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Notes to Accounts of CESC Ltd.
Mar 31, 2025
(r) Provisions and contingent liabilities
Provisions are recognised when the Company has
a present obligation as a result of a past event, it is
probable that an outflow of resources embodying
economic benefits will be required to settle the
obligation and a reliable estimate can be made of the
amount of the obligation.
A disclosure for contingent liabilities is made when
there is a possible obligation arising from past events,
the existence of which will be confirmed only by
the occurrence or non-occurrence of one or more
uncertain future events not wholly within the control
of the Company or a present obligation that arises
from past events where it is either not probable
that an outflow of resources embodying economic
benefits will be required to settle or a reliable estimate
of the amount cannot be made.
(s) Business combination
Business combination involving entities or businesses
under common control are accounted for using
the pooling of interest method whereby the assets
and liabilities of the combining entities / business
are reflected at their carrying value and necessary
adjustments , if any, have been given effect to as per
the scheme approved by National Company Law
Tribunal, as applicable.
(t) Regulatory deferral account balances
The Company is a rate regulated entity and follows
Ind AS 114, Regulatory Deferral Accounts. Expenses/
Income are recognized as Regulatory Income/
Expenses in the Statement of Profit and Loss to the
extent recoverable or payable in subsequent periods
based on the Company''s understanding of the
provision of the applicable regulations framed by
the West Bengal Electricity Regulatory Commission
(WBERC/ Commission) and/or their pronouncements/
orders, with corresponding balances shown in
the Balance Sheet as Regulatory Deferral Account
balances, at their present value duly considering
appropriate discounting methodology in consonance
with the applicable regulations and prudence.
Regulatory Deferral Account balances being estimates
are revised based on factual developments, including
impact of regulatory orders.
note-2b summary of significant judgements
and assumptions
The preparation of Standalone financial statements
requires the use of accounting estimates, judgements
and assumptions. Management also needs to exercise
judgement in applying the Company''s accounting policies.
Estimates and judgements are continually evaluated. They
are based on historical experience and other factors,
including expectations of future events that may have a
financial impact on the Company and that are believed to
be reasonable under the circumstances.
The areas involving critical estimates or Judgements are:-
Estimate of useful life of Intangible Assets -Note -2A (e)
Estimation of Restoration Liability- Note-2A (e)
Fair Valuation/Impairment assessment of certain Investments
-Note-7 & Note-2 A (g)
Estimation of Regulatory Deferral Account Balances- Note
-18 & 39
Impairment of Trade Receivables -Note - 2A (g)
Estimates used in Actuarial Valuation of Employee benefits
-Note-35
Estimates used in Lease liabilities -Note-50
note-3 changes in existing ind-as
Ministry of Corporate Affairs ("MCA") notifies new standards
or amendments to the existing standards under Companies
(Indian Accounting Standards) Rules as issued from time to
time. For the year ended March 31, 2025 , MCA has not
notified any new standards or amendments to the existing
standards applicable to the Company.
a) User Fee Income earned recognised in Statement of profit & loss '' 11.70 crore (previous year: '' 11.70 crore)
b) Fair valuation of the above freehold land as per rent capitalisation method (income approach) amounts to '' 295 crore
(as on 31.03.2024 : '' 292 crore) as per registered independent valuer and categorised as level 2. The main inputs used
in determining the fair valuation of the Investment Property are utility, marketability, self liquidity, future rentals, etc.
c) The lease term in respect of Investment Property given under Operating Lease is 25 years which can be extended
upon the sole discretion of the Company. This lease has been granted to Quest Properties India Limited to develop,
operate and maintain a mall during the said lease term and the aforesaid property has been offered as security in
respect of financial assistance availed by the said company. Incentive given by the Company by way of rent free period
for development of the Investment Property has been spread across the period of the contract. Future minimum lease
rental receivables during next one to five years '' 11.70 crore (as on 31.03.2024 : '' 11.70 crore) in each of the years and
later than five years '' 31.21 crore (as on 31.03.2024: '' 42.92 crore).
d) The lease term in respect of Investment Property - leasehold land is 29 years 11 months which can be extended upon
the execution and registration of fresh lease deed on mutually acceptable terms and conditions between the parties.
The Company intends to sublease this land in near future.
Fund for unforeseen exigencies has been created for dealing with unforeseen exigencies and the amount transferred
during the year will be invested as per the applicable regulations. Retained Earnings represents profit earned by the
Company, net of appropriations till date and adjustments done on transition to Ind AS. Equity Instruments through
Other Comprehensive Income represents the cumulative gains and losses arising on fair valuation of equity instruments
measured at fair value through Other Comprehensive Income.
Capital reserve had arisen consequent to a scheme of arrangement pursuant to National Company Law Tribunal
(NCLT) order in financial year ended 31st March 2018.
i Debentures amounting to Nil (31.03.2024 - '' 200.00 crore) are secured, ranking pari passu inter se, by hypothecation
of the movable property, plant and equipment of the Company as a first charge and '' 1400 crore (31.03.2024 - ''
1500.00 crore) are secured, ranking pari passu inter se, by equitable mortgage / hypothecation of the property,
plant and equipment of the Company as a first charge.
ii Term Loans amounting to:
(a) '' 7321.23 crore (31.03.2024 - '' 5870.84 crore) are secured, ranking pari passu inter se, by equitable mortgage
/ hypothecation of the property, plant and equipment of the Company including its land, buildings and
any other constructions thereon, plant and machinery, etc. as a first charge and, as a second charge, by
hypothecation of the Company''s current assets comprising stock of stores, coal, book debts, monies
receivable and bank balances;
(b) '' 857.51 crore (31.03.2024 - '' 913.35 crore) are secured, ranking pari passu inter se, by equitable mortgage /
hypothecation of the property, plant and equipment of the Company as a first charge;
(c) Nil (31.03.2024- '' 150.00 crore) are secured, ranking pari passu inter se, by hypothecation of the movable
property, plant and equipment and current assets of the Company as a first charge;
(d) '' 200 crore (31.03.2024- '' 200.00 crore) are secured, ranking pari passu inter se, by hypothecation of the
movable property, plant and equipment of the Company as a first charge;
(e) Out of above, creation of mortgage security in respect of Rupee Loans aggregating to '' 2327.50 crore is in
process as on 31.03.2025.
a. Estimated amount of contracts remaining to be executed on capital account and letter of comforts towards borrowing
/ financing obligations of subsidiaries from banks, not provided for amount to '' 41.31 crore (31.03.2024 : '' 34.68 crore)
and '' 1414.43 crore (31.03.2024 : '' 1263.87 crore) respectively.
b. The Ministry of Coal had encashed the bank guarantee of the Company amounting to '' 66.15 crore in April 2018, in
terms of its letter dated 25.04.2018, alleging non-compliance with the mining plan for the years 2015-16 and 2016¬
17 as per the Coal Mine Development and Production Agreement (CMDPA). Further, in terms of the above letter, the
Ministry had directed the Company to top-up the bank guarantee with the aforesaid encashed amount. The Hon''ble
High Court of Delhi while disposing the petition filed by the Company against the Ministry''s letter dated 25.04.2018,
stayed the operation of this letter and further directed the Company to approach the Tribunal. The Company has filed
a petition before the Special Tribunal at Godda, Jharkhand challenging the letter dated 25.04.2018 and further seeking
refund of the encashed amount. Based on a legal opinion, the Company expects a favourable outcome in the matter,
and no provision has been considered necessary.
c. The Company has given bank guarantee of '' 184.05 crore (31.03.2024 : '' 202.80 crore) for procurement of coal, etc.
which is outstanding as on the reporting date.
d. The Company had executed commitment agreement to extend support and provide equity in respect of certain
subsidiaries engaged in project development including restriction on transfer of investments.
e. i) The Company had received a Show Cause cum demand notice of '' 14.71 crore for Service Tax on Additional
Premium together with other charges being paid for coal mining to Government of India as per the terms of
allocation of the Sarisatoli Coal mine. The aforesaid demand has been confirmed by The Commissioner Central
Tax & Central Excise, Howrah Commissionerate. The Company has filed an Appeal against the said Order at
Customs, Excise and Service Tax Appellate Tribunal which is pending disposal as on date. Based on legal opinion
obtained, the Company expects a favourable outcome in the matter and no provision has been considered
necessary in the books of accounts.
(ii) The Company had received order under section 270A of the Income Tax Act for '' 0.96 crore in respect of
Assessment Year 2018-19 on certain disallowances made during the course of assessment proceedings and filed
necessary appeal. Based on legal opinion obtained, the Company expects a favourable outcome in the matter
and no provision has been considered necessary in the books of accounts.
(iii) The Company has received adjudication orders aggregating to '' 34.69 crore confirming GST on road restoration
charges paid by the Company to municipal authorities. The Company has filed appeals against the aforesaid
Order before the Commissioner Appeal. Based on legal opinion obtained, the Company expects a favourable
outcome in the matter and no provision has been considered necessary in the books of accounts.
f. Bharat Coking Coal Limited (BCCL) and Mahanadi Coalfields Limited (MCL) raised demands on the Company amounting
to '' 111 crore and '' 12 crore respectively with respect to alleged excess supply of coal during 2015-16 and 2016-17
under respective Fuel Supply Agreements (FSAs) towards levy of premium beyond the notified and settled price. Such
levy of premium is not in consonance with the FSAs and accordingly the Company has moved to the Hon''ble Calcutta
High Court and obtained interim protection against the aforesaid demands. In the current year, the Company received
similar demand from Eastern Coalfields Limited amounting to '' 22 crore. Based on a legal opinion, the Company
expects a favourable outcome in the matter, and no provision has been considered necessary.
g. With regard to the Company''s power purchase from one of its subsidiaries (provider), West Bengal Electricity Regulatory
Commission (WBERC) has issued the tariff order (considering applicable Annual Performance Review (APR) orders for
Generation and Transmission Project) for the years 2018-19 to 2024-25, wherein certain underlying matters have
been dealt with in deviation from past practices of tariff determination and kept for disposal through future truing up
exercise, impact of which is not ascertained. The said provider not being in agreement with the same, has since filed
appeal in respect of the above Tariff Order before the Hon''ble Appellate Tribunal for Electricity (APTEL) on the grounds
interalia, that the orders have been passed after substantial period of delay, the applicable periods are long over and
directions passed are impossible to comply because of significant delay in passing the said orders. However, since the
Tariff Order from the financial year 2022-23 onwards were issued during applicable financial years, the said provider
has given effect to the same from 2022-23 onwards with application of principles in terms of applicable Regulations.
With respect to APR orders of the said provider from WBERC for the years 2014-15 to 2019-20 including refund orders
for the aforesaid APR Orders, the said provider not being in agreement with the same, has filed appeals in the matter
before the Hon''ble APTEL in respect of APR orders/refund orders. Based on legal opinion obtained, the provider is
confident of the matter being adjudicated in its favour. Accordingly, necessary adjustment, if any, will be made on the
matter reaching finality.
The Company makes contributions for provident fund and family pension schemes (including for superannuation)
towards retirement benefit plans for eligible employees. Under the said plan, the Company is required to contribute a
specified percentage of the employees'' salaries to fund the benefits. The fund has the form of trust and is governed by
the Board of Trustees. During the year, based on applicable rates, the Company has contributed and charged '' 62.61
crore (previous year : '' 63.44 crore) on this count in the Statement of Profit and Loss .
The Company also sponsors the Gratuity plan, which is governed by the Payment of Gratuity Act, 1972. The Company
makes annual contribution to independent trust, who in turn, invests in the Employees Group Gratuity Scheme of
eligible funds for qualifying employees.
Liabilities at the year end for gratuity, leave encashment and other retiral benefits including post-retirement medical
benefits have been determined on the basis of actuarial valuation carried out by an independent actuary.
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 while 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.
The Plans in India typically expose the Company to some risks, the most significant of which are detailed below:
Discount Rate risk: Decrease in discount rate will increase the value of the liability. However, this will partially set off by
the increase in the value of plan assets.
Demographic Risk: In the valuation of the liability certain demographic (mortality and attrition rates) assumptions are
made. The Company is exposed to this risk to the extent of actual experience eventually being worse compared to the
assumptions thereby causing an increase in the scheme cost.
Future Salary Increase Risk: In case of gratuity & leave the scheme cost is sensitive to the assumed future salary
escalation rates for all last drawn salary linked defined benefit Schemes. If actual future salary escalations are higher
than that assumed in the valuation actual Scheme cost and hence the value of the liability will be higher than that
estimated. But PRMB & pension are not dependant on future salary levels.
Regulatory Risk: New Act/Regulations may come up in future which could increase the liability significantly in case
of Leave obligation, PRMB & Pension. Gratuity Benefit must comply with the requirements of the Payment of Gratuity
Act, 1972 (as amended up-to-date). Also in case of interest rate guarantee, Exempt Provident Fund must comply with
the requirements of the Employees Provident Funds and Miscellaneous Provisions Act 1952 as amended up-to-date.
Regulatory Income /(Expenses) arise to the Company pursuant to the regulatory provisions applicable to the Company
under the provisions of the Electricity Act, 2003 and regulations framed thereunder and disposals made by WBERC on
the Company''s various petitions / applications, in terms of the said regulations, at different timeframe including the tariff
and APR orders for various years notified till date. These estimates have been recognised with discounting methodology,
assuming recovery over a period of time, in consonance with the applicable regulations and application of prudence,
considering net discounting impact of '' (61.89) crore [previous year '' (695.25) crore].
The effect of adjustments towards income/(expenses) for the current year, relating to (a) cost of energy purchased, fuel
related costs and those having bearing on revenue account and (b) Deferred Taxation estimate, as appropriate, based on
the Company''s understanding of the applicable regulatory provisions and applicable orders of the competent authorities,
note-39 regulatory INCOME (Contd.)
amounts to '' 1195.00 crore [previous year '' 1623.00 crore] and '' (60.20) crore (previous year '' (126.64) crore) respectively.
The cumulative sum as described above have been shown as Regulatory Income/(Expenses) with corresponding sums,
reflected in Balance Sheet as Regulatory Deferral Account Balances (refer Note 18).
During the current financial year, the Company has received orders from WBERC in respect of its Annual Performance
Review (APR) for the financial year 2019-20 and Multi Year Tariff order for the period 2023-24 to 2025-26, which has
deviated from past practices / extant regulations in certain matters, for which the Company has filed necessary appeals.
Based on legal opinion obtained, the Company is confident of the matter being adjudicated in its favour. Accordingly,
necessary adjustment, if any, will be made on the matter reaching finality.
The Regulatory Deferral Asset and related Deferred Tax Liability balances as at 1st April, 2024, was recomputed and reduction
of '' 751.94 crore and '' 151.63 crore was factored on account of adoption of New Tax Regime and effect of change in capital
gains taxation pursuant to Finance Act 2024 respectively.
Regulatory deferral account debit balance comprise the effect of (a) Deferred tax recoverable, (b) cost of fuel and purchase
of power and other adjustments having bearing on revenue account amounting to '' 2,193.47 crore (31.03.2024: '' 3,207.94
crore) and '' 3,762.07 crore (31.03.2024: '' 2,564.04 crore) respectively. Upon discontinuation of AAD as per the revised
Regulations with effect from 1st April, 2023, the same was adjusted with Regulatory Deferral Account debit balance in
previous year. These balances have been recognised with discounting methodology, assuming recovery over a period of
time using such rate in accordance with regulations and application of prudence.
Accordingly, the accurate quantification and disposal of the matters with regard to Regulatory Deferral Account balances,
shall be given effect to, from time to time, on receipt of necessary direction from the appropriate authorities, including
those attributable to the mining of coal from Sarisatolli mine which commenced operations from 10th April 2015.
The different levels have been defined below:
Level 1: financial instruments measured using quoted price. The fair value of all equity instruments which are traded in
the stock exchanges is determined using the closing price.
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (i.e., as prices) or indirectly (i.e., derived from prices)
Level 3: inputs for the asset or liability that are not based on observable market data.
c) The following methods and assumptions were used to estimate the fair values
i. The fair value of preference share is determined on the basis of discounted cash flow wherein future cash flows
are based on the terms of preference share discounted at rate that reflects market rate.
ii. The carrying amounts of trade receivables, trade payables, receivable towards claims and services rendered,
receivable from related parties, other bank balances, interest accrued payable/receivable, other receivables/
payables, cash and cash equivalents are considered to be the same as their fair values, due to their short term
nature.
iii. Loans, non-current borrowings, lease receivable/payable and security deposits are based on amortised cost using
effective interest rate method.
iv. Fair Value of financial Intruments is determined on the basis of discounted cash flow analysis, considering the
nature, risk profile and other qualitative factors.The carrying amounts are a reasonable approximation of the fair
value.
note-41 financial risk and other risks management and capital management
The Company''s operations of generation and distribution of electricity are governed by the provisions of the Electricity
Act 2003 and Regulations framed thereunder by the West Bengal Electricity Regulatory Commission and accordingly
the Company, being a licensee under the said statute, is subject to regulatory provisions/ guidelines and issues evolving
therefrom, having a bearing on the Company''s liquidity, earning, expenditure and profitability, based on efficiency parameters
provided therein including timing of disposal of applications / regulatory matters by the authority.
The Company being the sole provider of electricity in the licenced area has been managing the operations keeping in
view its profitability and liquidity in terms of above regulations. In order to manage credit risk arising from sale of electricity,
multipronged approach is followed like maintenance of security deposit, precipitation of action against defaulting consumers,
obtaining support of the administrative authority. Credit risk towards Investment of surplus funds is managed by obtaining
support of credit rating and appraisal by external agencies and lending bodies. The Company extends financial support to
its subsidiaries including that of letter of comforts etc. to their lenders.
The Company manages its liquidity risk on financial liabilities by maintaining healthy working capital and liquid fund position
keeping in view the maturity profile of its borrowings and other liabilities as disclosed in the respective notes.
The Company''s market risk relating to variation of foreign currency, interest rate and commodity price is mitigated through
relevant regulations and availability of bulk commodity namely coal generally sourced from own captive mine, domestic
long term linkage and Special Forward E-Auction conducted by Coal India Limited and/or its subsidiaries.
While managing the capital, the Company ensures to take adequate precaution for providing returns to the shareholders
and benefit for other stakeholders, including protecting and strengthening the balance sheet. Availability of capital and
liquidity is also managed, in consonance with the applicable regulatory provisions.
The Company considers climate-related matters in estimates and assumptions, where appropriate. The Company is
closely monitoring relevant changes and developments, such as new climate-related legislation. The Company analyses all
applicable statutory compliances towards enhancing energy efficiency through implementation of latest technologies and
adoption towards reduction of green house gas emissions in its establishments.
Liability in respect of the security deposit collected by the Company, in terms of applicable regulations of the WBERC, has
been classified as non - current, given the nature of its business in the license area, excepting to the extent of the sum
refundable / payable within a year, based on past trends.
Interest on Consumers'' Security Deposits (being in the nature of trade deposits) is included in Other Expenses, as per
consistent practice followed by the Company. This is paid to the consumers at the applicable rates in terms of the Regulations
framed, under the Electricity Act, 2003.
NOTE-46
Miscellaneous Expenditure in Note 38, includes a Contribution of '' 60 crore (previous year: '' 60 crore) to Prudent Electoral
Trust in accordance with Sec. 182 of the Companies Act, 2013.
The Company is primarily engaged in generation and distribution of electricity which is the only reportable business segment
in line with the segment wise information which is being presented to the Chief Operating Decision Maker (CODM). There
are no reportable geographical segments, since all business is within India.
The Company is also running a single retail store in state of Gujarat which is not significant for the CODM and hence not
considered as reportable segment.
NOTE-49
Part A of Schedule II to the Companies Act. 2013 (the Act), inter alia, provides that depreciable amount of an asset is the
cost of an asset or other amount substituted for cost. Part B of the said Schedule deals with the useful life or residual value
of an asset as notified for accounting purpose by a Regulatory Authority constituted under an act of Parliament or by the
Central Government for calculating depreciation to be provided for such asset irrespective of the requirement of Schedule
II. In terms of applicable Regulations under the Electricity Act, 2003, depreciation on tangible assets other than freehold land
is provided on straight line method on a pro-rata basis at the rates specified therein, the basis of which is considered by the
West Bengal Electricity Regulatory Commission (Commission) in determining the Company''s tariff for the year, which is also
required to be used for accounting purpose as specified in the said Regulations. Based on legal opinions and accounting
interpretations obtained, the Company continues with the consistently followed practice of recouping from the retained
earnings an additional charge of depreciation relatable to the increase in value of assets arising from fair valuation , which
for the current year amounts to '' 190.96 crore (31.03.2024 : '' 249.18 crore) and corresponding withdrawal of '' 0.13 crore
( 31.03.2024 : '' 0.07 crore ) consequent to sale / disposal of such assets.
Consequent to change in WBERC regulations relating to Advance Against Depreciation (AAD), the net depreciation charge
for the year has been computed after necessary adjustments of AAD computed in terms of the Tariff regulations, as amended
from time to time. Consequently, the depreciation amount to be claimed for the year for tariff purposes, is reduced by '' 3.03
crore (previous year: '' 0.02 crore). Also refer Note 2A(c).
None of the above ratios vary more than 25% except Trade Payables turnover ratio. Such variation in Trade Payable turnover
ratio is due to increase in Payable to a subsidiary company for power purchases, which does not have any impact on a
consolidated basis.
Formulae for computation of above ratios are as follows:
Current Ratio = Total Current Assets / Total Current Liabilities
Debt Equity Ratio = Non Current Borrowings (including current maturities of long-term debts) Current Borrowings /
Total Equity
Debt Service Coverage Ratio = Profit after tax depreciation deferred tax provisions finance costs / finance costs
lease rent expense (excluding short term lease rent) debt repayments (net of proceeds utilised for Refinancing)
Return on Equity (ROE) = Profit after tax / Average Total Equity
Inventory Turnover Ratio = Cost of Fuel / Average Fuel Inventory
Trade Receivables Turnover Ratio = Revenue from Operations / Average Trade Receivables
Trade payables turnover Ratio = Cost of Fuel & Power Purchase / Average Trade payable for cost of energy purchased &
cost of fuel
Net working capital turnover ratio = Revenue from Operations / Average Working Capital
Net profit ratio = Profit after Tax / Total Income
Return on capital employed (ROCE) = Earning before interest and taxes / Capital Employed
Capital Employed = Total Equity Non Current Borrowings (including current maturities of long-term debts) Current
Borrowings
Return on investment = Income generated from investments/ Average invested funds in treasury investment
Net Worth = Equity Other Equity
I n addition to above, the Company had entered into certain transactions in the ordinary course of business with
347 struck off companies during the previous year. The individual balances of such struck off companies are below
'' 50,000 and the aggregate outstanding balance as on March 31, 2024 is '' (0.20) crore.
(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory
period.
(iv) The Company has not traded or invested in Crypto Currency or Virtual Currency during the financial year.
(v) The Company has not, except as detailed below, advanced or loaned or invested funds to any other person(s) or
entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf
of the company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
NOTE-53 OTHER STATUTORY INFORMATION (Contd.)
During the year the Company has given an amount of '' 1019 crore to Eminent Electricity Distribution Limited (EEDL), a
wholly owned subsidiary, who has acquired 100% controlling interest in Chandigarh Power Distribution Limited (CPDL)
for aggregate consideration of '' 871 crore. CPDL has been granted license to carry out the function of distribution and
retail supply of electricity in Union Territory of Chandigarh effective from 1st February, 2025.
(vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with
the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf
of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(vii) The Company has no such transaction which is not recorded in the books of accounts that has been surrendered or
disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey
or any other relevant provisions of the Income Tax Act, 1961).
(viii) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with
Companies (Restriction on number of Layers) Rules, 2017.
(ix) The Company is maintaining its books of accounts in electronic mode and these books of accounts are accessible in
India at all times and the back-up of the books of accounts has been kept in servers physically located in India on a daily
basis. The Company has used various accounting software for maintaining its books of account which has a feature
of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions
recorded in the software. Further no instance of audit trail feature being tampered with was noted in respect of those
accounting software. Additionally, the audit trail of previous year has been preserved by the Company as per the
statutory requirements for record retention to the extent it was enabled and recorded in the previous year.
(x) The quarterly returns or statements filed by the Company with the banks or financial institutions are in agreement with
the books of accounts.
NOTE-54 DISCLOSURE UNDER SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI) (LISTING OBLIGATIONS AND
DISCLOSURE REQUIREMENTS) REGULATIONS, 2015.
The Company has given loans and advances from time to time to its wholly owned subsidiaries, Kota Electricity Distribution
Limited (KEDL), Eminent Electricity Distribution Limited (EEDL) and Malegaon Power Supply Limited (MPSL) amounting to
'' 30.30 crore, '' 1019 crore and '' 60 crore respectively. Out of the said loans and advances, a sum of '' 52.60 crore was
refunded to the Company by KEDL thereby leaving an outstanding balance as on March 31, 2025 of '' 4 crore (31.03.2024:
'' 26.30 crore for KEDL), '' 1019 crore for EEDL (31.03.2024: Nil) and '' 60 crore for MPSL (31.03.2024: Nil). The maximum
outsanding amount during the year was '' 26.30 crore (31.03.2024: 82.30 crore), '' 1019 crore (31.03.2024: Nil) and '' 60
crore (31.03.2024: Nil) for KEDL, EEDL and MPSL respectively.
The installed capacity of the Generating Stations of the Company as on 31st March, 2025 was 1125000 kW (31st March,
2024 : 1125000 kW).
NOTE-56
The Ministry of Power, Government of India, has since issued Electricity Distribution (Accounts and Additional Disclosure)
Rules, 2024 (''the Rules'') in pursuance of section 176(1) and 176(2)(z) of the Electricity Act, 2003 read with second proviso
to section 129 (1) of the Companies Act, 2013, which are applicable to the Company and effective from the date of its
notification in the Official Gazette on 14th October, 2024, that have been complied with by the Company.
NOTE-57
The above financial statements were approved by the Board of Directors at their meeting held on 15th May, 2025.
For S.R. BATLIBOI & Co. LLP For and on behalf of Board of Directors
Chartered Accountants
Firm Registration Number -301003E/E300005
Chairman Dr. Sanjiv Goenka DIN: 00074796
Navin Agrawal Managing Director -Generation Brajesh Singh DIN: 10335052
Partner Managing Director- Distribution Vineet Sikka DIN: 10627000
Membership No.: 056102 Executive Director & CFO Rajarshi Banerjee
Kolkata, 15th May, 2025 Company Secretary Jagdish Patra
Mar 31, 2024
(r) Provisions and contingent liabilities
Provisions are recognised when the Company has a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
A disclosure for contingent liabilities is made when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control
of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources embodying economic benefits will be required to settle or a reliable estimate of the amount cannot be made.
(s) Business combination
Business combination involving entities or businesses under common control are accounted for using the pooling of interest method whereby the assets and liabilities of the combining entities / business are reflected at their carrying value and necessary adjustments , if any, have been given effect to as per the scheme approved by National Company Law Tribunal, as applicable.
