Anil D Ambani

(II). Other related parties with whom transactions have taken place during the year:

(i) Key Management Personnel:

1. Shri J P Chalasani (Chief Executive Officer)

2. Shri Ramaswami Kalidas (Manager) (w.e.f. May 27, 201 1)

3. Shri Paresh Rathod (upto May 27, 201 1)

(ii) Enterprises over which individual described in clause B (I) above have control:

1. Reliance Infocomm Infrastructure Private Limited (RIIPL)

2. Reliance General Insurance Company Limited (RGICL)

3. Reliance Communication Infrastructure Limited (RCIL)

4. Reliance Capital Limited (RCL)

5. Reliance Communication Limited (RCom)

(iii) Others

BSES Kerala Power Limited (BKPL), subsidiary of R Infra.

12) (Note 21 of notes to financial statements)

Disclosure under Micro, Small and Medium Enterprises Development Act, 2006

There are no Micro and Small Scale Business Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at March 31, 2013. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company

13) (Note 22 of notes to financial statements)

Exchange Difference on Long Term Monetary Items

In respect of exchange difference arising on long term foreign currency monetary items, the Company has availed the option available in the Companies (Accounting Standard) (Second Amendment) Rules, 2011, vide notification dated December 29, 2011 issued by Ministry of Corporate Affairs. Accordingly, the Company has accumulated a gain of Rs. 20,999 lakhs (Previous year Rs. 16,050 lakhs) to "Foreign currency monetary item translation difference account" towards exchange variation on revaluation of long term monetary items other than on account of depreciable assets.

14) (Note 23 of notes to financial statements)

During the year, based on the request placed by the Company, investments in 7.5% Non convertible non cumulative redeemable preference shares of Coastal Andhra Power Limited ("CAPL") (a wholly owned subsidiary) has been early redeemed as per approval of Board of Directors of the CAPL in the meeting held on December 24, 2012. The said shares were redeemed at a premium of Rs. 990 per share and profit on redemption of shares has been disclosed as an exceptional item in the Statement of Profit and loss.

15) (Note 24 of notes to financial statements)

The management has been legally advised that the Company is considered to be established with the object of providing infrastructural facilities and accordingly, Section 372A of the Companies Act, 1956 is not applicable to the Company

16) (Note 25 of notes to financial statements)

Previous year figures have been regrouped/recasted wherever considered necessary to make it comparable to current year presentation.


Mar 31, 2012

1) General information

Reliance Power Limited ("the Company") together with its subsidiaries ("Reliance Power group") is primarily engaged in the business of generation of power. The projects under development include coal, gas, hydro, wind and solar based energy projects. The portfolio of Reliance Power group also includes three ultra mega power projects (UMPP) of 3,960 MW each.

2) Abridged financial statement

The abridged financial statements have been prepared pursuant to Rule 7A of the Companies (Central Government's) General Rules and Forms, 1956 as per notification F. No. 17/51 /2012-CL-V, dated May 31, 2012 and are based on the annual financial statements for the year ended March 31, 2012 approved by the Board of Directors at their meeting held on May 24, 2012.

3) (Note 4 of notes to financial statements)

(a) Contingent liabilities

- Counter guarantees / Bank guarantees issued on behalf of subsidiary companies aggregating to Rs. 243,839 lakhs (Previous Year Rs. 264,675 lakhs).

- Refer note 15 with respect to Coastal Andhra Power Limited.

(b) Capital commitments

Estimated amount of contracts remaining unexecuted on capital account (net of advances paid) and not provided for Rs. 174 lakhs (Previous Year Rs. 290 lakhs).

(c) Other commitments:

The Company has ongoing commitments given to lenders or procurers of power or other regulatory authorities to extend support and provide equity in respect of various projects undertaken by the respective subsidiaries, wherein the amounts of investment would vary considering the project cost and debt equity ratio agreed with the respective lenders.

4) (Note 8 of notes to financial statements)

General reserve (arisen pursuant to various schemes)

a) The General Reserve of Rs. 111,503 lakhs had arisen pursuant to the composite scheme of arrangement between the Company, Reliance Natural Resources Limited, erstwhile Reliance Futura Limited and four wholly owned subsidiaries viz. Atos Trading Private Limited, Atos Mercantile Private Limited, Reliance Prima Limited and Coastal Andhra Power Infrastructure Limited. The said scheme has been sanctioned by Hon'ble High Court of Judicature at Bombay vide order dated October 15, 2010.

b) The General Reserve of Rs. 18,707 lakhs had arisen pursuant to the scheme of amalgamation with erstwhile Sasan Power Infraventure Private Limited, sanctioned by the Hon'ble High Court of Bombay vide order dated April 29, 2011. The scheme was effective from January 01, 2011.

c) The General Reserve of Rs. 22,984 lakhs has arisen pursuant to the scheme of amalgamation (Refer note 11) with Sasan Power Infrastructure Limited, sanctioned by the Hon'ble High Court of Bombay, vide order dated December 23, 2011. The scheme was effective from September 01, 2011.

All the above General Reserves are reserves which arose pursuant to the above Schemes and shall not be and shall not for any purpose be considered to be a reserve created by the Company.

5) (Note 9 of notes to financial statements)

4.928% Convertible Bonds (FCCBs)

Reliance Natural Resources Limited (RNRL) had issued FCCBs of USD 300,000,000 vide letter of offer dated October 12, 2006. The FCCBs were transferred to the Company in terms of Composite Scheme of Arrangement sanctioned by the High Court of Bombay on October 15, 2010. FCCBs were secured by the issuance of an irrevocable letter of credit to the trustee on behalf of the FCCB holders by Barclays Bank Plc. FCCBs were due for redemption on October 17, 2011. FCCB holders were eligible for conversion of FCCB to equity share at Rs. 104 per share for every fully paid equity share of Rs. 10 each to be issued by the Company on exercise of the option. During the year till the due date of redemption, no FCCBs were converted into equity shares and the Company has redeemed the outstanding FCCBs by fully repaying the FCCB holders.

