Notes to Accounts of PTC India Ltd.

Mar 31, 2025

8. Provisions

Provisions are recognized when the Company has a present obligation (legal
or constructive) as a result of a past event, it is probable that outflow of
economic benefits will be required to settle the obligation, and a reliable
estimate can be made of the amount of the obligation.

If the effect of the time value of money is material, provisions are discounted
using a current pre-tax rate that reflects, when appropriate, the risks specific
to the liability. When discounting is used, the increase in the provision due
to the passage of time is recognized as a finance cost.

The amount recognized as a provision is the best estimate of the
consideration required to settle the present obligation at reporting date,
taking into account the risks and uncertainties surrounding the obligation.

When some or all of the economic benefits required to settle a provision
are expected to be recovered from a third party, a receivable is recognized
as an asset if it is virtually certain that reimbursement will be received and
the amount of the receivable can be measured reliably. The expense relating
to a provision is presented net of any reimbursement in the statement of
profit and loss.

9. Contingent liabilities and contingent assets
Contingent Liability

Contingent liability is a possible obligation that arises from past events
and whose existence 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
but is not recognised because

i) it is not probable that an outflow of resources embodying economic
benefits will be required to settle the obligation; or

ii) the amount of the obligation cannot be measured with sufficient
reliability.

Contingent liabilities are disclosed on the basis of judgment of the
management/independent experts. These are reviewed at each balance
sheet date and are adjusted to reflect the current management estimate.

A contingent liability is not recognized but disclosed as per requirements of
Ind (AS) 37. The related asset is recognized when the realisation of income
becomes virtually certain.

Contingent Asset

A contingent asset is a possible asset that arises from past events and whose
existence will be confirmed only by the occurrence or non-occurrence of
one or more uncertain future events not wholly within the control of the
entity.

10. Employee Benefits

Defined contribution plans

A defined contribution plan is a post-employment benefit plan under
which an entity pays fixed contributions into separate entities and will have
no legal or constructive obligation to pay further amounts. Obligations for
contributions to defined contribution plans are recognized as an employee
benefits expense in profit or loss in the period during which services are
rendered by employees. Prepaid contributions are recognized as an asset to
the extent that a cash refund or a reduction in future payments is available.
Contributions to a defined contribution plan that are due after more than
12 months after the end of the period in which the employees render the
service are discounted to their present value.

The Company pays fixed contribution to Employees’ Provident Fund. The
contributions to the fund for the year are recognized as expense and are
charged to the profit or loss. The Company’s only obligation is to pay a
fixed amount with no obligation to pay further contributions if the fund
does not hold sufficient assets to pay all employee benefits.

Defined benefit plans

A defined benefit plan is a post-employment benefit plan other than a
defined contribution plan. The Company’s liability is towards gratuity and
post-retirement medical facility. The gratuity is funded by the Company and
is managed by separate trust PTC INDIA Gratuity Trust. The Company
has Post-Retirement Medical Scheme (PRMS), under which eligible retired
employee and the spouse are provided medical facilities and avail treatment
as out-patient subject to a ceiling fixed by the Company.

The Company’s net obligation in respect of defined benefit plans is
calculated separately for each plan by estimating the amount of future
benefit that employees have earned in return for their service in the current
and prior periods; that benefit is discounted to determine its present value.
Any unrecognized past service costs is recognised and the fair value of any
plan assets is deducted. The discount rate is based on the prevailing market
yields of Indian government securities as at the reporting date that have
maturity dates approximating the terms of the Company’s obligations
and that are denominated in the same currency in which the benefits are
expected to be paid.

The calculation is performed annually by a qualified actuary using the
projected unit credit method. When the calculation results in a benefit
to the Company, the recognized asset is limited to the total of any
unrecognized past service costs and the present value of economic benefits
available in the form of any future refunds from the plan or reductions in
future contributions to the plan. An economic benefit is available to the
Company if it is realizable during the life of the plan, or on settlement of
the plan liabilities. Any actuarial gains or losses are recognized in OCI in
the period in which they arise.

Other long-term employee benefits

Benefits under the Company’s leave encashment constitute other long term
employee benefits.

The Company’s obligation in respect of leave encashment is the amount
of future benefit that employees have earned in return for their service
in the current and prior periods; that benefit is discounted to determine
its present value. The discount rate is based on the prevailing market
yields of Indian government securities as at the reporting date that have
maturity dates approximating the terms of the Company’s obligations.
The calculation is performed using the projected unit credit method. Any

actuarial gains or losses are recognized in profit or loss in the period in
which they arise.

Short-term benefits

Short term employee benefits are that are expected to be settled wholly
before twelve months after the end of the reporting periods in which the
employee rendered the related services.

Short-term employee benefit obligations are measured on an undiscounted
basis and are expensed as the related service is provided.

A liability is recognized for the amount expected to be paid under
performance related pay if the Company has a present legal or constructive
obligation to pay this amount as a result of past service provided by the
employee and the obligation can be estimated reliably.

Liability in respect of gratuity, leave encashment and provident fund of
employees on deputation with the Company are accounted for on the basis
of terms and conditions of deputation of the parent organizations.

11. Financial Instruments

A financial instrument is any contract that gives rise to a financial asset of
one entity and a financial liability or equity instrument of another entity.

Financial assets and financial liabilities are recognized when a Company
entity becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value
except trade receivables and trade payable which are initially measured at
transaction price.

Transaction costs that are directly attributable to the acquisition or issue
of financial assets and financial liabilities (other than financial assets and
financial liabilities at fair value through profit or loss) are added to or
deducted from the fair value of the financial assets or financial liabilities, as
appropriate, on initial recognition. Transaction costs directly attributable
to the acquisition of financial assets or financial liabilities at fair value
through profit or loss are recognized immediately in profit or loss.

Financial Assets

Initial recognition and measurement

All financial assets are recognized initially at fair value plus, in the case of
financial assets not recorded at fair value through profit or loss, transaction
costs that are attributable to the acquisition of the financial asset.

Purchases or sales of financial assets that require delivery of assets within
a time frame established by regulation or convention in the market place
(regular way trades) are recognized on the trade date, i.e., the date that the
Company commits to purchase or sell the asset.

Subsequent measurement

For purposes of subsequent measurement, financial assets are classified as
under:

a) Debt instruments at amortized cost

b) Debt instruments and equity instruments at fair value through profit
or loss (FVTPL)

c) Equity instruments measured at fair value through other
comprehensive income (FVTOCI)

Debt instruments at amortized cost

A debt instrument is measured at the amortized cost if both the following
conditions are met:

a) The asset is held within a business model whose objective is to hold
assets for collecting contractual cash flows, and

b) Contractual terms of the asset give rise on specified dates to cash
flows that are solely payments of principal and interest (SPPI) on the
principal amount outstanding.

After initial measurement, such financial assets are subsequently measured
at amortized cost using the effective interest rate (EIR) method. Amortized
cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the EIR. The EIR
amortization is included in finance income in the profit or loss. The losses
arising from impairment are recognized in the profit or loss. This category
generally applies to trade and other receivables.

Effective interest method

The effective interest method is a method of calculating the amortised cost
of a debt instrument and of allocating interest income over the relevant
period. The effective interest rate is the rate that exactly discounts estimated
future cash receipts (including all fees and points paid or received that form
an integral part of the effective interest rate, transaction costs and other
premiums or discounts) through the expected life of the debt instrument,
or, where appropriate, a shorter period, to the net carrying amount on
initial recognition.

Income is recognised on an effective interest basis for debt instruments
other than those financial assets classified as at FVTPL. Interest income is
recognised in profit or loss and is included in the “Other income” line item.

Debt instruments and equity instruments at fair value through profit or
loss (FVTPL).

Debt Instruments at FVTPL

FVTPL is a residual category for debt instruments. Any debt instrument,
which does not meet the criteria for categorization as at amortized cost or
as FVTOCI, is classified as at FVTPL.

In addition, the Company may elect to classify a debt instrument, which
otherwise meets amortized cost or FVTOCI criteria, as at FVTPL.
However, such election is allowed only if doing so reduces or eliminates
a measurement or recognition inconsistency (referred to as ‘accounting
mismatch’).

Debt instruments included within the FVTPL category are measured at fair
value with all changes recognized in the P&L.

Equity Investments at FVTPL or FVTOCI

All equity investments in scope of Ind-AS 109 are measured at fair value.
Equity instruments which are held for trading are classified as at FVTPL.
For all other equity instruments, the Company decides to classify the same
either as at FVTOCI or FVTPL. The Company makes such election on
an instrument-by-instrument basis. The classification is made on initial
recognition and is irrevocable.

If the Company decides to classify an equity instrument as at FVTOCI,
then all fair value changes on the instrument, excluding dividends, are
recognized in the OCI. There is no recycling of the amounts from OCI to
P&L, even on sale of Investment. However, the Company may transfer the
cumulative gain or loss within equity.

Equity instruments included within the FVTPL category are measured at
fair value with all changes recognized in the P&L.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a
group of similar financial assets) is primarily derecognized when:

a) The rights to receive cash flows from the asset have expired, or

b) The Company has transferred its rights to receive cash flows from
the asset or has assumed an obligation to pay the received cash flows
in full without material delay to a third party under a ‘pass-through

arrangement; and either (i) the Company has transferred substantially
all the. risks and rewards of the asset, or (ii) the Company has neither
transferred nor retained substantially all the risks and rewards of the
asset, but has transferred control of the asset

When the Company has transferred its rights to receive cash-flows from an
asset or has entered into a pass-through arrangement, it evaluates if and to
what extent it has retained the risks and rewards of ownership. When it has
neither transferred nor retained substantially all of the risks and rewards of
the asset, nor transferred control of the asset, the Company continues to
recognize the transferred asset to the extent of the Company’s continuing
involvement. In that case, the Company also recognizes an associated
liability. The transferred asset and the associated liability are measured on a
basis that reflects the rights and obligations that the Company has retained.

Continuing involvement that takes the form of a guarantee over the
transferred asset is measured at the lower of the original carrying amount
of the asset and the maximum amount of consideration that the Company
could be required to repay.

Impairment of financial assets

In accordance with Ind AS 109, the Company applies expected credit loss
(ECL) model for measurement and recognition of impairment loss on the
following financial assets and credit risk exposure-

• Financial assets that are debt instruments, and are measured at
amortised cost e.g., loans, debt securities, deposits, trade receivables
and bank balance

• Financial assets that are debt instruments and are measured as at

FVTOCI

• Financial guarantee contracts which are not measured as at FVTPL

The Company follows ‘simplified approach’ for recognition of impairment
loss allowance on:

• Trade receivables, and/or any contractual right to receive cash or
another financial asset that result from transactions that are within
the scope of Ind AS 115

• All lease receivables resulting from transactions within the scope of

Ind AS 116

The application of simplified approach does not require the Company
to track changes in credit risk. Rather, it recognises impairment loss
allowance based on lifetime ECLs at each reporting date, right from its
initial recognition.

For recognition of impairment loss on other financial assets and Credit
risk exposure, the Company determines that whether there has been
a significant increase in the credit risk since initial recognition. If credit
risk has not increased significantly, 12-month ECL is used to provide for
impairment loss. However, if credit risk has increased significantly, lifetime
ECL is used. If, in a subsequent period, credit quality of the instrument
improves such that there is no longer a significant increase in credit risk
since initial recognition, then the entity reverts to recognising impairment
loss allowance based on 12-month ECL.

ECL impairment loss allowance (or reversal) recognized during the period
is recognized as income/expense in the statement of profit and loss (P&L).
This amount is reflected in a separate line in the P&L as an impairment
gain or loss.

The balance sheet presentation for various financial instruments is
described below:

Financial assets measured as at amortised cost, contract assets and lease
held receivables

ECL is presented as an allowance, i.e., as an integral part of the measurement
of those assets in the balance sheet. The allowance reduces the net carrying

amount. Until the asset meets write-off criteria, the Company does not
reduce impairment allowance from the gross carrying amount.

For assessing increase in credit risk and impairment loss, the Company
combines financial instruments on the basis of shared credit risk
characteristics with the objective of facilitating an analysis that is designed
to enable significant increases in credit risk to be identified on a timely
basis.

Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities
at fair value through profit or loss, loans and borrowings or payables, as
appropriate.

All financial liabilities are recognised initially at fair value and, in the case of
loans and borrowings and payables, net of directly attributable transaction
costs.

The Company’s financial liabilities include trade and other payables,
loans and borrowings including bank overdrafts and financial guarantee
contracts.