(t) Regulatory deferral account balances
The Company is a rate regulated entity and follows Ind AS 114, Regulatory Deferral Accounts. Expenses/ Income are recognized as Regulatory Income/ Expenses in the Statement of Profit and Loss to the extent recoverable or payable in subsequent periods based on the Company''s understanding of the provision of the applicable regulations framed by the West Bengal Electricity Regulatory Commission (WBERC/ Commission) and/or their pronouncements/ orders, with corresponding balances shown in the Balance Sheet as Regulatory Deferral Account balances, at their present value duly considering appropriate discounting methodology in consonance with the applicable regulations and prudence. Regulatory Deferral Account balances being estimates are revised based on factual developments, including impact of regulatory orders.
NOTE-2B SUMMARY OF SIGNIFICANT JUDGEMENTS
AND ASSUMPTIONS
The preparation of Standalone financial statements
requires the use of accounting estimates, judgements
and assumptions. Management also needs to exercise judgement in applying the Company''s accounting policies.
Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.
The areas involving critical estimates or judgements are :-Estimate of useful life of Intangible Assets -Note -2A (e) Estimation of Restoration Liability- Note- 2A (e)
Fair Valuation/Impairment assessment of certain Investments -Note-7 & Note-2 A (g)
Estimation of Regulatory Deferral Account Balances-Note -18 & 39
Impairment of Trade Receivables -Note - 2A (g) Estimates used in Actuarial Valuation of Employee benefits -Note-35
Estimates used in Lease liabilities -Note-50
NOTE-3 CHANGES IN EXISTING IND AS
The Ministry of Corporate Affairs has notified Companies (Indian Accounting Standards) Amendment Rules, 2023 dated 31 March 2023 to amend the following Ind AS which are effective for annual periods beginning on or after 1 April 2023, but do not have any significant impact on the Standalone Financial Statements.
(i) Definition of Accounting Estimates - Amendments to Ind AS 8
(ii) Disclosure of Material Accounting Policies -Amendments to Ind AS 1
(iii) Deferred Tax related to Assets and Liabilities arising from a Single Transaction - Amendments to Ind AS 12.
NOTE -19 EQUITY (Contd..)
f. Terms /rights attached to equity shares:
The Company has only one class of equity shares having a par value of '' 1/- per share fully paid up. Holders of equity shares are entitled to one vote per share. An Interim dividend of '' 4.50/- per equity share of '' 1/- each (31.03.2023: '' 4.50 /- per equity share of '' 1/- each) has been paid during the year ended 31st March 2024. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the sale proceeds from remaining assets of the Company after distribution of all preferential amounts, in proportion to the number of equity shares held by the shareholders.
NOTE -21 NON CURRENT BORROWINGS (Contd..)
ii Term Loans amounting to:
(a) '' 5870.84 crore (31.03.2023 - '' 3846.40 crore) are secured, ranking pari-passu inter se, by equitable mortgage / hypothecation of the property, plant and equipment of the Company including its land, buildings and any other constructions thereon, plant and machinery, etc. as a first charge and, as a second charge, by hypothecation of the Company''s current assets comprising stock of stores, coal, book debts, monies receivable and bank balances.
(b) '' 913.35 crore (31.03.2023 - '' 700.35 crore) are secured, ranking pari-passu inter se, by equitable mortgage / hypothecation of the property, plant and equipment of the Company as a first charge;
(c) '' 150 crore (31.03.2023- '' 350 crore) are secured, ranking pari-passu inter se, by hypothecation of the movable property, plant and equipment and current assets of the Company as a first charge;
(d) '' 200.00 crore (31.03.2023- '' 340.56 crore) are secured, ranking pari-passu inter se, by hypothecation of the movable property, plant and equipment of the Company as a first charge; and
(e) '' NIL (31.03.2023- '' 375 crore) are secured, ranking pari-passu inter se, by hypothecation of the Company''s current assets as a first charge and by equitable mortgage / hypothecation of the property, plant and equipment of the Company as a second charge.
NOTE - 27 CURRENT TRADE PAYABLES (Contd..)
'' 0.09 crore (31.03.2023- '' 0.08 crore ), Nil (31.03.2023 - Nil), '' 0.90 crore (31.03.2023 - '' 0.75 crore), '' 4.65 crore (31.03.2023 - '' 3.75 crore) and Nil (31.03.2023- Nil) representing interest due on amount outstanding as at the year end, interest paid along with amount of payment made beyond the appointed day, interest due and payable for the period of delay in making payment during the year, amount of interest accrued and remaining unpaid at the year end, amount of further interest remaining due and payable in the succeeding years, respectively due to Micro and Small Enterprises, as defined in the Micro, Small and Medium Enterprises Development Act, 2006 based on information available with the Company.
NOTE -31 CONTINGENT LIABILITIES AND COMMITMENTS
a. Estimated amount of contracts remaining to be executed on capital account and letter of comforts towards borrowing / financing obligations of subsidiaries from banks, not provided for amount to '' 34.68 crore (31.03.2023 : '' 23.87 crore) and '' 1263.87 crore (31.03.2023 : '' 1648.57 crore) respectively.
b. The Ministry of Coal had encashed the bank guarantee of the Company amounting to '' 66.15 crore in April 2018, in terms of its letter dated 25.04.2018, alleging non-compliance with the mining plan for the years 2015-16 and 201617 as per the Coal Mine Development and Production Agreement (CMDPA). Further, in terms of the above letter, the Ministry had directed the Company to top-up the bank guarantee with the aforesaid encashed amount. The Hon''ble High Court of Delhi while disposing the petition filed by the Company against the Ministry''s letter dated 25.04.2018, stayed the operation of this letter and further directed the Company to approach the Tribunal. The Company has filed a petition before the Special Tribunal at Godda, Jharkhand challenging the letter dated 25.04.2018 and further seeking refund of the encashed amount. Based on a legal opinion, the Company expects a favourable outcome in the matter, and no provision has been considered necessary.
c. The Company has given bank guarantee of '' 202.80 crore (31.03.2023 : '' 143.95 crore) for procurement of coal, etc. which is outstanding as on the reporting date.
NOTE -31 CONTINGENT LIABILITIES AND COMMITMENTS (Contd..)
d. The Company has ongoing commitment to extend support and provide equity to the subsidiaries, in respect of various projects and otherwise where, in certain cases there are restriction on transfer of investments.
e. i) The Company had received a Show Cause cum demand notice of '' 14.71 crores for Service Tax on Additional
Premium together with other charges being paid for coal mining to Government of India as per the terms of allocation of the Sarisatoli Coal Mine. The aforesaid demand has been confirmed by The Commissioner Central Tax & Central Excise, Howrah Commissionerate. The Company has filed an Appeal against the said Order at Customs, Excise and Service Tax Appellate Tribunal which is pending disposal as on date. Based on legal opinion obtained, the Company expects a favourable outcome in the matter and no provision has been considered necessary in the books of accounts.
ii) The Company had received a Show Cause cum demand notice of '' 16.32 crores for Goods and Services Tax (GST) on Additional Premium together with other charges being paid for coal mining to Government of India as per the terms of allocation of the Sarisatolli Coal Mine. The case is pending before The Additional Commissioner/ Joint Commissioner, CGST Kolkata North Commissionerate. Based on legal opinion obtained, the Company expects a favourable outcome in the matter and no provision has been considered necessary.
(iii) The Company had received order under section 270A of the Income Tax Act for '' 0.96 crore in respect of Assessment Year 2018-19 on certain disallowances made during the course of assessment proceedings and filed necessary appeal. Based on legal opinion obtained, the Company expects a favourable outcome in the matter and no provision has been considered necessary in the books of accounts.
(iv) The Company has received an adjudication order for '' 14.95 crore confirming GST on road restoration charges paid by the Company to municipal authorities. The Company is in process of filing an appeal against the aforesaid Order before the Commissioner Appeal. Based on legal opinion obtained, the Company expects a favourable outcome in the matter and no provision has been considered necessary in the books of accounts.
f. Bharat Coking Coal Limited (BCCL) and Mahanadi Coalfields Limited (MCL) raised demands on the Company amounting to '' 111 crore and '' 12 crore respectively with respect to alleged excess supply of coal during 2015-16 and 2016-17 under respective Fuel Supply Agreements (FSAs) towards levy of premium beyond the notified and settled price. Such levy of premium is not in consonance with the FSAs and accordingly the Company has moved the Hon''ble Calcutta High Court and obtained interim protection against the aforesaid demands. Based on a legal opinion, the Company expects a favourable outcome in the matter, and no provision has been considered necessary.
g. With regard to the Company''s power purchase from one of its subsidiaries (provider), West Bengal Electricity Regulatory Commission (WBERC) has issued the tariff order (considering applicable Annual Performance Review (APR) orders for Generation and Transmission Project) for the years 2018-19 to 2024-25, wherein certain underlying matters have been dealt with in deviation from past practices of tariff determination and kept for disposal through future truing up exercise, impact of which is not ascertained. The said provider not being in agreement with the same, has since filed appeal in respect of the above Tariff Order before the Hon''ble Appellate Tribunal for Electricity (APTEL) on the grounds interalia, that the orders have been passed after substantial period of delay, the applicable periods are long over and directions passed are impossible to comply because of significant delay in passing the said orders. However, since the Tariff Order for the financial year 2022-23 and 2023-24 were issued during applicable financial years, the said provider has given effect to the same from 2022-23 onwards with application of principles in terms of applicable Regulations. With respect to APR orders of the said provider from WBERC for the years 2014-15 to 2016-17 in respect of Generation Project and for the years 2014-15 to 2019-20 in respect of Transmission Project including refund orders for the aforesaid APR Orders, the said provider not being in agreement with the same, has filed appeals in the matter before the Hon''ble APTEL in respect of APR Orders and Review Petitions before the Hon''ble WBERC in respect of the refund orders. The said provider has since received the APR Order for 2017-18 for Generation project and the provider is in the process of filling necessary appeal thereagainst. Based on legal opinion obtained, the provider is confident of the matter being adjudicated in its favour. Accordingly, necessary adjustment, if any, will be made on the matter reaching finality.
h. Commitments relating to leasing arrangement , refer note 50.
NOTE - 35 EMPLOYEE BENEFITS EXPENSE (Contd..)
(i) Defined contribution plans
The Company makes contributions for provident fund and family pension schemes (including for superannuation) towards retirement benefit plans for eligible employees. Under the said plan, the Company is required to contribute a specified percentage of the employees'' salaries to fund the benefits. The fund has the form of trust and is governed by the Board of Trustees. During the year, based on applicable rates, the Company has contributed and charged '' 63.44 crore (previous year : '' 65.96 crore) on this count in the Statement of Profit and Loss .
The Company also sponsors the Gratuity plan, which is governed by the Payment of Gratuity Act, 1972. The Company makes annual contribution to independent trust, who in turn, invests in the Employees Group Gratuity Scheme of eligible funds for qualifying employees.
Liabilities at the year end for gratuity, leave encashment and other retiral benefits including post-retirement medical benefits have been determined on the basis of actuarial valuation carried out by an independent actuary.
viii) Risk exposure
The Plans in India typically expose the Company to some risks, the most significant of which are detailed below: Discount Rate risk: Decrease in discount rate will increase the value of the liability. However, this will partially offset by the increase in the value of plan assets.
Demographic Risk: In the valuation of the liability certain demographic (mortality and attrition rates) assumptions are made. The Company is exposed to this risk to the extent of actual experience eventually being worse compared to the assumptions thereby causing an increase in the scheme cost.
Future Salary Increase Risk: In case of gratuity & leave the scheme cost is sensitive to the assumed future salary escalation rates for all last drawn salary linked defined benefit Schemes. If actual future salary increases are higher than the future salary increases assumed in the valuation estimation, then the value of the liability will be higher than that estimated. This will also enhance the scheme cost. But PRMB & pension are not dependant on future salary levels. Regulatory Risk: New Act/Regulations may come up in future which could increase the liability significantly in case of Leave obligation, PRMB & Pension. Gratuity Benefit must comply with the requirements of the Payment of Gratuity Act, 1972 (as amended up-to-date). Also in case of interest rate guarantee Exempt Provident Fund must comply with the requirements of the Employees Provident Funds and Miscellaneous Provisions Act 1952 as amended up-to-date.
NOTE-39 REGULATORY INCOME (Contd..)
The said income/(expenses) for the previous year included adjustment of Advance against Depreciation amounting to '' (11.36) crore which has been discontinued in terms of applicable Regulations effective from 01 April, 2023. The cumulative sum as described above have been shown as Regulatory Income/(Expenses) with corresponding sums, reflected in Balance Sheet as Regulatory Deferral Account Balances (refer Note 18).
During the current financial year, the Company has received orders from WBERC in respect of its Annual Performance Review (APR) for the year ended 31st March 2019. The impact of aforesaid order has been considered in these financial statements, including estimated impact for subsequent periods till date, under Regulatory income/(expense) for the year ended 31st March 2024.
Regulatory deferral account debit balance comprise the effect of (a) Deferred tax, (b) cost of fuel and purchase of power and other adjustments having bearing on revenue account amounting to '' 3,207.94 crore (31.03.2023: '' 3,334.61 crore) and '' 2,564.04 crore (31.03.2023: '' 2,510.23 crore) respectively and that relating to credit balance as on 31.03.2023, comprise of advance against depreciation amounting to '' 1,569.21 crore. Upon discontinuation of AAD as per the revised Regulations with effect from 1st April, 2023, the same has been adjusted with Regulatory Deferral Account debit balance during the current year. These balances have been recognised with discounting methodology, assuming recovery over a period of time using such rate in accordance with regulations and application of prudence.
Accordingly, the accurate quantification and disposal of the matters with regard to Regulatory Deferral Account balances, shall be given effect to, from time to time, on receipt of necessary direction from the appropriate authorities, including those attributable to the mining of coal from Sarisatolli mine which commenced operations from 10th April 2015.
c) The following methods and assumptions were used to estimate the fair values
i. The fair value of preference share is determined on the basis of discounted cash flow wherein future cash flows are based on the terms of preference share discounted at rate that reflects market rate.
ii. The carrying amounts of trade receivables, trade payables, receivable towards claims and services rendered, receivable from related parties, other bank balances, interest accrued payable/receivable, other receivables/ payables, cash and cash equivalents are considered to be the same as their fair values, due to their short term nature.
iii. Loans, non-current borrowings, lease receivable/payable and security deposits are based on amortised cost using effective interest rate method.
iv. Fair Value of financial Intruments is determined on the basis of discounted cash flow analysis, considering the nature, risk profile and other qualitative factors.The carrying amounts are a reasonable approximation of the fair value.
NOTE-41 FINANCIAL RISK MANAGEMENT AND CAPITAL MANAGEMENT
The Company''s operations of generation and distribution of electricity are governed by the provisions of the Electricity Act 2003 and Regulations framed thereunder by the West Bengal Electricity Regulatory Commission and accordingly the Company, being a licensee under the said statute, is subject to regulatory provisions/ guidelines and issues evolving therefrom, having a bearing on the Company''s liquidity, earning, expenditure and profitability, based on efficiency parameters provided therein including timing of disposal of applications / regulatory matters by the authority.
The Company being the sole provider of electricity in the licenced area has been managing the operations keeping in view its profitability and liquidity in terms of above regulations. In order to manage credit risk arising from sale of electricity, multipronged approach is followed like maintenance of security deposit, precipitation of action against defaulting consumers, obtaining support of the administrative authority. Credit risk towards Investment of surplus funds is managed by obtaining support of credit rating and appraisal by external agencies and lending bodies. The Company extends financial support to its subsidiaries including that of letter of comforts etc. to their lenders.
NOTE-41 FINANCIAL RISK MANAGEMENT AND CAPITAL MANAGEMENT (Contd..)
The Company manages its liquidity risk on financial liabilities by maintaining healthy working capital and liquid fund position keeping in view the maturity profile of its borrowings and other liabilities as disclosed in the respective notes.
The Company''s market risk relating to variation of foreign currency, interest rate and commodity price is mitigated through relevant regulations and availability of bulk commodity namely coal generally sourced from own captive mine, domestic long term linkage and Special Forward E-Auction conducted by Coal India Limited and/or its subsidiaries.
While managing the capital, the Company ensures to take adequate precaution for providing returns to the shareholders and benefit for other stakeholders, including protecting and strengthening the balance sheet. Availability of capital and liquidity is also managed, in consonance with the applicable regulatory provisions.
Liability in respect of the security deposit collected by the Company, in terms of applicable regulations of the WBERC, has been classified as non - current, given the nature of its business in the license area, excepting to the extent of the sum refundable / payable within a year, based on experience.
Interest on Consumers'' Security Deposits (being in the nature of trade deposits) is included in Other Expenses, as per consistent practice followed by the Company. This is paid to the consumers at the applicable rates in terms of the Regulations framed, under the Electricity Act, 2003,
NOTE- 46
Miscellaneous Expenditure in Note 38, includes a Contribution of '' 60 crore to Prudent Electoral Trust in accordance with Sec. 182 of the Companies Act, 2013 and provision for demand of '' 103.30 crore received from lessor in respect of certain leasehold properties, which is pending final settlement.
The Company is primarily engaged in generation and distribution of electricity which is the only reportable business segment in line with the segment wise information which is being presented to the Chief Operating Decision Maker (CODM). There are no reportable geographical segments, since all business is within India.
The Company is also running a single retail store in state of Gujarat which is not significant for the CODM and hence not considered as reportable segment.
NOTE- 49
Part A of Schedule II to the Companies Act. 2013 (the Act), inter alia, provides that depreciable amount of an asset is the cost of an asset or other amount substituted for cost. Part B of the said Schedule deals with the useful life or residual value of an asset as notified for accounting purpose by a Regulatory Authority constituted under an act of Parliament or by the Central Government for calculating depreciation to be provided for such asset irrespective of the requirement of Schedule II. In terms of applicable Regulations under the Electricity Act, 2003, depreciation on tangible assets other than freehold land is provided on straight line method on a pro-rata basis at the rates specified therein, the basis of which is considered by the West Bengal Electricity Regulatory Commission (Commission) in determining the Company''s tariff for the year, which is also required to be used for accounting purpose as specified in the said Regulations. Based on legal opinions and accounting interpretations obtained, the Company continues with the consistently followed practice of recouping from the retained earnings an additional charge of depreciation relatable to the increase in value of assets arising from fair valuation, which for the current year amounts to '' 249.18 crore (31.03.2023 : '' 214.08 crore) and corresponding withdrawal of '' 0.07 crore ( 31.03.2023 : '' 0.50 crore ) consequent to sale / disposal of such assets.
Consequent to change in WBERC regulations relating to Advance Against Depreciation (AAD), the net depreciation charge for the year has been computed after necessary adjustments of AAD computed in terms of the Tariff regulations, as amended from time to time. Consequently, the depreciation amount to be claimed for the year for tariff purposes, is reduced by '' 0.02 crore (previous year: Nil). Also refer Note 2A(c).
NOTE- 53 OTHER STATUTORY INFORMATION (Contd..)
on a daily basis. The Company has used various accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. However, audit trail feature is not enabled for direct changes to data when using certain access rights for all applications, due to technical reasons. Further no instance of audit trail feature being tampered with, was noted in respect of those accounting software.
(x) The quarterly returns or statements filed by the Company with the banks or financial institutions are in agreement with the books of accounts.
NOTE- 54 DISCLOSURE UNDER SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI) (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015.
The Company has given loans and advances from time to time to its two wholly owned subsidiaries, Kota Electricity Distribution Limited (KEDL) and Bharatpur Electricity Services Limited (BESL) amounting to '' 82.30 crore and '' 6.30 crore respectively. Out of the said loans and advances, a sum of '' 21 Crore was converted to equity by KEDL, while BESL has converted the entire amount of '' 6.30 crore into equity during the year. A sum of '' 73 crore was refunded to the Company by KEDL thereby leaving an outstanding balance as on March 31, 2024 of '' 26.30 crore (31.03.2023: '' 38 crore for KEDL).
NOTE- 56
The above financial statements were approved by the Board of Directors at their meeting held on 23rd May, 2024.
For S.R. BATLIBOI & Co. LLP For and on behalf of Board of Directors
Chartered Accountants
Firm Registration Number -301003E/E300005
Chairman Dr. Sanjiv Goenka DIN: 00074796 Navin Agrawal Managing Director - Generation Rabi Chowdhury DIN: 06601588
Partner Managing Director - Distribution Debasish Banerjee DIN: 06443204
Membership No.: 056102 Executive Director & CFO Rajarshi Banerjee
Kolkata, 23rd May, 2024 Company Secretary Jagdish Patra
Mar 31, 2023
1. Pursuant to the approval of the shareholders at the Forty-third Annual General Meeting 1(one) Equity Share of face value of '' 10/- (Rupees Ten Only) each fully paid-up was subdivided into 10(ten) Equity Shares of '' 1/- (Rupee One Only) each fully paid-up effective 21st September, 2021.
2. For the period of five years immediately preceding 31st March,2023, no shares were allotted as fully paid up pursuant to any contract without consideration being received in cash or allotted as fully paid up by way of bonus shares or bought back.
f. Terms /rights attached to equity shares :
The Company has only one class of equity shares having a par value of '' 1/- per share fully paid up. Holders of equity shares are entitled to one vote per share. An Interim dividend of '' 4.50/- per equity share of '' 1/- each (31.03.2022: '' 4.50 /- per equity share of '' 1/- each) has been paid during the year ended 31st March 2023. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the sale proceeds from remaining assets of the Company after distribution of all preferential amounts, in proportion to the number of equity shares held by the shareholders.
i) Fund for unforeseen exigencies has been created for dealing with unforeseen exigencies and the amount transferred during the year will be invested as per the applicable regulations. Retained Earnings represents profit earned by the Company, net of appropriations till date and adjustments done on transition to Ind AS. Equity Instruments through Other Comprehensive Income represents the cumulative gains and losses arising on fair valuation of equity instruments measured at fair value through other comprehensive income.
ii) Capital reserve had arisen consequent to a scheme of arrangement in financial year ended 31st March 2018 and was adjusted with retained earnings.
(b) '' 1,200.00 crore (31.03.2022 - '' 700 crore) are secured, ranking pari passu inter se, by equitable mortgage /
hypothecation of the property, plant and equipment of the Company as a first charge.
ii Term Loans amounting to:
(a) '' 3,846.40 crore (31.03.2022 - '' 3,422.98 crore) are secured, ranking pari passu inter se, by equitable mortgage / hypothecation of the property, plant and equipment of the Company including its land, buildings and any other constructions thereon, plant and machinery, etc. as a first charge and, as a second charge, by hypothecation of the Company''s current assets comprising stock of stores, coal, book debts, monies receivable and bank balances. However, creation of the said mortgage security in respect of one Rupee Loan (31.03.2022 - three Rupee Loans), aggregating '' 110 crore (31.03.2022 - '' 900 crore) is in process;
(b) '' 700.35 crore (31.03.2022 - '' 455.40 crore) are secured, ranking pari passu inter se, by equitable mortgage / hypothecation of the property, plant and equipment of the Company as a first charge;
(c) '' 350 crore (31.03.2022- '' 550 crore) are secured, ranking pari passu inter se, by hypothecation of the movable property, plant and equipment and current assets of the Company as a first charge;
(d) '' Nil (31.03.2022- '' 166 crore) are secured, ranking pari passu inter se, by hypothecation of the movable property, plant and equipment of the Company as a first charge and by hypothecation of the Company''s current assets as a second charge;
(e) '' 340.56 crore (31.03.2022- '' 601.66 crore) are secured, ranking pari passu inter se, by hypothecation of the movable property, plant and equipment of the Company as a first charge; and
(f) '' 375 crore (31.03.2022- '' 500 crore) are secured, ranking pari passu inter se, by hypothecation of the Company''s current assets as a first charge and by equitable mortgage / hypothecation of the property, plant and equipment of the Company as a second charge.
Interest rates on Rupee Term Loans from Banks are fixed or based on spread over respective lenders'' benchmark rate. Interest rate on Debentures are fixed or based on spread over Repo / T-Bill rate.
AH of the above are repayable in periodic instalments over the maturity period of the respective loans. Debentures aggregating to '' 1,755 crore are due for maturity on 16-Nov-27 - '' 37.50 crore; 17-Oct-27 - '' 25 crore; 16-Aug-27 - '' 37.50 crore; 17-Jui-27 - '' 25 crore; 16-May-27 - '' 37.50 crore; 17-Apr-27 - '' 25 crore; 16-Feb-27 - '' 37.50 crore; 17-Jan-27 - '' 25 crore; 16-Nov-26 - '' 37.50 crore; 17-Oct-26 - '' 25 crore; 30-Sep-26 - '' 50 crore; 16-Aug-26 - '' 37.50 crore; 17-Jui-26 - '' 25 crore; 30-Jun-26 - '' 50 crore; 16-May-26 - '' 37.50 crore; 17-Apr-26 - '' 25 crore; 30-Mar-26 - '' 50 crore; 16-Feb-26
- '' 37.50 crore; 17-Jan-26 - '' 25 crore; 30-Dec-25 - '' 50 crore; 30-Sep-25 - '' 50 crore; 30-Jun-25 - '' 50 crore; 21-May-25 - '' 37.50 crore; 30-Mar-25 - '' 50 crore; 21-Feb-25 - '' 37.50 crore; 30-Dec-24 - '' 50 crore; 24-Dec-24 - '' 100 crore; 21-Nov-24 - '' 37.50 crore; 13-Oct-24 - '' 100.00 crore; 21-Aug-24 - '' 37.50 crore; 21-May-24 - '' 37.50 crore; 21-Feb-24
- '' 37.50 crore; 02-Feb-24 - '' 55.00 crore; 07-Dec-23 - '' 200.00 crore; 21-Nov-23 - '' 37.50 crore; 13-Oct-23 - '' 100.00 crore and 21-Aug-23 - '' 37.50 crore.
Interest rates on Rupee Term Loans from Banks are fixed or based on spread over respective lenders'' benchmark rate. Interest rate on Debentures are fixed or based on spread over Repo / T-Bill rate.
All of the above are repayable in periodic instalments over the maturity period of the respective loans. Debentures aggregating to '' 1,360 crore are due for maturity on 30-Sep-26 - '' 50 crore; 30-Jun-26 - '' 50 crore; 30-Mar-26 - '' 50 crore; 30-Dec-25 - '' 50 crore; 30-Sep-25 - '' 50 crore; 30-Jun-25 - '' 50 crore; 21-May-25 - '' 37.50 crore; 30-Mar-25 - '' 50 crore; 21-Feb-25 - '' 37.50 crore; 30-Dec-24 - '' 50 crore; 24-Dec-24 - '' 100 crore; 21-Nov-24 - '' 37.50 crore; 13-Oct-24 - '' 100.00 crore; 21-Aug-24 - '' 37.50 crore; 21-May-24 - '' 37.50 crore; 21-Feb-24 - '' 37.50 crore; 02-Feb-24 - '' 55.00 crore; 07-Dec-23 - '' 200.00 crore; 21-Nov-23 - '' 37.50 crore; 13-Oct-23 - '' 100.00 crore; 21-Aug-23 - '' 37.50 crore; 10-Feb-23 - '' 55.00 crore and 13-Oct-22 - '' 50.00 crore
Working capital facilities from bank in (a) above are secured, ranking pari passu inter se, by hypothecation of the Company''s current assets comprising stock of stores, coal , book debts, monies receivable and bank balances as a first charge and, as a second charge, by equitable mortgage / hypothecation of property, plant and equipment of the Company including its land, buildings and any other construction thereon.