6) (Note 10 of notes to financial statements)

Accounting under composite scheme of arrangement

In the previous year, the Composite Scheme of Arrangement ('Scheme') under Section 391 to 394 of the Act read with Sections 78, 100 to 103 of the Act between the Company, Reliance Natural Resources Limited, erstwhile Reliance Futura Limited and four wholly owned subsidiaries viz. Atos Trading Private Limited, Atos Mercantile Private Limited, Reliance Prima Limited and Coastal Andhra Power Infrastructure Limited, was sanctioned by Hon'ble High Court of Judicature at Bombay vide order dated October 15, 2010.

As per the terms defined in the Scheme, General reserve of the Company is a free reserve available for all purposes as the Board of directors may determine from time to time, including but not limited to meeting any loss incurred due to variation in exchange rates which are beyond the control of the Company. The Scheme also specifies that any use of General reserve shall be reflected in Statement of Profit and Loss against the item for which General Reserve is used.

The Company, based on a legal opinion and as per the approval of board of directors has offset the loss amounting to Rs. 13,588 lakhs incurred due to exchange variation on settlement of FCCBs, by withdrawing an equivalent amount from General Reserve. The Management has been legally advised that the disclosure of said accounting in the Statement of Profit and Loss is in compliance with revised Schedule VI of the Companies Act, 1956.

Had the Scheme not prescribed the utilization of General Reserve by an equivalent amount of credit to Statement of Profit and Loss towards the exchange loss, the profit before tax of the Company would have been lower by Rs.13,588 lakhs and the General Reserve would have been higher to that extent.

7) (Note 11 of notes to financial statements)

Scheme of amalgamation between Company and Sasan Power Infrastructure Limited

Sasan Power Infrastructure Limited (SPIL), a wholly owned subsidiary of the Company, incorporated with the main object to operate, install, develop, promote and maintain projects in infrastructure sectors including setting up power plants etc., was amalgamated into the Company pursuant to the Scheme of Amalgamation (Scheme), as on and from September 1, 2011, being the appointed date pursuant to the approval of Board of Directors of the Company and sanctioned by the Hon'ble High Court of Judicature at Bombay vide its order dated December 23, 2011 which was filed with the Registrar of Companies on February 23, 2012.

The Company has carried out the accounting treatment prescribed in the Scheme as approved by the Hon'ble High Court of Judicature at Bombay. The required disclosures as per paragraph 42 of Accounting Standard 14 (AS 14) 'Accounting for Amalgamations' as prescribed under the Companies (Accounting Standards) Rules, 2006 have been provided. Further, the Company has also been legally advised that the accounting treatment including disclosure under Revised Schedule VI carried out is in line with the Scheme approved by the Hon'ble Court of Judicature at Bombay and is not in violation of any applicable rules and regulations.

Hence, in accordance with the Scheme:

a) The Company has taken over all the assets aggregating to Rs. 28,006 lakhs and liabilities aggregating to Rs. 5,022 lakhs at their respective book values. The difference aggregating to Rs. 22,984 lakhs being the excess arising on transfer of assets and liabilities has been treated as General Reserve (arising pursuant to the Scheme).

b) No consideration is payable or receivable on implementation of the Scheme as the Scheme involves a wholly owned subsidiary. The entire issued, subscribed and paid up capital of the subsidiary has been cancelled and no shares have been allotted or exchanged in lieu of the same.

c) Investments in equity share capital of SPIL amounting to Rs. 20,005 lakhs has been written off in the Statement of Profit and Loss and an equivalent amount has been withdrawn from General Reserve vide board approval dated May 24, 2012, to off-set the said write off and the same has been credited to Statement of Profit and Loss.

Had the Scheme not prescribed the above accounting treatments, the treatment in accordance with AS 14 under purchase method would have been Rs. 22,984 lakhs, being the excess arising on transfer of assets and liabilities treated as General Reserve (arising pursuant to the Scheme), would have been treated as Capital Reserve. Also, Rs. 20,005 lakhs being the investment of the Company (share capital plus securities premium) in SPIL debited to Statement of Profit and Loss, would have been debited to Capital Reserve, and Rs. 20,005 lakhs withdrawn from General Reserve would not have been withdrawn.

The above accounting treatment as per the Scheme does not have a material impact on the Profit for the year and on the net worth of the Company.

8) (Note 12 of notes to financial statements)

Change in accounting policy (Income on fixed maturity plan of mutual fund)

During the year, based on legal opinion, the Company has changed its accounting policy for income on fixed maturity plans of mutual funds, from recognising it at the time of maturity to recognising it on an accrual basis based on the net asset value as on the reporting date considering the principles of reasonable certainty. Had the Company followed the earlier accounting policy, Profit before tax would have been lower by Rs. 1,988 lakhs.

9) (Note 13 of notes to financial statements)

Employees Stock Option Scheme (ESOS):

Pursuant to the approval accorded by the Shareholders on September 30, 2007 under Section 81(1A) of the Companies Act,1956, the Company has administered and implemented Employee Stock Option Scheme (ESOS) in terms of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,1 999 (Guidelines). The Board of Directors of the Company has constituted its ESOS compensation committee to operate and monitor the ESOS scheme which is administered through ESOS Trust.

The ESOS compensation committee of the Board of Directors of the Company approved a grant of 20,000,000 stock options to the eligible employees of the Company and its subsidiaries on May 8, 2010. The options are granted to the employees of the Company and its subsidiaries on satisfying the performance and other eligibility criteria set out in ESOS Plan. In accordance with the scheme, each option entitles the employee to apply for one fully paid equity share of Rs. 10 of the Company at an exercise price of Rs. 162 per share. The vesting period of options will commence on expiry of one year from the grant date and all the options granted shall vest immediately. The vested options can be exercised by the eligible employees over a period of nine years from the date of vesting.