Subsequent measurement

The measurement of financial liabilities depends on their classification, as
described below:

Financial liabilities at amortised cost

After initial recognition, Interest-bearing loans and borrowings are
subsequently measured at amortised cost using the EIR method. Gains and
losses are recognised in profit or loss when the liabilities are derecognised
as well as through the EIR amortisation process.

Amortised cost is calculated by taking into account any discount or
premium on acquisition and fees or costs that are an integral part of the
EIR. The EIR amortisation is included as finance costs in the statement of
profit and loss.

Financial guarantee contracts

Financial guarantee contracts issued by the Company are those contracts
that require a payment to be made to reimburse the holder for a loss it
incurs because the specified debtor fails to make a payment when due
in accordance with the terms of a debt instrument. Financial guarantee
contracts are recognised initially as a liability at fair value, adjusted
for transaction costs that are directly attributable to the issuance of the
guarantee. Subsequently, the liability is measured at the higher of the
amount of loss allowance determined as per impairment requirements of
Ind-AS 109 and the amount recognised less cumulative amortisation.

Derecognition

A financial liability is derecognised when the obligation under the liability
is discharged or cancelled or expires. When an existing financial liability
is replaced by another from the same lender on substantially different
terms, or the terms of an existing liability are substantially modified,
such an exchange or modification is treated as the derecognition of the
original liability and the recognition of a new liability. The difference in the
respective carrying amounts is recognised in the statement of profit or loss.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is
reported in the consolidated balance sheet if there is a currently enforceable
legal right to offset the recognised amounts and there is an intention to
settle on a net basis, to realise the assets and settle the liabilities
simultaneously.

Reclassification of financial assets

The Company determines the classification of financial assets and liabilities
on initial recognition. After initial recognition, no reclassification is
made for financial assets which are categorised as equity instruments at
FVTOCI and financial assets or financial liabilities that are specifically
designated at FVTPL. For financial assets, which are debt instruments, a
reclassification is made only if there is a change in the business model for
managing those assets. Changes to the business model are expected to be
infrequent. The management determines change in the business model
as a result of external or internal changes which are significant to the
Company’s operations. A change in the business model occurs when the
Company either begins or ceases to perform an activity that is significant
to its operations. If the Company reclassifies financial assets, it applies the
reclassification prospectively from the reclassification date which is the first
day of immediately next reporting period following the change in business
model. The Company does not restate any previously recognised gains,
losses (including impairment gains or losses) or interest.

12. Cash and cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at banks and
on hand and short-term deposits with an original maturity of three months
or less, which are subject to an insignificant risk of changes in value.

13. Dividend to equity holders

The company recognises a liability of dividend to equity holders when the
distribution is authorised and the distribution is no longer at the discretion
of the Company. As per the corporate laws in India, a distribution is
authorised when it is approved by the shareholders. A corresponding
amount is recognised directly in equity.

14. Inventories

Inventories are valued at the lower of cost and net realizable value. Cost
includes cost of purchase, cost of conversion and other costs incurred in
bringing the inventories to their present location and condition.

Cost of inventories is measured on First in and First out (FIFO) basis.

Costs of purchased inventory are determined after deducting rebates and
discounts.

Net realizable value is the estimated selling price in the ordinary course
of business, less estimated costs of completion and the estimated costs
necessary to make the sale.

15. Property, plant and equipment
Recognition and initial measurement

Property, Plant and equipment (PP&E) are carried in the balance sheet
on the basis of at cost of acquisition including incidental costs related
to acquisition and installation, net of accumulated depreciation and
accumulated impairment losses, if any.

Property, Plant and Equipment is recognized when it is probable that
future economic benefits associated with the item will flow to the Company
and the cost of each item can be measured reliably. Property, Plant and
Equipment are initially stated at cost.

Cost of asset includes

(a) Purchase price, net of any trade discount and rebates.

(b) Borrowing cost if capitalization criteria is met.

(c) Cost directly attributable to the acquisition of the assets which
incurred in bringing asset to its working condition for the intended
use.

(d) Incidental expenditure during the construction period is capitalized
as part of the indirect construction cost to the extent the expenditure
is directly related to construction or is incidental thereto.

(e) Present value of the estimated costs of dismantling & removing the
items & restoring the site on which it is located if recognition criteria
are met.

When significant parts of plant and equipment are required to be replaced
at intervals, the Company depreciates them separately based on their
specific useful lives. Likewise, when a major inspection is performed, its
cost is recognized in the carrying amount of the plant and equipment as a
replacement if the recognition criteria are satisfied.

Subsequent Measurement

Subsequent cost relating to Property, plant and equipment shall be
recognized as an asset if:

a) it is probable that future economic benefits associated with the item
will flow to the entity; and

b) the cost of the item can be measured reliably.

All other repair and maintenance costs are recognized in profit or loss as
incurred.

Depreciation and useful lives

The Company depreciates property, plant and equipment over their
estimated useful lives using written down method except wind mill and
leasehold land. The useful lives are at the rates and in the manner provided
in Schedule II of the Companies Act, 2013

The depreciation on Wind Mills has been changed on Straight Line
Method (SLM) at rates worked out based on the useful life and in the
manner prescribed in the Schedule II to the Companies Act, 2013.

Depreciation on additions to/deductions from property, plant &
equipment during the year is charged on pro-rata basis from/up to the
month in which the asset is available for use/disposed.

Advance paid towards the acquisition of property, plant and equipment
outstanding at each balance sheet date is shown under the head non¬
financial assets in the balance sheet.

The cost of assets not available for use is disclosed under Capital Work in
Progress till the time they are ready for use.

Where the cost of depreciable assets has undergone a change during
the year due to increase/decrease in long term liabilities on account of
exchange fluctuation, price adjustment, change in duties or similar factors,
the unamortized balance of such asset is charged off prospectively over
the remaining useful life determined following the applicable accounting
policies relating to depreciation/ amortization.

Where it is probable that future economic benefits deriving from the cost
incurred will flow to the enterprise and the cost of the item can be measured
reliably, subsequent expenditure on a PPE along-with its unamortized
depreciable amount is charged off prospectively over the revised useful life
determined by technical assessment.

In circumstance, where a property is abandoned, the cumulative capitalized
costs relating to the property are written off in the same period.

An item of property, plant and equipment and any significant part initially
recognized is derecognized upon disposal or when no future economic
benefits are expected from its use or disposal. Any gain or loss arising on
derecognition of the asset is included in the income statement when the
asset is derecognized.

Depreciation methods, useful lives and residual values are reviewed
periodically, including at each financial year end and adjusted prospectively,
if appropriate.

The Company follows component approach as envisaged in Schedule
II to the Companies Act, 2013. The approach involves identification of
components of the asset whose cost is significant to the total cost of the asset
and have useful life different from the useful life of the remaining assets
and in respect of such identified components, useful life is determined
separately from the useful life of the main asset.

Modification or extension to an existing asset, which is of capital nature
and which becomes an integral part thereof is depreciated prospectively
over the remaining useful life of that asset.

Asset costing less than Rs. 5000/- is fully depreciated in the year of
capitalization.

Derecognition

An item of Property, Plant and Equipment and any significant part initially
recognized is derecognized upon disposal or when no future economic
benefits are expected from its use or disposal. Any gain or loss arising on
derecognition of the asset (calculated as the difference between the net
disposal proceeds and the carrying amount of the asset) is included in the
statement of profit and loss when the asset is derecognized.

16. Earnings per equity share

In determining basic earnings per share, the Company considers the net
profit attributable to equity shareholders. The number of shares used in
computing basic earnings per share is the weighted average number of
shares outstanding during the period/year. In determining diluted earnings
per share, the net profit attributable to equity shareholders and weighted
average number of shares outstanding during the period/year are adjusted
for the effect of all dilutive potential equity shares.

17. Share based payments
Equity settled transactions

The excess of market price of underlying equity shares as of the date of the
grant of options over the exercise price of the options given to employees
under the employee stock option plan is recognize as deferred stock
compensation cost and amortized over the vesting period, on a straight line
basis. The cumulative expense recognised for equity-settled transactions at
each reporting date until the vesting date reflects the extent to which the
vesting period has expired and the company’s best estimate of the number
of equity instruments that will ultimately vest. The statement of profit and
loss expense or credit for a period represents the movement in cumulative
expense recognised as at the beginning and end of that period and is
recognised in employee benefits expense

18. Revenue Recognition

Revenue from contracts with customers is recognised when control of the
goods or services are transferred to the customer at an amount that reflects
the consideration to which the Company expects to be entitled in exchange
for those goods or services. The Company has generally concluded that
it is the principal in its revenue arrangements, except for the agency
nature transactions, because it typically controls the goods or services
before transferring them to the customer. The specific recognition criteria

described below must also be met before revenue is recognised. Revenue
from other income comprises interest from banks, employees, etc., dividend
from investments in associates and subsidiary companies, dividend from
mutual fund investments, surcharge received from customers for delayed
payments, other miscellaneous income, etc.

Sale of power

Sale is recognized when the power is delivered by the Company at the
delivery point in conformity with the parameters and technical limits and
fulfilment of other conditions specified in the Power Sales Agreement.
Sale of power is accounted for as per tariff specified in the Power Sales
Agreement. The sale of power is accounted for net of all local taxes and
duties as may be leviable on sale of electricity for all electricity made
available and sold to customers.

The Company considers whether there are other promises in the contract
that are separate performance obligations to which a portion of the
transaction price needs to be allocated. In determining the transaction
price for the sale of power, the Company considers the effects of variable
consideration, the existence of significant financing components, non-cash
consideration, and consideration payable to the customer (if any).

Rendering of services

The company provides consultancy services to its customers. The Company
recognises revenue over time, using the output method measuring the
completion of different stages of consultancy project relative to the total
completion the service, because the customer receives and consumes the
benefits provided by the Company over the time.

Revenue from transactions identified as of agency nature

When another party is involved in providing goods or services to the
customers, the Company determines whether it is a principal or an agent in
these transactions by evaluating the nature of its promise to the customer.
The company is a principal and records revenue on a gross basis if it controls
the promised goods or services before transferring them to the customer.
However, the company is an agent and records revenue on net basis if it
does not control the promised goods or services before transferring them
to the customer.

Variable consideration

If the consideration in a contract includes a variable amount, the Company
estimates the amount of consideration to which it will be entitled in exchange
for transferring the goods to the customer. The variable consideration is
estimated at contract inception and constrained until it is highly probable
that a significant revenue reversal in the amount of cumulative revenue
recognised will not occur when the associated uncertainty with the variable
consideration is subsequently resolved.

Contract assets

A contract asset is the right to consideration in exchange for goods or services
transferred to the customer. If the Company performs by transferring goods
or services to a customer before the customer pays consideration or before
payment is due, a contract asset is recognised for the earned consideration
that is conditional.

Trade receivables

A receivable represents the Company’s right to an amount of consideration
that is unconditional (i.e., only the passage of time is required before
payment of the consideration is due).

Contract liabilities

A contract liability is the obligation to transfer goods or services to a
customer for which the Company has received consideration (or an amount
of consideration is due) from the customer. If a customer pays consideration

before the Company transfers goods or services to the customer, a contract
liability is recognised when the payment is made or the payment is due
(whichever is earlier). Contract liabilities are recognised as revenue when
the Company performs under the contract.

Surcharge Income

The surcharge on late payment/ non- payment from customers is recognized
when:

i) the amount of surcharge can be measured reliably; and

ii) there is no significant uncertainty that the economic benefits
associated with the surcharge transaction will flow to the entity.

Interest income

Interest income from a financial asset is recognized when it is probable
that the economic benefits will flow to the company and the amount of
income can be measured reliably. Interest income is accrued on a time
basis by reference to the principal outstanding and at the effective interest
applicable, which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset to that asset’s net
carrying amount on initial recognition. When calculating the effective
interest rate, the company estimates the expected cash flows by considering
all the contractual terms of the financial instrument (for example,
prepayment, extension, call and similar options) but does not consider the
expected credit losses. Interest income is included in finance income in the
statement of profit and loss.

Dividends

Dividend income is recognized when the Company’s right to receive the
payment is established, which is generally when shareholders approve the
dividend, provided that it is probable that the economic benefits will flow
to the company and the amount of income can be measured reliably.

Rental income

Rental income arising from operating leases is accounted for on a straight¬
line basis over the lease terms unless the lease payments are structured
to increase in line with expected general inflation to compensate for the
lessor’s expected inflationary cost. Rental Income is included in revenue in
the statement of profit and loss.

