Notes to Accounts of Reliance Infrastructure Ltd.
Mar 31, 2023
Terms / Rights attached to Equity Shares:
The Company has only one class of equity Share having par value of '' 10 per share. Each shareholder is eligible for one vote per share held. In the event of liquidation of the Company, the equity share holders will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amount. The distribution will be in proportionate to the number of equity shares held by the shareholders.
(e) During the year, the Company had issued and allotted 8,88,00,000 equity shares of '' 10 each, at a premium of '' 52 per equity share - (i) 2,42,00,000 equity shares to VFSI Holdings Pte. Ltd, a Foreign Institutional Investor and (ii) 6,46,00,000 equity shares to promoter group company, upon exercise of their right to convert the equivalent number of warrants held by them in terms of Preferential Issue under Chapter V of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations. 2018. The aforesaid equity shares shall rank pari-passu in all respect with the existing equity shares of the Company. The Company had received '' 137.64 Crore being 25% as application and allotment money in previous year and balance '' 412.92 Crore during the current year out of which '' 300.40 are kept in separate bank account and balance money has been utilised for the General Corporate Purpose, for which it was raised.
16.1 Nature and purpose of Other Reserves
(a) Capital Reserve:
The Reserve is created based on statutory requirement under the Companies Act, 2013, on account of forfeiture of equity shares warrants and Schemes of Amalgamation and arrangements, This is not available for distribution of dividend but can be utilised for issuing bonus shares.
This reserve is used to record the premium on issue of shares. The same can be utilized in accordance with the provisions of the Act.
(c) Debenture Redemption Reserve:
The Company has been creating debenture redemption reserve (DRR) till March 31, 2020 as per the relevant provision of the Companies Act, 2013, however according to Companies (Share Capital and Debenture) Amendment Rules, 2019 effective from August 16, 2019, being a listed entity, the Company is not required to create DRR , hence DRR is not created in the books of account for the financial year 2020-21 onwards.
(d) Capital Redemption Reserve:
The Capital Redemption Reserve is required to be created on buy-back of equity shares. The Company may issue fully paid up bonus shares to its members out of the capital redemption reserve account.
(e) Treasury Shares:
Reliance Infrastructure ESOS Trust has in substance acted as an agent and the Company as a sponsor retains the majority of the risks rewards relating to funding arrangement. Accordingly, the Company has recognised issue of shares to the Trust as the issue of treasury shares by consolidating Trust into standalone financial statements of the Company.
17.1 Non Convertible Debentures (NCD) of '' 977 Crore are secured as under:
(i) 12.50% Series 29 NCD of '' 274.30 Crore secured by all of the Company''s rights, title, interest and benefits in, to and under a specific bank account of the Company and subservient charge over current assets of the Company.
(ii) 11.50 % Series 18 NCD of '' 600 Crore, secured by (a) first pari-passu charge on Company''s Land situated at Village
Sancoale, Goa and Plant, property and equipment at Samalkot Mandal, East Godavari District Andhra Pradesh (b) first
pari-passu charge over Immoveable Property (free hold Land) & Moveable Property of BSES Kerala Power Limited and over the specified Property, Plant & Equipment (buildings) situated in Mumbai.
(iii) 11.50% Series 20E NCD of '' 102.70 Crore secured by first pari-passu charge over the specified Property, Plant &
Equipment (buildings) situated in Mumbai and all of the Company''s rights, title, interest and benefits in, to and under a
specific bank account of Company.
17.2. Term Loans from Banks of '' 98.69 Crore are secured as under:
(i) '' 61.24 Crore by way of first exclusive charge on certain Plant and Machinery of EPC division and on Property, Plant
and Equipment of Windmill Project of the Company.
(ii) '' 37.45 Crore by subservient charge on moveable Property, Plant and Equipment of the Company.
17.3 Term Loans from Others of '' 1,639.57 Crore are secured as under:
(i) '' 1,612.57 Crore by way of:
a. First pari passu charge on (i) all receivable arising out of sub-debt / loan advanced / to be advanced to Road SPVs
(ii) all amounts owing to and received and/or receivables by the Company and/ or any persons (s) on its behalf from claims under unapproved regulatory assets. (iii) All amounts owing to and/or received and/or receivable by the Company from certain liquidity event.
b. Second pari passu charge over on the current assets of Company
c. Exclusive charge over (i) all rights, title, interest and benefit of the Company on investment in Redeemable Debentures of DA Toll Road Private Limited (ii) specified buildings of the Company (iii) over the ''Surplus Proceeds" from Sale of Shares of BSES Rajdhani Power Limited (BRPL) and / or BSES Yamuna Power Limited (BYPL), to be received by the Borrower or any Group Company of the Borrower (incl. subsidiary, affiliates, etc.). Charge on these loans shall rank pari-passu subject to, other lender(s)/security trustee having charge, on the charged assets, sharing pari- passu letters wherever applicable (iv) all amounts owing to, and received and/or receivable by the Company on its behalf from Delhi Airport Metro Express Pvt. Ltd
d. Pledge of 13,43,100 Equity Shares of NK Toll Road Limited, 15,63,000 Equity Shares of DS Toll Road Limited, 5,88,330 Equity Shares of GF Toll Road Private Limited, 10,22,700 Equity Shares of KM Toll Road Private Limited, 1 1,1 3,300 Equity Shares of HK Toll Road Private Limited, 38,26,695 Equity Shares of TK Toll Road Private Limited, 32,23,476 Equity Shares of TD Toll Road Private Limited, 55,23,678 Equity Shares of SU Toll Road Private Limited, 2,462 Equity Shares of JR Toll Road Private Limited, 2,465 Equity Shares of PS Toll Road Private Limited and 1,88,28,000 Equity Shares of BSES Kerala Power Limited.
e. Non-disposal Undertaking on 19% Equity Share holding of SU Toll Road Private Limited, GF Toll Road Private Limited, KM Toll Road Private Limited, HK Toll Road Private Limited, TD Toll Road Private Limited , TK Toll Road Private Limited, NK Toll Road Limited and DS Toll Road Limited . (As per application regulations, these 19% shares are kept in safe keep account instead of creation of pledge)
(ii) '' 27 Crore is secured by subservient charge on all current assets of the Company, present and future.
Non-Convertible Debentures (NCDs) Series-18 : Axis Trustee Services Ltd ("Trustee") had issued loan recall notice on September 20, 2019 due to downgrade of Company''s ratings. In terms of the Security Interest (Enforcement) Rules, 2002, Trustee has enforced the security and taken the possession of the mortgaged properties in respect of the said NCDs. NCDs Series-20E: In terms of the Security Interest (Enforcement) Rules, 2002, IDBI Trusteeship Services Limited ("Trustee") has enforced the security and taken the possession of the mortgaged properties in respect of the said NCDs. NCDs Series-29: Trustee of NCD Series 29 had issued loan recall notice on December 8, 2020 following which the entire outstanding has become due. The Company has entered into a Settlement Agreement with the Debenture holders on March 9, 2022, wherein the due date has been extended till September 30, 2022. The Trustee for the NCDs Series-18, Series-20E and Series-29 have invoked the security provided by the Company and
have adjusted if any, dues towards NCDs against the proceeds received therefrom. The Company has not been informed as regards
shortfall in the recovery of outstanding debt
17.5 The current assets of the Company are provided as security to the lenders and subservient charge on certain corporate guarantees.
17.6 During the year, Yes Bank Limited has assigned or transferred all its exposure i.e. credit facilities sanctioned, to company to J.C. Flowers Assets Reconstruction Private Limited (JCF ARC), a Assets Reconstruction Company, vide Assignment Agreement dated December 29, 2022 together with all underlying security interest.
17.7 During the year, the Company has not declared willful defaulter by any bank, financial institution or any other lender.
17.8 The Company at its Board Meeting dated September 25, 2021 has approved issue of unsecured foreign currency convertible bonds (FCCBs) upto U.S.$100 million maturing at the end of 10 years and 1 day from the issue date or the date of the FCCBs being fully paid up, whichever is later, with a coupon rate of 4.5% p.a. on private placement basis. The FCCBs shall be convertible into approximately 6.64 crore equity shares of ''10 each of the Company in accordance with the terms of the FCCBs, at a price of '' 111 (including a premium of '' 101) per equity share. The Company in its Board Meeting dated August 5, 2022 has approved issue of FCCBs not more than U.S. $ 400 million, consisting of U.S. $ 1 million each, maturing at the end of 10 years and 1 day from the issue date or the date of the FCCBs being fully paid up, whichever is later, with a coupon rate of 5% p.a. on private placement basis. The FCCBs shall be convertible into approximately 25.84 Crore equity shares of ''10 each of the Company in accordance with the terms of the FCCBs, at a price of '' 123 (including a premium of '' 113) per equity share.
31. Contingent Liabilities and Commitments
(a) Contingent Liabilities:
i) Claims against the Company not acknowledged as debts and under litigation aggregates to '' 1,650.24 Crore (March 31, 2022 - '' 1,264.96 Crore) .These include claim from suppliers aggregating to '' 561.83 Crore (March 31, 2022 -'' 22.14 Crore), income tax claims '' 563.29 Crore (March 31, 2022 - '' 724.47 Crore), indirect tax claims aggregating to '' 438.16 Crore (March 31, 2022 - '' 443.80 Crore) and other claims ''86.96 Crore (March 31, 2022 - '' 74.55 Crore). The above claims do not include claims/arbitration against the Company by the suppliers where the Company has also filed counter claims as the Company does not expect any liability.
ii) With respect of Energy Purchase Agreeement (EPA) entered with Dhursar Solar Power Private Limited (DSPPL), The Maharashtra Electricity Regulatory Commission (MERC) vide order dated October 21, 2016 allowed partial cost claimed by the Company. Aggrieved by the said order, the Company had challenged the said order before Appellate Tribunal for Electricity (APTEL). The APTEL has upheld the findings of MERC and the Company filed an appeal before the Supreme Court of India against the APTEL Order. The matter is currently pending before the Supreme Court of India. Post transfer of Mumbai Power Business to Reliance Electric Generation and Supply Limited (REGSL), a inter-se agreement was entered between REGCL, DSPPL and the Company, whereby the Company has agreed that the liability of REGSL to make tariff payments for the energy supplied by DSPPL is limited to the MERC approved tariff and the Company has agreed to pay the differential amount between tariff payment as per EPA and MERC approved tariff to the DSPPL through an agreement cum indemnity. Pending outcome of the matter, the Company continues to account differential expenditure as cost on monthly basis. The Company has also legally been advised that it has good case on merit and have fair chance to succeed. Based on the above facts the Company has not considered the said agreement cum indemnity as an Onerous Contract. The Company does not expect any cash outflow on this account.
(b) Capital and Other Commitments:
i) Uncalled liability on partly paid shares/warrants '' 10.70 Crore (March 31, 2022 - '' 558.20 Crore).
ii) The Company has given equity / fund support / other undertakings for setting up of projects / cost overrun in respect of various infrastructure and power projects being set up by Company''s subsidiaries and associates; the amounts of which currently are not ascertainable.
(c) During the financial year 2020-21, the Company, as a part of settlement with Yes Bank Limited, had sold its Investments property including Property, plant and equipment at Santacruz at a total transaction value of '' 1,200 Crore through the conveyance deed entered with Yes Bank Limited. The Company is entitled to exercise its rights/option to buy back this property after 8.5 years from the date of sale, subject to fulfillment of the condition precedents at an agreed price as per option agreement entered between parties.
d) Details of Material Transactions with Related Party
(i) Transactions during the year (Balance Sheet heads)
Investment in Equity share of RePL '' 335.08 Crore through conversion of ICD and interest receivable 2021-22
Investment in Equity share of RePL '' 595.00 Crore through conversion of ICD and interest receivable.
(ii) Balance sheet heads (Closing balance - Gross)
Trade payable, advances received and other liabilities CPPL '' 911.03 Crore, DSPPL '' 330.34 Crore and SPL '' 274.1 7 Crore . Investment in Equity of RePL '' 970.45 Crore, MMOPL '' 761.48 Crore, SUTRPL '' 209.69 Crore, TKTRPL '' 144 Crore,GFTRPL '' 195.12 Crore, CBDT '' 1 69.49 Crore, BKPL 82.81 Crore, BRPL '' 530.40 Crore and BYPL '' 283.56 Crore . ICD given to RePL '' 414.32 Crore and MMOPL '' 283.79 Crore . Subordinate debt given to PSTL '' 1,078.51 Crore, DAMEPL '' 787.53 Crore, HKTRPL '' 302.26 Crore, GFTRPL '' 128.59 Crore, JRTRPL '' 156.18 Crore, TKTRPL '' 215.04 Crore, NKTRL '' 190.27 Crore and MMOPL '' 209.65 Crore . Trade Receivables, Advances given and other receivables for rendering services SaPoL '' 2,845.36 Crore. Non Current Assets Held for sale and Discontinued Operations of KMTL '' 544.94 Crore.
Trade payable, advances received and other liabilities CPPL '' 911.03 Crore, DSPPL '' 289.26 Crore and SPL '' 277.1 3 Crore . Investment in Equity of RePL '' 813.19 Crore, MMOPL '' 761.48 Crore, SUTRPL '' 209.69 Crore, BRPL '' 530.40 Crore and BYPL '' 283.56 Crore . ICD given to RePL '' 547.51 Crore and MMOPL '' 283.79 Crore . Subordinate debt given to PSTL '' 1,078.51 Crore, DAMEPL '' 787.53 Crore, HKTRPL '' 302.26 Crore, TKTRPL '' 215.04 Crore and NKTRL '' 1 98.27 Crore. Trade Receivables, Advances given and other receivables for rendering services SaPoL '' 2,661.84 Crore. Non Current Assets Held for sale and Discontinued Operations of KMTL '' 544.94 Crore.
(iii) Guarantees and Collaterals 2022-23
Corporate Guarantee PSTL '' 796.41 Crore, TDTRPL '' 401.03 Crore, TKTRPL '' 295.23 Crore, JRTR '' 227.69 Crore and RePL '' 177.85 Crore outstanding as at March 31, 2023.
Corporate Guarantee PSTL '' 786.71 Crore and JRTR '' 307 Crore outstanding as at March 31, 2022.
f) Details of Transactions with Person having Control: Sitting fees paid NIL during the year 2022-23 (2021-22: '' 0.03 Crore.
Notes:
1) The above disclosure does not include transactions with/as public utility service providers, viz, electricity, telecommunications etc. in the normal course of business.
2) Transactions with Related Party which are in excess of 1 0% of the total revenue of the Company as per standalone financial statements are considered as Material Related Party Transactions.
34. Interest in Jointly Controlled Operations
(i) Coal Bed Methane: The Company along with M/s. Geopetrol International Inc. and Reliance Natural Resources Limited *(the consortium) was allotted 4 Coal Bed Methane (CBM) blocks from Ministry of Petroleum and Natural Gas (Mo PNG) covering an acreage of 3,266 square kilometers in the States of Madhya Pradesh, Andhra Pradesh and Rajasthan. The consortium had entered into a contract with Government of India for exploration and production of CBM gas from these four CBM blocks. The Company as part of the consortium had 45% share in each of the four blocks. M/s. Geopetrol International Inc was appointed the operator on behalf of the consortium for all the four CBM blocks. In SP(N) CBM block, Company subsequently acquired 10% share and Operatorship from M/s. Geopetrol International Inc.
The Board of Directors of the Company has approved the transfer of operatorship from M/s. Geopetrol International Inc to the Company on February 14, 2015. MoPNG approved the same on April 28, 2016 and amendment to Contract has been conveyed on January 29, 2018. DGH approved exploration Phase-II commencement date as February 28, 2018 with Company as Operator. Currently the company is awaiting the change of ownership of Environment clearance which was applied to Ministry of Environment Forest and Climate Change on March 28, 2018.
(ii) MZ-ONN-2004 / 2 : The Company along with M/s. Geopetrol International Inc, NaftoGaz India Private Limited and Reliance Natural Resources Limited *(the consortium) was allotted Oil and Gas block from Ministry of Petroleum and Natural Gas (MoPNG), in the State of Mizoram under the New Exploration Licensing Policy (NELP-VI) round, covering an acreage of 3,619 square kilometers and the consortium had signed a production sharing contract with the Government of India for exploration and production of Oil and Gas from block. The Company as part of the consortium had 70% share in the block. M/s NaftoGaz India Private Limited was the operator on behalf of the consortium for the block.
MoPNG, Government of India in October 2012, after six years of the award of block, observed that NaftoGaz India Limited had falsely represented itself as the subsidiary of NaftoGaz of Ukraine at the time of bidding and served notice of termination to all consortium members referring relevant clause of NELP-VI notice inviting offer (NIO) and Article 30.3(a) of the Production Sharing Contract (PSC) and demanded to pay penalty towards unfinished minimum work program. The Company has received letter dated April 16, 2015 from DGH to deposit USD 9,467,079 as cost of unfinished Minimum Work Program (MWP) to MoPNG. The claim has been contested by the Company vide letter dated June 21, 2014, May 25, 201 5 and March 05, 2016. The said amount is disclosed under Contingent Liability in Note No. 31 above.
(* Share of RNRL has since been demerged to 4 Companies of Reliance Power Limited).
(iii) Rinfra Astaldi Joint Venture (Metro): The Company along with ASTALDI S.p.A. (ASTALDI), a company incorporated under the law of Italy, consortium was allotted a project for Part Design and Construction of Elevated Viaduct and Elevated Stations [Excluding Architectural Finishing & Pre-engineered steel roof structure of Stations] from Chainage (-) 550 M TO 31872.088 M of LINE-4 CORRIDOR [Wadala-Ghatkopar-Mulund-Thane Kasarvadavali] of Mumbai Metro Rail Project of MMRDA. Company has entered into subcontract agreement with Milan Road Buildtech LLP (MILAN) for balance project work with effective date from 01st October 2021.
iv) Kashedighat JV: The Company along with "Construction Association Interbudmontazh" (CAI), a company registered at Ukraine, consortium was allotted a project from Ministry of Road Transport & Highways (MoRTH) through PWD, Maharashtra for Rehabilitation and Upgradation of NH-66 (Erstwhile NH-17) including 6 Lanes near Parshuram village in the State of Maharashtra under NHDP-IV on EPC Mode of Contract.
(a) Description of segments and principal activities
The Company is predominantly engaged in the business of Engineering and Construction (E&C). E&C segment renders comprehensive, value added services in construction, erection and commissioning. All other activities of the Company revolve around E&C business. As such there are no separate reportable segments, as per the Ind-AS 108 on Operating Segment.
(b) Information about Major Customer
Revenue from operations include '' 502.90 Crore (Previous Year: '' 1,1 36.23 Crore) from two customer (Previous Year: two customer) having more than 10% of the total revenue.
(c) Geographical Segment:
The Company''s operations are mainly confined in India. The Company does not have material earnings from business segment outside India. As such, there are no reportable geographical segments.
36. The Company has constituted a Corporate Social Responsibility Committee (CSR Committee) in compliance with the provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014. The CSR Committee consists of Shri S S Kohli as Chairman, Ms. Manjari Kacker, Shri K Ravikumar, Ms.Chhaya Virani and Shri Punit Garg as members. The CSR Committee has formulated a Corporate Social Responsibility Policy (CSR policy) indicating the CSR activities to be
undertaken by the Company. The Company is not required to spend any amount towards Corporate Social Responsibility as per section 135 of the Act since there is no average profit in the preceding three financial years calculated as per the provisions of the Act.
37. Investment in Delhi Airport Metro Express Private Limited
Hon''ble Supreme Court on September 9, 2021 upheld the arbitral award dated May 11, 2017 in favour of Delhi Airport Metro Express Private Limited (DAMEPL), a subsidiary of the Company, in dispute with Delhi Metro Rail Corporation Limited (DMRC), consequent to DAMEPL''s termination of the Concession Agreement for the Airport Metro. DMRC was directed to pay DAMEPL '' 2,945 crore and pre-award and post-award interest.
On March 17, 2023 the Hon''ble Delhi High Court (DHC) directed Government of India (GOI) & Government of National Capital Territory, Delhi (GONCTD) to provide sovereign guarantee/ subordinate debt to DMRC by March 31, 2023 so as to enable it to satisfy the Award by April 30, 2023. Alternatively, the order directed GOI to return the funds repatriated by DMRC after March 10, 2022 order, by March 31, 2023, so that DMRC could then pay the entire remaining amount to DAMEPL forthwith. The order along with modified order dated March 29, 2023, further directed attachment of DMRC''s all accounts excluding salary and O&M expenses by April 1, 2023 if the aforesaid options failed to materialize, and the Court reserved its right to issue further directions to GOI and GONCTD to satisfy the Award.
The GOI and GONCTD filed Special Leave Petitions (SLPs) before the Supreme Court. DAMEPL has also filed a SLP challenging the review order dated March 29, 2023. The 3 SLPs were heard on April 10, 2023 by the Bench headed by the Chief Justice of India and will be next heard on July 14, 2023. DMRC''s curative petition against the dismissal of its review petition relating to the judgement dated September 09, 2021 is also listed before the Supreme Court on July 20, 2023. In view of the above, DAMEPL has continued to prepare its financial statement on a ''Going Concern'' basis.
DMRC had so far paid '' 2,599.1 7 crore to DAMEPL, as per Hon''ble Delhi High Court''s interim orders so far. DAMEPL has utilised the amount for reducing its debt.
38. The Reliance Group of companies of which the Company is a part, supported an independent Company ("EPC Company") to inter alia undertake contracts and assignments for the large number of varied projects in the fields of Power (Thermal, Hydro and Nuclear), Roads, Telecom, Metro Rail, etc. which were proposed and/or under development by the Reliance Group. To this end along with other companies of the Reliance Group, the Company funded EPC Company by way of project advances, subscription of its debentures and inter corporate deposits given. The total exposure of the Company as on March 31, 2023 is '' 6,505.29 crore (net of provision of '' 3,972.1 7 crore). The Company had also provided corporate guarantees aggregating to '' 1,775 crore. The activities of EPC Company have been impacted by the reduced project activities of the companies of the Reliance Group.
Given the huge opportunity in the EPC field particularly considering the Government of India''s thrust on infrastructure sector coupled with increasing project and EPC activities of Reliance Group, the EPC Company with its experience will be able to achieve substantial project activities in excess of its current levels, thus enabling the EPC Company to meet its obligations. Based on the available facts, the provision made is adequate to deal with any contingency relating to recovery from the EPC Company. The Company had further provided corporate guarantees of ''4,895.87 crore on behalf of certain companies towards their borrowings. As per the reasonable estimate of the Management of the Company, it does not expect any obligation against the above guarantee amount.
39. Exceptional ItemsExceptional Item for the year ended March 31, 2023 includes:
i) The Company has net receivables aggregating to '' 1,621.15 crore from Reliance Power Group as on March 31, 2023. Management has recently performed an assessment of these receivables and based on the assessment the same has been provided and considered as exceptional item for the year ended March 31, 2023.
ii) KM Toll Road Private Limited (KMTR), a subsidiary Company, has terminated the Concession Agreement with National Highways Authority of India (NHAI) for Kandla-Mundra Road Project (Project) on May 7, 2019, on account of Material Breach and Event of Default under the provisions of the Concession Agreement (Agreement) by NHAI. Management has recently performed an assessment of exposure in KMTR of '' 544.94 crore and based on the assessment the same has been provided and considered as exceptional item for the year ended March 31, 2023.
iii) JR Toll Road Private Limited (JRTR), a wholly owned subsidiary, has been awarded the Concession on Build, Operate, and Transfer (BOT) basis, Jaipur Reengus section of National Highway No. 11 in the state of Rajasthan. During the year, NHAI has wrongfully terminated the Concession Agreement w.e.f. December 15, 2022 alleging defaults related to certain contractual obligations. In December 2022, JRTR filed a petiotion u/s 9 of the Arbitration and Conciliation Act, 1 996 against the NHAI in Hon''ble Court of Delhi High Court (DHC) for interim protection on account of wrongful termination, which was dismissed by DHC vide order dated May 19, 2023. Considering the above facts, total exposure of '' 226.56 crore in the JRTR has been provided and considered as exceptional item for the year ended March 31,
40. i) The Company is engaged in the business of providing infrastructural facilities as per Section 186 (11) read with
Schedule VI of the Act. Accordingly, Section 186 of the Act is not applicable to the Company.
ii) During the year, the Company has not entered, with any scheme of arrangements in terms of section 230 to 237 of the Companies Act, 2013 and there is no transactions with struck off company.
iii) No Fund have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any person or entity, including foreign entities (''Intermediaries'') with the understanding, whether recorded in writing or otherwise, that the intermediary shall land or invest in party indentified by or on behalf of the Company (''ultimate beneficiaries''). The Company has not received any funds from the any party with the understanding that the Company shall whether, directly or indirectly lend or invest in other person or entities identified by or on behalf of the Company (''ultimate beneficiaries'') or provide any guarantee, security or the like on behalf of the ultimate beneficiaries.
iv) The Company has complied with the provision of section 2(87) of the Companies Act, 2013 read with the Companies (Restrictions on number of layers) Rules, 2017.
41. The Company has net exposure aggregating to ''2,781.28 crore in its eight subsidiaries (road SPVs) as on March 31, 2023. Management has recently performed an impairment assessment against these exposures, by considering inter-alia the valuation of these subsidiaries carried out by independent external valuation expert. The determination of the value in use/fair value involves significant Management judgement and estimates on the various assumptions including relating to growth rates, discount rates, terminal value etc. The Company is confident of recovering its entire investments in road SPVs. Accordingly, based on the assessment and external valuation report, impairment of said exposure is not considered.
(b) Defined Benefit Plan Provident Fund
The benefit involving employee established provident funds, which require interest shortfall to be recompensated are to be considered as defined benefit plans. Any shortfall arising in meeting the stipulated interest liability, if any, gets duly provided for in the accounts of Provident Fund Trust maintained by the Company.
Gratuity
The Company operates a gratuity plan administered by insurance company. Every employee is entitled to a benefit equivalent to fifteen days salary last drawn for each completed year of service in line with the Payment of Gratuity Act, 1972 or Company scheme whichever is beneficial. The same is payable at the time of separation from the Company or _retirement, whichever is earlier. The benefits vest after five years of continuous service._
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
Gratuity Plan for Jointly Controlled Operations- Unfunded
The Gratuity plan in the Jointly Controlled Operation of the Company viz RInfra Astaldi Joint Venture (Metro) is unfunded. During the year gratuity expenses of '' Nil ( '' 0.05 Crore for the Financial Year 2021 -22) has been provided in statement of profit and loss and liability as at March 31, 2023 is Nil ( Nil as at March 31, 2022).
Risk Exposure:
Investment Risk: The Present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of reporting period on government bonds. If the return on plan asset is below this rate, it will create plan defecit.
Interest Risk: A decrease in the bond interest rate will increase the plan liability: however, this will be partially offset by an increase in th return on the plan debt investment.
Liquidity Risk: The present value of the defined plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.
Salary Risk: The present value of the defined plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.
There are no investments by loanees as at March 31, 2023 in the shares of the Company and Subsidiary Companies.
As at the year-end, the Company-
(a) has no loans and advances in the nature of loans to firms / companies in which directors are interested.
(b) The above amounts exclude subordinate debts.
44. The Company has outstanding obligations payable to its lenders and in respect of loan arrangements of certain entities, including subsidiaries/associates where the Company is also a guarantor and where certain amounts have also fallen due. The Company has repaid substantial debt in the earlier financial years as well as certain debt repayments in the current financial year and is confident of meeting balance obligations by way of time bound monetisation of its assets and receipt of proceeds from various arbitral awards and claims including receivables from Delhi Airport Metro Express Private Limited (DAMEPL). Accordingly, notwithstanding the dependence on these uncertain events, the Company continues to prepare its Standalone Financial Statement on a ''Going Concern'' basis.
The Company has entered into cancellable leasing agreement for office, residential and warehouse premises renewable by mutual consent on mutually agreeable terms. The Company has accounted '' 3.79 Crore as lease rental for the financial year 2022-23 ('' 12.21 Crore for the financial year 2021-22).
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes mutual funds and equity shares that have a quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period.
Level 2: The fair value of financial instruments that are not traded in an active market (for example over-the-counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, preference shares, debentures and financial guarantee which are included in level 3.
(c) Valuation technique used to determine fair value
Specific valuation techniques used to value financial instruments include
¦ the use of quoted market prices or dealer quotes for similar instruments
¦ the fair value of the remaining financial instruments is determined using discounted cash flow analysis / Earnings / EBITDA multiple method.
All of the resulting fair value estimates are included in level 1 and 2 except for unlisted equity securities, where the fair values have been determined based on present values and the discount rates used were adjusted for counterparty or own credit risk.
The carrying amounts of trade receivables, trade payables, advances to employees including interest thereon (secured/ unsecured), inter corporate deposits, security deposits, deposits from customers, other receivable, loans to employees, interest receivables, subordinate debt, unpaid dividends, bank deposits with original maturity of more than 3 months but less than 12 months, bank deposits with more than 12 months maturity, capital creditors, loans to employee and cash and cash equivalents are considered to have their fair values approximately equal to their carrying values. The fair values for other assets and liabilities were calculated based on cash flows discounted using a current lending rate. They are classified as level 3 fair values in the fair value hierarchy if there is inclusion of unobservable inputs including counterparty credit risk. The fair values of noncurrent borrowings and finance lease obligations are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk.
The Company''s business activities expose it to a variety of financial risks, namely liquidity risk, market risks and credit risk. The Company''s senior management has overall responsibility for the establishment and oversight of the Company''s risk management framework. The Company has constituted a Risk Management Committee, which is responsible for developing and monitoring the Company''s risk management policies.
The Company''s risk management is carried out by the treasury department under policies approved by the board of directors. Treasury Department identifies, evaluates and hedge financial risks in close cooperation the Company''s operating units.
The Company is exposed to credit risk, which is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. Credit risk arises from cash and cash equivalents, investments carried at amortised cost or fair value through profit & loss and deposits with banks and financial institutions, as well as credit exposures to trade/non-trade customers including outstanding receivables and loans.
(i) Credit risk management
Credit risk is managed at segment level and corporate level depending on the policy surrounding credit risk management. For banks and financial institutions, only high rated banks/institutions are accepted. Generally all policies surrounding credit risk have been managed at segment and corporate level. Each segment is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. For other financial assets, the Company assesses and manages credit risk based on internal credit rating system. The finance function consists of a separate team who assess and maintain an internal credit rating system. Internal credit rating is performed on a Company basis for each class of financial instruments with different characteristics. The Company assigns the following credit ratings to each class of financial assets based on the assumptions, inputs and factors specific to the class of financial assets:
Rating 1: High-quality assets, negligible credit risk
Rating 2: Quality assets, low credit risk
Rating 3: Medium to low quality assets, Moderate to high credit risk Rating 4: Doubtful assets, credit-impaired
(ii) Provision for expected credit losses
Trade receivables, retentions on contract and amounts due from customers for contract work
The provision for expected credit losses on financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs, based on the Company''s past history, existing market conditions, current creditability of the party as well as forward looking estimates at the end of each reporting period.
Investments other than equity instruments
Investments in financial assets other than equity instruments are exposed to the risk of loss that may occur in future from the failure of counterparties or issuers to make payments according to the terms of the contract. The maximum exposure to credit risk for each class of financial assets is the carrying amount of that class of financial instruments presented in the balance sheet.
Expected credit loss for financial assets where general model is applied
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by maintaining availability under committed credit lines.
Management monitors rolling forecasts of the Company''s liquidity position and cash and cash equivalents on the basis of expected cash flows. This is generally carried out at local level in the operating companies of the Company in accordance with practice and limits set by the Company. These limits vary by location to take into account the liquidity of the market in which the entity operates. In addition, the Company''s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans
Further in view of the certain cash flow mismatches the Company is considering debt resolution plan. Also the time bound monetisation of assets as well as favorable and timely outcome of various claims will enable the Company to meet its obligation. The Company is confident that such cash flows would enable it to service its debt, realise its assets and discharge its liabilities in the normal course of its business.
(i) Foreign currency risk
The Company operates in a business that exposes it to foreign exchange risk arising from foreign currency transactions, primarily with respect to the USD. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the Company''s functional currency (INR). The risk is measured through a forecast of highly probable foreign currency cash flows. The objective of the Company is to minimise the volatility of the INR cash flows of highly probable forecast transactions.
(a) The Company considers the following components of its Balance Sheet to be managed capital:
1. Total equity - Share Capital , Share warrants, Share premium, Retained profit, General reserves and Other reserves
2. Working capital.
(b) The Company manages its capital so as to safeguard its ability to continue as a going concern and to optimise returns to our shareholders. The capital structure of the Company is based on management''s judgement of the appropriate balance of key elements in order to meet its strategic and day-to-day needs. We consider the amount of capital in proportion to risk and manage the capital structure in light of changes in economic conditions and the risk characteristics of the underlying assets.
The Company''s aim to translate profitable growth to superior cash generation through efficient capital management. The Company''s policy is to maintain a stable and strong capital structure with a focus on total equity so as to maintain investor, creditor, and market confidence and to sustain future development and growth of its business. The Company''s focus is on keeping strong total equity base to ensure independence, security, as well as a high financial flexibility for potential future borrowings, if required, without impacting the risk profile of the group. The Company will take appropriate steps in order to maintain, or if necessary adjust, its capital structure.
The management monitors the return on capital as well as the level of dividends to shareholders. The Company''s goal is to continue to be able to return excess liquidity to shareholders by continuing to distribute dividends in future periods.
49. The figures for the previous year ended March 31, 2022 have been regrouped and rearranged to make them comparable with those of current year. Figures in bracket indicate previous year''s figures. @ - represents figures less than '' 50,000 which have been shown at actual in brackets with @.
50. Pu rsuant to first proviso to sub-section (3) of section 129 of the Act, read with rule 5 of Companies (Accounts) Rules, 2014, the Company has attached salient features of the financial statement of its subsidiaries, associates and joint-ventures in form AOC-1 with its Consolidated Financial Statements.
Mar 31, 2022
* The Balance equity stake is held by another subsidiary, Reliance Airport Developers Limited
** 26,1 1,20,000 (26,1 1,20,000) equity shares of Mumbai Metro One Private Limited, 38,66,574 (38,66,574) equity shares of SU Toll Road Private Limited, 9,89,840 (9,89,840) equity shares of DS Toll Road Limited, 3,72,609 (3,72,609) equity shares of GF Toll Road Private Limited, 20,41,535 (20,41,535) equity shares of TD Toll Road Private Limited, 24,23,574 (24,23,574) equity shares of TK Toll Road Private Limited, 7,05,090 (7,05,090) equity shares of HK Toll Road Private Limited, 8,50,570 (8,50,570) equity shares of NK Toll Road Private Limited are kept in safekeep accounts.
*** Include '' 678.62 crore in respect of Non-Convertible Redeemable Preference Shares in Reliance Infra Projects International Limited
A 53,03,99,995 (53,03,99,995) equity shares of BSES Rajdhani Power Limited, 28,35,59,995 (28,35,59,995) equity shares of BSES Yamuna Power Limited, 5,470 (5,470) equity shares of PS Toll Road Private Limited, 26,57,100 (26,57,100) equity shares of DS Toll Road Limited, 22,83,270 (22,83,270) equity shares of NK Toll Road Limited, 90,22,007 (90,22,007) equity shares of SU Toll Road Private Limited, 2,676 (2,676) equity shares of JR Toll Road Private Limited, are pledged with the lenders of the respective investee Companies.
# 2,465 (2,465) equity shares of PS Toll Road Private Limited,1 1,13,300 (1 1,13,300) equity shares of HK Toll Road Private Limited, 1 5,63,000 (1 5,63,000) equity shares of DS Toll Road Limited, 13,43,100 (13,43,100) equity shares of NK Toll Road Limited, 55,23,678 (55,23,678) equity shares of SU Toll Road Private Limited, 5,88,330 (5,88,330) equity shares of GF Toll Road Private Limited, 2,462 (2,462) equity shares of JR Toll Road Private Limited, 32,23,476 (32,23,476) equity shares of TD Toll Road Private Limited,38,26,695 (38,26,695) equity shares of TK Toll Road Private Limited, 16,65,35,749 (40,35,749) equity shares of Reliance Power Limited, 1,88,28,000 (1,88,28,000) equity shares of BSES Kerala Power Limited and 2,727,936,782 Redeemable Non-Convertible Debentures in DA Toll Road Private Limited are pledged with lenders of the Company.
## Written off
$ During the year, Reliance Power Limited has allotted 59,50,00,000 equity shares and 73,00,00.000 warrants convertible into equivalent number of equity shares on preferential basis, at the issue price of '' 10 each, to the Company amounting to '' 595 crore against equity shares and '' 182.50 crore, as amount equivalent to 25% of issue price against warrants respectively, by conversion of its existing debt. Pursuant to the allotment of equity shares, the aggregate holding of the Company in Reliance Power Limited has increased to 22.40%.
14. Non Current Assets Held for sale and Discontinued Operations KM Toll Road Private Limited (KMTR)
KM Toll Road Private Limited (KMTR), a subsidiary of the Company and part of road SPVs, has terminated the Concession Agreement with National Highways Authority of India (NHAI) for Kandla Mundra Road Project (Project) on May 7, 2019, on account of Material Breach and Event of Default under the provisions of the Concession Agreement (Agreement) by NHAI. The operations of the Project have been taken over by NHAI. In terms of the provisions of the Agreement, NHAI is liable to pay KMTR a termination payment as the termination has arisen owing to NHAI Event of Default and its has also raised further claims towards damages for the breaches of NHAI as per the Agreement. KMTR has invoked dispute resolution process under clause 44 of the Agreement. Subsequently on August 24, 2020 NHAI has release ''181.21 crore towards termination payment, which was utilized toward debt servicing.
As a part of the dispute resolution, KMTR has invoked arbitration and it is confident of fair outcome. KMTR filed its statement of claims before Arbitral Tribunal claiming termination payment '' 866.14 crore as the termination has arisen owing to NHAI''s Event of Default (This amount is arrived at after adjusting the amount of aforementioned payment received from NHAI). KMTR has also filed further claims of '' 981.63 crore towards damages for the breaches of NHAI as per the Agreement. Pending final outcome of the dispute resolution process and as legally advised, the claims for the Termination Payment are considered fully enforceable. Notwithstanding the dependence on above material uncertain events, KMTR continues to prepare its financial statement on a Going Concern basis. The Company is confident of recovering its entire investment in KMTR of '' 544.94 crore as at March 31, 2022 ( '' 544.94 crore as at March 31, 2021) and hence, no provision for impairment of the KMTR is considered in the financial statement. The Investments in the KMTR are classified as Non Current Assets held for sale as per Ind AS 105, "Non Current Assets held for sale and discontinued operations".
(d) The details of Shareholding of Promoters:
Shri Anil D Ambani held 1,39,437 equity shares (0.05%) as at March 31, 2022 and as at March 31, 2021.
(e) In terms of the approval of the shareholders obtained at Annual General Meeting of the Company held on September 14, 2021 the Company has reclassified its Authorised Share Capital from '' 2,050.06 crore (45,00,60,000 Equity Shares of '' 10 each; 80,00,000 Preference Shares of '' 10 each with differential rights; 1,55,00,00,000 Redeemable Preference Share of '' 10 each and 4,20,00,000 Unclassified Shares of '' 10 each ) to '' 2,050.06 crore (194,00,60,000 Equity Shares of '' 10 each, 10,00,00,000 Preference Shares of '' 10 each and 1,00,00,000 Equity Shares of '' 10 each with differential rights)
16.2 Nature and purpose of Other Reserves
(a) Capital Reserve:
The Reserve is created based on statutory requirement under the Companies Act, 2013, on account of forfeiture of equity shares warrants, mergers and acquisitions pursuant to the Order of Hon''ble High Court of Bombay. This is not available for distribution of dividend but can be utilised for issuing bonus shares.
(b) Securities Premium:
This reserve is used to record the premium on issue of shares. The same can be utilized in accordance with the provisions of the Act.
(c) Debenture Redemption Reserve:
The Company has been creating debenture redemption reserve (DRR) till March 31, 2020 as per the relevant provision of the Companies Act, 2013, however according to Companies (Share Capital and Debenture) Amendment Rules, 2019 effective from August 16, 2019, being a listed entity, the Company is not required to create DRR, hence DRR is not created in the books of account for the financial year 2020-21 onwards.
(d) Capital Redemption Reserve:
The Capital Redemption Reserve is required to be created on buy-back of equity shares. The Company may issue fully paid up bonus shares to its members out of the capital redemption reserve account.
(e) Treasury Shares:
Reliance Infrastructure ESOS Trust has in substance acted as an agent and the Company as a sponsor retains the majority of the risks rewards relating to funding arrangement. Accordingly, the Company has recognised issue of shares to the Trust as the issue of treasury shares by consolidating Trust into standalone financial statements of the Company.
17.1 Non Convertible Debentures (NCD): of ''1,064.29 Crore are secured as under:
(i) 12.50%, Series-29 NCD of '' 361.59 crore secured by (a) pledge of 1 6,65,35,749 Equity shares of Reliance Power Limited (b) all of the Company''s rights, title, interest and benefits in, to and under a specific bank account of the Company (c) subservient charge over current assets of the Company.
(ii) 11.50 %, Series-18 NCD of '' 600 crore, secured by (a) first pari-passu charge on Company''s Land situated at Village Sancoale, Goa and Plant, property and equipment at Samalkot Mandal, East Godavari District Andhra Pradesh (b) first pari-passu charge over Immoveable Property (free hold Land) & Moveable Property of BSES Kerala Power Limited and over the Identified Fixed assets (buildings) situated in Mumbai.
(iii) 11.50%, Series-20E NCD of '' 102.70 crore secured by first pari-passu charge over the Identified Fixed assets (buildings) situated in Mumbai and all of the Company''s rights, title, interest and benefits in, to and under a specific bank account of Company.
17.2. Term Loans from Banks of '' 2,123.62 Crore are secured as under:
(i) '' 71.25 crore by way of first exclusive charge on certain Plant and Equipment of EPC division and on Property, Plant
and Equipment of Windmill Project of the Company.
(ii) '' 37.45 crore by subservient charge on moveable Property, Plant and Equipment of the Company.
(iii) '' 2,014.92 crore are secured by the following.
a. First pari passu charge on (i) all receivable arising out of sub-debt / loan advanced / to be advanced to Road SPVs (ii) all amounts owing to and received and/or receivables by the Company and/ or any persons (s) on its behalf from claims under unapproved regulatory assets.
b. Second pari passu charge over (i) all amounts owing to and/or received and/or receivable by the Company from certain liquidity events (ii) on the current assets of Company
c. Exclusive charge over (i) all rights, title, interest and benefit of the Company on investment in Redeemable Debentures of DA Toll Road Private Limited (ii) indentified buildings of the Company (iii) over the ''Surplus Proceeds" from Sale of Shares of BSES Rajdhani Power Limited (BRPL) and / or BSES Yamuna Power Limited (BYPL), to be received by the Borrower or any Group Company of the Borrower (incl. subsidiary, affiliates, etc.). Charge on these loans shall rank pari-passu subject to, other lender(s)/security trustee having charge, on the charged assets, sharing pari- passu letters wherever applicable (iv) all amounts owing to, and received and/or receivable by the Company on its behalf from Delhi Airport Metro Express Pvt. Ltd
d. Pledge of 13,43,100 Equity Shares of NK Toll Road Limited, 15,63,000 Equity Shares of DS Toll Road Limited, 5,88,330 Equity Shares of GF Toll Road Private Limited, 10,22,700 Equity Shares of KM Toll Road Private Limited, 1 1,1 3,300 Equity Shares of HK Toll Road Private Limited, 38,26,695 Equity Shares of TK Toll Road Private Limited, 32,23,476 Equity Shares of TD Toll Road Private Limited, 55,23,678 Equity Shares of SU Toll Road Private Limited, 2,462 Equity Shares of JR Toll Road Private Limited 2,465 Equity Shares of PS Toll Road Private Limited, 1,88,28,000 Equity Shares of BSES Kerala Power Limited and ,2,72,79,36,782 Zero Coupon unsecured Redeemable Debentures of DA Toll Road Private Limited.
e. Non-disposal Undertaking on 19% Equity Share holding of SU Toll Road Private Limited, GF Toll Road Private Limited, KM Toll Road Private Limited, HK Toll Road Private Limited, TD Toll Road Private Limited , TK Toll Road Private Limited, NK Toll Road Limited and DS Toll Road Limited. (As per application regulations , these 19% shares are kept in safe keep account instead of creation of pledge).
NCD Series-29: Trustee of NCD Series 29 had issued loan recall notice on December 8, 2020 following which the entire outstanding has become due. The Company has entered into a settlement agreement with the debenture holders on March 9, 2022, wherein the due date has been extended till September 30, 2022 along with grant of interim standstill and waiver of additional interest till such extended due date. During the year there was delay in repayment of principal of '' 23.41 crore and interest of '' 35.35 crore.
NCD Series-18: Axis Trustee Services Ltd ("Trustee") had issued loan recall notice on September 20, 2019 due to downgrade of Company''s ratings. As per the Debenture Trust Deed dated April 7, 2014, the final redemption date has been defined as January 21, 2022. Redemption of debentures shall becomes due on the last date of its tenor and not otherwise and default in redemption shall be reckoned accordingly. As at March, 31, 2022, installments of '' 600 crore were outstanding beginning from January 20, 2020 and interest of '' 69 crore was outstanding since April 21, 2021. In terms of the Security Interest (Enforcement) Rules, 2002, Axis trustee Services Limited ("Trustee") has enforced the security and taken the possession of the mortgaged properties in respect of the NCDs. Trustee has informed the Company that in the event dues payable to the debenture holders are not fully recovered/satisfied with sale proceed of secured assets, the debentures holders are entitled for the recovery of the balance amount in the manner prescribed under applicable law. The Company has not been informed as regards any shortfall in the recovery of outstanding debt. During the year there was a delay in repayment of interest of '' 51.98 crore.
NCD Series-20E: In terms of the Security Interest (Enforcement) Rules, 2002, IDBI Trusteeship Services Limited ("Trustee") has enforced the security and taken the possession of the mortgaged properties in respect of the NCDs aggregating '' 102.70 crore and interest aggregating '' 1 60.42 crore. Trustee has informed the Company that in the event dues payable to the debenture holders are not fully recovered/satisfied with sale proceed of secured assets, the debentures holders are entitled for the recovery of the balance amount in the manner prescribed under applicable law. The Company has not been informed as regards any shortfall in the recovery of outstanding debt.
17.5 The current assets of the Company are provided as security to the lenders and subservient charge on certain corporate guarantees.
17.6 The Company at its Board Meeting dated September 25, 2021 has approved issue of unsecured foreign currency convertible bonds (FCCBs) upto U.S.$ 100 million maturing at the end of 10 years and 1 day from the issue date or the date of the FCCBs being fully paid up, whichever is later, with a coupon rate of 4.5% p.a. on private placement basis. The FCCBs shall be convertible into approximately 6.64 crore equity shares of ''10 each of the Company in accordance with the terms of the FCCBs, at a price of '' 111 (including a premium of '' 101) per equity share.
31. Contingent Liabilities & Commitments;
(a) Contingent Liabilities:
i) i) Claims against the Company not acknowledged as debts and under litigation aggregates to '' 1,264.96 crore (March 31, 2021 - '' 1,117.13 crore) .These include claim from suppliers aggregating to '' 22.14 crore (March 31, 2021 - '' 32.37 crore), income tax claims '' 724.47 crore (March 31, 2021 - '' 567.55 crore), indirect tax claims aggregating to '' 443.80 crore (March 31, 2021 - '' 447.88 crore) and other claims ''74.55 crore (March 31, 2021 - '' 69.32 crore). The above claims do not include claims/arbitration against the Company by the suppliers where the Company has also filed counter claims as the Company does not expect any liability.
ii) The Company''s application for compounding in respect of its ECB of USD 360 million has been deemed by the Reserve Bank of India (RBI) as never to have been made subsequent to the withdrawal of the compounding application. Accordingly, there is no liability in respect of the compounding fee of ''124.68 crore earlier specified by RBI. Subsequent to the withdrawal of the compounding application, the matter has been referred to the Enforcement Directorate where the same is still pending.
iii) With respect of Energy Purchase Agreeement (EPA) entered with Dhursar Solar Power Private Limited (DSPPL), The Maharashtra Electricity Regulatory Commission (MERC) vide order dated October 21, 2016 allowed partial cost claimed by the Company. Aggrieved by the said order, the Company had challenged the said order before Appellate Tribunal for Electricity (APTEL). The APTEL has upheld the findings of MERC and the Company filed an appeal before the Supreme Court of India against the APTEL Order. The matter is currently pending before the Supreme Court of India. Post transfer of Mumbai Power Business to Reliance Electric Generation and Supply Limited (REGSL), a inter-se agreement was entered between REGCL, DSPPL and the Company, whereby the Company has agreed that the liability of REGSL to make tariff payments for the energy supplied by DSPPL is limited to the MERC approved tariff and the Company has agreed to pay the differential amount between tariff payment as per EPA and MERC approved tariff to the DSPPL thorough an agreement cum indemnity. Pending outcome of the matter, the Company continues to account differential expenditure as cost on monthly basis. The Company has also legally been advised that it has good case on merit and have fair chance to succeed. Based on the above facts the Company has not considered the said agreement cum indemnity as an Onerous Contract. The Company does not expect any cash outflow on this account.
(b) Capital and Other Commitments:
i) Uncalled liability on partly paid shares/warrants '' 558.20 crore (March 31, 2021 - '' 10.70 crore).
ii) The Company has given equity / fund support / other undertakings for setting up of projects / cost overrun in respect of various infrastructure and power projects being set up by Company''s subsidiaries and associates; the amounts of which currently are not ascertainable.
(c) During the previous year, the Company, as a part of settlement with Yes Bank Limited, had sold its Investment property including Property, plant and equipment at Santacruz at a total transaction value of '' 1,200 crore through the conveyance deed entered with Yes Bank Limited. The Company is entitled to exercise its rights/option to buy back this property after 8.5 years from the date of sale, subject to fulfillment of the condition precedents at an agreed price as per option agreement entered between parties.
d) Details of Material Transactions with Related Party
(i) Transactions during the year (Balance Sheet heads)
Investment in Equity share of RePL '' 595.00 crore through conversion of ICD and interest receivable.
ICD given/assigned to RePL '' 371.73 crore.
(ii) Balance sheet heads (Closing balance)
Trade payable, advances received and other liabilities CPPL '' 911.03 crore, DSPPL '' 289.26 crore and SPL '' 277.13 crore . Investment in Equity of RePL '' 813.19 crore, MMOPL '' 761.48 crore, SUTRPL '' 209.69 crore, BRPL '' 530.40 crore and BYPL '' 283.56 crore . ICD given to RePL '' 547.51 crore and MMOPL '' 283.79 crore . Subordinate debt given to PSTL '' 1,078.51 crore, DAMEPL '' 787.53 crore, HKTRPL '' 302.26 crore, TKTRPL '' 215.04 crore and NKTRL '' 198.27 crore. Trade Receivables, Advances given and other receivables for rendering services SaPoL '' 2,661.84 crore. Non Current Assets Held for sale and Discontinued Operations of KMTL '' 544.94 crore.
Trade payable, advances received and other liabilities CPPL '' 911.03 crore and SPL '' 283.87 crore . Investment in Equity of MMOPL '' 761.48 crore, BRPL '' 530.40 crore and BYPL '' 283.56 crore . ICD given to RePL '' 1,121.21 crore and MMOPL '' 283.79 crore . Subordinate debt given to PSTL '' 1,078.51 crore, and DAMEPL '' 787.53 crore, HKTRPL '' 302.26 crore . Trade Receivables, Advances given and other receivables for rendering services SaPoL '' 2,585.89 crore. Non Current Assets Held for sale and Discontinued Operations of KMTL '' 544.94 crore.
f) Details of Transactions with Person having Control: Sitting fees paid '' 0.03 crore during the year 2021-22 (202021: '' 0.03 crore) During the previous year, the Company received advance of '' 10.75 crore against the expenses incurred on his behalf. Closing Balance Nil.
Notes:
1) The above disclosure does not include transactions with/as public utility service providers, viz, electricity, telecommunications etc. in the normal course of business.
2) Transactions with Related Party which are in excess of 1 0% of the total revenue of the Company as per standalone financial statements are considered as Material Related Party Transactions.
34. Interest in Jointly Controlled Operations
(i) Coal Bed Methane: The Company along with M/s. Geopetrol International Inc. and Reliance Natural Resources Limited *(the consortium) was allotted 4 Coal Bed Methane (CBM) blocks from Ministry of Petroleum and Natural Gas (Mo PNG) covering an acreage of 3,266 square kilometers in the States of Madhya Pradesh, Andhra Pradesh and Rajasthan. The consortium had entered into a contract with Government of India for exploration and production of CBM gas from these four CBM blocks. The Company as part of the consortium had 45% share in each of the four blocks. M/s. Geopetrol International Inc was appointed the operator on behalf of the consortium for all the four CBM blocks. In SP(N) CBM block, Company subsequently acquired 10% share and Operatorship from M/s. Geopetrol International Inc.
(ii) MZ-ONN-2004 / 2 : The Company along with M/s. Geopetrol International Inc, NaftoGaz India Private Limited and Reliance Natural Resources Limited *(the consortium) was allotted Oil and Gas block from Ministry of Petroleum and Natural Gas (MoPNG), in the State of Mizoram under the New Exploration Licensing Policy (NELP-VI) round, covering an acreage of 3,619 square kilometers and the consortium had signed a production sharing contract with the Government of India for exploration and production of Oil and Gas from block. The Company as part of the consortium had 70% share in the block. M/s NaftoGaz India Private Limited was the operator on behalf of the consortium for the block.
(iii) Rinfra Astaldi Joint Venture (Metro): The Company along with ASTALDI S.p.A. (ASTALDI), a company incorporated under the law of Italy, consortium was allotted a project for Part Design and Construction of Elevated Viaduct and Elevated Stations [Excluding Architectural Finishing & Pre-engineered steel roof structure of Stations] from Chainage (-) 550 M TO 31872.088 M of LINE-4 CORRIDOR [Wadala-Ghatkopar-Mulund-Thane Kasarvadavali] of Mumbai Metro Rail Project of MMRDA.
(iv) Reliance Astaldi JV (VBSL): The Company along with ASTALDI S.p.A. (ASTALDI), a company incorporated under the law of Italy, consortium was allotted a project from Maharashtra State Road Development Corporation Ltd. (MSRDC) for Design, Construction and Maintenance of 17.17 km length of Versova Bandra Sea Link (VBSL) in the State of Maharashtra. As on Januarry 1 7, 2022, the Company has transferred its participating interest in the joint operation.
(v) Kashedighat JV: The Company along with "Construction Association Interbudmontazh" (CAI), a company registered at Ukraine, consortium was allotted a project from Ministry of Road Transport & Highways (MoRTH) through PWD, Maharashtra for Rehabilitation and Upgradation of NH-66 (Erstwhile NH-17) including 6 Lanes near Parshuram village in the State of Maharashtra under NHDP-IV on EPC Mode of Contract.
**The Board of Directors of the Company has approved the transfer of operatorship from M/s. Geopetrol International Inc to the Company on February 14, 2015. MoPNG approved the same on April 28, 201 6 and amendment to Contract has been conveyed on January 29, 2018. DGH approved exploration Phase-II commencement date as February 28, 2018 with Company as Operator. Currently the company is awaiting the change of ownership of Environment clearance which was applied to Ministry of Environment Forest and Climate Change on March 28, 2018.
*** MoPNG, Government of India in October 2012, after six years of the award of block, observed that NaftoGaz India Limited had falsely represented itself as the subsidiary of NaftoGaz of Ukraine at the time of bidding and served notice of termination to all consortium members referring relevant clause of NELP-VI notice inviting offer (NIO) and Article 30.3(a) of the Production Sharing Contract (PSC) and demanded to pay penalty towards unfinished minimum work program. The Company has received letter dated April 16, 2015 from DGH to deposit USD 9,467,079 as cost of unfinished Minimum Work Program (MWP) to MoPNG. The claim has been contested by the Company vide letter dated June 21, 2014, May 25, 2015 and March 05, 2016. The said amount is disclosed under Contingent Liability in Note No. 32 above.
(* Share of RNRL has since been demerged to 4 Companies of Reliance Power Limited).
(a) Description of segments and principal activities
The Company is predominantly engaged in the business of Engineering and Construction (E&C). E&C segment renders comprehensive, value added services in construction, erection and commissioning. All other activities of the Company revolve around E&C business. As such there are no separate reportable segments, as per the Ind-AS 108 on Operating Segment.
(b) Information about Major Customer
Revenue from operations include '' 1,1 36.23 crore (Previous Year: '' 1,188.86 crore) from two customer (Previous Year: two customer) having more than 10% of the total revenue.
(c) Geographical Segment
The Company''s operations are mainly confined in India. The Company does not have material earnings from business segment outside India. As such, there are no reportable geographical segments.