The Company has opted for accounting the Compensation expenses under 'Intrinsic Value Method'. The closing market price on the date of grant was Rs. 140.20 per share at National Stock Exchange (being the latest trading price with highest trading volume). As the exercise price of the share is more than market price, the Company has not accounted for any compensation cost. The Company has advanced Rs. 14,000 lakhs (disclosed under Note 3.11 Long term loans and advances) to the ESOS trust for purchase of equity shares from the market. The ESOS trust has purchased 8,500,000 shares from the given advance.

Had the Company opted for accounting of Compensation cost under 'Fair value Method', Profit after tax would have been lower by Rs. 434 lakhs (Previous year: Rs. 3,851 lakhs) and Earnings per share (Basic and diluted) would have been Rs.1.09 (Previous year: Rs. 0.91)

10) (Note 14 of notes to financial statements)

Project Status of Dadri Project:

a) The Company is developing a 7,480 MW gas-fired power project to be located at the Dhirubhai Ambani Energy City in Dehra village, Dadri, Uttar Pradesh. The State of Uttar Pradesh in the year 2004 had acquired 2,100 acres of land and conveyed the same to the Company in the year 2005. While the State was in the process of acquiring further 400 acres of land for the project, a few land owners had filed writ petitions before the Allahabad High Court challenging the acquisition process under the Land Acquisition Act, 1894 ("the Act"). The Allahabad High Court has disposed of the writ petitions upholding the Section 4 notification and directed compliance with certain procedures relating to land acquisition that were left out earlier by the State Government. The Company has filed an appeal against the Allahabad High Court order which is now pending before Supreme Court. Few land owners have also filed appeals/petitions before the Supreme Court challenging Allahabad High Court's order upholding the Section 4 notification and alleging highhanded and forceful actions during the acquisition process, which are pending.

b) The construction and other allied activities at Dadri project will be commenced as soon as the gas supply is firmed up and on settlement of land issues. Considering the delay in the project execution, due to litigation as stated above, the Company as a matter of prudence, has written off the incidental expenditure amounting to Rs. 2,778 lakhs in the Statement of Profit and loss.

11) (Note 15 of notes to financial statements)

Project status of Coastal Andhra Power Limited (CAPL)

CAPL, a wholly owned subsidiary, has been set up to develop an Ultra Mega Power Project (UMPP) of 3,960 MW located in Krishnapatnam, District Nellore, based on imported coal sourced from Indonesia.

The Government of Indonesia introduced a new regulation in September 2010 which prohibits sale of coal, including sale to affiliate companies, at below Benchmark Price which is linked to international coal prices and requires adjustment of sale price every 12 months. This regulation also mandates to align all existing long-term coal supply contracts with the new regulations within one year i.e. by September 2011.CAPL had entered into a firm price fuel supply agreement with Reliance Coal Resources

Private Limited (RCRPL), a wholly owned subsidiary of the Company. In view of this new regulation, RCRPL now needs to supply coal at the market price, because of which an element of uncertainty has arisen in the fuel supply for the CAPL project, wherein the power needs to be supplied at a pre-agreed tariff as per the terms of Power Purchase Agreement (PPA) dated March 23, 2007. The said issue has been communicated to the power procurers and also to the Government of India through the Association of Power Producers to arrive at a suitable solution to the satisfaction of all the stakeholders.

Notwithstanding the above, considering the terms of PPA, CAPL has issued a dispute resolution notice to the procurers of power under the force majeure clause of the PPA, considering the change in Indonesian regulations as an event of force majeure. The procurers of power under the terms of PPA have also issued a notice for termination of PPA and have raised a demand for liquidated damages of Rs.40,000 lakhs (including bank guarantee of Rs. 30,000 lakhs), which has been disclosed under contingent liability.

CAPL has filed a petition before the Hon'ble High Court at Delhi inter alia for interim relief under Section 9 of the Arbitration and Conciliation Act, 1996. The Court vide its order dated March 20, 201 2 has granted such relief and prohibited the Procurers from taking any coercive steps against CAPL.

Based on the legal opinion obtained with regard to applicability of force majeure clause for the change in law in Indonesia and considering the nature of expenditure incurred till date at the project, no provision for impairment is considered in respect of investment made by the Company and for demands raised by the procurers of power.

12) (Note 16 of notes to financial statements)

Disclosure under Accounting Standard 15 (revised 2005) "Employee Benefits" (AS-15)

The Company has classified various employee benefits as under:

Defined contribution plans

(a) Provident fund

(b) Superannuation fund

(c) State defined contribution plans

- Employees' Pension Scheme 1995

The provident fund and the state defined contribution plan are operated by the regional provident fund commissioner and the superannuation fund is administered by the trust. Under the schemes, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits.

Leave encashment is payable to eligible employees who have earned leave, during the employment and/or on separation as per the Company's policy.

* Grouped under Note no 3.15 under Advance recoverable in cash or in kind.

# Grouped under Note no 3.4 and 3.8 under Provision for Leave Encashment.

The Company has seconded certain employees to the subsidiaries during the year. As per the terms of the secondment, liability towards Salaries, Provident fund and leave encashment will be provided and paid by the respective subsidiaries and gratuity will be paid/ provided by the Company.

13) (Note 17 of notes to financial statements)

Segment Reporting:

The Company operates in two business segments i.e. Power generation and Associated business activities (termed as "Others"). Associated business activities include project management, supervision and support services for generation and allied processes. Business segments have been identified as reportable primary segment in accordance with Accounting Standard 17 'Segment Reporting' as prescribed under Companies (Accounting Standards) Rules, 2006, taking into account the organisational and internal reporting structure as well as evaluation of risk and return for these segments. Segment reporting policies are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included as "un-allocable".

Geographical Segments: The Company's operations are mainly confined within India and as such there are no reportable geographical segments.