'' 0.08 crore (31.03.2022- Nil), Nil ( 31.03.2022 - Nil), '' 0.75 crore (31.03.2022 - '' 0.28 crore), '' 3.75 crore (31.03.2022'' 2.99 crore) and Nil (31.03.2022 - Nil) representing interest due on amount outstanding as at the year end, interest paid along with amount of payment made beyond the appointed day, interest due and payable for the period of delay in making payment during the year, amount of interest accrued and remaining unpaid at the year end, amount of further interest remaining due and payable in the succeeding years, respectively due to Micro and Small Enterprises, as defined in the Micro, Small and Medium Enterprises Development Act, 2006 based on information available with the Company.
NOTE -31 CONTINGENT LIABILITIES AND COMMITMENTS
a. Estimated amount of contracts remaining to be executed on capital account and letter of comforts towards borrowing / financing obligations of subsidiaries from banks, not provided for amount to '' 23.87 crore (31.03.2022 : '' 81.13 crore) and '' 1,648.57 crore ( 31.03.2022 : '' 1,606.19 crore ) respectively.
b. The Ministry of Coal had encashed the bank guarantee of the Company amounting to '' 66.15 crore in April 2018, in terms of its letter dated 25.04.2018, alleging non-compliance with the mining plan for the years 2015-16 and 2016-17 as per the Coal Mine Development and Production Agreement (CMDPA). Further, in terms of the above letter, the Ministry had directed the Company to top-up the bank guarantee with the aforesaid encashed amount. The Hon''ble High Court of Delhi while disposing the petition filed by the Company against the Ministry''s letter dated 25.04.2018, stayed the operation of this letter and further directed the Company to approach the Tribunal. Company has accordingly filed a petition before the Special Tribunal at Godda, Jharkhand challenging the letter dated 25.04.2018 and further seeking refund of the encashed amount. Based on a legal opinion, the Company expects a favourable outcome in the matter, and no provision has been considered necessary.
c. The Company has given bank guarantee of '' 143.95 crore (31.03.2022 : '' 139.95 crore) for procurement of coal, etc. which is outstanding as on the reporting date.
d. The Company has ongoing commitment to extend support and provide equity to the subsidiaries, in respect of various projects and otherwise where, in certain cases there are restriction on transfer of investments.
e. i) The Company had received a Show Cause cum demand notice of '' 14.71 crores for Service Tax on Additional
Premium together with other charges being paid for coal mining to Government of India as per the terms of allocation of the Sarsatolli Coal mine. The case is pending before CESTAT, East Regional Bench, Kolkata. Based
on legal opinion obtained the Company expects a favourable outcome in the matter and no provision has been considered necessary.
ii) The Company had received a Show Cause cum demand notice of '' 16.32 crores for Goods and Services Tax (GST) on Additional Premium together with other charges being paid for coal mining to Government of India as per the terms of allocation of the Sarisatolli Coal mine. The case is pending before The Additional Commissioner/ Joint Commissioner, CGST Kolkata North Commissionerate. Based on legal opinion obtained the Company expects a favourable outcome in the matter and no provision has been considered necessary.
f. Bharat Coking Coal Limited (BCCL) and Mahanadi Coalfields Limited (MCL) raised demands on the Company amounting to '' 111 crore and '' 12 crore respectively with respect to alleged excess supply of coal during 2015-16 and 2016-17 under respective Fuel Supply Agreements (FSAs) towards levy of premium beyond the notified and settled price. Such levy of premium is not in consonance with the FSAs and accordingly the Company has moved to the Hon''ble Calcutta High Court and obtained interim protection against the aforesaid demands. Based on a legal opinion, the Company expects a favourable outcome in the matter, and no provision has been considered necessary.
g. With regard to the Company''s power purchase from one of its subsidiaries (provider), West Bengal Electricity Regulatory Commission (WBERC) has issued the tariff orders for the years 2018-19 to 2022-23 (considering applicable orders for Transmission Projects till date), wherein certain underlying matters have been dealt with in deviation from past practices of tariff determination and kept for disposal through future truing up exercise, impact of which is not ascertained. The said provider not being in agreement with the same, has since filed appeals in respect of the above Tariff Orders before the Hon''ble Appellate Tribunal for Electricity on the grounds interalia, that the orders have been passed after substantial period of delay, the applicable periods are long over and directions passed are impossible to comply because of significant delay in passing the said orders. However, for the year 2022-23, since the year has not elapsed, the said provider of power has given effect to the Tariff Order for the financial year 2022-23 with application of principles in terms of applicable Regulations. Based on legal opinion obtained, the provider is confident of the matter being adjudicated in its favour in respect of earlier years. Accordingly, necessary adjustment, if any, will be made on the matter reaching finality.
The Company makes contributions for provident fund and family pension schemes (including for superannuation) towards retirement benefit plans for eligible employees. Under the said plan, the Company is required to contribute a specified percentage of the employees'' salaries to fund the benefits. The fund has the form of trust and is governed by the Board of Trustees. During the year, based on applicable rates, the Company has contributed and charged '' 65.96 crore (previous year : '' 64.61 crore) in the Statement of Profit and Loss . There is no shortfall in the Provident Fund Trust obligation which is required to be met by the Company, as on the Balance Sheet date.
The Company also sponsors the Gratuity plan, which is governed by the Payment of Gratuity Act, 1972. The Company makes annual contribution to independent trust, who in turn, invests in the Employees Group Gratuity Scheme of eligible funds for qualifying employees.
The Plans in India typically expose the Company to some risks, the most significant of which are detailed below:
Discount Rate risk: Decrease in discount rate will increase the value of the liability. However, this will partially offset by the increase in the value of plan assets.
Demographic Risk: In the valuation of the liability certain demographic (mortality and attrition rates) assumptions are made. The Company is exposed to this risk to the extent of actual experience eventually being worse compared to the assumptions thereby causing an increase in the scheme cost.
Future Salary Increase Risk: In case of gratuity & leave the scheme cost is sensitive to the assumed future salary escalation rates. But PRMB & pension are not dependant on future salary levels.
Regulatory Risk: New Act/Regulations may come up in future which could increase the liability significantly in case of Leave obligation, PRMB & Pension. Gratuity Benefit must comply with the requirements of the Payment of Gratuity Act, 1972 (as amended up-to-date). Also in case of interest rate guarantee Exempt Provident Fund must comply with the requirements of the Employees Provident Funds and Miscellaneous Provisions Act 1952 as amended up-to-date.
Regulatory Income /(Expenses) arise to the Company pursuant to the regulatory provisions applicable to the Company under the provisions of the Electricity Act, 2003 and regulations framed thereunder and disposals made by WBERC on the Company''s various petitions / applications, in terms of the said regulations, at different timeframe including the tariff and APR orders for the years notified till date. These estimates have been recognised with discounting methodology, assuming recovery over a period of time, in consonance with the applicable regulations and application of prudence. The effect of adjustments -income/(expenses), relating to (a) advance against depreciation, (b) cost of electrical energy purchased, fuel related costs and those having bearing on revenue account (c) Deferred Taxation estimate and (d) effect of exchange fluctuation including MTM gain, as appropriate, based on the Company''s understanding of the applicable regulatory provisions and applicable orders of the competent authorities, amounting to '' (11.36) crore (Previous year '' (38.83) crore), '' 824.00 crore [Previous year '' 780.00 crore], '' (25.44) crore ( Previous year '' (24.77) crore ) and NIL [Previous year '' (0.26) crore] respectively have been shown as Regulatory Income/(Expenses) with corresponding sums, reflected in Balance Sheet as Regulatory Deferral Account Balances (refer Note 18).
During the current financial year, the Company has received orders from WBERC in respect of its Annual Performance Review (APR) for the years ended 31st March 2015 to 31st March 2018. The impact of aforesaid orders has been considered in these financial statements, including estimated impact for subsequent periods till date, under Regulatory Income/(Expense) for the year ended 31st March 2023.
Regulatory deferral account debit balance comprise the effect of (a) Deferred tax, (b) cost of fuel and purchase of power and other adjustments having bearing on revenue account amounting to '' 3,334.61 crore (31.03.2022: '' 3,360.06 crore) and '' 2,510.23 crore (31.03.2022: '' 1,686.23 crore) respectively and that relating to credit balance comprise the effect of advance against depreciation amounting to '' 1,569.21 crore (31.03.2022: '' 1,557.85 crore). These balances have been recognised with discounting methodology, assuming recovery over a period of time using such rate in accordance with regulations and application of prudence.
Accordingly, the accurate quantification and disposal of the matters with regard to Regulatory Deferral Account balances, shall be given effect to, from time to time, on receipt of necessary direction from the appropriate authorities, including those attributable to the mining of coal from Sarisatolli mine which commenced operations from 10th April 2015.
The different levels have been defined below:
Level 1: financial instruments measured using quoted price. The fair value of all equity instruments which are traded in
the stock exchanges is determined using the closing price. The mutual funds are valued using the closing NAV.
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
(i.e., as prices) or indirectly (i.e., derived from prices)
Level 3: inputs for the asset or liability that are not based on observable market data. c) The following methods and assumptions were used to estimate the fair values
i. The fair values of the mutual fund instruments are based on net asset value of units declared at the close of the reporting date.
ii. The fair value of preference share is determined on the basis of discounted cash flow wherein future cash flows are based on the terms of preference share discounted at rate that reflects market rate. Significant unobservable input used is discount rate and 0.50% increase / decrease in discount rate would results in decrease / increase in fair value of preference share by '' 0.08 crore. The fair value of equity share is determined on the basis of discounted cash flow. Significant unobservable input used is discount rate and growth rate and 0.50% increase / decrease in discount rate and growth rate would result in decrease / increase in fair value of equity share by '' 0.16 crore and '' 0.17 crore respectively.
iii. The carrying amounts of trade receivables, trade payables, receivable towards claims and services rendered, receivable from related parties, other bank balances, interest accrued payable/receivable, other receivables/ payables, cash and cash equivalents are considered to be the same as their fair values, due to their short term nature.
iv. Loans, non-current borrowings, lease receivable/payable and security deposits are based on amortised cost using effective interest rate method.
v. Fair Value of financial Intruments is determined on the basis of discounted cash flow analysis, considering the nature , risk profile and other qualitative factors. The carrying amounts are a reasonable approximation of the fair value.
NOTE-41 FINANCIAL RISK MANAGEMENT AND CAPITAL MANAGEMENT
The Company''s operations of generation and distribution of electricity are governed by the provisions of the Electricity Act 2003 and Regulations framed thereunder by the West Bengal Electricity Regulatory Commission and accordingly the Company, being a licensee under the said statute, is subject to regulatory provisions/ guidelines and issues evolving therefrom, having a bearing on the Company''s liquidity, earning, expenditure and profitability, based on efficiency parameters provided therein including timing of disposal of applications / regulatory matters by the authority.
The Company being the sole provider of electricity in the licenced area has been managing the operations keeping in view its profitability and liquidity in terms of above regulations. In order to manage credit risk arising from sale of electricity, multipronged approach is followed like maintenance of security deposit, precipitation of action against defaulting consumers,
obtaining support of the administrative authority. Credit risk towards Investment of surplus funds is managed by obtaining support of credit rating and appraisal by external agencies and lending bodies. The Company extends financial support to its subsidiaries including that of letter of comforts etc. to their lenders.
The Company manages its liquidity risk on financial liabilities by maintaining healthy working capital and liquid fund position keeping in view the maturity profile of its borrowings and other liabilities as disclosed in the respective notes.
The Company''s market risk relating to variation of foreign currency, interest rate and commodity price is mitigated through relevant regulations and availability of bulk commodity namely coal generally sourced from own captive mine, domestic long term linkage and Special Forward E-Auction conducted by Coal India Limited and/or its subsidiaries.
While managing the capital, the Company ensures to take adequate precaution for providing returns to the shareholders and benefit for other stakeholders, including protecting and strengthening the balance sheet. Availability of capital and liquidity is also managed, in consonance with the applicable regulatory provisions.
NOTE- 4! Liability in respect of the security deposit collected by the Company, in terms of applicable regulations of the WBERC, has been classified as non - current, given the nature of its business in the license area, excepting to the extent of the sum refundable / payable within a year, based on experience.
NOTE- 41 Interest on Consumers'' Security Deposits (being in the nature of trade deposits) is included in Other Expenses, as per consistent practice followed by the Company. This is paid to the consumers at the applicable rates in terms of the Regulations framed, under the Electricity Act, 2003,
NOTE- 48 The Company is primarily engaged in generation and distribution of electricity which is the only reportable business segment in line with the segment wise information which is being presented to the Chief Operating Decision Maker (CODM). There are no reportable geographical segments, since all business is within India.
The Company is also running a single retail store in state of Gujarat which is not significant for the CODM and hence not considered as reportable segment.
Part A of Schedule II to the Companies Act. 2013 (the Act), inter alia, provides that depreciabie amount of an asset is the cost of an asset or other amount substituted for cost. Part B of the said Schedule deals with the useful life or residual value of an asset as notified for accounting purpose by a Regulatory Authority constituted under an act of Parliament or by the Central Government for calculating depreciation to be provided for such asset irrespective of the requirement of Schedule II. In terms of applicable Regulations under the Electricity Act, 2003, depreciation on tangible assets other than freehold land is provided on straight line method on a pro-rata basis at the rates specified therein, the basis of which is considered by the West Bengal Electricity Regulatory Commission (Commission) in determining the Company''s tariff for the year, which is also required to be used for accounting purpose as specified in the said Regulations. Based on legal opinions and accounting interpretations obtained, the Company continues with the consistently followed practice of recouping from the retained earnings an additional charge of depreciation relatable to the increase in value of assets arising from fair valuation , which for the current year amounts to '' 214.08 crore (31.03.2022 : '' 225.30 crore) and corresponding withdrawal of '' 0.50 crore ( 31.03.2022 : '' 2.03 crore ) consequent to sale / disposal of such assets.
Following are the Struck Off Companies where the balances are below '' 50,000
Gazi Poly PLast Products Pvt.Ltd, Mega Mobile Media Private Limited, Little Angles & - Developers Pvt.Ltd, Jkbm Ltd, Garuda Chains Pvt Ltd, B N Apartments Pvt Ltd, Regional Engineers Associated Pvt Ltd, Nook Holdings Pvt Ltd, Pashupati Developers Pvt .Ltd, Akla Builders Pvt.Ltd, Ekta Apartments Pvt. Ltd, Namaste Holdings Pvt Ltd, Midland Medicare Limited, The Dimakusi Tea Co Ltd, Gunadhatre Abasann Pvt.Ltd, Yash Rasayan Pvt Ltd, Longview Marketing & Impex Pvt Ltd, Oscar Projects Pvt.Ltd, Rajat Homfin Pvt.Ltd, Spark Dealers Pvt. Ltd, A.S.B. Properties Private Limited, Free India
Machinery Co Pvt Ltd, Shree Binayak Highrise Pvt.Ltd, Chandbali Properties Pvt Ltd, Madan Radio Co Pvt Ltd, Kailash Clothwear Pvt.Ltd, Navniketan Cine Pvt Ltd, Ledex Export (India) Pvt.Ltd, Packaging Aids Pvt.Ltd, Creation Marketing Pvt Ltd, Macneumatic Pvt. Ltd, Murarka Dealers Investors Pvt Ltd, Roshni Constructions Pvt Ltd, Shree Venkateswar Machine Tools Pvt.Ltd, National Ceramic Industries Ltd, India Steel Industries Pvt Ltd, Mishra Nirman Pvt Ltd, Dgm Infotech Private Limited, Demaca Commercial Pvt Ltd, Pradip Promotors Pvt Ltd, Aeercon Housing Pvt Ltd, Cine Sixteen Eastern Pvt Ltd, Pashupati Paints (India) Pvt Ltd, Gem Savings Unit Pvt Ltd, Calcutta Chemical Co Ltd, X''Clusive Business Centre Pvt.Ltd, Red Plus Clinics Pvt Ltd, Navkar Credit Services Pvt.Ltd, Acme Construction Co.Pvt.Ltd, Genius Consultants Pvt Ltd, Niva Marketing & Distribution Pvt. Ltd, Anil Tower Pvt.Ltd, G M Cure Home Pvt Ltd, Konatron Electronics - Pvt.Ltd, Sarwamangala Properties Pvt Ltd, Arihant Enclave Pvt Ltd, Cherish Projects & - Resources Pvt.Ltd, Exclusive Trade & Print Pvt.Ltd,
Saps Housing Projects Pvt Ltd, Dot Pvt Ltd, Siloni Engineers Pvt Ltd, Epic Apparels Pvt Ltd, Rocketing Properties Pvt. Ltd, Upasana Construction Pvt. Ltd, Lihala Metals Pvt Ltd, Acme Decals Pvt Ltd, Gallaine Developers Private Limited, Eikon Creators Pvt.Ltd, Purban Pvt Ltd, Uniphase Commercial Services Pvt Ltd, Hpb Developers Pvt. Ltd, Atlanta Health Centre Pvt Ltd, Rosewood Enclave Pvt Ltd, Amrita Commercial Co Pvt.Ltd, Metal Specialities Pvt Ltd, Silver Wings Pvt Ltd, D N Construction & Investment Pvt Ltd, Pathecherra Commotrade Pvt Ltd, S.D.Instruments Pvt.Ltd, Ghosh & Co (Textiles) Pvt Ltd, Amaltas Construction Pvt Ltd, Singhi Marketing Pvt. Ltd, Amrita Commercial Co Pvt Ltd, R.C. Estates Pvt Ltd, Santosh Biscuit Co Pvt Ltd, Estate Developers India Pvt Ltd, Parbati Multiplex Private Limited, Howrah Enclave Pvt.Ltd, Sas Laboratories Pvt Ltd, Moda Chrome Pvt.Ltd, Ananda Ashram Pvt Ltd, H P B Developers Pvt Ltd, Renaissance Cassette Pvt.Ltd, Das Fabrico Pvt.Ltd, G.B.Buildtech Pvt.Ltd, Naba Press Pvt Ltd, Farmaid India Pvt Ltd, Elmecon Bds Pvt. Ltd, Map Metal & Alloys - Pvt.Ltd, Nri Sweet Home Pvt.Ltd, Uniphase Commercial Services Pvt.Ltd, Innovative Design Centre Pvt.Ltd, Santosh Biscuit Co.Pvt. Ltd, Hpb Developers Pvt Ltd, Acme Construction Co Pvt Ltd, Tulika Holdings Pvt Ltd, Agency Syndicate Pvt. Ltd, Shree Roadways Ltd, B.K.Builders Pvt Ltd, Advani Properties Pvt Ltd, Benget India Pvt Ltd, Gunapunaraya Properties Pvt.Ltd, Shaw Vanaspati Pvt. Ltd, Shreekunj Hotels Pvt.Ltd, Star Wise Mercantiles Private Limited, System Engineers Pvt.Ltd, Swadevika Impex India Private Limited, Machfarm Pvt.Ltd, Simiran Textiles Pvt Ltd, Khaitan Pratisthan Pvt Ltd,
Blue Heaven Construction Company Pvt.Ltd, Suburban Projects Pvt.Ltd, Meghdoot Construction Pvt Ltd, Dhannantari Printing & Packaging Pvt.Ltd, Kajaria Sons Pvt.Ltd, Ranisati Merchandise Pvt Ltd, Anjali Towers Pvt.Ltd, Rishi Leather Pvt Ltd, A.K.Mukherjee & Co. Pvt.Ltd, D Bright & Co Pvt Ltd, Csj Enterprise Private Limited, Thienfore Co Pvt Ltd, Little-Oak Pharmaceuticals Pvt Ltd, L M C Finance Properties Pvt Ltd, Personal Finance Ltd, Capri Home Products Ltd, Jupiter Products Pvt Ltd, Bhagirathi Protein Ltd, Aadyasree Technologies Private Limited, A.S.Syndicate (Ware Houseing) Pvt Ltd, Eastern Pigments Pvt Ltd, Ess Ess Hirise Private Limited, Orbital Distributors Pvt Ltd, Torrent Merchandise Pvt Ltd, True Blue Media Private Limited, Dabro Agro Chemicals Pvt.Ltd, Lira Business Resources Pvt Ltd, Image Express Pvt.Ltd, Gcon Housing Pvt.Ltd, Modern India Machine Tools Pvt Ltd, Marcil Agriculture Farm Pvt Ltd, S.B.Minerals Pvt.Ltd, Nakoda Properties & Finance Pvt Ltd, Kva Homes Pvt.Ltd, Saryou Advisory Pvt Ltd, Mercodex India Pvt Ltd, Vasantlok Properties Pvt.Ltd, Ad Graphic And Design India Private Limited, Bajoria Coating Industries Pvt Ltd, M.PConsultancy Pvt Ltd, Howrah Warehouse Pvt.Ltd, Swil Ltd, Mindset Consulting Private Limited, Aryadeep Retailers Private Limited, Z.N.Construction - Pvt.Ltd, Rico Pvt Ltd, Claridge Commercial Pvt.Ltd, Natabar Oil Mill Pvt Ltd, Manu-Nem Holdings Pvt.Ltd, Ardikem Management Services Pvt.Ltd, Abhinav Print System Pvt Ltd, Eldyne Macro Systems India Pvt Ltd.
Nature of Transaction with the Struck Off Company : All transactions relate to Sale of Electricity and Security Deposit balance in the ordinary couse of business of electricity distribution.
Relationship with Struck off Companies : All are Electricity Consumers and there is no other relationship.
(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
(vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(vii) The Company has no such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).
(viii) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017.
(ix) The Company is maintaining its books of accounts in electronic mode and these books of accounts are accessible in India at all times and the back-up of the books of accounts has been kept in servers physically located in India on a daily basis
(x) The quarterly returns or statements filed by the Company with the banks or financial institutions are in agreement with the books of accounts.
The installed capacity of the Generating Stations of the Company (as per certification of technical expert) as on 31st March, 2023 was 1125000 kW (31st March, 2022 : 1125000 kW).
NOTE- 56 The Company has reclassified previous year''s figures to conform to this year''s classification along with other regrouping / rearrangement wherever necessary.
Mar 31, 2022
1. Pursuant to the approval of the shareholders at the Forty-third Annual General Meeting 1(one) Equity Share of face value of Rs 10/- (Rupees Ten Only) each fully paid-up was subdivided into 10(ten) Equity Shares of Re 1/- (Rupee One Only) each fully paid-up effective 21st September, 2021.
2. For the period of five years immediately preceding 31st March,2022, no share was : - (i) allotted as fully paid up pursuant to any contract without payment being received in cash, (ii) allotted as fully paid up by way of bonus shares and (iii) bought back.
f. Terms /rights attached to equity shares :
The Company has only one class of equity shares having a par value of H 1/- per share fully paid up. Holders of equity shares are entitled to one vote per share. An Interim dividend of H 4.50/- per equity share of H 1/- each (31.03.2021: H 45 /- per equity share of H 10/- each) has been paid during the year ended 31st March 2022. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the sale proceeds from remaining assets of the Company after distribution of all preferential amounts, in proportion to the number of equity shares held by the shareholders.
C. Nature and purpose of other reserves
i) Fund for unforeseen exigencies has been created for dealing with unforeseen exigencies and the amount transferred during the year will be invested as per the applicable regulations. Retained Earnings represents profit earned by the Company, net of appropriations till date and adjustments done on transition to Ind AS. FVTOCI reserve represents the cumulative gains and losses arising on fair valuation of equity instruments measured at fair value through other comprehensive income.
ii) Capital reserve had arisen consequent to a scheme of arrangement in financial year ended 31st March 2018 and was adjusted with retained earnings.
b. Nature of Security :
i Out of the Term Loans in (a) above, loans amounting to:
(a) H 3,422.98 crore (31.03.2021 - H 2,855.78 crore) are secured, ranking pari passu inter se, by equitable mortgage / hypothecation of the property, plant and equipment of the Company including its land, buildings and any other constructions thereon, plant and machinery, etc. (refer Note 4) as a first charge and, as a second charge, by hypothecation of the Company''s current assets comprising stock of stores, coal (refer Note 11), book debts, monies receivable (refer Note 13) and bank balances (refer Note 14). However, creation of the said mortgage security in respect of three Rupee Loans (31.03.2021 - three Rupee Loans), aggregating H 900 crore (31.03.2021 - H 240.12 crore) is in process;
(b) H 455.40 crore (31.03.2021 - H 333.56 crore) are secured, ranking pari passu inter se, by equitable mortgage / hypothecation of the property, plant and equipment of the Company as a first charge;
(c) H 550 crore (31.03.2021- H 600 crore) are secured, ranking pari passu inter se, by hypothecation of the movable property, plant and equipment and current assets of the Company as a first charge;
(d) H 166 crore (31.03.2021- H 462.50 crore) are secured, ranking pari passu inter se, by hypothecation of the movable property, plant and equipments of the Company as a first charge and by hypothecation of the Company''s current assets as a second charge;
(e) H 601.66 crore (31.03.2021- H 713.57 crore) are secured, ranking pari passu inter se, by hypothecation of the movable property, plant and equipment of the Company as a first charge; and
(f) H 500 crore (31.03.2021- H 500 crore) are secured, ranking pari passu inter se, by hypothecation of the Company''s current assets as a first charge and by equitable mortgage / hypothecation of the property, plant and equipment of the Company as a second charge.
ii Out of the Debentures in (a) above, Debentures amounting to:
(a) H 660.00 crore (31.03.2021 - H 620 crore) are secured, ranking pari passu inter se, by hypothecation of the movable property, plant and equipment of the Company as a first charge and
(b) H 700.00 crore (31.03.2021 - H 300 crore) are secured, ranking pari passu inter se, by equitable mortgage / hypothecation of the property, plant and equipment of the Company as a first charge.
c. Term loans of H 300 crore were raised towards the end of the year (March 2022) out of which H 125 crore have not been utilized by the end of the year and is lying in cash and cash equivalents as on March 31, 2022
AH of the above are repayable in periodic instalments over the maturity period of the respective loans. Debentures aggregating to H 1360 crore are due for maturity on 30-Sep-26 - H 50 crore; 30-Jun-26 - H 50 crore; 30-Mar-26 - H 50 crore; 30-Dec-25
- H 50 crore; 30-Sep-25 - H 50 crore; 30-Jun-25 - H 50 crore; 21-May-25 - H 37.50 crore; 30-Mar-25 - H 50 crore; 21-Feb-25
- H 37.50 crore; 30-Dec-24 - H 50 crore; 24-Dec-24 - H 100 crore; 21-Nov-24 - H 37.50 crore; 13-Oct-24 - H 100.00 crore; 21-Aug-24 - H 37.50 crore; 21-May-24 - H 37.50 crore; 21-Feb-24 - H 37.50 crore; 02-Feb-24 - H 55.00 crore; 07-Dec-23 -H 200.00 crore; 21-Nov-23 - H 37.50 crore; 13-Oct-23 - H 100.00 crore; 21-Aug-23 - H 37.50 crore; 10-Feb-23 - H 55.00 crore and 13-Oct-22 - H 50.00 crore
Interest rates on Rupee Term Loans from Banks are based on spread over respective lenders'' benchmark rate and that of on Foreign Currency Loan is based on spread over LIBOR. Interest rate on Debentures are fixed or based on spread over T-Bill rate.