36. Scheme of Amalgamation of Reliance Infraprojects Limited (RInfl) with the Company
The Hon''ble High Court of Judicature of Bombay had sanctioned the Scheme of Amalgamation of Reliance Infraprojects Limited (RInfl) with the Company on March 30, 201 1 with the appointed date being April 01, 2010. As per the clause 2.3.7 of the Scheme, the Company, as determined by its Board of Directors, is permitted to adjust foreign exchange/hedging/ derivative contract losses/gains debited/credited in the Statement of Profit and Loss by a corresponding withdrawal from or credit to General Reserve.
Pursuant to the option exercised under the above Scheme, net foreign exchange loss of '' 51.75 crore for the year ended March 31, 2021 has been credited to the Statement of Profit and Loss and an equivalent amount has been transferred from General Reserve. The Company has been legally advised that crediting and debiting of the said amount in Statement of Profit and Loss is in accordance with Schedule III to the Act. Had such transfer not been done, the loss before tax for year ended March 31, 2021 would have been higher by '' 51.75 crore and General Reserve would have been higher by '' 51.75 crore. The treatment prescribed under the Scheme override the relevant provisions of Ind AS 1, "Presentation of Financial Statements".
During the current financial year, the Company has not exercised above option; accordingly net foreign exchange gain of '' 55.23 crore has been credited to Statement of Profit and Loss directly. The figures for the previous year are not comparable with current year to that extent.
37. Investment in Delhi Airport Metro Express Private Limited
Hon''ble Supreme Court on September 9, 2021 upheld the arbitral award in favour of Delhi Airport Metro Express Private Limited (DAMEPL), a subsidiary of the Company, in the matter of the dispute between DAMEPL and Delhi Metro Rail Corporation Limited (DMRC), arising due to the termination of the Concession Agreement for Delhi Airport Metro Express Line Project by DAMEPL. DMRC was consequently directed to pay termination payment and other compensation, totaling to Rs. 2,945 crore plus pre-award and post-award interest up to the date of payment to DAMEPL. DAMEPL had filed execution petition dated September 10, 2021 before Hon''ble Delhi High Court seeking execution of the Award against DMRC.
DMRC had deposited Rs.1,000 crore on December 8, 2021, Rs. 600 crore on February 23, 2022 and Rs. 166.44 crore on March 14, 2022, in the escrow account of DAMEPL, as per Hon''ble Delhi High Court''s orders in the execution proceedings initiated by DAMEPL against DMRC. DAMEPL has utilised the amount received for its debt repayments. Hon''ble High Court of Delhi on March 10, 2022, in its judgment, directed DMRC to make payment of Rs. 824.10 crore within two weeks'' time and the remaining amount in two equal instalments on or before April 30, 2022 and May 31, 2022 respectively.
Being aggrieved by a particular paragraph of the judgment dated March 10, 2022, rejecting the computation of post-award interest by DAMEPL on pre-award interest portion of the sum awarded, DAMEPL filed a Special Leave Petition before Hon''ble Supreme Court, limited to the above referred issue of computation of interest on pre-award interest, which was dismissed on May 5, 2022. DAMEPL is evaluating the judgment and contemplates to go for review against the judgment and will be filing suitable proceedings for speedy realization of the sums receivable. DAMEPL has also initiated proceedings against DMRC for non-adherence to the judgment dated March 10, 2022 and seeks recovery of the balance amounts.
38. The Reliance Group of companies of which the Company is a part, supported an independent Company in which the Company holds less than 2% of equity shares ("EPC Company") to inter alia undertake contracts and assignments for the large number of varied projects in the fields of Power (Thermal, Hydro and Nuclear), Roads, Cement, Telecom, Metro Rail, etc. which were proposed and/or under development by the Reliance Group. To this end along with other companies of the Reliance Group the Company funded EPC Company by way of project advances, subscription to debentures and inter corporate deposits. The total exposure of the Company as at March 31, 2022 is '' 6,526.82 crore (net of provision of '' 3,972.1 7 crore). The Company has also provided corporate guarantees aggregating of '' 1,775 crore. The activities of EPC Company have been impacted by the reduced project activities of the companies of the Reliance Group. While the Company is evaluating the nature of relationship; if any, with the independent EPC Company, based on the analysis carried out in earlier years, the EPC Company has not been treated as related party.
Given the huge opportunity in the EPC field particularly considering the Government of India''s thrust on infrastructure sector coupled with increasing project and EPC activities of the Reliance Group, the EPC Company with its experience will be able to achieve substantial project activities in excess of its current levels, thus enabling the EPC Company to meet its obligations. Based on the available facts, the provision made will be adequate to deal with any contingency relating to recovery from the EPC Company. The Company has further provided corporate guarantees of '' 4,895.87 crore on behalf of certain companies towards their borrowings. As per the reasonable estimate of the Management of the Company, it does not expect any obligation against the above guarantee amount.
Exceptional Items for the financial year 2020-21 represents (a) gain of '' 1 56.83 crore on sale of entire stake in Parbati Koldam Transmission Company Limited (PKTCL), a subsidiary of the Company pursuant to Share Purchase Agreement entered with India Grid Trust on January 8, 2021(b) gain of '' 585.40 crore on sale of entire investment in DA Toll Road Private Limited a subsidiary of the Company pursuant to Share Purchase Agreement entered with Cube Highways and Infrastructure III Pte Limited on December 31, 2020 (c) gain of '' 551.26 crore on sale of Investment property and Property plant and equipments at Santacruz as a part of settlement with Yes Bank Limited at a total transaction value of '' 1,200 crore (d) written off '' 1009.51 crore trade receivables against the projects which are either completed or on hold and no further work is to be done (e) gain of '' 82.10 crore arising from fair valuation of Inter Corporate Loan pursuant to modification of terms of the loan agreement, in the line with Ind AS 109 (f) '' 3.19 crore write-off of Investment (net) in Utility Infrastructure & Works Private Limited, a subsidiary of the Company (g) '' 9.32 crore write-off of Investment in Reliance Cement Corporation Private Limited, a subsidiary of the Company.
40. i) The Company is engaged in the business of providing infrastructural facilities as per Section 186 (11) read with Schedule VI of the Act. Accordingly, Section 186 of the Act is not applicable to the Company.
ii) During the year, the Company has not entered with any scheme of arrangements in terms of section 230 to 237 of the Companies Act, 2013 and there was no transactions with struck off company.
iii) No Fund have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any person or entity, including foreign entities (''Intermediaries'') with the understanding, whether recorded in writing or otherwise, that the intermediary shall land or invest in party indentified by or on behalf of the Company (''ultimate beneficiaries''). The Company has not received any funds from the any party with the understanding that the Company shall whether, directly or indirectly lend or invest in other person or entities identified by or on behalf of the Company (''ultimate beneficiaries'') or provide any guarantee, security or the like on behalf of the ultimate beneficiaries.
iv) The company has complied with the provision of section 2(87) of the Companies Act, 2013 read with the Companies (Restrictions on number of layers) Rules, 2017.
41. The Company has exposure aggregating to '' 2,954.24 crore in its nine subsidiaries (road SPVs) as at March 31, 2022 ('' 2,928.24 crore as at March 31, 2021). Management has recently performed an impairment assessment against these exposures, by considering inter-alia the valuations of the underlying subsidiaries carried out by independent external valuation expert. The Company is confident of recovering its entire investment in road SPVs. Accordingly, based on the assessment and external valuation report, impairment of said exposure is not considered.
(b) Defined Benefit Plan Provident Fund
The benefit involving employee established provident funds, which require interest shortfall to be recompensated are to be considered as defined benefit plans. Any shortfall arising in meeting the stipulated interest liability, if any, gets duly provided for in the accounts of Provident Fund Trust maintained by the Company.
Gratuity
The Company operates a gratuity plan administered by insurance company. Every employee is entitled to a benefit equivalent to fifteen days salary last drawn for each completed year of service in line with the Payment of Gratuity Act, 1972 or Company scheme whichever is beneficial. The same is payable at the time of separation from the Company or retirement, whichever is earlier. The benefits vest after five years of continuous service.
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
Gratuity Plan for Jointly Controlled Operations- Unfunded
The Gratuity plan in the two Jointly Controlled Operation of the Company viz RInfra Astaldi Joint Venture (Metro) and Reliance Astaldi JV (VBSL) is unfunded. During the year gratuity expenses of '' 0.05 crore ('' 0.63 crore for the Financial Year 202021) has been provided in statement of profit and loss and liability as at March 31, 2022 is Nil ('' 0.53 crore as at March 31, 2021
Risk Exposure:
Investment Risk: The Present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of reporting period on government bonds. If the return on plan asset is below this rate, it will create plan defecit.
Interest Risk: A decrease in the bond interest rate will increase the plan liability: however, this will be partially offset by an increase in th return on the plan debt investment.
Interest Risk: A decrease in the bond interest rate will increase the plan liability: however, this will be partially offset by an increase in th return on the plan debt investment.
Liquidity Risk: The present value of the defined plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.
Salary Risk: The present value of the defined plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.
44. The Company has net receivables aggregating to '' 1,677 crore from Reliance Power Group as at March 31, 2022 ('' 2,380.78 crore as at March 31, 2021 ). Management has recently performed an impairment assessment of these receivables by considering inter-alia the valuations of the underlying subsidiaries of Reliance Power which are based on their value in use (considering discounted cash flows) and valuations of other assets of Reliance Power/its subsidiaries based on their fair values, which have been determined by external valuation experts. The determination of the value in use/fair value involves significant Management judgement and estimates on the various assumptions including relating to growth rates, discount rates, terminal value, time that may be required to identify buyers, negotiation discounts etc. Accordingly, based on the assessment, impairment of said receivables are not considered necessary by the Management.
There were no transfers between any levels during the year
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes mutual funds and equity shares that have a quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period.
Level 2: The fair value of financial instruments that are not traded in an active market (for example over-the-counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
This is the case for unlisted equity securities, preference shares, debentures and financial guarantee which are included in level 3.
) Valuation technique used to determine fair value
Specific valuation techniques used to value financial instruments include
⢠the use of quoted market prices or dealer quotes for similar instruments
⢠the fair value of the remaining financial instruments is determined using discounted cash flow analysis/Earnings/
EBITDA multiple method.
All of the resulting fair value estimates are included in level 1 and 2 except for unlisted equity securities, where the fair values have been determined based on present values and the discount rates used were adjusted for counterparty or own credit risk.
months, bank deposits with more than 12 months maturity, capital creditors, loans to employee and cash and cash equivalents are considered to have their fair values approximately equal to their carrying values. The fair values for other assets and liabilities were calculated based on cash flows discounted using a current lending rate. They are classified as level 3 fair values in the fair value hierarchy if there is inclusion of unobservable inputs including counterparty credit risk. The fair values of noncurrent borrowings and finance lease obligations are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk.
The Company''s business activities expose it to a variety of financial risks, namely liquidity risk, market risks and credit risk. The Company''s senior management has overall responsibility for the establishment and oversight of the Company''s risk management framework. The Company has constituted a Risk Management Committee, which is responsible for developing and monitoring the Company''s risk management policies.
The Company''s risk management is carried out by the treasury department under policies approved by the board of directors. Treasury Department identifies, evaluates and hedge financial risks in close cooperation the Company''s operating units.
The Company is exposed to credit risk, which is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. Credit risk arises from cash and cash equivalents, investments carried at amortised cost or fair value through profit & loss and deposits with banks and financial institutions, as well as credit exposures to trade/non-trade customers including outstanding receivables and loans.
(i) Credit risk management
Credit risk is managed at segment level and corporate level depending on the policy surrounding credit risk management. For banks and financial institutions, only high rated banks/institutions are accepted. Generally all policies surrounding credit risk have been managed at segment and corporate level. Each segment is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. For other financial assets, the Company assesses and manages credit risk based on internal credit rating system. The finance function consists of a separate team who assess and maintain an internal credit rating system. Internal credit rating is performed on a Company basis for each class of financial instruments with different characteristics. The Company assigns the following credit ratings to each class of financial assets based on the assumptions, inputs and factors specific to the class of financial assets:
Rating 1: High-quality assets, negligible credit risk Rating 2: Quality assets, low credit risk
Rating 3: Medium to low quality assets, Moderate to high credit risk Rating 4: Doubtful assets, credit-impaired
(ii) Provision for expected credit losses
Trade receivables, retentions on contract and amounts due from customers for contract work
The provision for expected credit losses on financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs, based on the Company''s past history, existing market conditions, current creditability of the party as well as forward looking estimates at the end of each reporting period.
Investments other than equity instruments
Investments in financial assets other than equity instruments are exposed to the risk of loss that may occur in future from the failure of counterparties or issuers to make payments according to the terms of the contract. The maximum exposure to credit risk for each class of financial assets is the carrying amount of that class of financial instruments presented in the balance sheet.
Year ended March 31, 2022:
Expected credit loss for financial assets where general model is applied
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by maintaining availability under committed credit lines.
Management monitors rolling forecasts of the Company''s liquidity position and cash and cash equivalents on the basis of expected cash flows. This is generally carried out at local level in the operating companies of the Company in accordance with practice and limits set by the Company. These limits vary by location to take into account the liquidity of the market in which the entity operates. In addition, the Company''s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans
Further in view of the certain cash flow mismatches the Company is considering debt resolution plan. Also the time bound monetisation of assets as well as favorable and timely outcome of various claims will enable the Company to meet its obligation. The Company is confident that such cash flows would enable it to service its debt, realise its assets and discharge its liabilities in the normal course of its business.
(i) Foreign currency risk
The Company operates in a business that exposes it to foreign exchange risk arising from foreign currency transactions, primarily with respect to the USD. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the Company''s functional currency (INR). The risk is measured through a forecast of highly probable foreign currency cash flows. The objective of the Company is to minimise the volatility of the INR cash flows of highly probable forecast transactions.
(a) The Company considers the following components of its Balance Sheet to be managed capital:
1. Total equity - Share Capital , Share warrants, Share premium, Retained profit, General reserves and Other reserves
2. Working capital.
(b) The Company manages its capital so as to safeguard its ability to continue as a going concern and to optimise returns to our shareholders. The capital structure of the Company is based on management''s judgement of the appropriate balance of key elements in order to meet its strategic and day-to-day needs. We consider the amount of capital in proportion to risk and manage the capital structure in light of changes in economic conditions and the risk characteristics of the underlying assets.
The Company''s aim to translate profitable growth to superior cash generation through efficient capital management.
The Company''s policy is to maintain a stable and strong capital structure with a focus on total equity so as to maintain investor, creditor, and market confidence and to sustain future development and growth of its business. The Company''s focus is on keeping strong total equity base to ensure independence, security, as well as a high financial flexibility for potential future borrowings, if required, without impacting the risk profile of the group. The Company will take appropriate steps in order to maintain, or if necessary adjust, its capital structure.
The management monitors the return on capital as well as the level of dividends to shareholders. The Company''s goal is to continue to be able to return excess liquidity to shareholders by continuing to distribute dividends in future periods.
49. The Company has constituted a Corporate Social Responsibility Committee (CSR Committee) in compliance with the provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014. The CSR Committee consists of Shri S S Kohli as Chairman, Ms. Manjari Kacker, Shri K Ravikumar, Dr. Thomas Mathew and Shri Punit Garg as members. The CSR Committee has formulated a Corporate Social Responsibility Policy (CSR policy) indicating the CSR activities to be undertaken by the Company. The Company is not required to spend any amount towards Corporate Social Responsibility as per section 135 of the Act since there is no average profit in the preceding three financial years calculates as per the provisions of the Act.
50. The Company has outstanding obligations payable to its lenders and in respect of loan arrangements of certain entities including subsidiaries/associates where the Company is also a guarantor where certain amounts have also fallen due. The Company has repaid substantial debt during the previous financial year vis a vis certain debts repayment in the current financial year also. The Company is confident of meeting balance obligations by way of time bound monetisation of its assets and receipt of various claims including receivable from DAMEPL against the DMRC arbitration award and accordingly, notwithstanding the dependence on these material uncertain events, the Company continues to prepare the Standalone Financial Statements on a ''Going Concern'' basis.
51. COVID-19 pandemic had impacted businesses across the globe and India causing significant disturbance and slowdown of economic activities. The Company has considered all possible impact of COVID-19 in preparation of the standalone financial statement, including assessment of the recoverability of financial and non-financial assets based on the various internal and external information and assumptions relating to economic forecasts up to the date of approval of these standalone financial statement. The aforesaid assessment is based on projections and estimations which are dependent on future development including government policies. Any changes due to the changes in situations/circumstances will be taken into consideration, if necessary, as and when it crystallizes.
52. The Code on Social Security, 2020 relating to employee benefits during employment and post- employment benefits has received presidential assent. However the effective date of the code and final rules are yet to be notified. The Company will assess the impact once the subject rules are notified and will give appropriate impact in its financial statements in the period in which, the Code becomes effective.
53. The figures for the previous year ended March 31, 2021 have been regrouped and rearranged to make them comparable with those of current year. Figures in bracket indicate previous year''s figures. @ - represents figures less than '' 50,000 which have been shown at actual in brackets with @.
54. Pursuant to first proviso to sub-section (3) of section 129 of the Act, read with rule 5 of Companies (Accounts) Rules, 2014, the Company has attached salient features of the financial statement of its subsidiaries, associates and joint-ventures in form AOC-1 with its Consolidated Financial Statements.
Mar 31, 2018
Corporate Information:
Reliance Infrastructure Limited (âRInfraâ, âthe Companyâ) is one of the largest infrastructure companies, developing projects through various Special Purpose Vehicles (SPVs) in several high growth sectors within the infrastructure space such as Power, Roads, Metro Rail and Defence. RInfra is also a leading utility having presence across the value chain of power business i.e. Generation, Transmission, Distribution and Power Trading. RInfra also provides Engineering, Procurement and Construction (EPC) services for various infrastructure projects.
The Company is a public limited Company which is listed on two recognised stock exchanges in India. The Companyâs Global Depository Receipts, representing Equity Shares, is also listed on London Stock Exchange. The Company is incorporated and domiciled in India under the provisions of the Companies Act, 1913. The registered office of the Company is located at H Block, 1st Floor, Dhirubhai Ambani Knowledge City, Navi Mumbai 400710.
These financial statements of the Company for the year ended March 31, 2018 were authorised for issue by the board of directors on April 23, 2018. Pursuant to the provisions of section 130 of the Act, the Central Government, Income tax authorities, Securities and Exchange Board of India, other statutory regulatory body and under section 131 of the Act, the board of directors of the Company have powers to amend / re-open the financial statements approved by the board / adopted by the members of the Company.
1. Critical estimates and judgements
The presentation of financial statements under Ind AS requires management to take decisions and make estimates and assumptions that may impact the value of revenues, costs, assets and liabilities and the related disclosures concerning the items involved as well as contingent assets and liabilities at the balance sheet date. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Estimation of deferred tax assets recoverable
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the same can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.
The Company has Rs.55.33 Crore (Rs.51.24 Crore) of Minimum Alternate Tax (MAT) credit entitlement assets. According to managementâs estimate, these balances will expire and may not be used to offset taxable income. The Company neither has any taxable temporary difference nor any tax planning opportunities available that could partly support the recognition of these MAT credit entitlement as deferred tax assets. On this basis, the Company has determined that it cannot recognise deferred tax assets on these balances.
Similarly, the Company has unused capital gain tax losses of Rs.747.71 Crore (Rs.1,011.12 Crore), which according to the management will expire and may not be used to offset taxable gain, if any, incurred by the Company. Refer Note No. 25(d) for amounts of such temporary differences on which deferred tax assets are not recognised.
- Estimated fair value of unlisted securities
The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The Company uses its judgement to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each reporting period. Refer Note No. 54 on fair value measurements where the assumptions and methods to perform the same are stated.
- Estimation of defined benefit obligation
The cost of the defined benefit gratuity plan and other post-employment employee benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates.
Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.
The mortality rate is based on publicly available Indian Assured Lives Mortality (2006-08) Ultimate. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates for the respective countries. Refer Note No. 46 for key actuarial assumptions.
- Impairment of trade receivables, loans and other financial assets
The impairment provisions for financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Companyâs past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
Refer Note No. 54 on financial risk management where credit risk and related impairment disclosures are made.
- Revenue recognition
The Company uses the âpercentage-of-completion methodâto determine the appropriate amount to recognise in a given period. The stage of completion is measured by reference to the contract costs incurred up to the end of the reporting period as a percentage of total estimated costs for each contract. Costs incurred in the year in connection with future activity on a contract are excluded from contract costs in determining the stage of completion.
- Regulatory deferral assets and liabilities
From April 01, 2012 till March 31, 2016 (2nd Multi Year Tariff (MYT) control period) and from April 01, 2016 till March 31, 2020 (3rd (MYT) control period), determination of Retail Supply Tariff (RST) / Transmission charges chargeable by the Company to its consumers is governed by MERC (MYT) Regulations 2011 and MERC (MYT Regulations) 2015, whereby MERC is required to determine the RST and Transmission charges in a manner that the Company recovers its power purchase costs as well as other prudently incurred expenses and earns assured return of 15.5% p.a. on MERC approved equity in Distribution Wires Business and Transmission Business and 17.5% p.a. on MERC approved equity in Retail Supply Business, subject to achievement of Plant Load Factor of 85% , transmission availability of 98% and Aggregate Technical and Commercial (AT&C) loss reduction targets respectively. The rate review or âtruing upâ process during the MYT period is being conducted as per the principles stated in MYT Regulations 2011 and 2015.
During the truing up process, revenue gaps (i.e. surplus/shortfall in actual returns over returns entitled) are determined by the regulator and are permitted to be carried forward as regulatory assets/ regulatory liabilities, which would be recovered / refunded through future billing based on future tariff determination by the regulator. At the end of each accounting period, Company also determines regulatory assets/regulatory liabilities in respect of each accounting period on self true up basis on principles specified in accounting policy Note No. 1(d)(i) wherever regulator is yet to take up formal truing up process.
Refer Note No. 16 for tariff orders received during the reporting periods that allowed the Company to recover regulatory gap determined by the regulator.
Notes: (i) Leased assets
a) Asset taken on Finance Lease
Terms of leasehold land taken
- Period of lease : 25 Years
- Renewal option : No renewal option given in the Power Purchase agreement
Terms of power purchase agreement with Vidarbha Industries Power Limited (VIPL) assessed as finance lease has resulted in the certain asset classes being disclosed as assets of the Company. The details are as follows:
The Company has an exclusive right to obtain the entire contracted capacity of a specified facility at all times and in turn the power so purchased is used as a distribution licensee.
The price at which purchase is made is regulated at a price which is neither contractually fixed nor reflects the current market price.
b) Lease Hold Land
The lease period for lease hold land varies from 35 Years to 99 years. The Company considers lease hold land as financial lease as the Company has an ongoing and unhindered right to use as a distribution license holder, i.e. a legal right of having precedence over others in line with Electricity Act 2003 and relevant rules. The Regulator has to make available a replacement parcel of land in case of non-renewal of lease. In the eighty eight years history of the Company there have been extremely rare instances of alternation of such right to use of land due to perennial nature of business and consumer demand for electricity.
(iii) Impairment loss
The impairment loss amounting to Rs.31.04 Crore relates to property, plant and equipment located at Goa Power Station has been reversed during the year and adjusted towards loss on sale of Property, plant and Equipment.
(iv) capital work-in-progress
Capital work in progress as at March 31, 2018 comprises expenditure for the plant in the course of construction.
(ii) contractual Obligations
The Company has no contractual obligations to purchase, construct or develop investment property. However, the responsibility for its repairs, maintenance or enhancements is with the Company.
(iii) Fair Value
The fair valuation of the investment property as at March 31, 2018 carried out by the independent valuer is Rs.531 Crore.
(iv) Pledged details
Rs.528.70 Crore (March 31, 2017 - Rs.558.42 Crore) pledged with Lenders of the Company (Refer Note No. 19 and 20) Policy for Estimation of Fair Value
The Company obtains independent valuations for its investment properties periodically. The best evidence of fair value is current prices in an active market for similar properties. Where such information is not available, the Company considers information from a variety of sources including:
- current prices in an active market for properties of different nature or recent prices of similar properties in less active markets, adjusted to reflect those differences;
- discounted cash flow projections based on reliable estimates of future cash flows; and
- capitalised income projections based upon a propertyâs estimated net market income, and a capitalisation rate derived from an analysis of market evidence.
The fair values of investment properties is determined by reputed third party, independent valuers.
The main inputs used are the rental growth rates, expected vacancy rates, terminal yields and discount rates based on comparable transactions and industry data.
All resulting fair value estimates for investment properties are included in level 3.
* The Balance equity stake is held by another subsidiary Reliance Airport Developers Limited ** Subsidiary relationship during the year
**** 26,1 1,20,000 equity shares are in safe keep accounts.
~ 53,03,99,995 (31,20,00,000 ) shares of BSES Rajdhani Power Limited,
28,35,59,995 (1 6,68,00,000) shares of BSES Yamuna Power Limited,
5,470 (5,470) shares of PS Toll Road Private Limited,
13,91,46,870 (1 3,91,46,870) shares of Parbati Koldam Transmission Company Limited,
10,19,00,000 (11,20,00,000) shares of Reliance Power Limited, are pledge with the lenders of the respective investee Company.
# 45,99,180 (45,99,180) shares of DA Toll Road Private Limited,
2,465 (2,465) shares of PS Toll Road Private Limited,
10,22,700 (10,22,700) shares of KM Toll Road Private Limited,
1 1,1 3,300 (1 1,1 3,300) shares of HK Toll Road Private Limited,
71,06,20,433 (62,75,20,433) shares of Reliance Power Limited ,
1.88.28.000 (1,88,28,000) shares of BSES Kerala Power Limited,
15.000 (15,000) Reliance Electric Generation and Supply Limited are pledge with lenders of the company.
$$ ceased to be a subsidiary of the Company during the year.
The list of investment in subsidiary, joint ventures and associates along with proportion of ownership interest held and country of incorporation are disclosed in Note No. 43 of Consolidated Financial Statement.
Restricted cash and cash Balances:
The Company is required to keep restricted cash for
a) Issuing the Bank Guarantee for Sales-tax department
b) Payment of Dividend
c) Escrow accounts,
2. Non-current assets and Non-current liabilities classified as held for Sale and Discontinued Operations
(a) Description
(i) Toll Roads: During the year ended March 31, 2017 Reliance Infrastructure Invit Fund (Fund) has been formed as a Trust to invest in infrastructure assets primarily being the toll road assets. The Company is a Sponsor / project manager to the Fund. Pursuant to this, the Company has proposed to transfer the controlling interest in seven Toll Road Companies viz, DS Toll Road Limited, GF Toll Road Private Limited, NK Toll Road Limited, JR Toll Road Private Limited, SU Toll Road Private Limited, TK Toll Road Private Limited and TD Toll Road Private Limited and accordingly investment in equity shares in these subsidiaries has been considered as assets classified as held for sale as per Ind AS 105 âNon Current Assets held for sale and discontinued operationsâ.
(ii) Western Region System Strengthening Scheme (WRSSS): On October 12, 2017, the Company completed the transfer of its WRSSS Transmission Undertakings to its two subsidiaries namely Western Transmission Gujarat Limited (WTGL) and Western Transco Power Limited (WTPL) and accordingly the Assets and Liabilities as well as Income and Expenditure of WRSSS have been considered as discontinued operations as per Ind AS 105 âNon Current Assets held for sale and discontinued operationsâ.
Assets pledged details
26.57.100 (26,57,100) shares of DS Toll Road Limited,
22,83,270 (22,83,270) shares of NK Toll Road Limited,
90,22,007 (90,22,007) shares of SU Toll Road Private Limited are pledged with the Lenders of the respective investee Company.
15,63,000 (15,63,000) shares of DS Toll Road Limited,
13.43.100 (13,43,100) shares of NK Toll Road Limited,
55,23,678 (55,23,678) shares of SU Toll Road Private Limited
5,88,330 (5,88,330) shares of GF Toll Road Private Limited 5,138 (5,245) shares of JR Toll Road Private Limited 32,23,476 (32,23,476) shares of TD Toll Road Private Limited 38,26,695 (38,26,695) shares of TK Toll Road Private Limited are pledged with the Lenders of the Company.
3,68,245 (3,68,245) equity shares of SU Toll Road Private Limited are in safe keep accounts.
3. Regulatory Deferral account Balance Regulatory assets / (Liability)
In accordance with accounting policy (Refer Note No. 1(d)(i)) and in accordance with the Guidance Note on Rate Regulated Activities issued by ICAI, the reconciliation of the Regulatory Assets / (Liabilities) of Mumbai Distribution and Mumbai Transmission division as on March 31, 2018 is as under:
a. * includes Rs.739.61 Crore recoverable from Vidarbha Industries Power Limited (VIPL) as per MERC Order dated June 20, 201 6 in the matter of petition of VIPL for truing up for FY 2014-15 and provisional truing up for FY 2015-16 and also MERC Order dated October 21, 2016 in the matter of petition of the Company for True-up for the year 2014-15 and provisional Truing up for the year 2015-16. Out of this amount, VIPL has paid Rs.213.50 Crore during the year ended March 31, 2017 and the balance amount of Rs.526.1 1 Crore recoverable from VIPL is included in Other Current financial assets as Other Receivables.
b. From April 01, 2016 till March 31, 2020 (3rd MYT control period), determination of Retail Supply Tariff (RST) / Transmission charges chargeable by the Company to its consumers is governed by MERC (MYT Regulations) 2015, whereby MERC is required to determine the RST and Transmission charges in a manner that the Company recovers its power purchase costs as well as other prudently incurred expenses and earns assured return of 15.5% p.a. on MERC approved equity in Distribution Wires Business and Transmission Business and 17.5% p.a. on MERC approved equity in Retail Supply Business, subject to achievement of Plant Load Factor of 85%, transmission availability of 98% and Aggregate Technical and Commercial (AT&C) loss reduction targets respectively. The rate review or âtruing upâ process during the MYT period is being conducted as per the principles stated in MYT Regulations 2015.
c. During the truing up process, revenue gaps (i.e. surplus/shortfall in actual returns over returns entitled) are determined by the regulator and are permitted to be carried forward as regulatory assets/ regulatory liabilities which would be recovered / refunded through future billing based on future tariff determination by the regulator. At the end of each accounting period, Company also determines regulatory assets/regulatory liabilities in respect of each accounting period on self true up basis on principles specified in accounting policy Note No. 1 (d)(i) wherever regulator is yet to take up formal truing up process.
d. During the year ended March 31, 2014, the Company had received tariff order from MERC allowing it to recover the regulatory gap determined by the regulator for the period upto March 31, 2012, aggregating to Rs.2,463.18 Crore along with carrying cost of Rs.1,403.65 Crore on smoothened recovery basis over a period of 6 years till FY 2018-19. The Company has apportioned an amount of Rs.474.09 Crore towards carrying cost out of the total recovery during the year ended March 31, 2018 of Rs.852.53 Crore under the said order.
e. In accordance with the MERC tariff regulation for determination of tariff, the income-tax paid is considered for tariff determination (truing up). Accordingly, the Company has considered Rs.49.14 Crore (Rs.26.59 Crore) of deferred tax liability for the year arising out of differences in rates of depreciation between MERC and income-tax as âRegulatory assets recoverable on account of Deferred Tax on Depreciation differenceâ. Similarly, the deferred tax asset for the year of Rs.130.83 Crore (March 31, 2017 - Rs.213.77 Crore) on account of timing difference on taxability of regulatory income accounted in the books is treated as reduction from âNet tax recoverable from future tariff determinationâ.
(c) terms / Rights attached to Equity Shares
(i) Voting
The Company has only one class of equity shares having a par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share.
(ii) Dividend
The Board of Directors in their meeting dated April 23, 2018 have approved a final dividend of Rs.9.50 per equity share for the financial year ended March 31, 2018. The proposal is subject to the approval of shareholders at the ensuing annual general meeting and if approved would result in a cash outflow of approximately Rs.301.20 Crore including corporate dividend tax of Rs.51.36 Crore.
(iii) Liquidation
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive all of the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
(d) Buy-back of equity Shares
Aggregate number of shares bought back during the period of five years immediately preceding the reporting date - Nil (44,30,262).
(e) Details of Shareholders holding more than 5% Shares of the total equity Shares of the company
Nature and purpose of Other Reserves
(a) capital Reserve
The Reserve is created based on statutory requirement under the Companies Act, 2013, on account of forfeiture of equity shares warrants, mergers and acquisitions pursuant to the Order of Honâble High Court of Bombay. This is not available for distribution of dividend but can be utilised for issuing bonus shares.
(b) Securities Premium account
Securities premium account is used to record the premium on issue of shares. The same can be utilized in accordance with the provisions of the Act.
(c) Debenture Redemption Reserve
As per the Companies (Share Capital and Debentures) Rules, 2014 (amended), the Company is required to create debenture redemption reserve out of profits, which is available for payment of dividend, equal to 25% of the amount of debentures issued. Accordingly, the Company has appropriated 25% of the debentures issued which would be utilized for redemption of debentures during its maturity.
(d) capital Redemption Reserve
The Capital Redemption Reserve is required to be created on buy-back of equity shares. The Company may issue fully paid up bonus shares to its members out of the capital redemption reserve account.
(e) Statutory Reserves
(i) Development Reserve account No. 1, 2 and 3
It represents Development Rebate Reserve required under the Income-tax Act.
(ii) Debt Redemption Reserve, Rural Electrification Scheme Reserve, Reserve to augment production facilities and Reserve for Power Project -
These reserves were created under the repealed Electricity (Supply) Act, 1948 and Tariff Regulations. These are Statutory Reserves.
(f) Foreign currency Monetary item Translation Difference account
The Company has availed an option of continuing the policy adopted for exchange differences arising from translation of long term foreign currency monetary items as per Previous GAAP. Foreign Currency Monetary Item Translation
Difference is on account of foreign exchange gain / (loss) on non-depreciable long term foreign currency monetary items. The Company has opted to continue the accounting policy of Previous GAAP for such long term foreign currency monetary items as per D1 3AA of Ind AS 101â First-time Adoption of Indian Accounting Standardsâ. Accordingly, such gain / (loss) is carried to reserves under this head and amortised over the life of such long term foreign currency monetary items.
(g) Treasury Shares
Reliance Infrastructure ESOS Trust has in substance acted as an agent and the Company as a sponsor retains the majority of the risks rewards relating to funding arrangement. Accordingly, the Company has recognised issue of shares to the Trust as the issue of treasury shares by consolidating Trust into financial statements of the Company.
Security
A. Non Convertible Debentures (NCD) of Rs.2,755 Crore (Principal undiscounted amount) are secured as under:
Rs.125 Crore are secured by way of first pari-passu charge, on Companyâs fixed Rs.125 Crore are secured by the following:-
(i) first pari-passu charge on Companyâs Properties situated at Village Sancoale, Goa.
(ii) first pari-passu charge on Companyâs Properties situated at Samalkot Mandal, East Godavari District Andhra Pradesh.
(iii) first pari-passu charge on certain fixed assets i.e. Plant and Machinery and Distribution Systems of Mumbai distribution division.
(iv) One Flat located in Thane District in the State of Maharashtra.
Rs.585 Crore are secured by way of first pari-passu charge on specific land and buildings located in Mumbai and on certain Property, Plant and Equipment and Intangible Assets of Mumbai distribution division of the Company.
Rs.500 Crore are secured by first pari-passu charge on Land and Buildings, certain Plant and Machinery and Distribution
Systems of the Companyâs Mumbai distribution division.
Rs.300 Crore are secured by the following:-
(i) Pledge of 1 9,56,84,684 Equity shares of M/s. Reliance Power Limited which are held by the Company.
(ii) All of the Companyâs rights, title, interest and benefits in, to and under a specific bank account of the Company with HDFC Bank, Mumbai Branch.
Rs.650 Crore are secured by the following:-
(i) first pari-passu charge on Companyâs Properties situated at Village Sancoale, Goa.
(ii) first pari-passu charge on Companyâs Properties situated at Samalkot Mandal, East Godavari District Andhra Pradesh.
iii) first pari-passu charge on certain fixed assets i.e. Plant and Machinery and Distribution Systems of Mumbai distribution division.
(iv) One Flat located in Thane District in the State of Maharashtra.
(The existing Rs.125 Crore NCD holders also hold pari-passu charge on the above assets.)
Rs.225 Crore are secured by first ranking pari-passu charge on the following:
(i) Specific Regulatory Assets, present and future, related to Mumbai distribution business and its related bank accounts.
(ii) Escrow Accounts (including DSRA account and Surplus Regulatory Asset Account)
(iii) One flat located in Thane District in the State of Maharashtra
(iv) Lien on permitted Investments
(Rs.350 Crore from Bank of Maharashtra and Rs.55.90 Crore from IndusInd Bank Limited, Rs.140 Crore from Syndicate Bank, Rs.24.10 Crore from Abu Dhabi Commercial Bank and Rs.100 Crore from Axis Bank Limited also hold pari-passu charge on the above assets).
Rs.295 Crore are secured by the following:-
(i) Pledge of 28,79,35,749 Equity shares of M/s. Reliance Power Limited which are held by the Company.
(ii) Exclusive charge on One Flat located in Thane District in the State of Maharashtra.
(iii) All of the Companyâs rights, title, interest and benefits in, to and under a specific bank account of Company with Deutsche Bank, Mumbai branch together with fixed deposits standing to the credit of the said bank account.
Rs.75 Crore are to be secured by first pari-passu charge on specific fixed assets of Mumbai Distribution Business of the Company, with a minimum security cover of 1.25x on the outstanding amount. The charge creation is under process.
B. term loans from Banks of Rs.5,653.89 crore (Principal undiscounted amount) are secured as under:
Rs.90 Crore from Jammu & Kashmir Bank is secured by way of first exclusive charge on certain Plant and Equipment of EPC division and on Property, Plant and Equipment of Windmill Project of the Company located in Jogimatti in Chitradurga district of Karnataka.
Rs.355.82 Crore from State Bank of India and Rs.106.74 Crore from South Indian Bank are secured by way of first pari-passu charge on certain Property, Plant and Equipment of Mumbai transmission division and specific Land and Building located in Thane and Mumbai.
Rs.144 Crore from Bank of Baroda are secured by way of first pari-passu charge over land of Dahanu Thermal Power Station. (The security on these assets is yet to be created).
Rs.350 Crore from Bank of Maharashtra and Rs.55.90 Crore from IndusInd Bank Limited, Rs.140 Crore from Syndicate Bank, and Rs.24.10 Crore from Abu Dhabi Commercial Bank and Rs.100 Crore from Axis Bank Limited, are secured by the first pari-passu charge on the following:
a. Specific Regulatory Assets, present and future, related to Mumbai distribution business and its related bank accounts.
b. Escrow Accounts (including DSRA account and Surplus Regulatory Asset Account).
c. One Flat located in Thane District in the State of Maharashtra.
d. Lien on permitted Investments.
(The existing Rs.225 Crore NCD holders also hold pari-passu charge on the above assets).
Rs.496.88 Crore from Yes Bank Limited are secured by the following:
a. Pledge of 22,01,03,025 Equity Shares of Reliance Naval and Engineering Limited held by Reliance Defence Systems Private Limited (step-down subsidiary of the Company).
b. Subservient charge on Current Assets of the Company, both present and future with a minimum security cover of 1x on the outstanding amount to be maintained at all the times.
Rs.100.79 Crore from Yes Bank Limited are secured by the following:
a. Pledge of 1,88,28,000 Equity Shares of BSES Kerala Power Limited (a 100% subsidiary of the Company)
b. Subservient charge on Current Assets of the Company with a minimum security cover of 1x on the outstanding amount to be maintained at all the times.
c. First Pari Passu charge on Moveable Property, Plant and Equipment of BSES Kerala Power Limited, both present and future.
Rs.100 Crore from Axis Bank Limited are secured by first pari passu charge on inventory and trade receivable, book debts, other current assets and additionally secured by a flat of the Company located at Mumbai.
(Existing working capital consortium facility led by Canara Bank, also hold pari-passu charge on above assets).
Rs.375 Crore from IDFC Bank Limited and Rs.150 Crore from Bank of Baroda are secured by the following.
a. Pledge of 13,43,100 Equity Shares of NK Toll Road Limited, 15,63,000 Equity Shares of DS Toll Road Limited, 5,88,330 Equity Shares of GF Toll Road Private Limited, 10,22,700 Equity Shares of KM Toll Road Private Limited, 1 1,1 3,300 Equity Shares of HK Toll Road Private Limited, 38,26,695 Equity Shares of TK Toll Road Private Limited, 32,23,476 Equity Shares of TD Toll Road Private Limited and 55,23,678 Equity Shares of SU Toll Road Private Limited (all 100% subsidiaries of the Company).
b. Pledge of 2,462 Equity Shares of JR Toll Road Private Limited and 2,465 Equity Shares of PS Toll Road Private Limited.
c. Non-disposal Undertaking on 45,99,180 Equity Shares of DA Toll Road Private Limited (a 100% subsidiary of the Company).
d. Non-disposal Undertaking on 19% Equity Share holding of SU Toll Road Private Limited, GF Toll Road Private Limited, KM Toll Road Private Limited, HK Toll Road Private Limited, TD Toll Road Private Limited , TK Toll Road Private Limited, NK Toll Road Private Limited and DS Toll Road Private Limited . (Pledge of this 19% Equity Shares is yet to be created).
e. Second pari passu charge on the current assets of Company.
f. First pari passu charge on all receivable arising out of sub-debt / loan advanced / to be advanced to Road Companies, as mentioned above.
Rs.83 Crore from Syndicate Bank are secured by second charge on Companyâs current assets excluding Regulatory Assets of Mumbai Distribution Business.
Rs.100 Crore from Axis Bank Limited is secured by the following.
a. Residual charge on the entire current assets of the Company both present and future.
b. Pledge of 2,676 Equity Shares of JR Toll Road Private Limited.
Rs.166.66 Crore from Vijaya Bank Limited is secured by subservient charge on moveable Property, Plant and Equipment of the Company with asset cover of minimum 1.25 times.
Rs.250 Crore from Canara Bank Limited is secured by subservient charge on moveable Property, Plant and Equipment of the Company with asset cover of minimum 1.25 times.
Rs.990 Crore from IndusInd Bank is secured by the subservient charge on all current assets of the Borrowerâs excluding Regulatory Assets of Mumbai Distribution Business, providing minimum 1x cover on outstanding facility.
Rs.975 Crore from Yes Bank is secured by the following.
a. First pari-passu charge, both present and future, on Companyâs Building and Plant and Machinery situated at Dahanu Thermal Power Station.
b. First pari-passu charge, both present and future, on specific Building situated in Mumbai.
c. Exclusive charge on Investment Property situated at Mumbai.
d. Exclusive charge over receivable and cash flow including rent and any other income incidental thereof from Reliance center property.
Rs.500 Crore loan from Yes Bank is secured by the following.
a. First charge on all assets of Dahanu Thermal Power Plant including plant and machinery but excluding Land.
b. Extension of charge on Pledge of 30% Equity Shares of Reliance Electric and Generation Supply Limited.
c. Term Loans from Financial institutions of Rs.539.64 crore (Principal undiscounted amount) are secured as under:
Rs.363.64 Crore from IFCI Limited are secured by the following:
a. Minimum 1.25 times cover of Non-agriculture Land situated at Dahanu Thermal Power Station to be shared with other lenders on pari-passu basis subject to maintenance of 1.25 times cover for the Loan. (The security on these assets is yet to be created).
b. Pledge of 22,70,00,000 Equity shares of M/s. Reliance Power Limited by Non-disposable undertaking and Power of Attorney mechanism, which are held by the Company. It is Interim Security till creation of security over land.
Rs.176 Crore from IFCI Limited are secured by exclusive charge on certain Property, Plant and Equipment of the Mumbai Distribution division of the Company.
D. Loans from Others of Rs.8.85 Crore are secured as under
Rs.8.85 Crore from CISCO Systems Capital (India) Private Limited is secured by first and exclusive charge on specific office equipments including specific networking systems of the Company.
Maturity Profile and rate of interest of Non Convertible Debentures (NCD) (Principal undiscounted) are as under:
Note:
* Security: Working Capital Loans and BuyersâCredit from Consortium Banks are secured by way of first pari-passu charge on stock, book debts, other current assets and additionally secured by a specific immovable property of the Company located at Mumbai;
**Short term loans from banks of Rs.1,180 crore are secured as under:
Rs.500 Crore from Canara Bank Limited is secured by subservient charge on moveable fixed assets of the Company with asset cover of minimum 1.25 times.
Rs.30 Crore from Yes Bank Limited is secured by subservient charge on the current assets of the company excluding Regulatory assets of Mumbai Distribution Business providing minimum 1x cover. The charge creation is under process.
Rs.500 Crore from Union Bank of India is secured by subservient charge on fixed assets of the Company with asset cover of minimum 1.25 times.
Rs.150 Crore from IDBI Bank Limited is secured by way of first pari-passu charge on stock, book debts, other current assets and additionally secured by a specific immovable property of the Company located at Mumbai (Existing working capital consortium facility led by Canara Bank, also hold pari-passu charge on above assets).
Note: In line with the requirements of Ind AS 114, âRegulatory Deferral Accountsâ, the entity presents the resulting deferred tax asset / (liability) and the related movement in that deferred tax asset / (liability) with the related regulatory deferral account balances and movements in those balances, instead of within that presented above in accordance with Ind AS 12 âIncome Taxesâ. Refer Note No. 16 for disclosures as per Ind AS 114.
4. The Company is engaged in the business of providing infrastructural facilities as per Section 186 (11) read with Schedule VI of the Act. Accordingly, disclosures under Section 186 of the Act is not applicable to the Company.
5. Figures for the previous year have been regrouped/reclassified/rearranged wherever necessary to make them comparable to those for the current year. Figures in bracket indicate previous yearâs figures. @ - represents figures less than Rs.50,000 which have been shown at actuals in brackets with @.
6. (a) contingent Liabilities
i) Claims against the Company not acknowledged as debts and under litigation aggregates to Rs.1,951.20 Crore (March 31, 2017 - Rs.1,567.56 Crore). These include claim from suppliers aggregating to Rs.607.81 Crore (March 31, 2017 - Rs.413.09 Crore), income tax claims Rs.317.58 Crore (March 31, 2017 - Rs.713.27 Crore), indirect tax claims aggregating to Rs.1,007.38 Crore (March 31, 2017 - Rs.411.08 Crore) out of which claims of Rs.320.63 Crore (March 31, 2017 - Rs.304.10 Crore), if materialised, will be recovered from the customers and other claims Rs.18.43 Crore (Net of provision made of Rs.44 Crore) (March 31, 2017 - Rs.30.12 Crore (Net of Provision made of Rs.32 Crore)).
ii) The Companyâs application for compounding in respect of its ECB of USD 360 million has been deemed by the Reserve Bank of India (RBI) as never to have been made subsequent to the withdrawal of the compounding application. Accordingly, there is no liability in respect of the compounding fee of Rs.1 24.68 Crore earlier specified by RBI. Subsequent to the withdrawal of the compounding application, the matter has been referred to the Enforcement Directorate where the same is still pending.
(b) capital and Other commitments
i) Estimated amount of contracts remaining unexecuted on capital account and not provided for Rs.272.40 Crore (March 31, 2017 - Rs.403.81 Crore).
ii) Uncalled liability on partly paid shares Rs.10.70 Crore (March 31, 2017 - Rs.10.70 Crore)
iii) The Company has given equity / fund support / other undertakings for setting up of projects / cost overrun in respect of various infrastructure and power projects being set up by Companyâs subsidiaries and associates; the amounts of which currently are not ascertainable.
e) Details of Material transactions with Related Party
(i) transactions during the year (Balance Sheet heads)
2017-18
ICD given to RePL Rs.1,140.69 Crore. ICD refunded by RePL Rs.1,357.14 Crore. Advance received against transfer of business from REGSL Rs.1,500.00 Crore.
2016-17
Cancellation of ICD taken on merger of RCoPL Rs.1,408.63 Crore
(ii) Balance sheet heads (closing balance)
2017-18
Investment in Equity of RePL Rs.6,828.42 Crore. ICD given to RNEL Rs.1,696.44 Crore. Subordinate debt given to RDSPL Rs.1,508.17 Crore. Advance received against transfer of business from REGSL Rs.1,500.00 Crore. Trade Receivables, Advances given and other receivables for rendering services SaPoL Rs.2,373.45 Crore.
2016-17
Trade payables, Advances received and other liabilities for receiving of services on revenue and capital account of CpPl Rs.1,214.03 Crore. Investment in Equity of RePL Rs.6,828.42 Crore. Subordinate debt given to RDSPL Rs.1,509.49 Crore.Trade Receivables, Advances given and other receivables for rendering services SaPoL Rs.2,356.77 Crore.
(iii) expenses heads
2017-18
Purchase of Power (including Open access charges - Net of Sales) from VIPL Rs.1,476.13 Crore 2016-17
Purchase of Power (including Open access charges - Net of Sales) from VIPL Rs.1,719.13 Crore *Remuneration does not include post-employment benefits, as they are determined on an actuarial basis for the Company as a whole.
Notes:
1) The above disclosure does not include transactions with/as public utility service providers, viz, electricity, telecommunications etc. in the normal course of business.
The closing balances of the balance sheet items and transactions during the year are as per Ind AS financial statements except for Ind AS adjustments pertaining to Power Purchase Agreement with VIPL (Refer Note No. 53(2)).
2) Transactions with Related Party which are in excess of 10% of the Total Revenue (including regulatory Income) of the Company are considered as Material Related Party Transactions. Total Revenue (including regulatory Income) for 2017-18 and 2016-17 is as per Ind AS.
3) Includes contractual interest payments based on the interest rate prevailing at the reporting date
7. Segment Reporting
(a) Description of segments and principal activities
The Company operates in two Business Segments namely Power and Engineering, Procurement, Construction (EPC) and Contracts. Business segments have been identified as reportable segments based on how the CODM examines the Companyâs performance both from a product and geographic perspective. The inter segment pricing is effected at cost. Segment accounting policies are in line with the accounting policies of the Company.
The Power segment is engaged in generation, transmission and distribution of electrical power at various locations. The Company operates a 500 MW Thermal Power Station at Dahanu, a 220 MW Combined Cycle Power Plant at Samalkot, a 48 MW Combined Cycle Power Plant at Mormugao, a 9.39 MW Wind-farm at Chitradurga and also purchases power from third parties and supplies the power through the Companyâs own distribution grid in suburbs of Mumbai.
EPC and Contracts segment of the Company renders comprehensive value added services in construction, erection, commissioning and contracting.
(b) Summary of Segment information is as under:
The expenses and income that are not directly attributable to any business segment are shown as unallocable income (net of unallocable expenses). Interest income and finance cost are not allocated to segments, as this type of activity is driven by the central treasury function, which manages the cash position of the Company.
(c) Segment Revenue
Sales between segments are carried out at armâs length and are eliminated on consolidation. The segment revenue is measured in the same way as in the Statement of Profit and Loss.
(d) Segment assets
Segment assets are measured in the same way as in the financial statements. These assets are allocated based on the operations of the segment and the physical location of the asset. Assets which canât be allocated to any of the segments are shown as Unallocated Assets.
Investments & derivative financial instruments held by the Company are not considered to be segment assets but are managed by the treasury function.
(e) Segment Liabilities
Segment liabilities are measured in the same way as in the financial statements. These liabilities are allocated based on the operations of the segment. Liabilities which canât be allocated to any of the segments are shown as Unallocated Liabilities.
The Companyâs borrowings and derivative financial instruments are not considered to be segment liabilities, but are managed by the treasury function.
(f) information about Major customer
Revenue from Crest Logistics and Engineers Private Limited of the Companyâs EPC & Contract Business is Rs.612.38 Crore (March 31, 2017 - Rs.1,054.05 Crore) which is more than 10% of the Companyâs segment revenue.
(g) Geographical Segment
The Companyâs operations are mainly confined in India. The Company does not have material earnings from business segment outside India. As such, there are no reportable geographical segments.
8. (A) Standby Charges
In the matter of liability of Rs.515.60 Crore of standby charges with the Tata Power Company Limited (TPC) determined by MERC for the period April 1, 1998 to March 31, 2004, which the Company has fully accounted for, the Appellate Tribunal of Electricity (ATE) determined the total liability at â500 Crore and directed TPC to refund Rs.354 Crore (inclusive of interest of Rs.15 Crore upto March 31, 2004) to the Company plus interest @ 10% p.a. commencing from April 01, 2004 till the date of payment. Against the said order, TPC filed an appeal with the Supreme Court. The Honâble Supreme Court passed an interim order dated February 07, 2007 granting stay of the impugned order of the ATE subject to the condition that, TPC furnish a bank guarantee in the sum of Rs.227 Crore and, in addition, deposit a sum of Rs.227 Crore with the Registrar General of the Court which may be withdrawn by the Company subject to the Company giving an undertaking that in the event of the appeal being decided against the Company, wholly or in part, the amount as may be found refundable by the Company shall be refunded to TPC without demur together with interest as may be determined by the Court. The Company accordingly withdrew the amount of Rs.227 Crore after complying with the conditions specified and has accounted the said amount as Other Liabilities pending final adjustment. Moreover, pending final order of the Honâble Supreme Court, the Company has not accounted for the reduction in standby charges liability of Rs.15.60 Crore as well as interest amount determined by ATE as payable by TPC to the Company.
(B) Take or Pay and Additional Energy Charges
Pursuant to the order passed by MERC dated December 12, 2007, in case No. 7 of 2002, TPC has claimed an amount of Rs.323.87 Crore towards the following:
(a) Difference in the energy charge for energy supplied by TPC at 220 kV interconnection for the period March 2001 to May 2004 along with interest at 24% per annum up to December 31, 2007, and
(b) Minimum offtake charges for energy for the years 1998-99 to 1 999-2000 along with interest at 24% per annum up to December 31, 2007.
In an appeal filed by the Company, ATE held that the amount in the matter (a) above is payable by the Company along with interest at State Bank of India prime lending rate for short term borrowings. The matter (b) was remanded to MERC for redetermination. The Company has filed an appeal against the said order before the Supreme Court, which while admitting the appeal, has restrained TPC from taking any coercive action in respect of the matter stated in (a) above and TPC has also filed an appeal against the said order. The Company has complied with the interim order directions of depositing Rs.25 Crore with the Registrar of Supreme Court and providing a Bank Guarantee of Rs.9.98 Crore. The said amount is disclosed under Contingent Liability in Note No. 35 above.
9. Investment in Delhi Airport Metro Express Private Limited
Delhi Airport Metro Express Private Limited (DAMEPL), a SPV of the Company, had terminated the Concession Agreement with Delhi Metro Rail Corporation (DMRC) for the Delhi Airport Metro Line and the operations were taken over by DMRC with effect from July 1, 2013. As per the terms of the Concession Agreement, DMRC is liable to pay DAMEPL a Termination Payment. The matter was referred to arbitration tribunal and vide order dated May 11, 2017 DAMEPL was granted arbitration award of Rs.2,950 Crore along with interest. DMRC preferred an appeal against the Arbitration award before the Honâble Delhi High Court. The Honâble Delhi High Court vide order dated March 06, 2018 upheld the arbitration award.
The Honâble Delhi High Court also passed an order on March 23, 2018 directing DMRC to pay Rs.306 Crore as an immediate interim relief to DAMEPL. DMRC has preferred an appeal against the order of the single judge before the division bench of the Honâble Delhi High Court. On April 09, 2018, the divisional bench of the Honâble Delhi High Court has directed DMRC to take over servicing of all debt liabilities of DAMEPL aggregating to Rs.1,618 Crore pending disposal of the appeal.
10. Scheme of Amalgamation of Reliance Infraprojects Limited (RInfl) with the Company:
The Honâble High Court of Judicature of Bombay had sanctioned the Scheme of Amalgamation of Reliance Infraprojects Limited (RInfl) with the Company on March 30, 201 1 with the appointed date being April 01, 2010. As per the clause 2.3.7 of the Scheme, the Company, as determined by its Board of Directors, is permitted to adjust foreign exchange / hedging / derivative contract losses / gains debited / credited in the Statement of Profit and Loss by a corresponding withdrawal from or credit to General Reserve.
Pursuant to the option exercised under the above Scheme, net gain on account of derivative instruments / forward contracts of Rs.5.79 Crore for the year ended March 31, 2018 has been credited to the Statement of Profit and Loss and an equivalent amount has been transferred to General Reserve. Similarly, foreign exchange loss of Rs.17.47 Crore (Rs. Nil attributable to finance cost) has been debited to Statement of Profit and Loss and an equivalent amount has been withdrawn from General Reserve. The Company has been legally advised that crediting and debiting of the said amount in Statement of Profit and Loss is in accordance with Schedule III to the Act. Had such transfer / withdrawal not been done, the Profit before tax for the year ended March 31, 2018 would have been lower by Rs.11.68 Crore and General Reserve would have been higher by an equivalent amount. The treatment prescribed under the Scheme override the relevant provisions of Ind AS 1: âPresentation of Financial Statementsâ.