14) (Note 18 of notes to financial statements)

Related party transactions:

As per accounting standard-18 'Related Party Disclosures' as prescribed under Companies (Accounting Standards) Rules, 2006, the Company's related parties and transactions are disclosed below:

A. Parties where control exists:

Subsidiaries: (Direct and step-down subsidiaries)

1. Sasan Power Limited (SPL)

2. Rosa Power Supply Company Limited (RPSCL)

3. Maharashtra Energy Generation Limited (MEGL)

4. Vidarbha Industries Power Limited (VIPL)

5. Tato Hydro Power Private Limited (THPPL)

6. Siyom Hydro Power Private Limited (SHPPL)

7. Chitrangi Power Private Limited (CPPL)

8. Urthing Sobla Hydro Power Private Limited (USHPPL)

9. Kalai Power Private Limited (KPPL)

10. Coastal Andhra Power Limited (CAPL)

11. Reliance Coal Resources Private Limited (RCRPL)

12. Reliance Power International SARL (RPIS) (upto 30.06.201 1)

13. Erstwhile Sasan Power Infrastructure Limited (SPIL) (Refer note 11)

14. Erstwhile Sasan Power Infraventures Private Limited (Erstwhile SPIPL)

15. Maharashtra Energy Generation Infrastructure Limited (MEGIL)

16. Amulin Hydro Power Private Limited (AHPPL)

17. Emini Hydro Power Private Limited (EHPPL)

18. Mihundon Hydro Power Private Limited (MHPPL)

19. Jharkhand Integrated Power Limited (JIPL)

20. Reliance CleanGen Limited (Formerly Reliance Patalganga Power Limited) (RCGL)

21. Rajasthan Sun Technique Energy Private Limited (RSTEPL)

22. Erstwhile Reliance Futura Limited (Erstwhile RFL)

23. Dahanu Solar Power Private Limited (DSPPL)

24. Solar Generation Company (Rajasthan) Private Limited (SGCPL) (upto 03.03.201 2)

25. Bharuch Power Limited (BPL)

26. Samalkot Power Limited (SMPL)

27. Reliance Prima Limited (RPrima)

28. Atos Trading Private Limited (ATPL)

29. Atos Mercantile Private Limited (AMPL)

30. Coastal Andhra Power Infrastructure Limited (CAPIL)

31. Reliance Power Netherlands BV (RPN)

32. PT Heramba Coal Resources (PTH)

33. PT Avaneesh Coal Resources (PTA)

34. Reliance Natural Resources Limited (RNRL)

35. Reliance Fuel Resources Limited (RFRL)

36. Reliance Natural Resources (Singapore) Pte Limited (RNRL- Singapore)

37. Reliance Renewable Power Private Limited (RRPPL) (upto 03.03.201 2)

38. Reliance Biomass Power Private Limited (RBPPL) (upto 03.03.2012)

39. Reliance Solar Resources Power Private Limited (RSRPPL)

40. Reliance Clean Power Private Limited (RCPPL)

41. Reliance Tidal Power Private Limited (RTPPL) (upto 03.03.2012)

42. Reliance Geothermal Power Private Limited (RGTPPL) (upto 03.03.2012)

43. Reliance Wind Power Private Limited (RWPPL)

44. Reliance Green Power Private Limited (RGPPL) (upto 03.03.2012)

45. PT Sumukha Coal Services (PTS)

46. PT Brayan Bintang Tiga Energi (BBE)

47. PT Sriwijiya Bintang Tiga Energi (SBE)

48. Shangling Hydro Power Private Limited (SPPL) (w.e.f. 19.05.2011)

49. Sumte Kothang Hydro Power Private Limited (SKPL) (w.e.f. 19.05.2011)

50. Teling Hydro Power Private Limited (TPPL) (w.e.f. 19.05.2011)

51. Lara Sumta Hydro Power Private Limited (LHPPL) (w.e.f. 19.05.201 1)

52. Purthi Hydro Power Private Limited (PHPPL) (w.e.f. 19.05.2011)

53. Reliance Clean Energy Private Limited (RCEPL) (w.e.f. 14.11.2011)

B. (i) Major investing parties/promoters having significant influence on the Company directly or indirectly Companies

Reliance Infrastructure Limited (R Infra)

AAA Project Ventures Private Limited (APVPL)

Individual

Shri Anil D Ambani

B. (ii) Other related parties with whom transactions have taken place during the year:

(i) Key Management Personnel:

1. Shri J P Chalasani (Chief Executive Officer)

2. Shri Paresh Rathod (Manager) (upto May 27, 201 1)

3. Shri Ramaswami Kalidas (Manager) (w.e.f. May 27, 201 1)

(ii) Enterprises over which individual described in clause B (i) above have control:

1. Reliance Infocomm Infrastructure Private Limited (RIIPL)

2. Reliance General Insurance Company Limited (RGICL)

3. Reliance Communication Infrastructure Limited (RCIL)

4. Reliance Capital Limited (RCL)

5. Reliance Communication Limited (RCom)

(iii) Others

BSES Kerala Power Limited (BKPL), subsidiary of R Infra

(iii) Other transactions:

a) The Company has pledged its shareholding in the following subsidiaries in accordance with sponsor support agreement, as a security towards the term loan availed by the Subsidiaries

i) 51% of equity shares of Sasan Power Limited.

ii) 51% of equity shares of Coastal Andhra Power Limited.

iii) 97% of equity shares of Dahanu Solar Power Private Limited.

iv) 64% of preference shares of Dahanu Solar Power Private Limited.

b) The Company has given equity support undertaking/financial support undertaking towards cost overrun to financial institutions/banks for rupee/foreign currency loans taken by Rosa Power Supply Company Limited, Sasan Power Limited, Vidarbha Industries Power Limited, Samalkot Power Limited and Dahanu Solar Power Private Limited.

c) Reliance Infrastructure Limited (R Infra) has issued Keep Well Letter in favour of a bank, which in turn has issued letter of credit in favour of FCCB holders of the Company, for which the Company has paid Rs. 36 lakhs to R Infra during the year.

d) During the year the Company has issued Commercial paper of Rs. 23,000 lakhs at a discount of 12% per annum, to RCL and the same has been redeemed at par on the maturity date.