19. Cash flow statement

Cash flow statement is prepared in accordance with the indirect method
prescribed in Ind AS 7 ‘Statement of Cash Flows’

20. Borrowing costs

Borrowing costs that are directly attributable to the acquisition, construction
or production of a qualifying asset are capitalized as a part of that asset.
Other borrowing costs are recognized as expenses in the period in which
they are incurred.

21. Business Combinations

Business Combinations are accounted for using the acquisition method of
accounting, except for common control transactions which are accounted
using the pooling of interest method that is accounted at carrying values.
The consideration transferred in the acquisition and the identifiable
assets acquired and liabilities assumed are recognized at fair values on
their acquisition date, which is the date at which control is transferred
to the Company. Goodwill is initially measured at cost, being the excess
of the consideration transferred over the net identifiable assets acquired
and liabilities assumed. Where the fair value of net identifiable assets
acquired and liabilities assumed exceed the consideration transferred,
after reassessing the fair values of the net assets and contingent liabilities,
the excess is recognized as capital reserve. Acquisition related costs are
expensed as incurred.

22. Assets held for Sale

Non-current assets (or disposal groups) are classified as held for sale if their
carrying amount will be recovered principally through a sale transaction
rather than through continuing use and a sale is considered highly probable.
They are measured at the lower of their carrying amount and fair value less
costs to sell, except for assets such as deferred tax assets, assets arising from
employee benefits, financial assets and contractual rights under insurance
contracts, which are specifically exempt from this requirement.

A discontinued operation is a component of the entity that has been
disposed of or is classified as held for sale and that represents a separate
major line of business or geographical area of operations, is part of a single
coordinated plan to dispose of such a line of business or area of operations,
or is a subsidiary acquired exclusively with a view to resale. The results of
discontinued operations are presented separately in the Statement of Profit
and Loss.

2.3 Use of estimates and management judgments

The preparation of financial statements requires management to make
judgments, estimates and assumptions that may impact the application
of accounting policies and the reported value of assets, liabilities, income,
expenses and related disclosures concerning the items involved as well as
contingent assets and liabilities at the balance sheet date. The estimates
and management’s judgments are based on previous experience and other
factors considered reasonable and prudent in the circumstances. Actual
results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognized in the period in which the
estimates are revised and in any future periods affected.

In order to enhance understanding of the financial statements, information
about significant areas of estimation, uncertainty and critical judgments in
applying accounting policies that have the most significant effect on the
amounts recognised in the financial statements is as under:

a) Useful life of property, plant and equipment

The estimated useful life of property, plant and equipment is based
on a number of factors including the effects of obsolescence, demand,
competition and other economic factors (such as the stability of
the industry and known technological advances) and the level of
maintenance expenditures required to obtain the expected future
cash flows from the asset.

b) Recoverable amount of property, plant and equipment

The recoverable amount of plant and equipment is based on estimates
and assumptions regarding in particular the expected market outlook
and future cash flows. Any changes in these assumptions may have a
material impact on the measurement of the recoverable amount and
could result in impairment.

c) Impairment of non-financial assets

The Company assesses at each reporting date whether there is an
indication that an asset may be impaired. If any indication exists,
or when annual impairment testing for an asset is required, the
Company estimates the asset’s recoverable amount. An asset’s
recoverable amount is the higher of an asset’s or CGU’s fair value less
costs of disposal and its value in use. It is determined for an individual
asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets or groups of assets. Where the
carrying amount of an asset or CGU exceeds its recoverable amount,
the asset is considered impaired and is written down to its recoverable
amount.

In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects current

market assessments of the time value of money and the risks specific
to the asset. In determining fair value less costs of disposal, recent
market transactions are taken into account. If no such transactions
can be identified, an appropriate valuation model is used.

d) Defined benefit plans

The cost of the defined benefit plan and other post-employment
benefits and the present value of such obligation are determined using
actuarial valuations. An actuarial valuation involves making various
assumptions that may differ from actual developments in the future.
These include the determination of the discount rate, future salary
increases, mortality rates and attrition rate. Due to the complexities
involved in the valuation and its long-term nature, a defined benefit
obligation is highly sensitive to changes in these assumptions. All
assumptions are reviewed at each reporting date.

e) Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities
recorded in the balance sheet cannot be measured based on quoted
prices in active markets, their fair value is measured using valuation
techniques including the Discounted Cash Flow (DCF) model. The
inputs to these models are taken from observable markets where
possible, but where this is not feasible, a degree of judgement is
required in establishing fair values. Judgements include considerations
of inputs such as liquidity risk, credit risk and volatility. Changes in
assumptions about these factors could affect the reported fair value of
financial instruments.

f) Impairment of financial assets

The impairment provisions for financial assets are based on
assumptions about risk of default and expected loss rates. The
Company uses judgement in making these assumptions and selecting
the inputs to the impairment calculation, based on Company’s
past history, existing market conditions as well as forward looking
estimates at the end of each reporting period.

g) Deferred Tax

Deferred tax assets are recognized for unused tax losses to the extent
that it is probable that taxable profit will be available against which the
losses can be utilized. Significant management judgment is required
to determine the amount of deferred tax assets that can be recognized,
based upon the likely timing and the level of future taxable profits
together with future tax planning strategies.

h) Provisions and contingencies

The assessments undertaken in recognizing provisions and
contingencies have been made in accordance with Ind AS 37,
‘Provisions, Contingent Liabilities and Contingent Assets’. The
evaluation of the likelihood of the contingent events has required best
judgment by management regarding the probability of exposure to
potential loss. Should circumstances change following unforeseeable
developments, this likelihood could alter.

In the normal course of business, contingent liabilities may arise from
litigation and other claims against the Company. There are certain
obligations which managements have concluded based on all available
facts and circumstances are not probable of payment or difficult to
quantify reliably and such obligations are treated as contingent
liabilities and disclosed in notes.

i) Leases

Significant judgment is required to apply lease accounting to Ind
AS 116 ‘Determining whether an arrangement contains a lease’. In
assessing the applicability to arrangements entered into by the Group,
management has exercised judgment to evaluate the right to use

the underlying asset, substance of the transactions including legally
enforceable agreements and other significant terms and conditions
of the arrangements to conclude whether the arrangement needs the
criteria under Appendix C to Ind AS 116.

j) Assets held for sale

Significant judgment is required to apply the accounting of non¬
current assets held for sale under Ind AS 105 ‘Non-current Assets Held
for Sale and Discontinued Operations’. In assessing the applicability,
management has exercised judgment to evaluate the availability of
the asset for immediate sale, management’s commitment for the sale
and probability of sale within one year to conclude if their carrying
amount will be recovered principally through a sale transaction rather
than through continuing use.

k) Revenue from contracts with customers

The Company applied the following judgements that significantly
affect the determination of the amount and timing of revenue from
contracts with customers:-

Determining method to estimate variable consideration and assessing the
constraint

Certain contracts for the sale of electricity give rise to variable consideration.
In estimating the variable consideration, the Company is required to use
either the expected value method or the most likely amount method based
on which method better predicts the amount of consideration to which it
will be entitled. The most likely amount method is used for those contracts

with a single volume threshold, while the expected value method is used for
contracts with more than one volume threshold.

Before including any amount of variable consideration in the transaction
price, the Company considers whether the amount of variable consideration
is constrained and the uncertainty on the variable consideration will be
resolved within a short time frame.

Principal versus agent considerations

The company enters into agreements with its customers for sales of power
at power exchanges. Under these contracts, the company determines that
it does not control the goods before they are transferred on the basic that
it does not have inventory risk, therefore the company determines the
transactions at exchange are of agency nature.

2.4 Recent accounting pronouncements

Standards issued but not yet effective

Recent accounting pronouncements

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 notified Ind AS - 117 Insurance Contracts
and amendments to Ind AS 116 - Leases, relating to sale and leaseback
transactions. The Company has reviewed the new pronouncements and
based on its evaluation has determined that it does not have any significant
impact in its financial statements.

Nature and purpose of reserves:

Securities premium

Securities premium account is used to record the premium on issue of shares/
securities. This amount is utilised in accordance with the provisions of the
Companies Act, 2013.

General reserve

General Reserve is a free reserve which is created from retained earnings. The
Company may pay dividend and issue fully paid-up bonus shares to its members
out of the general reserve account, and company can use this reserve for buy-back
of shares.

Contingent reserve

Contingent Reserve is a free reserve which is created from retained earnings. The
company may use it to meet any contingency.

Retained earnings

Retained earnings comprise of the Company’s undistributed earnings after taxes.
FVOCI-Equity investment reserve

The Company has elected to recognise changes in the fair value of certain
investments in equity securities in other comprehensive income. These changes
are accumulated within FVTOCI reserve within equity. The Company transfers
amounts from this reserve to retained earnings when the relevant equity securities
are derecognised.

a) The Company had an arrangement with a supplier for purchase of
power. The supplier claimed that the Company did not off take the
contracted power and claimed a compensation of '' 84.95 Crore (31
March 2024: '' 84.95 crore). The arbitrator concluded the arbitration
in favour of the Company, however, the supplier has contested the
award at High Court.

b) The Company had filed an appeal with the Hon’ble Supreme Court in
2014 against the Hon’ble APTEL’s Order dated April 4, 2013, which
required the Company to pay the compensation of '' 41.70 Crore
(along with simple interest @ 6% p.a.) to the power supplier due to
the non-offtake of power by the Company as per the “Take or Pay”
clause of the arrangement. As per the Court’s directions, the Company
deposited '' 20.85 Crore (50% of the compensation, against which
provision existed for '' 20.48 crore) with the supplier in April 2013.
The Hon’ble Supreme Court, vide order dated October 27, 2014
admitted the case and directed the parties to maintain status quo.

c) Pursuant to dispute with one of the suppliers, the supplier agreed to
pay the long term open access (LTA) charges but subsequently refuted
its liability to pay the same. The Central Transmission Utility (CTU)
raised a claim of '' 31.68 Crore (31 March 2024: '' 31.68 crore) on
the Company towards the outstanding LTA charges. However
subsequently the Company surrendered the long term open access.
The claim of CTU is being contested before Appellate Tribunal of
Electricity, which has granted a stay on the order of CERC, which had
earlier allowed the claim of CTU.

d) CERC allowed the petition filed by one of the Company’s suppliers
and inter alia passed certain orders/ directions against the Company for
paying 100% of the Long Term Open Access (LTA) charges even though
only 95% of the quantum of power is being supplied by its supplier
under an interim directions of Hon’ble Supreme Court of India and
directed the Company to refund the transmission charges of '' 21.77
Crore (31 March 2024: '' 21.77 crore) collected from the supplier and
paid to CTU, which is corresponding to 5% of LTA. The Company
has filed appeal against the CERC order in Appellate Tribunal for
Electricity and APTEL has granted stay of the order of CERC.

e) The Company had a PPA of 1200 MW of power with one of its
suppliers, out of which 840 MW was to be sold on long term basis,
216 MW on Merchant trade basis and 144 MW was the free power
of the home state. For sale of 840 MW on long term basis,- PTC had
PSAs with four DISCOMS. However there was considerable delay on
account of certain Force Majeure Events and two DISCOMs illegally
terminated the said PSAs and refused to off-take power under the
PSAs. The Company had relinquished Long Term Open Access
(LTA) in respect of these two DISCOMS.

Though the Company took the LTA but it was agreed that it was
being taken on behalf of DISCOMS which were liable to pay the
transmission charges. However, PGCIL claimed charges of '' 209.51
Crore (31 March 2024: '' 209.51 crore) from the Company against
relinquishment of LTA along with relinquishment charges for
Merchant Power and Free Power computed as per formula approved
by CERC. The formula approved by CERC is under challenge in
APTEL. As per PSAs, the liability for payment of transmission charges
was of DISCOMs. In case of one of Discoms, CERC held that the
termination of PPA by the Discom was illegal and the Company has
to pay to CTU and the Discom is liable to reimburse the same to
the Company. Liability towards relinquishment charges regarding the
merchant power on the Company is being contested in APTEL. The
case relating to other DISCOM and Free power is pending before
CERC.