11. In accordance with Ind AS 101-First time adoption of Indian Accounting Standards, the Company has opted to continue the policy as prescribed vide the notification dated December 29, 201 1 issued by the Ministry of Corporate Affairs. Accordingly, the Company has exercised the option given in paragraph 46A of the Accounting Standard-11 âThe Effects of Changes in Foreign Exchange Ratesâ in Previous GAAP of capitalising the foreign exchange loss/gain arising on long term foreign currency monetary items relating to acquisition of depreciable capital assets and depreciating the same over the balance life of such assets and in other cases amortising the foreign exchange loss/gain over the balance period of such long term foreign currency monetary items. Accordingly, the Company has carried forward the unamortised portion of net gain of Rs.77.77 Crore as on March 31, 2018 (March 31, 2017 - Rs.71.59 Crore) in âForeign Currency Monetary Item Translation Difference Accountâ and the same is grouped under âOther Equityâ.
In terms of the Scheme of amalgamation of Reliance Cement Works Private Limited with Western Region Transmission (Maharashtra) Private Limited (WRTM) wholly owned subsidiary of the Company, which was subsequently amalgamated with the Company w.e.f. April 1, 2013, the Board of Directors of the Company during the year ended March 31, 2018 determined an amount of Rs.411.50 Crore (March 31, 2017 - Rs.555.58 Crore) as Exceptional items stated above which was debited to the Statement of Profit and Loss and an equivalent amount has been withdrawn from General Reserve. Had such withdrawal not been done, the Profit before tax for the year ended March 31, 2018 would have been lower by Rs.411.50 Crore (March 31, 2017 - Rs.555.58 Crore) and General Reserve would have been higher by an equivalent amount. The treatment prescribed under the Scheme overrides the relevant provisions of Ind AS 1â Presentation of Financial Statementsâ. Other Exceptional item of Rs.284.1 9 Crore, during the year ended March 31, 2018, represents profit on sale of 24,83,923 equity shares representing 34.79% holding in Reliance Airport Developers Limited, wholly owned Subsidiary of the Company.
12. During the year ended March 31, 2018, 63,50,000 equity shares of Reliance Naval and Engineering Limited (RNEL) held by Reliance Defence Systems Private Limited (RDSPL), wholly owned subsidiary of the Company, which were pledged as security for loan obtained by RNEL have been invoked and thereby the holding of RDSPL in RNEL has reduced from 30.70% to 29.84%. In view of this, during the year ended March 31, 2018, the Company has written off an amount of Rs.22.61 Crore from the investment in RDSPL being the difference between the cost of the invoked shares of RNEL and the market value of those shares at the date on invocation and the same has been shown as an exceptional item.
13. In respect of Mumbai Metro One Private Limited (MMOPL), a subsidiary of the Company, conditions indicate that a material uncertainty exists that may cast significant doubt on MMOPLâs ability to continue as a going concern as the net worth has been substantially eroded as at the year-end, current liabilities exceeded its current assets by Rs.973.61 Crore and loss incurred during the year amounted to Rs.238.29 Crore. During the year ended March 31, 2018, Company has written off Rs.190.39 Crore out of the investment in MMOPL in view of the losses incurred and same has been shown as an exceptional item.
14. Disclosure under ind As 19 âEmployee Benefitsâ
Defined contribution Plan
(i) Provident fund
(ii) Superannuation fund
(iii) State defined contribution plans
- Employerâs contribution to Employeesâstate insurance
- Employersâ Contribution to Employeesâ 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 trustees of the Reliance Infrastructure Limited Officerâs Superannuation Scheme. 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 as expense in the financial statements for the year:
Defined Benefit Plan
Provident Fund (applicable to certain Employees)
The benefit involving employee established provident funds, which require interest shortfall to be recompensated are to be considered as defined benefit plans. As per the Audited Accounts of Provident Fund Trust maintained by the Company, the shortfall arising in meeting the stipulated interest liability, if any, gets duly provided for.
Gratuity
The Company operates a gratuity plan administered by various insurance companies. Every employee is entitled to a benefit equivalent to fifteen days salary last drawn for each completed year of service in line with the Payment of Gratuity Act, 1972 or Company scheme whichever is beneficial. The same is payable at the time of separation from the Company or retirement, whichever is earlier. The benefits vest after five years of continuous service.
*Includes Rs.0.07 Crore (Rs.0.34 Crore) for Discontinued Operations of WRSS.
** Includes Rs. Nil (Rs.0.26 Crore) for Discontinued Operations of WRSS
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
15. The Board of Directors at its meeting held on March 16, 2016 had approved the Scheme of restructuring envisaging transfer of various operating divisions of the Company, namely Dahanu Thermal Power Station (DTPS), Goa Power Station, Samalkot Power Station, Mumbai Power Transmission Division, Mumbai Power Distribution Division and Windmill Division (together considered as Power Business,) to its resulting wholly owned subsidiary viz. Reliance Electric Generation & Supply Limited with appointed date of April 01, 2016. The scheme received the approval of the Honâble Bombay High Court on January 19, 2017. The Honâble High Court vide order dated November 20, 2017, sanctioned the effective date of the scheme from April 01, 2016 to April 01, 2018, with liberty to apply. The scheme is effective subject to various approvals and accordingly no effect of the said scheme is given in the books of account and based on the legal advice received, has not been considered as Non Current Assets held for sale as per Ind AS 105 âNon Current Assets held for sale and discontinued operationsâ.
16. During the year ended March 31, 2017, the Company signed Term Sheet with Adani Transmission Limited (ATL) for sale of its assets in Western Region Strengthening Scheme (WRSS) projects and entire investment in subsidiary, Parbati Koldam Transmission Company Limited (PKTCL). On December 6, 2016, the Company executed Share Purchase Agreement with ATL for 100% sale of its WRSS Transmission Assets. On October 12, 2017, the Company completed the transfer of its Western Region System Strengthening Scheme (WRSSS) Transmission Undertakings to its two subsidiaries namely Western Transmission Gujarat Limited (WTGL) and Western Transco Power Limited (WTPL) and accordingly the Assets and Liabilities as well as Income and Expenditure of WRSSS have been considered as Non Current Assets held for sale and discontinued operations as per Ind AS 105 âNon Current Assets held for sale and discontinued operationsâ.
On the above transfer, there was a loss of Rs.1 98.50 Crore during the year ended March 31, 2018, being loss on fair value of assets and liabilities considered as held for sale. Pursuant to the Scheme of amalgamation of Reliance Cement Works Private Limited with Western Region Transmission (Maharashtra) Private Limited (WRTM) wholly owned subsidiary of the Company, which was subsequently amalgamated with the Company w.e.f. April 01, 2013, the Board of Directors of the Company during the quarter ended September 30, 2017 had determined this amount of Rs.198.50 Crore as Exceptional item, which was debited to the Statement of Profit and Loss and an equivalent amount had been withdrawn from General Reserve. Had such withdrawal not been done, the Profit before tax for the year ended March 31, 2018 would have been lower by Rs.198.50 Crore and General Reserve would have been higher by an equivalent amount. The treatment prescribed under the Scheme overrides the relevant provisions of Ind AS 1 âPresentation of Financial Statementsâ.
17. During the year ended March 31, 2018, the Company signed a Share Purchase Agreement (SPA) with Adani Transmission Limited (ATL) for sale of its integrated business of generation, transmission and distribution of power for Mumbai City. The Company received an advance of Rs.2,602 Crore during the year ended March 31, 2018 from ATL which will be adjusted from the consideration towards the SPA. The said transaction is subject to various regulatory and customary approvals and hence has not been considered as Non Current Assets held for sale and discontinued operations as per Ind AS 105 âNon Current Assets held for sale and discontinued operationsâ.
18. interest in Jointly controlled Operations
The Company along with M/s. Geopetrol International Inc. and Reliance Natural Resources Limited *(the consortium) was allotted 4 Coal Bed Methane (CBM) blocks from Ministry of Petroleum and Natural Gas (Mo PNG) covering an acreage of 3,266 square kilometers in the States of Madhya Pradesh, Andhra Pradesh and Rajasthan. The consortium had entered into a contract with Government of India for exploration and production of these four CBM blocks. The Company as part of the consortium had acquired proportionate share in each of the four blocks. M/s. Geopetrol International Inc was appointed the operator on behalf of the consortium for all the four CBM blocks.
Also, the Company along with M/s. Geopetrol International Inc, NaftoGaz India Private Limited and Reliance Natural Resources Limited *(the consortium) was allotted Oil and Gas block from Ministry of Petroleum and Natural Gas (MoPNG), in the State of Mizoram under the New Exploration Licensing Policy (NELP-VI) round, covering an acreage of 3,619 square kilometers and the consortium had signed a production sharing contract with the Government of India for exploration and production of Oil and Gas from block. The Company as part of the consortium has 70% share in the block. M/s. NaftoGaz India Private Limited was the operator on behalf of the consortium for the block.
**The Board of Directors of the Company has approved the transfer of operatorship from M/s. Geopetrol International Inc to the Company on February 14, 2015. MoPNG approved the same on April 28, 201 6 and amendment to Contract has been conveyed on January 29, 2018.
*** The consortium experienced inordinate delays in Government clearances, non receipt of Petroleum Exploration License (PEL) for more than 5 years and consequently relinquished its rights in respect of the block at Kothagudem, Andhra Pradesh vide letter dated February 06, 2013. The consortium vide letter dated November 21, 2013 communicated to Directorate General of Hydrocarbons (DGH) / MoPNG that the abnormal delays has made it impossible for the consortium to pursue performance under the contract. Under these circumstances, the contract is not effective and became incapable of being executed and that the consortium has no further obligations with respect to the said CBM Block. Govt. of India notified âPolicy Framework for Early Monetization of Coal Bed Methaneâ on April 11, 2017. Policy allows exit option if delay in grant of PEL exceeds two (2) years from the State Government.
Consortium has submitted request on June 07, 2017 for approval of exit option due to inordinate (more than 5 years) delays in receiving grant of PEL. DGH on October 31, 2017 conveyed relinquishment of the block. Liability, if any, which may arise on this relinquishment, is presently not ascertainable.
**** The consortium had experienced inordinate delays in receipt of clearances/permissions from State Government of Rajasthan. Timely grant of requisite approvals was beyond the control of the Consortium and the abnormal delay in the grant of requisite approvals/clearances and also abnormal delay in response on request of grant of extension of Phase-I by DGH, made the Consortium incapable of performance. In view of the difficulties faced, the Consortium relinquished all rights with respect to both the CBM blocks vide letter dated November 21, 2013 to the Government of India and it stated that the consortium has no further obligations with respect to the CBM Blocks. Govt. of India notified âPolicy Framework for Early Monetization of Coal Bed Methaneâ on April 11, 2017. Policy allows exit option without paying Cost of Unfinished Work Program in case of inordinate delays in granting clearances i.e. beyond two (2) years. Consortium had submitted request on June 07, 2017 for approval of exit option due to inordinate delays in receiving various clearances. DGH on October 31, 2017 conveyed relinquishment of both blocks. Liability, if any, which may arise on this relinquishment, is presently not ascertainable.
***** MoPNG, Government of India in October 2012, after six years of the award of block, observed that NaftoGaz India Limited had falsely represented itself as the subsidiary of NaftoGaz of Ukraine at the time of bidding and served notice of termination to all consortium members referring relevant clause of NELP-VI notice inviting offer (NIO) and Article 30.3(a) of the Production Sharing Contract (PSC) and demanded to pay penalty towards unfinished minimum work program. The Company has received letter dated April 16, 2015 from DGH to deposit USD 9,467,079 as cost of unfinished Minimum Work Program (MWP) to MoPNG. The clai
Mar 31, 2017
All resulting fair value estimates for investment properties are included in level 3.
* The Balance equity stake is held by another subsidiary Reliance Airport Developers Private Limited ** Subsidiary relationship during the year
**** 26,1 1,20,000 equity shares are in safe keep accounts.
***** 3,68,245 equity shares are in safe keep accounts
~ 31,20,00,000 (March 31, 2016: 29,97,64,706, April 01, 2015:29,97,64,706) shares of BSES Rajdhani Power Limited,
16.68.00.000 (March 31, 201 6: 1 6,02,58,824, April 01, 2015: 16,02,58,824) shares of BSES Yamuna Power Limited,
5,470 ( March 31, 201 6: 5,470, For April 01, 2015: 5,470) shares of PS Toll Road Private Limited,
13,91,46,870 (March 31, 201 6: 1 3,91,46,870, April 01, 2015: 13,91,46,870)shares of Parbati Koldam Transmission Company Limited,
11.20.00.000 (-) shares of Reliance Power Limited and
1,88,28,000 (-) shares of BSES Kerala Power Limited are pledged with the Lenders of the respective investee Company.
# 45,99,180 (March 31, 201 6: 44,18,81 9, April 01, 2015: Nil) shares of DA Toll Road Private Limited,
2,465 ( March 31, 2016: Nil, For April 01, 2015: Nil) shares of PS Toll Road Private Limited,
10,22,700 (March 31, 2016: 16,70,410, April 01, 2015: Nil) shares of KM Toll Road Private Limited,
1 1,13,300 (March 31, 2016: 18,18,390, April 01, 2015: Nil) shares of HK Toll Road Private Limited and 62,75,20,433 (March 31, 201 6: 62,65,20,433, April 01, 2015: 44,42,22,318) shares of Reliance Power Limited are pledged with the Lenders of the Company.
$ associate relationship during the year
$$ ceased to be a subsidiary of the Company during the year
The list of investment in subsidiary, joint ventures and associates along with proportion of ownership interest held and country of incorporation are disclosed in Note No 43 of Consolidated Financial Statement.
During the year ended March 31, 2017 Reliance Infrastructure Invit Fund (Fund) has been formed as a Trust to invest in infrastructure assets primarily being the toll road assets. The Company is a Sponsor / project manager to the Fund. Pursuant to this, the Company has proposed to transfer the controlling interest in seven Toll Road Companies viz, DS Toll Road Limited, GF Toll Road Private Limited, NK Toll Road Limited, JR Toll Road Private Limited, SU Toll Road Private Limited, TK Toll Road Private Limited and TD Toll Road Private Limited. During the year ended March 31, 2016, the Company had signed share purchase agreement with Birla Corporation Limited (BCL) for sale of its entire investment in wholly owned subsidiary Reliance Cement Company Private Limited (RCCPL). During the year ended March 31, 2017, the entire holding has been sold to BCL at a consideration ofRs,2,269.06 Crore out of which an amount ofRs,2,010 Crore has been received during the current year and the balance amount ofRs,259.06 Crore receivable from BCL, has been included in Other Current Financial Assets as Other Receivables. The loss on sale of this investment of ''1 53.33 Crore has been shown as an exceptional item in the Statement of Profit and Loss.
Assets pledged details
26.57.100 (March 31, 2016: 26,57,100, April 01, 201 5: 26,57,100) shares of DS Toll Road Limited,
5,470 (March 31, 201 6: 5,470, April 01, 2015: 5,470) shares of PS Toll Road Private Limited,
22,83,270 ( March 31, 2016: 22,83,270, April 01, 201 5: 22,83,270) shares of NK Toll Road Limited,
90,22,007 ( March 31, 2016: 90,22,007, April 01, 201 5: 90,22,007) shares of SU Toll Road Private Limited are pledged with the Lenders of the respective investee Company.
15,63,000 (March 31, 2016: Nil, April 01, 2015: Nil) shares of DS Toll Road Limited,
2,465 (March 31, 2016: Nil, April 01, 2015: Nil) shares of PS Toll Road Private Limited,
13.43.100 (March 31, 2016: Nil, April 01, 2015: Nil) shares of NK Toll Road Limited,
55,23,678 (March 31, 2016: Nil, April 01, 2015: Nil) shares of SU Toll Road Private Limited 5,88,330 (March 31, 2016: 9,60,939, April 01, 2015: Nil) shares of GF Toll Road Private Limited 5,245 (March 31, 2016: Nil, April 01, 2015: Nil) shares of JR Toll Road Private Limited 32,23,476 (March 31, 2016: Nil, April 01, 2015: Nil) shares of TD Toll Road Private Limited 38,26,695 (March 31, 2016: Nil, April 01, 2015: Nil) shares of TK Toll Road Private Limited
Nil (March 31, 2016: 8,53,34,926, April 01, 2015: Nil) shares of Reliance Cement Company Private Limited are pledged with the Lenders of the Company.
Regulatory Assets ofRs,1,102.13 Crore as at March 31, 2017,Rs,1,470.14 Crore as at March 31, 2016 andRs,1,849.41 Crore as at April 01, 2015 have been given as Security to the Lenders.
a. * includesRs,739.61 Crore recoverable from Vidarbha Industries Power Limited (VIPL) as per MERC Order dated June 20, 2016 in the matter of petition of VIPL for truing up for FY 2014-15 and provisional truing up for FY 2015-16 and also MERC Order dated October 21, 2016 in the matter of petition of the Company for True-up for the year 2014-15 and provisional Truing up for the year 2015-16. Out of this amount, VIPL has paidRs,213.50 Crore till March 31, 2017 and the balance amount ofRs,526.1 1 Crore recoverable from VIPL is included in Other Current financial assets as Other Receivables.
b. From April 01, 2012 till March 31, 2016 (2nd Multi Year Tariff (MYT) control period) and from April 01, 2016 till March
31, 2020 (3rd MYT control period), determination of Retail Supply Tariff (RST) / Transmission charges chargeable by the Company to its consumers is governed by MERC (MYT) Regulations 2011 and MERC (MYT Regulations) 2015, whereby MERC is required to determine the RST and Transmission charges in a manner that the Company recovers its power purchase costs as well as other prudently incurred expenses and earns assured return of 15.5% p.a. on MERC approved equity in Distribution Wires Business and Transmission Business and 17.5% p.a. on MERC approved equity in Retail Supply Business, subject to achievement of Plant Load Factor of 85% , transmission availability of 98% and Aggregate Technical and Commercial (AT&C) loss reduction targets respectively. The rate review or "truing up" process during the MYT period is being conducted as per the principles stated in MYT Regulations 2011 and 2015.
c. During the truing up process, revenue gaps (i.e. surplus/shortfall in actual returns over returns entitled) are determined by the regulator and are permitted to be carried forward as regulatory assets/ regulatory liabilities which would be recovered / refunded through future billing based on future tariff determination by the regulator. At the end of each accounting period, Company also determines regulatory assets/regulatory liabilities in respect of each accounting period on self true up basis on principles specified in accounting policy Note no. 1 (d)(i) wherever regulator is yet to take up formal truing up process.
d. During the year ended March 31, 2014, the Company had received tariff order from MERC allowing it to recover the regulatory gap determined by the regulator for the period up to March 31, 2012, aggregating toRs,2,463.18 Crore along with carrying cost ofRs,1,403.65 Crore on smoothened recovery basis over a period of 6 years till FY 2018-19. The Company has apportioned an amount ofRs,461.02 Crore towards carrying cost out of the total recovery during the year ended March 31, 2017 ofRs,829.03 Crore under the said order.
e. MERC, vide its Orders dated June 22, 2016, August 18, 2016 and October 21, 2016, has trued up revenue gap for period upto 31st March 2015 for Mumbai Transmission Business, Generation Business and Distribution Business respectively with certain dis-allowances. MERC has also approved tariffs in respect of Distribution Business for the year 2016-17 w.e.f. October 01, 2016 by its Tariff Order dated October 21, 2016.
f. During the year MERC vide its Order dated October 21, 2016 in respect of the Mumbai Distribution Business, trued up the revenue gap for the year 2014-15 wherein additional revenue gap ofRs,250.78 Crore was allowed to the Company. Similarly in the same Order MERC also allowed an additional amount ofRs,285.1 6 Crore giving effect to the order of the Appellate Tribunal in respect of certain disallowances made by the MERC for the years 2003-04 to 2011-12. MERC also gave additional revenue gap ofRs,64.22 Crore in respect of case no 69 of 2013 for the years 2011-12 & 2012
13 effect of which was inadvertently not considered by MERC in the True Up Order for the year 2013-14. Revenue Gap in respect of Generation Business ofRs,132.40 Crore for the years 2009-10, 2010-1 1 and 2011-12 was reversed during the year. The above amounted to an aggregate revenue gap ofRs,467.76 Crore which has been accounted as regulatory income during the year ended March 31, 2017.
g. In accordance with the MERC tariff regulation for determination of tariff, the income-tax paid is considered for tariff determination (truing up). Accordingly, the Company has consideredRs,26.59 Crore ('' 40.45 Crore) of deferred tax liability for the year arising out of differences in rates of depreciation between MERC and income-tax as "Regulatory assets recoverable on account of Deferred Tax on Depreciation difference". Similarly, the deferred tax liability / (asset) of ('' 213.78 Crore) (March 31, 2016 -Rs,33.27 Crore) on account of timing difference on taxability of regulatory income accounted in the books is treated as "Net tax recoverable from future tariff determination".
(c) Terms / Rights attached to Equity Shares:
(i) Voting
The Company has only one class of equity shares having a par value ofRs,10 per share. Each holder of equity shares is entitled to one vote per share.
(ii) Dividend
The Board of Directors in their meeting dated April 15, 2017 have approved a final dividend ofRs,9 per equity share for the financial year ended March 31, 2017. The proposal is subject to the approval of shareholders at the ensuing annual general meeting and if approved would result in a cash outflow of approximatelyRs,284.87 Crore including corporate dividend tax ofRs,48.18 Crore.
(iii) Liquidation
I n the event of liquidation of the Company, the holders of equity shares will be entitled to receive all of the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
(d) Buy-back of Equity Shares:
Aggregate number of shares bought back during the period of five years immediately preceding the reporting date -44,30,262 (March 31, 2016 - 44,30,262 and April 01, 201 5 - 44,30,262).
Nature and purpose of Other Reserves
(a) Capital Reserve:
The Reserve is created based on statutory requirement under the Companies Act, 2013, on account of forfeiture of equity shares warrants, mergers and acquisitions pursuant to the Order of Hon''ble High Court of Bombay. This is not available for distribution of dividend but can be utilised for issuing bonus shares.
(b) Securities Premium Account:
Securities premium account is used to record the premium on issue of shares. The same can be utilized in accordance with the provisions of the Act.
(c) Debenture Redemption Reserve:
As per the Companies (Share Capital and Debentures) Rules, 2014 (amended), the Company is required to create debenture redemption reserve out of profits, which is available for payment of dividend, equal to 25% of the amount of debentures issued. Accordingly, the Company has appropriated 25% of the debentures issued which would be utilized for redemption of debentures during its maturity.
(d) Capital Redemption Reserve:
The Capital Redemption Reserve is required to be created on buy-back of equity shares. The Company may issue fully paid up bonus shares to its members out of the capital redemption reserve account.
(e) Statutory Reserves
(i) Development Reserve Account No. 1, 2 and 3:
It represents Development Rebate Reserve required under the Income-tax Act.
(ii) Debt Redemption Reserve, Rural Electrification Scheme Reserve, Reserve to augment production facilities and Reserve for Power Project -
These reserves were created under the repealed Electricity (Supply) Act, 1948 and Tariff Regulations. These are Statutory Reserves.
(iii) Contingency Reserve
This is a statutory reserve created under the repealed Electricity (Supply) Act, 1948 and Tariff Regulations. In view of orders received and amendments in regulations, the balance amount in contingency reserve has been transferred to General Reserve during the year ended March 31, 2017.
(f) Foreign Currency Monetary Item Translation Difference Account:
The Company has availed an option of continuing the policy adopted for exchange differences arising from translation of long term foreign currency monetary items as per Previous GAAP. Foreign Currency Monetary Item Translation Difference is on account of foreign exchange gain / (loss) on non-depreciable long term foreign currency monetary items. The Company has opted to continue the accounting policy of Previous GAAP for such long term foreign currency monetary items as per D13AA of Ind AS 101" First-time Adoption of Indian Accounting Standards". Accordingly, such gain / (loss) is carried to reserves under this head and amortized over the life of such long term foreign currency monetary items.
(g) Treasury Shares:
Reliance Infrastructure ESOS Trust has in substance acted as an agent and the Company as a sponsor retains the majority of the risks rewards relating to funding arrangement. Accordingly, the Company has recognized issue of shares to the Trust as the issue of treasury shares by consolidating Trust into financial statements of the Company.
* Current Maturities of long term debt disclosed under other Financial Liabilities (Refer Note No 22)
Security:
A. Non Convertible Debentures ofRs,3,692.33 Crore (Principal undiscounted Amount) are secured as under:
'' 125 Crore are secured
(i) by way of first pari-passu charge on Company''s Property, Plant and Equipment , both present and future, of Goa Power Plant
(ii) by way of first pari-passu charge on all the assets of Samalkot Power Plant
(iii) by way first pari-passu charge on certain fixed assets i.e. Freehold Land, Plant and Machinery and Distribution Systems of Mumbai distribution division
(iv) One Flat located in Thane District in the State of MaharashtraRs,566.67 Crore are secured
(i) by way of first pari-passu charge, both present and future, on CompanyRs,s Plant & Machinery and Building situated at Dahanu
(ii) by way of first pari-passu charge, both present and future, on specific Land and Building situated in Mumbai
(iii) by way of first pari-passu charge, both present and future, on Investment Property situated at Mumbai.
Rs, 725.66 Crore are secured by way of first pari-passu charge on specific land and buildings located in Mumbai and on certain Property, Plant and Equipment and Intangible Assets of Mumbai distribution division of the Company.
Rs, 500 Crore are secured by first pari-passu charge on Land and Buildings, certain Plant and Machinery and Distribution Systems of the Company''s Mumbai distribution division and one flat situated in Thane District in the State of Maharashtra
Rs, 300 Crore are secured by the following:-
(i) Pledge of 18,30,84,684 shares of M/s. Reliance Power Limited which are owned by the Company.
(ii) All of the Company''s rights, title, interest and benefits in, to and under the bank account no.00600350138613 of Reliance Infrastructure Limited with HDFC Bank, Mumbai Branch.
'' 650 Crore are secured
(i) by way of first pari-passu charge on Company''s Property, Plant and Equipment, both present and future, of Goa Power Plant
(ii) by way of first pari-passu charge on all the assets of Samalkot Power Plant
(iii) by way first pari-passu charge on certain fixed assets i.e. Freehold Land, Plant and Machinery and Distribution Systems of Mumbai distribution division.
(iv) One Flat located in Thane District in the State of Maharashtra
(The existingRs,125 Crore NCD holders also hold pari-passu charge on the above assets.)
Rs, 475 Crore are secured by first ranking pari-passu charge on the following: -
(i) Specific Regulatory Assets, present and future, related to Mumbai distribution business
(ii) Escrow Accounts (including DSRA account and Surplus Regulatory Asset Account)
(iii) One flat located in Thane District in the State of Maharashtra
(iv) Lien on permitted Investments
(Rs, 450 Crorefrom Bank of Maharashtra and Rs,11 2.20 Crore from IndusInd Bank Limited,Rs, 200 Crore from Syndicate Bank,Rs,3 7.80 Crorefrom Abu Dhabi Commercial BankandRs,1 00 Crorefrom Axis Bank Limited also hold pari-passu charge on the above assets). Rs, 350 Crore are secured by the following:-
(i) Pledge of 21,74,35,749 shares of M/s. Reliance Power Limited which are owned by the Company.
(ii) One Flat located in Thane District in the State of Maharashtra
(iii) All of the Company''s rights, title, interest and benefits in, to and under the bank account no.0656363-00-0 of Reliance Infrastructure Limited with Deutsche Bank, Mumbai branch together with fixed deposits standing to the credit of the said bank account.
B. External Commercial Borrowings of Rs, 179.63 Crore (Principal undiscounted Amount) are secured as under:
First charge on transmission towers, plant and machinery and all other movable and immovable properties forming part of transmission work, current assets including book debts, operating cash flows, receivables etc., related to the Western Region Strengthening Scheme Project C .The Company is in the process of creating charge on the properties situated in the state of Madhya Pradesh.
C. Term Loans from Financial Institutions of Rs, 1,110.99 Crore (Principal undiscounted Amount) are secured as under:
Rs, 500 Crore from IFCI Limited are secured by the following:
a. Minimum 1.25 times cover of Non-agriculture Land to be shared with other lenders on pari-passu basis subject to maintenance of 1.25 times cover for IFCI Loan. (The security on these assets is yet to be created).
b. Pledge of 22,70,00,000 shares of M/s. Reliance Power Limited by Non-disposable undertaking and Power of Attorney mechanism, which are owned by the Company. It is Interim Security till creation of security over land.
Rs, 192 Crore from IFCI Limited are secured by exclusive charge on certain Property, Plant and Equipment of the Mumbai Distribution division of the Company.
Rs, 157.81 Crore from L&T Infrastructure Finance Company Limited & Rs, 261.18 Crore from India Infrastructure Finance Company Limited are secured by the following assets of the Company related to the Western Region Strengthening Scheme Project B:
a. First charge by way of mortgage over all the immovable properties, present and future pertaining to the Project;
b. First charge by way of mortgage over all the movable assets, including movable plant and machinery, machinery spares, tools and accessories, furniture, fixtures, vehicles and all other movable assets, present and future pertaining to the Project;
c. First charge by way of mortgage over cash flow, receivables, book debts, revenue of whatsoever nature and wherever arising, present and future pertaining to the Project
d. First charge byway ofallintangibles including but not limited to goodwill and uncalled capital, present and future, pertaining to the project;
e. A first charge by way of assignment or creation of security interest of:
i. Allthe rights, title, interest and benefits, claims and demands whatsoever of the Company in the project documents [including but not limited to Transmission services agreement (TSA)/ Power Transmission Agreement (PTA), EPC Contract Revenue Sharing Agreement (RSA), Insurance contracts],
ii. Subject to applicable law, all the rights, title, interest Benefits, claims and demands whatsoever of the Company in the clearances, licenses;
iii. All the rights, title, interest Benefits, claims and demands whatsoever of the Company in any letter of credit, guarantee, performance bond, corporate guarantee, bank guarantee provided by any party to the project documents and
iv. All insurance and insurance proceeds in respect of the project.
f. First charge on thetrust and retention accounts/ escrow account, DSR and any other reserves and other bank accounts of the Company wherever maintained and with respect to the project;
D. Term Loans from Banks of Rs, 6,033.14 Crore (Principal undiscounted Amount) are secured as under:
Rs, 224 Crore from Central Bank of India is secured by way of first exclusive pari-passu charge on certain Property, Plant and Equipment and Intangible Assets of Mumbai distribution division
Rs, 120 Crore from Jammu & Kashmir Bank is secured by way of first exclusive pari-passu charge on certain Plant and Equipment of EPC division and on Property, Plant and Equipment of Windmill Project of the Company located in Jogimatti in Chitradurga district of Karnataka
Rs, 319 Crore from State Bank of India, Rs, 119.30 Crore from South Indian Bank and Rs, 79.55 Crore from State Bank of Hyderabad, are secured by way of first pari-passu charge on certain Property, Plant and Equipment of Mumbai transmission division and specific Land and Building located in Thane and Mumbai, respectively.
Rs, 210 Crore from Bank of Baroda are secured by way of first pari-passu charge over land of Dahanu Thermal Power Station. (The security on these assets is yet to be created).
Rs, 450 Crore from Bank of Maharashtra and Rs, 112.20 Crore from Indus ind Bank Limited, Rs, 200 Crore from Syndicate Bank, and Rs, 37.80 Crore from Abu Dhabi Commercial Bank and Rs, 100 Crore from Axis Bank Limited, are secured by the first pari-passu charge on the following:
a. Specific Regulatory Assets, present and future, related to Mumbai distribution business
b. Escrow Accounts (including DSRA account and Surplus Regulatory Asset Account)
c. One Flat located in Thane District in the State of Maharashtra
d. Lien on permitted Investments
(The existing Rs, 475 Crore NCD holders also hold pari-passu charge on the above assets).
Rs, 98.23 Crore from IndusInd Bank Limited are secured by the following assets of the Company related to the Western Region Strengthening Scheme Project B:
a. First charge by way of mortgage over all the immovable properties, present and future pertaining to the Project
b. First charge by way of mortgage over all the movable assets, including movable plant and machinery, machinery spares, tools and accessories, furniture, fixtures, vehicles and all other movable assets, present and future pertaining to the Project;
c. First charge by way of mortgage over cash flow, receivables, book debts, revenue of whatsoever nature and wherever arising, present and future pertaining to the Project
d. First charge by way of all intangibles including but not limited to goodwill and uncalled capital, present and future, pertaining to the project;
e. A first charge by way of assignment or creation of security interest of:
i. All the rights, title, interest and benefits, claims and demands whatsoever of the Company in the project documents [including but not limited to Transmission services agreement (TSA)/ Power Transmission Agreement (PTA), EPC Contract Revenue Sharing Agreement (RSA), Insurance contracts],
ii. Subject to applicable law, all the rights, title, interest Benefits, claims and demands whatsoever of the Company in the clearances, licenses;
iii. All the rights, title, interest Benefits, claims and demands whatsoever of the Company in any letter of credit, guarantee, performance bond, corporate guarantee, bank guarantee provided by any party to the project documents and
iv. All insurance and insurance proceeds in respect of the project.
f. First charge on the trust and retention accounts / escrow account, DSR and any other reserves and other bank accounts of the Company wherever maintained and with respect to the project; (Term loan of Rs, 157.80 Crore from L & T Infrastructure Finance Company Limited and Rs, 261.20 Crore from India Infrastructure Finance Company Limited also hold pari-passu charge on the above assets).
Rs, 1,312.50 Crore from Yes Bank Limited are secured by the following:
a. Pledge of 22,01,03,025 Equity Shares of Reliance Defence and Engineering Limited by Reliance Defence Systems Private Limited (step-down subsidiary of the Company)
b. Subservient charge on Current Assets of the Company, both present and future Rs, 155.56 Crore from Yes Bank Limited are secured by the following:
a. Pledge of 1,88,28,000 Equity Shares of BSES Kerala Power Limited (a 100% subsidiary of the Company)
b. Subservient charge on Current Assets of the Company
c. Moveable Property, Plant and Equipment of BSES Kerala Power Limited
(The Security on the above assets is yet to be created).
Rs, 190 Crore from Axis Bank Limited are secured by first pari passu charge on inventory & trade receivable, book debts, other current assets and additionally secured by a flat of the Company located at Mumbai.
Rs, 600 Crore from IDFC Bank Limited and Rs, 600 Crore from Bank of Baroda are secured by the following.
a. Pledge of 13,43,100 Equity Shares of NK Toll Road Limited, 15,63,000 Equity Shares of DS Toll Road Limited, 5,88,330 Equity Shares of GF Toll Road Private Limited, 10,22,700 Equity Shares of KM Toll Road Private Limited, 1 1,13,300 Equity Shares of HK Toll Road Private Limited, 38,26,695 Equity Shares of TK Toll Road Private Limited, 32,23,476 Equity Shares of TD Toll Road Private Limited and 55,23,678 Equity Shares of SU Toll Road Private Limited
b. Pledge of 2,462 Equity Shares of JR Toll Road Private Limited and 2,465 Equity Shares of PS Toll Road Private Limited
c. Non-disposal Undertaking on 45,99,180 Equity Shares of DA Toll Road Private Limited.
d. Non-disposal Undertaking on 19% Equity Share holding of SU Toll Road Private Limited, GF Toll Road Private Limited, KM Toll Road Private Limited, HK Toll Road Private Limited, TD Toll Road Private Limited and TK Toll Road Private Limited. (Pledge of this 19% Equity Shares is yet to be created).
e. Second pari passu charge on the current assets of Company
f. First pari passu charge on all receivable arising out of sub-debt / loan advanced / to be advanced to Road Companies, as mentioned above.
Rs, 400 Crore from Syndicate Bank are secured by the following.
a. Second Charge on Company''s current assets excluding Regulatory Assets of Mumbai Distribution Business and WRSS transmission assets.
b. Non-disposal Undertaking and Power of Attorney for 49% shareholding in SPV which shall house WRSS Maharashtra project and 24% shareholding in SPV which shall house WRSS Gujarat project.
c. This security is to be created within 30 days of transfer of asset of WRSS from the Company to the SPVs which shall house WRSS Projects.
Rs, 150 Crore from Axis Bank Limited is secured by the following.
a. Residual charge on the entire current assets of the Company both present and future.
b. Pledge of 2,783 Equity Shares of JR Toll Road Private Limited
Rs, 250 Crore from Vijaya Bank Limited is secured by subservient charge on moveable Property, Plant and Equipment
of the Company with asset cover of minimum 1.25 times.
Rs, 305 Crore from Canara Bank Limited is secured by subservient charge on moveable Property, Plant and
Equipment of the Company with asset cover of minimum 1.25 times.
E. Loans from Others of Rs, 7.36 Crore are secured as under:
Rs, 7.36 Crore from CISCO Systems Capital (India) Private Limited is secured by first and exclusive charge on specific office equipments including specific networking systems of the Company.
Maturity Profile and rate of interest of Non Convertible Debentures (NCD) & External Commercial Borrowings (ECB) (Principal undiscounted) are as under:
Note:
*Security: Working Capital Loans and BuyersRs, Credit from Consortium Banks are secured by way of first pari-passu charge on stock, book debts, other current assets and additionally secured by a specific immovable property of the Company located at Mumbai;
**Rs, 300 Crore from Canara Bank Limited and Rs, 500 Crore from Canara Bank Limited is secured by subservient charge on moveable Property, Plant and Equipment of the Company with asset cover of minimum 1.25 times.
**Rs, 500 Crore from Union Bank of India is secured by subservient charge on moveable Property, Plant and Equipment of the Company with asset cover of minimum 1.25 times.
**Rs, 500 Crore from IDBI Bank Limited and Rs, 100 Crore from IDBI Bank Limited is secured by existing security available to the consortium.
Note: In line with the requirements of Ind AS 114, "Regulatory Deferral Accounts", the entity presents the resulting deferred tax asset / (liability) and the related movement in that deferred tax asset / (liability) with the related regulatory deferral account balances and movements in those balances, instead of within that presented above in accordance with Ind AS 12 "Income Taxes". Refer Note No 8 for disclosures as per Ind AS 114.
32. The Company is engaged in the business of providing infrastructural facilities as per Section 186 (11) read with Schedule VI of the Act. Accordingly, disclosures under Section 186 of the Act is not applicable to the Company.
33. Figures for the previous year have been regrouped/reclassified/rearranged wherever necessary to make them comparable to those for the current year. Figures in bracket indicate previous year''s figures. @- represents figures less than Rs, 50,000 which have been shown at actuals in brackets with @.
34 (a) Contingent Liabilities:
i) Claims against the Company not acknowledged as debts and under litigation aggregates to Rs, 1,605.47 Crore (March 31, 2016 - Rs, 1,725.04 Crore and April 01, 2015 Rs, 1,1 60.74 Crore). These include claim from suppliers
aggregating to Rs, 438.99 Crore (March 31, 2016 Rs, 431.83 Crore and April 01, 2015 Rs, 371.87 Crore), income tax claims Rs, 713.27 Crore (March 31, 2016 Rs, 838.35 Crore and April 01, 2015 Rs, 1 68.37 Crore), indirect tax claims aggregating to Rs, 411.08 Crore (March 31, 2016 Rs, 407.02 Crore and April 01, 2015 Rs, 568.60 Crore) out of which claims of Rs, 304.10 Crore (March 31, 2016 Rs, 287.58 Crore and April 01, 2015 Rs, 271.06 Crore), if materialized, will be recovered from the customers and other claims Rs, 42.12 Crore (Net of provision made of Rs, 20 Crore) (March 31, 2016 Rs, 47.84 Crore - Net of Provision made of Rs, 20 Crore and April 01, 2015 Rs, 51.90 Crore (Net of provision made of Rs, 8 Crore)).
ii) The Company''s application for compounding in respect of its ECB of USD 360 million has been deemed by the Reserve Bank of India (RBI) as never to have been made subsequent to the withdrawal of the compounding application. Accordingly, there is no liability in respect of the compounding fee of Rs, 124.68 Crore earlier specified by RBI. Subsequent to the withdrawal of the compounding application, the matter has been referred to the Enforcement Directorate where the same is still pending.
(b) Capital and Other Commitments:
i) Estimated amount of contracts remaining unexecuted on capital account and not provided for Rs, 403.81 Crore (March 31, 2016 Rs, 152.81 Crore and April 01, 2015 Rs, 125.38 Crore).
ii) Uncalled liability on partly paid shares Rs, 10.70 Crore (March 31, 2016 Rs, 10.70 Crore and April 01, 2015 Rs, 10.70 Crore).
iii) The Company has given equity / fund support / other undertakings for setting up of projects / cost overrun in respect of various infrastructure and power projects being set up by Company''s subsidiaries and associates; the amounts of which currently are not ascertainable.iI) The Company''s application for compounding in respect of its ECB of USD 360 million has been deemed by the Reserve Bank of India (RBI) as never to have been made subsequent to the withdrawal of the compounding application. Accordingly, there is no liability in respect of the compounding fee of Rs, 124.68 Crore earlier specified by RBI. Subsequent to the withdrawal of the compounding application, the matter has been referred to the Enforcement Directorate where the same is still pending.
1. Related Party Disclosure:
As per Ind AS - 24 "Related Party Disclosure" the Company''s related parties and transactions with them in the ordinary course of business are disclosed below :
(a) Parties where control exists:
Subsidiaries 1 Reliance Power Transmission Limited (RePL)
(including step down subsidiaries) 2 Reliance Airport Developers Private Limited (RADPL)
3 BSES Kerala Power Limited (BKPL)
4 Mumbai Metro One Private Limited (MMOPL)
5 Reliance Energy Trading Limited (RETL)
6 Parbati Koldam Transmission Company Limited (PKTCL)
7 DS Toll Road Limited (DSTL)
8 NK Toll Road Limited (NKTL)
9 KM Toll Road Private Limited (KMTL)
10 PS Toll Road Private Limited (PSTL)
11 HK Toll Road Private Limited (HKTL)
12 DA Toll Road Private Limited (DATL)
13 GF Toll Road Private Limited (GFTL)
14 CBD Tower Private Limited (CBDT)
__15 Reliance Electric Generation & Supply Private Limited (REGSPL)_
16 Reliance Cement Company Private Limited (RCPL) (upto August 21, 2016)
17 Reliance Cement Corporation Private Limited (RCCPL)
18 Reliance Sea Link One Private Limited (RSOPL)
19 Utility Infrastructure & Works Private Limited (UIWPL)
20 Reliance Smart Cities Private Limited (RSCL)
21 Reliance Energy Limited (REL)
22 Reliance E-Generation and Management Private Limited (REGMPL)
23 Reliance Defence Limited (RDL)
24 Reliance Cruise and Terminals Limited (RCTL)
(formerly known as Reliance Defence Ventures Limited) w.e.f. Jan 20, 2017
25 BSES Rajdhani Power Limited (BRPL)
26 BSES Yamuna Power Limited (BYPL)
27 JR Toll Road Private Limited (JRTL)
28 Delhi Airport Metro Express Private Limited (DAMEPL)
29 SU Toll Road Private Limited (SUTL)
30 TD Toll Road Private Limited (TDTL)
31 TK Toll Road Private Limited (TKTL)
32 Mumbai Metro Transport Private Limited (MMTPL)
33 North Karanpura Transmission Company Limited (NKTCL)
34 Talcher II Transmission Company Limited (TTCL)
35 Latur Airport Private Limited (LAPL)
36 Baramati Airport Private Limited (BAPL)
37 Nanded Airport Private Limited (NAPL)
38 Yavatmal Airport Private Limited (YAPL)
39 Osmanabad Airport Private Limited (OAPL)
40 Reliance Defence & Aerospace Private Limited (RDAPL)
41 Reliance Defence Technologies Private Limited (RDTPL)
42 Reliance SED Limited (RSL)
43 Reliance Propulsion Systems Limited (RPSL)
44 Reliance Defence System and Tech Limited (RDSTL)
(formerly known as Reliance Space Limited (RsPL))
45 Reliance Defence Infrastructure Limited (RDIL)
46 Reliance Helicopters Limited (RHL)
47 Reliance Land Systems Limited (RLSL)
48 Reliance Naval Systems Limited (RNSL)
49 Reliance Unmanned Systems Limited (RUSL)
50 Reliance Aerostructure Limited (RAL)
51 Reliance Defence Systems Private Limited (RDSPL)
52 Tamilnadu Industries Captive Power Company Limited (TICAPCO)
53 Reliance Delhi Metro Trust (RDMT)
54 Reliance Toll Road Trust (RTRT)
55 Reliance Infra Solutions Private Limited (RISPL)
56 Spice Commerce and Trade Private Limited (upto September 30,201 6) (SCTPL)
57 Space Trade Enterprises Private Limited (upto September 30,2016) (STEPL)
58 Skyline Global Trade Private Limited (upto September 30,2016) (SGTPL)
59 Worldcom Solutions Limited (upto September 30,201 6) (WSL)
60 Hirma Power Limited (upto September 30,2016) (HPL)
61 Jayamkondam Power Limited (upto September 30,2016) (JPL)
62 Reliance Thermal Energy Limited (upto September 30,201 6) (RTEL)
63 Noida Global SEZ Private Limited (upto September 30,2016) (NGSPL)
64 Globtech Adivsory Services Limited (upto September 30,201 6) (GASL)
65 Dassault Reliance Aerospace Limited (DRAL) w.e.f. February 10, 2017
66 Reliance Rafael Defence Systems Private Limited (RRDSPL) w.e.f. March 31, 2017
67 Western Transmission (Gujarat) Limited w.e.f. December 26, 2016 (WRTGL)
68 Western Transco power Limited w.e.f. December 26, 2016 (WRTML)
69 Reliance Concrete Private Limited (RCoPL) (upto April 01, 2016 - Refer Note No 29)
(b) Other related parties where transactions have taken place during the year
(i) Associates (including 1 Reliance Power Limited (RePL)
Subsidiaries of Associates) 2 Rosa Power Supply Company Limited (ROSA)
3 Sasan Power Limited (SPL)
4 Vidarbha Industries Power Limited (VIPL)
5 Chitrangi Power Private Limited (CPPL)
6 Jharkhand Integrated Power Limited (JIPL)
7 Coastal Andhra Power Limited (CAPL)
8 Samalkot Power Limited (SaPoL)
9 Rajasthan Sun Technique Energy Private Limited (RSTEPL)
10 Dhursur Solar Power Private Limited (DSPPL)
11 Siyom Hydro Power Private Limited (SHPPL)
12 Coastal Andhra Power Infrastructure Limited (CAPIPL)
13 Urthing Sobla Hydro Power Private Limited (USHPPL)
14 Reliance Defence and Engineering Limited (RDEL)
15 Reliance Marine and Offshore Limited (RMOL)
16 E- Complex Private Limited (ECPL)
17 Reliance Geothermal Power Private Limited (RGPPL)
18 Metro One Operations Private Limited (MOOPL)
19 RPL Photon Private Limited (RPPL)
20 RPL Sun Technique Private Limited (RSTPL) ___21 RPL Sun Power Private Limited (RSPPL)_
(ii) Joint Ventures___Utility Powertech Limited (UPL)_
(iii) Investing Party___Reliance Project Ventures and Management Private Limited (RPVMPL)_
(iv) Persons having control over Shri Anil D Ambani
__investing party___
(v) Enterprises over which 1 Reliance Innoventures Private Limited(REIL) person described in (iv) has 2 Reliance Life Insurance Company Limited (RLICL) c°ntr°l / significant influence 3 Reliance General Insurance Company Limited (RGI)
4 Reliance Capital Limited (RCap)
5 Reliance Tech Services Limited (RTSL)
6 Reliance Infocomm Infrastructure Limited (RIIL)
7 AAA Sons Private Limited (AAASPL)
8 Reliance Securities Limited (RSL)
9 Zapak Digital Entertainment Limited (ZDEL)
10 Reliance Infratel Limited (RITL)
11 Reliance Big Private Limited (RBPL)
12 Reliance Webstore Limited (RWL)
13 Reliance Communication Limited (RCom)
14 Talenthouse Entertainment Private Limited (THEPL)
15 Reliance Big Entertainment Limited (RBEL)
16 Reliance Assets Reconstruction Company Limited (RARCL)
17 Reliance Big TV Limited (RBTL)
18 Reliance Money Solutions Private Limited (RMSPL)
19 Reliance Money Limited (RML)
20 Reliance Transport and Travels Private Limited (RTTPL)
21 Reliance Broadcast Network Limited (RBNL)
22 Reliance Infocomm Limited (RInfo)
23 Reliance Mediaworks Limited (RMWL)
24 Reliance Money Precious Metals Private Limited (RMPMPL)
25 Reliance Enterprise and Ventures Private Limited (REVPL)
26 Reliance Home Finance Limited (RHL)
27 Reliance Nippon Life Asset Management Limited (RNLAML)
(Formerly Reliance Capital Asset Management Company Limited )
28 Reliance Commercial Finance Limited (RCFL)
29 Reliance IDC Limited (RIDC)
___30 Nationwide Communication Private Limited (NCPL)_
e) Details of Significant Transactions with Related Party
(i) Transactions during the year (Balance Sheet heads)
201 6-17
Cancellation of ICD taken on merger of RCoPL Rs, 1,408.63 Crore 2015-16
Investment in Equity of RCPL Rs, 1,445.00 Crore. Subordinate debt given to RDSPL Rs, 1,492.38 Crore. ICD taken from RCoPL Rs, 1,411.90 Crore.
(ii) Balance sheet heads (Closing balance)
201 6-17
Trade payables, Advances received and other liabilities for receiving of services on revenue and capital account of CPPL Rs, 1,214.03 Crore. Investment in Equity of RePL Rs, 6,828.42 Crore. Subordinate debt given to RDSPL Rs, 1,509.49 Crore. Trade Receivables, Advances given and other receivables for rendering services SaPoL Rs, 2,356.77 Crore
2015-16
ICD taken from RCoPL Rs, 1,408.63 Crore. Investment in Equity of RePL Rs, 6,828.42 Crore and RCPL Rs, 2,423.01 Crore. Subordinate debt given to RDSPL Rs, 1,492.38 Crore. Trade Receivables, Advances given and other receivables for rendering services SaPoL Rs, 2,408.47 Crore
2014-1 5
Advance against EPC CPPL Rs, 1,239.74 Crore. Investment in Equity of RePL Rs, 6,689.59 Crore. Trade Receivables, Advances given and other receivables for rendering services SaPoL Rs, 2,345.23 Crore.
(iii) Expenses heads 201 6-17
Purchase of Power (including Open access charges - Net of Sales) from VIPL Rs, 1,719.13 Crore
2015-16
Purchase of Power (including Open access charges - Net of Sales) from VIPL Rs, 2,014.01 Crore
Note:
1) The above disclosure does not include transactions with/as public utility service providers, viz, electricity, telecommunications etc. in the normal course of business.
2) The closing balances of the balance sheet items are as per Ind AS financial statements except for Ind AS adjustments pertaining to Power Purchase Agreement with VIPL (Refer Note 32).
3) Transactions with Related Party which are in excess of 10% of the Total Revenue (including regulatory Income) of the Company are considered as Material Related Party Transactions. Total Revenue (including regulatory Income) for
2016-17 and 2015-16 is as per Ind AS and 2014-15 is as per Previous GAAP.
4) Includes contractual interest payments based on the interest rate prevailing at the reporting date
37. Segment Reporting
(a) Description of segments and principal activities
The Company operates in two Business Segments namely Power and Engineering, Procurement, Construction (EPC) and Contracts. Business segments have been identified as reportable segments based on how the CODM examines the Company''s performance both from a product and geographic perspective. The inter segment pricing is effected at cost. Segment accounting policies are in line with the accounting policies of the Company.
The Power segment is engaged in generation, transmission and distribution of electrical power at various locations. The Company operates a 500 MW Thermal Power Station at Dahanu, a 220 MW Combined Cycle Power Plant at Samalkot, a 48 MW Combined Cycle Power Plant at Mormugao, a 9.39 MW Wind-farm at Chitradurga and also purchases power from third parties and supplies the power through the Company''s own distribution grid in suburbs of Mumbai.
EPC and Contracts segment of the Company renders comprehensive value added services in construction, erection, commissioning and contracting.
(b) Summary of Segment information is as under:
The expenses and income that are not directly attributable to any business segment are shown as unallocable income ( net of unallocable expenses). Interest income and finance cost are not allocated to segments, as this type of activity is driven by the central treasury function, which manages the cash position of the Company.
2. (A) Standby Charges:
In the matter of liability of Rs, 515.60 Crore of standby charges with the Tata Power Company Limited (TPC) determined by MERC for the period April 1, 1998 to March 31, 2004, which the Company has fully accounted for, the Appellate Tribunal of Electricity (ATE) determined the total liability at Rs, 500 Crore and directed TPC to refund Rs, 354 Crore (inclusive of interest of Rs, 15 Crore upto March 31, 2004) to the Company plus interest @ 10% p.a. commencing from April 1, 2004 till the date of payment. Against the said order, TPC filed an appeal with the Supreme Court. The Hon''ble Supreme Court passed an interim order dated February 7, 2007 granting stay of the impugned order of the ATE subject to the condition that, TPC furnish a bank guarantee in the sum of Rs, 227 Crore and, in addition, deposit a sum of Rs, 227 Crore with the Registrar General of the Court which may be withdrawn by the Company subject to the Company giving an undertaking that in the event of the appeal being decided against the Company, wholly or in part, the amount as may be found refundable by the Company shall be refunded to TPC without demur together with interest as may be determined by the Court. The Company accordingly withdrew the amount of Rs, 227 Crore after complying with the conditions specified and has accounted the said amount as Other Liabilities pending final adjustment. Moreover, pending final order of the Hon''ble Supreme Court, the Company has not accounted for the reduction in standby charges liability of Rs, 15.60 Crore as well as interest amount determined by ATE as payable by TPC to the Company.
(B) Take or Pay and Additional Energy Charges:
Pursuant to the order passed by MERC dated December 12, 2007, in case No. 7 of 2002, TPC has claimed an amount of Rs, 323.87 Crore towards the following:
(a) Difference in the energy charge for energy supplied by TPC at 220 kV interconnection for the period March 2001 to May 2004 along with interest at 24% per annum up to December 31, 2007, and
(b) Minimum off take charges for energy for the years 1 998-99 to 1999-2000 along with interest at 24% per annum up to December 31, 2007.
In an appeal filed by the Company, ATE held that the amount in the matter (a) above is payable by the Company along with interest at State Bank of India prime lending rate for short term borrowings. The matter (b) was remanded to MERC for redetermination. The Company has filed an appeal against the said order before the Supreme Court, which while admitting the appeal, has restrained TPC from taking any coercive action in respect of the matter stated in (a) above and TPC has also filed an appeal against the said order. The Company has complied with the interim order directions of depositing Rs, 25 Crore with the Registrar of Supreme Court and providing a Bank Guarantee of Rs, 9.98 Crore. The said amount is disclosed under Contingent Liability in Note 15 above.
3. Investment in Delhi Airport Metro Express Private Limited:
Delhi Airport Metro Express Private Limited (DAMEPL), a SPV of the Company, terminated the Concession Agreement with Delhi Metro Rail Corporation (DMRC) for the Delhi Airport Metro Line, on account of Material Breach and Event of Default under the provisions of the Concession Agreement by DMRC. The operations were taken over by DMRC with effect from July 1, 2013.
As per the terms of the Concession Agreement, DMRC is now liable to pay DAMEPL a Termination Payment, which is estimated at Rs, 2,823 Crore, as the termination has arisen owing to DMRC''s Event of Default. The matter has been referred to arbitration and the arbitration award is awaited. Pending final outcome of the arbitration, the Company continues to fund the statutory and other obligations of DAMEPL post take over by DMRC and accordingly has funded Rs, 279.10 Crore during the year ended March 31, 2017.
Based on the review of the progress in settlement of various claims and also on overall review of financial position of DAMEPL, the Company, as a matter of prudence, had written off the investment of Rs, 355.56 Crore during the year ended March 31, 2016 and Rs, 1,258.20 Crore was written off during the year ended March 31, 2015, out of total investment of Rs, 2,339.95 Crore in DAMEPL. However, as legally advised, DAMEPL''s claims for the termination payments are considered fully enforceable.
4. Scheme of Amalgamation of Reliance Infraprojects Limited (RInfl) with the Company:
The Hon''ble High Court of Judicature of Bombay had sanctioned the Scheme of Amalgamation of Reliance Infraprojects Limited (RInfl) with the Company on March 30, 201 1 with the appointed date being April 01, 2010. As per the clause 2.3.7 of the Scheme, the Company, as determined by its Board of Directors, is permitted to adjust foreign exchange / hedging / derivative contract losses / gains debited / credited in the Statement of Profit and Loss by a corresponding withdrawal from or credit to General Reserve.