The above disclosures do not include transactions with public utility service providers, viz, electricity, telecommunications in the normal course of business.

15) (Note 24 of notes to financial statements)

Disclosure under Micro, Small and Medium Enterprises Development Act, 2006

There are no Micro and Small Scale Business Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at March 31, 2012. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

16) (Note 25 of notes to financial statements)

Exchange Difference on Long Term Monetary Items

In respect of exchange difference arising on long term foreign currency monetary items, the Company has availed the option available in the Companies (Accounting Standard) (Second Amendment) Rules, 2011, vide notification dated December 29, 2011 issued by Ministry of Corporate Affairs. Accordingly, the Company has accumulated a gain of Rs. 16,050 lakhs to "Foreign currency monetary item translation difference account" towards exchange variation on revaluation of long term monetary items other than on account of depreciable assets.

17) (Note 26 of notes to financial statements)

The management has been legally advised that the Company is considered to be established with the object of providing infrastructural facilities and accordingly, Section 372A of the Companies Act, 1956 is not applicable to the Company.

18) (Note 27 of notes to financial statements)

The financial statements for the year ended March 31, 2011 had been prepared as per the then applicable pre-revised Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended March 31, 2012 have been prepared as per revised Schedule VI. Accordingly, the previous year's figures have also been reclassified to conform to this year's classification. The adoption of the Revised Schedule VI for the previous year's figures does not impact recognition and measurement principles followed for preparation of financial statements.


Mar 31, 2011

1) (a) Contingent Liabilities

Counter guarantees / Bank guarantees issued on behalf of subsidiary companies aggregating to Rs. 26,467,407,680 (Previous Year Rs.1 2,000,000,000) to power procurers / banks / financial institutions primarily issued towards the construction of power plant / finance raised by respective subsidiary.

(b) Capital Commitments

Estimated amount of contracts remaining unexecuted on capital account (net of advances paid) and not provided for Rs 28,968,335 (Previous Year Rs. Nil).

2) (Note No. 7 of Schedule 15 of financial statements) Composite Scheme of Arrangement

(a) The Composite Scheme of Arrangement ('Scheme') under Section 391 to 394 read with Sections 78, 100 to 103 of the Act between the Company, Reliance Natural Resources Limited (RNRL), the wholly owned subsidiary - Reliance Futura Limited (RFL) and four wholly owned subsidiaries of RFL - Atos Trading Private Limited (ATPL), Atos Mercantile Private Limited (AMPL), Reliance Prima Limited (RPrima) and Coastal Andhra Power Infrastructure Limited (CAPIL) has been sanctioned by Hon'ble High Court of Judicature at Bombay vide order dated October 1 5, 201 0. The Scheme has become effective on October 29, 201 0 on filing with Registrar of Companies (RoC) with an appointed date as on October 1 5, 2010

(b) RNRL was engaged in the business of sourcing, supply and transportation of gas, coal and liquid fuels. It was also involved in exploration and production of Coal Bed Methane (CBM) Blocks.

(c) Demerger of Business Undertaking of RNRL into the Company: In accordance with the Scheme

i) The business undertaking of RNRL representing undertaking related to exploration, fuel handling, shipping and related activities as a going concern, has been transferred to the Company. The transfer of assets and liabilities representing the business undertaking has been approved by the Board of Directors (BoD) of the Company at their meeting held on February 14, 2011.

ii) As a consideration, one fully paid equity share of Rs.1 0 each of the Company has been allotted for every four fully paid up equity shares of Rs.5 each of RNRL to shareholders of RNRL. Accordingly, 408,282,606 equity shares of Rs.10 each have been allotted to the shareholders of RNRL and an equivalent amount of Rs. 4,082,826,060 has been credited to share capital.

iv) On re-organisation of its share capital, RNRL has allotted 1 00,000 equity shares of Rs. 5 each to the Company and has become a wholly owned unlisted subsidiary, v) The difference in accounting policy with regard to depreciation on fixed assets between RNRL and the Company aggregating to Rs. 35,667,493 has been adjusted to the General Reserve of the Company.

(d) Transfer of exploration block undertakings from the Company to CAPIL, ATPL, AMPL, RPrima In accordance with the Scheme

i) The acquired CBM blocks from RNRL at Sohagpur (Madhya Pradesh), Barmer (Rajasthan), Kothagudam (Andhra Pradesh) and Oil Blocks at Mizoram, have been transferred to CAPIL, ATPL, AMPL and RPrima, respectively as a going concern,

ii) There is no consideration on transfer of these blocks to respective subsidiaries as these subsidiaries are directly/indirectly controlled by the Company,

iii) The assets and liabilities have been transferred at book values to the respective subsidiaries and the aggregate amount of net assets transferred amounting to Rs. 45,430,042 has been debited to General Reserve (created pursuant to the Scheme).