.f) One to the suppliers provided power to the Company from another
source. The customer did not pay to the Company for power supplied
from the another source. Further, the customer also deducted
compensation from the Company for short supply of power by not
considering power supplied from the another source. Consequently,
the Company also deducted the corresponding amounts from the
supplier. This deduction was challenged by the supplier before
TNERC which directed the Company to pay the principal amount
including interest which computed to '' 19.87 Crore (31 March 2024:
'' 19.87 crore). The Company has filed Appeal in APTEL against the
order of TNERC.

g) One of the suppliers of the Company has filed a Petition at CERC
challenging actions of the Company to appropriate '' 18.82 crore
(31 March 2024:'' 18.82) which was paid by one of the customers to
the Company as Late Payment Surcharge on the outstanding tariff
amount of the supplier and needs to be passed on to the Petitioner in
terms of PPA. In the opinion of the Company, it had fulfilled all its
obligations under the agreement and regulations.

h) The Resolution Professional (RP) had filed a claim against the
Company to refund '' 136.66 Crores pleading that the amount has
been deducted by the Company from the bills of the supplier. NCLT,
Hyderabad dismissed the RP’s claim but held that the Company
should have not invoked the Bank Guarantee (BG) of '' 27 Crores
from the supplier and the same is to be returned by the Company
along with penal interest.

---

Mar 31, 2024

8. Provisions

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that outflow of economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably. The expense relating to a provision is presented net of any reimbursement in the statement of profit and loss.

9. Contingent liabilities and contingent assets Contingent Liability

Contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the control of the company or a present obligation that arises from past events but is not recognised because

i) it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

ii) the amount of the obligation cannot be measured with sufficient reliability.

Contingent liabilities are disclosed on the basis of judgment of the management/independent experts. These are reviewed at each balance sheet date and are adjusted to reflect the current management estimate.

A contingent liability is not recognized but disclosed as per requirements of Ind (AS) 37. The related asset is recognized when the realisation of income becomes virtually certain.

A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity.

10. Employee Benefits

Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into separate entities and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution plans are recognized as an employee benefits expense in profit or loss in the period during which services are rendered by employees. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in future payments is available. Contributions to a defined contribution plan that are due after more than 12 months after the end of the period in which the employees render the service are discounted to their present value.

The Company pays fixed contribution to Employees’ Provident Fund. The contributions to the fund for the year are recognized as expense and are charged to the profit or loss. The Company’s only obligation is to pay a fixed amount with no obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits.

Defined benefit plans

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Company’s liability is towards gratuity and post-retirement medical facility. The gratuity is funded by the Company and is managed by separate trust PTC INDIA Gratuity Trust. The Company has Post-Retirement Medical Scheme (PRMS), under which eligible retired employee and the spouse are provided medical facilities and avail treatment as out-patient subject to a ceiling fixed by the Company.

The Company’s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. Any unrecognized past service costs is recognised and the fair value of any plan assets is deducted. The discount rate is based on the prevailing market yields of Indian government securities as at the reporting date that have maturity dates approximating the terms of the Company’s obligations and that are denominated in the same currency in which the benefits are expected to be paid.

The calculation is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a benefit to the Company, the recognized asset is limited to the total of any unrecognized past service costs and the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. An economic benefit is available to the Company if it is realizable during the life of the plan, or on settlement of the plan liabilities. Any actuarial gains or losses are recognized in OCI in the period in which they arise.

Other long-term employee benefits

Benefits under the Company’s leave encashment constitute other long term employee benefits.

The Company’s obligation in respect of leave encashment is the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. The discount rate is based on the prevailing market yields of Indian government securities as at the reporting date that have maturity dates approximating the terms of the Company’s obligations. The calculation is performed using the projected unit credit method. Any

actuarial gains or losses are recognized in profit or loss in the period in which they arise.

Short-term benefits

Short term employee benefits are that are expected to be settled wholly before twelve months after the end of the reporting periods in which the employee rendered the related services.

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.

A liability is recognized for the amount expected to be paid under performance related pay if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

Liability in respect of gratuity, leave encashment and provident fund of employees on deputation with the Company are accounted for on the basis of terms and conditions of deputation of the parent organizations.

11. Financial Instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Financial assets and financial liabilities are recognized when a Company entity becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value except trade receivables and trade payable which are initially measured at transaction price.

Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

Financial Assets

Initial recognition and measurement

All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.

Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognized on the trade date, i.e., the date that the Company commits to purchase or sell the asset.

Subsequent measurement

For purposes of subsequent measurement, financial assets are classified as under:

a) Debt instruments at amortized cost

b) Debt instruments and equity instruments at fair value through profit or loss (FVTPL)

c) Equity instruments measured at fair value through other comprehensive income (FVTOCI)

Debt instruments at amortized cost

A debt instrument is measured at the amortized cost if both the following conditions are met:

a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and

b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the profit or loss. The losses arising from impairment are recognized in the profit or loss. This category generally applies to trade and other receivables.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.

Income is recognised on an effective interest basis for debt instruments other than those financial assets classified as at FVTPL. Interest income is recognised in profit or loss and is included in the “Other income” line item.

Debt instruments and equity instruments at fair value through profit or loss (FVTPL)

Debt Instruments at FVTPL

FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.

In addition, the Company may elect to classify a debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ‘accounting mismatch’).

Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the P&L.

Equity Investments at FVTPL or FVTOCI

All equity investments in scope of Ind-AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at FVTPL. For all other equity instruments, the Company decides to classify the same either as at FVTOCI or FVTPL. The Company makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.

If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to P&L, even on sale of Investment. However, the Company may transfer the cumulative gain or loss within equity.

Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the P&L.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized when:

a) The rights to receive cash flows from the asset have expired, or

b) The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through arrangement; and either (i) the Company has transferred substantially all the. risks and rewards of the asset, or (ii) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset

When the Company has transferred its rights to receive cash-flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognize the transferred asset to the extent of the Company’s continuing involvement. In that case, the Company also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.

Impairment of financial assets

In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure-

• Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt securities, deposits, trade receivables and bank balance

• Financial assets that are debt instruments and are measured as at

FVTOCI

• Financial guarantee contracts which are not measured as at FVTPL

The Company follows ‘simplified approach’ for recognition of impairment loss allowance on:

• Trade receivables, and/or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 115

• All lease receivables resulting from transactions within the scope of

Ind AS 116

The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.

For recognition of impairment loss on other financial assets and Credit risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognising impairment loss allowance based on 12-month ECL.

ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/expense in the statement of profit and loss (P&L). This amount is reflected in a separate line in the P&L as an impairment gain or loss.

The balance sheet presentation for various financial instruments is described below:

Financial assets measured as at amortised cost, contract assets and lease held receivables

ECL is presented as an allowance, i.e., as an integral part of the measurement of those assets in the balance sheet. The allowance reduces the net carrying amount. Until the asset meets write-off criteria, the Company does not reduce impairment allowance from the gross carrying amount.

For assessing increase in credit risk and impairment loss, the Company combines financial instruments on the basis of shared credit risk characteristics with the objective of facilitating an analysis that is designed to enable significant increases in credit risk to be identified on a timely basis.

Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings or payables, as appropriate.

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

The Company’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts and financial guarantee contracts.

Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

Financial liabilities at amortised cost

After initial recognition, Interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss.

Financial guarantee contracts

Financial guarantee contracts issued by the Company are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind-AS 109 and the amount recognised less cumulative amortisation.

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the consolidated balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

Reclassification of financial assets

The Company determines the classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are categorised as equity instruments at FVTOCI and financial assets or financial liabilities that are specifically designated at FVTPL. For financial assets, which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. The management determines change in the business model as a result of external or internal changes which are significant to the Company’s operations. A change in the business model occurs when the Company either begins or ceases to perform an activity that is significant to its operations. If the Company reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of immediately next reporting period following the change in business model. The Company does not restate any previously recognised gains, losses (including impairment gains or losses) or interest.

12. Cash and cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

13. Dividend to equity holders

The company recognises a liability of dividend to equity holders when the distribution is authorised and the distribution is no longer at the discretion of the Company. As per the corporate laws in India, a distribution is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity.

14. Inventories

Inventories are valued at the lower of cost and net realizable value. Cost includes cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

Cost of inventories is measured on First in and First out (FIFO) basis.

Costs of purchased inventory are determined after deducting rebates and discounts.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

15. Property, plant and equipment Recognition and initial measurement

Property, Plant and equipment (PP&E) are carried in the balance sheet on the basis of at cost of acquisition including incidental costs related to acquisition and installation, net of accumulated depreciation and accumulated impairment losses, if any.

Property, Plant and Equipment is recognized when it is probable that future economic benefits associated with the item will flow to the Company and the cost of each item can be measured reliably. Property, Plant and Equipment are initially stated at cost.

Cost of asset includes

(a) Purchase price, net of any trade discount and rebates.

(b) Borrowing cost if capitalization criteria is met.

(c) Cost directly attributable to the acquisition of the assets which incurred in bringing asset to its working condition for the intended use.

(d) Incidental expenditure during the construction period is capitalized as part of the indirect construction cost to the extent the expenditure is directly related to construction or is incidental thereto.

(e) Present value of the estimated costs of dismantling & removing the items & restoring the site on which it is located if recognition criteria are met.

When significant parts of plant and equipment are required to be replaced at intervals, the Company depreciates them separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognized in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied.

Subsequent Measurement

Subsequent cost relating to Property, plant and equipment shall be recognized as an asset if:

a) it is probable that future economic benefits associated with the item will flow to the entity; and

b) the cost of the item can be measured reliably.

All other repair and maintenance costs are recognized in profit or loss as incurred.

Depreciation and useful lives

The Company depreciates property, plant and equipment over their estimated useful lives using written down method except wind mill and leasehold land. The useful lives are at the rates and in the manner provided in Schedule II of the Companies Act, 2013

The depreciation on Wind Mills has been changed on Straight Line Method (SLM) at rates worked out based on the useful life and in the manner prescribed in the Schedule II to the Companies Act, 2013.

Depreciation on additions to/deductions from property, plant & equipment during the year is charged on pro-rata basis from/up to the month in which the asset is available for use/disposed.

Advance paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date is shown under the head nonfinancial assets in the balance sheet.

The cost of assets not available for use is disclosed under Capital Work in Progress till the time they are ready for use.

Where the cost of depreciable assets has undergone a change during the year due to increase/decrease in long term liabilities on account of exchange fluctuation, price adjustment, change in duties or similar factors, the unamortized balance of such asset is charged off prospectively over the remaining useful life determined following the applicable accounting policies relating to depreciation/ amortization.

Where it is probable that future economic benefits deriving from the cost incurred will flow to the enterprise and the cost of the item can be measured reliably, subsequent expenditure on a PPE along-with its unamortized depreciable amount is charged off prospectively over the revised useful life determined by technical assessment.

In circumstance, where a property is abandoned, the cumulative capitalized costs relating to the property are written off in the same period.

An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is included in the income statement when the asset is derecognized.

Depreciation methods, useful lives and residual values are reviewed periodically, including at each financial year end and adjusted prospectively, if appropriate.

The Company follows component approach as envisaged in Schedule II to the Companies Act, 2013. The approach involves identification of components of the asset whose cost is significant to the total cost of the asset and have useful life different from the useful life of the remaining assets and in respect of such identified components, useful life is determined separately from the useful life of the main asset.

Modification or extension to an existing asset, which is of capital nature and which becomes an integral part thereof is depreciated prospectively over the remaining useful life of that asset.

Asset costing less than Rs. 5000/- is fully depreciated in the year of capitalization.

Derecognition

An item of Property, Plant and Equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit and loss when the asset is derecognized.

16. Earnings per equity share

In determining basic earnings per share, the Company considers the net profit attributable to equity shareholders. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the period/year. In determining diluted earnings per share, the net profit attributable to equity shareholders and weighted average number of shares outstanding during the period/year are adjusted for the effect of all dilutive potential equity shares.

17. Share based payments Equity settled transactions

The excess of market price of underlying equity shares as of the date of the grant of options over the exercise price of the options given to employees under the employee stock option plan is recognize as deferred stock compensation cost and amortized over the vesting period, on a straight line basis. The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the company’s best estimate of the number of equity instruments that will ultimately vest. The statement of profit and loss expense or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period and is recognised in employee benefits expense

18. Revenue Recognition

Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects

the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company has generally concluded that it is the principal in its revenue arrangements, except for the agency nature transactions, because it typically controls the goods or services before transferring them to the customer. The specific recognition criteria described below must also be met before revenue is recognised. Revenue from other income comprises interest from banks, employees, etc., dividend from investments in associates and subsidiary companies, dividend from mutual fund investments, surcharge received from customers for delayed payments, other miscellaneous income, etc.