Pursuant to the option exercised under the above Scheme, net gain on account of derivative instruments / forward contracts of '' 27.34 Crore for the year ended March 31, 2017 has been credited to the Statement of Profit and Loss and an equivalent amount has been transferred to General Reserve. Similarly, foreign exchange loss of Rs, 272.36 Crore ('' Nil attributable to finance cost) has been debited to Statement of Profit and Loss and an equivalent amount has been withdrawn from General Reserve. The Company has been legally advised that crediting and debiting of the said amount in Statement of Profit and Loss is in accordance with Schedule III to the Act. Had such transfer / withdrawal not been done, the Profit before tax for the year ended March 31, 2017 would have been lower by Rs, 245.02 Crore and General Reserve would have been higher by an equivalent amount. The treatment prescribed under the Scheme override the relevant provisions of Ind AS 1: "Presentation of Financial Statements".
During the financial year ended March 31, 2016, under the Previous GAAP in accordance with the above scheme, the Board of Directors had exercised an option to adjust the foreign exchange / hedging / derivative contracts losses / gains debited / credited to Statement of Profit and Loss by a corresponding withdrawal / transfer from / to General Reserve. Accordingly, foreign exchange gain of Rs, 36.72 Crore, foreign exchange loss attributable to finance cost of Rs, 252.50 Crore and loss on derivative contracts of '' 27.04 Crore was credited / debited to Statement of Profit and Loss and an equivalent amount was transferred to / withdrawn from General Reserve.
However, pursuant to the adoption of Ind AS from April 1, 2016 with the transition date of April 01, 2015, the net exchange gain (net of derivative loss) of Rs, 9.68 Crore for the year 2015-16 turned into a loss of Rs,158.26 Crore mainly on account of impact of fair valuation of financial instruments including derivative instruments. Since, the Board of Directors had already approved to adjust the foreign exchange losses / gains by equivalent withdrawal / transfer to general reserve it also approved to withdraw the additional exchange loss (including derivative loss) as a result of Ind AS adjustments of Rs, 167.94 Crore debited to the Statement of Profit and Loss for the year ended March 31, 2016 from General Reserve.
Had such withdrawal not been done, the Profit before Tax for the year ended March 31, 2016 would have been lower by Rs, 410.76 Crore (including loss of Rs, 252.50 Crore attributable to finance cost) and General Reserve would have been higher by an equivalent amount. The treatment prescribed under the Scheme overrides the relevant provisions of Previous GAAP AS -5 "Net Profit or loss for the period, prior period items and changes in Accounting Policies and Ind AS - 1 "Presentation of Financial Statements".
5. In accordance with Ind AS 101-First time adoption of Indian Accounting Standards, the Company has opted to continue the policy as prescribed vide the notification dated December 29, 201 1 issued by the Ministry of Corporate Affairs. Accordingly, the Company has exercised the option given in paragraph 46A of the Accounting Standard-11 "The Effects of Changes in Foreign Exchange Rates" in Previous GAAP of capitalizing the foreign exchange loss/gain arising on long term foreign currency monetary items relating to acquisition of depreciable capital assets and depreciating the same over the balance life of such assets and in other cases amortizing the foreign exchange loss/gain over the balance period of such long term foreign currency monetary items. Accordingly, the Company has carried forward the unamortized portion of net gain of Rs, 71.59 Crore as on March 31, 2017 (March 31, 2016 - Rs, 6.97 Crore, April 01, 2015 - (Rs, 71.68) Crore) in "Foreign Currency Monetary Item Translation Difference Account" and the same is grouped under ''Other Equity''.
I n terms of the Scheme of amalgamation of Reliance Cement Works Private Limited with Western Region Transmission (Maharashtra) Private Limited (WRTM) wholly owned subsidiary of the Company, which was subsequently amalgamated with the Company w.e.f. April 1, 2013, the Board of Directors of the Company during the year ended March 31, 2017 determined an amount of Rs, 555.58 Crore (Rs, 948.62 Crore) as Exceptional items stated above which was debited to the Statement of Profit and Loss and an equivalent amount has been withdrawn from General Reserve. Had such withdrawal not been done, the Profit before tax for the year ended March 31, 2017 would have been lower by Rs, 555.58 Crore (Rs, 948.62 Crore) and General Reserve would have been higher by an equivalent amount. The treatment prescribed under the Scheme overrides the relevant provisions of Ind AS 1" Presentation of Financial Statements".
6. The Acquisition of Reliance Defence and Engineering Limited (RDEL) (formerly Pipavav Defence and Offshore Engineering Company Limited) through Open Offer
During the year ended March 31, 2016, Reliance Defence Systems Private Limited (RDSPL) ("the Acquirer") and Reliance Infrastructure Limited (Person Acting in Concert referred as PAC) made an open offer to the public equity shareholders of RDEL (Target Company) to acquire up to 1 9,14,13,630 fully paid-up equity shares of face value of Rs, 10 each of RDEL, constituting 26% of the total fully diluted equity share capital at an offer price of Rs, 66 per share (plus Rs, 3.59 per share was paid towards interest at 10% p.a. for delay in payment beyond the scheduled payment date viz. June 15, 2015 as per the original offer till the date of actual payment i.e. December 30, 201 5). In terms of the said offer, the Acquirer has acquired 1 3,87,12,427 shares of RDEL, constituting 18.84% of the voting equity share capital at a total consideration of Rs, 965.30 Crore (including interest of Rs, 49.80 Crore). Subsequently, as per share purchase agreement dated March 4, 2015, the Acquirer also acquired 8,13,90,598 equity shares of RDEL at a total consideration of Rs, 512.76 Crore from erstwhile Promoters of RDEL whereby RDEL has become an associate of RDSPL with holding of 29.90%.During the year ended March 31, 2017, the acquirer has purchased 63,50,000 additional shares of RDEL at a consideration of Rs, 40.01 Crore thereby increasing the holding to 30.76%.
7. Disclosure under Ind AS 19 âEmployee Benefits":
Defined Contribution Plan:
(i) Provident fund
(ii) Superannuation fund
(iii) State defined contribution plans
- Employer''s contribution to Employees'' state insurance
- Employers'' Contribution to 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 trustees of the Reliance Infrastructure Limited Officer''s Superannuation Scheme. 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 Plan:
Provident Fund (Applicable to certain Employees):
The benefit involving employee established provident funds, which require interest shortfall to be decompensate are to be considered as defined benefit plans. As per the Audited Accounts of Provident Fund Trust maintained by the Company, the shortfall arising in meeting the stipulated interest liability, if any, gets duly provided for.
Gratuity
The Company operates a gratuity plan administered by various insurance companies. Every employee is entitled to a benefit equivalent to fifteen days salary last drawn for each completed year of service in line with the Payment of Gratuity Act, 1972 or Company scheme whichever is beneficial. The same is payable at the time of separation from the Company or retirement, whichever is earlier. The benefits vest after five years of continuous service.
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognized in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
* Subsidiary till September 30, 2016
# Except for these companies, all loans and advances stated above carry interest.
There are no investments by loanees as at March 31, 2017 in the shares of the Company and Subsidiary Companies.
As at the year-end, the Company-
(a) has no loans and advances in the nature of loans to firms / companies in which directors are interested.
(b) The above amounts exclude subordinate debts.
47. The Board of Directors at its meeting held on March 16, 2016 had approved the Scheme of restructuring envisaging transfer of various operating divisions of the Company, namely Dahanu Thermal Power Station (DTPS), Goa Power Station, Samalkot Power Station, Mumbai Power Transmission Division, Mumbai Power Distribution Division and Windmill Division (together considered as Power Business,) to its resulting wholly owned subsidiary viz. Reliance Electric Generation & Supply Private Limited with appointed date of April 1, 2016. The scheme received the approval of the Hon''ble Bombay High Court on January 19, 2017. The Company has filed an application on March 16, 2017 for change in effective date of demerger from April 01, 2016 to April 01, 2017 with Hon''ble Bombay High Court. The scheme is effective subject to various approvals and accordingly no effect of the said scheme is given in the books of account and based on the legal advice received, has not been considered as Non Current Assets held for sale as per Ind AS 105 "Non Current Assets held for sale and discontinued operations".
8. On October 5, 201 6, the Company signed Term Sheet with Adani Transmission Limited (ATL) for sale of its assets in
Western Region Strengthening Scheme (WRSS) projects and entire investment in subsidiary, Parbati Koldam Transmission Company Limited (PKTCL). On December 6, 2016, the Company executed Share Purchase Agreement with ATL for 100% sale of its WRSS Transmission Assets. The said transfer / sale is subject to various condition precedents and approvals and based on the legal advice received, has not been considered as Non Current Assets held for sale as per Ind AS 105 "Non Current Assets held for sale and discontinued operations".
9. The H on''ble High Court of Bombay vide order dated September 08, 2016, approved the Scheme of Amalgamation of a wholly owned subsidiary of the Company. Reliance Concrete Private Limited with the Company with effect from March 01,2016 (the appointed date). The following accounting treatment, inter-alia, has been given effect to the Scheme as approved by the Hon''ble High Court of Bombay:
(a) The amalgamation has been accounted for under " Pooling of Interest Method" as prescribed under AS 14 "Accounting for Amalgamations" of Previous GAAP.
(b) All assets and liabilities have been recorded in the books at their respective book values, intercompany balances, if any, have been eliminated and the excess amount arising out of the above of Rs, 1,402.95 Crore has been credited to the Capital Reserve. The retained earnings of Reliance Concrete Private Limited (RCCPL) as on March 31, 2016 of Rs, 5.68 Crore has been transferred to retained earnings.
Had the accounting been done as per Ind AS 103" Business Combinations", there would have been no impact on financial statements.
10. Capital Reduction Scheme:
a) Reliance Energy Trading Limited
Pursuant to the sanction of the Capital Reduction Scheme of M/s. Reliance Energy Trading Limited (RETL), a wholly owned subsidiary of the Company, by the Hon''ble High Court of Judicature of Bombay vide order dated May 6, 2016, RETL reduced its equity share capital and securities premium account to the tune of Rs, 28.55 Crore. As per the scheme, the said capital reduction was to be utilized by paying an equivalent amount to the shareholders of the Company and accordingly an amount of Rs, 28.55 Crore was paid by RETL to the Company against the said capital reduction scheme.
b) BSES Kerala Power Limited
Pursuant to the sanction of the Capital Reduction Scheme of M/s BSES Kerala Power Limited (BKPL), a wholly owned subsidiary of the Company, by the Hon''ble High Court of Judicature of Kerala, vide order dated May 28, 2016, BKPL reduced its equity share capital to the tune of Rs, 65 Crore. As per the scheme, the said capital reduction was to be utilized by paying an equivalent amount to the shareholders of the Company and accordingly an amount of Rs, 65 Crore was paid by BKPL to the Company against the said capital reduction scheme.
11. Interest in Jointly Controlled Operations:
The Company along with M/s. Geopetrol International Inc. and Reliance Natural Resources Limited *(the consortium) was allotted 4 Coal Bed Methane (CBM) blocks from Ministry of Petroleum and Natural Gas (Mo PNG) covering an acreage of 3,266 square kilometers in the States of Madhya Pradesh, Andhra Pradesh and Rajasthan. The consortium had entered into a contract with Government of India for exploration and production of these four CBM blocks. The Company as part of the consortium has proportionate share in each of the four blocks.
M/s Geopetrol International Inc is the operator on behalf of the consortium for all the four CBM blocks.
Also, the Company along with M/s. Geopetrol International Inc, Naftogaz India Private Limited and Reliance Natural Resources Limited *(the consortium) was allotted Oil and Gas block from Ministry of Petroleum and Natural Gas (MoPNG), in the State of Mizoram under the New Exploration Licensing Policy (NELP-VI) round, covering an acreage of 3,619 square ki
Mar 31, 2016
1. Terms/Rights attached to equity shares:
(a) Voting
The Company has only one class of equity shares having a par value of Rs,
10 per share. Each holder of equity shares is entitled to one vote per
share.
(b) Dividends
The Company declares and pays dividends in Indian rupees. The dividend
proposed by the Board of Directors is subject to the approval of the
shareholders in the ensuing Annual General Meeting.
During the year ended March 31, 2016, the amount of per share dividend
recognised as distributions to equity shareholders is Rs, 8.50.
(c) Liquidation
In the event of liquidation of the Company, the holders of equity
shares will be entitled to receive all of the remaining assets of the
Company, after distribution of all preferential amounts. The
distribution will be in proportion to the number of equity shares held
by the shareholders.
2. Buy-back of Equity Shares:
Aggregate number of shares bought back during the period of five years
immediately preceding the reporting date  44,30,262 (44,30,262).
Security:
A. Non convertible Debentures of Rs, 4,392.33 crore are secured as
under:
(a) Rs, 125 Crore are secured by way of first pari-passu charge, on
Company''s fixed Rs, 125 Crore are secured by way of first pari-passu charge
on Company''s fixed assets, both present and future, located at its
plants situated at Goa and Samalkot and specific premises at Hyderabad
properties comprising certain plant and machinery and certain fixed
assets of Mumbai distribution business and on Company''s specific
immovable properties located in Thane District in the State of
Maharashtra.
(b) Rs, 850 Crore are secured by way of first pari-passu charge on
Company''s certain fixed assets, both present and future, comprising of
its plant & machinery and building situated at Dahanu and on Company''s
specific premises in Mumbai.
(c) Rs, 862.33 Crore are secured by way of first pari-passu charge on
specific land and buildings located in Suburban Mumbai and on certain
fixed assets of Mumbai distribution business of the Company.
(d) Rs, 500 Crore are secured by first pari-passu charge on specific
properties (Land and Buildings) located in Suburban Mumbai and on
certain plant and machinery and other assets of the Company''s Mumbai
distribution business.
(e) Rs, 650 Crore are secured by way of first pari-passu charge on assets
of Company, located at its plants at Goa and Samalkot and specific
premises at Hyderabad, properties comprising certain plant and
machinery and certain fixed assets of Mumbai distribution business and
on Company''s specific immovable properties located in Thane District in
the State of Maharashtra. (The existing Rs, 125 Crore NCD holders also
hold pari-passu charge on the above assets.)
(f) Rs, 705 Crore are secured by first ranking pari-passu charge on the
following:- i) Specific Regulatory Assets, present and future, related
to Mumbai distribution business ii) Cash fows in specific Escrow
accounts established for the purpose
iii) Specific immovable property located in Thane District in the State
of Maharashtra. iv) Lien on permitted investments
(g) Rs, 400 Crore are secured by the following:- i) Pledge of
23,84,35,749 Equity Shares of Reliance Power Limited which are owned by
the Company. ii) Specific immovable property located at Thane District.
iii) All of the Company''s rights, title, interest and benefits in, to
and under the bank account no.0656363-00-0 of Reliance Infrastructure
Limited with Deutsche Bank, Mumbai branch together with fixed deposits
standing to the credit of the said bank account.
(h) Rs, 300 Crore are secured by the following:- i) Pledge of
16,10,84,684 Equity Shares of Reliance Power Limited which are owned by
the Company.
ii) All of the Company''s rights, title, interest and benefits in, to and
under the bank account no.00600350138613 of Reliance Infrastructure
Limited with HDFC Bank, Mumbai branch.
B. External commercial Borrowings of Rs, 217.32 crore are secured as
under:
First charge on transmission towers, plant and machinery and all other
movable and immovable properties forming part of transmission work,
current assets including book debts, operating cash fows, receivables
etc., related to the Western Region Strengthening Scheme Project C .The
Company is in the process of creating charge on the properties situated
in the state of Madhya Pradesh.
c. Term Loans from financial Institutions of Rs, 1,154.24 crore are
secured as under:
(a) Rs, 500 Crore from IFCI Limited are secured by the following:
(i). Minimum 1.25 times cover of Non-agriculture Land to be shared with
other lenders on pari-passu basis subject to maintenance of 1.25 times
cover for IFCI Limited Loan.
(ii) Pledge of 22,70,00,000 Equity Shares of Reliance Power Limited
which are owned by the Company. It is Interim Security till creation of
security over land.
(The security on these assets is yet to be created except the Pledge of
Shares).
(b) Rs, 200 Crore from IFCI Limited are secured by exclusive charge on
specific movable assets of the Mumbai Distribution Business of the
Company located in Suburban Mumbai
(c) Rs, 171.08 Crore from L & T Infrastructure Finance Company Limited &
Rs, 283.16 Crore from India Infrastructure Finance Company Limited are
secured by the following assets of the Company related to the Western
Region Strengthening Scheme Project B:
(i) First charge by way of mortgage over all the immovable properties,
present and future pertaining to the Project;
(ii) First charge by way of mortgage over all the movable assets,
including movable plant and machinery, machinery spares, tools and
accessories, furniture, fixtures, vehicles and all other movable assets,
present and future pertaining to the Project;
(iii) First charge by way of mortgage over cash fow, receivables, book
debts, revenue of whatsoever nature and wherever arising, present and
future pertaining to the Project;
(iv) First charge by way of all intangibles including but not limited
to goodwill and uncalled capital, present and future, pertaining to the
project;
(v) A first charge by way of assignment or creation of security interest
of:
i. All the rights, title, interest and benefits, claims and demands
whatsoever of the Company in the project documents [including but not
limited to Transmission services agreement (TSA)/ Power Transmission
Agreement (PTA), EPC Contract Revenue Sharing Agreement (RSA),
Insurance contracts],
ii. Subject to applicable law, all the rights, title, interest,
benefits, claims and demands whatsoever of the Company in the
clearances, licenses;
iii. All the rights, title, interest, benefits, claims and demands
whatsoever of the Company in any letter of credit, guarantee,
performance bond, corporate guarantee, bank guarantee provided by any
party to the project documents and
iv. All insurance and insurance proceeds in respect of the project.
(vi) First charge on the trust and retention accounts/escrow account,
DSR and any other reserves and other bank accounts of the Company
wherever maintained and with respect to the project;
D. Term Loans from Banks of Rs, 6,235.86 crore are secured as under:
(a) Rs, 252 Crore from Central Bank of India is secured by way of first
pari-passu charge on certain fixed assets of Mumbai distribution
business.
(b) Rs, 150 Crore from Jammu & Kashmir Bank is secured by way of first
pari-passu charge on certain fixed assets of EPC business & contracts
and by fixed assets related to Windmill Project of the Company located
in Jogimatti in Chitradurga district of Karnataka.
(c) Rs, 352.60 Crore from State Bank of India, Rs, 131.86 Crore from South
Indian Bank and Rs, 87.90 Crore from State Bank of Hyderabad, are secured
by way of first pari-passu charge on certain fixed assets of Mumbai
transmission business and specific immovable properties located in Thane
District in the State of Maharashtra. (The security on these assets is
yet to be created).
(d) Rs, 30 Crore from Jammu & Kashmir Bank and Rs, 10 Crore from Karnataka
Bank shall be secured by way of first pari- passu charge on the movable
& immovable assets of power plant belonging to M/s BSES Kerala Power
Limited (a 100% subsidiary of the Company) located in Kochi.
(e) Rs, 270 Crore from Bank of Baroda are secured by way of first
pari-passu charge over land of Dahanu Thermal Power Station. (The
security on these assets is yet to be created).
(f) Rs, 500 Crore from Bank of Maharashtra, Rs, 125 Crore from Indusind
Bank Limited, Rs, 250 Crore from Syndicate Bank, Rs, 50 Crore from Bank of
Baroda, Rs, 45 Crore from Abu Dhabi Commercial Bank and Rs, 200 Crore from
Axis Bank Limited, are secured by the first pari-passu charge on the
following:
(i) Specific Regulatory Assets, present and future, related to Mumbai
distribution business
(ii) Cash fows in specific Escrow accounts established for the purpose
(iii) Specific immovable property located in Thane District in the State
of Maharashtra.
(iv) Lien on permitted investments
(The existing Rs, 705 Crore NCD holders also hold pari-passu charge on
the above assets.)
(g) Rs, 106.50 Crore from IndusInd Bank Limited are secured by the
following assets of the Company related to the Western Region
Strengthening Scheme Project B:
(i) First charge by way of mortgage over all the immovable properties,
present and future pertaining to the Project;
(ii) First charge by way of mortgage over all the movable assets,
including movable plant and machinery, machinery spares, tools and
accessories, furniture, fixtures, vehicles and all other movable assets,
present and future pertaining to the Project;
(iii) First charge by way of mortgage over cash fow, receivables, book
debts, revenue of whatsoever nature and wherever arising, present and
future pertaining to the Project;
(iv) First charge by way of all intangibles including but not limited
to goodwill and uncalled capital, present and future, pertaining to the
project;
(v) A first charge by way of assignment or creation of security interest
of:
(i) All the rights, title, interest and benefits, claims and demands
whatsoever of the Company in the project documents [including but not
limited to Transmission services agreement (TSA)/ Power Transmission
Agreement (PTA), EPC Contract Revenue Sharing Agreement (RSA),
Insurance contracts],
(ii) Subject to applicable law, all the rights, title, interest
Benefits, claims and demands whatsoever of the Company in the
clearances, licenses;
(iii) All the rights, title, interest Benefits, claims and demands
whatsoever of the Company in any letter of credit, guarantee,
performance bond, corporate guarantee, bank guarantee provided by any
party to the project documents and
(iv) All insurance and insurance proceeds in respect of the project.
(vi) First charge on the trust and retention accounts/escrow account,
DSR and any other reserves and other bank accounts of the Company
wherever maintained and with respect to the project;
(Term Loan of Rs, 171.08 Crore from L & T Infrastructure Finance Company
Limited & Rs, 283.16 Crore from India Infrastructure Finance Company
Limited also hold pari-passu charge on the above assets)
(h) Rs, 1,200 Crore from State Bank of India, Rs, 500 Crore from IDFC Bank
Limited and Rs, 250 Crore from Syndicate Bank are secured by Pledge of
6,53,34,553 Equity shares of RCCPL, 21,93,670 Equity shares of NKTRL,
25,52,840 Equity shares of DSTRL, 9,60,939 Equity shares of GFTRL,
16,70,410 Equity shares of KMTRL, 44,18,819 Equity shares of DATRL and
18,18,390 Equity shares of HKTRL and Second charge on the fixed assets
of RCCPL (a 100% subsidiary of the Company)
(i) Rs, 1,325 Crore from Yes Bank Limited are secured by Pledge of
22,01,03,025 Equity Shares of Reliance Defence and Engineering Limited
(formerly known as Pipavav Defence and Offshore Engineering Company
Limited and subservient charge on certain Current Assets of the
Company, both present and future.
(j) Rs, 200 Crore from Yes Bank Limited are secured by Pledge of
2,00,00,373 Equity Shares of RCCPL (a 100% subsidiary of the Company)
and Subservient charge on certain Current Assets of the Company, both
present and future.
(k) Rs, 200 Crore from Axis Bank Limited are secured by first pari-passu
charge on stock, book debts, other current assets and additionally
secured by a specific immovable property of the Company located at
Mumbai.
E. Loans from Others of Rs, 8.98 crore are secured as under:
Rs, 8.98 Crore from CISCO Systems Capital (India) Private Limited is
secured by first and exclusive charge on certain assets of the Company.
Maturity Profile and rate of interest of Non Convertible Debentures
(NCD) & External Commercial Borrowings (ECB) are as under:
Security: Working Capital Loans and Buyers'' Credit from Consortium
Banks are secured by way of first pari-passu charge on stock, book
debts, other current assets and additionally secured by a specific
immovable property of the Company located at Mumbai;
** Secured by Pledge of 2,00,00,373 Equity Shares of RCCPL (a 100%
subsidiary of the Company) and Subservient charge on certain Current
Assets of the Company, both present and future.(Long term loan of Rs, 200
Crore from Yes Bank Limited also hold pari passu charge on the above
assets.)
29,97,64,706 (29,97,64,706) shares of BSES Rajdhani Power Limited,
16,02,58,824 (16,02,58,824) shares of BSES Yamuna Power Limited,
26,57,100 (26,57,100) shares of DS Toll Road Limited, 22,83,270
(22,83,270) shares of NK Toll Road Limited, 45,99,180 (45,99,180)
shares of DA Toll Road Private Limited, 5,470 (5,470) shares of PS Toll
Road Private Limited, 90,22,007 (90,22,007) shares of SU Toll Road
Private Limited, 13,91,46,870 (13,91,46,870) shares of Parbati Koldam
Transmission Company Limited are Pledge with the lenders of the
respective investee Company.
# 25,52,840 (Nil) shares of DS Toll Road Limited, 21,93,670 (Nil)
shares of NK Toll Road Limited, 44,18,819 (Nil) shares of DA Toll Road
Private Limited, 9,60,939 (Nil) shares of GF Toll Road Private Limited,
16,70,410 (Nil) shares of KM Toll Road Private Limited 18,18,390 (Nil)
shares of HK Toll Road Private Limited, 8,53,34,926 (Nil) shares of
Reliance Cement Company Private Limited, 62,65,20,433 (44,42,22,318)
shares of Reliance Power Limited are pledged with lenders of the
company.
(a) contingent Liabilities:
i) Bank guarantees given to banks against guarantees issued by the
banks on behalf of the jointly controlled operations aggregate to Rs,
0.06 Crore (Rs, 0.10 Crore) and for subsidiaries/associates/other body
corporate Rs, 313.60 Crore (Rs, 583.27 Crore).
ii) Corporate Guarantees given to banks and other parties aggregating Rs,
1,551.67 Crore (Rs, 1,681.89 Crore) in respect of financing facilities
granted to subsidiaries /associates/ other body corporate.
iii) Claims against the Company not acknowledged as debts and under
litigation aggregates to Rs, 1,562.14. Crore (Rs, 1,012.01 Crore). These
include claim from suppliers aggregating to Rs, 431.83 Crore (Rs, 371.87
Crore), income tax claims Rs, 838.35 Crore (Rs, 168.37 Crore), indirect tax
claims aggregating to Rs, 244.12 Crore (Rs, 419.87 Crore) out of which
claims of Rs, 122.33 Crore (Rs, 122.33 Crore), if materialised, will be
recovered from the customers and other claims Rs, 47.84 Crore (Net of
provision made of Rs, 20 Crore) (Previous Year Rs, 51.90 Crore - Net of
Provision made of Rs, 8 Crore).
iv) The Company''s application for compounding in respect of its ECB of
USD 360 million has been deemed by the Reserve Bank of India (RBI) as
never to have been made subsequent to the withdrawal of the compounding
application. Accordingly, there is no liability in respect of the
compounding fee of Rs, 124.68 Crore earlier specified by RBI. Subsequent
to the withdrawal of the compounding application, the matter has been
referred to the Enforcement Directorate where the same is still
pending.
v) Assignment of Buyers Credit Liability of Rs, 2,578.99 Crore and Rs,
758.27 Crore to Samalkot Power Limited and Reliance Cleangen Limited
respectively, pending approval from Lenders (Refer Note 48).
(b) capital and Other commitments:
i) Estimated amount of contracts remaining unexecuted on capital
account and not provided for Rs, 152.81 Crore (Rs, 125.38 Crore).
ii) Uncalled liability on partly paid shares Rs, 10.70 Crore (Rs, 10.70
Crore).
iii) The Company has given equity/fund support/other undertakings for
setting up of projects/cost overrun in respect of various
infrastructure and power projects being set up by company''s
subsidiaries and associates; the amounts of which currently are not
ascertainable.
iv) Acquisition of equity shares of Reliance Defence and Engineering
Limited (RDEL) (formerly Pipavav Defence and Offshore Engineering
Company Limited) (Refer Note 39).
3. Related Party Disclosure:
As per Accounting Standard -18 as prescribed under Section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, the
Company''s related parties and transactions are disclosed below:
(a) Parties where control exists:
Subsidiaries (including step (a) Reliance Power Transmission Limited
(RPTL) down subsidiaries)
(b) Talcher  II Transmission Company Limited (TTCL)
(c) North Karanpura Transmission Company Limited (NKTCL)
(d) BSES Kerala Power Limited (BKPL)
(e) Reliance Energy Trading Limited (RETL)
(f) Mumbai Metro One Private Limited (MMOPL)
(g) Parbati Koldam Transmission Company Limited (PKTCL) (h) CBD Tower
Private Limited (CBDTPL)
(i) Reliance Electric Generation and Supply Private Limited (REGSPL)
{Formerly known as Tulip Realtech Private Limited (TRPL)}
(j) DS Toll Road Limited (DSTL)
(k) NK Toll Road Limited (NKTL)
(I) GF Toll Road Private Limited (GFTL) (m) KM Toll Road Private
Limited (KMTL) (n) PS Toll Road Private Limited (PSTL) (o) HK Toll Road
Private Limited (HKTL) (p) DA Toll Road Private Limited (DATL)
(q) Reliance Cement Company Private Limited (RCPL)
(r) Reliance Cement Corporation Private Limited (RCCPL)
(s) Utility Infrastructure & Works Private Limited (UIWPL)
(t) Reliance Concrete Private Limited (RCoPL)
(u) Reliance Airport Developers Private Limited (RADPL)
(v) Latur Airport Private Limited (LAPL)
(w) Baramati Airport Private Limited (BAPL)
(x) Nanded Airport Private Limited (NAPL)
(y) Yavatmal Airport Private Limited (YAPL)
(z) Osmanabad Airport Private Limited (OAPL)
(aa) Reliance Sealink One Private Limited (RSOPL)
(bb) Reliance Defence and Aerospace Private Limited (RDAPL)
(cc) Reliance Defence Systems Private Limited (RDSPL)
(dd) Reliance Defence Technologies Private Limited (RDTPL)
(ee) Reliance Defence Limited (RDL)
(ff) Reliance Smart Cities Private Limited (RSCL) (w.e.f. August 6,
2015)
(gg) Reliance SED Limited (RSL) (w.e.f. May 2, 2015)
(hh) Reliance Energy Limited (REL) (w.e.f. January 7, 2016)
(ii) Reliance E Generation and Management Private Limited (REGMPL)
(w.e.f. March
31, 2016)
(jj) Reliance Propulsion Systems Limited (RPSL) (w.e.f. April 27, 2015)
(kk) Reliance Space Limited (RSpL) (w.e.f. April 27, 2015)
(II) Reliance Defence Infrastructure Limited (RDIL) (w.e.f. April 27,
2015) (mm) Reliance Helicopters Limited (RHL) (w.e.f. April 27, 2015)
(nn) Reliance Land Systems Limited (RLSL) (w.e.f. April 27, 2015)
(oo) Reliance Naval Systems Limited (RNSL) (w.e.f. May 2, 2015)
(pp) Reliance Unmanned Systems Limited (RUSL) (w.e.f. April 27, 2015)
(qq) Reliance Aero structure Limited (RAL) (w.e.f. April 27, 2015)
(rr) Reliance Defence Ventures Limited (RDVL) (w.e.f. February 22,
2016)
(b) Other related parties where transactions have taken place during
the year:
(i) Associates (a) Reliance Power Limited (RePL)
(b) Reliance Geo Thermal Power Private Limited (RGTPPL)
(c) JR Toll Road Private Limited (JRTL)
(d) Mumbai Metro Transport Private Limited (MMTPL)
(e) Metro One Operation Private Limited (MOOPL)
(f) Delhi Airport Metro Express Private Limited (DAMEPL)
(g) SU Toll Road Private Limited (SUTL) (h) TD Toll Road Private
Limited (TDTL) (i) TK Toll Road Private Limited (TKTL)
(j) Reliance Defence and Engineering Limited (RDEL) (w.e.f. January 8,
2016)
(Formerly known as Pipavav Defence and Offshore Engineering Company
Limited)
(ii) Joint Ventures (a) BSES Rajdhani Power Limited (BRPL)
(b) BSES Yamuna Power Limited (BYPL)
(c) Tamilnadu Industries Captive Power Company Limited (TICAPCO)
(d) Utility Powertech Limited (UPL)
(iii) Investing Party Reliance Project Ventures and Management Private
Limited (RPVMPL)
(iv) Persons having control Shri Anil D Ambani over investing party
(v) Key Management (a) Shri Lalit Jalan, CEO (w.e.f. January 1, 2016)
Personnel
(b) Shri M S Mehta, CEO (till December 31, 2015)
(c) Shri Madhukar Moolwaney, CFO
(d) Shri Ramesh Shenoy, Manager (till April 30, 2015) & Company
Secretary (vi) Enterprises over which (a) Reliance Innoventures Private
Limited (REIL) person described in (iv)
(b) Reliance Life Insurance Company Limited (RLICL)
has significant infuence
(c) Reliance General Insurance Company Limited (RGI)
(d) Reliance Capital Limited (RCap)
(e) Reliance Tech Services Private Limited (RTSPL)
(f) Reliance Infocomm Infrastructure Private Limited (RIIPL)
(g) AAA Sons Private Limited (AAASPL) (h) Reliance Securities Limited
(RSL)
(i) Reliance Capital Asset Management Company Limited (RAMCPL)
(j) Zapak Digital Entertainment Limited (ZDEL)
(k) Reliance Infratel Limited (RITL)
(l) Reliance Big Private Limited (RBPL)
(m) Reliance Webstore Private Limited (RWPL)
(n) Reliance Communication Limited (RComm)
(o) Talenthouse Entertainment Private Limited (THEPL)
(p) Reliance Big Entertainment Private Limited (RBEPL)
(q) Reliance Assets Reconstruction Company Limited (RARCL)
(r) Reliance Big TV Private Limited (RBTPL)
(s) Reliance Money Solutions Private Limited (RMSPL)
(t) Reliance Money Limited (RML)
(u) Reliance Transport and Travels Private Limited (RTTPL) (w.e.f.
October 28, 2015)
(v) Reliance Broadcast Network Limited (RBNL)
(w) Reliance Infocomm Limited (RInfo)
(x) Reliance Mediaworks Limited (RMWL)
(y) Reliance Money Precious Metals Private Limited (RMPMPL)
(z) Reliance Enterprise and Ventures Private Limited (REVPL)
(aa) Reliance Home Finance Limited (RHL)(a)
(d) Details of material Transactions with Related Party
(i) Transactions during the year (Balance Sheet heads)
Guarantees and Collaterals provided earlier-
expired/encashed/surrendered for JRTL Rs, 12.63 Crore , DATL Rs, 107.89
Crore and RCPL Rs, 9.69 Crore. ICD given to RePL Rs, 425 Crore. RDEL Rs,
322.40 Crore, RBEPL Rs, 138 Crore and MMOPL Rs, 150 Crore. ICD returned by
RePL Rs, 751.46 Crore. Recoverable Expenses incurred for RCPL Rs, 2.09
Crore, SUTL Rs, 0.71 Crore and KMTL Rs, 0.84 Crore. Recoverable Expenses
incurred by RePL Rs, 0.61 Crore and RPTL Rs, 3.07 Crore. Investment in
Equity of RCPL Rs, 1,445 Crore. Subordinate debt given to DAMEPL Rs, 358.76
Crore and RDSPL Rs, 1,492.38 Crore. Subordinate debt received back from
RCPL Rs, 138 Crore. ICD taken from RAMCPL Rs, 175 Crore and RCoPL Rs,
1,411.90 Crore. ICD repaid to RAMCPL Rs, 175 Crore. Liabilities written
back of MOOPL Rs, 0.02 Crore. Subordinate Debts written off of DAMEPL Rs,
355.56 Crore, MMOPL Rs, 305 Crore and GFTL Rs, 144.09 Crore. Sale of
Investment to RDL Rs, 0.03 Crore. ICD written off of RSOPL Rs, 40.97 Crore.
(Previous Year: Guarantees and Collaterals provided to RCPL Rs, 34.49
Crore. Guarantees and Collaterals provided earlier-
expired/encashed/surrendered for RPTL Rs, 94.60 Crore, MMOPL Rs, 35 Crore
and NKTL Rs, 156 Crore. ICD given to RePL Rs, 1,390 Crore. ICD returned by
RePL Rs, 850.85 Crore. Recoverable Expenses incurred for RCPL Rs, 1.86
Crore, SUTL Rs, 0.77 Crore and DATL Rs, 1.40 Crore. Recoverable Expenses
incurred by RETL Rs, 0.45 Crore and RCPL Rs, 0.15 Crore. Investment in
Equity of RCPL Rs, 462.10 Crore. Subordinate debt given to DAMEPL Rs,
233.89 Crore, PSTL Rs, 718.05 Crore and MMOPL Rs, 249 Crore. Subordinate
debt received back from SUTL Rs, 6.80 Crore. Advance against Securities
received back from JRTL Rs, 6.39 Crore. Reduction/Cancellation of
Investments of RPTL Rs, 606.49 Crore. Redemption of Debentures of RePL Rs,
1,100 Crore. Consideration on Revocation of Toll Collecting Rights of
DSTL Rs, 295 Crore & NKTL Rs, 247.50 Crore. Subordinate Debts written off
of DAMEPL Rs, 1,258.20 Crore).
(ii) Balance sheet heads (closing balance)
Trade payables, Advances received and other liabilities for receiving
of services on revenue and capital account REIL Rs, 21.96 Crore and
RAMCPL Rs, 5.40 Crore. Investment in Equity of RePL Rs, 2,849.77 Crore and
RCPL Rs, 2,423.01 Crore. ICDs placed RePL Rs, 212.69 Crore and MMOPL Rs,
283.80 Crore and RDEL Rs, 322.40 Crore. Subordinate debt given to PSTL Rs,
828.51 Crore and MMOPL Rs, 515.40 Crore and RDSPL Rs, 1,492.38 Crore.
Interest receivable on Investments and Deposits from RePL Rs, 32.68 Crore
and RDEL Rs, 4.85 Crore. Trade Receivables, Advances given and other
receivables for rendering services JRTL Rs, 11.04 Crore and GFTL Rs, 44.98
Crore. ICD taken from RAMCPL Rs, 175 Crore and RCoPL Rs, 1,408.63 Crore.
(Previous Year: Trade payables, Advances received and other liabilities
for receiving of services on revenue and capital account REIL Rs, 22.55
Crore, RCPL Rs, 5.91 Crore and RAMCPL Rs, 11.59 Crore. Investment in Equity
of RePL Rs, 2,710.94 Crore and RCPL Rs, 978.01 Crore. ICDs placed RePL Rs,
539.15 Crore and MMOPL Rs, 133.80 Crore. Subordinate debt given to DAMEPL
Rs, 425.89 Crore, PSTL Rs, 760.79 Crore and MMOPL Rs, 776.40 Crore. Interest
receivable on Investments and Deposits from RePL Rs, 67.92 Crore. Trade
Receivables, Advances given and other receivables for rendering
services DSTL Rs, 327.85 Crore and NKTL Rs, 260 Crore. ICD taken from
RAMCPL Rs, 175 Crore).
(iii) contingent Liabilities (closing Balance)
Guarantees and Collaterals provided to RePL Rs, 300 Crore, JRTL Rs, 368.57
Crore, RCPL Rs, 492.67 Crore and PSTL Rs, 300 Crore.
(Previous Year: Guarantees and Collaterals provided to RePL Rs, 300
Crore, JRTL Rs, 381.22 Crore, RCPL Rs, 502.35 Crore and
PSTL Rs, 300 Crore).
(iv) Income heads
Gross Revenue from EPC and Contracts Business from RCPL Rs, 5.81 Crore.
Dividend received from RePL Rs, 118.40 Crore and RETL Rs, 21.68 Crore.
Interest earned from RePL Rs, 32.68 Croreand MMOPL Rs, 21.37 Crore. Other
Income DATL Rs, 4.23 Crore, HKTL Rs, 1.98 Crore and PSTL Rs, 4.47 Crore.
(Previous Year: Gross Revenue of EPC and Contracts Division from RWPL Rs,
0.96 Crore, PSTL Rs, 1.38 Crore and RCPL Rs, 4 Crore. Dividend received
from RETL Rs, 20.65 Crore and UPL Rs, 2.77 Crore. Interest earned from RePL
Rs, 79.48 Crore. Other Income from RCPL Rs, 4.38 Crore, DATL Rs, 4.33 Crore
and PSTL Rs, 4.82 Crore)
(v) Expenses heads
Purchase of Power (including Open access charges  Net of Sales) from
REIL Rs, 30.32 Crore, RePL Rs, 46.22 Crore. Purchase/Services of other
items on Revenue account from RCPL Rs, 1.40 Crore. Receiving of Services
from RGI Rs, 3.56 Crore and RTSPL Rs, 2.12 Crore. Interest Paid to RAMCPL Rs,
23.02 Crore and RCoPL Rs, 13.28 Crore. Rent paid to RCap Rs, 0.08 Crore.
Dividend paid RPVMPL Rs, 84.92 Crore and RBPL Rs, 15.60 Crore.
(Previous Year: Purchase of Power (including Open access charges  Net
of Sales) from REIL Rs, 30.53 Crore and RePL Rs, 45.21 Crore. Purchase of
Power - Compensation Bills/IEX (Net of Sales) RETL Rs, 95.15 Crore.
Purchase/Services of other items on Revenue account from RCPL Rs, 7.60
Crore. Receiving of Services from RGI Rs, 16.30 Crore, RLICL Rs, 3.06 Crore
and RComm Rs, 4.78 Crore. Interest Paid to RAMCPL Rs, 22.75 Crore. Rent
paid to RIIPL Rs, 2.04 Crore. Dividend paid RPVMPL Rs, 79.61 Crore and RBPL
Rs, 14.63 Crore).
(vi) Salaries, Commission and Other Benefits paid/payable to Shri Anil D
Ambani Rs, 5.50 Crore (Rs, 5.59 Crore), Shri Lalit Jalan Rs, 0.87 Crore (Rs,
1.76 Crore), Shri M.S. Mehta Rs, 3.38 Crore (Rs, 2.89 Crore), Shri Madhukar
Moolwaney Rs, 1.50 Crore (Rs, 1.37 Crore) and Shri Ramesh Shenoy Rs, 0.83
Crore (Rs, 1.21 Crore).
(* Only pertaining to the segment)
5. (A) Standby charges:
In the matter of liability of Rs, 515.60 Crore of standby charges with
the Tata Power Company Limited (TPC) determined by MERC for the period
April 1, 1998 to March 31, 2004, which the Company has fully accounted
for, the Appellate Tribunal of Electricity (ATE) determined the total
liability at Rs, 500 Crore and directed TPC to refund Rs, 354 Crore
(inclusive of interest of Rs, 15 Crore up to March 31, 2004) to the
Company plus interest @ 10% p.a. commencing from April 1, 2004 till the
date of payment. Against the said order, TPC fled an appeal with the
Supreme Court. The Hon''ble Supreme Court passed an interim order dated
February 7, 2007 granting stay of the impugned order of the ATE subject
to the condition that, TPC furnish a bank guarantee in the sum of Rs, 227
Crore and, in addition, deposit a sum of Rs, 227 Crore with the Registrar
General of the Court which may be withdrawn by the Company subject to
the Company giving an undertaking that in the event of the appeal being
decided against the Company, wholly or in part, the amount as may be
found
6. Segment Reporting
Basis of Preparation: The Company operates in two Business Segments:
Power and Engineering, Procurement, Construction (EPC) and Contracts.
Business segments have been identified as reportable primary segments in
accordance with Accounting Standard-17 Segment Reporting, as prescribed
under section 133 of the Act, read with Rule 7 of the Companies
(Accounts) Rules, 2014 taking into account the organisation and
internal reporting structure as well as evaluation of risks and returns
from these segments. The inter segment pricing is effected at cost.
Segment accounting policies are in line with the accounting policies of
the Company.
In the case of Power segment, the Company operates a 500 MW Thermal
Power Station at Dahanu, a 220 MW combined cycle power plant at
Samalkot, a 48 MW combined cycle power plant at Mormugao, a 9.39 MW
Windfarm at Chitradurga and also purchases power from third parties and
supplies the power through the Company''s own distribution grid. The
Company supplies power to residential, industrial, commercial and other
consumers. The Company also transmits electricity through its
transmission network.
EPC and Contracts segment renders comprehensive value-added services in
construction, erection and commissioning.
Geographical Segments: The Company''s operations are mainly confined
within India. The Company does not have material earnings from business
segments outside India. As such there are no reportable geographical
segments.
refundable by the Company shall be refunded to TPC without demur
together with interest as may be determined by the Court. The Company
accordingly withdrew the amount of Rs, 227 Crore after complying with the
conditions specified and has accounted the said amount as Other
Liabilities pending final adjustment. Moreover, pending final order of
the Hon''ble Supreme Court, the Company has not accounted for the
reduction in standby charges liability of Rs, 15.60 Crore as well as
interest amount determined by ATE as payable by TPC to the Company.
(B) Take or Pay and Additional Energy charges:
Pursuant to the order passed by MERC dated December 12, 2007, in case
No. 7 of 2002, TPC has claimed an amount of Rs, 323.87 Crore towards the
following
(a) Difference in the energy charge for energy supplied by TPC at 220
kV interconnection for the period March 2001 to May 2004 along with
interest at 24% per annum up to December 31, 2007, and
(b) Minimum offtake charges for energy for the years 1998-99 to
1999-2000 along with interest at 24% per annum up to December 31, 2007.
In an appeal fled by the Company, ATE held that the amount in the
matter (a) above is payable by the Company along with interest at State
Bank of India prime lending rate for short term borrowings. The matter
(b) was remanded to MERC for redetermination. The Company has fled an
appeal against the said order before the Supreme Court, which while
admitting the appeal, has restrained TPC from taking any coercive
action in respect of the matter stated in (a) above and TPC has also
fled an appeal against the said order. The Company has complied with
the interim order directions of depositing Rs, 25 Crore with the
Registrar of Supreme Court and providing a Bank Guarantee of Rs, 9.98
Crore. The said amount is disclosed under Contingent Liability in Note
5(a)(iii) above.
b. From 1st April 2012 till 31st March 2016 (Multi Year Tariff (MYT)
period), determination of Retail Supply Tariff (RST)/ Transmission
charges chargeable by the Company to its consumers is governed by MERC
(Multi Year Tariff ) Regulations 2011 (MYT Regulations), whereby MERC
determines the RST/Transmission charges in a manner that the Company
recovers its power purchase costs as well as other prudently incurred
expenses and earns assured return of 15.5% p.a. on MERC approved equity
in Distribution Wires Business and Transmission Business and 17.5% p.a.
on MERC approved equity in Retail Supply Business, subject to
achievement of Distribution loss/Transmission availability targets. The
rate review or "truing up" process during the MYT period is being
conducted as per the principles stated in MYT Regulations to adjust the
tariff rates downgrade or upgrade to ensure recovery of costs and
assured return on investment.
c. During the truing up process, revenue gaps (i.e. surplus/shortfall
in actual returns over returns entitled) are determined by the
regulator and are permitted to be carried forward as regulatory
assets/regulatory liabilities which would be recovered/ refunded
through future billing based on future tariff determination by the
regulator. At the end of each accounting period, Company also
determines regulatory assets/regulatory liabilities in respect of each
accounting period on self true up basis on principles specified in
accounting policy Note no. 1(d)(i) wherever regulator is yet to take up
formal truing up process. The above process is followed by MERC both
in case of Mumbai Distribution and Mumbai Transmission business.
d. During the year ended March 31, 2014, the Company had received
tariff order from MERC allowing it to recover the regulatory gap
determined by the regulator for the period up to March 31, 2012,
aggregating to Rs, 2,463.18 Crore along with carrying cost of Rs, 1,403.65
Crore on smoothened recovery basis over a period of 6 years till FY
2018-19. The Company has apportioned an amount of Rs, 475.13 Crore
towards carrying cost out of the total recovery during the year ended
March 31, 2016 of Rs, 854.40 Crore under the said order.
e. In accordance with the MERC tariff regulation for determination of
tariff, the income-tax paid is considered for tariff determination
(truing up). Accordingly, the Company has considered Rs, 40.45 Crore (Rs,
41.13 Crore) of deferred tax liability for the year arising out of
differences in rates of depreciation between MERC and income-tax as
"Net tax recoverable from future tariff determination". Similarly, the
deferred tax liability of Rs, 33.27 Crore (Rs, 35.12 Crore) on account of
timing difference on taxability of regulatory income accounted in the
books is treated as "Net tax recoverable from future tariff
determination".
7. Investment in Delhi Airport metro Express Private Limited:
Delhi Airport Metro Express Private Limited (DAMEPL), a SPV of the
Company, terminated the Concession Agreement with Delhi Metro Rail
Corporation (DMRC) for the Delhi Airport Metro Line, on account of
Material Breach and Event of Default under the provisions of the
Concession Agreement by DMRC. The operations were taken over by DMRC
with effect from July 1, 2013.
As per the terms of the Concession Agreement, DMRC is now liable to pay
DAMEPL a Termination Payment, which is estimated at Rs, 2,823 Crore, as
the termination has arisen owing to DMRC''s Event of Default. The matter
has been referred to arbitration and the process for the same is
continuing. Pending final outcome of the arbitration, the Company
continues to fund the statutory and other obligations of DAMEPL post
takeover by DMRC and accordingly has funded Rs, 358.76 Crore during the
year ended March 31, 2016.
Based on the review of the progress in settlement of various claims and
also on overall review of financial position of DAMEPL, the Company has,
as a matter of prudence, written off Rs, 355.56 Crore, out of total
investment of Rs, 2,060.86 Crore in DAMEPL. An amount of Rs, 1,258.20 Crore
was also written off during the previous year ended March 31, 2015.
However, as legally advised, DAMEPL''s claims for the termination
payments are considered fully enforceable. This has been treated as an
exceptional item. (Refer Note 37)
8. Scheme of Amalgamation of Reliance Infraprojects Limited (RInf)
with the company:
The Hon''ble High Court of Judicature of Bombay had sanctioned the
Scheme of Amalgamation of Reliance Infraprojects Limited (RInf) with
the Company on March 30, 2011 with the appointed date being April 1,
2010. As per the clause 2.3.7 of the Scheme, the Company, as determined
by its Board of Directors, is permitted to adjust foreign
exchange/hedging/derivative contract losses/gains debited/credited in
the Statement of Profit and Loss by a corresponding withdrawal from or
credit to General Reserve.
Pursuant to the option exercised under the above Scheme, net foreign
exchange gain of Rs, 36.72 Crore (Rs, 117.25 Crore) for the year ended
March 31, 2016 has been credited to the Statement of Profit and Loss and
an equivalent amount has been transferred to General Reserve.
Similarly, foreign exchange loss of Rs, 252.50 Crore (Rs, 236.11 Crore)
attributable to fnance cost and net loss on account of derivative
instruments/forward contracts of Rs, 27.04 Crore (Rs, 16.59 Crore) have
been debited to Statement of Profit and Loss and an equivalent amount
has been withdrawn from General Reserve. The Company has been legally
advised that crediting of the said amount in Statement of Profit and
Loss is in accordance with Schedule III to the Act. Had such
transfer/withdrawal not been done, the Profit before tax for the year
ended March 31, 2016 would have been lower by Rs, 242.82 Crore (Rs, 135.45
Crore) and General Reserve would have been higher by an equivalent
amount. The treatment prescribed under the Scheme override the relevant
provisions of Accounting Standard 5 (AS-5) ''Net Profit or Loss for the
Period, Prior Period Items and Changes in Accounting Policies''.
9. In line with the notification dated December 29, 2011 issued by the
Ministry of Corporate Affairs, the Company has exercised the option
given in paragraph 46A of the Accounting Standard-11 "The Effects of
Changes in Foreign Exchange Rates" of capitalising the foreign exchange
loss/gain arising on long term foreign currency monetary items relating
to acquisition of depreciable capital assets and depreciating the same
over the balance life of such assets and in other cases amortising the
foreign exchange loss/gain over the balance period of such long term
foreign currency monetary items. Accordingly, the Company has
capitalized foreign exchange loss arising during the year on long term
foreign currency monetary items relating to depreciable capital assets
of Rs, 59.67 Crore (Rs, 2.97 Crore). In other cases, the Company has
carried forward the unamortised portion of net gain of Rs, 258.29 Crore
(Rs, 241.65 Crore) as on March 31, 2016 in "Foreign Currency Monetary
Item Translation Difference Account" and the same is grouped under
''Reserves and Surplus''.
10. The Company had, based on valuation made by approved valuer,
revalued as at April 1, 2012, its freehold land, building and plant and
machinery located at Goa, Samalkot and Chitradurg as per the
replacement cost method and incremental value on revaluation amounting
to Rs, 495.69 Crore has been added to Gross Block of Fixed assets and
credited to Revaluation Reserve. Consequent to revaluation, there is
an additional charge of depreciation of Rs, 25.88 Crore (Rs, 28.55 Crore)
in the Statement of Profit and Loss.
11. Exceptional Items
In terms of the Scheme of amalgamation of Reliance Cement Works Private
Limited with Western Region Transmission (Maharashtra) Private Limited
(WRTM) wholly owned subsidiary of the Company, which was subsequently
amalgamated with the Company w.e.f. April 1, 2013, the Board of
Directors of the Company during the year ended March 31, 2016
determined an amount of Rs, 948.62 Crore as Exceptional items being bad
debts of Rs, 143.97 Crore in respect of Goa Power Station and investment
write off of Rs, 804.65 Crore comprising of Rs, 355.56 Crore being
investment in an associate viz Delhi Airport Metro Express Private
Limited (Refer Note No 10),and investments in subsidiaries viz Mumbai
Metro One Private Limited and GF Toll Road Private Limited of Rs, 305
Crore and Rs, 144.09 Crore respectively in view of the losses incurred
up to March 31, 2016 by the said Subsidiaries, which was debited to the
Statement of Profit and Loss and an equivalent amount has been withdrawn
from General Reserve and credited to the Statement of Profit and Loss.
Had such withdrawal not been done, the Profit before tax for year ended
March 31, 2016 would have been lower by Rs, 948.62 Crore and General
Reserve would have been higher by an equivalent amount. The treatment
prescribed under the Scheme 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''.
12. Depreciation
a. During the year ended March 31, 2016, based on the valuation made
by the Approved Valuer, the Plant and Machinery located at Goa Power
Station has been impaired to the extent of Rs, 31.04 Crore. Accordingly,
provision for impairment has been made and adjusted against revaluation
reserve since such decrease relates to previous increase on account of
revaluation. Hence, there is no impact on the Statement of Profit and
Loss.
b. Pursuant to application guide on the provision of Schedule II to
the Act, issued by Institute of Chartered Accountants of India (ICAI),
the Company has withdrawn the amount of depreciation provided on
revalue portion of fixed assets of Rs, 43.14 Crore (Rs, 54.20 Crore) from
Revaluation Reserve and credited to General Reserve.
13. The Acquisition of Reliance Defence and Engineering Limited (RDEL)
(formerly Pipavav Defence and Offshore Engineering company Limited)
through Open Offer
During the year ended March 31, 2016, Reliance Defence Systems Private
Limited (RDSPL) ("the Acquirer") and Reliance Infrastructure Limited
(Person Acting in Concert referred as PAC) made an open offer to the
public equity shareholders of RDEL (Target Company) to acquire up to
19,14,13,630 fully paid-up equity shares of face value of Rs, 10 each of
RDEL, constituting 26% of the total fully diluted equity share capital
at an offer price of Rs, 66 per share (plus Rs, 3.59 per share was paid
towards interest at 10% p.a. for delay in payment beyond the scheduled
payment date viz. June 15, 2015 as per the original offer till the date
of actual payment i.e. December 30, 2015). In terms of the said offer,
the Acquirer has acquired 13,87,12,427 shares of RDEL, constituting
18.84% of the voting equity share capital at a total consideration of Rs,
965.30 Crore (including interest of Rs, 49.80 Crore). Subsequently, as
per share purchase agreement dated March 4, 2015, the Acquirer also
acquired 8,13,90,598 equity shares of RDEL at a total consideration of
Rs, 512.76 Crore from erstwhile Promoters of RDEL whereby RDEL has become
an associate of RDSPL with holding of 29.90%. The balance shares to be
acquired in terms of share purchase agreement are 4,86,09,402 equity
shares at price of Rs, 63 per share.
14. Disclosure under Accounting Standard 15 (revised 2005) "Employee
Benefits":
The Company has classified various employee benefits as under:
(A) Defend contribution plans
a. Provident fund
b. Superannuation fund
c. State defend contribution plans
- Employers'' Contribution to Employees'' State Insurance
- Employers'' Contribution to Employees'' Pension Scheme 1995
The provident fund and the state defend contribution plan are operated
by the Regional Provident Fund Commissioner and the superannuation fund
is administered by the trustees of the Reliance Infrastructure Limited
Officer''s Superannuation Scheme. Under the schemes, the Company is
required to contribute a specified percentage of payroll cost to the
retirement benefit schemes to fund the benefits. These funds are
recognized by the Income tax authorities.
# Except for these companies, all loans and advances stated above are
interest free. There are no investments by loanees in the shares of
the Company and Subsidiary Companies. As at the year-end, the Company-
(a) has no loans and advances in the nature of loans to firms/companies
in which directors are interested. (b) The above amounts exclude
subordinate debts.
(b) Pursuant to the clarification issued by the Institute of Chartered
Accountants of India on March 29, 2008 on accounting of derivatives
(other than forward contracts), the Company has not recognized net gain
of Rs, 11.68 Crore (Rs, 10.38 Crore) for the year ended March 31, 2016 on
mark to market of the derivative instruments as income in the Statement
of Profit and Loss as a matter of prudence. provided/(reversed)
unrealized loss of Rs, NIL (Previous Year Rs, NIL) on account of
revaluation of foreign exchange derivative instruments at the fair
values as at the reporting year end. Gain of Rs, 11.68 Crore (Rs, 10.38
Crore).