(e) Merger of RFL with the Company:

RFL was incorporated with the main objects of designing, developing, engineering power projects, etc. in India and abroad

In accordance with the Scheme

i) Net assets aggregating to Rs. 1 95,779,841 transferred have been accounted for at a fair value in the books of the Company. The net assets taken over primarily include Investments in mutual funds,

ii) There is no consideration payable as the entire share capital has been held by the Company and accordingly for an equivalent amount of net assets taken over, capital reserve of Rs. 1 95,779,841 has been created,

iii) The merger has been accounted for under the Purchase Method as prescribed by Accounting Standard 14 (AS 14) 'Accounting for Amalgamations' as prescribed under the Companies (Accounting Standards) Rules, 2006

3) (Note No. 8 of Schedule 1 5 of financial statements)

RNRL had issued 4.928% Convertible Bonds (FCCBs) of USD 300,000,000 vide letter of offer dated October 12, 2006. As per the terms of the above mentioned scheme, FCCBs shall be treated as FCCBs issued by the Company with same rights and obligations. The Bonds are convertible into equity shares at any time on or after November 27, 2006 and before October 11

2011 at the option of the Bondholder. The bonds are secured by the issuance of an irrevocable letter of credit to the trustee on behalf of the Bondholders by Barclays Bank Pic. The principal value of FCCBs are convertible at an exchange rate of Rs. 45.61 5 for one USD, determined on the basis of the buying rate on October 1 2, 2006. The Bonds were originally convertible at a price of Rs. 26 per share for each fully paid share of Rs. 5 to be issued by RNRL. Upon the scheme (Refer Note 7 above) being effective and on the basis of share exchange ratio given in 7 (c) above, the effective conversion price of the Bond stands at Rs. 104 per share for every fully paid equity share of Rs. 1 0 each to be issued by the Company on exercise of the option. The Bond may subject to certain conditions relating to trading of shares, be redeemed at the option of the Company on or after November 7 2007 and on or before October 1 0, 2011. The Bonds, however, fall due for redemption at the principal amount on October 1 7 2011, unless they are previously redeemed, converted, purchased or cancelled.

During the year, one FCCB having a face value of USD 1 00,000 has been converted against which the Company has allotted 43,860 fully paid equity shares of Rs. 1 0 each at a premium of Rs. 94 per share on the basis of effective price stated above

4) (Note No. 9 of Schedule 15 of financial statements) Scheme of Amalgamation between Company and SPIPL

Sasan Power Infraventures Private Limited (SPIPL), a wholly owned subsidiary of the Company, incorporated with the main object to operate, install, develop, promote and maintain projects in infrastructure sectors including setting up power plants etc., was amalgamated into the Company pursuant to the Scheme of Amalgamation (Scheme), as on and from January 1, 2011, being the appointed date pursuant to the approval of Board of Directors of the Company and sanctioned by the Hon'ble High Court of Judicature at Bombay vide its order dated April 29, 2011 which was filed with the Registrar of Companies on May 25, 2011 The Company has carried out the accounting treatment prescribed in the Scheme as approved by the Hon'ble High Court of Judicature at Bombay. The required disclosures as per paragraph 42 of Accounting Standard 14 (AS 14) 'Accounting for Amalgamations' as prescribed under the Companies (Accounting Standards) Rules, 2006 has been provided. Further, the Company has also been legally advised that the said accounting treatment carried out in line with the Scheme approved by the Hon'ble Court of Judicature at Bombay is not in violation of any applicable rules and regulations. Hence, in accordance with the Scheme

a) The Company has taken over all the assets aggregating to Rs. 1,887,775,1 20 and liabilities aggregating to Rs. 1 7,072,226 at their respective book values. The difference aggregating to Rs. 1,870,702,894 being the excess arising on transfer of assets and liabilities has been credited to General Reserve (arising pursuant to the Scheme).

b) There is no consideration payable or receivable on implementation of the Scheme as the Scheme involves a wholly owned subsidiary. The entire issued, subscribed and paid up capital of the subsidiary has been cancelled and no shares have been allotted or exchanged in lieu of the same.

c) Investments in equity share capital of SPIPL amounting to Rs. 1,780,1 00,000 has been written off in the Profit and Loss Account and an equivalent amount has been withdrawn from General Reserve vide board approval dated May 27, 2011, to off-set the said write off and credited the same to Profit and Loss Account.

Had the Scheme not prescribed the above accounting treatments, the treatment in accordance with AS 14 would have been:

a) Rs. 1,870,702,894 being the excess arising on transfer of assets and liabilities credited to General Reserve (arising pursuant to the Scheme), would have been credited to Capital Reserve.

b) Rs. 1,780,1 00,000 being the investment of the Company (share capital plus securities premium) in SPIPL debited to the Profit and Loss Account, would be debited to the Capital Reserve.

c) Rs. 1,780,1 00,000 withdrawn from General Reserve would have not been withdrawn The above accounting treatment as per the Scheme does not have a material impact on the Profit for the year and on the net worth of the Company.

5) (Note No. 10 of Schedule 15 of financial statements) Employee Stock Option Scheme (ESOS)

Pursuant to the approval accorded by the Shareholders on September 30, 2007 under Section 81(1 A) of the Companies Act,1 956, the Company has administered and implemented Employee Stock Option Scheme (ESOS) in terms of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,1 999 (Guidelines). The Board of Directors of the Company have constituted its ESOS compensation committee to operate and monitor the ESOS scheme which is administered through ESOS Trust.

The ESOS compensation committee of the Board of Directors of the Company approved a grant of upto 20,000,000 stock options to the eligible employees of the Company and its subsidiaries on May 8, 201 0. The options are granted to the employees of the Company and its subsidiaries on satisfying the performance and other eligibility criteria set out in ESOS Plan. In accordance with the scheme, each option entitles the employee to apply for one fully paid equity share of Rs. 1 0 of the Company at an exercise price of Rs. 1 62 per share. The vesting period of options will commence on expiry of one year from the grant date and all the options granted shall vest immediately. The vested options can be exercised by the eligible employees over a period of nine years from the date of vesting.