Sale of power

Sale is recognized when the power is delivered by the Company at the delivery point in conformity with the parameters and technical limits and fulfilment of other conditions specified in the Power Sales Agreement. Sale of power is accounted for as per tariff specified in the Power Sales Agreement. The sale of power is accounted for net of all local taxes and duties as may be leviable on sale of electricity for all electricity made available and sold to customers.

The Company considers whether there are other promises in the contract that are separate performance obligations to which a portion of the transaction price needs to be allocated. In determining the transaction price for the sale of power, the Company considers the effects of variable consideration, the existence of significant financing components, non-cash consideration, and consideration payable to the customer (if any).

Rendering of services

The company provides consultancy services to its customers. The Company recognises revenue over time, using the output method measuring the completion of different stages of consultancy project relative to the total completion the service, because the customer receives and consumes the benefits provided by the Company over the time.

Revenue from transactions identified as of agency nature

When another party is involved in providing goods or services to the customers, the Company determines whether it is a principal or an agent in these transactions by evaluating the nature of its promise to the customer. The company is a principal and records revenue on a gross basis if it controls the promised goods or services before transferring them to the customer. However, the company is an agent and records revenue on net basis if it does not control the promised goods or services before transferring them to the customer.

Variable consideration

If the consideration in a contract includes a variable amount, the Company estimates the amount of consideration to which it will be entitled in exchange for transferring the goods to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognised will not occur when the associated uncertainty with the variable consideration is subsequently resolved.

Contract assets

A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration that is conditional.

Trade receivables

A receivable represents the Company’s right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due).

A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Company performs under the contract.

Surcharge Income

The surcharge on late payment/ non- payment from customers is recognized when:

i) the amount of surcharge can be measured reliably; and

ii) there is no significant uncertainty that the economic benefits associated with the surcharge transaction will flow to the entity.

Interest income

Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the company and the amount of income can be measured reliably. Interest income is accrued on a time basis by reference to the principal outstanding and at the effective interest applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount on initial recognition. When calculating the effective interest rate, the company estimates the expected cash flows by considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) but does not consider the expected credit losses. Interest income is included in finance income in the statement of profit and loss.

Dividends

Dividend income is recognized when the Company’s right to receive the payment is established, which is generally when shareholders approve the dividend, provided that it is probable that the economic benefits will flow to the company and the amount of income can be measured reliably.

Rental income

Rental income arising from operating leases is accounted for on a straightline basis over the lease terms unless the lease payments are structured to increase in line with expected general inflation to compensate for the lessor’s expected inflationary cost. Rental Income is included in revenue in the statement of profit and loss.

19. Cash flow statement

Cash flow statement is prepared in accordance with the indirect method prescribed in Ind AS 7 ‘Statement of Cash Flows’

20. Borrowing costs

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as a part of that asset. Other borrowing costs are recognized as expenses in the period in which they are incurred.

21. Business Combinations

Business Combinations are accounted for using the acquisition method of accounting, except for common control transactions which are accounted using the pooling of interest method that is accounted at carrying values. The consideration transferred in the acquisition and the identifiable assets acquired and liabilities assumed are recognized at fair values on their acquisition date, which is the date at which control is transferred to the Company. Goodwill is initially measured at cost, being the excess of the consideration transferred over the net identifiable assets acquired

and liabilities assumed. Where the fair value of net identifiable assets acquired and liabilities assumed exceed the consideration transferred, after reassessing the fair values of the net assets and contingent liabilities, the excess is recognized as capital reserve. Acquisition related costs are expensed as incurred.

22. Assets held for Sale

Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable. They are measured at the lower of their carrying amount and fair value less costs to sell, except for assets such as deferred tax assets, assets arising from employee benefits, financial assets and contractual rights under insurance contracts, which are specifically exempt from this requirement.

A discontinued operation is a component of the entity that has been disposed of or is classified as held for sale and that represents a separate major line of business or geographical area of operations, is part of a single coordinated plan to dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The results of discontinued operations are presented separately in the Statement of Profit and Loss.

2.3 Use of estimates and management judgments

The preparation of financial statements requires management to make judgments, estimates and assumptions that may impact the application of accounting policies and the reported value of assets, liabilities, income, expenses and related disclosures concerning the items involved as well as contingent assets and liabilities at the balance sheet date. The estimates and management’s judgments are based on previous experience and other factors considered reasonable and prudent in the circumstances. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

In order to enhance understanding of the financial statements, information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is as under:

a) Useful life of property, plant and equipment

The estimated useful life of property, plant and equipment is based on a number of factors including the effects of obsolescence, demand, competition and other economic factors (such as the stability of the industry and known technological advances) and the level of maintenance expenditures required to obtain the expected future cash flows from the asset.

b) Recoverable amount of property, plant and equipment

The recoverable amount of plant and equipment is based on estimates and assumptions regarding in particular the expected market outlook and future cash flows. Any changes in these assumptions may have a material impact on the measurement of the recoverable amount and could result in impairment.

c) Impairment of non-financial assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the

carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used.

d) Defined benefit plans

The cost of the defined benefit plan and other post-employment benefits and the present value of such obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and attrition rate. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

e) Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

f) Impairment of financial assets

The impairment provisions for financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Company’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

g) Deferred Tax

Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

h) Provisions and contingencies

The assessments undertaken in recognizing provisions and contingencies have been made in accordance with Ind AS 3 7, ‘Provisions, Contingent Liabilities and Contingent Assets’. The evaluation of the likelihood of the contingent events has required best judgment by management regarding the probability of exposure to potential loss. Should circumstances change following unforeseeable developments, this likelihood could alter.

In the normal course of business, contingent liabilities may arise from litigation and other claims against the Company. There are certain obligations which managements have concluded based on all available facts and circumstances are not probable of payment or difficult to quantify reliably and such obligations are treated as contingent liabilities and disclosed in notes.

i) Leases

Significant judgment is required to apply lease accounting to Ind AS 116 ‘Determining whether an arrangement contains a lease’. In assessing the applicability to arrangements entered into by the Group, management has exercised judgment to evaluate the right to use the underlying asset, substance of the transactions including legally enforceable agreements and other significant terms and conditions of the arrangements to conclude whether the arrangement needs the criteria under Appendix C to Ind AS 116.

j) Assets held for sale

Significant judgment is required to apply the accounting of noncurrent assets held for sale under Ind AS 105 ‘Non-current Assets Held for Sale and Discontinued Operations’. In assessing the applicability, management has exercised judgment to evaluate the availability of the asset for immediate sale, management’s commitment for the sale and probability of sale within one year to conclude if their carrying amount will be recovered principally through a sale transaction rather than through continuing use.

k) Revenue from contracts with customers

The Company applied the following judgements that significantly affect the determination of the amount and timing of revenue from contracts with customers:-

Determining method to estimate variable consideration and assessing the constraint

Certain contracts for the sale of electricity give rise to variable consideration. In estimating the variable consideration, the Company

is required to use either the expected value method or the most likely amount method based on which method better predicts the amount of consideration to which it will be entitled. The most likely amount method is used for those contracts with a single volume threshold, while the expected value method is used for contracts with more than one volume threshold.

Before including any amount of variable consideration in the transaction price, the Company considers whether the amount of variable consideration is constrained and the uncertainty on the variable consideration will be resolved within a short time frame.

Principal versus agent considerations

The company enters into agreements with its customers for sales of power at power exchanges. Under these contracts, the company determines that it does not control the goods before they are transferred on the basic that it does not have inventory risk, therefore the company determines the transactions at exchange are of agency nature.

2.4 Recent accounting pronouncements Standards issued but not yet effective Recent accounting pronouncements

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, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.

Notes

i) Claims against the Company not acknowledged as debt include:

a) The Company had an arrangement with a supplier for purchase of power. The supplier claimed that the Company did not off take the contracted power and claimed a compensation of '' 84.95 Crore (31 March 2023: '' 84.95 crore). The arbitrator concluded the arbitration in favour of the Company, however, the supplier has contested the award at High Court.

b) The Company had filed an appeal with the Hon’ble Supreme Court in 2014 against the Hon’ble APTEL’s Order dated April 4, 2013, which required the Company to pay the compensation of '' 41.70 Crore (31 March 2023: '' 41.70 crore) (along with simple interest @ 6% p.a.) to the power supplier due to the non-offtake of power by the Company as per the “Take or Pay” clause of the arrangement. As per the Court’s directions, the Company deposited '' 20.85 Crore (50% of the compensation) with the supplier in April 2013. The Hon’ble Supreme Court, vide order dated October 27, 2014 admitted the case and directed the parties to maintain status quo. As per the legal opinion obtained, the Company has a good case. Considering there is no movement in the matter and the last hearing in the Hon’ble Supreme Court had taken place in April 2016, as an abundant caution, during the year ended 31st March 2024 the Company has created a provision of '' 20.48 Crore against the amount deposited with the supplier. Accordingly contingent liability has been shown net of the same.

c) Pursuant to dispute with one of the suppliers, the supplier agreed to pay the long term open access (LTA) charges but subsequently refuted its liability to pay the same. The Central Transmission Utility (CTU) raised a claim of '' 31.68 Crore (31 March 2023: '' 31.68 crore) on the Company towards the outstanding LTA charges. However subsequently the Company surrendered the long term open access. The claim of CTU is being contested before Appellate Tribunal of Electricity, which has granted a stay on the order of CERC, which had earlier allowed the claim of CTU.

d) CERC allowed the petition filed by one of the Company’s suppliers and inter alia passed certain orders/ directions against the Company for paying 100% of the Long Term Open Access (LTA) charges even though only 95% of the quantum of power is being supplied by its supplier under an interim directions of Hon’ble Supreme Court of India and directed the Company to refund the transmission charges of '' 21.77 Crore (31 March 2023: '' 21.77 crore) collected from the supplier and paid to CTU, which is corresponding to 5% of LTA. The Company has filed appeal against the CERC order in Appellate Tribunal for Electricity and APTEL has granted stay of the order of CERC.

e) The Company had a PPA of 1200 MW of power with one of its suppliers, out of which 840 MW was to be sold on long term basis, 216 MW on Merchant trade basis and balance 144 MW was the free power of the home state. For sale of 840 MW on long term basis,-PTC had PSAs with four DISCOMS. However there was considerable delay on account of certain Force Majeure Events and two DISCOMs illegally terminated the said PSAs and refused to off-take power under the PSAs. The Company had relinquished Long Term Open Access (LTA) in respect of these two DISCOMS.

Though the Company took the LTA but it was agreed that it was being taken on behalf of DISCOMS which were liable to pay the transmission charges. However, PGCIL claimed charges of '' 209.51 Crore (31 March 2023: '' 209.51 crore) from the Company against relinquishment of LTA along with relinquishment charges for Merchant Power and Free Power computed as per formula approved by CERC. The formula approved by CERC is under challenge in

APTEL. As per PSAs, the liability for payment of transmission charges was of DISCOMs. In case of one of Discoms, CERC held that the termination of PPA by the Discom was illegal and the Company has to pay to CTU and the Discom is liable to reimburse the same to the Company. Liability towards relinquishment charges regarding the merchant power on the Company is being contested in APTEL. The case relating to other DISCOM and Free power is pending before CERC.

f) One to the suppliers provided power to the Company from another source. The customer did not pay to the Company for power supplied from the another source. Further, the customer also deducted compensation from the Company for short supply of power by not considering power supplied from the another source. Consequently, the Company also deducted the corresponding amounts from the supplier. This deduction was challenged by the supplier before TNERC which directed the Company to pay the principal amount including interest which computed to '' 19.87 Crore (31 March 2023: '' 19.87 crore). The Company has filed Appeal in APTEL against the order of TNERC.

g) One of the suppliers of the Company has filed a Petition at CERC challenging actions of the Company to appropriate '' 18.82 crore (31 March 2023: NIL) which was paid by one of the customers to the Company as Late Payment Surcharge on the outstanding tariff amount of the supplier and needs to be passed on to the Petitioner in terms PPA. In the opinion of the Company, it had fulfilled all its obligations under the agreement and regulations.

h) Other claims against the Company not acknowledged as debts '' 14.84 crore crore (31 March 2023: '' 42.91 crore)

i) In two cases, the suppliers have raised various issues concerning interpretation of various clauses of PPAs. The suppliers have filed the Petition before CERC. As the issues are at initial stage and still pending before CERC, the measurement of financial effects of the same is impracticable as on date. Further, in the opinion of the Company, it had fulfilled all its obligations under the agreement and regulations.

i) Disputed income tax/ custom duty/service tax pending before various forums/ authorities amount to '' 492.76 crore (31 March 2023: '' 694.67 crore). Many of income tax matters were adjudicated in favour of the Company but are disputed before higher forums/ authorities by the concerned departments.