All of the above are repayable in periodic instalments over the maturity period of the respective loans. Debentures aggregating of H 920 crore are due for maturity on the following dates : 21-May-25 - H 37.50 crore; 21-Feb-25 - H 37.50 crore; 21-Nov-24
- H 37.50 crore; 13-Oct-24 - H 100.00 crore; 21-Aug-24 - H 37.50 crore; 21-May-24 - H 37.50 crore; 21-Feb-24 -H 37.50 crore; 02-Feb-24 - H 55.00 crore; 07-Dec-23 - H 200.00 crore; 21-Nov-23 - H 37.50 crore; 13-Oct-23 - H 100.00 crore; 21-Aug-23
- H 37.50 crore; 10-Feb-23 - H 55.00 crore; 13-Oct-22 - H 50.00 crore and 18-Feb-22 - H 60.00 crore
c. Nature of Security
Working capital facilities from bank in (a) above are secured, ranking pari passu inter se, by hypothecation of the Company''s current assets comprising stock of stores, coal (refer note 11), book debts, monies receivable (refer note 13) and bank balances (refer note 14) as a first charge and, as a second charge, by equitable mortgage / hypothecation of property, plant and equipment of the Company including its land, buildings and any other construction thereon, where exists plant and machinery etc (refer note 4).
Nil (31.03.2021-H 0.01 Crore ), Nil ( 31.03.2021 - Nil), H 0.28 crore (31.03.2021 - H0.34 crore ) and H 2.99 crore ( 31.03.2021-H 2.71 crore), Nil ( 31.03.2021 - Nil ) representing interest due on amount outstanding as at the year end ,interest paid along with amount of payment made beyond the appointed day, interest due and payable for the period of delay in making payment during the year, amount of interest accrued and remaining unpaid at the year end, amount of further interest remaining due and payable in the succeeding years, respectively due to Micro and Small Enterprises, as defined in the Micro, Small and Medium Enterprises Development Act, 2006 on information available with the Company.
a. Commitments of the Company on account of estimated amount of contracts remaining to be executed on capital account and letter of comforts towards borrowing / financing obligations of subsidiaries from banks, not provided for amount to H 81.13 crore (31.03.2021 : H 71.12 crore) and H 1,606.19 crore ( 31.03.2021 : H 1,292.73 crore ) respectively.
b. The Ministry of Coal had encashed the bank guarantee of the Company amounting to H 66.15 crore in April 2018, in terms of its letter dated 25.04.2018, alleging non-compliance with the mining plan for the years 2015-16 and 2016-17 as per the Coal Mine Development and Production Agreement (CMDPA). Further, in terms of the above letter, the Ministry had directed the Company to top-up the bank guarantee with the aforesaid encashed amount. The Hon''ble High Court of Delhi while disposing the petition filed by the Company against the Ministry''s letter dated 25.04.2018, stayed the operation of this letter and further directed the Company to approach the Tribunal. Company has accordingly filed a petition before the Special Tribunal at Godda, Jharkhand challenging the letter dated 25.04.2018 and further seeking refund of the encashed amount. Based on a legal opinion, the Company expects a favourable outcome in the matter, and no provision has been considered necessary in the books of account.
c. The Company has given bank guarantee of H 139.95 crore (31.03.2021 : H 155.95 crore) for procurement of coal, etc. which is outstanding as on the reporting date.
d. The Company has ongoing commitment to extend support and provide equity to the subsidiaries, in respect of various projects and otherwise (where, in certain cases there are restriction on transfer of investments). The future cash outflow in respect of above cannot be ascertained at this stage.
e. Commitments relating to leasing arrangement , refer note 50
f. (i) The Company had received a Show Cause cum demand notice for Service Tax on Additional Premium together with
other charges being paid for coal mining to Government of India as per the terms of allocation of the Sarisatoli Coal mine. The case is pending before The Commissioner Central Tax & Central Excise, Kolkata North Commissionerate. The amount of disputed Service Tax demand is H 14.71 crores. Based on legal opinion obtained the Company expects a favourable outcome in the matter and no provision has been considered necessary in the books of accounts.
(ii) The Company had received an order u/s 143(3) of Income Tax Act, 1961 for Assessment Year 2018-19 during the year involving certain disallowances leading to an outstanding demand of H 12.74 crore which has been disputed by the Company at appropriate forum. Based on legal opinion obtained the Company expects a favourable outcome in the matter and no provision has been considered necessary in the books of accounts.
The Company makes contributions for provident fund and family pension schemes (including for superannuation) towards retirement benefit plans for eligible employees. Under the said plan, the Company is required to contribute a specified percentage of the employees'' salaries to fund the benefits. The fund has the form of trust and is governed by the Board of Trustees. During the year, based on applicable rates, the Company has contributed and charged H 64.61 crore (previous year : H 63.03 crore) on this count in the Statement of Profit and Loss .
The Company also sponsors the Gratuity plan, which is governed by the Payment of Gratuity Act, 1972. The Company makes annual contribution to independent trust, who in turn, invests in the Employees Group Gratuity Scheme of eligible funds for qualifying employees.
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.
The Plans in India typically expose the Company to some risks, the most significant of which are detailed below:
Discount Rate risk: Decrease in discount rate will increase the value of the liability. However, this will partially offset by the increase in the value of plan assets.
Demographic Risk: In the valuation of the liability certain demographic (mortality and attrition rates) assumptions are made. The Company is exposed to this risk to the extent of actual experience eventually being worse compared to the assumptions thereby causing an increase in the scheme cost.
Future Salary Increase Risk: In case of gratuity & leave the scheme cost is sensitive to the assumed future salary escalation rates for all last drawn salary linked defined benefit Schemes. If actual future salary escalations are higher than that assumed in the valuation actual Scheme cost and hence the value of the liability will be higher than that estimated. But PRMB & pension are not dependant on future salary levels.
Regulatory Risk: New Act/Regulations may come up in future which could increase the liability significantly in case of Leave obligation, PRMB & Pension. Gratuity Benefit must comply with the requirements of the Payment of Gratuity Act, 1972 (as amended up-to-date). Also in case of interest rate guarantee Exempt Provident Fund must comply with the requirements of the Employees Provident Funds and Miscellaneous Provisions Act 1952 as amended up-to-date.
Regulatory Income /(Expenses) arise to the Company pursuant to the regulatory provisions applicable to the Company under the provisions of the Electricity Act, 2003 and regulations framed thereunder and disposals made by WBERC on the Company''s various petitions / applications, in terms of the said regulations, at different timeframe including the tariff and APR orders for the years notified till date. The effect of adjustments - income/(expenses), relating to (a) advance against depreciation, (b) cost of electrical energy purchased, fuel related costs and those having bearing on revenue account (c) Deferred Taxation estimate and (d) effect of exchange fluctuation including MTM gain, as appropriate, based on the Company''s understanding of the applicable regulatory provisions and applicable orders of the competent authorities, amounting to H (38.83) crore (Previous year H (77.17) crore), H 780.00 crore [Previous year H 630.00 crore], H (24.77) crore ( Previous year H (95.89) crore ) and H (0.26) crore [Previous year H (0.02) crore] respectively have been shown as Regulatory Income/(Expenses) with corresponding sums, reflected in Balance Sheet as Regulatory Deferral Account Balances (refer Note 18).
Regulatory deferral account debit balance comprise the effect of (a) Deferred tax, (b) exchange fluctuation (c) cost of fuel and purchase of power and other adjustments having bearing on revenue account amounting to H 3,360.05 crore (31.03.2021 : H 3,384.81 crore), Nil ( 31.03.2021 : H 7.14 crore ) and H 2,147.23 crore (31.03.2021 : H 1,367.23 crore) respectively and that relating to credit balance comprise the effect of (a) advance against depreciation, and (b) MTM Gain amounting to H 1,557.85 crore ( 31.03.2021 : H 1519.02 crore ), and Nil ( 31.03.2021 : H 6.87 crore) respectively. These balances have been recognised with discounting methodology, assuming recovery over a period of time using such rate in consonance with the applicable regulations and application of prudence.
Accordingly, the accurate quantification and disposal of the matters with regard to Regulatory Deferral Account balances, shall be given effect to, from time to time, on receipt of necessary direction from the appropriate authorities relating to the applicable matters in a comprehensive way including those attributable to the mining of coal from Sarisatolli mine which commenced from 10 April, 2015 following the said mine having been allotted to the Company effective 1 April 2015 pursuant to the auction conducted by the Ministry of Coal, Government of India under the provisions of the applicable laws.
The different levels have been defined below:
Level 1: financial instruments measured using quoted price. The fair value of all equity instruments which are traded in the
stock exchanges is determined using the closing price. The mutual funds are valued using the closing NAV.
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e.,
as prices) or indirectly (i.e., derived from prices)
Level 3: inputs for the asset or liability that are not based on observable market data. c) The following methods and assumptions were used to estimate the fair values
i. The fair values of the mutual fund instruments are based on net asset value of units declared at the close of the reporting date.
ii. The fair values of the cross currency swap is determined using discounted cash flow analysis and swaps and options pricing models.
iii. The fair value of preference share is determined on the basis of discounted cash flow wherein future cash flows are based on the terms of preference share discounted at rate that reflects market rate. Significant unobservable input used is discount rate and 0.50% increase / decrease in discount rate would results in decrease / increase in fair value of preference share by H 0.08 crore. The fair value of equity share is determined on the basis of discounted cash flow (31.03.21 discounted cash flow). Significant unobservable input used is discount rate and growth rate and 0.50% increase / decrease in discount rate and growth rate would result in decrease / increase in fair value of equity share by H 0.06 crore and H 0.09 crore respectively
iv. The carrying amounts of trade receivables, trade payables, investment in commercial paper, receivable towards claims and services rendered, receivable from related parties, other bank balances, interest accrued payable/receivable, other receivables/payables, cash and cash equivalents are considered to be the same as their fair values, due to their short term nature.
v. Loans, non-current borrowings, lease receivable/payable and security deposits are based on discounted cash flows using the current borrowing rate.
vi. Fair Value of financial Intruments is determined on the basis of discounted cash flow analysis, considering the nature , risk profile and other qualitative factors.The carrying amounts are a reasonable approximation of the fair value.
The Company''s operations of generation and distribution of electricity are governed by the provisions of the Electricity Act 2003 and Regulations framed thereunder by the West Bengal Electricity Regulatory Commission and accordingly the Company, being a licensee under the said statute, is subject to regulatory provisions/ guidelines and issues evolving therefrom, having a bearing on the Company''s liquidity, earning, expenditure and profitability, based on efficiency parameters provided therein including timing of disposal of applications / matters by the authority.
The Company being the sole provider of electricity in the licenced area has been managing the operations keeping in view its profitability and liquidity in terms of above regulations. In order to manage credit risk arising from sale of electricity, multipronged approach is followed like maintenance of security deposit, precipitation of action against defaulting consumers, obtaining support of the administrative authority. Credit risk towards Investment of surplus funds is managed by obtaining support of credit rating and appraisal by external agencies and lending bodies. The Company extends financial support to its subsidiaries including that of letter of comforts etc. to their lenders.
The Company manages its liquidity risk on financial liabilities by maintaining healthy working capital and liquid fund position keeping in view the maturity profile of its borrowings and other liabilities as disclosed in the respective notes.
The Company''s market risk relating to variation of foreign currency, interest rate and commodity price is mitigated through relevant regulations and availability of bulk commodity namely coal is generally sourced from own captive mine, domestic long term linkage and Special Forward E-Auction conducted by Coal India Limited and/or its subsidiaries.
While managing the capital, the Company ensures to take adequate precaution for providing returns to the shareholders and benefit for other stakeholders, including protecting and strengthening the balance sheet. Availability of capital and liquidity is also managed, in consonance with the applicable regulatory provisions.
NOTE- 45 Liability in respect of the security deposit collected by the Company, in terms of applicable regulations of the WBERC, has been classified as non - current, given the nature of its business in the license area, excepting to the extent of the sum refundable / payable within a year, based on experience.
NOTE- 46 India and other global markets experienced significant disruption in operations resulting from uncertainty caused by the worldwide outbreak of Coronavirus pandemic. The Company''s business includes Generation and Distribution of power within its licensed area in the state of West Bengal, India. Considering power supply being an essential service, management believes that there is not much of an impact likely due to this pandemic on the business of the Company , its subsidiaries and joint venture except some lower demand and its consequential impact on supply and collection from consumers, which are believed to be temporary in nature. The Company has duly ensured compliance with specific regulatory directives issued in the related matter.
The Company is taking all necessary steps and precautionary measures to ensure smooth functioning of its operations/business and to ensure the safety and well-being of all its employees.
The Company is closely monitoring developments, its operations, liquidity and capital resources and is actively working to minimize the impact of this unprecedented situation.
The Company is also monitoring the operations of its subsidiaries and joint venture, basis which, no impairment is required to be recognised in respect of such investments.
Pursuant to the approval of the shareholders at the Forty-third Annual General Meeting 1(one) Equity Share of face value of H 10/- (Rupees Ten Only) fully paid-up was subdivided into 10(ten) Equity Shares of H 1/- (Rupee One Only) each fully paid-up, effective 21st September, 2021. This has been considered for calculating weighted average number of equity shares for the comparative period presented as per Ind AS 33 - ''Earning Per Share''. In line with the above, EPS (basic and diluted) have been adjusted for the comparative period presented.
NOTE- 48 The Company is primarily engaged in generation and distribution of electricity which is the only reportable business segment in line with the segment wise information which is being presented to the CODM. There are no reportable geographical segments, since all business is within India.
The Company is also running a single retail store in state of Gujarat which is not significant for the CODM and hence not considered as reportable segment.
NOTE- 49 Part A of Schedule II to the Companies Act. 2013 (the Act), inter alia, provides that depreciable amount of an asset is the cost of an asset or other amount substituted for cost. Part B of the said Schedule deals with the useful life or residual value of an asset as notified for accounting purpose by a Regulatory Authority constituted under an act of Parliament or by the Central Government for calculating depreciation to be provided for such asset irrespective of the requirement of Schedule II. In terms of applicable Regulations under the Electricity Act, 2003, depreciation on tangible assets other than freehold land is provided on straight line method on a pro-rata basis at the rates specified therein, the basis of which be considered by the West Bengal Electricity Regulatory Commission (Commission) in determining the Company''s tariff for the year, which is also required to be used for accounting purpose as specified in the said Regulations. Based on legal opinions and independent accounting opinions obtained, the Company continues with the consistently followed practice of recouping from the retained earnings an additional charge of depreciation relatable to the increase in value of assets arising from fair valuation , which for the current year amounts to H 225.30 crore (31.03.21 : H 243.57 crore) and corresponding withdrawal of H 2.03 crore ( 31.03.21 : H 1.38 crore ) consequent to sale / disposal of such assets and the same will be followed in subsequent years.
NOTE- 50 Property, Plant and Equipment of the Company includes right-of-use assets in the opening balance as on 01.04.2021, additions,deletion, depreciation and closing balance for the year ended 31.03.2022 amounting to H 742.67 crore (01.04.2020: H 888.72 crore), H 5.34 crore (31.03.2021 H 5.69 crore), H 0.12 crore (31.03.2021 H 96.08 crore), H 54.11 crore (31.03.2021 H 55.66 crore) and H 693.78 crore (31.03.2021 H 742.67 crore) respectively. Carrying value of right of use assets as at 31.03.2022 in respect of land, building, plant & machinery and vehicles amounts to H 440.02 crore (31.03.2021 H 459.36 crore), H 240.67 crore ( 31.03.2021 H 263.30 crore), H 13.08 crore (31.03.2021 H 19.98 crore) and H 0.01 crore (31.03.2021 H 0.03 crore) respectively and its related depreciation / amortisation expense for the year ended 31.03.2022 in respect of land, building, plant & machinery and vehicles amount to H 19.49 crore (31.03.2021 H 19.44 crore), H 27.70 crore (31.03.2021 H 28.54 crore), H 6.90 crore (31.3.2021 H 7.66 crore) and H 0.02 crore (31.03.2021 H 0.02 crore) respectively.
Future minimum lease payments during next one year H 12.03 crore (31.03.2021 H 13.82 crore) and H 15.45 crore (31.03.2021 H 13.47 crore), later than one year but not later than five years H 19.94 crore (31.03.2021 H 29.63 crore) and H 55.64 crore (31.03.2021 H 54.94 crore) and later than five years H 5.75 crore (31.03.2021 H 5.68 crore) and H 31.14 crores (31.03.2021 H 36.84 crore) applying 10% and 7% respectively as weighted average incremental borrowing rate.
Other Expenses include short term leases of H 3.07 crore (31.03.2021 H 2.47 crore) and low-value assets of H 0.66 crore (31.03.2021 H 0.67 crore), net of applicable taxes.
* Including transfer of H 18.00 crore to Unspent CSR Account for the Year 2021-22 for making available to RP- Sanjiv Goenka Group CSR Trust for School Project which has been identified as Ongoing Project by the Board of Directors of the Company.
** Including transfer of H 19.50 crore to Unspent CSR Account for the Year 2020-21 for making available to RP - Sanjiv Goenka Group CSR Trust for School Project which has been indentified as Ongoing Project by the Board of Directors of the Company.
NOTE- 52 Contract Liability at the beginning of the year in respect of Contribution from Consumers for certain jobs stood at H 161.81 crore, out of which H 21.64 crore has been dealt with in the revenue account during the year, on satisfaction of performance obligation. The balance of the said contract liability as at the year-end stood at H 165.07 crore pending satisfaction of the performance obligation
NOTE- 53 With regard to the Company''s power purchase from one of its subsidiaries (provider), West Bengal Electricity Regulatory Commission (WBERC) has issued the tariff order in respect of its generation assets for the years 2018-19 and 201920 vide its tariff order dated 8 September 2021, wherein certain underlying issues/items have been dealt with in deviation from past practices of tariff determination and kept for disposal through future truing up exercise. The said provider not being in agreement with the same, has since preferred an appeal in respect of the above Tariff Order before the Hon''ble Appellate Tribunal for Electricity on the grounds interalia, that the orders have been passed after substantial period of delay and in fact after the applicable periods are long over and certain directions that have been passed in the said are impossible to comply with because of the aforesaid delay in passing the said order and also not taking into consideration the final project cost for determination of tariff which was already filed with Hon''ble WBERC. Based on legal opinion obtained, the provider is continuing with the tariff earlier determined by WBERC for the year 2017-18 and is confident of the matter being adjudicated in its favour. Accordingly, necessary adjustment, if any, will be made on the matter reaching finality.
Further, Hon''ble WBERC has also issued the Tariff Order for 2017-18 in respect of transmission assets of the said provider vide its Order dated April 20, 2022 which have been passed after substantial period of delay and wherein certain issues/ items have been dealt with in deviation from its regulations and without having regard to the special nature of the Project. The said provider not being in agreement with the Order is in the process of filing necessary petition. Based on legal opinion obtained, the Company is continuing with the tariff earlier determined by Hon''ble WBERC for the year 2016-17 and is confident of the matter being adjudicated in its favour. Accordingly, necessary adjustment, if any, will be made on the matter reaching finality.
The Company being in the business of distribution of electricity, such connection was given earlier in the ordinary course of business.
(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(iv) The Company has not traded or invested in Crypto Currency or Virtual Currency during the financial year.
(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
(vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(vii) The Company has no such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).
(viii) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017.
The installed capacity of the Generating Stations of the Company (as per certification of technical expert) as on 31st March, 2022 was 1125000 kW (31st March, 2021 : 1125000 kW).
NOTE- 57 The Company has reclassified previous year''s figures to conform to this year''s classification along with other regrouping / rearrangement wherever necessary.
Mar 31, 2019
NOTE-1 The operations of the Company are governed by the Electricity Act, 2003 and various Regulations and / or Policies framed thereunder by the appropriate authorities. Accordingly, in preparing the financial statements the relevant provisions of the said Act, Regulations etc. have been duly considered.
NOTE-2A Summary of significant judgements and assumptions
The preparation of financial statements requires the use of accounting estimates, judgements and assumptions which, by definition, will seldom equal the actual results. Management also needs to exercise judgement in applying the Company''s accounting policies. Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.
The areas involving critical estimates or judgements are Estimated useful life of Intangible Assets -Note -2A (e)
Estimated Fair Valuation/impairment assessment of certain Investments -Note-7 & Note-2A (g)
Estimation of Regulatory Items - Note -18 & 39 Estimation of Restoration Liability- Note- 2A (e)
Impairment of Trade Receivables -Note - 2A (g)
Estimates used in Actuarial Valuation of Employee benefits -Note-35
NOTE-2B Changes in Accounting Policy
Ind AS 115 was issued on March 28, 2018 and supercedes Ind AS 11 "Construction Contracts" and Ind AS 18 "Revenue" and it applied, with limited exception, to all revenue arising from contract with customers from 1st April, 2018. The company has adopted IndAS 115 using modified retrospective approach. However, the application of standard does not have any impact on the recognition and measurement of revenue and related items.
Other amendments and interpretations apply for the first time in March 2019, but do not have an impact on the financial statements of the Company. The Company has not early adopted any standards or amendments that have been issued but are not yet effective.
NOTE- 3 New standards that are not yet effective
The amendments to standards issued but not yet effective up to the date of issuance of the Company''s financial statements is disclosed below. The Company intends to adopt this standard, if applicable, when it becomes effective.
a Issue of Ind AS 116- Leases
Ind AS 116 Leases was notified in March 2019 and it replaces Ind AS 17 Leases. Ind AS 116 is effective for annual periods beginning on or after 1 April 2019. It sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under Ind AS 17. Lessor accounting under Ind AS 116 is substantially unchanged from today''s accounting under Ind AS 17. Ind AS 116 requires lessees and lessors to make more extensive disclosures than under Ind AS 17. The Company is in the process of evaluating the requirements of the standard and its impact on its financial statements.
b Amendment to Existing Ind AS
The MCA has also carried out amendments of the following accounting standards:
i. Ind AS 12 - Income Taxes
ii. Ind AS 109 - Financial Instruments
iii. Ind AS 19 - Employee Benefits
iv. Ind AS 23 - Borrowing Costs
v. Ind AS 28 - Investments in Associates and Joint Ventures and
vi. Ind AS 103 - Business Combinations
Application of above amendments does not have significant impact on the Company''s financial statements.
# Refer Note 51
* includes leasehold improvements
1. The lease term in respect of land acquired under finance lease ranges from 30-99 years, which is renewable at the option of lessee or as mutually agreed. Future minimum lease obligation payable on leasehold land during next one yearRs. 0.83 crore (as on 31.03.18:Rs. 0.83 crore) later than one year but not later than five years Rs. 2.64 crore (as on 31.03.18:Rs. 2.64 crore) and later than five years Rs. 3.23 crore ( as on 31.03.18:Rs. 3.45 crore)
2. The company is in the process of renewing the lease agreement, in respect of certain leasehold land, having Gross Block Rs. 210.34 crore (Net Block: Rs. 201.46 crore).
a) Income earned recognised in Statement of profit and loss Rs. 12.27 crore (previous year: Rs. 12.26 crore )
b) Fair valuation of the above land as per rent capitalisation method (income approach) amounts to Rs. 288 croref as on 31.03.18 : Rs.282 crore) as per approved independent valuer and categorised as level 2. The main inputs used in determining the fair valuation of the Investment Property are utility, marketability, self liquidity, future rentals, etc.
c) The lease term in respect of Investment property given under Operating Lease is 25 years which can be extended upon the sole discretion of the Company. This lease has been granted to Quest Properties India Limited to construct, develop, operate and maintain a mall during the said lease term and the aforesaid property has been offered as security in respect of financial assistance availed of by the said Company. Incentive given by the Company byway of rent free period for development of the Investment Property has been spread across the period of the contract. Future minimum lease rental receivables during next one yearRs. 12.27 crore (as on 31.03.18:Rs. 12.26 crore) later than one year but not later than five years Rs. 49.05 crore (as on 31.03.18:Rs. 49.05 crores) and later than five years Rs. 106.28 crore (as on 31.03.18:Rs. 118.54 crores).
a. Amount lying in deposit accounts with banks as at 31st March, 2019 includes Rs. 246.86 crore (31.03.2018:Rs. 229.50 crore) appropriated upto the previous year towards Fund for unforeseen exigencies and interest attributable thereto.
b. Bank deposits with original maturity more than 3 months include Rs. 179.12 crore (31.03.2018 :Rs. 33.00 crore ) having original maturity more than 12 months as on the reporting date.
For the period of five years immediately preceding 31st March, 2019, no share was : - (i) allotted as fully paid up pursuant to any contract without consideration being received in cash, (ii) allotted as fully paid upby way of bonus shares and (iii) bought back.
f. Terms /rights attached to equity shares :
The Company has only one class of equity shares having a par value of Rs. 10 per share fully paid up. Holders of equity shares are entitled to one vote per share. An Interim dividend of Rs. 17.50 per equity share(31.03.18: Rs. 12 per equity share) has been paid during the year. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the sale proceeds from 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.
Fund for unforeseen exigencies has been created for dealing with unforeseen exigencies and the amount transferred during the year will be invested as per the applicable regulations. Retained Earnings represents profit earned by the Company, net of appropriations till date and adjustments done on transition to Ind AS. FVTOCI reserve represents the cumulative gains and losses arising on fair valuation of equity instruments measured at fair value through other comprehensive income.
c. Nature of Security :
Out of the Term Loans in (a) above, loans amounting to:
(a) Rs. 4137.50 crore (31.03.2018 -Rs. 4053.08 crore) are secured, ranking pari passu inter se, by equitable mortgage/hypothecation of the fixed assets of the Company including its land, buildings and any other constructions thereon, plant and machinery, etc. (refer Note 4) as a first charge and, as a second charge, by hypothecation of the Companyâs current assets comprising stock of stores, coal (refer Note 11) and other consumables, book debts, monies receivable (refer Note 13) and bank balances (refer Note 14). However, creation of the said mortgage security in respect of five Rupee Loans (Previous year: one Rupee Loan) aggregating Rs.755.50 crore (31.03.2018-Rs. 30 crore) is in process and
(b) Rs. 40.00 crore (31.03.2018- 203.44 crore) are secured, ranking pari passu inter se, by hypothecation of the movable fixed assets and current assets of the Company by way of a charge subservient to the charge of the first and second charge holders on the said assets.
e. Outstanding foreign currency loans as on 31st March, 2019 as disclosed above, stand fully hedged in Indian Rupees.
Overdraft facilities from bank in (a) above are secured, ranking pari passu inter se, by hypothecation of the Company''s current assets comprising stock of stores, coal and other consumables (refer note 11), book debts, monies receivable (refer note 13) and bank balances (refer note 14) as a first charge and, as a second charge, by equitable mortgage / hypothecation of fixed assets of the Company including its land, buildings and any other construction thereon, where exists plant and machinery etc (refer note 4). However, creation of the said security in respect of working capital facilities from banks aggregating Rs. 30.65 Crore (31.03.2018 - Nil) is in process.
NOTE - 4 CURRENT - TRADE PAYABLES
Rs.0.01 crore (31.3.2018-Rs. 0.08 Crore ),Rs. NIL ( 31.03.2018 - Rs.Nil),Rs. 0.58 crore (31.3.2018-Rs.0.52 crore ) and Rs. 1.97 crore ( 31.3.2018-Rs. 1.39 crore ), Rs.NIL ( 31.03.2018 - Rs.Nil ) representing interest due on amount outstanding as at the year end ,interest paid along with amount of payment made beyond the appointed day , interest due and payable for the period of delay in making payment during the year, amount of interest accrued and remaining unpaid at the year end , amount of further interest remaining due and payable in the succeeding years, respectively due to Micro and Small Enterprises, as defined in the Micro, Small and Medium Enterprises Development Act, 2006 on information available with the Company .
e Others include current portion of consumer security deposit (including accrued interest thereon), employee related liabilities, liabilities on capital account, liabilities towards contractual obligations and Rs. 1282.00 crore (31.03.2018:Rs. 1492.00 crore) payable to Haldia Energy Limited .