The Company has opted for accounting the Compensation expenses under 'Intrinsic Value Method'. The closing market price on the date of grant was Rs. 1 40.20 per share at National Stock Exchange (being latest trading price with highest trading volume) As the exercise price of the share is more than market price, the Company has not accounted for any compensation cost during the year. The Company has advanced Rs. 1,400,01 0,000 (disclosed under Schedule 7 - Loans and Advances) to the ESOS trust for purchase of equity shares from the market. The ESOS trust has purchased 8,500,000 shares from the given advance

6) (Note No. 11 of Schedule 15 of financial statements) Project Status

a) The Company is currently developing a 7,480 MW gas-fired power project to be located at the Dhirubhai Ambani Energy City in Dehra village, Dadri, Uttar Pradesh. The State of Uttar Pradesh in the year 2004 has acquired 2,1 00 acres of land and conveyed the same to the Company in the year 2005. While the State is in the process of acquiring further 400 acres of land for the project, a few land owners have filed writ petitions before the Allahabad High Court challenging the acquisition process under the Land Acquisition Act, 1894 ("the Act"). The Allahabad High Court has disposed off the writ petitions upholding the Section 4 notification and directed compliance with certain procedures relating to land acquisition that were left out earlier by State Government. The Company has filed appeal against the Allahabad High Court order which is now pending before Supreme Court. Few land owners have also filed appeals/petitions before the Supreme Court challenging Allahabad High Court upholding Section 4 notification and alleging highhanded and forceful actions during the acquisition process, which are pending.

b) The construction and other allied activities at Dadri project will be commenced as soon as the gas supply is firmed up and on settlement of land acquisition issues. Expenditure incurred during the construction and incidental to setting up the project are carried forward as "Capital Work in Progress". These expenses would be capitalised as fixed assets on completion of the project and commencement of commercial operations. Considering the current status and future plans with regard to the project, the Company does not envisage provision for impairment as at the balance sheet date.

7) (Note No. 12 of Schedule 15 of financial statements) Assignment of Samalkot Power Project

During the year, the Company had entered into Erection, Procurement, Construction and Service contract with Reliance Infrastructure Limited (R Infra) for its proposed 2,400 mega watt gas based power project (Samalkot Power Project) at Samalkot (Andhra Pradesh). As per the terms of contract, the Company had given an advance of Rs. 7,874,400,000 to R Infra. The Company has entered into Deed of assignment on March 21, 201 1 with a wholly owned subsidiary Samalkot Power Limited (special purpose vehicle (SPV) for Samalkot Power Project). In accordance with the terms of assignment, the Company has transferred all rights, obligations, assets including the aforesaid advance and liabilities, pertaining to the Samalkot Power Project to the said SPV. The said capital advance paid has been considered as an Inter-Corporate Deposit as at the year end.

8) (Note No. 13 of Schedule 15 of financial statements)

Disclosure under Accounting Standard 1 5 (revised 2005) "Employee Benefits" (AS-1 5) The Company has classified various employee benefits as under: Defined contribution plans

(a) Provident fund

(b) Superannuation fund

(c) State defined contribution plans

- Employees' Pension Scheme 1995 The provident fund and the state defined contribution plan are operated by the regional provident fund commissioner and the superannuation fund is administered by the trust. Under the schemes, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits.

Defined Benefit Plans

(a) Gratuity

(b) Leave encashment

Leave encashment is payable to eligible employees who have earned leave, during the employment and/or on separation as per the Company's policy.

11) (Note No. 14 of Schedule 15 of financial statements)

Related Party Transactions

As per accounting standard-1 8 'Related Party Disclosures' as prescribed under Companies (Accounting Standards) Rules, 2006 the Company's related parties and transactions are disclosed below:

A. Parties where Control exists

(i) Subsidiaries: (Direct and Step Down Subsidiaries)

1. Sasan Power Limited (SPL)

2. Rosa Power Supply Company Limited (RPSCL)

3. Maharashtra Energy Generation Limited (MEGL)

4. Vidarbha Industries Power Limited (VIPL)

5. Tato Hydro Power Private Limited (THPPL)

6. Siyom Hydro Power Private Limited (SHPPL)

7. Chitrangi Power Private Limited (CPPL)

8. Urthing Sobla Hydro Power Private Limited (USHPPL)

9. Kalai Power Private Limited (KPPL)

10. Coastal Andhra Power Limited (CAPL)

11. Reliance Coal Resources Private Limited (RCRPL)

12. Reliance Power International SARL (RPIS)

13. Sasan Power Infrastructure Limited (SPIL) (w.e.f 16.08.2010)

14. Erstwhile Sasan Power Infraventures Private Limited (Erstwhile SPIPL) (w.e.f. 1 6.08.2010) (Refer Note 9 above)

15. Maharashtra Energy Generation Infrastructure Limited (MEGIL)

16. Amulin Hydro Power Private Limited (AHPPL)

17. Emini Hydro Power Private Limited (EHPPL)

18. Mihundon Hydro Power Private Limited (MHPPL)

1 9. Jharkhand Integrated Power Limited (JIPL)

20. Reliance CleanGen Limited (Formerly Reliance Patalganga Power Limited) (RPPL) (w.e.f. 05.06.2010)

21. Rajasthan Sun Technique Energy Private Limited

(Formerly Ballerina Advisory Services Private Limited) (RSTEPL) (w.e.f. 29.07.2010)

22. Erstwhile Reliance Futura Limited (Erstwhile RFL) (w.e.f. 29.06.2010) (Refer Note 7 above)

23. Dahanu Solar Power Private Limited

(Formerly Reliance Last Mile Communications Private Limited) (DSPPL) (w.e.f. 08.09.2010)