In respect of service tax, the dispute pertains to applicability of service tax on compensation received by the Company which is passed by it to generators/ discoms. Further, the Company is only acting as an intermediary in the transactions and generators/discoms are the ultimate beneficiary of the compensation received. The Company has filed a writ against the Order of the Commissioner, CGST in Delhi High Court. Further, the Ministry of Finance has issued Circular No. 178/10/2022- GST dated August 03, 2022 clarifying that Service tax/ GST is not applicable on compensation since the compensation is not by way of consideration for any other independent activity; it is just an event in the course of performance of that contract. Therefore, the company believes that it has good grounds on merits to defend itself.

Commissioner of Customs, Guntur passed an order confirming duty demand stating that coal imported by PTC had CV (Or m, mmf basis) and VM (on dry, mmf basis) more than 5833 kcal/kg and 14% respectively with reference to the certain vessels and fell under the category of bituminous instead of steam coal. The appeal was filed before CESTAT, Bangalore including stay application for deposit of duty. CESTAT has granted the stay and directed to deposit 50% of the differential duty, along with interest The company paid a deposit amounting to '' 6.45 crore against custom duty/interest in July, 2015 which is subject to the outcome of the appeal.

iii) Pending resolution of the respective proceedings, it is not practicable for the company to estimate the timings of cash outflows, if any, in respect of the above as it is determinable only on receipt of judgements/decisions pending with various forums/authorities.

Commitments

a). Estimated amount of contracts remaining to be executed on capital account

(property, plant & equipment and intangible assets) and not provided for as at 31 March 2024 is '' 0.06 crore (31 March 2023: '' 0.56 crore). The details is as under:-

(i) Defined contribution plans:

A. Provident fund

The Company pays fixed contribution to provident fund to the appropriate authorities. The contributions to the fund for the year are recognized as expense and are charged to the profit or loss. An amount of '' 1.42 crore (31 March 2023: '' 1.31 crore) for the year is recognised as expense on this account and charged to the Statement of Profit and Loss.

B. National Pension System (NPS)

The Company pays fixed contribution to NPS to the appropriate authorities. The contributions to the NPS for the year are recognized as expense and are charged to the profit or loss. An amount of '' 0.72 crore (31 March 2023: '' 0.63 crore) for the year is recognised as expense on this account and charged to the Statement of Profit and Loss.

(ii) Defined benefit plans:

A. Gratuity-Funded

a) The Company has a defined benefit gratuity plan. Every employee who has rendered continuous service of five years or more is entitled to gratuity at 15 days salary (15/26 X last drawn basic salary) for each completed year of service subject to a maximum of '' 0.20 crore on superannuation, resignation, termination, disablement or on death.

Based on the actuarial valuation obtained in this respect, the following table sets out the status of the gratuity and the amounts recognised in the Company’s financial statements as at balance sheet date:

E. Risk exposure

---

Mar 31, 2023

KGPUL defaulted in repayment of loan and was referred to NCLT under IBC. NCLT, Hyderabad vide order dated 27.02.2020 approved the Resolution Plan for KGPUL submitted by one of the Applicants. As per the Resolution Plan, equity of the existing shareholders including that of the Company, has become NIL after the CIRP and the approval of the Resolution Plan by NCLT.

However, Debt Recovery Tribunal, Hyderabad , based on a Petition filed by ARCIL, issued a notice in February 2022 to KGPUL and others including the Company and PFC. As per the notice, it appears that the Petitioner has filed case for recovery of '' 327. 62 Crores more so against the individual promoters who had executed guarantees in favour of the lenders. The petition in this matter has been served on the Company and the Company is in the process of filing counter/reply and also application to set aside the Petition in Debt Recovery Tribunal to the extent of relief sought against the Company and has been legally advised that there can’t be any liability on it in view of the aforesaid NCLT order approving the Resolution Plan.

a) Trade receivables are hypothecated to the banks for availing the fund based and non- fund based working capital facilities.

b) Trade receivables include an amount of '' 16.23 Crore due from Tamil Nadu Electricity Board (TNEB), now TANGEDCO, towards compensation claim. Sole arbitrator gave an Award against the company which had been set aside by Single Judge of Madras High Court giving an option to the Company to invoke the Arbitration afresh to recover its dues. Meanwhile, TNEB filed an Appeal in Madras HC against the order of the single judge and the proceedings are going on. The management assessed that the chances of a decision in favor of the company is high as the compensation amount has not been paid by TNEB in terms of the Agreement.

c) Trade receivables include '' 150.00 crore (Previous year '' 222.75 crore) of bills of exchange drawn on state utilities (customers) and discounted with banks based on arrangements between the Company, banks and state utilities.

d) Refer note no. 44 for ageing of trade receivables as on 31.03.2023 and 31.03.2022

*The Board in its meeting held on 31^st May 2022 has approved additional issuance of corporate guarantee of '' 50 Crore (in addition of '' 225 Crore approved already in FY 2021-22) in favour of working capital lenders of PTC Energy Limited (PEL), a subsidiary of the Company. Subsequently, the Company has also executed additional corporate guarantee for '' 75 Crore (in addition of '' 200 Crore executed already) in favour of working capital lenders of PEL for the purpose of meeting additional working capital requirements of PEL. For executing corporate guarantee, the Company has charged consideration determined at arm length basis from the subsidiary company. (also refer note

Retained earnings

Retained earnings comprise of the Company’s undistributed earnings after taxes. FVOCI-Equity investment reserve

The Company has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive income. These changes are accumulated within FVTOCI reserve within equity. The Company transfers amounts from this reserve to retained earnings when the relevant equity securities are derecognised.

Nature and purpose of reserves:

Securities premium

Securities premium account is used to record the premium on issue of shares/ securities. This amount is utilised in accordance with the provisions of the Companies Act, 2013.

General reserve

General Reserve is a free reserve which is created from retained earnings. The Company may pay dividend and issue fully paid-up bonus shares to its members out of the general reserve account, and company can use this reserve for buy-back of shares.

Contingent reserve

Contingent Reserve is a free reserve which is created from retained earnings. The company may use it to meet any contingency.

i) Claims against the Company not acknowledged as debt include:

a) The company had an arrangement with a supplier for purchase of power. The supplier claimed that the company did not off take the contracted power and claimed a compensation of '' 84.95 Crore (31 March 2022: '' 84.95 crore). The arbitrator concluded the arbitration in favour of the company, however, the supplier has contested the award at High Court.

b) The company had an arrangement with a supplier for purchase of power. However, due to the prevalent market situation, the company was unable to find a buyer for power from the supplier for most of the contracted period. The supplier raised a compensation bill of '' 43.28 Crore (31 March 2022: '' 43.28 crore) for non-supply of power. The matter is pending at Supreme Court. The company has paid an amount of '' 20.48 crore as deposit, and the same is subject to the outcome of the appeal pending before Supreme Court.

c) Pursuant to dispute with one of the suppliers, the supplier agreed to pay the LTA charges but subsequently refuted its liability to pay the LTA charges. The Central Transmission Utility (CTU) has raised a claim of '' 31.68 Crore (31 March 2022: '' 31.68 crore)

on the company towards the outstanding LTA charges. However subsequently company surrendered the long term open access (LTA). The claim of CTU is being contested before Appellate Tribunal of Electricity, which has granted a stay on the order of CERC.

d) CERC has allowed the petition filed by one of the Company’s suppliers and inter alia passed certain orders/ directions against the Company for paying 100% of the Long Term Open Access charges even though only 95% of the quantum of power is being supplied by its supplier under an interim directions of Hon’ble Supreme Court of India and directing the Company to refund the transmission charges of '' 21.77 Crore (31 March 2022: '' 21.77 crore) collected from the supplier which is corresponding to 5% of LTA. The Company has filed appeal against the CERC order in Appellate Tribunal for Electricity and APTEL had granted stay of the order of CERC.

e) The Company had a PPA of 1200 MW of power with one of its suppliers, out of which 840 MW was to be sold on long term basis, 216 MW on Merchant trade basis and balance 144 MW was the free power of the home state. For sale of 840 MW on long term basis,-PTC had PSAs with four DISCOMS. However there was considerable delay on account of certain Force Majeure events and two DISCOMs illegally terminated the said PSAs and refused to off-take power under the PSAs. The Company had relinquished LTA in respect of these two DISCOMS.

Though the Company had taken the LTA but it was agreed that it was being taken on behalf of DISCOMS which were liable to pay the transmission charges. However, PGCIL claimed charges of '' 209.51 Crore (31 March 2022: '' 209.51 crore) from the Company against relinquishment of LTA along with relinquishment charges for Merchant Power and Free Power computed as per formula approved by CERC. The formula approved by CERC is under challenge in APTEL. As per PSAs, the liability for payment of transmission charges was of DISCOMs. in case of one of Discoms, CERC held that the termination of PPA by the Discom is illegal and the Discom is liable for relinquishment charges/ transmission charges. Liability towards relinquishment charges regarding the merchant power on the Company is being contested in APTEL (for merchant power).

f) One to the suppliers provided power to the Company from another source. The customer did not pay to the Company for power supplied from the another source. Further, the customer also deducted compensation from the Company for short supply of power by not considering power supplied from the another source. Consequently the Company also deducted the corresponding amounts from the supplier. This deduction was challenged by the supplier before TNERC which directed the Company to pay the principal amount including interest which computed to '' 19.87 Crore (31 March 2022: '' 19.87 crore). The Company has filed Appeal in APTEL along with an Application for Interim Stay of the order of TNERC.

g) One of the suppliers has raised a claim of '' 33.50 Crore (31 March 2022: NIL) on the Company citing various issues concerning interpretation of various clauses of PPAs and filed a petition before CERC. In the opinion of the Company, it had fulfilled all its obligations under the agreement and regulations.

h) One of the suppliers has a claim of '' 6.87 Crore (31 March 2022: NIL) as Late Payment Surcharge on account of delayed reimbursement of POC Charges. The Company is of the view that there is no specified

time-frame for reimbursement of the POC charges. Further, there was a delay in reimbursement of POC charges by the respective discoms.

i) Other claims against the Company not acknowledged as debts '' 2.54 crore crore (31 March 2022: '' 3.82 crore)

j) In two cases, the suppliers have raised various issues concerning interpretation of various clauses of PPAs. The suppliers have filed the Petition before CERC. As the issues are at initial stage and still pending before CERC, the measurement of financial effects of the same is impracticable as on date. Further, in the opinion of the Company, it had fulfilled all its obligations under the agreement and regulations.

ii) Disputed income tax/ custom duty/service tax pending before various forums/ authorities amount to '' 694.67 crore (31 March 2022: '' 585.48 crore). Many of income tax matters were adjudicated in favour of the Company but are disputed before higher forums/ authorities by the concerned departments.

In respect of service tax, the dispute pertains to applicability of service tax on compensation received by the Company which is passed by it to generators/ discoms. Further, the Company is only acting as an intermediary in the transactions and generators/discoms are the ultimate beneficiary of the compensation received. The Company has filed a writ against the Order of the Commissioner, CGST in Delhi High Court. Further, the Ministry of Finance has issued Circular No. 178/10/2022- GST dated August 03, 2022 clarifying that Service tax/ GST is not applicable on compensation since the compensation is not by way of consideration for any other independent activity; it is just an event in the course of performance of that contract. Therefore, the company believes that it has good grounds on merits to defend itself.

Commissioner of Customs, Guntur passed an order confirming duty demand stating that coal imported by PTC had CV (Or m, mmf basis) and VM (on dry, mmf basis) more than 5833 kcal/kg and 14% respectively with reference to the certain vessels and fell under the category of bituminous instead of steam coal. The appeal was filed before CESTAT, Bangalore including stay application for deposit of duty. CESTAT has granted the stay and directed to deposit 50% of the differential duty, along with interest The company has paid a deposit amounting to '' 6.45 crore against custom duty/interest in July, 2015 which is subject to the outcome of the appeal.

iii) Pending resolution of the respective proceedings, it is not practicable for the company to estimate the timings of cash outflows, if any, in respect of the above as it is determinable only on receipt of judgements/decisions pending with various forums/authorities.