NOTE -5 CONTINGENT LIABILITIES AND COMMITMENTS
a. Claims against the Company not acknowledged as debts:
The West Bengal Taxation Tribunal had held meter rentals received by the Company from consumers to be deemed sales under the provisions of the Bengal Finance (Sales Tax) Act, 1941 and that sales tax was payable on such rentals. Based on such findings the Commercial Taxes Directorate assessed Rs.0.69 crore as sales tax on meter rentals received during the year ended 31st March, 1993 and raised a demand of Rs.0.36 crore on account of interest. Against the above demand , the Company had deposited a sum of Rs.0.75 crore with the sales tax authorities and obtained a stay against the balance demand from the Deputy Commissioner of Commercial Taxes. The sales tax authorities also indicated their intention to levy such sales tax on meter rentals for the subsequent years as well, against which, the Company filed a writ petition in the Calcutta High Court and prayed for an interim order, inter alia, restraining the sales tax authorities from proceeding with the assessment for the subsequent years till disposal of the appeal. An interim order has been issued by the High Court permitting the sales tax authorities to carry out assessments but restraining them from serving any assessment order on the Company. The disposal of the case is still pending.
b. Commitments of the Company on account of estimated amount of contracts remaining to be executed on capital account and letter of comforts towards borrowing/financing obligations of subsidiaries from banks, not provided for amount to Rs. 97.65 crore (31.03.2018 : Rs. 75.27 crore) and Rs. 1395.35 crore ( 31.03.2018 :Rs. 1497.55 crore ) respectively, (refer note 42 for details )
c The Ministry of Coal had encashed the bank guarantee of the Company amounting to Rs. 66.15 crore in April 2018, in terms of its letter dated 25.04.2018, alleging non-compliance with the mining plan for the years 2015-16 and 2016-17 as per the Coal Mine Development and Production Agreement (CMDPA). Further, in terms of the above letter, the Ministry had directed the Company to top-up the bank guarantee with the aforesaid encashed amount. The Hon''ble High Court of Delhi while disposing the petition filed by the Company against the Ministry''s letter dated 25.04.2018, stayed the operation of this letter and further directed the Company to approach the Tribunal. Company has accordingly filed a petition before the Special Tribunal at Godda, Jharkhand challenging the letter dated 25.04.2018 and further seeking refund of the encashed amount. Based on a legal opinion, the Company expects a favourable outcome in the matter, and no provision has been considered necessary in the books of account from Rs. 1,102 crore in 2017-18 to Rs. 1,194 crore in 2018-19. After accounting for tax expense, profit after taxes for 2018-19 was Rs. 937 crore, up 8.8% over Rs. 861 crore in the previous year.
d. The Company has given bank guarantee of Rs. 294.97 crore ( 31.03.2018 : Rs. 222.76 crore ) for procurement of coal , etc , which is outstanding as on the reporting date.
e. The Company has ongoing commitment to extend support and provide equity to the subsidiaries, in respect of various projects and otherwise (where, in certain cases there are restriction on transfer of investments). The future cash outflow in respect of above cannot be ascertained at this stage.
f. Commitment relating to leasing arrangement, refer note 4 and 46
g. There are numerous interpretative issues relating to the Supreme Court (SC)judgement dated 28th February, 2019 in respect of Provident Fund (PF) on the inclusion of allowances for the purpose of PF contribution as well as its effective date. The company is consulting Legal counsel for further clarity and evaluating its impact on its financial statement, if any, and is of the view that it is only possible but not probable that outflow of economic resources will be there in this regard.
c Earnings from sale of electricity are determined in accordance with the relevant orders of the Commission, to the extent applicable. The said earnings are also net of discount for prompt payment of bills allowed to consumers on a net basis from month to month amounting to Rs. 89.93 crore ( previous year: Rs. 87.85 crore).
NOTE-6 COSTOFFUEL
a Cost of Fuel includes freight Rs. 300.48 crore (previous year: Rs. 296.12 crore) b Consumption of fuel:
(i) Defined contribution plans
The Company makes contributions for provident fund and family pension schemes (including for superannuation) towards retirement benefit plans for eligible employees. Under the said plan, the Company is required to contribute a specified percentage of the employees'' salaries to fund the benefits. The fund has the form of trust and is governed by the Board of Trustees. During the year, based on applicable rates, the Company has contributed and charged Rs. 58.08 crore (previous year: Rs. 56.76 crore) on this count in the Statement of Profit and Loss .
The Company also sponsors the Gratuity plan, which is governed by the Payment of Gratuity Act, 1972. The Company makes annual contribution to independent trust, who in turn, invests in the Employees Group Gratuity Scheme of eligible funds for qualifying employees.
Liabilities at the year end for gratuity, leave encashment and other retiral benefits including post-retirement medical benefits have been determined on the basis of actuarial valuation carried out by an independent actuary.
The above sensitivity analysis 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.
viii) Risk exposure
The Plans in India typically expose the Company to some risks, the most significant of which are detailed below:
Discount Rate risk: Decrease in discount rate will increase the value of the liability. However, this will partially offset by the increase in the value of plan assets.
Demographic Risk: In the valuation of the liability certain demographic (mortality and attrition rates) assumptions are made. The Company is exposed to this risk to the extent of actual experience eventually being worse compared to the assumptions thereby causing an increase in the scheme cost.
Future Salary Increase Risk: In case of gratuity & leave the scheme cost is sensitive to the assumed future salary escalation rates for all last drawn salary linked defined benefit Schemes. If actual future salary escalations are higher than that assumed in the valuation actual Scheme cost and hence the value of the liability will be higher than that estimated. But PRMB & pension are not dependant on future salary levels.
Regulatory Risk: New Act/Regulations may come up in future which could increase the liability significantly in case of Leave obligation, PRMB & Pension. Gratuity Benefit must comply with the requirements of the Payment of Gratuity Act, 1972 (as amended up-to-date). Also in case of interest rate guarantee Exempt Provident Fund must comply with the requirements of the Employees Provident Funds and Miscellaneous Provisions Act 1952 as amended up-to-date.
Regulatory (Income) / Expenses arise to the Company pursuant to the regulatory provisions applicable to the Company under the provisions of the Electricity Act, 2003 and regulations framed thereunder and disposals made by WBERC on the Company''s various petitions / applications, in terms of the said regulations, at different timeframe including the tariff and APR orders for the years notified till date. The effect of adjustments - (income)/expenses, relating to (a) advance against depreciation, (b) cost of electrical energy purchased, fuel related costs and those having bearing on revenue account, as appropriate, based on the Company''s understanding of the applicable available regulatory provisions and available orders of the competent authorities, and (c) effect of exchange fluctuation including MTM gain amounting to Rs. 79.64 crore (Previous yearRs. 198.00 crore), Rs. (657.00 crore) [Previous year Rs. (414.75 crore)], and Rs. 6.10 crore [Previous year Rs. 7.51 crore] respectively have been shown as Regulatory (lncome)/Expenses with corresponding sums, reflected in Balance Sheet as Regulatory Deferral Account Balances (see Note 18).
Regulatory deferral account debit balance comprise the effect of (a) Deferred tax, (b) exchange fluctuation, (c) cost of fuel and purchase of power and other adujstments having bearing on revenue account amounting to Rs. 3474.98 crore (31.3.2018 : Rs. 3487.21 crore), Rs. 48.05 crore ( 31.3.2018 :Rs. 34.33 crore ) and Rs. 123.23 crore (31.3.2018 : Nil) respectively and that relating to credit balance comprise the effect of (a) advance against depreciation, (b) cost of fuel and purchase of power and other adujstments having bearing on revenue account and (c) MTM Gain amount to Rs. 1360.71 crore ( 31.3.2018 :Rs. 1281.07crore ), Nil ( 31.3.2018 :Rs. 533.77 crore ) and Rs. 40.96 crore ( 31.3.2018 :Rs. 21.15 crore) respectively.
The accurate quantification and disposal of the matters with regard to Regulatory deferral account balances, are being given effect to, from time to time, after conclusion of the concerned event/year, as appropriate, on receipt of necessary direction from the appropriate authorities relating to the applicable matters in a comprehensive way including those attributable to the mining of coal from Sarisatolli mine which commenced from 10 April, 2015 following the said mine having been allotted to the Company effective 1 April 2015 pursuant to the auction conducted by the Ministry of Coal, Government of India under the provisions of the applicable laws.
The different levels have been defined below:
Level 1: financial instruments measured using quoted price. The fair value of all equity instruments which are traded in the stock exchanges is determined using the closing price. The mutual funds are valued using the closing NAV.
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices)
Level 3: inputs for the asset or liability that are not based on observable market data.
c) The following methods and assumptions were used to estimate the fair values
i. The fair values of the mutual fund instruments are based on net asset value of units declared at the close of the reporting date.
ii. The fair values of the cross currency swap is determined using discounted cash flow analysis and swaps and options pricing models.
iii. The fair value of preference share is determined on the basis of discounted cash flow wherein future cash flows are based on the terms of preference share discounted at rate that reflects market rate. Significant unobservable input used is discount rate and 0.50% increase / decrease in discount rate would result in decrease / increase in fair value of preference share by Rs. 0.07 crore. The fair value of equity share is determined on the basis of discounted cash flow (31.03.18 net asset value). Significant unobservable input used is discount rate and growth rate and 0.50% increase / decrease in discount rate and growth rate would result in decrease / increase in fair value of equity share by Rs. 0.05 crore and Rs. 0.01 crore respectively.
iv. The carrying amounts of trade receivables, trade payables, investment in commercial paper, receivable towards claims and services rendered, receivable from related parties, other bank balances, interest accrued payable/receivable, other receivables/payables, cash and cash equivalents are considered to be the same as their fair values, due to their short term nature.
v. Loans, non-current borrowings, lease receivable/payable and security deposits are based on discounted cash flows using a current borrowing rate.
vi. Fair Value of financial instruments which is determined on the basis of discounted cash flow analysis , considering the nature, risk profile and other qualitative factors. The carrying amounts will be reasonable approximation of the fair value.
NOTE-7 Financial risk management and Capital Management
The Company''s operations of generation and distribution of electricity are governed by the provisions of the Electricity Act 2003 and Regulations framed thereunder by the West Bengal Electricity Regulatory Commission and accordingly the Company, being a licensee under the said statute, is subject to regulatory provisions/ guidelines and issues evolving there from, having a bearing on the Company''s liquidity, earning, expenditure and profitability, based on efficiency parameters provided therein including timing of disposal of applications / matters by the authority.
The Company being the sole provider of electricity in the licenced area has been managing the operations keeping in view its profitability and liquidity in terms of above regulations. In order to manage credit risk arising from sale of electricity, multipronged approach is followed like maintenance of security deposit, precipitation of action against defaulting consumers, obtaining support of the administrative authority. Credit risk towards investment of surplus funds is managed by obtaining support of credit rating and appraisal by external agencies and lending bodies. The Company extends financial support to its subsidiaries including that of letter of comforts etc. to their lenders.
The Company manages its liquidity risk on financial liabilities by maintaining healthy working capital and liquid fund position keeping in view the maturity profile of its borrowings and other liabilities as disclosed in the respective notes.
The Company''s market risk relating to variation of foreign currency, interest rate and commodity price is mitigated through relevant regulations and availability of bulk commodity namely coal is generally sourced from own captive mine, domestic long term linkage and Special Forward E-Auction conducted by Coal India Limited and/or its subsidiaries.
While managing the capital, the Company ensures to take adequate precaution for providing returns to the shareholders and benefit for other stakeholders, including protecting and strengthening the balance sheet. Availability of capital and liquidity is also managed, in consonance with the applicable regulatory provisions.
a. Shares alloted during the year in respect of Share Application money paid to subsidiaries Rs. 160 crore ( 31.03.18 :Rs. 115.58 crore)
b- Refer Note. 31(b) relating to commitments (letter of comfort) provided to banks towards borrowing obligations as on 31.03.2019 in respect of subsidiary companies,
c. Outstanding balances are unsecured and settlement occurs in cash.
NOTE-8 Liability in respect of the security deposit collected by the Company, in terms of applicable regulations of the WBERC, has been classified as non - current, given the nature of its business in the license area, excepting to the extent of the sum refundable / payable within a year, based on experience.
NOTE-9 Future rentals payable in respect of non-cancellable leases for assets comprising various equipment and vehicles acquired under operating leases for the period ranging between 36-60 months work out to Rs. 6.27 crore (as on 31.03.18 :Rs. 0.39 crore) and Rs. 18.21 crore (as on 31.03.18 : Rs. 1.29 crore) during next one year and thereafter till five years respectively. There are no restrictions in respect of such leases.
NOTE- 10 The Company is primarily engaged in generation and distribution of electricity which is the only reportable business segment in line with the segment wise information which is being presented to the CODM. There are no reportable geographical segments, since all business is within India.
The Company is also running a single retail store in state of Gujarat which is not significant for the CODM and hence not considered as reportable segment.
NOTE- 11 Part A of Schedule II to the Companies Act. 2013 (the Act), inter alia, provides that depreciable amount of an asset is the cost of an asset or other amount substituted for cost. Part B of the said Schedule deals with the useful life or residual value of an asset as notified for accounting purpose by a Regulatory Authority constituted under an act of Parliament or by the Central Government for calculating depreciation to be provided for such asset irrespective of the requirement of Schedule II. In terms of applicable Regulations under the Electricity Act, 2003, depreciation on tangible assets other than freehold land is provided on straight line method on a pro-rata basis at the rates specified therein, the basis of which be considered by the West Bengal Electricity Regulatory Commission (Commission) in determining the Company''s tariff for the year, which is also required to be used for accounting purpose as specified in the said Regulations. Based on legal opinions and independent accounting opinions obtained, the Company continues with the consistently followed practice of recouping from the retained earnings an additional charge of depreciation relatable to the increase in value of assets arising from fairvaluation , which for the current year amounts to Rs. 304.04 crore (31.03.18 :Rs. 306.25 crore) and corresponding withdrawal of Rs. 2.72 crore ( 31.03.18 :Rs. 5.18 crore ) consequent to sale / disposal of such assets and the same will be followed in subsequent years .
NOTE- 12 In terms of the provisions of Companies Act, 2013, the required Corporate Social Responsibility (CSR) spending for the year works out to Rs. 20.16 crore (31.03.18 :Rs. 19.35 crore). The said requirement of CSR spending was met by way of contribution to a trust set up for the said purpose and direct expenditure of Rs. 18.00 crore (31.03.18 :Rs. 17.10 crore ) and Rs. 2.23 crore ( 31.03.18 :Rs. 2.25 crore) respectively.
NOTE-13 The Company, in the financial statements for the year ended March 31, 2018, had given effect to the composite scheme of arrangement approved by Hon''ble National Company Law Tribunal (NCLT) (the appropriate authority) except for demerger of the Generation Undertaking which shall be effective in terms thereof upon approval of the Hon''ble West Bengal Electricity Regulatory Commission (WBERC) to the Power Purchase Agreement (PPA) between the Company and Haldia Energy Limited (One of the Scheme Companies) which is awaited.
NOTE- 14 Contract Liability at the beginning of the year in respect of Contribution from Consumers for certain jobs stood atRs. 124.20 crore, out of which Rs. 35.39 crore has been dealt with in the revenue account during the year, on satisfaction of performance obligation. The balance of the said contract liability as at the year-end stood at Rs. 146.54 crore pending satisfaction of the performance obligation.
The derated installed capacity of the Generating Stations of the Company (as per certification of technical expert) as on 31st March, 2019 was 1125000 kW (31st March, 2018 :1125000 kW).
NOTE-15 The Company has reclassified previous yearâs figures to conform to this yearâs classification along with other regrouping / rearrangement wherever necessary.
Mar 31, 2018
NOTE - 1 The operations of the Company are governed by the Electricity Act, 2003 and various Regulations and / or Policies framed thereunder by the appropriate authorities. Accordingly, in preparing the financial statements the relevant provisions of the said Act, Regulations etc. have been duly considered.
NOTE â 2A Summary of significant judgements and assumptions
The preparation of financial statements requires the use of accounting estimates, judgements and assumptions which, by definition, will seldom equal the actual results. Management also needs to exercise judgement in applying the Companyâs accounting policies.
Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.
The areas involving critical estimates or judgements are :-
Estimated useful life of Intangible Assets -Note -2(e)
Estimated Fair Valuation of certain Investments -Note-7
Estimation of Regulatory Items - Note -18 & 39
Estimation of Restoration Liability- Note- 2 (e)
Impairment of Trade Receivables -Note - 2(g)
Estimates used in Actuarial Valuation of Employee benefits -Note-35
NOTE - 3 New standards that are not yet effective
The amendments to standards issued but not yet effective up to the date of issuance of the Companyâs financial statements is disclosed below. The Company intends to adopt this standard, if applicable, when it becomes effective.
The Ministry of Corporate Affairs (MCA) has issued the Companies (Indian Accounting Standards) Amendment Rules, 2017 and Companies (Indian Accounting Standards) Amendment Rules, 2018 amending the following standard :
a. Issue of Ind AS 115 Revenue from Contracts with Customers
The Company has evaluated the impact of implementation of Ind AS 115 âRevenue from Contracts with Customersâ which is applicable to it w.e.f 1st April 2018 and basis the evaluation done and based on the arrangement that the Company has with its consumers, the implementation of Ind AS 115 does not have any significant impact on the profit or loss of the Company.
b. Amendment to Existing issued Ind AS
The MCA has also carried out amendments of the following accounting standards :
i. Ind AS 21 - The Effects of Changes in Foreign Exchange Rates
ii. Ind AS 40 - Investment Property
iii. Ind AS 12 - Income Taxes
iv. Ind AS 28 - Investments in Associates and Joint Ventures and
v. Ind AS 112 - Disclosure of Interests in Other Entities
Application of above amendments does not have significant impact on the Companyâs financial statement.
c. Nature of Security :
Out of the Term Loans in (a) above, loans amounting to :
(a) Rs.4053.08 crore (31.03.2017- Rs.3825.60 crore) are secured, ranking pari passu inter se, by equitable mortgage/hypothecation of the fixed assets of the Company including its land, buildings and any other constructions thereon, plant and machinery, etc. (refer note 4) as a first charge and, as a second charge, by hypothecation of the Companyâs current assets comprising stock of stores, coal (refer note 11) and other consumables, book debts, monies receivable (refer note 13) and bank balances (refer note 14). However, creation of the said mortgage security in respect of one Rupee Loan (31.03.2017 - five Rupee Loans) aggregating Rs.30.00 crore (31.03.2017- Rs.633.13 crore) is in process and
(b) Rs.203.44 crore (31.03.2017- Rs.324.69 crore) are secured, ranking pari passu inter se, by hypothecation of the movable fixed assets and current assets of the Company by way of a charge subservient to the charge of the first and second charge holders on the said assets.
c. Nature of Security
Overdraft facilities from bank in (a) above are secured, ranking pari passu inter se, by hypothecation of the Companyâs current assets comprising stock of stores, coal and other consumables (refer note 11), book debts, monies receivable (refer note 13) and bank balances (refer note 14) as a first charge and, as a second charge, by equitable mortgage / hypothecation of fixed assets of the Company including its land, buildings and any other construction thereon, where exists plant and machinery etc (refer note 4).
NOTE - 4 CURRENT - TRADE PAYABLES
Rs.0.08 crore (31.3.2017- Rs. Nil), Rs. Nil (31.03.2017 - Rs. Nil), Rs.0.52 crore (31.03.2017- Rs.0.11 crore) and Rs.1.39 crore (31.03.2017- Rs.0.87 crore), Rs. Nil (31.03.2017 - Rs. Nil) representing interest due on amount outstanding as at the year end, interest paid along with amount of payment made beyond the appointed day, interest due and payable for the period of delay in making payment during the year, amount of interest accrued and remaining unpaid at the year end, amount of further interest remaining due and payable in the succeeding years, respectively due to Micro and Small Enterprises, as defined in the Micro, Small and Medium Enterprises Development Act, 2006 on information available with the Company.
NOTE - 5 CONTINGENT LIABILITIES AND COMMITMENTS
a. Claims against the Company not acknowledged as debts :
The West Bengal Taxation Tribunal had held meter rentals received by the Company from consumers to be deemed sales under the provisions of the Bengal Finance (Sales Tax) Act, 1941 and that sales tax was payable on such rentals. Based on such findings the Commercial Taxes Directorate assessed Rs.0.69 crore as sales tax on meter rentals received during the year ended 31st March, 1993 and raised a demand of Rs.0.36 crore on account of interest. Against the above demand, the Company had deposited a sum of Rs.0.75 crore with the sales tax authorities and obtained a stay against the balance demand from the Deputy Commissioner of Commercial Taxes. The sales tax authorities also indicated their intention to levy such sales tax on meter rentals for the subsequent years as well, against which, the Company filed a writ petition in the Calcutta High Court and prayed for an interim order, inter alia, restraining the sales tax authorities from proceeding with the assessment for the subsequent years till disposal of the appeal. An interim order has been issued by the High Court permitting the sales tax authorities to carry out assessments but restraining them from serving any assessment order on the Company. The disposal of the case is still pending.
b. Commitments of the Company on account of estimated amount of contracts remaining to be executed on capital account and the same (letter of comfort) towards borrowing / financing obligations of subsidiaries from banks, not provided for amount to Rs.75.27 crore (31.03.2017 : Rs. 151.18 crore), Rs.1497.55 crore (31.03.2017 : Rs. 1550.05 crore) respectively (refer note 42 for details).
c. The Ministry of Coal had encashed the bank guarantee of the Company amounting to Rs.66.15 crore in April 2018, in terms of its letter dated 25.04.2018, alleging non-compliance with the mining plan for the years 2015-16 and 2016-17 as per the CMDPA. Further, in terms of the above letter, the Ministry had directed the Company to top-up the bank guarantee with the aforesaid encashed amount. The Honâble High Court of Delhi while disposing of the petition filed by the Company against the Ministryâs letter dated 25.04.2018, stayed the operation of this letter and further directed the Company to approach the Tribunal. Company has accordingly filed a petition before the Special Tribunal at Godda, Jharkhand challenging the letter dated 25.04.2018 and further seeking refund of the encashed amount. Based on a legal opinion, the Company expects a favourable outcome in the matter, and no provision has been considered necessary in the books of account.
d. The Company has given bank guarantee of Rs.222.76 crore (31.03.2017 : Rs.325.41 crore) for procurement of coal, etc. which is outsantding as on the reporting date.
e. The Company has ongoing commitment to extend support and provide equity to the subsidiaries, in respect of various projects and otherwise (where, in certain cases there are restriction on transfer of investments). The future cash outflow in respect of above cannot be ascertained at this stage.
f. Commitment relating to leasing arrangement, refer note 4 and 47.
NOTE - 6 COST OF FUEL
a Cost of Fuel includes freight Rs.296.12 crore (previous year : Rs.262.07 crore)
b Cost of Fuel includes gain of NIL (previous year: gain of Rs.0.59 crore) due to exchange fluctuations.
c Consumption of fuel :
(i) Defined contribution plans
The Company makes contributions for provident fund and family pension schemes (including for superannuation) towards retirement benefit plans for eligible employees. Under the said plan, the Company is required to contribute a specified percentage of the employeesâ salaries to fund the benefits. The fund has the form of trust and is governed by the Board of Trustees. During the year, based on applicable rates, the Company has contributed Rs.56.76 crore (previous year : Rs.57.00 crore) on this count in the Statement of Profit and Loss.
The Company also sponsors the Gratuity plan, which is governed by the Payment of Gratuity Act, 1972. The Company makes annual contribution to independent trust, who in turn, invests in the Employees Group Gratuity Scheme of eligible agencies for qualifying employees.
Liabilities at the year end for gratuity, leave encashment and other retiral benefits including post-retirement medical benefits have been determined on the basis of actuarial valuation carried out by an independent actuary, based on the method prescribed in IND AS 19 - âEmployee Benefitsâ of the The Companies (Indian Accounting Standards) Rules, 2015.
The above sensitivity analysis 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.
The Plans in India is typically expose the Company to some risks, the most significant of which are detailed below :
Discount Rate risk : Decrease in discount rate will increase the value of the liability. However, this will partially offset by the increase in the value of plan assets.
Demographic Risk : In the valuation of the liability certain demographic (mortality and attrition rates) assumptions are made. The Company is exposed to this risk to the extent of actual experience eventually being worse compared to the assumptions thereby causing an increase in the scheme cost.
Future Salary Increase Risk : In case of gratuity & leave the scheme cost is sensitive to the assumed future salary escalation rates for all final salary defined benefit Schemes. If actual future salary escalations are higher than that assumed in the valuation actual Scheme cost and hence the value of the liability will be higher than that estimated. But PRMB & pension are not dependant on future salary levels.
Regulatory Risk : New Act/Regulations may come up in future which could increase the liability significantly in case of Leave obligation, PRMB & Pension. Gratuity Benefit must comply with the requirements of the Payment of Gratuity Act, 1972 (as amended up-to-date). Also in case of interest rate guarantee Exempt Provident Fund must comply with the requirements of the Employees Provident Funds and Miscellaneous Provisions Act 1952 as amended up-to-date.
Regulatory (Income) / Expenses arise to the Company pursuant to the regulatory provisions applicable to the Company under the provisions of the Electricity Act, 2003 and regulations framed thereunder and disposals made by WBERC on the Companyâs various petitions / applications, in terms of the said regulations, at different timeframe including the tariff and APR orders for the years notified till date. The effect of adjustments - (income) / expenses, relating to (a) advance against depreciation, (b) cost of electrical energy purchased, fuel related costs including effect of balance sum relating to additional levy and those having bearing on revenue account, as appropriate, based on the Companyâs understanding of the applicable available regulatory provisions and available orders of the competent authorities, and (c) effect of exchange fluctuation including MTM gain, amounting to Rs.198 crore (Previous year Rs.73.38 crore), â (414.75 crore) [Previous year â (252 crore)], and Rs.7.51 crore [Previous year â (11.61 crore)] respectively have been shown as Regulatory (Income) / Expenses with corresponding sums, reflected in Balance sheet as Regulatory Deferral Account Balance (see Note 18).
Regulatory deferral account debit balance comprise the effect of (a) tax, (b) exchange fluctuation amounting to Rs.3,487.21 crore (31.03.2017: Rs.3,554.76 crore) and Rs.34.33 crore (31.03.2017 : Rs.65.21 crore) respectively and that relating to credit balance comprise the effect of (a) advance against depreciation, (b) cost of fuel and purchase of power and other adujstments having bearing on revenue account and (c) MTM Gain amount to Rs.1281.07 crore (31.03.2017 : Rs.1,083.07 crore), Rs.533.77 crore (31.03.2017 : Rs.1,064.96 crore) and Rs.21.15 crore (31.03.2017 : Rs.44.52 crore) respectively.