(c) Net Foreign Currency exposures that are not covered by derivative
instruments or otherwise are Receivables (net) of Rs, 357.66 Crore (Rs,
783.04 Crore).
15. Assignment of Assets and Liabilities to Reliance cleanse Limited
and Samalkot Power Limited
As per the agreements entered into by the Company with Reliance
Cleangen Limited (Cleangen) and Samalkot Power Limited (Samalkot) dated
March 29, 2016, the Company has assigned its buyers credit liability
(which is availed from various Banks/ Financial Institutions) of Rs,
2,578.99 Crore and Rs, 758.27 Crore to Samalkot and Cleangen respectively
and also assigned its receivables of Rs, 2,328.67 Crore from Samalkot,
Inter Corporate Deposit of Rs, 250.32 Crore and Rs, 758.27 Crore to
Samalkot and Cleangen respectively.
The Company is in the process of obtaining approval from the lenders
for assignment of buyers credit. Pending such approval, the buyers
credit liability of Rs, 3,337.26 Crore has been shown as a contingent
liability in Note 5(a)(v) above.
16. The Board of Directors at its meeting held on March 16, 2016
approved the Scheme of arrangement envisaging transfer of various
operating divisions of the Company, namely Dahanu Thermal Power Station
(DTPS), Goa Power Station, Samalkot Power Station, Mumbai Power
Transmission Division, Mumbai Power Distribution Division and Windmill
Division (together considered as Power Business, hereinafter referred
to as "Discontinuing Operations") to its wholly owned subsidiary viz
Reliance Electric Generation & Supply Private Limited with appointed
date of April 1, 2016.
Securities and Exchange Board of India (SEBI) and concerned Stock
Exchange(s) have approved the Scheme. The Company had since fled the
application with Hon''ble High Court of Judicature at Bombay, and as per
its order dated May 06, 2016, the meeting of the Equity Shareholders of
the Company will be convened on, June 06, 2016. The Scheme will be
effective upon receipt of approval of Hon''ble High Court of Bombay and
other requisite approvals.
The Company has disclosed below the information in accordance with the
requirement of Accounting Standard-24 ''Discontinuing Operations''
(AS-24) specified under section 133 of the Act read with Rule 7 of the
Companies (Accounts) Rules 2014.
17. Interest in Jointly controlled Operations:
The Company along with M/s. Geopetrol International Inc. and Reliance
Natural Resources Limited *(the consortium) was allotted 4 Coal Bed
Methane (CBM) blocks from Ministry of Petroleum and Natural Gas (Mo
PNG) covering an acreage of 3,266 square kilometers in the States of
Madhya Pradesh, Andhra Pradesh and Rajasthan. The consortium had
entered into a contract with Government of India for exploration and
production of these four CBM blocks. The Company as part of the
consortium has 45% share in each of the four blocks. M/s. Geopetrol
International Inc. is the operator on behalf of the consortium for all
the four CBM blocks.
Also, the Company along with M/s. Geopetrol International Inc, Naftogaz
India Private Limited and Reliance Natural Resources Limited *(the
consortium) was allotted Oil and Gas block from Ministry of Petroleum
and Natural Gas (Mo PNG), in the State of Mizoram under the New
Exploration Licensing Policy (NELP - VI) round, covering an acreage of
3,619 square kilometers and the consortium had signed a production
sharing contract with the Government of India for exploration and
production of Oil and Gas from block. The Company as part of the
consortium has 70% share in the block. M/s. Naftogaz India Private
Limited was the operator on behalf of the consortium for the block.
**The Board of Directors of the Company has approved the transfer of
operatorship from M/s. Geopetrol International Inc. to the Company on
February 14, 2015.
*** The consortium experienced inordinate delays in Government
clearances, non receipt of Petroleum Exploration License (PEL) for more
than 5 years and consequently relinquished its rights in respect of the
block at Kothgudem, Andhra Pradesh vide letter dated February 6, 2013
and the reply from the Government is awaited. Pending reply from the
Government, the consortium vide letter dated November 21, 2013
communicated to Directorate General of Hydrocarbons (DGH)/MoPNG that
the abnormal delays has made it impossible for the consortium to pursue
performance under the contract. Under these circumstances, the contract
is not effective and became incapable of being executed and that the
consortium has no further obligations with respect to the said CBM
Block. Liability, if any, which may arise on this relinquishment, is
presently not ascertainable.
**** The consortium had experienced inordinate delays in receipt of
clearances/permissions from State Government of
Rajasthan. Timely grant of requisite approvals was beyond the control
of the Consortium and the abnormal delay in the grant of requisite
approvals/clearances and also abnormal delay in response on request of
grant of extension of Phase-I by DGH, made the Consortium incapable of
performance. In view of the difficulties faced, the Consortium
relinquished all rights with respect to both the CBM blocks vide letter
dated November 21, 2013 to the Government of India and it stated that
the consortium has no further obligations with respect to the CBM
Blocks. Liability, if any, which may arise on this relinquishment, is
presently not ascertainable.
***** MoPNG, Government of India in October 2012, after six years of
the award of block, observed that NaftoGaz India Limited had falsely
represented itself as the subsidiary of NaftoGaz of Ukraine at the time
of bidding and served notice of termination to all consortium members
referring relevant clause of NELP-VI notice inviting offer (NIO) and
Article 30.3(a) of the Production Sharing Contract (PSC) and demanded
to pay penalty towards unfinished minimum work program. The Company has
received letter dated April 16, 2015 from DGH to deposit USD 9,467,079
as cost of unfinished Minimum Work Program (MWP) to MoPNG. The claim has
been contested by the Company vide letter dated June 21, 2014, May 25,
2015 and March 5, 2016. The said amount is disclosed under Contingent
Liability in Note 5(a)(iii) above.
The above joint ventures are unincorporated joint ventures carrying out
jointly controlled operations. Based on the audited statement of
accounts of the consortium forwarded by the Operator, except for Mizo
Block, the Company''s share in respect of assets and liabilities as at
March 31, 2016 and expenditure for the year ended on that date has been
accounted as under.
*The Lease terms are renewable on a mutual consent of Less or and
Lessee.
18. Termination of the concession Agreement with Reliance Sea Link One
Private Limited (RSOPL)
During the year RSOPL, SPV of the Company, has terminated the
Concession Agreement in relation to the implementation of Western
Freeway Sea Link with the Maharashtra State Road Development
Corporation Limited on February 29, 2016 with mutual consent of the
parties and agree to waiver of right to claim as per the Concession
agreement. Pursuant to above, the Company has written off the advances
given to RSOPL of Rs, 40.97 Crore in the Statement of Profit and loss.
This has been treated as an exceptional item.
19. During the year ended March 31, 2016, the Company has signed share
purchase agreement with Birla Corporation Limited (BCL) for sale of its
entire investment in wholly owned subsidiary Reliance Cement Company
Private Limited (RCCPL), subject to fulfilment of conditions precedent
of the said agreement. Pending fulfilment of conditions precedent, no
effect of the same has been given in the Financial Statements.
As a part of the conditions precedent to the said agreement, it was
agreed with BCL that RCCPL''s wholly owned subsidiary namely Reliance
Concrete Private Limited (RCOPL) will not be transferred to them. It is
therefore proposed to merge Concrete with the Company through court
approved Scheme of Amalgamation (Scheme). The Board of Directors in
their meeting held on February 8, 2016, approved the Scheme and the
Scheme has since been fled with Hon''ble High Court of Bombay. Pending
20. Expenditure related to Corporate Social Responsibility as per
Section 135 of the Act, read with Schedule VII thereof is Rs, 32.50
Crore.
21. Pursuant to first proviso to sub-section (3) of section 129 of the
Act, read with rule 5 of Companies (Accounts) Rules, 2014, the Company
has attached salient features of the financial statement of its
subsidiaries, associates and joint-ventures in form AOC-1 with its
Consolidated Financial Statements.
22. Figures for the previous year have been
regrouped/reclassified/rearranged wherever necessary to make them
comparable to those for the current year. Figures in bracket indicate
previous year''s figures. @''- represents figures less than Rs, 50,000
which have been shown at actual in brackets with @.
Mar 31, 2015
1. Terms/Rights attached to equity shares:
(a) Voting
The Company has only one class of equity shares having a par value of
Rs. 10 per share. Each holder of equity shares is entitled to one vote
per share.
(b) Dividends
The Company declares and pays dividends in Indian rupees. The dividend
proposed by the Board of Directors is subject to the approval of the
shareholders in the ensuing Annual General Meeting.
During the year ended March 31, 2015, the amount of per share dividend
recognised as distributions to equity shareholders is Rs. 8.00.
(c) Liquidation
In the event of liquidation of the Company, the holders of equity
shares will be entitled to receive all of the remaining assets of the
Company, after distribution of all preferential amounts. The
distribution will be in proportion to the number of equity shares held
by the shareholders.
2. Buy-back of Equity Shares:
Aggregate number of shares bought back during the period of five years
immediately preceding the reporting date - 44,30,262 (51,83,767)
Security:
Non Convertible Debentures of Rs. 4,497.50 Crore are secured as under:
(a) Rs. 125 Crore are secured by way of first pari-passu charge, on
Company's fixed assets, both present and future, located at its plants
situated at Goa and Samalkot and specific premises at Hyderabad ,
properties comprising certain plant and machinery and certain fixed
assets of Mumbai distribution business and on Company's specific
immovable properties located in Thane District in the State of
Maharashtra.
(b) Rs. 850 Crore are secured by way of first pari-passu charge on
Company's certain fixed assets, both present and future, located at its
plant & machinery and building situated at Dahanu and on Company's
specific premises in Mumbai.
(c) Rs. 965 Crore are secured by way of first pari-passu charge on
specific land and buildings located in Suburban Mumbai and second
mortgage on certain fixed assets of Mumbai distribution business of the
Company.
(d) Rs. 500 Crore are secured by first pari-passu charge on specific
properties (Land and Buildings) located in Suburban Mumbai and second
mortgage on certain plant and machinery and other assets of the
Company's Mumbai distribution business.
(e) Rs. 650 Crore are secured by way of first pari-passu charge on
assets of Company, located at its plants at Goa and Samalkot and
specific premises at Hyderabad, properties comprising certain plant and
machinery and certain fixed assets of Mumbai distribution business and
on Company's specific immovable properties located in Thane District in
the State of Maharashtra. (The existing Rs. 125 Crore NCD holders also
hold pari-passu charge on the above assets.)
(f) Rs. 907.50 Crore are secured by first ranking pari-passu charge on
the following:-
i) Regulatory Assets , present and future, related to Mumbai
distribution business
ii) Cash flows in specific Escrow accounts established for the purpose
iii) Specific immovable property located in Thane District in the State
of Maharashtra.
(g) Rs. 500 Crore are secured by the following:-
i) Pledge of 26,57,22,318 shares of M/s. Reliance Power Limited which
are owned by the Company.
ii) Specific immovable property located at Thane District.
iii) All of the Company's rights, title, interest and benefits in, to
and under the bank account no.0656363-00-0 of Reliance Infrastructure
Limited with Deutsche Bank, Mumbai branch together with fixed deposits
standing to the credit of the said bank account.
External Commercial Borrowings of Rs. 238.75 Crore are secured as
under:
First charge on transmission towers, plant and machinery and all other
movable and immovable properties forming part of transmission work,
current assets including book debts, operating cash flows, receivables
etc., related to the Western Region Strengthening Scheme Project C. The
Company is in the process of creating charge on the properties situated
in the state of Madhya Pradesh.
Term Loans from Financial Institutions of Rs. 997.88 Crore are secured
as under:
(a) Rs. 500 Crore from IFCI Ltd. are secured by the following:
i) Minimum 1.25 times cover of Non-agriculture Land to be shared with
other lenders on pari-passu basis subject to maintenance of 1.25 times
cover for IFCI Loan.
ii) Pledge of 17,80,00,000 shares of M/s. Reliance Power Limited which
are owned by the Company. It is Interim Security till creation of
security over land.
(The security on these assets is yet to be created except the Pledge of
Shares).
(b) Rs. 195 Crore from PTC India Financial Services Limited shall be
secured by land in Thane district and fixed assets related to two
specific schemes of Mumbai transmission business.
(c) Rs. 302.88 Crore from L & T Infrastructure Finance Private Limited
are secured by the following assets of the Company related to the
Western Region Strengthening Scheme Project B :
i) First charge by way of mortgage over all the immovable properties,
present and future pertaining to the Project;
ii) First charge by way of mortgage over all the movable assets,
including movable plant and machinery, machinery spares, tools and
accessories, furniture, fixtures, vehicles and all other movable
assets, present and future pertaining to the Project;
iii) First charge by way of mortgage over cash flow, receivables, book
debts, revenue of whatsoever nature and wherever arising, present and
future pertaining to the Project;
iv) First charge by way of all intangibles including but not limited to
goodwill and uncalled capital, present and future, pertaining to the
project;
v) A first charge by way of assignment or creation of security interest
of :
a. All the rights, title, interest and benefits, claims and demands
whatsoever of the Company in the project documents [including but not
limited to Transmission services agreement (TSA)/Power Transmission
Agreement (PTA), EPC Contract Revenue Sharing Agreement (RSA),Insurance
contracts],
b. Subject to applicable law, all the rights, title, interest
Benefits, claims and demands whatsoever of the Company in the
clearances, licenses;
c. All the rights, title, interest Benefits, claims and demands
whatsoever of the Company in any letter of credit, guarantee,
performance bond, corporate guarantee, bank guarantee provided by any
party to the project documents and
d. All insurance and insurance proceeds in respect of the project.
vi) First charge on the trust and retention accounts/escrow account,
DSR and any other reserves and other bank accounts of the Company
wherever maintained and with respect to the project;
Term Loans from Banks of Rs. 3,049.09 Crore are secured as under:
(a) Rs. 280 Crore from Central Bank of India is secured by way of first
exclusive pari-passu charge on certain fixed assets of Mumbai
distribution business.
(b) Rs. 54.49 Crore from Central Bank of India is secured by way of
first exclusive pari-passu charge on certain fixed assets of EPC
business.
(c) Rs. 200 Crore from South Indian Bank, Rs. 84 Crore from Corporation
Bank and Rs. 68.99 Crore from State Bank of Hyderabad, are secured by
way of first pari-passu charge on certain fixed assets of Mumbai
transmission business and specific immovable property located in Thane
District in the State of Maharashtra.
(d) Rs. 140.63 Crore from Bank of Maharashtra is secured by way of
first exclusive charge on certain fixed assets of Mumbai transmission
business and specific immovable property located in Thane District in
the State of Maharashtra.
(e) Rs. 90 Crore from Jammu & Kashmir Bank and Rs. 30 Crore from
Karnataka Bank shall be secured by way of first pari-passu charge on
the movable & immovable assets of power plant belonging to M/s BSES
Kerala Power Limited (a 100% subsidiary of the Company) located in
Kochi. (The security on these assets is yet to be created).
(f) Rs. 11 Crore from Andhra Bank are secured by way of second
pari-passu charge on certain fixed assets of Mumbai distribution
business of the Company.
(g) Rs. 22 Crore from Bank of India are secured by way of second
pari-passu charge on certain fixed assets of Mumbai distribution
business of the Company.
(h) Rs. 16 Crore from Canara Bank are secured by way of second
pari-passu charge on certain fixed assets of Mumbai distribution
business of the Company.
(i) Rs. 29.10 Crore from Axis Bank Ltd. are secured by way of second
pari-passu charge on certain fixed assets of Mumbai distribution
business of the Company.
(j) Rs. 300 Crore from Bank of Baroda are secured by way of first
pari-passu charge over land of Dahanu Thermal Power Station. (The
security on these assets is yet to be created).
(k) Rs. 500 Crore from Bank of Maharashtra and Rs. 125 Crore from Indus
Ind Bank Limited, Rs. 250 Crore from Syndicate Bank, Rs. 300 Crore from
Bank of Baroda and Rs. 45 Crore from Abu Dhabi Commercial Bank and Rs.
200 Crore from Axis Bank Limited, are secured by the first pari-passu
charge on the following:
i) Regulatory Assets related to Mumbai distribution business pursuant
to execution of an inter creditor agreement between the Debenture
Trustee and Security Trustee.
ii) Escrow Accounts (including DSRA account and Surplus Regulatory
Asset Account)
iii) Specified immovable property
iv) Lien on permitted Investments (for the loan of Rs. 300 Crores
availed from Bank of Baroda)
(l) Rs. 302.88 Crore from Indus Ind Bank Limited are secured by the
following assets of the Company related to the Western Region
Strengthening Scheme Project B:
i) First charge by way of mortgage over all the immovable properties,
present and future pertaining to the Project;
ii) First charge by way of mortgage over all the movable assets,
including movable plant and machinery, machinery spares, tools and
accessories, furniture, fixtures, vehicles and all other movable
assets, present and future pertaining to the Project;
iii) First charge by way of mortgage over cash flow, receivables, book
debts, revenue of whatsoever nature and wherever arising, present and
future pertaining to the Project;
iv) First charge by way of all intangibles including but not limited to
goodwill and uncalled capital, present and future, pertaining to the
project;
v) A first charge by way of assignment or creation of security interest
of :
a. All the rights, title, interest and benefits, claims and demands
whatsoever of the Company in the project documents [including but not
limited to Transmission services agreement (TSA)/Power Transmission
Agreement (PTA), EPC Contract Revenue Sharing Agreement (RSA),Insurance
contracts],
b. Subject to applicable law, all the rights, title, interest
Benefits, claims and demands whatsoever of the Company in the
clearances, licenses;
c. All the rights, title, interest Benefits, claims and demands
whatsoever of the Company in any letter of credit, guarantee,
performance bond, corporate guarantee, bank guarantee provided by any
party to the project documents and
d. All insurance and insurance proceeds in respect of the project.
vi) First charge on the trust and retention accounts/escrow account,
DSR and any other reserves and other bank accounts of the Company
wherever maintained and with respect to the project;
3. (a) Contingent Liabilities:
i) Bank guarantees given to banks against guarantees issued by the
banks on behalf of the jointly controlled operations aggregate to Rs.
0.10 Crore (Rs. 0.79 Crore) and for subsidiaries/associates/other body
corporate Rs. 583.27 Crore (Rs. 456.03 Crore).
ii) Corporate Guarantees given to banks and other parties aggregating
Rs. 1,681.89 Crore (Rs. 1,950.28 Crore) in respect of financing
facilities granted to subsidiaries/associates/other body corporates.
iii) Claims against the Company not acknowledged as debts and under
litigation aggregates to Rs. 1,023.73 Crore (Rs. 1,109.45 Crore). These
include claim from suppliers aggregating to Rs. 371.87 Crore (Rs.
303.56 Crore), income tax claims Rs. 168.37 Crore (Rs. 428.90 Crore),
Indirect tax claims aggregating to Rs. 423.59 Crore (Rs. 376.26 Crore)
out of which claims of Rs. 122.33 Crore (Rs. 1 22.33 Crore), if
materialised, will be recovered from the customers and other claims Rs.
59.90 Crore (Rs. 0.73 Crore).
iv) The Company's application for compounding in respect of its ECB of
USD 360 million has been deemed by the Reserve Bank of India (RBI) as
never to have been made subsequent to the withdrawal of the compounding
application. Accordingly, there is no liability in respect of the
compounding fee of Rs. 124.68 Crore earlier specified by RBI.
Subsequent to the withdrawal of the compounding application, the matter
has been referred to the Enforcement Directorate where the same is
still pending.
(b) Capital and Other Commitments:
i) Estimated amount of contracts remaining unexecuted on capital
account and not provided for Rs. 125.38 Crore W(Rs. 231.05 Crore).
ii) Uncalled liability on partly paid shares Rs. 10.70 Crore (Rs. 10.70
Crore).
iii) The Company has given equity/fund support for setting up of
projects/cost overrun in respect of various infrastructure and power
projects being set up by company's subsidiaries and associates; the
amounts of which currently are not ascertainable.
iv) Acquisition of Pipavav Defense Offshore Engineering Company Limited
through open offer (Refer Note 44)
4. Related Party Disclosure:
As per Accounting Standard -18 as prescribed under Section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, the
Company's related parties and transactions are disclosed below:
(a) Parties where control exists:
Subsidiaries (including step down subsidiaries)
(a) Reliance Power Transmission Limited (RPTL)
(b) Talcher - II Transmission Company Limited (TTCL)
(c) North Karanpura Transmission Company Limited (NKTCL)
(d) BSES Kerala Power Limited (BKPL)
(e) Reliance Energy Trading Limited (RETL)
(f) Mumbai Metro One Private Limited (MMOPL)
(g) Parbati Koldam Transmission Company Limited (PKTCL)
(h) CBD Tower Private Limited (CBDTPL)
(i) Tulip Realtech Private Limited (TRPL)
(j) DS Toll Road Limited (DSTL)
(k) NK Toll Road Limited (NKTL)
(l) GF Toll Road Private Limited (GFTL)
(m) KM Toll Road Private Limited (KMTL)
(n) PS Toll Road Private Limited (PSTL)
(o) HK Toll Road Private Limited (HKTL)
(p) DA Toll Road Private Limited (DATL)
(q) Reliance Cement Company Private Limited(RCPL)
(r) Reliance Cement and Infra Private Limited (RCIPL) upto March 31,
2015
(s) Reliance Cement Corporation Private Limited (RCCPL)
(t) Utility Infrastructure and Works Private Limited (UIWPL)
(u) Reliance Concrete Private Limited (RCoPL)
(v) Reliance Airport Developers Private Limited (RADPL)
(w) Latur Airport Private Limited (LAPL)
(x) Baramati Airport Private Limited (BAPL)
(y) Nanded Airport Private Limited (NAPL)
(z) Yavatmal Airport Private Limited (YAPL)
(aa) Osmanabad Airport Private Limited (OAPL)
(bb) Reliance Sealink One Private Limited (RSOPL)
(cc) Reliance Defence and Aerospace Private Limited (RDAPL) w.e.f.
December 22, 2014
(dd) Reliance Defence Systems Private Limited (RDSPL) w.e.f. December
22, 2014
(ee) Reliance Defence Technologies Private Limited (RDTPL) w.e.f.
December 22, 2014
(ff) Reliance Defence Limited (RDL) w.e.f. March 28, 2015
(b) Other related parties where transactions have taken place during
the year:
(i) Associates (including subsidiaries of associates)
(a) Reliance Power Limited (RePL)
(b) Reliance Geo Thermal Private Limited (RGTPL) w.e.f. Jan17, 2015
(c) Rosa Power Supply Company Limited (ROSA)
(d) Sasan Power Limited (SPL)
(e) Vidarbha Industries Power Limited (VIPL)
(f) Chitrangi Power Private Limited (CPPL)
(g) Jharkhand Integrated Power Limited (JIPL)
(h) Coastal Andhra Power Limited (CAPL)
(i) Samalkot Power Limited (SaPoL)
(j) Rajasthan Sun Technique Energy Private Limited (RSTEPL)
(k) Dhursur Solar Power Private Limited (DSPPL)
(l) JR Toll Road Private Limited (JRTL)
(m) Mumbai Metro Transport Private Limited (MMTPL)
(n) Metro One Operation Private Limited (MOOPL)
(o) Delhi Airport Metro Express Private Limited (DAMEPL)
(p) SU Toll Road Private Limited (SUTL)
(q) TD Toll Road Private Limited (TDTL)
(r) TK Toll Road Private Limited (TKTL)
(s) Siyom Hydro Power Private Limited (SHPPL)
(t) Coastal Andhra Power Infrastructure Limited (CAPIPL)
(u) Urthing Sobla Hydro Power Private Limited (USHPPL)
(ii) Joint Ventures
(a) BSES Rajdhani Power Limited (BRPL)
(b) BSES Yamuna Power Limited (BYPL)
(c) Tamilnadu Industries Captive Power Company Limited (TICAPCO)
(d) Utility Powertech Limited (UPL)
(iii) Investing Party
Reliance Project Ventures and Management Private Limited (RPVMPL)
(Formerly known as AAA Project Ventures Private Limited
(AAAPVPL))
(iv) Persons having control over investing party
Shri Anil D. Ambani
(v) Key Management Personnel
(a) Shri Lalit Jalan (upto July 6, 2014)
(b) Shri M S Mehta (w.e.f. July 7, 2014), CEO
(c) Shri Madhukar Moolwaney, CFO
(d) Shri Ramesh Shenoy, Manager and CS
(vi) Enterprises over which person described in (iv) has significant
influence
(a) Reliance Innoventures Private Limited(REIL)
(b) Reliance Life Insurance Company Limited (RLICL)
(c) Reliance General Insurance Company Limited (RGI)
(d) Reliance Capital Limited (RCap)
(e) Reliance Tech Services Private Limited (RTSPL)
(f) Reliance Infocomm Infrastructure Private Limited (RIIPL)
(g) AAA Sons Private Limited (AAASPL)
(h) Reliance Securities Limited (RSL)
(i) Reliance Broadcast Network Limited (RBNL)
(j) Reliance Capital Asset Management Company Limited (RAMCPL)
(k) Zapak Digital Entertainment Limited (ZDEL)
(l) Reliance Infocomm Limited (RInfo)
(m) Reliance Infratel Limited (RITL)
(n) Reliance Big Private Limited (RBPL)
(o) Reliance Webstore Private Limited (RWPL)
(p) Reliance Home Finance Limited (RHL)
(q) Reliance Communication Limited (RComm)
(r) Reliance Mediaworks Limited (RMWL)
(s) Reliance Money Precious Metals Private Limited (RMPMPL)
(t) Reliance Enterprise and Ventures Private Limited (REVPL)
(u) Talenthouse Entertainment Private Limited (THEPL)
(i) Transactions during the year (Balance Sheet heads)
5. Details of Material Transactions with Related Party
(i) Transactions during the year (Balance Sheet heads)
Guarantees and Collaterals provided to RCPL Rs. 34.49 crore. Guarantees
and Collaterals provided earlier- expired/ encashed/surrendered for
RPTL Rs. 94.60 crore, MMOPL Rs. 35 crore, and NKTL Rs. 156 crore. ICD
given to RePL Rs. 1,390 crore. ICD returned by RePL Rs. 850.85 crore.
Recoverable Expenses incurred for VIPL Rs. 1.78 crore, RSTEPL Rs. 2.85
crore RCPL Rs. 1.86 crore and DATL Rs. 1.40 crore. Recoverable Expenses
incurred by SPL Rs. 6.04 crore. Investment in Securities of RCPL Rs.
462.10 crore. Subordinate debt given to DAMEPL Rs. 233.89 crore, PSTL
Rs. 718.05 crore and MMOPL Rs. 249 crore. Subordinate debt received
back from SUTL Rs. 6.80 crore. Advance against Securities received back
from JRTL Rs. 6.39 crore. Reduction/Cancellation of Investments of RPTL
Rs. 606.49 crore. Redemption of Debentures of RePL Rs. 1,100 crore.
ICD repaid to CPPL Rs. 13.85 crore. Sale of Fixed Assets to VIPL Rs.
0.11 crore. Consideration on Revocation of Toll Collecting Rights of
DSTL Rs. 295 crore & NKTL Rs. 247.50 crore. Subordinate Debts written
off of DAMEPL Rs. 1,258.20 crore.
(Previous Year: Guarantees and Collaterals provided to JRTL Rs. 40.78
crore. Guarantees and Collaterals provided earlier- expired/encashed for
DAMEPL Rs. 55 crore, MMOPL Rs. 186.63 crore, HKTL Rs. 52.60 crore and
KMTL Rs. 47.69 crore. ICD given to TKTL Rs. 21.70 crore and GFTL Rs.
12.25 crore. ICD returned by NKTL Rs. 8.60 crore. Recoverable Expenses
incurred for SPL Rs. 11.20 crore, RSTEPL Rs. 13.57 crore and DATL Rs.
0.73 crore. Recoverable Expenses incurred by SPL Rs. 0.93 crore, VIPL
Rs. 0.52 crore and BYPL Rs. 0.28 crore. Investment in Securities of
PKTCL Rs. 43.40 crore. Subordinate debt given to DAMEPL Rs. 402.48
crore, RPTL Rs. 94.10 crore, HKTL Rs. 103.33 crore and MMOPL Rs. 114.97
crore. Advance against Securities given to MMOPL Rs. 150 crore and RCPL
Rs. 373.85 crore. Advance against Securities received back from RePL Rs.
100 crore. Sale of Investments in Equity shares in RCCPL Rs. 9.32 crore.
Advance returned to SPL Rs. 8.00 crore. ICD/Advance against Securities
converted into sub-debts for JRTL Rs. 63.34 crore and TKTL Rs. 90.77
crore. ICD received from RAMCPL Rs. 175 crore.ICD repaid to BKPL Rs. 47
crore. Sale of Fixed Assets to WRTM Rs. 0.69 crore. Purchase of Equity
Shares from REVPL Rs. 1,076.34 crore. Consideration on Revocation of
Toll Collecting Rights of PSTL Rs. 850 crore).
(ii) Balance sheet heads (Closing balance)
Trade payables, Advances received and other liabilities for receiving
of services on revenue and capital account CPPL Rs. 1,239.74 crore and
SPL Rs. 487.28 crore. Investment in Securities of RePL Rs. 2,710.94
crore and RCPL Rs. 978.01 crore. ICDs placed RePL Rs. 539.1 5 crore and
MMOPL Rs. 1 33.80 crore. Subordinate debt given to DAMEPL Rs. 425.89
crore, PSTL Rs. 760.79 crore and MMOPL Rs. 776.40 crore. Interest
receivable on Investments and Deposits from RePL Rs. 67.92 crore. Trade
Receivables, Advances given and other receivables for rendering
services SaPoL Rs. 2,526.78 crore and SPL Rs. 443.59 crore. ICD taken
from RAMCPL Rs. 1 75.00 crore.
(Previous Year: Trade payables, Advances received and other liabilities
for receiving of services on revenue and capital account CPPL Rs.
1,214.14 crore and SPL Rs. 913.90 crore. ICD taken from RAMCPL Rs.
175.00 crore. Investment in Securities RePL Rs. 3,810.94 crore and RPTL
Rs. 622.39 crore. ICDs placed RCIPL Rs. 600.00 crore. Subordinate debt
given to DAMEPL Rs. 1,450.20 crore and MMOPL Rs. 527.40 crore. Advance
against Securities MMOPL Rs. 150.00 crore and RCPL Rs. 373.85 crore.
Interest receivable on Investments and Deposits from RePL Rs. 1.14
crore and CPPL Rs. 1.30 crore. Trade Receivables, Advances given and
other receivables for rendering services SPL Rs. 902.00 crore, SaPoL
Rs. 2,216.72 crore and PSTL Rs. 853.84 crore. Intangible Assets from
DSTL Rs. 312.55 crore, NKTL Rs. 255.58 crore).
(iii) Contingent Liabilities (Closing Balance)
Guarantees and Collaterals provided to RePL Rs. 300.00 crore, JRTL Rs.
381.22 crore, RCPL Rs. 502.35 crore and PSTL Rs. 300.00 crore.
(Previous Year: Guarantees and Collaterals provided to RePL Rs. 300.00
crore, JRTL Rs. 387.05 crore, RCPL Rs. 478.80 crore and PSTL Rs. 300.00
crore)
(iv) Income heads
Gross Revenue of EPC and Contracts Division from SPL Rs. 555.42 crore
and SaPoL Rs. 95.28 crore. Dividend received from RETL Rs. 20.65 crore
and UPL Rs. 2.77 crore. Interest earned from RePL Rs. 79.48 crore.
Other Income RCPL Rs. 4.38 crore, DATL Rs. 4.33 crore and PSTL Rs. 4,82
crore.
(Previous Year: Gross Revenue of EPC and Contracts Division from SPL
Rs. 1,152.73 crore, SaPoL Rs. 444.33 crore and RSTEPL Rs. 690.70 crore.
Dividend received from BKPL Rs. 47.27 crore. Interest earned from RePL
Rs. 2.40 crore and CPPL Rs. 1.38 crore. Other Income PSTL Rs. 7.31
crore, HKTL Rs. 3.04 crore and DATL Rs. 3.13 crore)
(v) Expenses heads
Purchase of Power (including Open access charges - Net of Sales) from
VIPL Rs. 1,994.60 crore. Purchase of Power - Compensation Bills/IEX
(Net of Sales) from RETL Rs. 95.15 crore. Purchase/Services on Revenue
account from RCPL Rs. 7.60 crore. Receiving of Services from RGI Rs.
16.30 crore, RLICL Rs. 3.06 crore and RComm Rs. 4.78 crore. Purchase of
other items on Capital account from CAPL Rs. 0.34 crore. Interest Paid
to RAMCPL Rs. 22.75 crore. Rent paid to RIIPL Rs. 2.04 crore. Dividend
paid RPVMPL Rs. 79.61 crore and RBPL Rs. 14.63 crore.
(Previous Year: Purchase of Power (including Open access charges - Net
of Sales) from DSPPL Rs. 124.65 crore and VIPL Rs. 501.41 crore.
Purchase of Power - Compensation Bills/IEX (Net of Sales) from RETL Rs.
207.00 crore. Purchase/Services on Revenue account from RITL Rs. 0.15
crore and RePL Rs. 0.31 crore. Receiving of Services from RGI Rs. 12.27
crore, SPL Rs. 8.63 crore. Purchase of other items on Capital account
from SaPoL Rs. 0.53 crore. Interest Paid to RAMCPL Rs. 10.44 crore.
Rent paid to RIIPL Rs. 0.76 crore and UPL Rs. 0.26 crore. Dividend paid
RPVMPL Rs. 78.55 crore and RBPL Rs. 14.43 crore).
(vi) Salaries, Commission and Other Benefits paid/payable to Shri Anil
D Ambani Rs. 5.50 crore (Rs. 5.59 crore), Shri Lalit Jalan Rs. 1.76
crore (Rs. 2.91 crore), Shri M.S. Mehta Rs. 2.89 crore (NIL), Shri
Madhukar Moolwaney Rs. 1.37 crore (NIL) and Shri Ramesh Shenoy Rs. 1.21
crore (Rs. 0.62 crore).
6. Segment Reporting
Basis of Preparation: The Company operates in two Business Segments:
Power and Engineering, Procurement, Construction (EPC) and Contracts.
Business segments have been identified as reportable primary segments in
accordance with Accounting Standard-17 Segment Reporting, as prescribed
under section 133 of the Act, read with Rule 7 of the Companies
(Accounts) Rules, 2014 taking into account the organisation and internal
reporting structure as well as evaluation of risks and returns from
these segments. The inter segment pricing is effected at cost. Segment
accounting policies are in line with the accounting policies of the
Company.
In the case of Power segment, the Company operates a 500 MW Thermal
Power Station at Dahanu, a 220 MW combined cycle power plant at
Samalkot, a 48 MW combined cycle power plant at Mormugao, a 7.59 MW
Windfarm at Chitradurga and also purchases power from third parties and
supplies the power through the Company's own distribution grid. The
Company supplies power to residential, industrial, commercial and other
consumers. The Company also transmits electricity through its
transmission network. EPC and Contracts segment renders comprehensive
value-added services in construction, erection and commissioning.
Geographical Segments: The Company's operations are mainly confined
within India. The Company does not have material earnings from business
segments outside India. As such there are no reportable geographical
segments.
7. (A) Standby Charges:
In the matter of liability of Rs. 515.60 Crore of standby charges with
the Tata Power Company Limited (TPC) determined by MERC for the period
April 1, 1998 to March 31, 2004, which the Company has fully accounted
for, the Appellate Tribunal of Electricity (ATE) determined the total
liability at Rs. 500 Crore and directed TPC to refund Rs. 354 Crore
(inclusive of interest of Rs. 15 Crore upto March 31, 2004) to the
Company plus interest @ 10% p.a. commencing from April 1, 2004 till the
date of payment. Against the said order, TPC filed an appeal with the
Supreme Court. The Hon'ble Supreme Court passed an interim order dated
February 7, 2007 granting stay of the impugned order of the ATE subject
to the condition that, TPC furnish a bank guarantee in the sum of Rs.
227 Crore and, in addition, deposit a sum of Rs. 227 Crore with the
Registrar General of the Court which may be withdrawn by the Company
subject to the Company giving an undertaking that in the event of the
appeal being decided against the Company, wholly or in part, the amount
as may be found refundable by the Company shall be refunded to TPC
without demur together with interest as may be determined by the Court.
The Company accordingly withdrew the amount of Rs. 227 Crore after
complying with the conditions specified and has accounted the said
amount as Other Liabilities pending final adjustment. Moreover, pending
final order of the Hon'ble Supreme Court, the Company has not accounted
for the reduction in standby charges liability of Rs. 15.60 Crore as
well as interest amount determined by ATE as payable by TPC to the
Company.
(B) Take or Pay and Additional Energy Charges:
Pursuant to the order passed by MERC dated December 12, 2007, in case
No. 7 of 2002, TPC has claimed an amount of Rs. 323.87 Crore towards
the following:
(a) Difference in the energy charge for energy supplied by TPC at 220
kV interconnection for the period March 2001 to May 2004 along with
interest at 24% per annum up to December 31, 2007, and
(b) Minimum offtake charges for energy for the years 1998-99 to 1
999-2000 along with interest at 24% per annum up to December 31, 2007.
In an appeal filed by the Company, ATE held that the amount in the
matter (a) above is payable by the Company along with interest at State
Bank of India prime lending rate for short term borrowings. The matter
(b) was remanded to MERC for redetermination. The Company has filed an
appeal against the said order before the Supreme Court, which while
admitting the appeal, has restrained TPC from taking any coercive
action in respect of the matter stated in (a) above and TPC has also
filed an appeal against the said order. The Company has complied with
the interim order directions of depositing Rs. 25 Crore with the
Registrar of Supreme Court and providing a Bank Guarantee of Rs. 9.98
Crore. The said amount is disclosed under Contingent Liability in Note
26(a)(iii) above.
8. Revenue from Sale of Power and Regulatory Matters:
a. Regulatory Assets
In accordance with accounting policy (Refer Note 1 (d) (i)) the Company
has accrued Rs. 84.76 Crore (Rs. 283.64 Crore) during the year as
revenue gap under 'Income from Sale of Power'. The Company has
recovered Rs. 407.42 Crore (Rs. 406.60 Crore) of the regulatory assets
during the year. Cumulative revenue gap as on March 31, 2015 of Rs.
2,416.38 Crore (Rs. 2,739.04 Crore) has been shown as regulatory assets
in the balance sheet. Based on management estimate, an amount of Rs.
374.18 Crore (Rs. 410.53 Crore) being recoverable in the subsequent
year has been included in Other Current Assets and the balance amount
of Rs. 2,042.20 Crore (Rs. 2,328.51 Crore) has been included in Other
Non Current Assets. During the year ended March 31, 2014, the Company
had received tariff order from MERC allowing it to recover the
regulatory gap determined by the regulator for the period upto March
31, 2012, aggregating to Rs. 2,463.18 Crore along with carrying cost of
Rs. 1,403.65 Crore on smoothened recovery basis over a period of 6
years till FY 2018-19. The Company has apportioned an amount of Rs.
492.1 1 Crore towards carrying cost out of the total recovery during
the year ended March 31, 2015 of Rs. 884.94 Crore under the said order.
b. In accordance with the MERC tariff regulation for determination of
tariff, the income-tax paid is considered for tariff determination
(truing up). Accordingly, the Company has considered Rs. 41.13 Crore
(Rs. 37.79 Crore) of deferred tax liability for the year arising out of
differences in rates of depreciation between MERC and income-tax as
"Net tax recoverable from future tariff determination". Similarly, the
deferred tax liability of Rs. 35.12 Crore (Rs. 46.58 Crore) on account
of timing difference on taxability of regulatory income accounted in
the books is treated as "Net tax recoverable from future tariff
determination".
9. Investment in Delhi Airport Metro Express Private Limited:
Delhi Airport Metro Express Private Limited (DAMEPL), a SPV of the
Company, terminated the Concession Agreement with Delhi Metro Rail
Corporation (DMRC) for the Delhi Airport Metro Line, on account of
Material Breach and Event of Default under the provisions of the
Concession Agreement by DMRC. The operations were taken over by DMRC
with effect from July 1, 2013.
As per the terms of the Concession Agreement, DMRC is now liable to pay
DAMEPL a Termination Payment, which is estimated at Rs. 2,823 Crore, as
the termination has arisen owing to DMRC's Event of Default. The matter
has been referred to arbitration and the process for the same is
continuing. Pending final outcome of the arbitration, the Company
continues to fund the statutory and other obligations of DAMEPL post
take over by DMRC and accordingly has funded Rs. 251.89 Crore during
the year ended March 31, 2015.
Based on the review of the progress in settlement of various claims and
also on overall review of financial position of DAMEPL, the Company
has, as a matter of prudence, written off Rs. 1,258.20 Crore, out of
total investment of Rs. 1,702.10 Crore in DAMEPL. However, as legally
advised, DAMEPL's claims for the termination payments are considered
fully enforceable. This has been treated as an exceptional item (Refer
Note 39).
10. Scheme of Amalgamation of Reliance Infraprojects Limited (RInfl)
with the Company:
The Hon'ble High Court of Judicature of Bombay had sanctioned the
Scheme of Amalgamation of Reliance Infraprojects Limited (RInfra) with
the Company on March 30, 201 1 with the appointed date being April 1,
2010. As per the clause 2.3.7 of the Scheme, the Company, as determined
by its Board of Directors, is permitted to adjust foreign
exchange/hedging/derivative contract losses/gains debited/credited in
the Statement of Profit and Loss by a corresponding withdrawal from or
credit to General Reserve.
Pursuant to the option exercised under the above Scheme, net foreign
exchange gain of Rs. 117.25 Crore (Rs. 101.46 Crore) for the year ended
March 31, 2015 has been credited to the Statement of Profit and Loss and
an equivalent amount has been transferred to General Reserve. Similarly,
foreign exchange loss of Rs. 236.1 1 Crore (Rs. 361.32 Crore)
attributable to finance cost and net loss on account of derivative
instruments/forward contracts of Rs. 16.59 Crore (Rs. 52.30 Crore) have
been debited to Statement of Profit and Loss and an equivalent amount
has been withdrawn from General Reserve. The Company has been legally
advised that crediting of the said amount in Statement of Profit and
Loss is in accordance with Schedule III to the Act. Had such
transfer/withdrawal not been done, the Profit before tax for the year
ended March 31, 2015 would have been lower by Rs. 135.45 Crore (Rs.
312.16 Crore) and General Reserve would have been higher by an
equivalent amount. The treatment prescribed under the Scheme override
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. Scheme of Amalgamation of WRTG and WRTM with the Company
The Hon'ble High Court of Judicature at Bombay vide order dated July
15, 2014 subject to certain approvals had approved the Scheme of
Amalgamation of two wholly owned Subsidiaries of the Company viz.
Western Region Transmission (Maharashtra) Private Limited (WRTM) and
Western Region Transmission (Gujarat) Private Limited (WRTG), whose
principal business is transmission of electricity, with the Company
w.e.f. April 1, 2013 (Appointed Date). All requisite approvals have
been obtained, however, certain procedural formalities with Central
Electricity Regulatory Commission (CERC) are required to be completed.
Pending completion of procedural formalities, the Company has given
effect to the substance of the Scheme and accordingly these
Subsidiaries have been amalgamated with the Company during the year
ended March 31, 2015 with effect from the Appointed Date.
In accordance with the Scheme so sanctioned, the following accounting
treatment, inter alia has been given to give effect to the Scheme:
a. The amalgamation has been accounted for under the "Purchase Method"
as prescribed by Accounting Standard 14 (AS-14).
b. All Assets and Liabilities of the Subsidiaries have been recorded
in the books of the Company at their respective fair values,
intercompany investments and balances, if any, have been cancelled and
the excess amount arising out of above adjustment of Rs. 613.74 Crore
has been credited to Capital Reserve.
c. Since the Scheme received all the required approvals after the
financial statements for the year ended March 31, 2014 were adopted by
the shareholders in the general meeting, the relevant impact of
amalgamation has been given in the current financial year. The profit
after tax of Rs. 5.84 Crore for the year ended March 31, 2014 of these
amalgamated Subsidiaries has been transferred to Surplus as per
Statement of Profit and Loss.
The figures for the previous year do not include figures for the
erstwhile WRTG and WRTM and accordingly the current year figures are
not comparable to those of the previous year.
12. Capital Reduction Scheme - Reliance Power Transmission Limited
(RPTL)
Pursuant to the sanction of the Capital Reduction Scheme of M/s
Reliance Power Transmission Limited (RPTL), a wholly owned subsidiary
of the Company, by the Hon'ble High Court of Judicature of Bombay dated
October 31, 2014, RPTL has reduced its equity share capital and
securities premium account to the tune of Rs. 606.49 Crore.
Accordingly, the Company has also written off its investment in RPTL by
an equivalent amount and debited the same in the Statement of Profit
and Loss. This has been treated as an exceptional item (Refer Note 39).
13. In line with the notification dated December 29, 201 1 issued by
the Ministry of Corporate Affairs, the Company has exercised the option
given in paragraph 46A of the Accounting Standard-11 "The Effects of
Changes in Foreign Exchange Rates" of capitalising the foreign exchange
loss/gain arising on long term foreign currency monetary items relating
to acquisition of depreciable capital assets and depreciating the same
over the balance life of such assets and in other cases amortising the
foreign exchange loss/gain over the balance period of such long term
foreign currency monetary items. Accordingly, the Company has
capitalized foreign exchange loss arising during the year on long term
foreign currency monetary items relating to depreciable capital assets
of Rs. 2.97 Crore (Rs. NIL).
In other cases, the Company has carried forward the unamortised portion
of net gain of Rs. 241.65 Crore (Rs. 238.48 Crore) as on March 31, 2015
in "Foreign Currency Monetary Item Translation Difference Account" and
the same is grouped under 'Reserves and Surplus'.
14. The Company had, based on valuation made by approved valuer,
revalued as at April 01, 2012, its freehold land, building and plant
and machinery located at Goa, Samalkot and Chitradurg as per the
replacement cost method and incremental value on revaluation amounting
to Rs. 495.69 Crore has been added to Gross Block of Fixed assets and
credited to Revaluation Reserve. Consequent to revaluation, there is
an additional charge of depreciation of Rs. 28.55 Crore in the
Statement of Profit and Loss.
15. Exceptional Items
Pursuant to the Scheme of amalgamation between WRTM and Reliance Cement
Works Private Limited sanctioned by the Hon'ble High Court of
judicature at Bombay on April 25, 2014, WRTM or its successors is
permitted to offset any extra ordinary/ exceptional items, as
determined by the Board of Directors, debited in the Statement of
Profit and Loss by a corresponding withdrawal from General Reserve.
The Company being the successor of WRTM shall now be entitled to all the
rights and the privileges of and shall be liable to fulfill all the
obligations of and shall follow all the policies applicable to WRTM as
if successor was the transferee Company. During the year ended March 31,
2015 the Board of Directors of the Company, in terms of the aforesaid
Scheme, determined an amount of Rs. 1,924.15 Crore as Exceptional items
being loss on reduction in value of Investment in RPTL of Rs. 606.49
Crore (Refer Note 36) and write off of investments aggregating to Rs.
1,317.66 Crore comprising of investment in Mumbai Metro Transport
Private Limited Rs. 59.46 Crore (Refer Note 42) and in Delhi Airport
Metro Express Private Limited Rs. 1,258.20 Crore (Refer Note 33), 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. The Company has been legally advised that crediting of
the said amount in Statement of Profit and Loss is in compliance with
Schedule III to the Act.
Had such withdrawal not been done, profit before tax would have been
lower by Rs. 1,924.15 Crore and General Reserve would have been higher
by an equivalent amount. The above treatment prescribed by the Scheme
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'.
16. Depreciation
a. During the year, the useful life of the fixed assets other than in
respect of power business has been revised in accordance with Part C of
Schedule II to the Act and depreciation has been provided based on
revised balance useful life. As a result of the above revision in
useful life, depreciation expense of the Company for the year is higher
by Rs. 18.62 Crore. Further, in case of assets whose remaining useful
life is exhausted on April 01, 2014, the carrying value (net of
residual value) of those assets amounting to Rs. 4.75 Crore has been
debited to the Statement of Profit and Loss.
b. Till last year, the depreciation provided on revalued portion of
fixed assets was debited to the Statement of Profit and Loss and an
equivalent amount was withdrawn from Revaluation Reserve and credited
to the Statement of Profit and Loss. However, from current year,
pursuant to application guide on the provision of Schedule II to the
Act, issued by Institute of Chartered Accountants of India (ICAI), the
Company has withdrawn an equivalent amount from Revaluation Reserve and
credited to General Reserve. As a result of above, the profit for the
year is lower by Rs. 54.20 Crore. In addition, an amount of Rs. 335.55
Crore in Revaluation Reserve pertaining to depreciation on revalued
amount which was withdrawn from General Reserve in previous years has
been transferred from Revaluation Reserve to General Reserve.
17. O & M Contracts with DS Toll Road Private Limited and NK Toll Road
Private Limited
The Company had entered into Operation and Maintenance Contract with DS
Toll Road Limited (DSTL) and NK Toll Road Limited (NKTL), wholly owned
subsidiaries of the Company, vide agreement dated March 28, 201 1. In
view of the difficulties being faced by both the parties in execution
of the contract in present form, both the parties have mutually agreed
to revoke the arrangements for entitlement of the Company in the
residual cash flow of the toll collection vide agreements dated March
25, 201 5 in return for DSTL and NKTL agreeing to pay Rs. 295 Crore and
Rs. 247.50 Crore respectively to the Company against which the Company
has received Rs. 5 Crore each from DSTL and NKTL during the year
2014-15. The balance receivable of Rs. 290 Crore and Rs. 242.50 Crore
respectively from DSTL & NKTL has been included as Other Receivables
under Other Current Assets. On such revocation, the Company has
suffered a loss of Rs. 25.64 Crore which has been debited in the
Statement of Profit and Loss.
18. Termination of Agreement with Mumbai Metro Transport Private
Limited (MMTPL)
MMTPL, SPV of the Company, terminated the Concession Agreement for
Charkop-Bandra-Mankhurd Metro corridor, with the Government of
Maharashtra (GoM) on November 11, 2014 with mutual consent of the
parties at no cost to either party and agreed that neither party is
liable to pay any damage, compensation and termination payments to the
other party. Pursuant to above and overall review of financial position
of MMTPL the Company has written off Rs. 59.46 Crore out of its total
investment of Rs. 59.51 Crore in the Statement of Profit and Loss. This
has been treated as an exceptional item (Refer Note 39).
19. During the previous year ended March 31, 2014, the Company had
consolidated the financial statements of R Infra ESOS Trust with its
Standalone Financial Statements in terms of Securities and Exchange
Board of India (Employee Stock Option Scheme and Employee Stock
Purchase Scheme) Guidelines, 1999 and opinion of the Expert Advisory
Committee (EAC) of the Institute of Chartered Accountants of India
("ICAI"). Consequently, the paid up share capital and securities
premium account of the Company as at March 31, 2014 are disclosed net
of Rs. 0.45 Crore and Rs. 36.40 Crore respectively, being the value of
4,50,000 equity shares held by the trust.
However, pursuant to revised guidelines issued by SEBI (Share based
Employee Benefits) Regulations, 2014 dated October 28, 2014, the
accounting for share based schemes shall be done in accordance with the
requirements of Guidance Note on Accounting for Employee Share-based
payments issued by The Institute of Chartered Accountants of India
(ICAI). Accordingly, the advance given by the Company to the trust
amounting to Rs. 36.85 Crore towards purchase of 4,50,000 equity shares
of the Company from the secondary market, has been shown under short
term loans and advances.
20. The Acquisition of Pipavav Defence Offshore Engineering Company
Limited through Open Offer
Reliance Defence Systems Private Limited (Acquirer), a wholly owned
subsidiary of the Company and Reliance Infrastructure Limited (Person
Acting in Concert referred as PAC) has entered into Purchase Agreement
with the promoters of Pipavav Defence and Offshore Engineering Company
Limited (Target Company) to purchase 13,00,00,000 equity shares
constituting 17.66% of the share capital of the Target Company from its
promoters at a price of Rs. 63.00 per equity share in cash. In terms of
the Purchase Agreement and subject to the conditions therein, the
promoters of Target Company shall sell additional 5,47,87,774 equity
shares of the Target Company, to the Acquirer at a price of Rs. 63.00
per equity share that would result in the Acquirer acquiring not less
than 25.10% of the paid-up equity share capital in the Target Company
after taking into account the acquisitions made under the Offer.
Since the Acquirer has entered into an agreement to acquire voting
rights in excess of 25% of the total voting rights of the Target
Company, the Acquirer has to make an open offer to the shareholders of
the Target Company under Regulation 3(1) of the SEBI (Substantial
Acquisition and Takeovers) Regulations.
The Acquirer and the PAC will make an open offer to the public equity
shareholders of the Target Company to acquire up to 1 9,14,13,630 fully
paid-up equity shares of face value of Rs. 10 each of the Target
Company, constituting 26% of the total fully diluted equity share
capital of the Target Company at an offer price of Rs. 66 per share
(the Offer Price) aggregating to total consideration of Rs. 1,263.33
Crore (the Offer size) payable in cash.
The open offer is subject to approval from the Competition Commission
of India (CCI) and the Gujarat Maritime Board. The Acquirer has
received approval of the CCI and the approval from the Gujarat Maritime
Board is awaited.
21. Disclosure under Accounting Standard 15 (revised 2005) "Employee
Benefits":
The Company has classified various employee benefits as under:
(A) Defined contribution plans
a. Provident fund
b. Superannuation fund
c. State defined contribution plans
* Employers' Contribution to Employees' State Insurance
* Employers' Contribution to 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 trustees of the Reliance Infrastructure Limited
Officer's Superannuation Scheme. Under the schemes, the Company is
required to contribute a specified percentage of payroll cost to the
retirement benefit schemes to fund the benefits. These funds are
recognised by the Income tax authorities.
(B) Defined Benefit Plans
a. Provident Fund (Applicable to certain employees)
b. Gratuity
c. Leave Encashment
The guidance on implementing AS 15, Employee Benefits (revised 2005)
issued by Accounting Standard Board states benefit involving employee
established provident funds, which require interest shortfalls to be
recompensed are to be considered as defined benefit plans. As per the
audited accounts of Provident Fund Trust maintained by the Company, the
shortfall arising in meeting the stipulated interest payment liability,
if any, gets duly provided for.
Leave encashment is payable to eligible employees who have earned
leaves, during the employment and/or on separation as per the Company's
policy.
22. (a) The Company is engaged in the business of providing
infrastructural facilities as per Section 186 (ii) read with Schedule
VI of the Act. Accordingly, disclosures under Section 186 of the Act is
not applicable to the Company.
(b) Pursuant to the clarification issued by the Institute of Chartered
Accountants of India on March 29, 2008 on accounting of derivatives
(other than forward contracts), the Company has for the year ended
March 31, 2015 provided/(reversed) unrealised loss of Rs. NIL (Previous
Year Rs. NIL) on account of revaluation of foreign exchange derivative
instruments at the fair values as at the reporting year end. Gain of
Rs. 10.38 Crore on mark to market of the above derivative instruments
as on March 31, 2015 has not been recognised as income as a matter of
prudence.
(c) Net Foreign Currency exposures that are not covered by derivative
instruments or otherwise are Receivables of Rs. 976.79 Crore (Previous
Year Payables of Rs. 2,407.43 Crore).
23. Interest in Jointly Controlled Operations:
The Company along with M/s. Geopetrol International Inc. and Reliance
Natural Resources Limited *(the consortium) was allotted 4 Coal Bed
Methane (CBM) blocks from Ministry of Petroleum and Natural Gas (Mo
PNG) covering an acreage of 3,266 square kilometers in the States of
Madhya Pradesh, Andhra Pradesh and Rajasthan. The consortium had
entered into a contract with Government of India for exploration and
production of these four CBM blocks. The Company as part of the
consortium has 45% share in each of the four blocks.
M/s Geopetrol International Inc is the operator on behalf of the
consortium for all the four CBM blocks.
Also, the Company along with M/s. Geopetrol International Inc, Naftogaz
India Private Limited and Reliance Natural Resources Limited *(the
consortium) was allotted oil and gas block from Ministry of Petroleum
and Natural Gas (Mo PNG), in the State of Mizoram under the New
Exploration Licensing Policy (NELP - VI) round, covering an acreage of
3,619 square kilometers and the consortium had signed a production
sharing contract with the Government of India for exploration and
production of Oil and Gas block. The Company as part of the consortium
has 70% share in the block. M/s Naftogaz India Private Limited is the
operator on behalf of the consortium for the block.
** The Board of Directors of the Company has approved the transfer of
operatorship from M/s Geopetrol International Inc to the Company on
February 14, 2015.
*** The consortium experienced inordinate delays in Government
clearances, non receipt of Petroleum Exploration License (PEL) for more
than 5 years and consequently relinquished its rights in respect of the
block at Kothgudem, Andhra Pradesh vide letter dated February 6, 2013
and the reply from the Government is awaited. Pending reply from the
Government, the consortium vide letter dated November 21, 2013
communicated to Directorate General of Hydrocarbons (DGH)/MoPNG that
the abnormal delays has made it impossible for the consortium to pursue
performance under the contract. Under these circumstances, the contract
is not effective and became incapable of being executed and that the
consortium has no further obligations with respect to the said CBM
Block. Liability, if any, which may arise on this relinquishment, is
presently not ascertainable.