Commitments

a). Estimated amount of contracts remaining to be executed on capital account (property, plant & equipment and intangible assets) and not provided for as at 31 March 2023 is '' 0.56 crore (31 March 2022: '' 0.13 crore). The details is as under:-

B. National Pension System (NPS)

The Company pays fixed contribution to NPS to the appropriate authorities. The contributions to the NPS for the year are recognized as expense and are charged to the profit or loss. An amount of '' 0.63 crore (31 March 2022: '' 0.59 crore) for the year is recognised as expense on this account and charged to the Statement of Profit and Loss.

(ii) Defined benefit plans:

A. Gratuity-Funded

a) The Company has a defined benefit gratuity plan. Every employee who has rendered continuous service of five years or more is entitled to gratuity at 15 days salary (15/26 X last drawn basic salary) for each completed year of service subject to a maximum of '' 0.20 crore on superannuation, resignation, termination, disablement or on death.

Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an approximation of the sensitivity of the assumptions shown.

The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period. This analysis may not be representative of the actual change in the defined benefit obligations as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

E. Risk exposure

Through its defined benefit plans, the Company is exposed to a

number of risks, the most significant of which are detailed below:

a) Asset volatility

The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. Most of the plan asset investments are in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimise risk to an acceptable. The equity securities are expected to earn a return in excess of the discount rate and contribute to the plan deficit. Any deviations from the range are corrected by rebalancing the portfolio. The Company intends to maintain the above investment mix in the continuing years.

b) Changes in discount rate

A decrease in discount rate will increase plan liabilities, although this will be partially offset by an increase in the value of the plans’ assets holdings.

The Company actively monitors how the duration and the expected yield of the investments are matching the expected cash outflows arising from the employee benefit obligations. The Company has not changed the processes used to manage its risks from previous periods.

(iii) Other long term employee benefit plans Leave

The Company provides for earned leave benefit (including compensated absences), non-encashable leave (NEL) and half-pay leave (not applicable for new employee joining after November, 2008 and accumulated balance of the same was freezed for the employees existing at that time) to the employees of the Company which accrue annually at 34 days (included compensated absences), 6 days and 20 days respectively. Earned leave (EL) is encashable while in service whereas NEL is non-encashable while in service. Total number of leave (i.e. EL & NEL combined) that can be encashed on superannuation shall be restricted to 300 days and in addition to this half-pay leave is encashable upto 150 days. The scheme is unfunded and liability for the same is recognised on the basis of actuarial valuation. A provision of '' 1.38 crore (31 March 2022: '' 1.43 crore) for the year have been made on the basis of actuarial valuation at the year end and debited to the Statement of Profit and Loss.

Terms and conditions of transactions with the related parties

(a) Transactions with the related parties are made on normal commercial terms and conditions and at market rates.

(b) The Company is deputing its employees to Subsidiaries as per the terms and conditions agreed between the companies, which are similar to those applicable for deputation of employees to other companies and institutions. The cost incurred by the company towards superannuation and employee benefits are recovered from these companies.

(c) The company has given office space on lease to subsidiary company. The rent and other terms and conditions are fixed after mutual discussion and after taking into account the prevailing market conditions.

(d) Outstanding balances of Subsidiaries and other related parties, if any, at the year-end, are unsecured and interest free and settlement occurs through banking transaction. For the year ended 31 March 2023, the company has recorded '' 2.20 Crore on account of impairment and written off amounting to '' 0.59 crore against receivable from related parties (31 March 2022: '' Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

There have been no other transactions involving Equity shares or potential Equity shares between the reporting date and the date of authorisation of these Financial Statements.

Note No.43 - Disclosure as per Ind AS 36 ‘Impairment of Assets’

i) The Company had created an impairment provision of '' 50 Crores during FY 2020-21 against the carrying value of its investment in M/s PTC Energy Limited (PEL), a wholly owned subsidiary of the Company. PEL has received favourable orders from Hon’ble High Court and Hon’ble Supreme Court regarding old Tariff issues with Andhra Pradesh Discom. Further, during the current year PEL has also realized long outstanding dues under the Electricity (Late Payment Surcharge and Related Matters) Rules, 2022 notified by Ministry of Power (MoP).

Taking into the consideration abovementioned positive developments, the Company has carried out fair value assessment of the investments in PEL as on 31st March 2023. Based on the fair value assessment, the Company has reversed the impairment provision of '' 50 crores.

ii) The Company has invested '' 37.55 crore as 49% of equity in its associate

Krishna Godavari Power Utilities Limited (KGPUL)”” for 60 MW Thermal imported coal based project. The project was 90% completed and further progress on the project was stopped due to paucity of funds. One of the lenders has carried out the valuation of assets of the project and based on the valuation report, the company had recognized an impairment loss of '' 37.55 crore in respect of such investment in FY 2015-16.

77,77,500 No of Equity Shares out of total 3,75,48,700 equity shares of '' 10 each at par held by the Company in KGPUL along with the promoter of KGPUL were pledged to Power Finance Corporation (PFC), to comply with the lending requirements of PFC for loan taken by KGPUL. PFC has sought to invoke the said shares and the company consented / given NOC for the same as on June 22, 2018.

KGPUL defaulted in repayment of loan and was referred to NCLT under IBC. NCLT, Hyderabad vide order dated 27.02.2020 approved the Resolution Plan for KGPUL submitted by one of the Applicants. As per the Resolution Plan, equity of the existing shareholders. including that of the Company, has become NIL after the CIRP and the approval of the Resolution Plan by NCLT.

However, Debt Recovery Tribunal, Hyderabad , based on a Petition filed by ARCIL, issued a notice in February 2022 to KGPUL and others including the Company and PFC. As per the notice, it appears that the Petitioner has filed case for recovery of '' 327. 62 Crores more so against the individual promoters who had executed guarantees in favour of the lenders. The petition in this matter has been served on the Company and the Company

is in the process of filing counter/reply and also application to set aside the Petition in Debt Recovery Tribunal to the extent of relief sought against the Company and has been legally advised that there can’t be any liability on it in view of the aforesaid NCLT order approving the Resolution Plan.

Also, refer Note No. 44 for “Reconciliation of impairment loss provisions”.

Note No.44 . Financial Risk Management

The Company’s principal financial liabilities comprise trade payables, borrowings and other payables including financial obligations. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets are trade & other receivables, current investments and cash and short-term deposits that derive directly from its operations. The Company also holds equity investments in subsidiaries, associate companies and other companies.

Risk management framework

The Company’s activities make risk an integral and unavoidable component of business. The company manages risks in a proactive and effective manner and has taken adequate measures to address such concerns by developing adequate systems and practices.

In order to institutionalize the risk management process in the Company, there is a Risk Management Group (RMG) and an elaborate Risk Management Policy (RMP) has been formulated.

Governance Framework

The Governance framework of the Risk Management is constituted by three layers of authority:

i) Board of Directors and Risk Management Committee

ii) Executive Management Team

iii) Functional Head(s)

The process of escalation to and monitoring of risks by the three layers in the Governance framework is built around the following key facilitating roles. A cross functional team approach has been followed to establish a workable and business focused risk management process in PTC.

i) Chief Risk Officer

ii) Risk Owners (typically Functional Heads or functionaries reporting to Functional Heads)

Roles and Responsibilities

Board and Risk Management Committee: Terms of reference of Risk Management Committee of the Board, inter-alia, include the following:

(i) To formulate, review and monitor risk management policy;

(ii) To implement, monitor and review the risk management framework, the risk management plan and related matters; and

(iii) Any other matter as the Committee may deem appropriate after approval of the Board of Directors or as may be directed by the Board of Directors from time to time.

Chief Risk Officer (CRO): The CRO oversees the establishment, monitoring and structuring of risk management process and further monitors its compliance in accordance with relevant provisions of the policy. CRO coordinates between the Risk Management Committee and Executive Management Team to establish an advance / proactive risk reporting system, based on ethical principles, so that risks are understood in a simple and transparent manner.

Executive Management Team: The CEO, Whole Time Directors and other Functional heads of respective Business Units / Functions constitute the Executive Management Team. By virtue of their roles, they are the best equipped to have knowledge and understanding of their respective business functions. Hence, they constitute the first layer of risk review and escalation by risk owners.

Risk Owners: Risk Owners have been delegated the ownership of risks. The Risk Owner is typically the Functional Head or a functionary reporting to her. The risk owner’s responsibilities are guided in accordance with the relevant sections of the Risk Management Policy.

Risk Management Group: Members of the Risk Management Group, supporting the CRO, monitor effective implementation and compliance of the risk management policy. They coordinate among various managerial levels of PTC and the Group Companies to establish processes and ensure smooth and timely flow of information.

Risk Monitors: The RMC meets every quarter or as needed. Risks are regularly monitored through reporting of key performance indicators and tools like Risk Matrix at transaction level. Outcomes/exceptions and aggregate level reports are submitted for information of the Board of Directors.

Group Exposures on Common customers: Constituted for consultation of senior management of PTC and group companies on exposures to common customers.

Note No.44 . Financial Risk Management Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations resulting in a financial loss to the Company. Credit risk arises principally from trade receivables, investment in debt securities, loans & advances, cash & cash equivalents and deposits with banks and financial institutions.

The company has Risk Governance System. To determine whether operations are within the risk appetite of the organisation at any given time, the following parameters are reported to the appropriate layer of the Risk Governance system, and in particular to the Board of Directors and Risk Management Committee periodically:-

For Marketing - a) Short Term: List of all open positions and periods involved in each such position; this is reported on a periodic basis to ensure timely corrective action in case of exigency.

b) Long-Term: List of all agreements where take-or-pay liability was taken by PTC and periods involved in each such position; this is reported on a periodic basis to ensure timely corrective action in case of exigency.

Trade receivables

The company primarily sells electricity to bulk customers comprising mainly state power utilities owned by State Governments generally with security mechanism in the form of Letters of Credit. The company has no experience of significant impairment losses in respect of trade receivables in the past years.

For purchase of power through Power Exchange(s), for clients other than state owned power utilities, the company either takes payments from the parties on advance basis or ensures security mechanism in the form of Bank Guarantee/ Letter of Credits. Transactions with state owned power utilities may sometimes be made without security mechanism. However, transactions with state owned power utilities are within manageable Risk thresholds.

Investments in marketable securities

The company invests in marketable securities to park its short term working capital funds.

The Board of directors has established an investment policy by taking into account liquidity risk as well as credit risk. The investment policy prescribes guidelines for investible funds on fulfillment of certain conditions i.e. investment in AMC who invest as per SEBI Guidelines, limit of investment in single AMC, performance rating etc. The Company’s treasury department operates in line with such policy. The treasury department actively monitors the return rate and maturity period of the investments. The Company has not experienced any significant impairment losses in respect of any of the investments.

Loans & advances

The Company has given open access advances and security deposits. There is insignificant risk in case of open access advances paid on account of state owned power utilities. In case of open access advances are paid on account of generators, the Company generally takes irrevocable undertaking from the generators to adjust the amounts against their running accounts in case of default. The company has no experience of significant impairment losses in respect of open access advances in the past years.

Cash and cash equivalents

The Company held cash and cash equivalents of '' 915.38 crore (31 March 2022: '' 868.59 crore). The cash and cash equivalents are held with banks with high credit ratings.

Deposits with banks and financial institutions

The Company held deposits with banks and financial institutions of '' 683.00 Crore (31 March 2022: '' 27.00 crore). In order to manage the risk, the Company makes these deposit with high credit rating as per investment policy of the company. Deposits with banks and financial institutions are inclusive of deposit of '' 425 crore (31 March 2022: '' NIL) shown under cash and cash equivalents (refer note no. 13).

(ii) Provision for expected credit losses

(a) Financial assets for which loss allowance is measured using 12 month expected credit losses

The company has assets where the counter- parties have sufficient capacity to meet the obligations and where the risk of default is very low. Accordingly, loss allowance for impairment has been recognised as disclosed later in this note under “Reconciliation of impairment loss provisions”.

(b) Financial assets for which loss allowance is measured using life time expected credit losses

The company has customers (State government utilities) with sufficient capacity to meet the obligations and therefore the risk of default is negligible or low. Further, management believes that the unimpaired overdue amounts are still collectible in full, based on historical payment behavior. However, the management has made provision for expected impairment loss for the parties identified on

node

Trade receivables include '' 150.00 Crore (31 March 2022: '' 222.75 crore) of bill of exchange drawn on state utilities (customers) and discounted with banks based on arrangements between Company, banks and state utilities. Further, the interest amounting to '' 10.98 Crore (31 March 2022: '' 10.67 Crore) paid to bank under bill of exchange arrangements has been reimbursed by utilities.