The accurate quantification and disposal of the matters with regard to Regulatory deferral account balances, are being given effect to, from time to time, after conclusion of the concerned event / year, as appropriate, on receipt of necessary direction from the appropriate authorities relating to the applicable matters in a comprehensive way including those attributable to the mining of coal from Sarisatolli mine which commenced from 10 April, 2015 following the said mine having been allotted to the Company effective 1 April 2015 pursuant to the auction conducted by the Ministry of Coal, Government of India under the provisions of the applicable laws.
Level 1 : financial instruments measured using quoted price. The fair value of all equity instruments which are traded in the stock exchanges is determined using the closing price. The mutual funds are valued using the closing NAV.
Level 2 : inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e., derived from prices).
Level 3 : inputs for the asset or liability that are not based on observable market data.
c) The following methods and assumptions were used to estimate the fair values.
i. The fair values of the mutual fund instruments are based on net asset value of units declared at the close of the reporting date. The fair value of equity shares are based on net asset value of entity as at reporting date.
ii. The fair values of the cross currency swap is determined using discounted cash flow analysis and swaps and options pricing models.
iii. The fair value of preference share is determined on the basis of discounted cash flow wherein future cash flows are based on the terms of preference share discounted at rate that reflects market rate. Significant unobservable input used is discount rate and 0.50% increase / decrease in discount rate would results in decrease / increase in fair value of preference share by Rs.0.07 crore respectively.
iv. The carrying amounts of trade receivables, trade payables, investment in commercial paper, receivable towards claims and services rendered, other bank balances, interest accrued payable/receivable, cash and cash equivalents are considered to be the same as their fair values, due to their short term nature.
v. Loans, non-current borrowings, lease receivable, security deposits and restoration liability are based on discounted cash flows using a current borrowing rate.
vi. Fair value of financial instuments which is determined on the basis of discounted cash flow analysis, considering the nautre , risk profile and other qualitative factors. The carrying amounts will be reasonable approximation of the fair value.
NOTE - 7 Financial risk management and Capital Management
The Companyâs operations of generation and distribution of electricity are governed by the provisions of the Electricity Act 2003 and Regulations framed thereunder by the West Bengal Electricity Regulatory Commission and accordingly the Company, being a licensee under the said statute, is subject to regulatory provisions/ guidelines and issues evolving therefrom, having a bearing on the Companyâs liquidity, earning, expenditure and profitability, based on efficiency parameters provided therein including timing of disposal of applications / matters by the authority.
The Company being the sole provider of electricity in the licenced area has been managing the operations keeping in view its profitability and liquidity in terms of above regulations. In order to manage credit risk arising from sale of electricity, multipronged approach is followed like maintenance of security deposit, precipitation of action against defaulting consumers, obtaining support of the administrative authority. Credit risk towards Investment of surplus funds is managed by obtaining support of credit rating and appraisal by external agencies and lending bodies. The Company extends financial support by way of loans / guarantees etc. to its subsidiaries / step down subsidiaries only.
The Company manages its liquidity risk on financial liabilities by maintaining healthy working capital and liquid fund position keeping in view the maturity profile of its borrowings and other liabilities as disclosed in the respective notes.
The Companyâs market risk relating to variation of foreign currency, interest rate and commodity price is mitigated through relevant regulation.
While managing the capital, the Company ensures to take adequate precaution for providing returns to the shareholders and benefit for other stakeholders, including protecting and strengthening the balance sheet. Availability of capital and liquidity is also managed, in consonance with the applicable regulatory provisions.
NOTE - 8 Liability in respect of the security deposit collected by the company, in terms of applicable regulations of the WBERC, has been classified as non - current, given the nature of its business in the license area, excepting to the extent of the sum refundable / payable within a year, based on experience.
NOTE - 9 Outstanding foreign currency loans as on 31st March, 2018 as disclosed in Note 21, stands fully hedged in Indian Rupee.
NOTE - 10 Future rentals payable in respect of non-cancellable leases for assets comprising various equipment and vehicles acquired under operating leases for the period ranging between 36-60 months work out to Rs.0.39 crore (as on 31.03.17 : Rs.2.39 crore) and Rs.1.29 crore (as on 31.03.17 : Rs.3.01 crore) during next one year and thereafter till five years respectively. There are no restrictions in respect of such leases.
NOTE - 11 The Company is primarily engaged in generation and distribution of electricity which is the only reportable business segment in line with the segment wise information which is being presented to the CODM. There are no reportable geographical segments, since all business is within India.
The Company is also running a single retail store in state of Gujarat which is not significant for the CODM and hence not considered as reportable segment.
NOTE - 12 Part A of Schedule II to the Companies Act. 2013 (the Act), inter alia, provides that depreciable amount of an asset is the cost of an asset or other amount substituted for cost. Part B of the said Schedule deals with the useful life or residual value of an asset as notified for accounting purpose by a Regulatory Authority constituted under an act of Parliament or by the Central Government for calculating depreciation to be provided for such asset irrespective of the requirement of Schedule II. In terms of applicable Regulations under the Electricity Act, 2003, depreciation on tangible assets other than freehold land is provided on straight line method on a pro-rata basis at the rates specified therein, the basis of which be considered by the West Bengal Electricity Regulatory Commission (Commission) in determining the Companyâs tariff for the year, which is also required to be used for accounting purpose as specified in the said Regulations. Based on legal opinions and independent accounting opinions obtained, the Company continues with the consistently followed practice of recouping from the retained earnings an additional charge of depreciation relatable to the increase in value of assets arising from fair valuation , which for the current year amounts to Rs.306.25 crore (previous year- Rs.318.41 crore) and corresponding withdrawal of Rs.5.18 crore ( previous year : Rs.23.09 crore ) consequent to sale / disposal of such assets and the same will be followed in subsequent years.
NOTE - 13 In terms of the provisions of Companies Act, 2013, the required Corporate Social Responsibility (CSR) spending for the year works out to Rs.19.35 crore ( previous year : Rs.17.47 crore). The said requirement of CSR spending was met by way of contribution to a trust set up for the said purpose and direct expenditure of Rs.17.10 crore ( previous year : Rs.15.00 crore ) and Rs.2.25 crore ( previous year :Rs.2.47 crore ) respectively. Expenditure on account of CSR activities shown under Note no. 38 also include a sum of Rs.0.07 crore relates to an adjustment pursuant to the Scheme of Arrangement. ( refer note 52)
NOTE - 14 In order to lay specific focus on its operations and investments in the areas, inter alia, of power distribution, generation, organised retail (Retail Undertaking) and other sundry areas including business process outsourcing & property (IT Undertaking) by way of due alignment, the Board of Directors of CESC Limited (âParentâ, âthe Companyâ) at its meeting held on 18th May, 2017 had approved, subject to necessary approvals, a composite scheme of arrangement (Scheme) under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 involving the Parent and nine of its subsidiaries (Scheme Companies). The Scheme provides for restructuring of the Parent and its undertakings (all under common control as per Ind-AS 103) referred to in the Scheme into four listed entities, focussed on the above referred four verticals, the appointed date being 1st October 2017(âthe Appointed Dateâ)
The Company on 5th October, 2018 has received from Honâble National Company Law Tribunal (NCLT) (the appropriate authority), the certified copy of the order dated 28 March, 2018 sanctioning the Scheme, subject to a condition that demerger of the Generation Undertaking shall be effective upon approval of the Honâble West Bengal Electricity Regulatory Commission (WBERC) to the Power Purchase Agreement (PPA) between the Company and Haldia Energy Limited ( One of the Scheme Companies) . Pending the said approval, with necessary legal consultation, the Board of Directors at its meeting held on 12 October, 2018 has decided to give effect to the Scheme as below :
a) Demerger of the Generation undertaking to be given effect after receipt of necessary approvals from WBERC.
b) the remaining parts of the Scheme to be given effect from the Appointed Date in terms of the order of Honâble NCLT, whereby,
i) the said Retail Undertaking (Retail undertaking 1 as per the scheme) and IT Undertaking have been demerged into two entities as stipulated in the Scheme, viz. RP-SG Retail Limited (RSRL) and RP-SG Business Process Services Limited (RSBP) respectively.
ii) the three wholly owned subsidiaries , viz; CESC Infrastructure Limited (CIL) (engaged in the business of promoting and supporting entities engaged in infrastructure sector including power), Spencerâs Retail Limited (SRL) post demerger of its retail undertaking (Retail undertaking 2 as per the scheme) (engaged in developing and conducting organized retail business) and Music World Retail Limited (MWL) (engaged in the business of organised music retailing stores and selling of music accessories) have been merged with the Company. The balances and transactions of CIL, have been merged on the basis of audited financials of CIL for the six months ended 30th September, 2017 and year ended 31st March, 2018.
c) Each shareholder of the Company registered on the record date of 31 October, 2018 in respect of every 10 shares is entitled to additional 6 fully paid up equity shares of Rs. 5 each in RP-SG Retail Limited and additional 2 fully paid up equity shares of Rs. 10 each in the RP-SG Business Process Services Limited. CESC Limited is entitled to 500000 fully paid up 0.01% non-cumulative compulsorily redeemable preference shares of Rs. 100 each by RP-SG Retail Limited. Three entities merged with the Company, as stated above, were wholly owned subsidiaries of the Company and hence no consideration was to be given in lieu of transfer of said undertakings.
d) Necessary accounting effect of the above has been given in these financial statements in terms of the above NCLT order, in the manner detailed herein : i) The assets and liabilities as at the Appointed Date acquired/transferred by the Company in terms of the Scheme at book value are summarized below:
NOTE - 15 The derated installed capacity of the Generating Stations of the Company (as per certification of technical expert) as on 31st March, 2018 was 1125000 kW (31st March, 2017 : 1125000 kW).
NOTE - 16 The Company has reclassified previous yearâs figures to conform to this yearâs classification alongwith other regrouping / rearrangement wherever necessary.
Mar 31, 2017
NOTE - 1 The operations of the Company are governed by the Electricity Act, 2003 and various Regulations and / or Policies framed thereunder by the appropriate authorities. Accordingly, in preparing the financial statements the relevant provisions of the said Act, Regulations etc. have been duly considered.
NOTE - 2A SIGNIFICANT ACCOUNTING POLICIES
These financial statements have been prepared to comply in all material aspects with Indian Accounting Standards (âInd ASâ) notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016 notified under Section 133 of the Companies Act, 2013 and other provisions of the Companies Act, 2013 and the regulations under the Electricity Act, 2003 to the extent applicable. A summary of important accounting policies which have been applied consistently are set out below.
The financial statements upto the year ended 31st March 2016 were prepared in accordance with Accounting Standards notified under Companies (Accounting Standard) Rules, 2006 (as amended) and other relevant provision of the Act [âprevious Generally Accepted Accounting Principles (GAAP)â].
These financial statements are the first financial statements of the Company under Ind AS. An explanation of how the transition from previous GAAP to Ind AS has affected the Companyâs financial position, financial performance and cash flows is given in Note 3.
NOTE - 2B Summary of significant judgements and assumptions
The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. Management also needs to exercise judgement in applying the Companyâs accounting policies.
Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.
The areas involving critical estimates or judgements are :
Estimated Fair valuation of Property, Plant and Equipment - Note -52
Estimated useful life of Intangible Assets -Note -2A(e)
Estimated Fair Valuation of certain Investments in subsidiaries -Note-7
Estimation of Regulatory Items - Note -19 & 40
Estimation of Restoration Liability- Note- 2A(e)
Impairment of Trade Receivables -Note -2A(g)
Estimated fair Valuation of additional levy recoverable- Note -51
Estimates used in Actuarial Valuation of Employee benefits -Note-36
NOTE - 2C New standards that are not yet effective
The standards issued but not yet effective up to the date of issuance of the Companyâs financial statements is disclosed below. The Company intends to adopt this standard when it becomes effective.
- Ind AS 102 - Share-based Payment
- Ind AS 7 - Statement of Cash Flows
The MCA has notified Companies (Indian Accounting Standards) (Amendment) Rules, 2017 to amend the above Ind ASâs. The amendment will come into force from accounting period commencing on or after April 1, 2017. The Company, is in the process of assessing the possible impact of Ind AS 7: Statement of Cash Flows, will adopt the amendments on the required effective date whereas Ind AS 102 is not applicable to the Company.
NOTE - 3 First-time Adoption of Ind AS
The accounting policies set out in Note 2A have been applied in preparing the financial statements for the year ended 31st March 2017, the comparative information presented in these financial statements for the year ended 31st March 2016 and in the preparation of an opening balance sheet at 1st April, 2015 under Ind AS. The adoption of Ind AS has been carried out in accordance with Ind AS 101, with April 1, 2015 as the transition date. An explanation of how the transition from previous GAAP to Ind AS has affected the Companyâs Balance Sheet, Statement of Profit and Loss and cash flow statement is set out below.
Set out below are the applicable Ind AS 101 mandatory exemptions and optional exemptions applied in the transition from previous GAAP to Ind AS.
Exemptions availed on first-time adoption of Ind AS 101
1) The Company has elected to measure all items of property, plant and equipment at fair value and use that fair value as its deemed cost at the transition date.
2) Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease, the Company has used the exemption under Ind AS 101 and assessed all arrangements based on conditions in place at the date of transition.
3) The investments in subsidiaries, associates and joint venture are measured at fair value and use that fair value as its deemed cost at the transition date.
Exceptions availed on first-time adoption of Ind AS 101
1) Ind AS estimates as at 1st April, 2015 are consistent with the estimates as at the same date made in conformity with the previous GAAP. The Company has made estimates for the following items in accordance with Ind AS at the date of transition as these were not required under the previous GAAP.
Investments in Mutual Funds, and asset on account of MTM Gain are carried at Fair Value Through Profit and Loss.
Assessment of financial assets based on expected credit loss model.
2) Ind AS 101 requires the Company to assess classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS.
NOTE -4 CONTINGENT LIABILITIES AND COMMITMENTS
a. Claims against the Company not acknowledged as debts:
The West Bengal Taxation Tribunal had held meter rentals received by the Company from consumers to be deemed sales under the provisions of the Bengal Finance (Sales Tax) Act, 1941 and that sales tax was payable on such rentals. Based on such findings the Commercial Taxes Directorate assessed Rs.0.69 crore as sales tax on meter rentals received during the year ended 31st March, 1993 and raised a demand of Rs.0.36 crore on account of interest. Against the above demand , the Company had deposited a sum of Rs.0.75 crore with the sales tax authorities and obtained a stay against the balance demand from the Deputy Commissioner of Commercial Taxes. The sales tax authorities also indicated their intention to levy such sales tax on meter rentals for the subsequent years as well, against which, the Company filed a writ petition in the Calcutta High Court and prayed for an interim order, inter alia, restraining the sales tax authorities from proceeding with the assessment for the subsequent years till disposal of the appeal. An interim order has been issued by the High Court permitting the sales tax authorities to carry out assessments but restraining them from serving any assessment order on the Company. The disposal of the case is still pending.
b. Commitments of the Company on account of estimated amount of contracts remaining to be executed on capital account and the same (letter of comfort) towards borrowing / financing obligations of subsidiaries and a body corporate from banks, not provided for amounting to Rs.151.18 crore (31.03.2016 : Rs.104.22, 1.04.2015 : Rs.162.57 crore), Rs.1550.05 crore (31.03.2016 : Rs.1585.33 crore, 1.04.2015 : Rs.1597.48 crore) and Rs.Nil (31.03.2016 : Rs.77.07 crore, 1.04.2015 :Rs.104.59 crore) respectively. (refer note 43 for details)
c. Other money for which the company is contingently liable :
(i) Income tax matters : Nil ( 31.03.2016 : Nil, 1.04.2015 : Rs.12.74 crore)
(ii) Other matters : Nil (31.03.2016 : Nil, 1.04.2015 : Rs.20.50 crore )
d. The Company has ongoing commitment to extend support and provide equity to the subsidiaries, in respect of various projects and otherwise (where, in certain cases there are restriction on transfer of investments).
The future cash outflow in respect of above cannot be ascertained at this stage.
e. For commitment relating to leasing arrangement, refer note 4 and 48
NOTE - 5 COST OF FUEL
a The consumption of coal for the year 2016-17 works out to 36,46,133 tonnes (Previous Year 43,47,348 tonnes) having a value of Rs.1346.32 crore (Previous Year Rs.1501.14 crore).
b Cost of fuel shown in the Profit and Loss account includes freight of Rs.262.07 crore (Previous Year Rs.274.08 crore) and gain of Rs.0.59 crore (Previous year gain Rs.0.11 crore) towards exchange fluctuation and is net off write back of Nil (Previous Year Rs.170.46 crore) pursuant to settlement on this count.
c The consumption of oil for the year 2016-17 works out to 2,687.09 Kilolitres (Previous year 3,245.33 kilolitres) having a value of Rs.12.42 crore (Previous Year Rs.16.61 crore)
(i) Defined contribution plans
The Company makes contributions for provident fund and pension (including for superannuation) towards retirement benefit plans for eligible employees. Under the said plans, the Company is required to contribute a specified percentage of the employeesâ salaries to fund the benefits. During the year, based on applicable rates, the Company has recognised Rs.57.00 crore (previous year : Rs.54.44 crore) on this count in the Statement of Profit and Loss. The Company also makes annual contribution to independent trust, who in turn, invests in the Employees Group Gratuity Scheme of eligible agencies for qualifying employees. Liabilities at the year-end for gratuity, leave encashment and other retiral benefits including medical have been determined on the basis of actuarial valuation carried out by an independent actuary, based on the method prescribed in IND AS 19 - âEmployee Benefitsâ. of the The Companies (Indian Accounting Standards) Rules, 2015.
(viii) Risk exposure
Credit Risk: If the scheme is insured and fully funded on PUC basis there is a credit risk to the extent the insurer(s) is/ are unable to discharge their obligations including failure to discharge in timely manner. Also in case of interest guarantee Exempt Provident Funds have to follow laid down investment norms and to that extent credit risk will be limited. However, as such funds can also invest in corporate bonds and other stock market securities credit and counter party risk will be present to that extent. Such instruments should be regularly reviewed so as to keep credit risk under control.
Pay-as-you-go Risk: For unfunded schemes financial planning could be difficult as the benefits payable will directly affect the revenue and this could be widely fluctuating from year to year. Moreover there may be an opportunity cost of better investment returns affecting adversely the cost of the scheme.
Discount Rate risk: The Company is exposed to the risk of fall in discount rate. A fall in discount rate will eventually increase in the ultimate cost of providing the above benefit thereby increasing the value of the liability.
Liquidity Risk: This risk arises from the short term asset and liability cash-flow mismatch thereby causing the company being unable to pay the benefits as they fall due in the short term. Such a situation could be the result of holding large illiquid assets disregarding the results of cashflow projections and cash outgo inflow mismatch. (Or it could be due to insufficient assets/cash.)
Future Salary Increase Risk: In case of gratuity & leave the scheme cost is sensitive to the assumed future salary escalation rates for all final salary defined benefit Schemes. If actual future salary escalations are higher than that assumed in the valuation actual Scheme cost and hence the value of the liability will be higher than that estimated. But PRMB & pension are not dependant on future salary levels.
Demographic Risk: In the valuation of the liability certain demographic (mortality and attrition rates) assumptions are made. The Company is exposed to this risk to the extent of actual experience eventually being worse compared to the assumptions thereby causing an increase in the scheme cost.
Regulatory Risk: New Act/Regulations may come up in future which could increase the liability significantly in case of Leave obligation, PRMB & Pension. Gratuity Benefit must comply with the requirements of the Payment of Gratuity Act, 1972 (as amended up-to-date). In case there is a risk of change in the regulations requiring higher gratuity payments (e.g. raising the present ceiling of Rs.10,00,000, raising accrual rate from 15/26 etc.). Also in case of interest rate guarantee Exempt Provident Fund must comply with the requirements of the Employees Provident Funds and Miscellaneous Provisions Act 1952 as amended up-to-date. There is a risk of change in the regulations requiring higher guarantee cost to be provided. Also EPFO Rate in each year is determined by the Authority based on the investment performance of EPFO managed PF among other things.
NOTE - 6 REGULATORY (INCOME) / EXPENSES
Regulatory (Income) / Expenses arise to the Company pursuant to the regulatory provisions applicable to the Company under the provisions of the Electricity Act, 2003 and regulations framed thereunder and disposals made by WBERC on the Companyâs various petitions / applications, in terms of the said regulations, at different timeframe. The effect of adjustments - (income)/expenses, relating to (a) advance against depreciation, (b) cost of electrical energy purchased, fuel related costs and those having bearing on revenue account, as appropriate, based on the Companyâs understanding of the applicable available regulatory provisions and available orders of the competent authorities, (c) effect of exchange fluctuation including MTM gain, amounting to Rs.73.38 crore (Previous year Rs.150.11 crore), â (252.00 crore) (Previous year Rs.31.89 crore), and â (11.61 crore ) (Previous year Rs.6.16 crore) respectively have been shown as Regulatory (Income)/Expenses with corresponding sums, reflected in Balance-sheet as Regulatory Deferral Account Balance (see Note 19). The Company has accounted for advance against depreciation considered in Tariff Orders, based on actual repayment of the applicable loans effected against depreciation charged off for the corresponding periods, which hitherto had been accounted for based on the individual annual tariff orders, resulting in credit of Rs.100.72 crore.
Regulatory deferral account debit balance comprise the effect of (a) tax, (b) exchange fluctuation amounting to Rs.3,554.76 crore ( 31.3.2016 : Rs.3,506.01 crore and 01.04.2015: Rs.3,433.98 crore ) and Rs.65.21 crore ( 31.3.2016 : Rs.133.36 crore and 01.04.2015 : Rs.145.56 crore) respectively and that relating to credit balance comprise the effect of (a) advance against depreciation, (b) cost of fuel and purchase of power and other adujstments having bearing on revenue account and (c) MTM Gain amount to Rs.1083.07 crore ( 31.3.2016 : Rs.1,009.69 crore and 01.04.2015 : Rs.859.58 crore), Rs.1,064.96 crore ( 31.3.2016 : Rs.1,316.96 crore and 01.04.2015 : Rs.1,285.06 crore) and Rs.44.52 crore ( 31.3.2016 : Rs.124.27 crore and 01.04.2015 : Rs.130.32 crore) respectively.
The accurate quantification and disposal of the matters with regard to Regulatory deferral account balances, are being given effect to, from time to time, after conclusion of the concerned event/year, as appropriate, on receipt of necessary direction from the appropriate authorities relating to the applicable matters in a comprehensive way including those attributable to the mining of coal from Sarisatolli mine which commenced from 10 April, 2015 following the said mine having been allotted to the Company effective 1 April 2015 pursuant to the auction conducted by the Ministry of Coal, Government of India under the provisions of the applicable laws.
NOTE - 7 Fair value measurements
a) The carrying value and fair value of financial instruments by categories as at March 31, 2017, March 31, 2016 and April 1, 2015 is as follows :
b) Fair value hierarchy
The table shown below analyses financial instruments carried at fair value, by valuation method.
The different levels have been defined below :
Level 1 : financial instruments measured using quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price. The mutual funds are valued using the closing NAV.
Level 2 : inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).
Level 3 : inputs for the asset or liability that are not based on observable market data.
c) The following methods and assumptions were used to estimate the fair values
i. The fair values of the mutual fund instruments are based on net asset value of units declared at the close of the reporting date.
ii. The fair values of the cross currency swap is determined using discounted cash flow analysis and swaps and options pricing models.
iii. The carrying amounts of trade receivables, trade payables, investment in commercial paper, receivable towards claims and services rendered, other bank balances, interest accrued payable/receivable, cash and cash equivalents are considered to be the same as their fair values, due to their short term nature.
iv. Loans, non-current borrowings, lease receivable, security deposits and restoration liability are based on discounted cash flows using a current borrowing rate.
v. Considering the nature , risk profile and other qualitative factors of the financial instruments of the Company ,the carrying amounts will be the reasonable approximation of the fair value.
d) Under Previous GAAP, financial assets and liabilities are recorded at their transaction value. Ind AS requires all financial assets and liabilities are to be carried at fair value. Accordingly, the difference between the fair value and the transaction value have been recognised as per the applicable Ind ASâs.
NOTE - 8 Financial risk management and Capital Management
The Companyâs operations of generation and distribution of electricity are governed by the provisions of the Electricity Act 2003 and Regulations framed thereunder by the West Bengal Electricity Regulatory Commission and accordingly the Company, being a licensee under the said statute, is subject to regulatory provisions/ guidelines and issues evolving therefrom, having a bearing on the Companyâs liquidity, earning, expenditure and profitability, based on efficiency parameters provided therein including timing of disposal by the authority.
The Company being the sole provider of electricity in the licensed area has been managing the operations keeping in view its profitability and liquidity in terms of the above regulations. In order to manage the credit risk arising from sale of electricity, multipronged approach is followed like maintenance of security deposit, precipitation of action against defaulting consumers, obtaining support of the administrative authority , credit rating and appraisal by external agencies and lending bodies. Availability of capital and liquidity is also managed, in consonance with the applicable regulatory provisions.
While managing the capital, the Company ensures to take adequate precaution for providing returns to the shareholders and benefit for other stakeholders, including protecting and strengthening the balance sheet.
Dividend
An interim dividend of Rs.159.55 crore (previous year : Rs.159.55 crore) inclusive of dividend tax has been paid during the year ended 31 March 2017.
NOTE - 9 Liability in respect of the security deposit collected by the company, in terms of applicable regulations of the WBSERC, has been classified as non - current, given the nature of its business in the license area, excepting to the extent of the sum refundable / payable within a year, based on experience.
NOTE - 10 Outstanding foreign currency loans as on 31st March, 2017 as disclosed in Note 22, stands fully hedged in Indian Rupee.
NOTE - 11 Future rentals payable in respect of non-cancellable leases for assets comprising various equipment and vehicles acquired under operating leases for the period ranging between 36-60 months work out to Rs.2.39 crore (as on 31.03.16 : Rs.3.45 crore, as on 01.04.15: Rs.3.50 crore) and Rs.3.01 crore (as on 31.03.16 : Rs.5.78 crore, as on 01.04.15: Rs.10.21 crore) during next one year and thereafter till five years respectively. There are no restrictions in respect of such leases.
NOTE - 12 The Company is engaged in generation and distribution of electricity and does not operate in any other reportable segments. The reportable business segments are in line with the segment wise information which is being presented to the CODM. There are no reportable geographical segments, since all business is written in India.
NOTE - 13 Additional levy amounting to Rs.998 crore paid to the account of the Central Government, in terms of the provisions of the Coal Mines (Special Provisions) Ordinance, 2014, read with the Coal Mines (Special Provisions) Rules, 2014 framed thereunder, Coal Mines (Special Provisions) Second Ordinance, 2014 and Coal Mines (Special Provisions) Act, 2015, relatable to the output of Sarisatolli Coal block for meeting part of the Companyâs coal requirement since inception to 31st March, 2015, has been considered as recoverable (accounted for in the year ended 31st March 2015 partly as receivable of Rs.897 crore and balance as fuel cost) by way of tariff in terms of the applicable laws / regulations, for which appropriate reference was made to West Bengal Electricity Regulatory Commission, and being pursued by the management. Based on such reference/persuasion, the management expects a favourable outcome in the matter.
Consequent to accounting under Ind-AS framework effective 01.04.2015, the aforesaid receivable, discounted to its present value of Rs.116 crore, based on an expected period of recovery as at the date of transition, has been adjusted with retained earnings, in accordance with the transitional provisions of the said framework.