**** The consortium had experienced inordinate delays in receipt of
clearances/permissions from State Government of Rajasthan. Timely grant
of requisite approvals was beyond the control of the Consortium and the
abnormal delay in the grant of requisite approvals/clearances and also
abnormal delay in response on request of grant of extension of Phase-I
by DGH, made the Consortium incapable of performance. In view of the
difficulties faced, the Consortium relinquished all rights with respect
to both the CBM blocks vide letter dated November 21, 2013 to the
Government of India and it stated that the consortium has no further
obligations with respect to the CBM Blocks. Liability, if any, which may
arise on this relinquishment, is presently not ascertainable.
***** MoPNG, Government of India in October 2012, after six years of
the award of block, observed that NaftoGaz India Limited had falsely
represented itself as the subsidiary of NaftoGaz of Ukraine at the time
of bidding and served notice of termination to all consortium members
referring relevant clause of NELP-VI notice inviting offer (NIO) and
Article 30.3(a) of the Production Sharing Contract (PSC) and demanded
to pay penalty towards unfinished minimum work program. The Company has
received letter dated April 16, 2015 from DGH to deposit USD 9,467,079
as cost of unfinished Minimum Work Program (MWP) to MoPNG. The claim
was contested by the Company vide letter dated June 21, 2014 and May
25, 2015. The said amount is disclosed under Contingent Liability in
Note 26(a)(iii) above.
24. Disclosure as required under AS - 19 :
Disclosure as required under AS - 19 "Accounting for Leases" as
prescribed under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014 is given below :
(a) The Company has entered into cancellable/non-cancellable leasing
agreement for office, residential and warehouse premises renewable by
mutual consent on mutually agreeable terms.
25. Pursuant to first proviso to sub-section (3) of section 129 of the
Act, read with rule 5 of Companies (Accounts) Rules, 2014, the Company
has attached salient features of the financial statement of its
subsidiaries, associates and joint-ventures in form AOC-1 with its
Consolidated Financial Statements
26. Expenditure related to Corporate Social Responsibility as per
Section 135 of the Act, read with Schedule VII thereof is Rs. 25 Crore
27. Figures for the previous year have been
regrouped/reclassified/rearranged wherever necessary to make them
comparable to those for the current year. Figures in bracket indicate
previous year's figures. @'- represents figures less than Rs. 50,000
which have been shown at actuals in brackets with @.
Mar 31, 2014
1. (a) Contingent Liabilities:
i) Counter guarantees given to banks against guarantees issued by the
banks on behalf of the jointly controlled operations aggregate to Rs.
0.79 Crore (Rs. 0.55 Crore) and for subsidiaries and associates Rs. 368.91
Crore (Rs. 368.91 Crore).
ii) Corporate Guarantees given to banks and other parties aggregating Rs.
1,950.28 Crore (Rs. 2,207.26 Crore) in respect of subsidiaries
/associates/ other body corporates.
iii) Claims against the Company not acknowledged as debts and under
litigation aggregate to Rs. 1,109.45 Crore (Rs. 1,519.65 Crore). These
include claim from suppliers aggregating to Rs. 273.63 Crore (Rs. 248.58
Crore), income tax claims Rs. 428.90 Crore (Rs. 847.68 Crore), claims from
sales tax authorities aggregating to Rs. 373.73 Crore (Rs. 395.68 Crore)
out of which claims of Rs. 122.33 Crore (Rs. 122.33 Crore), if
materialised, will be recovered from the customers and other claims Rs.
33.19 Crore (Rs. 27.71 Crore).
iv) The Company''s application for compounding in respect of its ECB of
USD 360 million has been deemed by the Reserve Bank of India (RBI) as
never to have been made subsequent to the withdrawal of the compounding
application. Accordingly, there is no liability in respect of the
compounding fee of Rs. 124.68 Crore earlier specified by RBI. Subsequent
to the withdrawal of the compounding application, the matter has been
referred to the Enforcement Directorate where the same is still
pending.
(b) Capital and Other Commitments:
i) Estimated amount of contracts remaining unexecuted on capital
account and not provided for Rs. 231.05 Crore (Rs. 237.56 Crore).
ii) Uncalled liability on partly paid shares Rs. 10.70 Crore (Rs. 10.70
Crore).
iii) The Company has given equity / fund support for setting up of
projects / cost overrun in respect of various infrastructure and power
projects being set up by Company''s subsidiaries and associates; the
amounts of which currently are not ascertainable.
2. Related Party Disclosure:
As per Accounting Standard -18 as prescribed under the Companies
(Accounting Standards) Rules, 2006, the Company''s related parties and
transactions are disclosed below:
(a) Parties where control exists
Subsidiaries (including step down subsidiaries)
(a) Reliance Power Transmission Limited (RPTL)
(b) Western Region Transmission (Gujarat) Private Limited (WRTG)
(c) Western Region Transmission (Maharashtra) Private Limited (WRTM)*
(d) Talcher  II Transmission Company Limited (TTCL)
(e) North Karanpura Transmission Company Limited (NKTCL)
(f) BSES Kerala Power Limited (BKPL)
(g) Reliance Energy Trading Limited (RETL) (h) Mumbai Metro One Private
Limited (MMOPL) (i) Parbati Koldam Transmission Company Limited (PKTCL)
(j) CBD Tower Private Limited (CBDTPL) (k) Tulip Realtech Private
Limited (TRPL) (l) DS Toll Road Limited (DSTL) (m) NK Toll Road Limited
(NKTL)
(n) SU Toll Road Private Limited (SUTL) up to September 29, 2013
(o) TD Toll Road Private Limited (TDTL) up to September 29, 2013
(p) TK Toll Road Private Limited (TKTL) up to September 29, 2013
(q) GF Toll Road Private Limited (GFTL)
(r) KM Toll Road Private Limited (KMTL)
(s) PS Toll Road Private Limited (PSTL)
(t) HK Toll Road Private Limited (HKTL)
(u) DA Toll Road Private Limited (DATL)
(v) Reliance Cement Company Private Limited(RCPL)
(w) Reliance Cement and Infra Private Limited (RCIPL)
(x) Reliance Cement Corporation Private Limited (RCCPL)
(y) Reliance Cement Works Private Limited (RCWPL)*
(z) Utility Infrastructure & Works Private Limited (UIWPL)
(aa) Reliance Concrete Private Limited ( RCoPL)
(bb) Reliance Airport Developers Private Limited (RADPL)
(cc) Latur Airport Private Limited (LAPL)
(dd) Baramati Airport Private Limited (BAPL)
(ee) Nanded Airport Private Limited (NAPL)
(ff) Yavatmal Airport Private Limited (YAPL)
(gg) Osmanabad Airport Private Limited (OAPL)
(hh) Reliance Sealink One Private Limited (RSOPL)
(b) Other related parties where transactions have taken place during
the year:
(i) Associates
(including subsidiaries of associates)
(a) Reliance Power Limited (RePL)
(b) Urthing Sobla Hydro Power Private Limited (USHPPL)
(c) Rosa Power Supply Company Limited (ROSA)
(d) Sasan Power Limited (SPL)
(e) Vidarbha Industries Power Limited (VIPL)
(f) Chitrangi Power Private Limited (CPPL)
(g) Coastal Andhra Power Limited (CAPL)
(h) Samalkot Power Limited (SaPoL)
(i) Rajasthan Sun Technique Energy Private Limited (RSTEPL)
(j) Dhursar Solar Power Private Limited (DSPPL) (earlier known as
Dahanu Solar Power Private Limited)
(k) Reliance Clean Gen Limited (RCGL)
(l) JR Toll Road Private Limited (JRTL)
(m) Mumbai Metro Transport Private Limited (MMTPL)
(n) Metro One Operation Private Limited(MOOPL)
o) Delhi Airport Metro Express Private Limited (DAMEPL)
(p) SU Toll Road Private Limited (SUTL) w.e.f. September 30, 2013
(q) TD Toll Road Private Limited (TDTL) w.e.f. September 30, 2013
(r) TK Toll Road Private Limited (TKTL) w.e.f. September 30, 2013
(s) Siyom Hydro Power Private Limited (SHPPL)
(t) Coastal Andhra Power Infrastructure Limited (CAPIPL)
(ii) Joint Ventures
(a) BSES Rajdhani Power Limited (BRPL)
(b) BSES Yamuna Power Limited (BYPL)
(c) Tamilnadu Industries Captive Power Company Limited (TICAPCO)
(d) Utility Powertech Limited (UPL)
(iii) Investing Party AAA Project Ventures Private Limited (AAAPVPL)
(iv) Persons having control over investing party
Shri Anil D Ambani
(v) Key Management Personnel
(a) Shri Lalit Jalan
(b) Shri Ramesh Shenoy
(vi) Enterprises over which person described in (iv) has significant
infuence
(a) Reliance Innoventures Private Limited(REIL)
(b) Reliance Life Insurance Company Limited (RLICL)
(c) Reliance General Insurance Company Limited (RGI)
(d) Reliance Capital Limited (RCap)
(e) Reliance Tech Services Private Limited (RTSPL)
(f) Reliance Infocomm Infrastructure Private Limited (RIIPL)
(g) AAA Sons Private Limited (AAASPL) (h) Reliance Securities Limited
(RSL)
(i) Reliance Money Precious Metals Private Limited (RMPMPL)
(j) Reliance Capital Asset Management Company Limited (RAMCPL)
(k) Reliance Enterprise and Ventures Private Limited (REVPL)
(l) Reliance Infocomm Limited (RInfo)
(m) Reliance Infratel Limited (RITL)
(n) Reliance Big Private Limited (RBPL)
(o) Talenthouse Entertainment Private Limited (THEPL)
(p) Reliance Home finance Limited (RHL)
* Refer Note 41
Rs. Crore
Enterprises Key
over which Managerial
Investing person Personnel/
party,
Particulars Subsidiaries described Persons
Associates
and in (iv) has having control
Joint Ventu
-res significant over investing
influence party
(c) Contingent Liabilities (Closing balances):
(i) Guarantees
and Collaterals 1,186.80 703.05 - -
1,429.57 717.26 - -
(d) Details of Material Transactions with Related Party
(i) Transactions during the year (Balance Sheet heads)
Guarantees and Collaterals provided to JRTL Rs. 40.78 Crore. Guarantees
and Collaterals provided earlier- expired / encashed for DAMEPL Rs. 55
Crore, MMOPL Rs. 186.63 Crore, HKTL Rs. 52.60 Crore and KMTL Rs. 47.69 Crore.
ICD given to TKTL Rs. 21.70 Crore and Rs. GFTL Rs. 12.25 Crore. ICD returned
by NKTL Rs. 8.60 Crore. Recoverable Expenses incurred for SPL Rs. 11.20
Crore, RSTEPL Rs. 13.57 Crore and DATL Rs. 0.73 Crore. Recoverable Expenses
incurred by SPL Rs. 0.93 Crore, VIPL Rs. 0.52 Crore and BYPL Rs. 0.28 Crore.
Investment in Securities of PKTCL Rs. 43.40 Crore. Subordinate debt given
to DAMEPL Rs. 402.48 Crore, RPTL Rs. 94.10 Crore, HKTL Rs. 103.33 Crore and
MMOPL Rs. 114.97 Crore. Advance against Securities given to MMOPL Rs. 150
Crore and RCPL Rs. 373.85 Crore. Advance against Securities received back
from RePL Rs. 100 Crore. Sale of Investments in Equity shares in RCCPL Rs.
9.32 Crore. Advance returned to SPL Rs. 8.00 Crore. ICD/ Advance against
Securities converted into sub-debts for JRTL Rs. 63.34 Crore and TKTL Rs.
90.77 Crore. ICD received from RAMCPL Rs. 175 Crore.ICD repaid to BKPL Rs.
47 Crore. Sale of Fixed Assets to WRTM Rs. 0.69 Crore. Purchase of Equity
Shares from REVPL Rs. 1,076.34 Crore. Consideration on Revocation of Toll
Collecting Rights of PSTL Rs. 850 Crore.
(Previous Year: Guarantees and Collaterals provided to RCPL Rs. 435.25
Crore, NKTL Rs. 156.00 Crore and PSTL Rs. 298.90 Crore. ICD given to RPTL
Rs. 426.70 Crore, MMOPL Rs. 277.70 Crore and RCIPL Rs. 600.00 Crore. ICD
returned by RPTL Rs. 426.70 Crore. Recoverable Expenses incurred for
SaPoL Rs. 5.52 Crore and RSTEPL Rs. 15.71 Crore. Recoverable Expenses
incurred by SaPoL Rs. 6.64 Crore Investment in Equity Shares of RIEPL Rs.
1,147.25 Crore. Subordinate debt given to DAMEPL Rs. 227.77 Crore, RPTL Rs.
55.20 Crore and RCPL Rs. 62.00 Crore. Subordinate debt returned by PSTL Rs.
246.20 Crore . Advance against Investments paid to RePL Rs. 1,200 Crore.
EPC Advance received from DSPPL Rs. 40.77 Crore. Advances returned to SPL
Rs. 200 Crore, VIPL Rs. 140.37 Crore and CAPL Rs. 888.00 Crore. Purchase of
Fixed assets from SPL Rs. 8.77 Crore. Reduction / cancellation of
Investments RIEPL Rs. 1,147.30 Crore. ICD to MMOPL Rs. 320.23 Crore
Converted to Sub Debts. ICD received from BKPL Rs. 47.00 Crore. Sale of
Investments to TRPL Rs. 0.01 Crore).
(ii) Balance sheet heads (Closing balance)
Trade payables, Advances received and other liabilities for receiving
of services on revenue and capital account CPPL Rs. 1,214.14 Crore and
SPL Rs. 913.90 Crore. ICD taken from RAMCPL Rs. 175.00 Crore. Investment in
Securities RePL Rs. 3,810.94 Crore and RPTL Rs. 622.39 Crore. ICDs placed
RCIPL Rs. 600.00 Crore. Subordinate debt given to DAMEPL Rs. 1,450.20 Crore
and MMOPL Rs. 527.40 Crore. Advance against Securities MMOPL Rs. 150.00
Crore and RCPL Rs. 373.85 Crore. Interest receivable on Investments and
Deposits from RePL Rs. 1.14 Crore and CPPL Rs. 1.30 Crore. Trade
Receivables, Advances given and other receivables for rendering
services SPL Rs. 902.00 Crore, SaPoL Rs. 2,216.72 Crore and PSTL Rs. 853.84
Crore. Intangible Assets from DSTL Rs. 312.55 Crore, NKTL Rs. 255.58 Crore.
(Previous Year: Trade payables, Advances received and other liabilities
for receiving of services on revenue and capital account CPPL Rs.
1,214.82 Crore and SPL Rs. 670.55 Crore. ICD taken from BKPL Rs. 47.00
Crore. Investment in Equity RPTL Rs. 622.39 Crore and RePL Rs. 1,635.31
Crore. ICDs placed RCIPL Rs. 600.00 Crore. Subordinate debt given to
DAMEPL Rs. 1,047.72 Crore and MMOPL Rs. 412.43 Crore. Advance against
Investments RePL Rs. 1,200.00 Crore. Interest receivable on Investments
and Deposits from RePL Rs. 6.12 Crore Trade Receivables, Advances given
and other receivables for rendering services SaPoL Rs. 1,601.76 Crore and
SPL Rs. 892.68 Crore. Intangible Assets from DSTL Rs. 313.02 Crore, NKTL Rs.
255.79 Crore and PSTL Rs. 846.90 Cror).
(iii) Contingent Liabilities (Closing Balance)
Guarantees and Collaterals provided to RePL Rs. 300.00 Crore, JRTL Rs.
387.05 Crore, RCPL Rs. 478.80 Crore and PSTL Rs. 300.00 Crore.
(Previous Year: Guarantees and Collaterals provided to RePL Rs. 300.00
Crore, JRTL Rs. 346.27 Crore, MMOPL Rs. 235.63 Crore, RCPL Rs. 435.25 Crore
and PSTL Rs. 298.90 Crore.)
(iv) Income heads
Gross Revenue of EPC and Contracts Division from SPL Rs. 1,152.73 Crore,
SaPoL Rs. 444.33 Crore and RSTEPL Rs. 690.70 Crore. Dividend received from
BKPL Rs. 47.27 Crore. Interest earned from RePL Rs. 2.40 Crore and CPPL Rs.
1.38 Crore. Other Income PSTL Rs. 7.31 Crore, HKTL Rs. 3.04 Crore and DATL
Rs. 3.13 Crore.
(Previous Year: Gross Revenue of EPC and Contracts Division from SPL Rs.
3,665.72 Crore, SaPoL Rs. 690.61 Crore and RSTEPL Rs. 801.77 Crore.
Dividend received from BKPL Rs. 76.65 Crore and RETL Rs. 14.45 Crore.
Interest earned from RePL Rs. 6.12 Crore and WRTM Rs. 4.56 Crore. Other
Income PSTL Rs. 3.95 Crore, HKTL Rs. 3.26 Crore and VIPL Rs. 4.70 Crore)
(v) Expenses heads
Purchase of electricity (including Open access charges  Net of Sales)
from DSPPL Rs. 124.65 Crore and VIPL Rs. 501.41 Crore. Purchase of
Electricity- Compensation Bills / IEX (Net of Sales) from RETL Rs. 207.00
Crore. Purchase / Services on Revenue account from RITL Rs. 0.15 Crore
and RePL Rs. 0.31 Crore. Receiving of Services from RGI Rs. 12.27 Crore,
SPL Rs. 8.63 Crore. Purchase of other items on Capital account from SaPoL
Rs. 0.53 Crore. Interest Paid to RAMCPL Rs. 10.44 Crore. Rent paid to
RIIPL Rs. 0.76 Crore and UPL Rs. 0.26 Crore. Dividend paid AAAPVPL Rs. 78.55
Crore and RBPL Rs. 14.43 Crore.
(Previous Year: Purchase of electricity (including Open access charges
- Net of Sales) from RETL Rs. 76.65 Crore, DSPPL Rs. 107.62 Crore and VIPL
Rs. 597.10 Crore. Purchase of Electricity- Compensation Bills / IEX (Net
of Sales) from RETL Rs. 99.43 Crore. Purchase / Services on Revenue
account from RGI Rs. 10.89 Crore, RLICL Rs. 1.96 Crore and RePL Rs. 1.78
Crore. Purchase of other items on Capital account from SPL Rs. 8.78
Crore. Receiving of Services from RBPO Rs. 3.70 Crore SPL Rs. 6.90 Crore,
SaPoL Rs. 5.47 Crore, CAPL Rs. 2.63 Crore and UPL Rs. 2.86 Crore. Interest
Paid to BKPL Rs. 2.72 Crore. Rent paid to RIIPL Rs. 2.88 Crore. Dividend
paid AAAPVPL Rs. 91.72 Crore).
(vi) Salaries, Commission and Other benefits paid / payable to Shri Anil
D Ambani Rs. 5.59 Crore (Rs. 5.51 Crore), Shri S.C. Gupta Rs. Nil (Rs. 0.57
Crore), Shri Lalit Jalan Rs. 2.91 Crore (Rs. 1.45 Crore) and Shri Ramesh
Shenoy Rs. 0.62 Crore (Rs. 0.87 Crore).
3. Segment Reporting
Basis of Preparation: The Company operates in two Business Segments:
Electrical Energy and Engineering, Procurement, Construction (EPC) and
Contracts. Business segments have been identified as reportable primary
segments in accordance with Accounting Standard-17 Segment Reporting,
as prescribed under Companies (Accounting Standards), Rules, 2006,
taking into account the organisation and internal reporting structure
as well as evaluation of risks and returns from these segments. The
inter segment pricing is effected at cost. Segment accounting policies
are in line with the accounting policies of the Company.
In the case of electrical energy, the Company operates a 500 MW Thermal
Power Station at Dahanu, a 220 MW combined cycle power plant at
Samalkot, a 48 MW combined cycle power plant at Mormugao, a 7.59 MW
Windfarm at Chitradurga and also purchases power from third parties and
supplies the power through the Company''s own distribution grid. The
Company supplies power to residential, industrial, commercial and other
consumers. The Company also transmits electricity through its
transmission network in the State of Maharashtra. EPC and Contracts
segment renders comprehensive value-added services in construction,
erection and commissioning.
Geographical Segments: The Company''s operations are mainly confned
within India. The Company does not have material earnings from business
segments outside India. As such there are no reportable geographical
segments.
4. (A) Standby Charges:
In the matter of liability of Rs. 515.60 Crore of standby charges with
The Tata Power Company Limited (TPC) determined by MERC for the period
April 1, 1998 to March 31, 2004, which the Company has fully accounted
for, the Appellate Tribunal of Electricity (ATE) determined the total
liability at Rs. 500 Crore and directed TPC to refund Rs. 354 Crore
(inclusive of interest of Rs. 15 Crore upto March 31, 2004) to the
Company plus interest @ 10% p.a. commencing from April 1, 2004 till the
date of payment. Against the said order, TPC fled an appeal with the
Supreme Court. The Hon''ble Supreme Court passed an interim order dated
February 7, 2007 granting stay of the impugned order of the ATE subject
to the condition that, TPC furnish a bank guarantee in the sum of Rs. 227
Crore and, in addition, deposit a sum of Rs. 227 Crore with the Registrar
General of the Court which may be withdrawn by the Company subject to
the Company giving an undertaking that in the event of the appeal being
decided against the Company, wholly or in part, the amount as may be
found refundable by the Company shall be refunded to TPC without demur
together with interest as may be determined by the Court. The Company
accordingly withdrew the amount of Rs. 227 Crore after complying with the
conditions specified and has accounted the said amount as Other
Liabilities pending final adjustment. Moreover, pending final order of
the Hon''ble Supreme Court, the Company has not accounted for the
reduction in standby charges liability of Rs. 15.60 Crore as well as
interest amount determined by ATE as payable by TPC to the Company.
(B) Take or Pay and Additional Energy Charges:
Pursuant to the order passed by MERC dated December 12, 2007, in case
No. 7 of 2002, TPC has claimed an amount of Rs. 323.87 Crore towards the
following:
(a) Difference in the energy charge for energy supplied by TPC at 220
kV interconnection for the period March 2001 to May 2004 along with
interest at 24% per annum up to December 31, 2007, and
(b) Minimum offtake charges for energy for the years 1998-99 to
1999-2000 along with interest at 24% per annum up to December 31, 2007.
In an appeal fled by the Company, ATE held that the amount in the
matter (a) above is payable by the Company along with interest at State
Bank of India prime lending rate for short term borrowings. The matter
(b) was remanded to MERC for redetermination. The Company has fled an
appeal against the said order before the Supreme Court, which while
admitting the appeal, has restrained TPC from taking any coercive
action in respect of the matter stated in (a) above and TPC has also
fled an appeal against the said order. The Company has complied with
the interim order directions of depositing Rs. 25 Crore with the
Registrar of Supreme Court and providing a Bank Guarantee of Rs. 9.98
Crore. The said amount is disclosed under Contingent Liability in Note
26(a)(iii) above.
5. Revenue from Sale of Electrical Energy and Regulatory Matters:
a. Regulatory Assets
In accordance with accounting policy (Refer Note 1 (d) (i)) the Company
has accrued Rs. 283.64 Crore (Rs. 545.79 Crore) during the year as revenue
gap under ''Income from Sale of Electricity''. The Company has recovered
Rs. 406.60 Crore (Rs. Nil) of the regulatory assets during the year ended
March 31, 2014 (including Rs. 146.61 Crore out of the revenue gap accrued
in the current year). Cumulative revenue gap as on March 31, 2014 of Rs.
2,739.04 Crore (Rs. 2,862.00 Crore) has been shown as Regulatory Assets
in the balance sheet. Based on management estimate, an amount of Rs.
410.53 Crore (Rs. 401.71 Crore) being recoverable in the subsequent year
has been included in Other Current Assets and the balance amount of Rs.
2,328.51 Crore (Rs. 2,460.29 Crore) has been included in Other Non
Current Assets.
On August 22, 2013 the Company received a Tariff Order in respect of
Mumbai Distribution business from MERC approving the revenue gap of Rs.
2,463.18 Crore for the period upto March 31, 2012. The MERC also
approved carrying cost of Rs. 1,403.65 Crore for the period upto March
31, 2013 on the above revenue gap. Such carrying cost will be accounted
for by the Company on the basis of actual recovery of the above amount
of Rs. 3,866.83 Crore through the Tariff approved by MERC w.e.f.
September 1, 2013 along with further carrying cost till the date of
full recovery. During the year ended March 31, 2014, the Company has
recovered Rs. 497.72 Crore as per the said Tariff Order out of which Rs.
276.78 Crore has been apportioned against Carrying Cost as income and Rs.
220.94 Crore has been apportioned against the past regulatory assets.
b. In accordance with the MERC tariff regulation for determination of
tariff, the income-tax paid is considered for tariff determination
(truing up). Accordingly, the Company has considered Rs. 37.79 Crore (Rs.
72.62 Crore) of deferred tax liability for the year arising out of
differences in rates of depreciation between MERC and income-tax as
"Net tax to be recovered in future tariff determination". Similarly,
the deferred tax liability of Rs. 46.58 Crore (Rs.189.42 Crore) on account
of timing difference on taxability of regulatory income accounted in
the books is treated as "Net tax to be recovered in future tariff
determination".
6. Investment in Delhi Airport Metro Express Private Limited:
Delhi Airport Metro Express Private Limited (DAMEPL), SPV of the
Company, terminated the Concession Agreement with Delhi Metro Rail
Corporation (DMRC) for the Delhi Airport Metro Line, on account of
Material Breach and Event of Default under the provisions of the
Concession Agreement by DMRC. The operations were taken over by DMRC
with effect from July 1, 2013.
As per the terms of the Concession Agreement, DMRC is now liable to pay
DAMEPL a Termination Payment, which is estimated at Rs. 2,823 Crore, as
the termination has arisen owing to DMRC''s Event of Default. The matter
has been referred to arbitration and the process for the same has
already begun. Pending final outcome of the arbitration, the Company
continues to fund the statutory and other obligations of DAMEPL post
take over by DMRC and accordingly has funded Rs. 275.50 Crore upto March
31, 2014. As legally advised, the claims for the Termination Payment
are considered fully enforceable and the Company is confdent of
recovering its entire investment of Rs. 1,450.20 Crore in DAMEPL as at
March 31, 2014.
7. Scheme of Amalgamation of Reliance Infraprojects Limited ( RInf)
with the Company:
The Hon''ble High Court of Judicature of Bombay had sanctioned the
Scheme of Amalgamation of Reliance Infraprojects Limited (RInf) with
the Company on March 30, 2011 with the appointed date being April 1,
2010. As per the clause 2.3.7 of the Scheme, the Company, as determined
by its Board of Directors, is permitted to adjust foreign exchange and
derivative losses / gains debited / credited in the Statement of profit
and Loss by a corresponding withdrawal from or credit to General
Reserve.
Pursuant to the option exercised under the above Scheme, net foreign
exchange gain of Rs. 101.46 Crore for the year ended March 31, 2014 has
been credited to Statement of profit and Loss and an equivalent amount
has been transferred to General Reserve. Similarly, foreign exchange
loss of Rs. 361.32 Crore attributable to finance cost and net loss on
account of derivative instruments of Rs. 52.30 Crore have been debited to
Statement of profit and Loss and an equivalent amount has been withdrawn
from General Reserve. The Company has been legally advised that
crediting of the said amount in Statement of profit and Loss is in
accordance with Revised Schedule VI to the Act. Had the Scheme not
prescribed this treatment, the profit before tax for the year ended
March 31, 2014 would have been lower by Rs. 312.16 Crore and the General
Reserve would have been higher by an equivalent amount. The treatment
prescribed under the Scheme override the relevant provision of
Accounting Standard 5 (AS-5) ''Net profit or Loss for the Period, Prior
Period Items and Changes in Accounting Policies''.
8. In line with the notifcation dated December 29, 2011 issued by the
Ministry of Corporate Affairs, the Company has exercised the option
given in the Paragraph 46A of the Accounting Standard-11 "The Effect of
Change in Foreign Exchange Rates" of capitalising the foreign exchange
loss/gain arising on long term foreign currency monetary items relating
to acquisition of depreciable capital assets and depreciating the same
over the balance life of such assets and in other cases amortising the
foreign exchange loss/gain over the balance period of such long term
foreign currency monetary items. Accordingly, the Company has carried
forward the unamortised portion of net gain of Rs. 238.48 Crore (Rs. 156.22
Crore) in "Foreign Currency Monetary Item Translation Difference
Account" and the same is grouped under ''Reserves and Surplus".
9. During the year 2012-13, the Company had, based on valuation made
by approved valuer, revalued its freehold land, building and plant and
machinery located at Goa, Samalkot and Chitradurg w.e.f. April 01. 2012
as per the replacement cost method and incremental value on revaluation
amounting to Rs. 495.69 Crore had been added to Gross Block of Fixed
assets and credited to Revaluation Reserve. Consequent to revaluation,
there is an additional charge of depreciation of Rs. 28.55 Crore (Rs. 26.05
Crore) and equivalent amount has been withdrawn from the Revaluation
Reserve, which has no impact on the profit for the year.
10. Towards the end of September, 2013, the Company had diluted its
equity holding in SU Toll Road Private Limited (SUTL), TD Toll Road
Private Limited (TDTL) and TK Toll Road Private Limited (TKTL) each
from 100% to 49% at book value for a consideration of Rs. 108.26 Crore, Rs.
54.80 Crore and Rs. 74.70 Crore respectively. As a result of these
transfers SUTL, TDTL and TKTL ceased to be subsidiaries and became
associates of the Company. Pursuant to this dilution, 2% of the shares
in each of these Companies have been transferred to Reliance Toll Road
Trust for the benefit of the Company. However, as required under the
concession and other applicable agreements, the Company continues to
provide financial support to these Companies. The validity of the
transfers and the consequential reclassifcation of these Companies as
Associates is confirmed by legal advice obtained by the Company.
Further, the Company''s equity holding in the two joint ventures, BSES
Rajdhani Power Limited (BRPL) and BSES Yamuna Power Limited (BYPL) was
diluted towards the end of September, 2013 from 49% to 28.82% at book
value for a consideration of Rs. 209.84 Crore and Rs. 112.18 Crore
respectively.
Certain requisite approvals from concerned authorities in respect of
transfer of equity shareholding in SUTL, TDTL, TKTL, BRPL & BYPL are
still awaited and management expects to receive them in due course.
11. Towards the end of September, 2013, the Company had diluted its
equity holding in Reliance Cement Company Private Limited (RCCPL) from
100% to 19% for a consideration of Rs. 436.48 Crore. The said dilution
was subject to requisite approvals. As the requisite approvals could
not be obtained, the said holding was again restored on March 31, 2014
by agreeing to repay to the transferee Companies the same amount at
which the holding was diluted. The above amount of Rs. 436.48 Crore has
been included in Other Liabilities and accordingly, RCCPL has been
considered as wholly owned subsidiary for the entire year as if no
dilution had ever happened.
12. The financial statements of R Infra ESOS Trust as at March 31, 2014
has been consolidated with Standalone Financial Statements of the
Company in terms of SEBI (ESOS and ESPS) Guidelines, 1999 and recent
opinion of the Expert Advisory Committee (EAC) of the Institute of
Chartered Accountants of India (the ICAI). Consequently, the paid up
share capital and securities premium of the Company as at March 31,
2014 are disclosed net of Rs. 0.45 Crore and Rs. 36.40 Crore respectively,
being the value of 4,50,000 equity shares held by the trust.
13. The Board of Directors in their meeting held on November 11, 2013,
approved the Scheme of Amalgamation of two wholly owned subsidiaries of
the Company viz. Western Region Transmission (Gujarat) Private Limited
and Western Region Transmission (Maharashtra) Private Limited with the
Company. Since, the Scheme has not yet been sanctioned by the Hon''ble
High Court; these subsidiaries have not been merged with the Company.
14. Scheme of Amalgamation between WRTM and RCWPL
The Scheme of Amalgamation between two wholly owned subsidiaries of the
Company, M/s Reliance Cement Works Private Limited (RCWPL) with M/s
Western Region Transmission (Maharashtra) Private Limited (WRTMPL) has
been sanctioned by the Hon''ble High Court of Bombay on April 25, 2014,
with the appointed date April 1, 2013. The Scheme shall become
effective upon WRTMPL fling the Order with the Registrar of Companies,
as required under section 394(3) of the Companies Act, 1956. As per
the Scheme the Company would get 8% Non Cumulative Non Convertible
Redeemable Preference Shares of Rs. 0.02 Crore of WRTMPL in lieu of the
equity investment of Rs. 0.02 Crore in RCWPL held and disclosed under Non
Current Investments as at March 31, 2014.
15. The Company had entered into Operation and Maintenance arrangement
with PS Toll Road Private Limited (PSTR) vide agreement dated March 28,
2011.In view of the diffculties being faced by both the parties in
execution of the contract in present form, both the parties have
mutually agreed to revoke the arrangement for entitlement of the
Company in the residual cash fow of the toll collection vide
arrangement dated March 29, 2014 in return for the PSTR agreeing to pay
Rs. 850 Crore to the Company which has since been received after the end
of the financial year 2013-14.
16. Disclosure under Accounting Standard 15 (revised 2005) "Employee
benefits":
The Company has classifed various employee benefits as under:
(A) Defined contribution plans
a. Provident fund
b. Superannuation fund
c. State Defined contribution plans
- Employers'' Contribution to Employees'' State Insurance
- Employers'' Contribution to 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 trustees of the Reliance Infrastructure Limited
officer''s Superannuation Scheme. Under the schemes, the Company is
required to contribute a specified percentage of payroll cost to the
retirement benefit schemes to fund the benefits. These funds are
recognized by the Income tax authorities.
The Company has recognised the following amounts in the Statement of
profit and Loss for the year:
(B) Defined benefit Plans
a. Provident Fund (Applicable to certain employees)
b. Gratuity
c. Leave Encashment
The guidance on implementing AS 15, Employee benefits (revised 2005)
issued by Accounting Standard Board states benefit involving employee
established provident funds, which require interest shortfalls to be
recompensed are to be considered as Defined benefit plans. As per the
audited accounts of Provident Fund Trust maintained by the Company, the
shortfall arising in meeting the stipulated interest payment liability,
if any, gets duly provided for.
Leave encashment is payable to eligible employees who have earned
leaves, during the employment and/or on separation as per the Company''s
policy.
17. The Company 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 Act, is
not applicable to the Company.
18. Disclosure under Micro, Small and Medium Enterprises Development
Act, 2006:
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 and relied upon by the auditors.
19. Derivative Instruments:
(a) The Company has not entered into any contracts for derivative
instruments during the year ended March 31, 2014 and there are no
outstanding derivative instruments as of March 31, 2014.
(c) Pursuant to the clarifcation issued by the Institute of Chartered
Accountants of India on March 29, 2008 on accounting of derivatives,
the Company has for the year ended March 31, 2014 provided unrealised
loss of Rs. Nil (Rs. 39.12 Crore) on account of revaluation of foreign
exchange derivative instruments at fair values as at the reporting year
end.
The provision for mark to market losses towards the same as on March
31, 2014 amounts to Rs. Nil (Previous Year Rs. 108.86 Crore). (Refer Note
No.34).
(d) Net Foreign Currency exposures that are not covered by derivative
instruments or otherwise are Rs. 2,667.23 Crore (Previous Ye a r Rs. 923.22
Crore).
20. Interest in Jointly Controlled Operations:
The Company along with M/s. Geopetrol International Inc. and Reliance
Natural Resources Limited *(the consortium) was allotted 4 Coal Bed
Methane (CBM) blocks from Ministry of Petroleum and Natural Gas (Mo
PNG) covering an acreage of 3,266 square kilometers in the States of
Madhya Pradesh, Andhra Pradesh and Rajasthan. The consortium had
entered into a production sharing agreement with Government of India
for exploration and production of these four CBM blocks. The Company as
part of the consortium has 45% share in each of the four blocks. M/s
Geopetrol International Inc is the operator on behalf of the consortium
for all the four CBM blocks.
Also, the Company along with M/s. Geopetrol International Inc, Naftogaz
India Private Limited and Reliance Natural Resources Limited *(the
consortium) was allotted oil block from Mo PNG, in the State of Mizoram
under the New Exploration Licensing Policy (NELP - VI) round, covering
an acreage of 3,619 square kilometers and the consortium had signed an
agreement with the Government of India for exploration and production
of an Oil and Gas block. The Company as part of the consortium has 70%
share in the block. M/s Naftogaz India Private Limited is the operator
on behalf of the consortium for the block
** Keeping in view various issues faced by the Consortium like
inordinate delays in Government clearances, non receipt of Petroleum
Exploration License (PEL) for more than 5 years, availability of scarce
geologically effective fair way due to overlap with tribal land,
reserve forest cover and Singarani Coal Mines, the Consortium has
relinquished its rights in respect of the CBM Blocks KG (E) Â CBM Â
2005 / III at Kothgudem, Andhra Pradesh by passing a resolution in the
23rd Operating Committee meeting held on January 30, 2013. The decision
has been conveyed to Government of India vide letter dated February 6,
2013 and the reply from the Government is awaited. Since the Petroleum
Exploration Licence (PEL) has not been granted, there is no effective
contract start date and the contract stands ineffective and null due to
non-receipt of PEL. The Company hence does not envisage any payment
liability related to unfnished work programme.
*** Keeping in view the issues faced by the Consortium like in-ordinate
delays in Government clearances, delay in processing of Consortium
request for extension of Phase -1 under excusable delays and
non-receipt of clearances / permissions from the State Government of
Rajasthan for more than 4 years, during the year the Consortium has
decided to relinquish its rights with respect of CBM Blocks viz. BS(4)
- CBM - 2005 / III and BS(5) - CBM - 2005 / III at Barmer, Rajasthan
under force majure. Directorate General of Hydrocarbons (DGH) has
conveyed the consortium stating that Minimum Work Programme (MWP) was
payable towards the unfnished work which the Company has contested.
Though any liability which may arise on this relinquishment is
presently not ascertainable, the Company does not envisage any material
claims in this regard.
**** The Company received a notice from the Mo PNG on October 11, 2012
for termination of the contract on the grounds of misrepresentation of
facts by the Operator M/s Naftogaz India Private Limited. The Company
also received a notice dated October18, 2012 from DGH for payment of
unfulfilled work program penalty. The Company has contested the claims
and has not received any communication from DGH till date. More-over
the cost of unfnished work programme cannot be easily ascertained owing
to lack of commensurate benchmarking in such inhospitable terrain.
Though any liability which may arise on this termination is presently
not ascertainable, the Company does not envisage any material claims in
this regard.
21. Power Banking:
The cost of electricity purchased is net of cost incurred towards units
purchased and banked with other parties and / or units banked by other
parties with us, both on loan basis. Such transactions remaining
unsettled at the year end, is carried forward under Short Term Loans
and Advances at the value of purchase on the date of the transactions
when the units are banked.
22. Disclosure as required under AS Â 19 :
Disclosure as required under AS - 19 "Accounting for Leases" as
prescribed under Companies (Accounting Standards) Rules, 2006 is given
below:
(a) The Company has entered into cancellable / non-cancellable leasing
agreement for office, residential and warehouse premises renewable by
mutual consent on mutually agreeable terms.
23. The Ministry of Corporate Affairs, Government of India, vide
General Circular No.2 and 3 dated February 08, 2011 and February 21,
2011 respectively has granted a general exemption from compliance with
section 212 of the Act, subject to conditions stipulated in the
circular. The Company has satisfed the conditions stipulated in the
circular and hence is entitled to the exemption. Necessary information
relating to the subsidiaries has been included in the Consolidated
Financial Statements.
24. Figures for the previous year have been
regrouped/reclassified/rearranged wherever necessary to make them
comparable to those for the current year. Figures in bracket indicate
previous year''s fgures. @''- represents fgures less than Rs. 50,000 which
have been shown at actuals in brackets with @.
Mar 31, 2013
1. (a) Contingent Liabilities : Contingent Liabilities:
(i) Counter guarantees given to banks against guarantees issued by the
banks on behalf of the jointly controlled operations aggregate to Rs.
0.55 Crore (Rs. 9.58 Crore) and for subsidiaries and associates Rs.
368.91 Crore (Rs. 382.30 Crore).
(ii) Corporate Guarantees given to banks and other parties aggregating
Rs. 2,207.26 Crore (Rs. 2,288.17 Crore) in respect of financing
facilities granted to subsidiaries /associates/ other body corporates.
(iii) Claims against the Company not acknowledged as debts and under
litigation aggregates to Rs. 1,459.48 Crore (Rs. 1,948.59 Crore). These
include claim from suppliers aggregating to Rs. 248.58 Crore (Rs.
293.53 Crore), income tax claims Rs. 847.68 Crore (Rs. 1,524.99 Crore),
claims from sales tax authorities aggregating to Rs. 335.51 Crore
(Rs.128.55 Crore) out of which claims of Rs. 122.33 crore (Rs. 122.33
crore), if materialised, will be recovered from the customers and other
claims Rs. 27.71 Crore (Rs. 1.52 Crore).
(b) Capital and Other Commitments:
(i) Estimated amount of contracts remaining unexecuted on capital
account and not provided for Rs. 237.56 Crore (Rs. 299.81 Crore)
(ii) Uncalled liability on partly paid shares Rs. 10.70 Crore (Rs.
10.70 Crore)
(iii) The Company has given equity / fund support for setting up of
projects / cost overrun in respect of various infrastructure and power
projects being set up by company''s subsidiaries and associates; the
amounts of which currently are not ascertainable.
2. Related Party Disclosures:
As per Accounting Standard -18 as prescribed under the Companies
(Accounting Standards) Rules, 2006, the Company''s related parties and
transactions are disclosed below:
(a) Parties where control exists
Subsidiaries (including step down subsidiaries)
(a) Reliance Power Transmission Limited (RPTL)
(b) Western Region Transmission (Gujarat) Private Limited (WRTG)
(c) Western Region Transmission (Maharashtra) Private Limited (WRTM)
(d) Talcher - II Transmission Company Limited (TTCL)
(e) North Karanpura Transmission Company Limited (NKTCL)
(f) BSES Kerala Power Limited (BKPL)
(g) Noida Global SEZ Private Limited (NGSPL) upto March 30, 201 3
(h) Reliance Energy Trading Limited (RETL)
(i) Mumbai Metro One Private Limited (MMOPL)
(j) Parbati Koldam Transmission Company Limited (PKTCL)
(k) CBD Tower Private Limited (CBDTPL)
(I) Tulip Realtech Private Limited (TRPL)
(m) DS Toll Road Limited (DSTL)
(n) NK Toll Road Limited (NKTL)
(o) SU Toll Road Private Limited (SUTL)
(p) TD Toll Road Private Limited (TDTL)
(q) TK Toll Road Private Limited (TKTL)
(r) GF Toll Road Private Limited (GFTL)
(s) KM Toll Road Private Limited (KMTL)
(t) PS Toll Road Private Limited (PSTL)
(u) HK Toll Road Private Limited (HKTL)
(v) DA Toll Road Private Limited (DATL)
(w) Reliance Cement Company Private Limited (RCPL)
(x) Reliance Cement and Infra Private Limited (RCIPL)
(y) Reliance Cement Corporation Private Limited (RCCPL)
(z) Reliance Cement Works Private Limited (RCWPL)
(aa) Utility Infrastructure & Works Private Limited (UIWPL)
(bb) Reliance Concrete Private Limited (RCoPL)
(cc) Reliance Airport Developers Private Limited (RADPL)
(dd) Latur Airport Private Limited (LAPL)
(ee) Baramati Airport Private Limited (BAPL)
(ff) Nanded Airport Private Limited (NAPL)
(gg) Yavatmal Airport Private Limited (YAPL)
(hh) Osmanabad Airport Private Limited (OAPL)
(ii) Reliance Sealink One Private Limited (RSOPL)
(jj) Reliance Infrastructure Engineers Private Limited (RIEPL) *
(kk) Reliance Jamnagar Power Private Limited (RJPPL) *
(II) Reliance Bhavnagar Power Private Limited (RBPPL) *
(b) Other related parties where transactions have taken place during
the year:
(i) Associates (including
subsidiaries of associates)
(a) Reliance Power Limited (RePL)
(b) Urthing Sobla Hydro Power Private Limited (USHPPL)
(c) Rosa Power Supply Company Limited (ROSA)
(d) Sasan Power Limited (SPL)
(e) Vidarbha Industries Power Limited (VIPL)
(f) Chitrangi Power Private Limited (CPPL)
(g) Jharkhand Integrated Power Limited (JIPL)
(h) Coastal Andhra Power Limited (CAPL)
(i) Samalkot Power Limited (SaPoL)
(j) Rajasthan Sun Technique Energy Private Limited (RSTEPL)
(k) Dahanu Solar Power Private Limited (DSPPL)
(l) Reliance Clean Gen Limited (RCGL)
(m) JR Toll Road Private Limited (JRTL)
(n) Mumbai Metro Transport Private Limited (MMTPL)
(o) Metro One Operation Private Limited (MOOPL)
(p) Delhi Airport Metro Express Private Limited (DAMEPL) w.e.f April 1,
2012
(ii) Joint Ventures (a) BSES Rajdhani Power Limited (BRPL)
(b) BSES Yamuna Power Limited (BYPL)
(c) Tamilnadu Industries Captive Power Company Limited (TICAPCO)
(d) Utility Powertech Limited (UPL)
(iii) Investing Party AAA Project Ventures Private Limited (AAAPVPL)
(iv) Persons having control over investing party
Shri Anil D. Ambani
(v) Key Management Personnel
(a) Shri S.C.Gupta (Upto June 30, 2012)
(b) Shri Lalit Jalan
(c) Shri Ramesh Shenoy (w.e.f April 21, 2012)
(vi) Enterprises over which person described in (iv) has significant
influence
(a) Reliance Communications Limited (RComm)
(b) Reliance Innoventures Private Limited(REIL)
(c) Reliance Life Insurance Company Limited (RLICL)
(d) Reliance General Insurance Company Limited (RGI)
(e) Reliance Capital Limited (RCap)
(f) Reliance Tech Services Private Limited (RTSPL)
(g) Reliance Infocomm Infrastructure Private Limited (RIIPL)
(h) Reliance Big Entertainment Private Limited (RBig)
(i) AAA Sons Private Limited (AAASPL)
(j) Reliance BPO Private Limited (RBPO)
(k) Reliance Securities Limited (RSL)
(l) Reliance Money Precious Metals Private Limited (RMPMPL)
* Merged with the Company (Refer Note 34)
(d) Details of Material Transactions with Related Parties
(i) Transactions during the year (Balance Sheet heads):
Guarantees and Collaterals provided to RCPL Rs. 435.25 Crore, NKTL Rs.
156 Crore and PSTL Rs. 298.90 Crore. ICD given to RPTL Rs. 426.70
Crore, MMOPL Rs. 277.70 Crore and RCIPL Rs. 600 Crore. ICD returned by
RPTL Rs. 426.70 Crore. Recoverable Expenses incurred for SaPoL Rs.
5.52 Crore and RSTEPL Rs. 15.71 Crore. Recoverable Expenses incurred by
SaPoL Rs. 6.64 Crore Investment in Equity Shares of RIEPL Rs. 1,147.25
Crore. Subordinate debt given to DAMEPL Rs. 227.77 Crore, RPTL Rs.
55.20 Crore and RCPL Rs. 62 Crore. Subordinate debt returned by PSTL
Rs. 246.20 Crore. Advance against Investments paid to RePL Rs. 1,200
Crore. EPC Advance received from DSPPL Rs. 40.77 Crore. Advances
returned to SPL Rs. 200 Crore, VIPL Rs. 140.37 Crore and CAPL Rs.
888.00 Crore. Purchase of Fixed assets from SPL Rs. 8.77 Crore.
Reduction / cancellation of Investments RIEPL Rs. 1,147.30 Crore. ICD
to MMOPL Rs. 320.23 Crore Converted to Sub Debts. ICD received from
BKPL Rs. 47 Crore. Sale of Investments to TRPL Rs. 0.01 Crore.
(Previous Year: Guarantees and Collaterals provided to MMOPL Rs. 148.69
Crore. ICD given to RICL* Rs. 99.32 Crore ,RSOPL Rs. 33.74 Crore and
MMOPL Rs. 99.73 Crore. ICD returned by DATL Rs. 630.15 Crore and KMTL
Rs. 193 Crore, and HKTL Rs. 177 Crore. Recoverable Expenses incurred
for RCPL Rs. 2.21 Crore and NGSPL Rs. 3.98 Crore. Recoverable Expenses
incurred by SPL Rs. 4.03 Crore and SaPoL Rs. 5.77 Crore. Investment in
Equity Shares of RCPL Rs. 296.99 Crore, RPTL Rs. 165.73 Crore, BRPL Rs.
284.20 Crore, BYPL Rs. 215.60 Crore and RInvL Rs. 302.83 Crore.
Subordinate debt given to DAMEPL Rs. 208 Crore. Subordinate debt
received back from HKTL Rs. 181.41 Core, DATL Rs. 493.01 Crore and KMTL
Rs. 196.71 Crore. Advance against Investments paid to JRTL Rs. 10.53
Crore and PKTCL Rs. 22.20 Crore. Advance against Investments received
back from BYPL Rs. 17.15 Crore, PKTCL Rs. 22.20, RPTL Rs. 16.50 Crore
and SUTL Rs. 11 Crore. Advances returned to JIPL Rs. 100 Crore.
Purchase of Fixed assets from LAPL Rs. 0.05 Crore. Reduction /
cancellation of Investments RIEPL Rs. 54.30 Crore and RICL* Rs. 10.29
Crore).
(ii) Balance sheet heads (Closing balance):
Trade payables, Advances received and other liabilities for receiving
of services on revenue and capital account CPPL Rs. 1214.82 Crore. ICD
taken from BKPL Rs. 47 Crore. Investment in Equity RPTL Rs. 622.39
Crore and RePL Rs. 1635.31 Crore. ICDs placed RCIPL Rs. 600 Crore.
Subordinate debt given to DAMEPL Rs. 1,047.72 Crore and MMOPL 41 2.43
Crore. Advance against Investments RePL Rs. 1,200 Crore. Trade
Receivables, Advances given and other receivables for rendering
services SaPoL Rs. 1,601.76 Crore. Interest receivable from RePL Rs.
6.12 Crore. Intangible Assets from DSTL Rs. 313.02 Crore, NKTL Rs.
255.79 Crore and PSTL Rs. 846.90 Crore.
(Previous Year: Trade payables, Advances received and other liabilities
for receiving of services on revenue and capital account CPPL Rs.
1,214.47 Crore, PSTL Rs. 890 Crore and CAPL Rs. 726.38 Crore.
Investment in Equity RPTL Rs. 542.33 Crore and RePL Rs. 1,720 Crore.
ICDs placed RSOPL Rs. 33.74 Crore and MMOPL Rs. 99.73 Crore.
Subordinate debt PSTL Rs. 259.91 Crore, DATL Rs. 187.35 Crore and
DAMEPL Rs. 819.95 Crore. Advance against Investments JRTL Rs. 63.98
Crore and PKTCL Rs. 22.20 Crore. Trade Receivables, Advance given and
other receivables for rendering services SaPoL Rs. 2,076.46 Crore and
RPTL Rs. 11.83 Crore. and SAPL Rs. 529.73 Crore)
(iii) Contingent Liabilities (Closing Balance):
Guarantees and Collaterals provided to RePL Rs. 300 Crore, JRTL Rs.
346.27 Crore, MMOPL Rs. 235.63 Crore, RCPL Rs. 435.25 Crore and PSTL
Rs. 298.90 Crore.
(Previous Year: Guarantees and Collaterals provided to RePL Rs. 300
Crore, JRTL Rs. 184 Crore, and MMOPL. 179.77 Crore)
(iv) Income heads:
Sale of Electricity from RETL Rs. 80.58 Crore. Gross Revenue of EPC and
Contracts Division from SPL Rs. 3,665.72 Crore, SaPoL Rs.690.61 Crore
and RSTEPL Rs.801.77 Crore. Dividend received from BKPL Rs.76.65 Crore
and RETL Rs.14.45 Crore. Interest earned from RePL Rs. 6.12 Crore and
WRTM Rs. 4.56 Crore. Other Income PSTL Rs. 3.95 Crore, HKTL Rs. 3.26
Crore and VIPL Rs. 4.70 Crore. (Previous Year: Sale of Electricity
from RETL Rs. 150.42 Crore. Gross Revenue of EPC and Contracts Division
from SPL Rs. 4,269.15 Crore and SaPoL Rs. 5,652.57 Crore. Dividend
received from UPL Rs. 1.19 Crore. Rent / lease rent earned from RComm
Rs. 0.76 Crore. Interest earned from WRTG Rs. 5.76 Crore, WRTM Rs. 2.66
Crore , MMOPL Rs. 2.81 Crore and RICL* Rs. 5.57 Crore. Other Income
RePL Rs. 6.89 Crore).
(v) Expenses heads:
Purchase of electricity (including Open access charges) from RETL Rs.
92.19 Crore, DSPPL Rs. 107.62 Crore and VIPL Rs. 597.10 Crore. Purchase
of Electricity- Compensation Bills/IEX from RETL Rs. 164.48 Crore.
Purchase/Services on Revenue account from RGI Rs. 10.89 Crore, RLICL
Rs. 1.96 Crore and RePL Rs. 1.78 Crore. Purchase of other items on
Capital account from SPL Rs. 8.78 Crore. Receiving of Services from
RBPO Rs. 3.70 Crore SPL Rs. 6.90 Crore, SaPoL Rs. 5.47 Crore, CAPL Rs.
2.63 Crore and UPL Rs. 2.86 Crore. Interest Paid to BKPL Rs. 2.72
Crore. Rent paid to RIIPL Rs. 2.88 Crore. Dividend paid AAAPVPL Rs.
91.72 Crore.
(Previous Year: Purchase of electricity (including Open access charges)
from RETL Rs. 61.53 Crore and REIL Rs. 31.13 Crore. Purchase of
Electricity- Compensation Bills/IEX from RETL Rs. 82.84 Crore.
Purchase/Services on Revenue account from RGI Rs. 14.82 Crore and RePL
Rs. 62.75 Crore. Purchase of other items on Capital account from LAPL
Rs. 0.05 Crore. Receiving of Services from RICL* Rs. 1.97 Crore. Rent
paid to RICL* Rs. 0.77 Crore and RIIPL Rs. 4.16 Crore. Dividend paid
AAAPVPL Rs. 90.47 Crore).
(vi) Salaries, Commission and Other Benefits paid / payable to Shri
Anil D Ambani Rs. 5.51 Crore (Rs. 5.51 Crore), Shri S.C. Gupta Rs.
0.57 Crore (Rs. 0.84 Crore), Shri Lalit Jalan Rs. 1.45 Crore (Rs. 0.84
Crore) and Shri Ramesh Shenoy Rs. 0.87 Crore.
* RICL - Reliance Infrastructure and Consultants Limited is no more a
related party in the current year.
3. Segment Reporting:
Basis of Preparation: The Company operates in two Business Segments:
Electrical Energy and Engineering, Procurement, Construction (EPC) and
Contracts. Business segments have been identified as reportable primary
segments in accordance with Accounting Standard-17 Segment Reporting,
as prescribed under Companies (Accounting Standards), Rules, 2006,
taking into account the organisation and internal reporting structure
as well as evaluation of risks and returns from these segments. The
inter segment pricing is effected at cost. Segment accounting policies
are in line with the accounting policies of the Company
In the case of electrical energy, the Company operates a 500 MW Thermal
Power Station at Dahanu, a 220 MW combined cycle power plant at
Samalkot, a 48 MW combined cycle power plant at Mormugao, a 7.59 MW
Windfarm at Chitradurga and also purchases power from third parties and
supplies the power through the Company''s own distribution grid. The
Company supplies power to residential, industrial, commercial and other
consumers. EPC and Contracts segment renders comprehensive value-added
services in construction, erection and commissioning.
Geographical Segments: The Company''s operations are mainly confined
within India. The Company does not have material earnings from business
segments outside India. As such there are no reportable geographical
segments.
4. (A) Standby Charges:
In the matter of liability of Rs. 515.60 Crore of standby charges with
The Tata Power Company Limited (TPC) determined by MERC for the period
April 1, 1998 to March 31, 2004, which the Company has fully accounted
for, the Appellate Tribunal of Electricity (ATE) determined the total
liability at Rs. 500 Crore and directed TPC to refund Rs. 354 Crore
(inclusive of interest of Rs. 15 Crore upto March 31, 2004) to the
Company plus interest @ 10% p.a. commencing from April 1, 2004 till the
date of payment. Against the said order, TPC filed an appeal with the
Supreme Court. The Hon''ble Supreme Court passed an interim order dated
February 7, 2007 granting stay of the impugned order of the ATE subject
to the condition that, TPC furnish a bank guarantee in the sum of Rs.