24. Solar Generation Company (Rajasthan) Private Limited (SGCPL) (w.e.f. 29.09.2010)

25. Bharuch Power Limited (BPL) (w.e.f 08.06.2010)

26. Samalkot Power Limited (SMPL) (w.e.f. 29.07.2010)

27. Reliance Prima Limited (RPrima) (w.e.f. 30.06.2010)

28. Atos Trading Private Limited (ATPL) (w.e.f. 30.06.2010)

29. Atos Mercantile Private Limited (AMPL) (w.e.f 30.06.2010)

30. Coastal Andhra Power Infrastructure Limited (CAPIL)

31. Reliance Power Netherlands BV (RPN) (w.e.f. 09.07.2010)

32. PT Heramba Coal Resources (PTH) (w.e.f. 02.08.2010)

33. PT Avaneesh Coal Resources (PTA) (w.e.f. 02.08.2010)

34. Reliance Natural Resources Limited (RNRL) (w.e.f. 15.10.2010)*

35. Reliance Fuel Resources Limited (RFRL) (w.e.f. 1 5.1 0.201 0)*

36. Reliance Natural Resources (Singapore) Pte Limited (RNRL-Singapore) (w.e.f. 15.10.2010)*

37. Reliance Renewable Power Private Limited (RRPPL) (w.e.f. 29.10.2010)

38. Reliance Biomass Power Private Limited (RBPPL) (w.e.f 1 0.1 1.201 0)

39. Reliance Solar Resources Power Private Limited (RSRPPL) (w.e.f 1 0.11.201 0)

40. Reliance Clean Power Private Limited (RCPPL) (w.e.f 1 0.11.201 0)

41. Reliance Tidal Power Private Limited (RTPPL) (w.e.f 1 0.11.201 0)

42. Reliance Geothermal Power Private Limited (RGTPPL) (w.e.f 1 0.11.201 0)

43. Reliance Wind Power Private Limited (RWPPL) (w.e.f 11.11.201 0)

44. Reliance Green Power Private Limited (RGPPL) (w.e.f 11.11.201 0)

45. PT Sumukha Coal Services (PTS) (w.e.f 1 5.1 0.201 0)

46. PT Brayan BintangTiga Energi (BBE) (w.e.f 04.1 0.201 0)

47. PTSriwijiya BintangTiga Energi (SBE) (w.e.f 04.1 0.201 0)

transferred on account of Composite Scheme of Arrangement (Refer Note 7 above)

(ii) Major Investing Parties/Promoters having significant influence on the Company directly or indirectly

Companies

Reliance Infrastructure Limited (R Infra)

AAA Project Ventures Private Limited (APVPL)

Individual

Shri Anil D Amban

B. Other related parties with whom transactions have taken place during the year:

(i) Key Managerial Personnel

1. Shri K H Mankad (Whole-time Director) (up to March 13, 2011)

2. Shri J P Chalasani (Chief Executive Officer)

3. Shri Paresh Rathod (Manager)

(ii) Enterprises over which individual described in clause A (ii) above has control

1. Reliance Infocomm Infrastructure Private Limited (RIIPL)

2. Reliance General Insurance Company Limited (RGICL)

3. Reliance Communication Infrastructure Limited (RCIL)

4. Reliance Capital Limited (RCL)

5. Reliance Communication Limited (RCom) (iii) Others

BSES Kerala Power Limited (BKPL), subsidiary of R Infra

(iii) Other transactions:

a) The Company has pledged 51 % of its holding in equity shares of Sasan Power Limited and Coastal Andhra Power Limited in accordance with sponsored support agreement dated April 21, 2009 and July 7, 201 0 respectively as a security towards the term loan availed by these companies.

b) The Company has given equity support undertaking/financial support undertaking towards cost overrun to financial nstitution/banks for rupee/foreign currency loan taken by Rosa Power Supply Company Limited, Coastal Andhra Power Limited, Sasan Power Limited and Vidarbha Industries Power Limited.

c) The Company has transferred all rights, obligations and assets pertaining to 2,400 MW Samalkot Power Project to Samalkot Power Limited in accordance with Deed of Assignment with the said Company. (Refer Note 1 2 above)

d) Reliance Infrastructure Limited (R Infra) has issued Keep Well Letter in favour of a bank, who in turn has issued letter of credit in favour of FCCB holders of the Company, for which the Company has incurred Rs. 3,21 5,1 14 towards keep well charges during the period October 1 5, 201 0 to March 31, 2011

e) The Company on behalf of the subsidiary - JIPL has paid Rs. 8,900,000,000 as an advance against EPC contract entered by JIPL with R Infra. The said advance has been considered as Inter Corporate Deposit and accordingly disclosed.

f) During the year, pursuant to the Composite Scheme of Arrangement, the Company has entered into transactions with subsidiaries in accordance with the Scheme sanctioned by Hon'ble High Court. (Refer Note 7 above)

The above disclosures do not include transactions with public utility service providers, viz, electricity, telecommunications in the normal course of business.

9) (Note No. 1 6 of Schedule 1 5 of financial statements) Segment Reporting

The Company operates in two business segments i.e. Power Generation and Associated Business Activities (termed as "Others") Associated Business Activities includes project management, supervision and support services for generation and allied processes Business segment have been identified as reportable primary segment in accordance with Accounting Standard 1 7 'Segment Reporting' as prescribed under Companies (Accounting Standards) Rules, 2006, taking into account the organisational and internal reporting structure as well as evaluation of risk and return for these segments. Segment reporting policies are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included as "unallocable".

10) (Note No. 21 of Schedule 15 of financial statements)

Disclosure under Micro, Small and Medium Enterprises Development Act, 2006

There are no Micro and Small Scale Business Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at March 31, 2011. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

11) (Note No. 22 of Schedule 15 of financial statements)

The Company has used the option available under Accounting Standard 11 as referred under Note 1 (d) above. The exchange gain/loss (disclosed under Schedule 13) arising on revaluation of FCCB (including its interest), being a liability other than on depreciable assets, has been fully amortised upto March 31, 2011. Accordingly there is no unamortised balance of the same as at the year end in "Foreign Currency Monetary Item Translation Difference Account",

12) (Note No. 24 of Schedule 15 of financial statements)

The management has been legally advised that the Company is considered to be established with the object of providing nfrastructural facilities and accordingly, Section 372A of the Companies Act, 1 956 is not applicable to the Company.

13) (Note No. 26 of Schedule 15 of financial statements)

Figures for the previous year have been regrouped/rearranged wherever necessary. Previous year figures are not comparable with that of the current year on account of the effects of the Schemes.

 
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