NOTE - 14 As on the date of transition the Company has adopted fair valuation of its Property, Plant and Equipment in order to bring its valuation to the current replacement cost. The total fair valuation carried out by an independent approved valuer amounting to Rs.5,407 crore has been accounted at the transition date, 1.4.2015 and the incremental value generated therefrom has been included in Retained Earnings contained in Note 21.
Part A of Schedule II to the Companies Act. 2013 (the Act), inter alia, provides that depreciable amount of an asset is the cost of an asset or other amount substituted for cost. Part B of the said Schedule deals with the useful life or residual value of an asset as notified for accounting purpose by a Regulatory Authority constituted under an act of Parliament or by the Central Government for calculating depreciation to be provided for such asset irrespective of the requirement of Schedule II. In terms of applicable Regulations under the Electricity Act, 2003, depreciation on tangible assets other than freehold land is provided on straight line method on a pro-rata basis at the rates specified therein, the basis of which be considered by the West Bengal Electricity Regulatory Commission (Commission) in determining the Companyâs tariff for the year, which is also required to be used for accounting purpose as specified in the said Regulations. Based on legal opinions and independent accounting opinions obtained, the Company continues with the consistently followed practice of recouping from the retained earnings an additional charge of depreciation relatable to the increase in value of assets arising from fair valuation , which for the current year amounts to Rs.318.41 crore (previous year- Rs.309.62 crore) and corresponding withdrawal of Rs.23.09 crore (previous year : Rs.4.91 crore) consequent to sale / disposal of such assets.
NOTE - 15 In terms of the provisions of Companies Act, 2013, the required Corporate Social Responsibility (CSR) spending works out to Rs.17.41 crore (previous year : Rs.16.53 crore), which has been met by way of contribution to a trust set up for the said purpose and direct expenditure of Rs.15.00 crore (previous year : Rs.14.57 crore) and Rs.2.41 crore (previous year : Rs.2.02 crore ) respectively.
NOTE - 16 The Board has adopted a Composite Scheme of Arrangement under the provisions of Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 amongst the Company and some of its subsidiaries viz CESC Infrastructure Limited, Spencerâs Retail Limited, Music World Retail Limited, Spen Liq Private Limited, New Rising Promoters Private Limited, Haldia Energy Limited, RP-SG Retail Limited, RP-SG Business Process Services Limited and Crescent Power Limited and their respective shareholders (âthe Schemeâ). The Scheme which is subject to requisite approvals including those of the shareholders, National Company Law Tribunal and other statutory/regulatory authorities and, inter alia, provides for the following :
(a) amalgamation of CESC Infrastructure Limited, Spencerâs Retail Limited and Music World Retail Limited with the Company;
(b) Demergers of (i) Generation Undertaking (as defined in the Scheme) of the Company to Haldia Energy Limited, (ii) Retail Undertaking 1 (as defined in the Scheme) of the Company and Retail Undertaking 2 (as defined in the Scheme) of Spencerâs Retail Limited (âSRLâ) to RP-SG Retail Limited (âRetail Coâ) and (iii) IT Undertaking of the Company to RP-SG Business Process Services Limited (âIT Coâ).
(c) amalgamation of Spen Liq Private Limited with IT Co;
(d) amalgamation of New Rising Promoters Private Limited with Crescent Power Limited
(e) reduction and cancellation of the existing shareholding of the Company in HEL, Retail Co and IT Co; and
(f) reduction of the face value of the equity share of the Company from Rs.10 per share to Rs.5 per share and subsequent consolidation of two equity shares of the Company of Rs.5 each into one equity share of Rs.10 each.
As consideration, holders of equity shares of the Company will be entitled to fully paid equity shares as follows :
a) 1 equity share of Rs.10/- (Indian Rupees Ten) of Haldia Energy Limited (each credited as fully paid up) for every 2 equity shares of Rs.10/- (Indian Rupees Ten) of the Company.
b) 3 equity shares of Rs.10/-(Indian Rupees Ten) of RP-SG Retail Limited (each credited as fully paid up) for every 5 equity shares of Rs.10/- (Indian Rupees Ten) of the Company.
c) 1 equity share of Rs.10/- (Indian Rupees Ten) of RP-SG Business Process Service Limited (each credited as fully paid up) for every 5 equity shares of Rs.10/- (Indian Rupees Ten) of the Company.
NOTE - 17 The derated installed capacity of the Generating Stations of the Company (as per certification of technical expert) as on 31st March, 2017 was 1125000 kW (31st March, 2016 : 1125000 kW).
NOTE - 18 The Company has reclassified previous yearâs figures to conform to this yearâs classification alongwith other regrouping / rearrangement wherever necessary.
Mar 31, 2015
NOTE - 1 The operations of the Company are governed by the Electricity
Act, 2003 and various Regulations and/or Policies framed thereunder by
the appropriate authorities. Accordingly, in preparing the financial
statements, the relevant provisions of the said Act, Regulations etc.
have been duly considered.
NOTE 2 In terms ofthe provisions ofthe Companies Act, 1956 Members
ofthe Company at the Thirty-fifth Annual General Meeting held on 26
July, 2013 have approved payment of commission to the non-executive
directors at a rate not exceeding 3% per annum of the net profits of
the Company for each of the five financial years commencing from
2013-14. Accordingly the said Commission has been fully provided for
the year 2014-15. A fresh Ordinary Resolution in terms of the
provisions of the Companies Act, 2013 has been included in the notice
convening the ensuing Thirty-seventh Annual General Meeting of the
members of the Company for the said payment of commission to the
non-executive directors commencing from the financial year 2014-15 at a
rate not exceeding 3% per annum of the net profits of the Company,
subject to the total managerial remuneration not exceeding 11% of the
net profit of the Company, for the relevant financial year.
NOTE 3 Outstanding foreign currency loans as on 31st March, 2015 as
disclosed in Note 5, stands fully hedged in Indian Rupee. Trade
Payables include Rs. 18.25 crore (31.03.2014 : Rs. Nil) representing amount
payable in United States Dollar which have not been hedged.
NOTE 4 Based on a review of the projected business prospects of the
Company''s subsidiaries, inspite of present losses in many of them, the
management does not foresee any diminution, other than temporary, in
the value of the Company''s investments and share application money
placed therein other than in its investments in Mahuagarhi Coal Company
Private Limited (MCCPL), which was incorporated in India for
development of Mahuagarhi coal field and exploration of coal therefrom
as a joint venture company with 50% participation of the Company in
MCCPL''s share capital, in terms of the requirements of allocation of
the said coal block by the Ministry of Coal, Government of India.
Pursuant to the judgement dated 25th August, 2014 and the subsequent
Order dated 24th September, 2014 ofthe Hon''ble Supreme Court of India,
the underlying coal block got deallocated during the year.
Consequently, the value of the Company''s investments amounting to Rs.
2.43 crore in equity share of MCCPL has been fully provided for. The
interests of the Company as at 31st March, 2015 in the assets,
liabilities and expenses of the joint venture are Rs. 0.01 crore
(previous year: Rs. 3.20 crore), Rs. 0.93 crore (previous year: Rs. 0.05
crore) and Rs. 3.18 crore (previous year: Rs. 0.01 crore) respectively and
in respect thereof, in terms of the Order dated 6th February, 2015 of
Hon''ble High Court at Delhi, the Company has also provided a Bank
Guarantee of Rs. 20.50 crore to the Ministry of Coal for its share in the
deallocated coal block valid till 7th June, 2015.
NOTE - 5 Future rentals payable in respect of non-cancellable leases
for assets comprising various equipment and vehicles acquired under
operating leases for the period ranging between 36-60 months work out
to Rs. 3.50 crore (previous year: Rs. 7.42 crore) and Rs. 10.21 crore
(previous year: Rs. 5.91 crore) during next one year and thereafter till
five years respectively. There are no restrictions in respect of such
leases.
Borrowing Financing obligation :
During the year, (i) a sum ofRs. 24.85 crore towards dividend for the
year 2013-14 was paid to Rainbow Investments Ltd, an enterprise related
to the Company in terms of Para 3(e) of Accounting Standard AS -18
issued by ICAI and (ii) Commission and sitting fees paid to the
Chairman amounting to Rs. 8.49 crore. Also refer Note 23(b) above
relating to commitments as on 31.03.2015 in respect of DIL, HEL, SRL
and others amounting to Rs. 638.86 crore, Rs. 555.50 crore, Rs. 280 crore and
Rs. 123.12 crore respectively and Note 34 relating to Mahuagarhi Coal
Company Private Limited.
NOTE - 6 Pursuant to allocation of the Sarisatoli coal block in the
State of West Bengal to the Company in 1993 by the Ministry of Coal,
Government of India, a portion ofthe Company''s coal requirement has
been met since October 2002 from the production ofthe said mine. By the
judgement dated 25th August 2014 read with its Order dated 24th
September 2014 of the Hon''ble Supreme Court ofIndia in Coal Block
Allocation, the process of allocation ofcoal blocks adopted by the
Government of India in vogue since 1993, was held to be wanting in
material respects which resulted in the Hon''ble Apex Court cancelling
most of the allocations, including the aforesaid Sarisatoli coal block
and even those to Central as well as State Public Sector Undertakings,
made under that process. Moreover, payment of an additional levy in
respect of coal extracted from the said mine(s) was directed under the
aforesaid judgement, which in the above referred case worked out to Rs.
1044.87 crore upto the effective date of cancellation i.e. 31st March,
2015.
In terms ofthe provisions ofthe Coal Mines (Special Provisions)
Ordinance, 2014, read with the Coal Mines (Special Provisions) Rules,
2014 framed thereunder, Coal Mines (Special Provisions) Second
Ordinance, 2014 and Coal Mines (Special Provisions) Act, 2015, inter
alia, payment of the aforesaid sum by the Company was necessitated and,
a demand has so far been raised on the Company by the Competent
Authority for payment of a sum of Rs. 995.52 crore, which has been fully
paid and the balance sum would also be duly settled in terms ofthe
appropriate order / legislations. Considering that the above payment
being in the form of levy, and given the facts and circumstances ofthe
incidence thereof, a portion ofthe said additional levy amounting to Rs.
896.73 crore relatable to the period since inception upto 31st March,
2014 has been shown in the financial statements as an Exceptional Item
and an amount ofRs. 101.03 crore for the financial year 2014-15 included
in the fuel cost, the total amount ofRs. 997.76 crore being directly
relatable to the underlying fuel sourced for the Company''s (a statutory
distribution licensee supplying electricity to the end consumers in
Kolkata and surrounding areas) embedded generation, and hence
considered as recoverable by way of tariff in terms ofthe applicable
laws / regulations, for which a reference has since been made to West
Bengal Electricity Regulatory Commission (WBERC). The balance sum of Rs.
47.11 crore has not been considered as recoverable and charged off to
Profit and Loss Account.
Subsequently, following the auction conducted by the Ministry of Coal,
Government of India, under the provisions of the applicable laws, the
Company has been allotted the said Sarisatoli coal block effective 1st
April, 2015 and mining operations thereat commenced from 10th April,
2015 which has since been duly informed to WBERC.
NOTE - 7 76,21,118 new equity shares of Rs 10 each were allotted on
5th November, 2014 for cash at a premium of Rs. 634 per share to
Qualified Institutional Buyers in compliance with applicable legal
requirements and pending its utilisation in terms of the Issue, the
proceeds thereof have been kept invested in mutual funds and shown
under Current Investments.
NOTE - 8 As per plans, the 60 year old 100 MW New Cossipore generating
station of the Company has permanently ceased to generate power
effective on 30th November, 2014. Net block of fixed assets of New
Cossipore plant (net of adjustment from revaluation reserve) amount to
Rs. 18.51 crore, in respect ofwhich no adjustment has so far been given
effect to. However, the realizable value of these assets are estimated
to be significantly higher than the aforesaid book value.
NOTE - 9 In terms of the provisions of Companies Act, 2013, the
required Corporate Social Responsibility (CSR) spending works out to Rs.
15.17 crore, which has been met by way of contribution to a trust set
up for the said purpose and direct expenditure of Rs. 12.11 crore and Rs.
3.06 crore respectively.
NOTE - 10 The derated installed capacity of the Generating Stations of
the Company (as per certification of technical expert) as on 31st
March, 2015 was 1125000 kW (31st March, 2014 : 1225000 kW).
NOTE-11 The Company has reclassified previous year''s figures to conform
to this year''s classification alongwith other regrouping/ rearrangement
wherever necessary.
Mar 31, 2014
NOTE - 1 The operations of the Company are governed by the Electricity
Act, 2003 and various Regulations and / or Policies framed thereunder
by the appropriate authorities. Accordingly, in preparing the financial
statements the relevant provisions of the said Act, Regulations etc.
have been duly considered.
NOTE- 2 SHORT-TERM BORROWINGS
B. Nature of Security
Overdraft facilities from banks in (A) above are secured, ranking pari
passu inter se, by hypothecation of the Company''s current assets
comprising stock of stores, coal and other consumables, book debts,
monies receivable and bank balances as a first charge and as a second
charge by equitable mortgage / hypothecation of fixed assets of the
Company including its land, buildings and other construction thereon
where exists, plant and machinery etc. However, creation of the said
mortgage security in respect of overdraft facilities from banks
aggregating Rs. 190 crore (31.03.2013 - Rs. 165 crore) is in process.
NOTE- 3 TRADE PAYABLES
Trade payables include Rs. 3.10 crore ( 31.3.2013 - Rs. 3.37 crore) due to
Micro and Small Enterprises, as defined in the Micro, Small and Medium
Enterprises Development Act, 2006, based on information available with
the Company.
- Nil (31.3.2013 - Rs. 0.00 crore), Rs. 0.17 crore (31.3.2013 - Rs. 0.14
crore) and Rs. 0.57 crore (31.03.2013 - Rs. 0.40 crore) representing
interest due on amount outstanding as at the year end, interest accrued
and due for the period of delay in making payment during the year and
interest accrued and remaining unpaid at the year end respectively.
NOTE-4 OTHER CURRENT LIABILITIES
(g) Unclaimed dividend and unclaimed Public Deposits do not include any
amounts, due and outstanding, to be credited to Investor Education and
Protection Fund.
(h) Other payables include accrued interest on consumer security
deposit, employee related liability, creditors towards contractual
obligations etc.
NOTE-5 CASH AND BANK BALANCES
(c) Amount lying in deposit accounts with banks as at 31st March, 2014
includes Rs. Nil (31.03.2013 : Rs. 26.00 crore) appropriated upto the
previous year towards Fund for unforeseen exigencies and interest
attributable thereto.
(d) Amount lying in deposit accounts with banks as at 31st March, 2014
includes Rs. 150.75 crore (31.03.2013 : Rs. 91.00 crore) appropriated for
upto the previous year towards Fund for unforeseen exigencies and
interest attributable thereto.
(e) Bank deposits with original maturity more than 3 months under Other
bank balances include Rs. Nil (31.03.2013: Rs. 18.75 crore) having original
maturity more than 12 months as on the reporting date.
NOTE - 6 CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT
PROVIDED FOR)
(a) Claims against the Company not acknowledged as debts :
The West Bengal Taxation Tribunal had held meter rentals received by
the Company from consumers to be deemed sales under the provisions of
the Bengal Finance (Sales Tax) Act, 1941 and that sales tax was payable
on such rentals. Based on such findings the Commercial Taxes
Directorate assessed Rs. 0.69 crore as sales tax on meter rentals
received during the year ended 31st March, 1993 and raised a demand of
Rs. 0.36 crore on account of interest. Against the above demand, the
Company had deposited a sum ofRs. 0.75 crore with the sales tax
authorities and obtained a stay against the balance demand from the
Deputy Commissioner of Commercial Taxes. The sales tax authorities also
indicated their intention to levy such sales tax on meter rentals for
the subsequent years as well, against which, the Company filed a writ
petition in the Calcutta High Court and prayed for an interim order,
inter alia, restraining the sales tax authorities from proceeding with
the assessment for the subsequent years till disposal of the appeal.
An interim order has been issued by the High Court permitting the sales
tax authorities to carry out assessments but restraining them from
serving any assessment order on the Company. The disposal of the case
is still pending.
(b) Other money for which the company is contingently liable :
Municipal Tax : Rs. 1.12 crore (31.03.2013 : Rs. 1.06 crore) in respect of
certain properties, the rates of which are disputed by the Company.
(c) Commitment of the Company on account of estimated amount of
contracts remaining to be executed on capital account and the same
towards borrowing obligation of a subsidiary and a body corporate from
a bank, not provided for amount to Rs. 161.89 crore (31.03.2013 : Rs.
127.06 crore), Rs. 150 crore (31.03.2013 : Rs. 154.58 crore), and Rs. 132.08
crore (31.03.2013 : Rs. 161.25 crore) respectively.
(d) The Company has ongoing commitment to extend support and provide
equity to the subsidiaries, in respect of various projects and
otherwise (where, in certain cases there are restriction on transfer of
investments).
The future cash outflow in respect of above cannot be ascertained at
this stage.
(e) For commitment relating to leasing arrangement, refer note no. 35
NOTE-7 REVENUE FROM OPERATIONS
(c) Earnings from sale of electricity are determined in accordance with
the relevant orders of the Commission, where appropriate, giving due
effect to the required adjustments which include a sum of Rs. (0.95)
crore (previous year: Rs. 42.53 crore) in respect of the cost of
electrical energy purchased, fuel and related costs and also those
relating to revenue account, based on the Company''s understanding of
the applicable regulatory provisions on this count, after giving effect
of the impact arising from applicable orders in this regard for earlier
years and the net impact of the said adjustments has been included in
Other long term liabilities, to the extent applicable. The accurate
quantification and disposal of the matters are being given effect to,
from time to time, on receipt of necessary direction from the
appropriate authorities. The said earnings are also net of discount for
prompt payment of bills allowed to consumers on a net basis from month
to month and advance against depreciation amounting to Rs. 62.41 crore
(previous year: Rs. 81.91 crore) and Rs. 62.67 crore (previous year: Rs.
148.20 crore) respectively.
NOTE-8 EMPLOYEE BENEFIT EXPENSES
(B) Employee Benefits
The Company makes contributions for provident fund and pension
(including for superannuation) towards retirement benefit plans for
eligible employees. Under the said plans, the Company is required to
contribute a specified percentage of the employees'' salaries to fund
the benefits. During the year, based on applicable rates, the Company
has recognised Rs. 38.78 Crores (previous year: Rs. 30.58 crore) on this
count in the Statement of Profit and Loss. The Company also makes
annual contribution to independent trust, who in turn, invests in the
Employees Group Gratuity Scheme of eligible agencies for qualifying
employees. Liabilities at the year-end for gratuity, leave encashment
and other retiral benefits including medical have been determined on
the basis of actuarial valuation carried out by an independent actuary,
based on the method prescribed in Accounting Standard 15 - "Employee
Benefits" of the Companies (Accounting Standard) Rules, 2006.
NOTE - 9 The Members of the Company at the Thirty-fifth Annual General
Meeting held on 26 July, 2013 have approved payment of commission to
the non executive directors at a rate not exceeding 3% per annum of the
net profits of the Company for each of five financial years commencing
from 2013-14. Approval of the Central Government for payment of such
commission in excess of 1% of the net profit of the Company for the
financial year 2013-14 is being sought and accordingly the Commission
proposed for non executive directors in excess of said 1% i.e Rs. 16.67
crore, is subject to approval of the Central Government.
NOTE - 10 Outstanding foreign currency loans as on 31st March, 2014 as
disclosed in Note 5, stands fully hedged in Indian Rupee. Trade
Payables include Rs. Nil crore (31.03.2013 : Rs. 41.74 crore) representing
amount payable in United States Dollar which have not been hedged.
NOTE - 11 Based on a review of the projected business prospects of the
Company''s subsidiaries, inspite of present losses therein, the
management does not foresee any diminution, other than temporary, in
the value of the Company''s investments and share application money
placed therein.
NOTE - 12 Future rentals payable in respect of non-cancellable leases
for assets comprising various equipment and vehicles acquired under
operating leases for the period ranging between 36-60 months work out
to Rs. 7.42 crore (previous year: Rs. 2.76 crore) and Rs. 5.91 crore
(previous year: Rs. 0.77 crore) during next one year and thereafter till
five years respectively. There are no restrictions in respect of such
leases.
NOTE - 13 The Company is engaged in generation and distribution of
electricity and does not operate in any other reportable segment.
NOTE - 14 The derated installed capacity of the Generating Stations of
the Company (as per certification of technical expert) as on 31st
March, 2014 was 1225000 kW (31st March, 2013 : 1225000 kW).
NOTE-15 The Company has reclassified previous year''s figures to conform
to this year''s classification alongwith other regrouping/ rearrangement
wherever necessary.
Mar 31, 2013
NOTE 1 The operations of the Company are governed by the Electricity
Act, 2003 and various Regulations and / or Policies framed thereunder
by the appropriate authorities. Accordingly, in preparing the financial
statements the relevant provisions of the said Act, Regulations etc.
have been duly considered.
NOTE 2 TRADE PAYABLES
Trade payables include Rs. 3.37 crore ( 31.3.2012 - Rs. 2.76 crore) due
to Micro and Small Enterprises, as defined in the Micro, Small and
Medium Enterprises Development Act, 2006, based on information
available with the Company.
Rs. 0.00 crore (31.3.2012 - Rs. 0.01 crore), Rs. 0.14 crore (31.3.2012
- Rs. 0.26 crore) and Rs. 0.40 crore ( 31.03.2012- Rs. 0.26 crore)
representing interest due on amount outstanding as at the year end,
interest accrued and due for the period of delay in making payment
during the year and interest accrued and remaining unpaid at the year
end respectively.
NOTE 3 CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT
PROVIDED FOR)
(a) Claims against the Company not acknowledged as debts:
The West Bengal Taxation Tribunal had held meter rentals received by
the Company from consumers to be deemed sales under the provisions of
the Bengal Finance (Sales Tax) Act, 1941 and that sales tax was payable
on such rentals. Based on such findings the Commercial Taxes
Directorate assessed Rs. 0.69 crore as sales tax on meter rentals
received during the year ended 31st March, 1993 and raised a demand of
Rs. 0.36 crore on account of interest. Against the above demand, the
Company had deposited a sum of Rs. 0.75 crore with the sales tax
authorities and obtained a stay against the balance demand from the
Deputy Commissioner of Commercial Taxes. The sales tax authorities also
indicated their intention to levy such sales tax on meter rentals for
the subsequent years as well, against which, the Company filed a writ
petition in the Calcutta High Court and prayed for an interim order,
inter alia, restraining the sales tax authorities from proceeding with
the assessment for the subsequent years till disposal of the appeal. An
interim order has been issued by the High Court permitting the sales
tax authorities to carry out assessments but restraining them from
serving any assessment order on the Company. The disposal of the case
is still pending.
(b) Other money for which the company is contingently liable :
Municipal Tax : Rs. 1.06 crore (31.03.2012: Rs. 1.01 crore) in respect
of certain properties, the rates of which are disputed by the Company.
(c) Commitment of the Company on account of estimated amount of
contracts remaining to be executed on capital account and others, not
provided for amount to Rs. 442.89 crore (31.03.2012: Rs. 136.38 crore).
(d) The Company has ongoing commitment to extend support and provide
equity to the subsidiaries, in respect of various projects and
otherwise (where, in certain cases there are restriction on transfer of
investments). The future cash outflow in respect of above cannot be
ascertained at this stage.
(e) For commitment relating to leasing arrangement, refer note no.35
NOTE 4 COST OF FUEL
(a) Cost of fuel includes freight Rs. 286.69 crore ( previous year: Rs.
230.98 crore)
(b) Cost of fuel includes loss of Rs. 3.06 crore (previous year: loss
of Rs. 4.55 crore) due to exchange fluctuations.
(c) Consumption of fuel:
NOTE 5 The Members of the Company at the Thirtieth Annual General
Meeting held on 30th July, 2008 and the Central Government vide its
letter dated 20th August, 2009 approved payment of commission to the
non executive directors from 2008-09 to 2012-13 at a rate not exceeding
1 % per annum of the net profits of the Company computed in the manner
laid down in Section 198(1) of the Companies Act, 1956.
In respect of the years 2011-12 and 2012-13, payment of the said
commission at a rate not exceeding 3% of the said net profits of the
Company has been approved at the Thirty-fourth Annual General Meeting
of the members of the Company held on 27th July, 2012 for which
approval of Central Government is awaited. Accordingly, the commission
proposed for non-executive directors in excess of 1 % of the net
profits, i.e., Rs. 15.96 crore for the year 2012-13, is subject to the
said approval.
NOTE 6 Other long term liabilities represent those arising from
adjustments detailed in Note 23 and the unadjusted balance of sums
received from consumers for Capital jobs, pending completion thereof.
NOTE 7 Outstanding foreign currency loans as on 31st March, 2013 as
disclosed in Note 5, stands fully hedged in Indian Rupee. Trade
Payables include Rs. 41.74 crore (31.03.2012 : Rs. 76.60 crore)
representing amount payable in United States Dollar which have not been
hedged.
NOTE 8 Based on a review of the projected business prospects of the
Company''s subsidiaries, inspite of present losses therein, the
management does not foresee any diminution, other than temporary, in
the value of the Company''s investments and share application money
placed therein.
NOTE 9 Future rentals payable in respect of non-cancellable leases for
assets comprising various equipment and vehicles acquired under
operating leases for the period ranging between 36-60 months work out
to Rs. 2.76 crore (previous year: Rs. 8.93 crore) and Rs. 0.77 crore
(previous year : Rs. 2.27 crore) during next one year and thereafter
till five years respectively. There are no restrictions in respect of
such leases.
NOTE 10 The Company is engaged in generation and distribution of
electricity and does not operate in any other reportable segment.
NOTE 11 The derated installed capacity of the Generating Stations of
the Company (as per certification of technical expert) as on 31st
March, 2013 was 1225000 kW (31st March, 2012 : 1225000 kW).
NOTE 12 The Company has reclassified previous year''s figures to conform
to this year''s classification alongwith other regrouping/ rearrangement
wherever necessary.
Mar 31, 2012
(a) Terms / rights attached to equity shares :
The Company has only one class of equity shares having a par value of
Rs. 10 per share fully paid up. Each holder of equity share is entitled
to one vote per share. During the year ended 31 st March, 2012 the
amount of dividend per share recommended by the Board of Directors as
distributions to equity shareholders is Rs. 5 (31.03.2011 - Rs. 4)
subject to declaration at the ensuing Annual General Meeting by the
members. In the event of liquidation of the Company, the holders of
equity shares will be entitled to receive sale proceeds from 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.
(b) 3,10,58,414 Equity Shares of Rs. 10 each were allotted as fully
paid-up on 12 October, 2007 pursuant to a Scheme of Amalgamation
sanctioned by the Hon'ble High Court at Calcutta, without consideration
being received in cash.
(c) Amount transferred during the year to Fund for unforeseen
exigencies to be invested as per the statute.
(A) Nature of Security:
1. Term loans in (A) above are secured by equitable mortgage /
hypothecation of the fixed assets of the Company including its land,
buildings and other constructions thereon where exits, plant and
machinery etc. as a first charge and as a second charge, by
hypothecation of the Company's current assets comprising stock of
stores, coal and other consumables, book debts, monies receivable and
bank balances. However, creation of the said mortgage security in
respect of two Rupee Loans and one Foreign Currency Loan aggregating
Rs. 397.50 Crore (31.03.2011 - Rs. Nil) is in process. User rights in
respect of a freehold land having a book value of Rs. 68.95 crore have
been offered for financial assistance availed of by a subsidiary
company to their lenders.