227 Crore and, in addition, deposit a sum of Rs. 227 Crore with the
Registrar General of the Court which may be withdrawn by the Company
subject to the Company giving an undertaking that in the event of the
appeal being decided against the Company, wholly or in part, the amount
as may be found refundable by the Company shall be refunded to TPC
without demur together with interest as may be determined by the Court.
The Company accordingly withdrew the amount of Rs. 227 Crore after
complying with the conditions specified and has accounted the said
amount as Other Liabilities pending final adjustment. Moreover, pending
final order of the Hon''ble Supreme Court, the Company has not accounted
for the reduction in standby charges liability of Rs. 15.60 Crore as
well as interest amount determined by ATE as payable by TPC to the
Company
(B) Take or Pay and Additional Energy Charges:
Pursuant to the order passed by the MERC dated December 12, 2007, in
case No. 7 of 2002, TPC has claimed an amount of Rs. 323.87 Crore
towards the following:
Pursuant to the order passed by the Maharashtra Electricity Regulatory
Commission (MERC) dated December 12, 2007 in case No. 7 of 2002, TpC
has claimed an amount of Rs. 323.87 Crore
(a) Difference in the energy charge for energy supplied by TPC at 220
kV interconnection for the period March 2001 to May 2004 along with
interest at 24% per annum up to December 31, 2007, and
(b) Minimum offtake charges for energy for the years 1 998-99 to
1999-2000 along with interest at 24% per annum up to December 31, 2007.
In an appeal filed by the Company, ATE held that the amount in the
matter (a) above is payable by the Company along with interest at State
Bank of India prime lending rate for short term borrowings. The matter
(b) is remanded to MERC for redetermination. The Company has filed an
appeal against the said order before the Supreme Court, which while
admitting the appeal, has restrained TPC from taking any coercive
action in respect of the matter stated in (a) above and TPC has also
filed an appeal against the said order. The Company has complied with
the interim order directions of depositing Rs. 25 Crore with the
Registrar of Supreme Court and providing a Bank Guarantee of Rs. 9.98
Crore. The said amount is disclosed under Contingent Liability in Note
26(a)(iii) above.
5. Revenue from Sale of Electrical Energy and Regulatory Matters:
a. Regulatory Assets
In accordance with accounting policy (Refer Note 1 (d) (i)), the
Company has accrued Rs. 545.79 Crore (Rs. 251.46 Crore) during the year
as revenue gap under ''Income from Sale of Electricity'' and the
cumulative revenue gap as on March 31, 2013 of Rs. 2,862.00 Crore (Rs.
2,316.21 Crore) has been shown as regulatory assets in the balance
sheet. Based on management estimate, an amount of Rs. 401.71 Crore (Rs.
300 Crore) being recoverable in the subsequent year has been included
in Other Current Assets and the balance amount of Rs. 2,460.29 Crore
(Rs. 2,016.21 Crore) has been included in Other Non Current Assets.
b. In accordance with the MERC tariff regulation for determination of
tariff, the income-tax paid is considered for tariff determination
(truing up). Accordingly, the Company has considered Rs. 72.62 Crore
(Rs. 45.41 Crore) of deferred tax liability for the year arising out of
differences in rates of depreciation between MERC and income-tax as
"Net tax to be recovered in future tariff determination". Similarly,
the deferred tax liability of Rs. 189.42 Crore (Rs. 82.47 Crore) on
account of timing difference on taxability of regulatory income
accounted in the books is treated as "Net tax to be recovered in future
tariff determination".
6. Investment in Delhi Airport Metro Express Private Limited:
As a result of transfers consequent to which 65% of the shares of Delhi
Airport Metro Express Private Limited (DAMEPL) are held by Reliance
Delhi Metro Trust for the benefit of the Company, DAMEPL has become an
"Associate" and has ceased to be a subsidiary for the purposes of AS 23
(Accounting for Investments in Associates in Consolidated Financial
Statements) and AS 21 (Consolidated Financial Statements) respectively.
However, as required by the Concession and other applicable Agreements
the Company continues to incur certain financial obligations and has
during the year ended March 31, 2013 provided further financial
assistance to DAMEPL of Rs. 227.77 Crore. The validity of the transfers
and the consequential reclassification of DAMEPL as an Associate is
confirmed by legal advice obtained by the Company.
Considering inter alia the claims of the DAMEPL against Delhi Metro
Rail Corporation (DMRC) which are presently, the subject matter of
arbitration proceedings, it is not considered necessary to provide for
any diminution of the investment or loss in respect of Company''s
investments aggregating to Rs. 1,047.72 Crore (Rs. 819.96 Crore) in
equity shares and subordinated debt of DAMEPL.
7. Scheme of Amalgamation of three wholly owned subsidiaries with the
Company:
Pursuant to the approval of the Board vide resolution dated August 14,
2012 and the sanction of Scheme of Amalgamation between Reliance
Bhavnagar Power Private Limited (RBPPL) and Reliance Infrastructure
Engineers Private Limited (RIEPL) and Reliance Jamnagar Power Private
Limited (RJPPL) with the Company by the Hon''ble High Court of
judicature at Bombay on February 22, 201 3, the assets and liabilities
of the erstwhile companies RBPPL, RIEPL and RJPPL, the wholly owned
subsidiaries of the Company were transferred and vested in the Company
with effect from the appointed date February 1, 2013.
In accordance with the scheme so sanctioned, the following accounting
treatment, inter alia has been given to give effect to the Scheme:
a) All Assets and Liabilities (Net) amounting to Rs. 1,149.77 Crore, of
the Subsidiaries have been recorded in the books of the Company at
their respective fair values, and corresponding equivalent amount is
credited to the Capital Reserve.
b) Investments in RBPPL, RIEPL and RJPPL amounting to Rs. 1,147.32
Crore have been written off and an equivalent amount has been withdrawn
from the General Reserve. The Company has been legally advised that
crediting of the said amount in Statement of Profit and Loss is in
compliance with Revised Schedule VI to the Act.
Had the Scheme not prescribed this treatment and the Company followed
the accounting treatment prescribed under Accounting Standard 14
relating to Accounting for amalgamations, General Reserve would have
been higher and Capital Reserve would have been lower by Rs. 1,147.32
Crore.
There were no significant difference in the accounting policies
followed between the erstwhile Companies and the Company as on the
appointed date.
The figures for the previous year do not include figures for the
erstwhile RBPPL, RIEPL and RJPPL and accordingly the current year
figures are not comparable to those of the previous year.
Consequent upon the amalgamation, the authorized share capital of the
Company has increased from Rs. 1,950 Crore to Rs. 2,050.06 Crore by way
of increase in number of equity shares of Rs. 10 each from 35,00,00,000
to 45,00,60,000.
8. Provision for Extraordinary and Exceptional Items:
The Hon''ble High Court of Judicature of Bombay had sanctioned the
Scheme of Amalgamation of Reliance Infraprojects Limited (RInfl) with
the Company on March 30, 201 1 with appointed date being April 01,
2010. The clause 2.3.8 of the Scheme states that the Board of Directors
can withdraw an amount not exceeding Rs. 3,000 Crore out of the General
Reserve and which may be reorganised as "Provision for Extraordinary &
Exceptional Items" to meet up any extraordinary and exceptional items
upto March 31, 2013. Any balance remaining in the said account shall be
credited back to General Reserve.
During the year, the Company has identified certain Exceptional Items
aggregating to Rs. 692.53 Crore consisting of Loss on sale of
Investments in Noida Global SEZ Private Limited (NgSpL) of Rs. 70.67
Crore , Write off of Bad Debts of Rs. 604.14 Crore and Loss on
Derivative transactions of Rs. 17.72 Crore, which have been debited in
the Statement of Profit and Loss and pursuant to the above clause, an
equivalent amount has been withdrawn from the "Provision for
Extraordinary and Exceptional Items" created out of General Reserve and
credited to Statement of Profit and Loss. The Company has been legally
advised that crediting of the said amount in Statement of Profit and
Loss is in compliance with Revised Schedule VI to the Act.
Had the scheme not prescribed the above treatment, the profit before
tax for the year would have been lower by Rs. 692.53 Crore and the
General Reserve would have been higher by an equivalent amount. The
above treatment as prescribed by the Scheme overrides the relevant
provisions of Accounting Standard 5 "Net profit or Loss for the period,
Prior Period Items and Changes in Accounting Policies".
9. In line with the notification dated December 29, 201 1 issued by
the Ministry of Corporate Affairs, the Company has exercised the option
given in the Paragraph 46A of the Accounting Standard-11 "The Effect of
Change in Foreign Exchange Rates" of capitalising the foreign exchange
loss/gain arising on long term foreign currency monetary items relating
to acquisition of depreciable capital assets and depreciating the same
over the balance life of such assets and in other cases amortising the
foreign exchange loss/gain over the balance period of such long term
foreign currency monetary items. Accordingly, the Company has carried
forward the unamortised portion of net gain of Rs. 1 56.22 Crore (Rs.
109.55 Crore) in "Foreign Currency Monetary Item Translation Difference
Account" and the same is grouped under ''Reserves and Surplus".
10. During the year, based on the valuation made by the approved
valuer, the Company revalued its freehold land, building and plant and
machinery located at Goa, Samalkot and Chitradurg w.e.f. April 01. 2012
as per the replacement cost method and incremental value on revaluation
amounting to Rs. 495.69 Crore has been added to Gross Block of Fixed
assets and credited to Revaluation Reserve. Consequent to revaluation,
there is an additional charge of depreciation of Rs. 26.05 Crore and
equivalent amount has been withdrawn from the Revaluation Reserve,
which has no impact on the profit for the year.
11. During the year, the Company has sold 5,30,51,807 equity shares of
Reliance Power Limited (RPower), an associate Company resulting in
reduction of the Company''s holding of RPower from 38.41% to 36.52%. The
profit of Rs. 418.34 Crore on sale of these shares has been shown as
exceptional item.
12. Disclosure under Accounting Standard 15 (revised 2005) "Employee
Benefits":
The Company has classified various employee benefits as under:
(A) Defined contribution plans
(a) Provident fund
(b) Superannuation fund
(c) State defined contribution plans
- Employers'' Contribution to Employees'' State Insurance
- Employers'' Contribution to 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 trustees of the Reliance Infrastructure Limited
Officer''s Superannuation Scheme. Under the schemes, the Company is
required to contribute a specified percentage of payroll cost to the
retirement benefit schemes to fund the benefits. These funds are
recognized by the Income tax authorities.
(B) Defined Benefit Plans
(a) Provident Fund (Applicable to certain employees)
(b) Gratuity
(c) Leave Encashment
The guidance on implementing AS 15, Employee Benefits (revised 2005)
issued by Accounting Standard Board states benefit involving employee
established provident funds, which require interest shortfalls to be
recompensed are to be considered as defined benefit plans. As per the
audited accounts of Provident Fund Trust maintained by the Company, the
shortfall arising in meeting the stipulated interest payment liability,
if any, gets duly provided for, Leave encashment is payable to eligible
employees who have earned leaves, 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 independent actuary, as at the Balance Sheet date, based
on the following assumptions:
13. The Company 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 Act, is
not applicable to the Company
14. Disclosure under Micro, Small and Medium Enterprises Development
Act, 2006:
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 and relied upon by the auditors.
15. Interest in Jointly Controlled Operations:
The Company along with M/s. Geopetrol International Inc. and Reliance
Natural Resources Limited *(the consortium) was allotted 4 Coal Bed
Methane (CBM) blocks from Ministry of Petroleum and Natural Gas (Mo
PNG) covering an acreage of 3,266 square kilometers in the States of
Madhya Pradesh, Andhra Pradesh and Rajasthan. The consortium had
entered into a production sharing agreement with Government of India
for exploration and production of these four CBM blocks. The Company as
part of the consortium has 45% share in each of the four blocks. M/s
Geopetrol International Inc is the operator on behalf of the consortium
for all the four CBM blocks.
Also the Company along with M/s. Geopetrol International Inc, Naftogaz
India Private Limited and Reliance Natural Resources Limited *(the
consortium) was allotted oil block from Ministry of Petroleum and
Natural Gas (Mo PNG), in the State of Mizoram under the New Exploration
Licensing Policy (NELP - VI) round, covering an acreage of 3,619 square
kilometers and the consortium had signed an agreement with the
Government of India for exploration and production of an Oil and Gas
block. The Company as part of the consortium has 70% share in the
block. M/s Naftogaz India Private Limited is the operator on behalf of
the consortium for the block
16. Power Banking:
The cost of electricity purchased is net of cost incurred towards units
purchased and banked with other parties and / or units banked by other
parties with us, both on loan basis. Such transactions remaining
unsettled at the year end, is carried forward under Short Term Loans
and Advances at the value of purchase on the date of the transactions
when the units are banked.
17. Disclosure as required under AS - 19 :
Disclosure as required under AS - 19 "Accounting for Leases" as
prescribed under Companies (Accounting Standards) Rules, 2006 is given
below:
(a) The Company has entered into cancellable / non-cancellable leasing
agreement for office, residential and warehouse premises renewable by
mutual consent on mutually agreeable terms.
(b) Future minimum lease payments under non-cancellable operating lease
are as under:
18. The Ministry of Corporate Affairs, Government of India, vide
General Circular No.2 and 3 dated February 08, 2011 and February 21,
2011 respectively has granted a general exemption from compliance with
section 212 of the Act, subject to conditions stipulated in the
circular. The Company has satisfied the conditions stipulated in the
circular and hence is entitled to the exemption. Necessary information
relating to the subsidiaries has been included in the Consolidated
Financial Statements.
19. Figures for the previous year have been
regrouped/reclassified/rearranged wherever necessary to make them
comparable to those for the current year. Figures in bracket indicate
previous year''s figures. @Rs. represents figures less than Rs. 50,000
which have been shown at actuals in brackets with @.
Mar 31, 2012
1. Change in accounting policy:
(a) Dividend on investment in subsidiary company:
Till the year ended March 31, 2011, the Company, in accordance with the
pre-revised Schedule VI requirement was recognizing dividend declared
by subsidiary companies after the reporting date in current year's
Statement of Profit and Loss if such dividend pertained to the period
ending on or before the reporting date. The Revised Schedule VI,
applicable for financial years commencing on or after April 01, 2011,
does not contain this requirement. Hence, the Company has changed its
accounting policy for recognition of dividend income from subsidiary
companies. In accordance with the revised policy, which is also in
compliance with AS 9 Revenue Recognition, the Company recognizes
dividend as income only when the right to receive the same is
established by the reporting date.
(b) Depreciation of Fixed Assets pertaining to Electricity Business:
Pursuant to the General Circular No. 31 / 2011 (No.51 /23/2011
-CL-III) dated 31st May-11 from Ministry of Corporate Affairs, it was
clarified that the rates of depreciation and methodology notified under
Electricity Act, 2003 for electricity business prevails over the rates
notified under Schedule XIV to the Companies Act, 1956. As the rates
prescribed under the Electricity Act being a special Act and specific
for the industry prevails over the general rates prescribed under
Schedule XIV to the Companies Act, 1956 applicable to all types of
industries, the Company has revised its accounting policy and
methodology relating to charging of depreciation with effect from April
1, 2009 following the rates and methodology notified by the respective
electricity regulators. The Company has obtained legal opinion in
support of adopting revised accounting policy. Accordingly, accumulated
depreciation of Rs. 227.18 Crore, after transfer of Rs. 52.31 Crore to
revaluation reserve and Rs. 4.97 Crore to service line contribution
reserve being the write back pertaining to the revalued portion /
service line assets for the years 2009-10 and 2010-11, has been written
back during the current financial year and included in Other Operating
Income. Similarly, the depreciation charge for the current year ended
March 31, 2012 is lower and profit before tax is higher by Rs. 55.96
Crore on account of such change.
2.1 Terms / Rights attached to equity shares:
(a) Voting
The Company has only one class of equity shares having a par value of Rs.
10 per share. Each holder of equity shares is entitled to one vote per
share.
(b) Dividends
The Company declares and pays dividends in Indian rupees. The dividend
proposed by the Board of Directors is subject to the approval of the
shareholders in the ensuing Annual General Meeting.
During the year ended March 31, 2012, the amount of per share dividend
recognised as distributions to equity shareholders was Rs. 7.30 (Rs. 7.20)
(c) Liquidation
In the event of liquidation of the Company, the holders of equity
shares will be entitled to receive all of the remaining assets of the
Company, after distribution of all preferential amounts. The
distribution will be in proportion to the number of equity shares held
by the shareholders.
2.2 Buy-back of Equity Shares:
Pursuant to the approval of the Board of Directors of the Company, for
buy-back of equity shares under Section 77A of the Act to the extent of
less than 10% of the paid-up equity share capital and free reserves of
the Company aggregating not exceeding Rs. 1,000 Crore, the Company
bought-back 44,30,262 (Nil) equity shares of Rs. 10 each during the year
ended March 31, 2012 through open market transactions at an aggregate
value of Rs. 234.88 Crore (Rs. Nil), by utilising the Securities Premium
account to the extent of Rs. 230.45 Crore ( Rs. Nil) and the Capital
Redemption Reserve has been created out of the General Reserve for Rs.
4.43 Crore (Rs. Nil) being the nominal value of shares bought- back in
terms of Section 77A of the Act.
Aggregate number of shares bought back during the period of five years
immediately preceding the reporting date - 1,56,90,262 (1,12,60,000)
Security:
Non Convertible Debentures referred above to the extent of:
a. Rs. 625 Crore are secured by way of first charge, ranking pari-passu
with the charges created in favour of the Company's existing and
proposed Lenders on Company's fixed assets, both present and future,
located at its plants situated at Goa and Samalkot and specific
premises at Hyderabad.
b. Rs. 850 Crore are secured by way of first charge, ranking pari-passu
with the charges created in favour of the Company's existing and
proposed Lenders on Company's certain fixed assets, both present and
future, located at its plant situated at Dahanu and on Company's
specific premises in Mumbai.
c. Rs. 1,000 Crore are secured by way of first charge, ranking
pari-passu with the charges created in favour of the Company's existing
and proposed Lenders on specific land and buildings and fixed assets of
Mumbai Distribution division of the Company.
The term loans of Rs. 950 Crore are secured as under:
a. Rs. 350 Crore from Central Bank of India is secured by way of
pari-passu charge on certain fixed assets of Mumbai Distribution
Business.
b. Rs. 300 Crore from Central Bank of India is secured by way of
pari-passu charge on certain fixed assets of EPC business.
c. Rs. 300 Crore from South Indian Bank is secured by way of pari-passu
charge on certain fixed assets of Mumbai Transmission Business.
Maturity Profile and rate of interest of Non Convertible Debentures
(NCD) & External Commercial Borrowings (ECB) are as under:
3. (a) Contingent Liabilities:
i) Counter guarantees given to banks against guarantees issued by the
banks on behalf of the jointly controlled operations aggregate to Rs.
9.58 Crore (Rs. 19.91 Crore) and for subsidiaries and associates Rs. 385.75
Crore (Rs. 385.75 Crore).
ii) Corporate Guarantees given to banks and other parties aggregating Rs.
2,620.74 Crore (Rs. 2,923.97 Crore) in respect of financing facilities
granted to subsidiaries /associates /other body corporates (including
in respect of joint venture Rs. 2.45 Crore (Rs. 2.45 Crore).
iii) Claims against the Company not acknowledged as debts and under
litigation aggregates to Rs. 1,947.94 Crore (Rs. 1,459.82 Crore). These
include claim from suppliers aggregating to Rs. 293.53 Crore (Rs. 268.48
Crore), income tax claims Rs. 1,524.99 Crore (Rs. 1,061.92 Crore), other
claims Rs. 6.95 Crore (Rs. 6.95 Crore) and claims of Rs. 122.47 Crore
(Rs. 122.47 Crore) from sales tax authorities which, if materialised,
will be recovered from the customers.
iv) The Company's application for compounding in respect of its ECB of
USD 360 million has been deemed by the Reserve Bank of India (RBI) as
never to have been made subsequent to the withdrawal of the compounding
application. Accordingly, there is no liability in respect of the
compounding fee of Rs. 124.68 Crore earlier specified by RBI. The
Company is legally advised that it is in compliance with the
regulations under the Foreign Exchange Management Act, 1999.
Accordingly, no provision is considered necessary in this regard.
(b) Capital and Other Commitments:
i) Estimated amount of contracts remaining unexecuted on capital
account and not provided for Rs. 299.81 Crore (Rs. 53.55 Crore).
ii) Uncalled liability on partly paid shares Rs. 10.70 Crore (Rs. 83.83
Crore).
iii) The Company has given equity / fund support for setting up of
projects / cost overrun in respect of various infrastructure and power
projects being set up by company's subsidiaries and associates; the
amounts of which currently are not ascertainable.
(d) Details of Material Transactions with Related Party:
(i) Transactions during the year (Balance Sheet heads)
Guarantees and Collaterals provided to MMOPL Rs. 148.69 Crore. Deposit
given to RICL Rs. 99.32 Crore ,RSOPL Rs. 33.74 Crore and MMOPL Rs. 99.73
Crore. Deposits returned by DATL Rs. 630.15 Crore and KMTL Rs. 193.00
Crore, and HKTL Rs. 177.00 Crore. Recoverable Expenses incurred for RCPL
Rs. 2.21 Crore and NGSPL Rs. 3.98 Crore. Recoverable Expenses incurred by
SPL Rs. 4.03 Crore and SaPoL Rs. 5.77 Crore. Investment in Equity Shares of
RCPL Rs. 296.99 Crore, RPTL Rs. 165.73 Crore, BRPL Rs. 284.20 Crore, BYPL Rs.
215.60 Crore and RInvL Rs. 302.83 Crore. Subordinate debt given to DAMEPL
Rs. 208.00 Crore. Subordinate debt received back from HKTL Rs. 181.41 Core,
DATL Rs. 493.01 Crore and KMTL Rs. 196.71 Crore. Advance against
Investments paid to JRTL Rs. 10.53 Crore and PKTCL Rs. 22.20 Crore.
Advance against Investments received back from BYPL Rs. 17.15 Crore,
PKTCL Rs. 22.20, RPTL Rs. 16.50 Crore and SUTL Rs. 11.00 Crore. Advances
returned to JIPL Rs. 100 Crore. Purchase of Fixed assets from LAPL Rs. 0.05
Crore. Reduction / cancellation of Investments RIEPL Rs. 54.30 Crore and
RICL Rs. 10.29 Crore.
(Previous Year: Guarantees and Collaterals provided to JRTL Rs. 389.00
Crore and DATL Rs. 107.89 Crore. Deposit given to HKTL Rs. 177.00 Crore,
DATL Rs. 627.00 Crore and KMTL Rs. 193.00 Crore. Deposit returned by RICL Rs.
83.17 Crore and RETL Rs. 35.75 Crore. Recoverable Expenses incurred for
REGL Rs. 24.71 Crore and REL Rs. 55.10 Crore. Recoverable Expenses incurred
by RComm Rs. 1.67 Crore and BKPL Rs. 0.29 Crore. Investment in Equity
Shares of RCPL Rs. 165.14 Crore, RPTL Rs. 376.55 Crore, SUTL Rs. 171.59
Crore and GFTL Rs. 168.62 Crore. Warrants money received from AAAPVPL Rs.
1,570.99 Crore. Warrants money of AAAPVPL converted into equity shares
Rs. 2,094.65 Crore. Subordinate debt given to HKTL Rs. 261.60 Crore, DATL
Rs.664.32 Crore and KMTL Rs. 284.60 Crore. Advance against Investments paid
to JRTL Rs. 53.10 Crore and PSTL Rs. 237.92 Crore. Advance against
Investments received back from RCPL Rs. 17.25 Crore. Purchase of
Intangible Assets from DSTL Rs. 355 Crore, NKTL Rs. 275 Crore and PSTL Rs.
1,780 Crore. Tax collected at source from DSTL Rs. 7.10 Crore, NKTL Rs.
5.50 Crore and PSTL Rs. 35.60 Crore. Advances received from CPPL Rs.
1,240.36 Crore, JIPL Rs. 1,000.00 Crore and SaPoL Rs. 787.44 Crore.)
(ii) Balance sheet heads (Closing balance)
Trade payables, Advances received and other liabilities for receiving
of services on revenue and capital account CPPL Rs. 1,214.47 Crore, PSTL
Rs. 890.00 Crore and CAPL Rs. 726.38 Crore. Investment in Equity RPTL Rs.
542.33 Crore and RePL Rs. 1,720.00 Crore. ICDs placed RSOPL Rs. 33.74 Crore
and MMOPL Rs. 99.73 Crore. Subordinate debt PSTL Rs. 259.91 Crore, DATL Rs.
187.35 Crore and DAMEPL Rs. 819.95 Crore. Advance against Investments
JRTL Rs. 63.98 Crore and PKTCL Rs. 22.20 Crore. Trade Receivables, Advance
given and other receivables for rendering services SaPoL Rs. 2,076.46
Crore and RPTL Rs. 11.83 Crore. and SAPL Rs. 529.73 Crore.
(Previous Year: Trade payables, Advances received and other liabilities
for receiving of services on revenue and capital account CPPL Rs.
1,220.22 Crore, JIPL Rs. 996.10 Crore, SPL Rs. 1,244.88 Crore, PSTL Rs.
890.00 Crore, SaPoL Rs. 767.94 Crore and CAPL Rs. 732.26 Crore. Investment
in Equity RInvl Rs. 568.57 Crore and RePL Rs. 1,720.00 Crore. ICDs placed
HKTL Rs. 177.00 Crore, DATL Rs. 627.00 Crore and KMTL Rs. 193.00 Crore.
Subordinate debt HKTL Rs. 261.60 Crore, DATL Rs. 664.32 Crore, KMTL Rs.
284.60 Crore and DAMEPL Rs. 611.95 Crore. Advance against Investments
JRTL Rs. 53.45 Crore, MMOPL Rs. 36.86 Crore and PSTL Rs. 237.92 Crore.
Trade Receivables, Advance given and other receivables for rendering
services WRTG Rs. 209.68 Crore, WRTM Rs. 67.03 Crore. REGL Rs. 42.94 Crore
and REL Rs. 128.06 Crore.)
(iii) Income heads
Sale of Electricity from RETL Rs. 150.42 Crore. Gross Revenue of EPC and
Contracts Division from SPL Rs. 4,269.15 Crore and SaPoL Rs. 5,652.57
Crore. Dividend received from UPL Rs. 1.19 Crore. Rent / Lease rent
earned from RComm Rs. 0.76 Crore. Interest earned from WRTG Rs. 5.76 Crore,
WRTM Rs. 2.66 Crore , MMOPL Rs. 2.81 Crore and RICL Rs. 5.57 Crore. Other
Income RePL Rs. 6.89 Crore.
(Previous Year: Gross Revenue of EPC and Contracts Division from WRTM Rs.
401.04 Crore, SPL Rs. 547.29 Crore, CAPL Rs. 599.43 Crore, GFTL Rs. 278.60
Crore and VIPL Rs. 336.43 Crore. Dividend received from UPL Rs. 0.40 Crore.
Rent / Lease rent earned from RComm Rs. 0.51 Crore. Interest earned from
WRTG Rs. 5.06 Crore, WRTM Rs. 6.00 Crore and RICL Rs. 6.09 Crore. Other
Income RePL Rs. 4.86 Crore, PSTL Rs. 1.88 Crore and RNRL Rs. 4.72 Crore).
(iv) Expenses heads
Purchase of electricity (including Open access charges) from RETL Rs.
61.53 Crore and REIL Rs. 31.13 Crore. Purchase of Electricity-
Compensation Bills / IEX from RETL Rs. 82.84 Crore. Purchase / Services
on Revenue account from RGI Rs. 14.82 Crore and RePL Rs. 62.75 Crore.
Purchase of other items on Capital account from LAPL Rs. 0.05 Crore.
Receiving of Services from RICL Rs. 1.97 Crore. Rent paid to RICL Rs. 0.77
Crore and RIIPL Rs. 4.16 Crore. Dividend paid AAAPVPL Rs. 90.47 Crore.
(Previous Year: Purchase / Services on Revenue account from REIL Rs.
27.87 Crore, RNRL Rs. 76.49 Crore. Purchase of electricity (including
Open access charges) from RETL Rs. 541.20 Crore. Purchase of Electricity-
Compensation Bills / IEX from RETL Rs. 170.33 Crore.
Purchase of other items on Capital account from RComm Rs. 0.89 Crore.
Receiving of Services from REIL Rs. 11.78 Crore, RNRL Rs. 28.71 Crore, RePL
Rs. 23.18 Crore and RGIRs. 18.13 Crore. Rent paid to RICL Rs. 0.76 Crore and
RIIPL Rs. 1.93 Crore. Dividend paid AAAPVPL Rs. 73.20 Crore.)
(v) Salaries, Commission and Other Benefits paid / payable to Shri Anil
D Ambani Rs. 5.50 Crore (Rs. 11.01 Crore), Shri S.C. Gupta Rs. 0.84 Crore
(Rs.1.12 Crore) and Shri Lalit Jalan Rs. 0.84 Crore (Rs. 0.81 Crore).
4. Segment Reporting:
Basis of Preparation: The Company operates in two Business Segments:
Electrical Energy and Engineering, Procurement and Contracts (EPC).
Business segments have been identified as reportable primary segments
in accordance with Accounting Standard-17 Segment Reporting, as
prescribed under Companies (Accounting Standards), Rules, 2006, taking
into account the organisation and internal reporting structure as well
as evaluation of risks and returns from these segments. The inter
segment pricing is effected at cost. Segment accounting policies are in
line with the accounting policies of the Company.
In the case of electrical energy, the Company operates a 500 MW Thermal
Power Station at Dahanu, a 220 MW combined cycle power plant at
Samalkot, a 48 MW combined cycle power plant at Mormugao, a 7.59 MW
Windfarm at Chitradurga and also purchases power from third parties and
supplies the power through the Company's own distribution grid. The
Company supplies power to residential, industrial, commercial and other
consumers. EPC segment renders comprehensive value-added services in
construction, erection and commissioning.
Geographical Segments: The Company's operations are mainly confined
within India. The Company does not have material earnings from business
segments outside India. As such, there are no reportable geographical
segments.
5. (A) Standby Charges:
In the matter of liability of Rs. 515.60 Crore of standby charges with
The Tata Power Company Limited (TPC) determined by MERC for the period
April 1, 1998 to March 31, 2004, the Appellate Tribunal of Electricity
(ATE) determined the total liability at Rs. 500 Crore and directed TPC to
refund Rs. 354 Crore (inclusive of interest of Rs. 15 Crore upto March 31,
2004) to the Company plus interest @ 10% p.a. commencing from April 1,
2004 till the date of payment. Against the said order, TPC filed an
appeal with the Supreme Court. The Hon'ble Supreme Court passed an
interim order dated February 7, 2007 granting stay of the impugned
order of the ATE subject to the condition that, TPC furnish a bank
guarantee in the sum of Rs. 227 Crore and, in addition, deposit a sum of
Rs. 227 Crore with the Registrar General of the Court which may be
withdrawn by the Company subject to the Company giving an undertaking
that in the event of the appeal being decided against the Company,
wholly or in part, the amount as may be found refundable by the Company
shall be refunded to TPC without demur together with interest as may be
determined by the Court. The Company accordingly withdrew the amount of
Rs. 227 Crore after complying with the conditions specified and has
accounted the said amount as Other Liabilities pending final
adjustment. Moreover, pending final order of the Hon'ble Supreme Court,
the Company has not accounted for the reduction in standby charges
liability of Rs. 15.60 Crore as well as interest amount determined by ATE
as payable by TPC to the Company.
(B) Take or Pay and Additional Energy Charges:
Pursuant to the order passed by MERC dated December 12, 2007, in case
No. 7 of 2002, TPC has claimed an amount of Rs. 323.87 Crore towards the
following Pursuant Pursuant to the order passed by the MERC dated
December 12, 2007, in case No. 7 of 2002, TPC has claimed an amount of
Rs. 323.87 Crore towards the following:
Pursuant to the order passed by the Maharashtra Electricity Regulatory
Commission (MERC) dated December 12, 2007 in case No. 7 of 2002, TPC
has claimed an amount of Rs. 323.87 Crore
(a) Difference in the energy charge for energy supplied by TPC at 220
kV interconnection for the period March 2001 to May 2004 along with
interest at 24% per annum up to December 31, 2007, and
(b) Minimum offtake charges for energy for the years 1998-99 to
1999-2000 along with interest at 24% per annum up to December 31, 2007.
In an appeal filed by the Company, ATE held that the amount in the
matter (a) above is payable by the Company along with interest at State
Bank of India prime lending rate for short term borrowings. The matter
(b) is remanded to MERC for redetermination. The Company has filed an
appeal against the said order before the Supreme Court, which while
admitting the appeal, has restrained TPC from taking any coercive
action in respect of the matter stated in (a) above and TPC has also
filed an appeal against the said order. The Company has complied with
the interim order directions of depositing Rs. 25 Crore with the
Registrar of Supreme Court and providing a Bank Guarantee of Rs. 9.98
Crore. The said amount is disclosed under Contingent Liability in Note
27(a)(iii) above.
6. Revenue from Sale of Electrical Energy and Regulatory Matters:
(a) Regulatory Assets
In accordance with accounting policy (Refer Note 1 (d) (i)) the Company
has accrued Rs. 254.13 Crore (Rs. 461.97 Crore) during the year as
unbilled revenue under 'Income from Sale of Electricity' and the
cumulative revenue gap as on March 31, 2012 of Rs. 2,318.88 Crore (Rs.
2,064.75 Crore) has been shown under assets in the balance sheet.
Based on management estimate, an amount of Rs. 300 Crore (Rs. 32.34 Crore)
being recoverable in the subsequent year has been included in Other
Current Assets and the balance amount of Rs. 2,018.88 Crore (Rs. 2,032.41
Crore) has been included in Other Non Current Assets.
(b) In accordance with the MERC tariff regulation for determination of
tariff, the income-tax paid is considered for tariff determination
(truing up). Accordingly, the Company has considered Rs. 45.41 Crore (Rs.
132.78 Crore) of deferred tax liability for the year arising out of
differences in rates of depreciation between MERC and income-tax as
"Net tax to be recovered in future tariff determination". Similarly,
the deferred tax liability of Rs. 82.47 Crore ( Rs. Nil) on account of
timing difference on taxability of regulatory income accounted in the
books is treated as "Net tax to be recovered in future tariff
determination".
7. Scheme of Arrangement between the Company and Reliance Energy
Limited (REL) and Reliance Infraventures Limited (RInvl) and Reliance
Goa & Samalkot Power Limited (RGSPL) and Reliance Energy Generation
Limited (REGL) and Reliance Property Developers Limited (RPDL) and
Reliance Infrastructure Engineers Private Limited (RIEPL)
Pursuant to the approval of Board vide circular resolution dated
January 17, 2012 and the sanction of Scheme of Arrangement between REL,
RInvl, RGSPL, REGL, RPDL and RIEPL with the Company by the Hon'ble High
Court of judicature at Bombay on April 20, 2012, the assets and
liabilities of the erstwhile companies REL, RInvl, REGL, RGSPL, RPDL,
the wholly owned subsidiaries of the Company were transferred and
vested in the Company with effect from the appointed date February 1,
2012 and the assets and liabilities of the Container business of RIEPL,
a wholly owned subsidiary were transferred and vested in the Company
with effect from the appointed date April 1, 2011.
In accordance with the scheme so sanctioned, the following accounting
treatment, inter alia has been given to give effect to the scheme.
a) All Assets and Liabilities (Net) amounting to Rs. 1,212.60 Crore, of
the Subsidiaries have been recorded in the books of the Company at
their respective book value and corresponding equivalent amount is
credited to the Capital Reserve.
b) Investments in REL, REGL, RInvl, RGSPL and RPDL amounting to Rs.
987.00 Crore have been written off and an equivalent amount has been
withdrawn from the General Reserve. The Company has been legally
advised that crediting of the said amount in Statement of Profit and
Loss is in compliance with Revised Schedule VI to the Act.
Had the Scheme not prescribed this treatment and the company followed
the accounting treatment prescribed under Accounting Standard 14
relating to Accounting for amalgamations, General Reserve would have
been higher and Capital Reserve would have been lower by Rs. 1,212.60
Crore (Net).
There were no significant difference in the accounting policies
followed between the erstwhile Companies and the Company as on the
appointed date.
The figures for the previous year do not include figures for the
erstwhile REL, REGL, RInvl, RGSPL and RPDL and accordingly the current
year figures are not comparable to those of the previous year.
8. Scheme of Amalgamation of Reliance Infraprojects Limited (RInfl)
with the Company:
The Hon'ble High Court of Judicature of Bombay had sanctioned the above
Scheme on March 30, 2011 with appointed date being April 1, 2010. The
clause 2.3.8 of the Scheme states that the Board of Directors can
withdraw an amount not exceeding Rs. 3,000 Crore out of the General
Reserve and which may be reorganised as "Provision for Extraordinary &
Exceptional items" to meet up any extraordinary and exceptional items
upto March 31, 2013. Any balance remaining in the said account shall be
credited back to General Reserve.
During the year, the Company has identified certain Exceptional Items
aggregating to Rs. 933.42 Crore consisting of Cancellation of Investments
in RIEPL of Rs. 54.31 Crore, Write off of Bad Debts of Rs. 585.00 Crore and
Income Accrued on Investment of Rs. 294.11 Crore, which have been
debited in the Statement of Profit and Loss and pursuant to the above
clause, an equivalent amount has been withdrawn from the "Provision for
Extraordinary and Exceptional Items" created out of General Reserve and
credited to Statement of Profit and Loss. The Company has been legally
advised that crediting of the said amount in Statement of Profit and
Loss is in compliance with Revised Schedule VI to the Act.
Had the scheme not prescribed the above treatment, the profit before
tax for the year would have been lower by Rs. 933.42 Crore and the
General Reserve would have been higher by an equivalent amount.
9. During the year, in line with the notification dated December 29,
2011 issued by the Ministry of Corporate Affairs, the Company has
exercised the option given in the Paragraph 46A of the Accounting
Standard-11 "The Effect of Change in Foreign Exchange Rates" of
capitalising the foreign exchange loss / gain arising on long term
foreign currency monetary items relating to acquisition of depreciable
capital assets and depreciating the same over the balance life of such
assets and in other cases amortising the foreign exchange loss / gain
over the balance period of such long term foreign currency monetary
items. Accordingly, the Company has carried forward the unamortised
portion of Rs. 109.55 Crore as on March 31, 2012 and the same is grouped
under 'Other long term liabilities'. Had the Company followed earlier
practice of accounting the exchange difference in Statement of Profit
and Loss, the profit before tax for the year ended March 31, 2012 would
have been higher by Rs. 109.55 Crore.
10. Disclosure under Accounting Standard 15 (revised 2005) "Employee
Benefits":
The Company has classified various employee benefits as under:
(A) Defined contribution plans
a. Provident fund
b. Superannuation fund
c. State defined contribution plans
- Employers' Contribution to Employees' State Insurance
- Employers' Contribution to 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 trustees of the Reliance Infrastructure Limited
Officer's Superannuation Scheme. Under the schemes, the Company is
required to contribute a specified percentage of payroll cost to the
retirement benefit schemes to fund the benefits. These funds are
recognized by the Income tax authorities.
(B) Defined Benefit Plans
a. Provident Fund (Applicable to certain employees)
b. Gratuity
c. Leave Encashment
The guidance on implementing AS 15, Employee Benefits (revised 2005)
issued by Accounting Standard Board states benefit involving employee
established provident funds, which require interest shortfalls to be
recompensed are to be considered as defined benefit plans. As per the
audited accounts of Provident Fund Trust maintained by the Company, the
shortfall arising in meeting the stipulated interest payment liability,
if any, gets duly provided for. Pending the issuance of guidance note
from the Actuary Society of India, the Company's actuary has expressed
an inability to reliably measure provident fund liabilities.
Leave encashment is payable to eligible employees who have earned
leaves, 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 independent actuary, as at the Balance Sheet date, based
on the following assumptions:
11. The Company 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 Act, is
not applicable to the Company.
12. Revaluation of Tangible Assets:
The Company had, based on a valuation made by approved valuers,
revalued as at April 1, 2003 the Plant and Machinery located at Dahanu.
The revaluation of the same was based on the technological
obsolescence, the year of purchase, the maintenance levels and the
currency and customs duty variations as applicable. The resultant
appreciation aggregating to Rs. 752.17 Crore has been added to the Gross
Block of the Fixed Assets and credited to Revaluation Reserve.
Consequent to the revaluation, there is an additional charge for
depreciation for the year of Rs. 29.71 Crore (Rs. 53.96 Crore) and an
equivalent amount, has been withdrawn from Revaluation Reserve and
credited to the Statement of Profit and Loss. Pursuant to the change in
depreciation policy of Assets of Electricity business as explained in
Note No 2(b) above, the Company has recalculated the depreciation as
per the manner prescribed under the Electricity Regulations and
accordingly reversed the additional depreciation on revalued assets
amounting to Rs. 52.31 Crore pertaining to the years 2009-10 and 2010-11
in the Statement of profit and loss and an equivalent amount has been
transferred to revaluation reserve.
@ less than Rs. 50,000
# Except for these companies, all loans and advances stated above are
interest free.
Loans to employees have been considered to be outside the purview of
disclosure requirements.
* Merged with the Company (Refer Note 34)
As at the year-end, the Company-
(a) has no loans and advances in the nature of loans, wherein there is
no repayment schedule or repayment is beyond seven years and (b) has no
loans and advances in the nature of loans to firms / companies in which
directors are interested. (c) The above amounts exclude subordinate
debts.
(b) Pursuant to the clarification issued by the Institute of Chartered
Accountants of India on March 29, 2008 on accounting of derivatives,
the Company has for the year ended March 31, 2012 reversed / (provided)
unrealised loss of Rs. 58.68 Crore (Previous Year (Rs. 39.32 Crore)) on
account of revaluation of foreign exchange derivative instruments at
fair values as at the reporting year end. The provision for mark to
market losses towards the same as on March 31, 2012 amounts to Rs. 69.74
Crore (Previous Year Rs. 128.42 Crore).
13. Interest in Jointly Controlled Operations:
The Company along with M/s. Geopetrol International Inc. and Reliance
Natural Resources Limited *(the consortium) has been allotted 4 Coal
Bed Methane (CBM) blocks from Ministry of Petroleum and Natural Gas (Mo
PNG) covering an acreage of 3,266 square kilometers in the States of
Madhya Pradesh, Andhra Pradesh and Rajasthan. The consortium has
entered into a production sharing agreement with Government of India
for exploration and production of these four CBM blocks. The Company is
a non- operator and has 45% share in each of the four blocks.
Also the Company along with M/s. Geopetrol International Inc, Naftogaz
India Private Limited and Reliance Natural Resources Limited *(the
consortium) has been allotted oil block from Ministry of Petroleum and
Natural Gas (Mo PNG), in the State of Mizoram under the New Exploration
Licensing Policy (NELP - VI) round, covering an acreage of 3,619 square
kilometers and the consortium has signed an agreement with the
Government of India for exploration and production of an Oil and Gas
block. The Company is a non-operator and has 70% share in the block.
14. Power Banking:
The cost of electricity purchased is net of cost incurred towards units
purchased and banked with other parties and / or units banked by other
parties with us, both on loan basis. Such transactions remaining
unsettled at the year end, is carried forward under Short Term Loans
and Advances at the value of purchase on the date of the transactions
when the units are banked.
15. Disclosure as required under AS - 19 :
Disclosure as required under AS - 19 "Accounting for Leases" as
prescribed under Companies (Accounting Standards) Rules, 2006 is given
below:
(a) The Company has entered into cancellable / non-cancellable leasing
agreement for office, residential and warehouse premises renewable by
mutual consent on mutually agreeable terms.
*The Lease terms are renewable on a mutual consent of Lessor and
Lessee.
The lease rentals have been included under the head "Rent" under Note
no. "11 - Other Expenses".
16. The Ministry of Corporate Affairs, Government of India, vide
General Circular No.2 and 3 dated February 08, 2011 and February 21,
2011 respectively has granted a general exemption from compliance with
section 212 of the Act, subject to conditions stipulated in the
circular. The Company has satisfied the conditions stipulated in the
circular and hence is entitled to the exemption. Necessary information
relating to the subsidiaries has been included in the Consolidated
Financial Statements.
17. Figures for the previous year have been
regrouped/reclassified/rearranged wherever necessary to make them
comparable to those for the current year. Figures in bracket indicate
previous year's figures.
@'- represents figures less than Rs. 50,000 which have been shown at
actuals in brackets with @.
18. The financial statements for the year ended March 31, 2011 had
been prepared as per the applicable, pre-revised Schedule VI to the
Companies Act,1956 ('the Act'). During the year, the revised Schedule
VI notified under the Act has become applicable to the Company.
Accordingly, the Company has reclassified previous year figures to
conform to the current year's classification. The adoption of revised
schedule VI does not impact recognition and measurement principle
followed for preparation of financial statements. However, it has
significant impact on presentation and disclosures made in the
financial statements.
Mar 31, 2011
1. (a) Contingent Liabilities:
(i) counter guarantees given to banks against guarantees issued by the
banks on behalf of the joint ventures aggregate to Rs. 19.91 Crore (Rs. 1
0.50 Crore). Bank guarantees issued for performing its own obligations
are not considered as part of contingent liability,
(ii) Corporate Guarantees given to banks and other parties aggregating
Rs. 2,924.21 Crore (Rs. 2,367.88 Crore) in respect of financing facilities
granted to other body corporates (including in respect of joint venture
Rs. 2.45 Crore (Rs. 2.45 Crore)).
(iii) Uncalled liability on partly paid shares Rs. 83.83 Crore (Rs. 45.20
Crore)
(iv) Claims against the Company not acknowledged as debts and under
litigation aggregates to Rs. 1,337.35 Crore (Rs. 709.90 Crore). These
include claim from suppliers aggregating to Rs. 268.48 Crore (Rs. 243.43
Crore), income tax claims Rs. 1,061.92 Crore (Rs. 459.82 Crore) and other
claims Rs. 6.95 Crore (Rs. 6.95 Crore).
(v) The Company's application for compounding in respect of its ECB of
USD 360 million has been deemed by the Reserve Bank of India (RBI) as
never to have been made subsequent to the withdrawal of the compounding
application. Accordingly, there is no liability in respect of the
compounding fee of Rs. 1 24.68 Crore earlier specified by RBI. The
Company is legally advised that it is in compliance with the
regulations under the Foreign Exchange Management Act, 1999.
Accordingly, no provision is considered necessary in this regard
(b) Capital Commitments:
Estimated amount of contracts remaining unexecuted on capital account
and not provided for Rs. 53.55 Crore (Rs. 92.41 Crore)
2. Related Party Disclosure :
(Note no. 7 of Schedule 16 of Financial Statements)
As per Accounting Standard -18 as prescribed under the Companies
(Accounting Standards) Rules, 2006, the Company's related parties and
transactions are disclosed below:
(a) Parties where control exists:
Subsidiaries (a) Reliance Power Transmission Limited (RPTL)
(including step (b) Western Region Transmission (Gujarat) Private
Limited (WRTG)
down subsidiaries) (c) Western Region Transmission (Maharashtra)
Private Limited (WRTM)
(d) Talcher - II Transmission Company Limited (TTCL) w.e.f April 27,
2010
(e) North Karanpura Transmission Company Limited (NKTCL) w.e.f. May 20,
2010
(f) Reliance Infraventures Limited (RInvL)
(g) BSES Kerala Power Limited (BKPL)
(h) Noida Global SEZ Private Limited (NGSPL)
(i) Reliance Energy Trading Limited (RETL)
(j) Mumbai Metro One Private Limited (MMOPL)
(k) Parbati Koldam Transmission Company Limited (PKTCL)
(I) Delhi Airport Metro Express Private Limited (DAMEPL)
(m) CBD Tower Private Limited (CBDTPL)
(n) Tulip Realtech Private Limited (TRPL)
(o) Reliance Energy Generation Limited (REGL)
(p) Reliance Energy Limited (REL)
(q) Reliance Property Developers Limited (RPDL)
(r) Reliance Goa and Samalkot Power Limited (RGSPL)
(s) DS Toll Road Limited (DSTL)
(t) NKToll Road Limited (NKTL)
(u) SU Toll Road Private Limited (SUTL)
(v) TD Toll Road Private Limited (TDTL)
(w) TK Toll Road Private Limited (TKTL)
(x) GFToll Road Private Limited (GFTL)
(y) KM Toll Road Private Limited (KMTL)
(z) PS Toll Road Private Limited (PSTL)
(aa) HK Toll Road Private Limited ( HKTL) w.e.f. May 19, 2010
(bb) DA Toll Road Private Limited (DATL) w.e.f. May 26, 2010
(cc) Reliance Cementation Private Limited (RCPL)
(dd) Reliance Cement and Infra Private Limited (RCIPL)
(ee) Reliance Cement Corporation Private Limited (RCCPL)
(ff) Reliance Cement Works Private Limited (RCWPL)
(gg) Utility infrastructure & Works Private Limited (UIWPL) w.e.f.
December 28, 2010
(hh) Reliance Concrete Private Limited ( RCoPL) (erstwhile Reliance
Cement Private Limited) w.e.f. March 18, 2011
(ii) Reliance Airport Developers Private Limited (RADPL) (jj) Latur
Airport Private Limited (LAPL) (kk) Baramati Airport Private Limited
(BAPL) (11) Nanded Airport Private Limited (NAPL) (mm) Yavatmal Airport
Private Limited (YAPL) (nn) Osmanabad Airport Private Limited (OAPL)
(oo) Reliance infrastructure Engineers Private Limited (RIEPL) w.e.f.
March 25, 2011 (pp) Reliance Sealink One Private Limited ( RSOPL)
w.e.f. May 26, 2010 (b) Other related parties where transactions have
taken place during the year:
(i) Associates (including (a) Reliance infrastructure Engineers Private
Limited (RIEPL) upto March 24, 2011 subsidiaries of associates)
(b) Reliance infrastructure and Consultants Limited (RICL)
(c) Reliance Power Limited (RePL)
(d) Urthing Sobla Hydro Power Private Limited (USHPPL)
(e) Rosa Power Supply Company Limited (ROSA)
(f) Sasan Power Limited (SPL)
(g) Vidarbha Industries Power Limited (VIPL) (h) Chitrangi Power
Private Limited (CPPL)
(i) Tato Hydro Power Private Limited (THPPL)
(j) Siyom Hydro Power Private Limited (SHPPL)
(k) Jharkhand integrated Power Limited (JIPL)
(I) Coastal Andhra Power Limited (CAPL)
(m) Reliance Coal Resources Private Limited (RCRPL)
(n) Samalkot Power Limited (SaPoL) w.e.f. July 29, 2010
(o) JR Toll Road Private Limited (JRTL)
(p) Mumbai Metro Transport Private Limited (MMTPL)
(q) Metro One Operation Private Limited(MOOPL)
(ii) Joint Ventures (a) BSES Rajdhani Power Limited (BRPL)
(b) BSES Yamuna Power Limited (BYPL)
(c) Tamilnadu Industries Captive Power Company Limited (TICAPCO)
(d) Utility Powertech Limited (UPL)
(iii) Investing Party AAA Project Ventures Private Limited (AAAPVPL)
(iv) Persons having control over Shri Anil D. Amban investing party
(v) Key Management Personnel (a) Shri S.C.Gupta
(b) Shri Lalitjalan
(vi) Enterprises over which (a) Reliance Natural Resources Limited
(RNRL) upto October 14, 2010 person described in (iv) has (b) Reliance
Communications Limited (RComm) significant influence (c) Reliance
Innoventures Private Limited(REIL)
(d) Reliance Webstores Limited (RWeb)
(e) Reliance General insurance Company Limited (RGI)
(f) Reliance Capital Limited (RCap)
(g) Reliance Infratel Limited (RInfTL)
(h) Reliance Infocomm infrastructure Private Limited (RIIPL) (i)
Reliance Big Entertainment Private Limited (RBig)
(d) Details of Material Transactions with Related Party
(i) Transactions during the year (Balance Sheet heads)
Guarantees and Collaterals provided toJRTLRs. 389.00 Crore and DATL Rs.
107.89 Crore. Deposit given to HKTL Rs. 1 77.00 Crore, DATL Rs. 627.00
Crore and KMTL Rs. 193.00 Crore. Deposit returned by RICL Rs. 83.1 7 Crore
and RETL Rs. 35.75 Crore. Recoverable Expenses incurred for REGL Rs. 24.71
Crore and REL Rs. 55.10 Crore. Recoverable Expenses incurred by RComm Rs.
1.67 Crore and BKPL Rs. 0.29 Crore. Investment in Equity Shares of RCPL Rs.
165.14 Crore, RPTLRs. 376.55 Crore, SUTL Rs. 171.59 Crore and GFTLRs. 168.62
Crore. Warrants money received from AAAPVPL Rs. 1,570.99 Crore. Warrants
money of AAAPVPL converted into equity shares Rs. 2,094.65 Crore,
Subordinate debt given to HKTL Rs. 261.60 Crore, DATL Rs. 664.32 Crore and
KMTL Rs. 284.60 Crore. Advance againstinvestments paid to JRTL Rs. 53.10
Crore and PSTL Rs. 237.92 Crore. Advance againstinvestments received
back from RCPL Rs. 1 7.25 Crore. Purchase of Intangible Assets from DSTL
Rs. 355 Crore, NKTL Rs. 275 Crore and PSTLRs. 1,780 Crore. Tax collected at
source from DSTLRs. 7.10 Crore, NKTLRs. 5.50 Crore and PSTLRs. 35.60 Crore,
Advances received from CPPL Rs. 1,240.36 Crore, JIPL Rs. 1,000.00 Crore and
SaPoL Rs. 787.44 Crore,
(Previous Year: Guarantees and Collaterals provided to DAMEPL Rs. 489.51
Crore. Deposit given to RETL Rs. 75.00 Crore, RICL Rs. 78.55 Crore. Deposit
returned by BKPL Rs. 8.95 Crore, RICL Rs. 20.68 Crore, DSTL Rs. 7 7.60 Crore,
NKTL 110.97 Crore, RETL Rs. 75.00 Crore. Recoverable Expenses incurred
for REGL Rs. 18.23 Crore, RGSPL Rs. 73.95 Crore and PEL Rs. 72.97 Crore, RICL
Rs. 0.75 Crore, SPL Rs. 0.08 Crore, ROSA Rs. 0.27 Crore, REIL Rs. 0.05 Crore
and CAPL Rs. 0.02 Crore. Recoverable Expenses incurred by BKPL Rs. 0.07
Crore and MMOPL Rs. 0.07 Crore. Investment in Equity Shares ofRIEPLt
10.00 Crore, RETLt 10.00 Crore, RCPLt 53.78 Crore. Warrants money
received from AAAPVPL Rs. 2,361.70 Crore. Warrants money of AAAPVPL
converted into equity shares Rs. 1,820.62 Crore. Subordinate debt given
to SUTL Rs. 91.36 Crore, TDTL Rs. 56.18 Crore and TKTL Rs. 69.24 Crore.
Advance againstinvestments paid to DAMEPL Rs. 93.05 Crore, RInfL Rs. 66.27
Crore and GFTL Rs. 7 65.42 Crore. Advance againstinvestments received
back from RPTL Rs. 189.86 Crore, Purchase ofinvestments from RNRL Rs.
53.78 Crore. Sale of Fixed Assets to SPL Rs. 0.03 Crore. Advances
received from SPL Rs. 700 Crore and VIPL Rs. 700 Crore.)
(ii) Balance sheet heads (Closing balance)
Sundry Creditors, Advances received and Other Liabilities for rendering
services CPPL Rs. 1,220.22 Crore, JIPL Rs. 996.10 Crore, SPL Rs. 1,244.88
Crore, PSTL Rs. 890.00 Crore, SaPoL Rs. 767.94 Crore and CAPL Rs. 732.26
Crore, Investment in Equity RInvlRs. 568.57 Crore and RePLRs. 1,720.00
Crore. ICDs placed HKTLRs. 177.00 Crore, DATL Rs. 627.00 Crore and KMTLRs. 1
93.00 Crore. Subordinate debt HKTLRs. 261.60 Crore, DATLRs. 664.32 Crore,
KMTL Rs. 284.60 Crore and DAMEPLRs. 61 1.95 Crore. Advance against
investments JRTLRs. 53.45 Crore, MMOPLRs. 36.86 Crore and PSTL Rs. 237.92
Crore. Recoverable Expenses REGL Rs. 42.94 Crore and REL Rs. 128.06 Crore.
Sundry Debtors WRTG Rs. 209.68 Crore and WRTM Rs. 67.03 Crore.