2. The security for the term loans in (A) above ranks pari passu inter
se.
A. Nature of Security
1. Overdraft facilities from banks in (A) above are secured by
hypothecation of the Company's current assets comprising stock of
stores, coal and other consumables, book debts, monies receivable and
bank balances as a first charge and as a second charge by equitable
mortgage / hypothecation of fixed assets of the Company including its
land, buildings and other constructions thereon where exists, plant and
machinery etc. However, creation of the said mortgage security in
respect of overdraft facilities from banks aggregating Rs. 97.60 crore
(31.03.2011 - Rs. 97.60 crore) is in process.
2. The security for the overdraft facilities in (A) above ranks pari
passu inter se.
NOTES TRADE PAYABLES
Trade payable include Rs. 2.76 crore (31.3.2011 - Rs. Nil) due to Micro
and Small Enterprises, as defined in the Micro, Small and Medium
Enterprises Development Act, 2006, based on information available with
the Company.
Rs. 0.01 crore (31.3.2011 - Rs. Nil) and Rs. 0.26 crore (31.3.2011 -
Rs. Nil) representing interest due on amount outstanding as at the year
end and interest accrued and due for the period of delay in making
payment as at the year end respectively.
(g) Unclaimed dividend and unclaimed Public Deposits do not include any
amounts, due and outstanding, to be credited to Investor Education and
Protection Fund.
(c) Amount lying in deposit accounts with banks as at 31 March, 2012
includes Rs. 62.70 crore (31.03.2011 : Rs. 61.40 crore) appropriated
upto the previous year towards Fund for unforeseen exigencies and
interest attributable thereto.
(d) Amount lying in deposit accounts with banks as at 31 March, 2012
includes Rs. 23.00 crore (31.03.2011 : Rs. Nil) appropriated upto the
previous year towards Fund for unforeseen exigencies and interest
attributable thereto.
(e) Bank deposits with original maturity more than 3 months under Other
bank balances include Rs. 50.45 crore (31.03.2011 : 72.60 crore) having
original maturity more than 12 months as on the reporting date.
NOTE 1 CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT
PROVIDED FOR)
(a) Claims against the Company not acknowledged as debts :
The West Bengal Taxation Tribunal had held meter rentals received by
the Company from consumers to be deemed sales under the provisions of
the Bengal Finance (Sales Tax) Act, 1941 and that sales tax was payable
on such rentals. Based on such findings the Commercial Taxes
Directorate assessed Rs. 0.69 crore as sales tax on meter rentals
received during the year ended 31 March, 1993 and raised a demand of
Rs. 0.36 crore on account of interest. Against the above demand, the
Company had deposited a sum of Rs. 0.75 crore with the sales tax
authorities and obtained a stay against the balance demand from the
Deputy Commissioner of Commercial Taxes. The sales tax authorities also
indicated their intention to levy such sales tax on meter rentals for
the subsequent years as well, against which, the Company filed a writ
petition in the Calcutta High Court and prayed for an interim order,
inter alia, restraining the sales tax authorities from proceeding with
the assessment for the subsequent years till disposal of the appeal. An
interim order has been issued by the High Court permitting the sales
tax authorities to carry out assessments but restraining them from
serving any assessment order on the Company. The disposal of the case
is still pending.
(b) Other money for which the company is contingently liable :
i. Municipal Tax : Rs. 1.01 crore (31.03.2011 : Rs. 0.95 crore) in
respect of certain properties, the rates of which are disputed by the
Company.
ii. Water Cess : Rs. Nil (31.03.2011 : Rs. 6.74 crore) - disputed by
the Company.
(c) Estimated amount of contracts remaining to be executed on capital
account etc. and not provided for amount to Rs. 136.38 crore
(31.03.2011 :Rs. 114.76 crore).
(d) The Company has ongoing commitment to extend support and provide
equity to the subsidiaries, in respect of various projects and
otherwise (where, in certain cases there are restrictions on transfer
of Investments).
The future cash outflow in respect of above cannot be ascertained at
this stage.
(e) For commitment relating to leasing arrangment, refer note no. 35
(c) Earnings from sale of electricity are determined in accordance with
the relevant orders of the Commission, where appropriate, giving due
effect to the required adjustments. Such adjustments include the effect
of increase in tariff for the account months of April, 2011 to January,
2012 in terms of the order of the Commission, recovery of which has
since commenced and will be made, as directed. and that by netting of
a sum of Rs. 358.93 crore (previous year: Rs. (154.36) crore) in
respect of the cost of electrical energy purchased, fuel and related
costs and those relating to revenue account, based on the Company's
understanding of the applicable regulatory provisions on this count,
after giving effect of the impact arising from applicable orders in
this regard for earlier years and the net impact of the said
adjustments has been included in Other long term liabilities, to the
extent appropriate. The accurate quantification and disposal of the
matters are being given effect to, from time to time, on receipt of
necessary direction from the appropriate authorities. The said earnings
are also net of discount for prompt payment of bills and advance
against depreciation amounting to Rs. 79.35 crore (previous year: Rs.
71.20 crore) and Rs. 51.77 crore (previous year: Rs. 67.55 crore)
respectively.
NOTE 2 COST OF FUEL
(a) Cost of Fuel includes freight Rs. 230.98 crore (previous year: Rs.
190.88 crore)
(b) Cost of Fuel includes loss of Rs. 4.55 crore (previous year: gain
of Rs. 1.25 crore) due to exchange fluctuations.
(B) Employee Benefits
The Company makes contributions for provident fund and pension
(including for superannuation) towards retirement benefit plans for
eligible employees. Under the said plans, the Company is required to
contribute a specified percentage of the employees' salaries to fund
the benefits. During the year, based on applicable rates, the Company
has recognised Rs. 29.12 crore (previous year: Rs. 29.77 crore) on this
count in the Profit and Loss Statement. The Company also makes annual
contribution to independent trust. who in turn, invests in the
Employees Group Gratuity Scheme of eligible agencies for qualifying
employees. Liabilities at the year- end for gratuity, leave encashment
and other retiral benefits including medical have been determined on
the basis of actuarial valuation carried out by an independent actuary,
based on the method prescribed in Accounting Standard 15 - "Employee
Benefits" of the Companies (Accounting Standard) Rules, 2006.
Plan Assets consist of funds maintained with LICI, ICICI Prudential,
Birla Sun Life and HDFC Standard Life.
Above disclosures as required by AS-15-Employee Benefits are given to
the extent available from the actuarial report.
The estimates of future salary increase considered in the actuarial
valuation takes into account factors like inflation, seniority,
promotion and other relevant factors. The expected return on plan
assets is based on actuarial expectation of the average long term rate
of return expected on investments of the funds during the estimated
terms of the obligations. The contribution expected to be made by the
Company for the year ending 31 March, 2013 is not readily ascertainable
and therefore not disclosed.
(I) Miscellaneous Expenses in (k) above include research and
development expense of Rs. 1.17 crore (previous year: Rs. 0.70 crore).
NOTE 3 The Members of the Company at the Thirtieth Annual General
Meeting held on 30 July 2008 and the Central Government vide its letter
dated 20 August 2009 approved payment of commission to the
non-executive directors from 2008-09 to 2012-13 at a rate not exceeding
1% per annum of the net profits of the Company computed in the manner
laid down in Section 198(1) of the Companies Act, 1956.
The Board of Directors in its meeting held on 13 June, 2012 has
considered to seek the approval of the Members at the forthcoming
Annual General Meeting and of the Central Government thereafter, for
payment of commission to the non-executive directors for each of the
years 2011-12 and 2012-13 at an increased rate not exceeding 3% per
annum of the net profit of the Company as required under Secton 310 of
the said Act. Accordingly, the commission proposed for non-executive
directors in excess of 1% of the net profits i.e. Rs. 13.95 crore, for
the year 2011-12, is subject to the approval of the Members and of the
Central Government.
NOTE 4 Other long term liabilities represent those arising from
adjustments detailed in Note 23 and the unadjusted balance of sums
received from consumers for Capital jobs, pending completion thereof.
NOTE 5 Out of the outstanding foreign currency loans of Rs. 677.64
crore (31.03.2011 : Rs. 531.16 crore) disclosed in Note 5, loan balance
amounting to Rs. 606.79 crore (31.03.2011 : Rs. 469.09 crore) have been
fully hedged in Indian Rupee and Rs. 70.85 crore (31.03.2011 : Rs.
62.07 crore) represents sum restated at year end exchange rate in
respect of underlying contractual obligations in United States Dollar.
Trade Payables include Rs. 76.60 crore (31.03.2011 : Rs. 19.63 crore)
representing amount payable in United States Dollar restated at year
end exchange rate which have not been hedged.
NOTE 6 Based on a review of the projected business prospects of the
Company's subsidiaries, inspite of present losses therein, the
management does not foresee any dimunition, other than temporary, in
the value of the Company's investments and share application money
placed therein.
NOTE 7 Future rentals payable in respect of non-cancellable leases for
assets comprising various equipment and vehicles acquired under
operating leases for the period ranging between 36-60 months work out
to Rs. 8.93 crore (previous year: Rs. 9.77 crore) and Rs. 2.27 crore
(previous year: Rs. 10.47 crore) during next one year and thereafter
till five years respectively. There are no restrictions in respect of
such leases.
NOTE 8 The Company is engaged in generation and distribution of
electricity and does not operate in any other reportable segment.
(*) Mahuagarhi Coal Company Private Limited (MCCPL) was incorporated in
India for development of Mahuagarhi coal field and exploration of coal
there from as a joint venture company with 50% participation of the
Company in MCCPL's share capital, in terms of the requirements of
allocation of the coal block by the Ministry of Coal, Government of
India, which is yet to commence its commercial operation. The interests
of the Company as at 31 March, 2012 in the assets, liabilities and
expenses of the joint venture are Rs. 2.27 crore (31 March, 2011 : Rs.
1.65 crore), Rs. 0.00 crore (31 March, 2011 : Rs. 0.01 crore) and Rs.
0.03 crore (previous year :Rs. 0.09 crore) respectively.
NOTE 9 The derated installed capacity of the Generating Stations of
the Company (as per certification of technical expert) as on 31 March.
2012 was 1225000 kW (31 March, 2011 : 1225000 kW).
NOTE 10 The Company was using pre-revised Schedule VI to the Companies
Act, 1956, for preparation and presentation of its financial statement
for previous year's figures till the year ended 31st March 2011. During
the year ended 31st March 2012, the revised Schedule VI notified under
Companies Act, 1956 has become applicable to the Company. The Company
has reclassified previous year's figures to conform to this year's
classification alongwith other regrouping / rearrangement wherever
necessary.
Mar 31, 2011
1. The operations of the Company are governed by the Electricity Act,
2003 and various Regulations and/or Policies framed thereunder by the
appropriate authorities/Accordingly, in preparing the financial
statements the relevant provisions of the said Act, Regulations etc.
have been duly considered.
2. Earnings from sale of electricity are determined in accordance with
the relevant orders of the Commission, where appropriate, giving due
effect of the required adjustments. Such earnings are net of discount
for prompt payment of bills and advance against depreciation amounting
to Rs.71.20 crore (previous year: Rs.62.05 crore) and Rs.67.55 crore
(previous year: Rs.109.08 crore) respectively.
3. (a) Fixed assets other than furniture and vehicles as on 31 March
2005 have been revalued which resulted in an increase in the value of
such assets by an amount of Rs.1,900.77 crore with corresponding credit
to Revaluation Reserve.
(b) Capital work in progress includes capital advance of Rs 15.31 crore
(31 March, 2010 : Rs 16.05 crore).
4. Estimated amount of commitment on capital account etc. and not
provided for is Rs. 114.76 crore (31 March, 2010 : Rs. 136.98 crore).
5. Claims against the Company not acknowledged as debts :
(a) The West Bengal Taxation Tribunal had held meter rentals received
by the Company from consumers to be deemed sales under the provisions
of the Bengal Finance (Sales Tax) Act, 1941 and that sales tax was
payable on such rentals. Based on such findings the Commercial Taxes
Directorate assessed Rs.0.69 crore as sales tax on meter rentals
received during the year ended 31 March, 1993 and raised a demand of
Rs.0.36 crore on account of interest. Against the above demand, the
Company had deposited a sum of Rs.0.75 crore with the sales tax
authorities and obtained a stay against the balance demand from the
Deputy Commissioner of Commercial Taxes. The sales tax authorities also
indicated their intention to levy such sales tax on meter rentals for
the subsequent years as well, against which, the Company filed a writ
petition in the Calcutta High Court and prayed for an interim order,
inter alia, restraining the sales tax authorities from proceeding with
the assessment for the subsequent years till disposal of the appeal. An
interim order has been issued by the High Court permitting the sales
tax authorities to carry out assessments but restraining them from
serving any assessment order on the Company. The disposal of the case
is still pending.
(b) Other matters:
i. Municipal Tax : Rs. 0.95 crore (31 March, 2010: Rs. 0.89 crore) in
respect of certain properties, the rates of which are disputed by the
Company.
ii. Water Cess : Rs. 6.74 crore (31 March 2010 : Rs. 2.74 crore) -
disputed by the Company.
6. Amount lying in deposit accounts with scheduled banks as at 31
March 2011 includes Rs. 61.40 crore (31 March 2010 : Rs. 42 crore)
appropriated upto the previous year towards Reserve for unforeseen
exigencies and interest attributable thereto.
7. The Company has accounted for in the current year a net sum of Rs.
(154.36) crore (previous year: Rs. (29.56) crore) shown as cost
adjustments in schedule 11 to the Profit and Loss Account, based on the
Companys understanding of the applicable regulatory provisions in
respect thereof, towards an estimated adjustable sum on account of cost
of electrical energy purchased and fuel and related cost and adjustment
relating to revenue account after giving the effect arising from the
applicable orders for earlier years (which include a sum of Rs 125.80
crore attributable to expenditure of 2009-10 for which formal
adjustment is under consideration of the Commission) in this regard.
The accurate quantification and disposal of the matter are being given
effect to from time to time on receipt of necessary directions from the
appropriate authorities.
8. Interest expenses in Schedule 12 and cost of fuel in Schedule 11
include gain of Rs.0.00 crore and Rs.1.25 crore respectively (previous
year: gain of Rs. 0.03 crore and Rs. 3.04 crore respectively) due to
exchange fluctuations. Miscellaneous Expenses in Schedule 11 include
Borrowing Cost other than interest, amounting to Rs.5.81 crore
(previous year: Rs. 5.81 crore), which has been allocated to capital
account and research and development expense of Rs. 0.70 crore
(previous year: Rs. 0.25 crore). Income from Long Term Trade Investment
and Income from Current Investment - other than trade shown in Schedule
10 include dividend income of Rs.0.30 crore (previous year: Rs. 0.30
crore) and Rs.nil (previous year: Rs. 2.78 crore) respectively.
9. Based on a review of the projected business prospects of the
Companys subsidiaries, inspite of present losses therein, the
management does not foresee any permanent diminution in the value of
the Companys long term investments (including advance against equity)
therein.
10. Future rentals payable in respect of non-cancellable leases for
assets comprising various equipment and vehicles acquired under
operating leases for the period ranging between 36-60 months work out
to Rs. 9 77 crore (previous year: Rs. 10.21 crore) and Rs. 10.47 crore
(previous year: Rs. 19.14 crore) during next one year and thereafter
till five years respectively. There are no restrictions in respect of
such leases.
11. There are no amount due to Micro and Small Enterprises, as defined
in the Micro, Small and Medium Enterprises Development Act, 2006, based
on information available with the Company.
12. Out of the outstanding foreign currency loans of Rs 531.16 crore
(previous year: Rs. 602.79 crore) disclosed in Schedule 3 and Schedule
4, loan balance amounting to Rs. 469.09 crore (previous year: Rs.
532.97 crore) have been fully hedged in Indian Rupee and Rs 62.07 crore
(previous year: Rs. 69.82 crore) represents sum restated at year end
exchange rate in respect of underlying contractual obligations in
United States Dollar. Current Liabilities include Rs.19.63 crore
(previous year: Rs. 17.87 crore) representing amount payable in United
States Dollar restated at year end exchange rate which have not been
hedged.
13. Employee Benefits Defined Contribution Plan
The Company makes contributions for provident fund and pension
(including for superannuation) towards defined contribution retirement
benefit plans for eligible employees. Under the said plans, the Company
is required to contribute a specified percentage of the employees
salaries to fund the benefits. During the year, based on applicable
rates, the Company has recognised Rs. 29 77 crore (previous year: Rs.
24.47 crore) on this count in the Profit and Loss Account.
Defined Benefit Plans
The Company makes annual contribution to independent trust, who in
turn, invests in the Employees Group Gratuity Scheme of eligible
agencies for qualifying employees. Liabilities at the year-end for
gratuity, leave encashment and medical benefits have been determined on
the basis of actuarial valuation carried out by an independent actuary,
based on the method prescribed in Accounting Standard 15 - "Employee
Benefits" of the Companies (Accounting Standard) Rules, 2006.
14. The Company is engaged in generation and distribution of
electricity and does not operate in any other reportable segment.
15. Related Parties disclosures
(a) Related Parties and their relationship_
Names of Related Parties Nature of Relationship
Spencers Retail Limited Subsidiary Company
Au Bon Pain Cafe India Limited Subsidiary of Spencers Retail Limited
Music World Retail Limited Subsidiary of Spencers Retail Limited
CESC Properties Limited Subsidiary Company
Metromark Green Commodities Pvt. Ltd. Subsidiary of CESC Properties
Limited
CESC Infrastructure Limited Subsidiary Company (w.e.f 22 February 2011)
Haldia Energy Limited Subsidiary of CESC Limited (till 27 March, 2011)
and Subsidiary of CESC Infrastructure Limited (w.e.f. 28 March, 2011)
Dhariwal Infrastructure Limited Subsidiary of Haldia Energy Limited
Surya Vidyut Limited Subsidiary of Haldia Energy Limited (w.e.f 28
June, 2010)
Nalanda Power Company Limited Subsidiary Company
Mahuagarhi Coal Company Private Limited (*) Joint Venture
Mr. Sumantra Banerjee Key Management Personnel
(*) Mahuagarhi Coal Company Private Limited (MCCPL) was incorporated in
India for development of Mahuagarhi coal field and exploration of coal
there from as a joint venture company with 50% participation of the
Company in MCCPLs share capital, in terms of the requirements of
allocation of the coal block by the Ministry of Coal, Government of
India, which is yet to commence its commercial operation. The interests
of the Company as at 31 March, 2011 in the assets, liabilities and
expenses of the joint venture are Rs. 1.65 crore (31 March 2010 : Rs.
1.00 crore), Rs.0.01 crore (31 March 2010 : Rs. 0.00 crore) and Rs.
0.09 crore (previous year: Rs. 0.04 crore) respectively.
16. The derated installed capacity of the Generating Stations of the
Company (as per certification of technical expert) as on 31 March, 2011
was 1225000 kW (31 March, 2010 :1225000 kW)
17. Previous years figures have been regrouped / rearranged, wherever
necessary.
Mar 31, 2010
1. The operations of the Company are governed by the Electricity Act,
2003 and various Regulations and/or Policies framed thereunder by the
appropriate authorities. Accordingly, in preparing the financial
statements the relevant provisions of the said Act, Regulations etc.
have been duly considered.
2. Earnings from sale of electricity are determined in accordance with
the relevant orders of the Commission, where appropriate, giving due
effect of the required adjustments including those relating to recovery
of arrears in respect of earlier years which has resulted in a net
credit adjustment of Rs. 24.28 crore in the current year. Such earnings
are net of discount for prompt payment of bills and advance against
depreciation amounting to Rs.62.05 crore (previous year: Rs.56.91
crore) and Rs.109.08 crore (previous year: Rs.139.68 crore)
respectively.
3. Fixed assets other than furniture, vehicles and intangible assets
as on 31 March 2005 have been revalued which resulted in an increase in
the value of such assets by an amount of Rs.1,900.77 crore with
corresponding credit to Revaluation Reserve.
4. Estimated amount of contracts remaining to be executed on capital
account and not provided for is Rs. 80.73 crore (31 March, 2009: Rs.
279.74 crore).
5. Claims against the Company not acknowledged as debts :
(a) The West Bengal Taxation Tribunal had held meter rentals received
by the Company from consumers to be deemed sales under the provisions
of the Bengal Finance (Sales Tax) Act, 1941 and that sales tax was
payable on such rentals. Based on such findings the Commercial Taxes
Directorate assessed Rs.0.69 crore as sales tax on meter rentals
received during the year ended 31 March, 1993 and raised a demand of
Rs.0.36 crore on account of interest. Against the above demand, the
Company had deposited a sum of Rs.0.75 crore with the sales tax
authorities and obtained a stay against the balance demand from the
Deputy Commissioner of Commercial Taxes. The sales tax authorities also
indicated their intention to levy such sales tax on meter rentals for
the subsequent years as well, against which, the Company filed a writ
petition in the Calcutta High Court and prayed for an interim order,
inter alia, restraining the sales tax authorities from proceeding with
the assessment for the subsequent years till disposal of the appeal. An
interim order has been issued by the High Court permitting the sales
tax authorities to carry out assessments but restraining them from
serving any assessment order on the Company. The disposal of the case
is still pending.
(b) Other matters:
i. Municipal Tax : Rs. 0.89 crore (31 March, 2009: Rs. 1.11 crore) in
respect of certain properties, the rates of which are
disputed by the Company. ii. Water Cess : Rs. 2.74 crore (31 March,
2009 : Rs. 8.13 crore) in respect of interest on water cess disputed by
the Company.
6. During the year the 250 MW thermal power project at Budge Budge was
completed at a project cost of Rs.1,336.93 crore and the commercial
operation was declared on 28 February, 2010.
7. The net proceeds of 95,60,000 equity shares allotted in 2007-08 to
Qualified Institutional Buyers in accordance with Chapter XIII A of
SEBI (DIP) Guidelines 2000, as amended have since been fully utilised
for strengthening the Companys distribution network and making equity
contribution to Haldia Energy Limited, a wholly owned subsidiary of the
Company pursuing setting up of a 600 MW generating facility in Haldia.
8. Amount lying in deposit accounts with scheduled banks as at 31
March, 2010 includes Rs.42 crore (31 March 2009 : Rs. 27.19 crore)
appropriated upto the previous year towards Reserve for unforeseen
exigencies and interest attributable thereto.
9. The Company has accounted for in the current year a net sum of
Rs.(29.56) crore (previous year: Rs.269.83 crore) shown as cost
adjustments in schedule 11 to the Profit and Loss Account, based on the
Companys understanding of the applicable regulatory provisions in
respect thereof, towards an estimated adjustable sum on account of cost
of electrical energy purchased and fuel and related cost and adjustment
relating to revenue account after giving the effect arising from the
applicable orders for earlier years (including a carry forward sum of
Rs.125.80 crore, pending disposal by the Commission) in this regard.
The accurate quantification and disposal of the matter are being given
effect to from time to time on receipt of necessary directions from the
appropriate authorities.
10. Interest expenses in Schedule 12 and cost of fuel in Schedule 11
include gain of Rs.0.03 crore and Rs.3.04 crore respectively (previous
year: loss of Rs.0.02 crore and Rs.9.76 crore respectively) due to
exchange fluctuations. Miscellaneous Expenses in Schedule 11 include
Borrowing Cost other than interest, amounting to Rs.5.81 crore (31
March 2009 : Rs.3.62 crore), which has been allocated to capital
account. Income from Long Term Trade Investment and Income from Current
Investment - other than trade shown in Schedule 10 include dividend
income of Rs.0.30 crore (previous year: Rs.0.30 crore) and Rs.2.78
crore (previous year: Rs.28.88 crore) respectively.
11. Based on a review of the projected business prospects of the
Companys subsidiaries, inspite of present losses therein, the
management does not foresee any permanent diminution in the value of
the Companys long term investments (including advance against equity)
therein.
12. Future rentals payable in respect of non-cancellable leases for
assets comprising various equipment and vehicles acquired after 1
April, 2001 under operating leases for the period ranging between 36-60
months work out to Rs.10.21 crore and Rs.19.14 crore during next one
year and thereafter till five years respectively. There are no
restrictions in respect of such leases.
13. There are no amount due to Micro and Small Enterprises, as defined
in the Micro, Small, Medium Enterprises Development Act, 2006, based on
information available with the Company.
14. Out of the outstanding foreign currency loans of Rs.602.79 crore
disclosed in Schedule 3 and Schedule 4, loan balance amounting to
Rs.532.97 crore have been fully hedged in Indian Rupee and Rs.69.82
crore represents sum restated at year end exchange rate in respect of
underlying contractual obligations in United States Dollar. Current
Liabilities include Rs.17.87 crore representing amount payable in
United States Dollar restated at year end exchange rate which have not
been hedged.
15. Employee Benefits
Defined Contribution Plan
The Company makes contributions for provident fund and pension
(including for superannuation) towards defined contribution retirement
benefit plans for eligible employees. Under the said plans, the Company
is required to contribute a specified percentage of the employees
salaries to fund the benefits. During the year, based on applicable
rates, the Company has recognised Rs. 26.90 crore (previous year:
Rs.24.76 crore) on this count in the Profit and Loss Account.
Defined Benefit Plans
The Company makes annual contribution to independent trust, who in
turn, invests in the Employees Group Gratuity Scheme of eligible
agencies for qualifying employees. Liabilities at the year-end for
gratuity, leave encashment and medical benefits have been determined on
the basis of actuarial valuation carried out by an independent actuary,
based on the method prescribed in Accounting Standard 15 - "Employee
Benefits" of the Companies (Accounting Standard) Rules, 2006.
16. The Company is engaged in generation and distribution of
electricity and does not operate in any other reportable segment.
17. Related Parties disclosures
(a) Related Parties and their relationship
Names of Related Parties Nature of Relationship
Spencers Retail Limited Subsidiary Company
Au Bon Pain Cafe India Limited Subsidiary of Spencers Retail Limited
Music World Retail Limited Subsidiary of Spencers Retail Limited
CESC Properties Limited Subsidiary Company
Metromark Green Commodities Pvt. Ltd. Subsidiary of CESC Properties
Limited
Haldia Energy Limited Subsidiary Company
Dhariwal Infrastructure Limited Subsidiary of Haldia Energy Limited
(w.e.f 27 August, 2009)
Nalanda Power Company Limited Subsidiary Company (w.e.f 24 June, 2009)
Mahuagarhi Coal Company Private Limited (*) Joint Venture
Mr.SumantraBanerjee Key Management Personnel
(*) Mahuagarhi Coal Company Private Limited (MCCPL) was incorporated in
India for development of Mahuagarhi coal field and exploration of coal
there from as a joint venture company with 50% participation of the
Company in MCCPLs share capital, in terms of the requirements of
allocation of the coal block by the Ministry of Coal, Government of
India, which is yet to commence its commercial operation. The interests
of the Company as at 31 March, 2010 in the assets, liabilities and
expenses of the joint venture are Rs. 1.00 crore, Rs.0.00 crore and Rs.
0.04 crore respectively.
18. Previous years figures have been regrouped / rearranged, wherever
necessary.
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