(Previous Year: Sundry Creditors, Advances received and Other
Liabilities for rendering services SPL Rs. 1,183.18 Crore, VIPL Rs. 195.73
Crore and CAPL Rs. 615.88 Crore. Investment in Equity RInfL Rs. 502 70
Crore, RInvl Rs. 502.11 Crore and RePL Rs. 1,720.00 Crore. ICDs placed BKPL
Rs. 9.36 Crore and RICL Rs. 140.62 Crore. Subordinate debt NKTL Rs. 40.29
Crore, DSTL Rs. 46.80 Crore, SUTL Rs. 166.99 Crore, TDTL Rs. 96.77 Crore and
TKTL Rs. 120.83 Crore. Advance againstinvestments DAMEPL Rs. 466.95 Crore,
RPTL Rs. 757.46 Crore and GFTL Rs. 165.62 Crore. Recoverable Expenses REGL
Rs. 78.23 Crore, RGSPL Rs. 73.95 Crore and REL Rs. 72.97 Crore. Sundry
Debtors WRTG Rs. 27.84 Crore and WRTM Rs. 37.68 Crore).
(iii) income heads
Gross Revenue of EPC and contracts Division / Sales reversal from WRTG
Rs. 239.1 7 Crore, WRTM Rs. 380.80 Crore, SPL Rs. 501.04 Crore, CAPL Rs. 623.23
Crore and VIPL Rs. 292.99 Crore. Dividend received from UPL Rs. 0.40 Crore.
Rent / Lease rent earned from RComm Rs. 0.51 Crore. Interest earned from
WRTG Rs. 5.06 Crore, WRTM Rs.6.00 Crore and RICLRs. 6.09 Crore. Other income
RePLRs. 4.86 Crore, PSTLRs. 1.88 Crore and RNRLRs.4.72 Crore,
(Previous Year: Sale of Electricity to RETL Rs.18.14 Crore. Gross
Revenue of EPC and contracts Division / Sales reversal from WRTG Rs.
98.79 Crore, WRTM Rs. 147.95 Crore, SPL Rs. 76204 Crore, CAPL Rs. 87.06 Crore
and VIPL Rs. 70.26 Crore. Dividend received from UPL Rs.0.12 Crore, RInfL Rs.
54.73 Crore and RInvL Rs. 60.25 Crore. Rent / Lease Rent earned from BKPL
Rs. 0.07 Crore. Interest earned from BKPL Rs.0.97 Crore and RICL Rs. 10.76
Crore. Other income SUTL Rs. 0.45 Crore, TDTL Rs. 0.45 Crore, TKTL Rs. 0.45
Crore, GFTL Rs. 0.45 Crore and ROSA Rs. 0.38 Crore).
(iv) Expenses heads
Purchase / Services on Revenue account from REIL Rs. 21 .SI Crore and
RNRL Rs. 76.49 Crore. Purchase of electricity (including Open access
charges) from RETL Rs. 541.20 Crore. Purchase of Electricity-
Compensation Bills / IEX from RETL Rs. 1 70.33 Crore. Purchase of other
items on Capital account from RComm Rs. 0.89 Crore Receiving of Services
from REILRs. 11.78 Crore, RNRLRs. 28.71 Crore, RePLRs. 23.1 8 Crore and
RGIRs.18.13 Crore, Rent paid to RICL Rs. 0.76 Crore and RIIPL Rs. 1.93 Crore.
Dividend paid AAAPVPL Rs. 73.20 Crore,
(Previous Year: Purchase / Services on Revenue account from RNRL Rs.
242.20 Crore. Purchase of electricity from RETL Rs. 454.43 Crore.
Purchase of Electricity- Compensation Bills / IEX from RETL Rs. 160.65
Crore. Receiving of Services from REIL Rs. 4.72 Crore, UPL Rs. 75.87 Crore,
RNRL Rs. 55.99 Crore and RGI Rs. 9.44 Crore. Rent paid to RICL Rs. 0.53
Crore. Dividend paid AAAPVPL Rs. 58.44 Crore.).
(v) Salaries, Commission and Other Benefits paid / payable to Shri Anil
D Ambani Rs. 11.01 Crore (Rs. Nil), Shri S.C. Gupta Rs. 1.1 2 Crore (Rs. 1.1 3
Crore) and Shri Lalit Jalan Rs. 0.81 Crore (Rs. 1.10 Crore). The Company
has made payment to Shri Anil D Ambani towards commission for the
financial year 2009-10 amounting to Rs. 5.50 Crore which was not
provided in the previous year (Refer note 3 above).
(vi) The Company has given (a) equity support undertakings to power
procurers in respect of Sasan Ultra Mega Power Project (UMPP),
Krishnapatnam UMPP, Tiliaya UMPP and Chitrangi Power Project of
Reliance Power Limited for setting up the respective projects, (b)
funding support undertaking for cost overrun and equity support
undertaking to Financial institutions / Banks in respect of Rosa Power
Project and (c) keep well letter in favour of a bank, who in turn has
issued a letter of credit in favour of the foreign currency convertible
bond (FCCB) holders of RNRL (now Reliance Power Limited); the amounts
of which currently are not ascertainable
3. Segment Reporting:
(Note no. 8 of Schedule 16 of Financial Statements)
Basis of Preparation: The Company operates in two Business Segments:
Electrical Energy and Engineering, Procurement and contracts (EPC).
Business segments have been identified as reportable primary segments
in accordance with Accounting Standard-1 7 Segment Reporting, as
prescribed under Companies (Accounting Standards), Rules, 2006, taking
into account the organisation and internal reporting structure as well
as evaluation of risks and returns from these segments. The inter
segment pricing is effected at cost. Segment accounting policies are in
line with the accounting policies of the Company,
In the case of electrical energy, the Company operates a 500 MW Thermal
Power Station at Dahanu, a 220 MW combined cycle power plant at
Samalkot, a 48 MW combined cycle power plant at Mormugao, a 7.59 MW
Windfarm at Chitradurga and also purchases power from third parties and
supplies the power through the Company's own distribution grid. The
Company supplies power to residential, industrial, commercial and other
consumers. EPC segment renders comprehensive value-added services in
construction, erection and commissioning.
Geographical Segments: The Company's operations are mainly confined
within India. The Company does not have material earnings from business
segments outside India. As such there are no reportable geographical
segments
4. (Note no. 10 of Schedule 16 of Financial Statements)
A Standby Charges:
In the matter of liability of Rs. 515.60 Crore of standby charges with
The Tata Power Company Limited (TPC) determined by MERC for the period
April 1, 1998 to March 31, 2004, the Appellate Tribunal of Electricity
(ATE) determined the total liability atRs. 500 Crore and directed TPC to
refund Rs. 354 Crore (inclusive of Interest of Rs. 15 Crore upto March 31,
2004) to the Company plus Interest @ 10% p.a. commencing from April 1,
2004 till the date of payment. Against the said order, TPC filed an
appeal with the Supreme Court. The Hon'ble Supreme Court passed an
interim order dated February 7 2007 granting stay of the impugned order
of the ATE subject to the condition that, TPC furnish a bank guarantee
in the sum ofRs. 227 Crore and, in addition, deposit a sum ofRs. 227 Crore
with the Registrar General of the Court which may be withdrawn by the
Company subject to the Company giving an undertaking that in the event
of the appeal being decided against the Company, wholly or in part, the
amount as may be found refundable by the Company shall be refunded to
TPC without demur together with Interest as may be determined by the
Court. The Company accordingly withdrew the amount ofRs. 227 Crore after
complying with the conditions specified and has accounted the said
amount as other liabilities pending final adjustment. Moreover, pending
final order of the Hon'ble Supreme Court, the Company has not accounted
for the reduction in standby charges liability of Rs. 15.60 Crore as
well as Interest amount determined by ATE as payable by TPC to the
Company
B. Take or Pay and Additional Energy Charges:
Pursuant to the order passed by MERC dated December 1 2, 2007, in case
No. 7 of 2002, TPC has claimed an amount ofRs. 323.87 Crore towards the
following:
(a) Difference in the energy charge for energy supplied by TPC at 220
kV interconnection for the period March 2001 to May 2004 along with
Interest at 24% per annum up to December 31, 2007, and
(b) Minimum offtake charges for energy for the years 1998-99 to
1999-2000 along with Interest at 24% per annum up to December 31, 2007
In an appeal filed by the Company, ATE held that the amount in the
matter (a) above is payable by the Company along with Interest at State
Bank of India prime lending rate for short term borrowings. The matter
(b) is remanded to MERC for redetermination. The Company has filed an
appeal against the said order before the Supreme Court, which while
admitting the appeal, has restrained TPC from taking any coercive
action in respect of the matter stated in (a) above and TPC has also
filed an appeal against the said order. The Company has complied with
the interim order directions of depositing Rs. 25 Crore with the
Registrar of Supreme Court and providing a Bank Guarantee of Rs. 9.98
Crore
The said amount is disclosed under Contingent Liability in Note
2(a)(iv) above
5. Revenue from Sale of Electrical Energy and Regulatory Matters :
(Note no. 11 of Schedule 16 of Financial Statements)
(a) Tariff Adjustment Account
In accordance with accounting policy (refer note 1 (c) (i)) the Company
has accrued Rs. 461.97 Crore (Rs. 568.33 Crore) during the year as unbilled
revenue under 'Current Assets, Loans and Advances'
(b) Regulatory Matters
MERC vide its order dated June 15, 2009 had determined the tariff for
the distribution business for the financial year 2009-2010. However,
considering the directives received from the Government of Maharashtra,
MERC vide its order dated July 15, 2009 stayed the tariff order with
respect to the certain consumer categories where there was an increase
in tariff as compared to the previous year tariff. Accordingly, the
Company billed to the consumers as per the old tariff. Further, MERC
vide its order dated September 8, 2009, based on the directives
received from Government of Maharashtra, appointed Administrative Staff
College of India (ASCI) to investigate whether the Company has
discharged its duties as envisaged in Electricity Act, 2003 in the most
economical and efficient manner. After considering the contents of the
report submitted by ASCI, MERC vide its order dated September 9, 2010
has vacated the interim order dated July 15, 2009 setting aside the
stay on the tariff. Subsequent to vacation of the stay order, the
Company started billing to the consumers as per the above referred
order and has also filed its Annual Revenue Requirement (ARR) with MERC
for the financial year 2009-10 and 2010-11.
(c) In accordance with the MERC tariff regulation for determination of
tariff, the income-tax paid is considered for tariff determination
(truing up) for the financial years commencing from 2007-08.
Accordingly, the Company has considered Rs. 1 32.78 Crore of deferred tax
liability arising out of differences in rates of depreciation between
MERC and income-tax as "Net tax to be recovered in future tariff
determination",
6. (Note no. 1 2 of Schedule 16 of Financial Statements)
The Scheme of Restructuring dated May 9, 2009, envisaging transfer of
various operating divisions of the Company, viz., Dahanu Thermal Power
Station division, Goa and Samalkot Power Stations division, Power
Transmission division, Power Distribution division, Toll Roads division
and Real Estate division to its respective resulting six wholly owned
subsidiaries was sanctioned by the Hon'ble Bombay High Court on July
24, 2009, subject to the Company receiving the requisite approvals. In
view of inter alia the considerable lapse of time of nearly 2 years and
subsequent changes in the business environment, the proposal is no
longer considered relevant and has been withdrawn on March 25, 2011
with the approval of the Hon'ble Bombay High Court, There is no Impact
on the profitability or business of the Company
7. Disclosure under Accounting Standard 15 (revised 2005) "Employee
Benefits". (Note no. 1 3 of Schedule 16 of Financial Statements)
The Company has classified various employee benefits as under: (A)
Defined contribution plans
a. Provident fund
b. Superannuation fund
c. State defined contribution plans
Employers' Contribution to Employees' State insurance
Employers' Contribution to 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 trustees of the Reliance infrastructure Limited
Officer's Superannuation Scheme. Under the schemes, the Company is
required to contribute a specified percentage of payroll cost to the
retirement benefit schemes to fund the benefits. These funds are
recognized by the income tax authorities
(B) Defined Benefit Plans
a. Provident Fund (Applicable to certain employees)
b. Gratuity
c. Leave Encashment
The guidance on implementing AS 15, Employee Benefits (revised 2005)
issued by Accounting Standard Board states benefit involving employee
established provident funds, which require Interest shortfalls to be
recompensed are to be considered as defined benefit plans. As per the
audited accounts for the year ended March 31, 2011 of Provident Fund
Trust maintained by the Company, the shortfall arising in meeting the
stipulated Interest payment liability has been duly provided for.
Pending the issuance of guidance note from the Actuary Society of
India, the Company's actuary has expressed an inability to reliably
measure provident fund liabilities
Leave encashment is payable to eligible employees who have earned
leaves, during the employment and/or on separation as per the Company's
policy
11. (Note no. 14 of Schedule 16 of Financial Statements)
The Company has been legally advised that the Company is considered to
be established with the object of providinginfrastructural facilities
and accordingly Section 372A of the Companies Act, 1956 is not
applicable to the Company
8. (Note no. 15 of Schedule 16 of Financial Statements)
Revaluation of Tangible Assets
The Company had, based on a valuation made by approved values,
revalued as at April 1, 2003 the Plant and Machinery located at Dahanu.
The revaluation of the same was based on the technological
obsolescence, the year of purchase, the maintenance levels and the
currency and customs duty variations as applicable. The resultant
appreciation aggregating to Rs. 752.1 7 Crore has been added to the Gross
Block of the Fixed Assets and credited to Revaluation Reserve.
Consequent to the revaluation, there is an additional charge for
depreciation for the year ofRs. 53.96 Crore (Rs. 53.90 Crore) and an
equivalent amount, has been withdrawn from Revaluation Reserve and
credited to the Profit and Loss Account,
9. (Note no. 16 of Schedule 16 of Financial Statements)
Disclosure under Micro, Small and Medium Enterprises Development Act,
2006
There are no Micro and Small 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
10. Equity Share Warrants:
(Note no. 1 8 of Schedule 16 of Financial Statements)
During the year, the Company received an application from AAA Project
Ventures Private Limited (AAAPVL) for conversion of 2,25,50,000
warrants into shares along with the payment of balance amount of Rs.
1,570.99 Crore. The Company allotted 2,25,50,000 equity shares to
AAAPVL against conversion of said warrants. The outstanding 7,50,000
warrants after the said conversion have been cancelled and the sum of Rs.
1 7.42 Crore paid on such warrants is forfeited in accordance with the
Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2009. The said amount has been credited to
Capital Reserve
11. (Note no. 19 of Schedule 16 of Financial Statements)
In accordance with the provisions of the Companies Act, 1956 and the
Securities and Exchange Board of India (Buy-back of Securities)
Regulations, 1998, the Company made a Public announcement to
buybackthe equity shares of the Company at a maximum price of Rs. 725 per
equity share, up to an amount not exceeding 10 per cent of the paid-up
equity share capital and fire reserves (including securities premium)
of the Company, i.e. up to Rs. 1000 Crore
12. (Note no. 20 of Schedule 16 of Financial Statements)
During the year, the Company has entered into an Operations &
Maintenance contract with its 3 subsidiary companies viz. DS Toll Road
Limited, NKToll Road Limited and PS Toll Road Private Limited, where by
the Company is entitled to a residual Interest (by way of Fixed and
Variable charges) in the monthly cash flow of the toll road business
for a period of 1 2,14 and 15 years respectively. The consideration
ofRs. 355 Crore, Rs. 275 Crore and Rs. 1,780 Crore payable respectively to
acquire these rights are amortised over the useful life of the contract
on the basis of projected revenue
13. (Note no. 22 of Schedule 16 of Financial Statements)
Scheme of Amalgamation of Reliance Infraprojects Limited (RInf L) with
the Company:
Pursuant to the approval of the Board vide resolution dated November
22, 2010 and the sanction of the Scheme of Amalgamation of RInfL with
the Company by the Hon'ble High Court of Judicature at Bombay on March
30, 2011, the assets and liabilities of the erstwhile RInfL, a wholly
owned subsidiary of the Company, were transferred to and vested in the
Company with effect from the appointed date viz. April 1, 2010 in
accordance with the Scheme so sanctioned
The amalgamation has been accounted for under the "Pooling of Interest
Method" as defined in Accounting Standard 14 - Accounting for
Amalgamation (AS-1 4) as prescribed under the Companies (Accounting
Standards) Rules, 2006 and as per the terms of the scheme of
amalgamation as under
The accumulated balance in Profit and Loss Account ofRs. 1 27.22 Crore as
on April 1, 2010 of RInfL has been transferred to General Reserve
The assets and liabilities have been taken over at the book value in
the books of the Company,
Theinvestments of the Company in equity shares of RInfL amounting to Rs.
502.10 Crore stands cancelled
There were no significant differences in the accounting policies
followed between the erstwhile Company and the Company as on the
appointed date
The figures for the previous year do not include figures for the
erstwhile RInfL and accordingly the current year figures are not
comparable to those of the previous year.
14. Derivative instruments :
(Note no. 27 of Schedule 16 of Financial Statements)
(b) Pursuant to the clarification issued by the Institute of Chartered
Accountants of India on March 29, 2008 on accounting of derivatives,
the Company has for the year ended March 31, 2011 provided /
(reversed) unrealised loss of Rs. 39.32 Crore (Previous Year (Rs. 81.08
Crore)) on account of revaluation of foreign exchange derivative
instruments at fair values as at the reporting year end. Profit or Loss
on such foreign exchange derivative instruments will be crystallised /
realised only on expiry of such instruments in subsequent financial
years
(c) Commodity contracts:
The Company uses Commodity Future contracts to hedge against
fluctuations in commodity prices. The following are outstanding
aluminum future contracts entered into by the Company as on March 31,
2011
15. Interest in Joint Venture Operations:
(Note no. 28 of Schedule 16 of Financial Statements)
The Company along with M/s. Geopetrol international Inc. and Reliance
Natural Resources Limited *(the consortium) has been allotted 4 Coal
Bed Methane (CBM) blocks from Ministry of Petroleum and Natural Gas (Mo
PNG) covering an acreage of 3,266 square kilometers in the States of
Madhya Pradesh, Andhra Pradesh and Rajasthan. The consortium has
entered into a production sharing agreement with Government of India
for exploration and production of these four CBM blocks. The Company is
a non-operator and has 45% share in each of the four blocks.
Also the Company along with M/s. Geopetrol international Inc, Naftogaz
India Private Limited and Reliance Natural Resources Limited *(the
consortium) has been allotted oil block from Ministry of Petroleum and
Natural Gas (Mo PNG), in the State of Mizoram under the New Exploration
Licensing Policy (NELP - VI) round, covering an acreage of 3,619
square kilometers and the consortium has signed an agreement with the
Government of India for exploration and production of an Oil and Gas
block. The Company is a non-operator and has 70% share in the block
16. Power Banking:
(Note no. 29 of Schedule 16 of Financial Statements)
The cost of electricity purchased is net of cost incurred towards units
purchased and banked with other parties and/or units banked by other
parties with us, both on loan basis. Such transactions remaining
unsettled at the year end, is carried forward under Loans and Advances
/ Sundry Creditors, as the case may be at the value of purchase on the
date of the transactions when the units are banked, either way, as the
case may be
17. Disclosure as required under AS - 19 :
(Note no. 30 of Schedule 16 of Financial Statements)
Disclosure as required under AS - 19 "Accounting for Leases" as
prescribed under Companies (Accounting Standards) Rules 2006 is given
below:
(a) The Company has entered into cancellable leasing agreement for
office, residential and warehouse premises renewable by mutual consent
on mutually agreeable terms
18. (Note no. 31 of Schedule 16 of financial statements)
Figures for the previous year have been
regrouped/reclassifed/rearranged wherever necessary to make them
comparable to those for the current year.
Figures in bracket indicate previous year's figures, @'- represents
figures less than Rs. 50,000 which have been shown at actuals in brackets
with @My dear fellow Shareowners,
It gives me great pleasure to share with you the highlights of our
Company's performance during the year 2010-11. I am delighted to
inform you that Reliance infrastructure, one of the country's fastest
growing companies in the infrastructure sector, continues to play a
pivotal role in driving the India growth story. Our rapid strides
towards achieving leadership positions across all major infrastructure
domains, is leading the way in creating inclusive growth for the nation
and superior returns for stakeholders.
Over the past few years, the infrastructure sector in India has
undergone a paradigm shift. The Government, for long the lead direct
investor in infrastructure creation, has iincreasingly played the role
of a facilitator, focusing its attention iinstead on formulating the
appropriate policy framework for attracting privateinvestments into
the sector through the public-private- partnership model.
The private sector has responded to this shift in economic perspective
with a great deal of excitement and alacrity as is evident from its
growing participation in the entire spectrum of infrastructure projects,
be it roads, ports, airports, urban utilities and transport systems or
power..
I am proud to report that Reliance infrastructure is now the largest
private sector infrastructure developer in India. We have made
significant strides in the development of roads and highways, metro
rails and other mass rapid transit systems, sea link, airports, cement,
etc. We have already commissioned or are in the process of doing so
over 2 dozen large infrastructure projects including 11 road projects,
3 metro rails, 5 transmission lines, 5 brown field airports, 2 cement
plants and the Mumbaii sea link.
We are at the threshold of an exciting journey that will take us to
even greater heights. I seek your continued support in this mission.
Performance Review
I am happy to share with you the highlights of our financial and
operational performance during the year 2010-11.
- Total income ofRs. 10,266 crore (US$ 2.3 billion), as against Rs.
10,908 crore in the previous financial year.
- Cash Profit of Rs. 1,336 crore (US$ 300 million) against Rs. 1,435 crore
in the previous financial year.
- Net Profit of Rs. 1,081 crore (US$ 242 million) against Rs. 1,152 crore
in the previous financial year
- Cash Earnings Per Share for the year of Rs. 50 (US$ 1.1) against Rs. 59
in the previous financial year
- Earnings Per Share (EPS) of Rs. 43 (US$ 1) against Rs. 51 in the previous
financial year.
With a net worth of about Rs. 17,670 crore (US$ 4 billion), Reliance
infrastructure ranks among the top performing Indian private sector
companies in the country
Our group revenues stand at about Rs. 28,270 crore (US$6.34 billion),
while our gross fixed assets amount to Rs. 26,050 crore (US$ 5.84
billion).
Buy-back of Shares
In keeping with our overriding philosophy of creating value for our
investors, we decided to utilize a part of our accumulated surpluses
for buy-back of shares, Improving in the process our return on equity.
Our Company has bought back 18 lakh equity shares for an aggregate
value of Rs. 115.58 crore up to May 27, 2011.
Power feneration, transmission and distribution Power Generation
Our power generation units at Dahanu, Samalkot, Goa and Koch continue
to demonstrate significant improvements across major operational,
environmental and safety performance parameters The Dahanu Thermal
Power Station, the flagship plant of the Company, continues to operate
at Plant Load Factor of over 100 per cent over the last eight years
while all our other power plants recorded plant availability in the
range of over 90 to 96 per cent. The Dahanu plant continues to make
significant progress on six sigma quality iinitiatives for all round
improvement in business processes. During the year, the Dahanu plant
iiimplemented the Energy Management system, BS EN 16001 -2009, Power
Transmission
The Company is developing five transmission projects worth about Rs.
7,000 crore, making it the largest private player in the transmission
sector. Reliance Power Transmission Limited (RPTL) the transmission arm
of the Company, has emerged as the successful bidder in four of the
eight inter-state transmission projects notified by the Ministry of
Power, Government of India RPTL will actively participate in the
bidding for new projects worth approximatelyRs. 8,000 crore so far
notified by the Ministry of Power.
RPTL has completed two transmission lines of 440 ckt kms associated
with the Western Region System Strengthening Scheme-II with line length
of 116 kms. These are the first set of 100 per cent privately owned
extra high voltage transmission line in India to achieve commercial
operation. The first line was commissioned in a record of 15 months
and ahead of schedule.
The Company has also made substantial progress in the remaining
transmission projects including the Parbati Koldam 40 kV transmission
line currently being executed by our joint venture company with Power
Grid Corporation of India Limited and in which RInfra holds 74 per cent
equity stake Power Distribution
Our Company's distribution network in Mumbai continues to enjoy the
distinction of consistently operating its network at 99.98 per cent
reliability. The Company's distribution license mentions the terminal
date as August 15, 2011. The Company has submitted an application to
Maharashtra Electricity Regulatory Commission (MERC) for a firesh
license for distribution of electricity. With its consistent
performance over the last eight decades and world class quality and
system reliability, the Company is confident that MERC would grant the
distribution license and ensure that we continue to serve the consumers
of Mumbai suburbs with renewed vigour and commitment. The Company has
also initiated various energy conservation and energy efficiency
programmes under Demand Side Management to create greater social
awareness on the iiimportance of smarter usage and conservation of
energy. To bridge the shortfall in the supply of power, the Company has
initiated procurement of power for medium and long term through a
competitive bidding process Our two power distribution companies in
Delhi, BSES Rajdhan Power Limited (BRPL) and BSES Yamuna Power Limited
(BYPL) again clocked strong operating numbers backed by improvement
across all major performance parameters. These Discoms have succeeded
in achieving significant reduction of AT&C losses While BRPL reduced
its losses from 19.03 per cent to 16.83 per cent, BYPL brought them
down from 23.11 per cent to 19.89 per cent during FY11. This
continuing reduction in losses entitles the two companies to a
performance incentive from the state regulator for the fourth year in a
row.
I am also proud to report that these Discoms played a pivotal role in
the successful organization of the Commonwealth Games by ensuring
uninterrupted power supply, a fact widely acknowledged and appreciated
by the organizers as well as the Government. Power Trading
Reliance Energy Trading Limited (RETL), the trading arm of the Company,
has positioned itself as a favoured trader for trading of power from
captive / independent power plants and has been consistently ranked
among the top five trading licensees in terms of volume. RETL is also
expecting a significant boost in volume through the trading of merchant
power from the group's upcoming power projects. The EPC Business
The Engineering, Procurement and Construction Division (EPC) achieved a
turnover of Rs. 3,389 crore during the year. It has a record order book
position of Rs. 29,635 crore as on March 31, 2011. The Division is
equipped with the requisite expertise and experience to efficiently
undertake large and complex EPC projects and complete them ahead of
schedule. We employ state-of-the-art technology in engineering design
and project management to execute our projects. The Division is
currently implementing 7 power projects aggregating 9,900 MW, apart
from transmission and road projects. We are also developing
competencies in other infrastructure sectors such as metro/mono rails,
airports and cement plants infrastructure Projects Road Projects
Our Company is now one of the largest developers of road and highway
projects for the National Highways Authority of India (NHAI) under the
build, own, transfer (BOT) scheme. Our roads portfolio includes 1 1
projects totaling 970 kms and connecting major urban centres in 6
States at an investment of about Rs. 12,000 crore. Three of the projects
are operational and six more road projects will be commissioned in the
current financial year. Construction work is in full swing at all the
project sites. I am glad to inform you that the Company was the first
developer to iintroduce Einterprise Toll Management System which would
facilitate real time toll plaza monitoring, auto MIS and single console
for the projects. Metro Projects
I am glad to inform you that our Company is today the largest
established private player in metro rail sector in the country. The
Delhi airport express link started commercial operations from February
2011, the first ever public-private partnership project to become
operational in India. The airport express link has been built in a
record time of 27 months and connects New Delhi Railway Station to
Dwarka via the Indira Gandhi international airport. The construction of
Mumbai Metro Line I covering Versova-Andheri-Ghatkopar is in full swing
and we expect to commission the corridor ahead of the contractual
commissioning date. For Mumbai Metro Line II covering Charkop-Bandra-
Mankhurd corridor, financial closure has been achieved and preliminary
work is in progress. Cement Business
Reliance Cementation Private Limited, a wholly owned subsidiary of the
Company, is developing two cement plants of 5 million tonnes each at
Maihar in Madhya Pradesh and Mukutban in Maharashtra respectively.
Significant progress has been made in project related activities.
Airport Projects
Reliance Airport Developers Private Limited has been awarded lease
rights to develop and operate 5 brownfield airports in Maharashtra. It
is also developing an airstrip/airport at Sasan in Madhya Pradesh where
a captive power plant is being developed by a subsidiary of Reliance
Power. Western fireway Sealink
The Company has formed a special purpose vehicle to execute the Western
fireway Sea Link Project which envisages operation and maintenance of
the existing Bandra-Worli Sealink and construction of Sealink between
Worli to Haji Ali in Mumbaii for a concession period of 40 years. The
project is proposed to be completed within a period of 42 months from
the date of handing over of the existing Bandra-Worli Sealink,
Corporate Governance
Rinfra has always maintained the best governance standards and
practices by adopting, as is the norm for all constituent companies of
the Group, the "Reliance Group - Corporate Governance Policies and Code
of Conduct". These Policies and Code prescribe a set of systems,
processes and principles, which conform to the highest international
standards and are reviewed periodically to ensure their continuing
relevance, effectiveness and responsiveness to the needs of investors,
both local and global, and all other stakeholders Social Commitments
As a responsible corporate citizen, we take our social obligations
seriously. During FY 2011, we pursued a number of welfare programmes
aimed at Improving the quality of life of communities in and around our
businesses. Our iinitiatives have focused on education, health, water,
sanitation, rural development, safety and environment, giving priority
to the needy and economically vulnerable sections of society in the
vicinity of our power stations and contracting sites. Awards and
Recognitions
It is a matter of pride and satisfaction that our Company has received
several prestigious national and global awards in appreciation of our
outstanding contribution in various fields viz. energy management and
energy conservation, quality environment best practices, water
management, health and safety, human resource training and development.
Our Commitment
Our founder, the legendary Shri Dhirubhai Ambani, gave us a simple
maintra: to aspire to the highest global standards of quality,
efficiency, operational performance and customer care. We remain
committed to upholding that vision. Dhirubhai exhorted us to think big.
With your continued support, we will think bigger. Indeed not just
bigger but better, creating ever greater value for all our
stakeholders.
Mar 31, 2010
1. (a) Contingent Liabilities :
(i) Counter guarantees given to banks against guarantees issued by the
banks on behalf of the joint ventures aggregate to Rs. 10.50 Crore (Rs.
14.55 Crore). Bank guarantees issued for performing its own obligations
are not considered as part of contingent liability.
(ii) Corporate Guarantees given to banks and other parties aggregating
Rs. 2,367.88 Crore (Rs. 3,155.66 Crore) in respect of fnancing
facilities granted to other body corporates.
(iii) Uncalled liability on partly paid shares Rs. 45.20 Crore (Rs.
45.20 Crore).
(iv) Claims against the Company not acknowledged as debts and under
litigation aggregates to Rs. 684.90 Crore (Rs. 638.39 Crore), these
include claim from suppliers aggregating to Rs. 218.43 Crore (Rs.
282.68 Crore), income tax claims Rs. 459.82 Crore (Rs. 343.17 Crore)
and other claims Rs. 6.65 Crore (Rs. 12.54 Crore).
(v) The Companys application for compounding in respect of its ECB of
USD 360 million has been deemed by the Reserve Bank of India (RBI) as
never to have been made subsequent to the withdrawal of the compounding
application. Accordingly, there is no liability in respect of the
compounding fee of Rs. 124.68 Crore earlier specifed by RBI. The
Company is legally advised that it is in compliance with the
regulations under the Foreign Exchange Management Act, 1999.
Accordingly, no provision is considered necessary in this regard.
(b) Capital Commitments :
Estimated amount of contracts remaining unexecuted on capital account
and not provided for Rs. 92.41 Crore (Rs. 130.54 Crore).
2. Related Party Disclosure :
As per Accounting Standard -18 as prescribed under the Companies
(Accounting Standards) Rules, 2006, the Companys related parties and
transactions are disclosed below :
(a) Parties where control exists :
Subsidiaries (a) Reliance Infraprojects Limited (RInfL)
(including (b) Reliance Power Transmission Limited (RPTL)
step down
(e) Reliance Infraventures Limited (RInvL)
(f) BSES Kerala Power Limited (BKPL)
(g) Noida Global SEZ Private Limited (NGSPL) (h) Reliance Energy
Trading Limited (RETL)
(i) Mumbai Metro One Private Limited (MMOPL)
(j) Parbati Koldam Transmission Company Limited (PKTCL)
(k) Delhi Airport Metro Express Private Limited (DAMEPL)
(l) CBD Tower Private Limited (CBDTPL)
(m) Tulip Realtech Private Limited (TRPL)
(n) Reliance Energy Generation Limited (REGL)
(o) Reliance Energy Limited (REL)
(p) Reliance Property Developers Private Limited (RPDPL)
(q) DS Toll Road Limited (DSTL)
(r) NK Toll Road Limited (NKTL)
(s) SU Toll Road Private Limited (SUTL)
(t) TD Toll Road Private Limited (TDTL)
(u) TK Toll Road Private Limited (TKTL)
(v) GF Toll Road Private Limited (GFTL)
(w) KM Toll Road Private Limited (KMTL) w.e.f. February 4, 2010
(x) PS Toll Road Private Limited (PSTL) w.e.f. February 9, 2010
Subsidiaries (including step down subsidiaries)
(y) Reliance Goa and Samalkot Power Limited (RGSPL)
(z) Reliance Cementation Private Limited (RCPL)w.e.f. September 5, 2009
(aa) Reliance Cement and Infra Private Limited (RCIPL) w.e.f. September
5, 2009
(bb) Reliance Cement Corporation Private Limited (RCCPL) w.e.f.
September 5, 2009
(cc) Reliance Cement Works Private Limited (RCWPL) w.e.f. September 5,
2009
(dd) Reliance Airport Developers Private Limited (RADPL) w.e.f.
September 25, 2009
(ee) Latur Airport Private Limited (LAPL) w.e.f. September 29, 2009
(ff) Baramati Airport Private Limited (BAPL) w.e.f. September 29, 2009
(gg) Nanded Airport Private Limited (NAPL) w.e.f. September 29, 2009
(hh) Yavatmal Airport Private Limited (YAPL) w.e.f. September 29, 2009
(ii) Osmanabad Airport Private Limited (OAPL) w.e.f. September 29, 2009
(b) Other related parties where transactions have taken place during
the year :
(i) Associates (including subsidiaries of associates)
(a) Reliance Power Limited (RePL)
(b) Reliance Infrastructure Engineers Private Limited (RIEPL)
(c) Reliance Infrastructure and Consultants Limited (RICL)
(d) Urthing Sobla Hydro Power Private Limited (USHPPL)
(e) Rosa Power Supply Company Limited (ROSA)
(f) Sasan Power Limited (SPL)
(g) Vidarbha Industries Power Limited (VIPL)
(h) Maharashtra Energy Generation Limited (MEGL)
(i) Chitrangi Power Private Limited (CPPL)
(j) Tato Hydro Power Private Limited (THPPL)
(k) Siyom Hydro Power Private Limited (SHPPL)
(l) Jharkhand Integrated Power Limited (JIPL)
(m) Coastal Andhra Power Limited (CAPL)
(n) Reliance Coal Resources Private Limited (RCRPL)
(o) JR Toll Road Private Limited (JRTL) w.e.f. December 09, 2009
(p) Mumbai Metro Transport Private Limited (MMTPL) w.e.f. October 29,
2009
(q) Metro One Operation Private Limited(MOOPL) w.e.f. April 1, 2009
(ii) Joint Ventures
(a) BSES Rajdhani Power Limited (BRPL)
(b) BSES Yamuna Power Limited (BYPL)
(c) Tamilnadu Industries Captive Power Company Limited (TICAPCO)
(d) Utility Powertech Limited (UPL)
(iii) Persons having control over investing party / Major shareholder
Shri Anil D. Ambani
(iv) Key Management Personnel
(a) Shri S.C.Gupta
(b) Shri Lalit Jalan
(v) Enterprises over which person described in (iii) has control
(a) Reliance Natural Resources Limited (RNRL)
(b) Reliance Communications Limited (RCL)
(c) Reliance Innoventures Private Limited(REIL)
(d) Reliance Communications Infrastructure Limited (RCIL)
(e) AAA Projects Venture Private Limited (AAAPVPL)
(f) Reliance Cementation Private Limited (RCPL) (upto September 4,
2009)
(g) Reliance Land Private Limited (RLPL) (h) Reliance Webstores Limited
(RWeb)
(i) Reliance Big Entertainment Private Ltd (RBig)
(j) Reliance General Insurance Company Limited (RGI)
(k) Reliance Capital Limited (RCap)
(d) Details of Material Transactions with Related Party
(i) Transactions during the year (Balance Sheet heads): Guarantees and
Collaterals provided to DAMEPL Rs. 489.51 crore (Rs. 625.00 crore).
Deposit given to RETL Rs. 15.00 crore (Rs. 18.45 crore), RICL Rs. 18.55
crore (Rs 106.10 crore). Deposit returned by NGSPL Rs. Nil (Rs.27.32
crore), DAMEPL Rs. Nil (Rs. 92.90 crore), RPTL Rs. Nil (Rs. 34.89
crore), BKPL Rs. 8.95 crore (Rs. 26.84 crore), RICL Rs. 20.68 crore
(Rs. 0.95 crore), DSTL Rs. 11.60 crore (Rs. Nil), NKTL Rs. 10.97 crore
(Rs. Nil), RETL Rs. 15.00 crore (Rs. 18.45 crore). Recoverable Expenses
incurred for REGL Rs. 18.23 crore (Rs. Nil), RGSPL Rs. 13.95 crore (Rs.
Nil), REL Rs. 72.97 crore (Rs. Nil), RICL Rs. 0.15 crore (Rs. 1.26
crore), REIL Rs. Nil (Rs. 9.46 crore), SPL Rs. 0.08 crore (Rs. 7.97
crore), ROSA Rs. 0.21 crore (Rs. 10.97 crore), REIL Rs. 0.05 crore
(Rs. 9.46 crore) and CAPL Rs. 0.02 crore (Rs. 8.47 crore). Recoverable
Expenses incurred by BKPL Rs. 0.01 crore (Rs. Nil) and MMOPL Rs. 0.01
crore (Rs. Nil). Investment in Equity Shares of RIEPL Rs. 10.00 crore
(Rs. 0.01 crore), RETL Rs. 10.00 crore (Rs. Nil), RCPL Rs. 53.78 crore
(Rs. Nil), MMOPL Rs. Nil (Rs. 103.50 crore) and CBDTPL Rs. Nil(Rs.
163.70 crore). Warrants money received from AAAPVPL Rs. 2,361.70 crore
(Rs. 783.49 crore). Warrants money of AAAPVPL converted into equity
shares Rs. 1820.62 crore (Rs. Nil). Subordinate debt given to NKTL Rs.
Nil (Rs. 15.38 crore), DSTL Rs. Nil (Rs. 13.64 crore), SUTL Rs. 91.36
crore (Rs. 19.41 crore), TDTL Rs. 56.18 crore (Rs. 10.62 crore) and
TKTL Rs. 69.24 crore (Rs. 22.60 crore). Advance against Investments
paid to DAMEPL Rs. 93.05 crore (Rs. 373.90 crore), RInfL Rs. 66.27
crore (Rs. Nil) and GFTL Rs. 165.42 crore (Rs. 0.20 crore). Advance
against Investments received back from RPTL Rs. 189.86 crore (Rs. Nil),
Purchase of Investments from RNRL Rs. 53.78 crore (Rs. Nil). Sale of
Investments to RIEPL Rs. Nil (@). Sale of Fixed Assets to RePL Rs. Nil
(Rs. 0.37 crore), SPL Rs. 0.03 crore (Rs. 0.13 crore) and CAPL Rs. Nil
(Rs. 0.10 crore). Advances received towards contract from SPL Rs. 700
crore (Rs. 700 crore), VIPL Rs. 100 crore (Rs. 200 crore) and CAPL Rs.
Nil (Rs. 700 crore). Advance towards contracts refunded to MEGL Rs. Nil
(Rs. 105 crore).
(ii) Balance sheet heads (Closing balance): Sundry Creditors / Other
Liabilities for rendering services SPL Rs. 1,183.18 crore (Rs. 1,351.11
crore), VIPL Rs. 195.73 crore (Rs. 380.42 crore), CAPL Rs. 615.88 crore
(Rs. 679.37 crore). Investment in Equity RInf Rs. 502.10 crore (Rs.
502.10 crore), RInvl Rs. 502.11 crore (Rs. 502.11 crore) and RePL Rs.
1,720.00 crore (Rs. 1,720 crore). Deposits Given BKPL Rs. 9.36 crore
(Rs. 18.30 crore) and RICL Rs. 140.62 crore (Rs. 142.75 crore).
Subordinate debt NKTL Rs. 40.29 crore (Rs. 40.29 crore), DSTL Rs. 46.80
crore (Rs. 46.80 crore), SUTL Rs. 166.99 crore (Rs. 75.63 crore), TDTL
Rs. 96.71 crore (Rs. 40.52 crore) and TKTL Rs. 120.83 crore (Rs. 51.59
crore). Advance against Investments DAMEPL Rs. 466.95 crore (Rs. 373.90
crore), RPTL Rs. 151.46 crore (Rs. 341.32 crore) and GFTL Rs. 165.62
crore (Rs. 0.20 crore) Recoverable Expenses RNRL Rs. Nil (Rs. 1.68
crore), REGL Rs. 18.23 crore (Rs. Nil), RGSPL Rs. 13.95 crore (Rs.Nil),
REL Rs. 72.97 crore (Rs. Nil), THPPL Rs. Nil (Rs. 3.67 crore) and
USHPPL Rs. Nil (Rs. 1.78 crore). Sundry Debtors WRTG Rs. 27.84 crore
(Rs. Nil), WRTM Rs. 37.68 crore (Rs. Nil), CAPL Rs. Nil (Rs. 12.92
crore) and VIPL Rs. Nil (Rs. 13.24 crore).
(iii) Income heads: Sale of Electricity to RETL Rs. 18.14 crore (Rs.
9.04 crore). Gross Revenue of EPC and Contracts Division / Sales
reversal from WRTG Rs. 98.19 crore (Rs. Nil), WRTM Rs. 147.95 crore
(Rs. Nil), SPL Rs. 162.04 crore (Rs. 38.38 crore), CAPL 81.06 crore
(Rs. 22.19 crore) and VIPL Rs.70.26 crore (Rs. 27.18 crore). Dividend
received from UPL Rs. 0.12 crore (Rs. 0.48 crore), RInfL Rs. 54.73
crore (Rs. Nil) and RInvL Rs. 60.25 crore (Rs. Nil). Rent / Lease Rent
earned from BKPL Rs. 0.01 crore (Rs. 0.01 crore). Interest earned from
BKPL Rs. 0.97 crore (Rs. 2.70 crore) and RICL Rs. 10.76 crore (Rs 10.82
crore). Other Income DSTL Rs. Nil (Rs. 4.00 crore), NKTL Rs. Nil (Rs.
4.00 crore), SUTL Rs. 0.45 crore (Rs. Nil), TDTL Rs. 0.45 crore (Rs.
Nil), TKTL Rs. 0.45 crore (Rs. Nil), GFTL Rs. 0.45 crore (Rs. Nil) and
ROSA Rs. 0.38 crore (Rs. Nil).
(iv) Expenses heads: Purchase / Services on Revenue account from RNRL
Rs. 242.20 crore (Rs. 198.56 crore). Purchase of electricity from RETL
Rs. 467.25 crore (Rs. 166.37 crore). Purchase of other items on Capital
account from RICL Rs. Nil (Rs. 2.35 crore). Receiving of Services from
REIL Rs. 4.72 crore (Rs. 33.07 crore), UPL Rs. 15.81 crore (Rs. 19.25
crore), RNRL Rs. 55.99 crore (Rs. 65.42 crore) and RGI Rs. 9.44 crore
(Rs. 32.57 crore). Rent paid to RICL Rs. 0.53 crore (Rs. 0.76 crore).
Interest paid to MEGL Rs. Nil (Rs. 3.85 crore), SHPPL Rs. Nil (Rs.
10.21 crore). Dividend paid AAAPVPL Rs. 58.45 crore (Rs. 52.60 crore).
(v) Salaries, Commission and Other benefits paid / payable to Shri S.C.
Gupta Rs. 1.13 crore (Rs. 1.12 crore) and Shri Lalit Jalan Rs. 1.10
crore (Rs. 1.10 crore).
(vi) The Company has given (a) equity support undertakings to power
procurers in respect of Sasan Ultra Mega Power Project (UMPP),
Krishnapatnam UMPP, Tiliaya UMPP and Chitrangi Power Project of
Reliance Power Limited for setting up the respective projects, (b)
funding support undertaking for cost overrun and equity support
undertaking to Financial Institutions / Banks in respect of Rosa Power
Project and (c) keep well letter in favour of a bank, who in turn has
issued a letter of credit in favour of the foreign currency convertible
bond (FCCB) holders of RNRL (now Reliance Power Limited); the amounts
of which currently are not ascertainable.
3. Segment Reporting
Basis of Preparation : The Company operates in two Business Segments :
Electrical Energy and Engineering, Procurement and Contracts (EPC).
Business segments have been identifed as reportable primary segments in
accordance with Accounting Standard-17 Segment Reporting, as prescribed
under Companies (Accounting Standards), Rules, 2006, taking into
account the organisation and internal reporting structure as well as
evaluation of risks and returns from these segments. The inter segment
pricing is effected at cost. Segment accounting policies are in line
with the accounting policies of the Company.
In the case of electrical energy, the Company operates a 500 MW Thermal
Power Station at Dahanu, a 220 MW combined cycle power plant at
Samalkot, a 48 MW combined cycle power plant at Mormugao, a 7.59 MW
Windfarm at Chitradurga and also purchases power from third parties and
supplies the power through the Companys own distribution grid. The
Company supplies power to residential, industrial, commercial and other
consumers. EPC segment renders comprehensive value-added services in
construction, erection and commissioning.
Geographical Segments : The Companys operations are mainly confned
within India. The Company does not have material earnings from business
segments outside India. As such there are no reportable geographical
segments.
4. (a) Standby Charges :
In the matter of liability of Rs. 515.60 crore of standby charges with
The Tata Power Company Limited (TPC) for the period April 1, 1999 to
March 31, 2004, the Appellate Tribunal of Electricity (ATE) set aside
the order of Maharashtra Electricity Regulatory Commission (MERC) dated
May 31, 2004 and directed to TPC to refund Rs. 354 crore (inclusive of
interest of Rs. 15 crore upto March 31, 2004) to the Company plus
interest @ 10% p.a. commencing from April 1, 2004 till the date of
payment. Against the said order, TPC fled an appeal with the Supreme
Court. The Honble Supreme Court passed an interim order dated February
7, 2007 granting stay of the impugned order of the ATE subject to the
condition that, TPC furnish a bank guarantee in the sum of Rs. 227
Crore and, in addition, deposit a sum of Rs. 227 Crore with the
Registrar General of the Court which may be withdrawn by the Company
subject to the Company giving an undertaking that in the event of the
appeal being decided against the Company, wholly or in part, the amount
as may be found refundable by the Company shall be refunded to TPC
without demur together with interest as may be determined by the Court.
The Company accordingly withdrew the amount of Rs. 227 Crore after
complying with the conditions specifed and has accounted the said
amount as other liabilities pending fnal adjustment. Moreover, pending
fnal order of the Honble Supreme Court, the Company has not accounted
for the reduction in standby charges liability of Rs. 15.60 Crore as
well as interest amount determined by ATE as payable by TPC to the
Company.
(b) Take or Pay and Additional Energy Charges :
In the matter of claims raised by TPC towards (a) difference in the
energy supplied by TPC for the period March 2001 to May 2004 and (b)
minimum offtake charges for energy for the period 1998 to 2000, MERC
had issued an order dated December 12, 2007 in favour of TPC, on an
appeal fled by the Company, ATE in its order dated May 12, 2008 held
that in respect of matter (a) above, the Company is liable to pay the
amount for an estimated aggregate amount of Rs. 323. 87 crore alongwith
interest upto December 31, 2007. In respect of matter (b) above, ATE
remanded back the matter to MERC to examine it afresh. The Company and
TPC has fled an appeal against the said order before the Supreme Court,
which while admitting the appeal, has restrained TPC from taking any
coercive action in respect of the matter stated in (a) above. The
Company has complied with the interim order directions of depositing
Rs. 25 crore with the Registrar of Supreme Court and providing a Bank
Guarantee of Rs. 9.98 crore.
The said amount is disclosed under Contingent Liability in Note
2(a)(iv) above.
5. Revenue from Sale of Electrical Energy and Regulatory Matters :
(a) Tariff Adjustment Account
In accordance with accounting policy (refer note 1 (c) (i)) the Company
has accounted for Rs. 568.33 Crore (Rs. 1,034.45 Crore) during the year
as unbilled revenue under Tariff Adjustment Account.
(b) Regulatory Matters
MERC vide its order dated June 15, 2009 had determined the tariff for
the distribution business for the financial year 2009- 2010. However,
considering the directives received from the Government of Maharashtra,
MERC vide its order dated July 15, 2009 stayed the tariff order with
respect to the certain consumer categories where there is an increase
in tariff as compared to the previous year tariff. Accordingly, the
Company billed to the consumers as per the old tariff. Further, MERC
vide its order dated September 8, 2009, based on the directives
received from Government of Maharashtra, appointed Administrative Staff
College of India (ASCI) to investigate whether the Company has
discharged its duties as envisaged in Electricity Act, 2003 in the most
economical and effcient manner. After considering the contents of the
report submitted by ASCI, MERC vide its order dated September 9, 2010
has vacated the interim order dated July 15, 2009 setting aside the
stay on the tariff. Subsequent to vacation of the stay order, the
Company started billing to the consumers as per the above referred
order and has also fled its Annual Revenue Requirement (ARR) with MERC
for the financial year 2009-10 and 2010-11.
6. The Committee of Whole-time Directors at its meeting held on
February 25, 2009 approved the Scheme of Restructuring envisaging
transfer of various operating divisions of the Company, namely Dahanu
thermal power station division, Goa and Samalkot power station
division, power transmission division, power distribution division
(together considered under electrical segment), toll roads division and
real estate division (together considered under other unallocable
segment) to its respective resulting six wholly owned subsidiaries with
effect from March 31, 2009 , has since been sanctioned by the Bombay
High Court on September 09, 2009 subject to the Company receiving
requisite approvals and the same has been fled with the Registrar of
Companies on September 14, 2009. Implementation of the said scheme in
the financial statements is contingent upon receipt of requisite
approvals.
7. Disclosure under Accounting Standard 15 (revised 2005) "Employee
benefits".
The Company has classifed various employee benefits as under : (A)
Defned contribution plans
a. Provident fund
b. Superannuation fund
c. State defned contribution plans
- Employers Contribution to Employees State Insurance
- Employers Contribution to Employees Pension Scheme 1995
The provident fund and the state defned contribution plan are operated
by the Regional Provident Fund Commissioner and the superannuation fund
is administered by the trustees of the Reliance Infrastructure Limited
officers Superannuation Scheme. Under the schemes, the Company is
required to contribute a specifed percentage of payroll cost to the
retirement benefit schemes to fund the benefits. These funds are
recognized by the Income tax authorities.
(B) Defned benefit Plans
a. Provident Fund (Applicable to certain employees)
b. Gratuity
c. Leave Encashment
The guidance on implementing AS 15, Employee benefits (revised 2005)
issued by Accounting Standard Board states benefit involving employee
established provident funds, which require interest shortfalls to be
recompensed are to be considered as defned benefit plans. The audited
accounts for the year ended March 31, 2010 of Provident Fund Trust
maintained by the Company shows that there is no shortfall arising in
meeting the stipulated interest payment liability. Pending the
issuance of guidance note from the Actuary Society of India, the
Companys actuary has expressed an inability to reliably measure
provident fund liabilities.
Leave encashment is payable to eligible employees who have earned
leaves, during the employment and/or on separation as per the Companys
policy.
8. The Company 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.
9. Revaluation of Tangible Assets :
The Company had, based on a valuation made by approved valuers,
revalued as at April 1, 2003 the plant and machinery located at Dahanu.
The revaluation of the same was based on the technological
obsolescence, the year of purchase, the maintenance levels and the
currency and customs duty variations as applicable. The resultant
appreciation aggregating to Rs. 752.17 Crore has been added to the
Gross Block of the Fixed Assets and credited to Revaluation Reserve.
Consequent to the revaluation, there is an additional charge for
depreciation of Rs. 53.90 Crore (Rs. 53.95 Crore) and an equivalent
amount, has been withdrawn from Revaluation Reserve and credited to the
profit and Loss Account.
10. 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, 2010. 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 identifed on the basis
of information available with the Company.
11. Buy-back of Equity Shares :
Pursuant to the approval of the Board of Directors and shareholders of
the Company, for buy-back of equity shares under Section 77A of the
Companies Act, 1956 upto 25% of the paid-up equity share capital and
free reserves of the Company aggregating Rs. 2,000.14 Crore, the
Company has bought-back 7,53,505 (9,554,995) equity shares during the
year ended March 31, 2010 through open market transactions for Rs.
43.15 Crore (Rs.759.28 Crore), by utilising the Securities Premium
account and the General Reserve to the extent of Rs. 42.40 Crore (Rs.
749.73 Crore) and Rs. 0.75 Crore (Rs. 9.55 Crore) respectively. The
Capital Redemption Reserve has been created out of General Reserve for
Rs. 0.75 Crore (Rs. 9.55 Crore) being the nominal value of shares
bought back in terms of Section 77A of the Companies Act, 1956.
12. Equity Share Warrants :
(a) The Company had received an amount of Rs. 783. 49 crore towards
initial subscription of 4.30 crore warrants from a promoter group
company (as defned under SEBI (Substantial Acquisition of Shares and
Takeovers) (Amendment) Regulations, 2009), to subscribe 4.30 crore
equity shares for an aggregate value of Rs. 7,835 crore. As the
promoters have opted not to exercise the option of conversion, the
Committee of Directors in its meeting held on May 24, 2009 approved the
cancellation of 4.30 crore warrants and forfeited the advance amount
received. The said amount has been credited to Capital Reserve.
(b) During the year, pursuant to the approval of the shareholders
through postal ballot, the Company made a allotment of 4.29 crore
warrants to one of the promoters AAA Project Ventures Private Limited
(AAAPVL). The warrant holder will be entitled to apply for one equity
share of the Company of Rs. 10 each for every warrant held, at any time
but on or before 18 months from the date of allotment of warrants. The
Company received an amount of Rs. 996.23 crore from AAAPVL towards
initial subscription of 4.29 crore warrants being 25% of the total
amount. Subsequently, the Company received an application for
conversion of 1.96 crores warrants into shares along with the balance
of Rs.1,365.47 crore. The Company allotted 1.96 crore equity shares to
AAAPVL against conversion of said warrants.
13. Interest in Joint Venture Operations :
The Company along with M/s. Geopetrol International Inc. and Reliance
Natural Resources Limited *(the consortium) has been allotted 4 Coal
Bed Methane (CBM) blocks from Ministry of Petroleum and Natural Gas (Mo
PNG) covering an acreage of 3,266 square kilometers in the States of
Madhya Pradesh, Andhra Pradesh and Rajasthan. The consortium has
entered into a production sharing agreement with Government of India
for exploration and production of these four CBM blocks. The Company is
a non-operator and has 45% share in each of the four blocks.
Also the Company along with M/s. Geopetrol International Inc, Naftogaz
India Private Limited and Reliance Natural Resources Limited *(the
consortium) has been allotted oil block from Ministry of Petroleum and
Natural Gas (Mo PNG), in the State of Mizoram under the New Exploration
Licensing Policy (NELP - VI) round, covering an acreage of 3,619 square
kilometers and the consortium has signed an agreement with the
Government of India for exploration and production of an Oil and Gas
block. The Company is a non-operator and has 70% share in the block.
During the year, the Company has accounted for Rs. 3.71 Crore towards
its share of expenditure on survey and prospecting activities.
14. Amount due from customers represents amount of Rs. 3,400.50 crore
(Rs. 5,061.50 crore) being contracts in progress valued at cost plus
recognised profit less progress billing of Rs. 3,146.10 crore (Rs.
4,899.86 crore). Amount due to customer represents an amount of Rs.
6,778.29 crore (Rs. 1,681.92 crore) being contract in progress valued
at progress billing less cost plus recognised profit of Rs. 6,472.96
crore (Rs. 1,620.68 crore).
Pursuant to Accounting Standard (AS) 7 (Revised) "Construction
Contracts", aggregate amount of Contract cost incurred and recognised
profits (less recognised losses) as at the end of the financial year
for all the contracts in progress is Rs. 9,873.46 crore (Rs. 6,682.18
crore).
15. Disclosure as required under AS Ã 19 :
Disclosure as required under AS - 19 "Accounting for Leases" as
prescribed under Companies (Accounting Standards) Rules, 2006 is given
below :
(a) The Company has entered into cancellable leasing agreement for
office, residential and warehouse premises renewable by mutual consent
on mutually agreeable terms.
16. Power Banking :
The cost of electricity purchased is net of cost incurred towards units
purchased and banked with other parties and/or units banked by other
parties with us, both on loan basis. Such transactions remaining
unsettled at the year end, is carried forward under Loans and Advances
/ Sundry Creditors, as the case may be at the value of purchase on the
date of the transactions when the units are banked, either way, as the
case may be.
17. Figures for the previous year have been
regrouped/reclassified/rearranged wherever necessary to make them
comparable to those for the current year. Figures in bracket indicate
previous years fgures. Ã@- represents fgures less than Rs. 50,000
which have been shown at actuals in brackets with @.
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