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

The Company has an appropriate liquidity risk management framework for the management of short, medium and long term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate cash reserves/banking facilities/ reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

The Company’s treasury department is responsible for managing the short term and long term liquidity requirements of the Company. Short term liquidity situation is reviewed daily by Treasury. The Board of directors has established an investment policy by taking into account liquidity risk as well as credit risk. The Company’s treasury department operates in line with such policy. Long term liquidity position is reviewed by the Board of Directors and appropriate decisions are taken according to the situation.

Commercial department and Finance department monitor the company’s net liquidity position by monitoring the level of expected cash inflows on trade and other receivables together with expected cash outflows on trade and other

payables.

Typically the Company ensures that it has sufficient cash on demand to meet expected operational expenses and payments to trade payables including the

payables and other financial liabilities are considered to be the same as their fair values, due to their short-term nature.

The carrying values for finance lease receivables, if any, approximates the fair value as these are periodically evaluated based on credit worthiness of customer and allowance for estimated losses is recorded based on this evaluation.

The fair values for lease obligation were calculated based on cash flows discounted using a discount rate. The carrying amount of finance lease obligations approximate its fair value.

For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.

Note No.46 . Capital Management & Gearing Ratio

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the company. The primary objective of the Company’s capital management is to maximize the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders, raise debts or issue new shares.

Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes investments in quoted equity instruments. Quoted equity instruments are valued using quoted prices at stock exchanges.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. This level includes mutual funds which are valued using the closing NAV.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unquoted equity instruments included in level 3.

There have been no transfers in either direction for the years ended 31 March 2023 and 31 March 2022

Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

''Jote No. 48 Corporate social responsibilities expenses (CSR)

) As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. A CSR committee has been formed by the Company as per the Act. The CSR funds are utilized during the year on the activities which are specified in Schedule VII of the Companies Act, 2013 as per CSR policy of the Company:

- the use of quoted market prices

- the fair value of the remaining financial instruments is determined using discounted cash flow/net adjusted asset value/ book value analysis/ NAV.

C) Fair value of financial assets and liabilities measured at amortised cost

The carrying amounts of trade receivables, cash and cash equivalents, loans, other bank balances, Investment (other than investment in subsidiaries, associates and joint ventures accounted at the cost in accordance with Ind AS 27 ‘Separate Financial Statements’), other financial assets, trade

Performance obligation

Information about the Company’s performance obligations are summarised below:

i) Sale of Power

The performance obligation is satisfied upon delivery of power and payment is generally due within 30 to 60 days from delivery. The contract generally provide customers with a right to early payment rebate which give rise to variable consideration subject to constraint.

ii) Rendering of Service

The performance obligation is satisfied over-time and payment is generally due upon completion of stage of service and acceptance of the customer. In some contracts, short-term advances are required before the consultancy is provided.

iii) Transactions identified as of agency nature

There are contracts with customers where the company acts in accordance with timely instruction of the customer and bids at Exchange platform in accordance with the procedures laid down by the Exchange. The performance obligation is satisfied and payment is due upon delivery of power to the customer.

Note No. 50 - Other information

a) The company is engaged in the business of power which in context of Ind AS 108- “Operating Segments”, is considered as the operating segment of the company.

f) (i) In accordance with the accounting policy, the surcharge recoverable

on late/ non-payment of dues by customers is recognized when no significant uncertainty as to measurability or collectability exists. Correspondingly surcharge liabilities on late/ non-payments to the suppliers, in view of the matching concept, is not being recognized in the accounts. The estimated liability in this regard, however is lower than the company’s claims from its customers.

(ii) During the year, the company has recognized surcharge of '' 306.33 crore (previous year, '' 452.61 crore) from customers on amounts overdue on sale of power which has been included in “Revenue from operations”. Correspondingly surcharge expense of '' 126.12 crore (previous year, '' 102.14 crore) paid/payable to sundry creditors has been included in “Operating expenses”.

g) Amount in the financial statements are presented in '' crore (upto two decimals) except for per share data and as other-wise stated.

h) Disclosure as per Ind AS 103 ‘Business Combinations’:

Acquisition during the year ended 31.03.2023

During the year, the Company has acquired the energy advisory business undertaking of IL&FS Energy Development Company Limited (IEDCL) on a going concern basis, by way of a slump sale at a consideration of '' 14.90 Crore.

i) The Primary reasons for the acquisition:

a) Business development of the Company.

b) Achieve economies of scale by synergizing with the existing energy advisory business of the company and strong presence of the Company in the consultancy field.

ii) Consideration transferred:

The Company paid '' 14.90 Crore as purchase consideration in cash for acquisition of energy advisory business undertaking of IEDCL.

If the acquisitions during the year ended March 31, 2023, had been consummated on April 1, 2022, management estimates that consolidated revenues for the Company would have been '' 14894.37 Crore and the profit after taxes would have been '' 370.76 Crore for the year ended March 31, 2023. The pro-forma amounts are not necessarily indicative of the actual or future results if the acquisition had been consummated on April 1, 2022.

j) The Company and its subsidiary (PTC India Financial Services Limited) had signed an agreement in March, 2017 for acquisition of land (share of 50% each) situated at Greater Noida Expressway, Noida, Uttar Pradesh to be used for construction of office building of PTC Group. Accordingly, the Company deposited its share (50%) of the transfer charges of '' 10.26 Crores with Yamuna Expressway Industrial Development Authority (YEIDA) for transfer of the land. Subsequently, YEIDA cancelled the approval for transfer and forfeited the transfer charges deposited, citing the reason as delay in registration, however, the delay was not attributable to the Company. The Company has filed an appeal before Principal Secretary, Urban Development, Government of UP as per directions of Allahabad High Court for retrieving the forfeited amount.

Presently, the matter is pending before Principal Secretary, Government of UP. As the Company had cancelled the land deal, as a matter of abundant caution, a provision against the amount deposited with YEIDA was created in FY 2020-21.

k) i) On January 19, 2022, three Independent Directors of PTC India

v) Acquisition related costs:

The Company incurred acquisition-related costs of '' 0.02 Crore on professional fees. These costs have been included in “Other Expenses” in Statement of Profit and Loss and under operating activities in the Statement of Cash Flows.

vi) Revenue and profit contribution

The Company acquired energy advisory business of IEDCL with effect from July 27, 2022. During the period from July 27.2022 to March 31, 2023, the acquired business contributed revenue of '' 14.72 Crore and Profit of '' 5.13 Crore to the Company’s result.

Financial Services Limited (PFS), a subsidiary of the Company, had resigned, mentioning lapses in corporate governance and compliance. To address the issues raised by independent directors who had resigned, on November 4, 2022, the forensic auditor appointed by PFS, submitted its forensic audit report (FAR). PFS engaged a reputed professional services firm to independently review its management’s response submitted in FAR and documents supporting such response and commenting on such observations, including financial implications and any indication towards suspected fraud. PFS management’s responses and remarks of professional services firm, together with report of its forensic auditor, had been presented by PFS management to the PFS Board in its meeting held on November 7, 2022 and November 13, 2022 and PFS Board observed that forensic auditor has not identified any event having material impact on the financials of PFS and has not identified any instance of fraud and/or diversion of funds by PFS. Presently communications / correspondences is going on with SEBI, Stock exchanges, RBI and ROC on the matters stated in resignation letters referred above and/ or the Forensic audit report. Pursuant to the direction of RBI vide its letter dated January 6 ,2023, Board of directors of PFS in its meeting held on February 3 ,2023 has revisited the findings of the FAR and again took on record that the forensic auditor had not identified any event having material impact on the financials of PFS and also have not identified any instances of fraud and diversion of funds by PFS and/or by its employees. Registrar of Companies, Ministry of Corporate Affairs, NCT of Delhi & Haryana (ROC) has issued four

show-cause notices (SCNs) dated February 14, 2023 and February 16, 2023 to PFS and its KMPs for non compliances of the provisions of section 149(8), 177(4)(v) & (vii) and 178 of the Companies Act, 2013 and PFS has submitted its replies on March 14 & 17, 2023 and April 24, 2023 denying the non-compliances mentioned in above SCNs and has prayed to the ROC for withdrawal of these SCNs which is pending. PFS management believes that there will be no material financial impact of these on the state of affairs of PFS.

ii) Two independent directors of PFS have resigned w.e.f. 2nd December 2022 mentioning various concerns which includes the matters raised by the earlier independent directors of PFS who have resigned on 19th January 2022, concerns related to conduct and outcome of forensic audit, divergent views of the directors and management on the outcome of forensic audit report, meetings called at short notice/ without adequate notice, violation of SEBI directive regarding change in Board composition, submission of proposal for grant of facilities to the Business Committee/ Board during the period after April 2022 which were not in compliance with the extant policy laid down by the Board and few other matters as detailed in their resignation letters filed by PFS with the stock exchanges. PFS has rebutted these claims and submitted its reply with the stock exchanges and Reserve Bank of India and in this regard presently communications/correspondences is going on and PFS management believes that there will be no material financial impact of these on the state of affairs of PFS.

iii) In respect of PFS, the certain pending minutes of meetings of audit committee and IT strategy committee held since April 8, 2022 till November 14,2022 have been finalized, basis recordings/videos of such meeting and in this regard a certificate from an external legal expert has been taken on record. Further, these minutes have been signed by the current chairman(s) of the respective committees of PFS. PFS believes that the relevant provisions of Companies Act, 2013 have been complied with and there will be no material impact on its state of affairs.

iv) Securities and Exchange Board of India (SEBI) has sent a Show Cause Notice (SCN) dated May 08,2023 to Managing Director and Chief Executive Officer (MD & CEO) and Non-Executive Chairman of PFS, on matters of Corporate Governance Issues raised by Independent Directors who resigned on January 19, 2022 and December 2, 2022, as detailed in (i) & (ii) above, under Sections 11(1), 11(4), 11(4A), 11B(1) and 11B(2) read with section 15HB of the SEBI, 1992 read with SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995. In this regard PFS Audit Committee and PFS Board of Directors have noted and taken on record that the above stated SCN which issued by SEBI to the MD & CEO and Non-Executive Chairman , is in their individual name/capacity ( addressed to ) . Presently, as informed, MD & CEO and the Non-Executive Chairman both are in the process of preparing replies (also in process of compiling all required data / records / information/ details). PFS believes that the issues raised in SCN will be resolved on submission of detailed evidence/ information/ replies/ details by the MD & CEO and the Non-Executive Chairman and there will be no financial implications/ impact on this account on the state of affairs of PFS and the same has been noted and taken on record by PFS Audit Committee and PFS Board of Directors in their respective meetings held on May 18, 2023.

l) i) The Company has received resignation letters from its three independent directors w.e.f. December 05, 2022 and one

independent director w.e.f. December 06, 2022 wherein they have

raised issues related to corporate governance and compliance, divergent views of Board members and non-implementation of recommendations in respect of RMC report of the Company, calling meetings at short notice and few other matters as detailed in their resignation letters filed by the Company with the stock exchanges. The Board of the Company has noted these resignation letters and the management’s replies thereon in its meetings dated 6th December and 7^th December 2022. Further, the Company has rebutted these claims and has submitted the clarifications on the issues raised by these independent directors to the stock exchanges on 8^th December 2022.

ii) Due to the resignation of four independent directors of the company, the composition of Board of the Company was not in accordance with the requirement of the Regulations in terms of minimum number of independent directors. The Company has appointed requisite number of independent directors by April 13, 2023, hence its Board Composition is now in compliance with Regulations.

m) Additional Information

The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period,

The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

The Company has not advanced or loaned or invested funds to any other person(s) or entity, 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

The Company has not received any fund from any person or entity, 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

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.

The Company has not done any transaction with Struck off Companies during the year ended 31st March 2023.

The title deed of immovable prosperities of the Company are held in the name of the Company.

The Company is not declared willful defaulter by any bank or financial institution of any other lenders.

p). The figures for the corresponding previous years have been re-grouped/ reclassified, wherever necessary, to make them comparable.

---

Mar 31, 2022

The Company had pledged, in favour of Power Finance Corporation Limited (PFC), 77,77,500 Equity Shares of '' 10 each at par held by it in M/s. Krishna Godavari Power Utilities Limited (KGPUL) along with the promoter of KGPUL to comply with the lending requirements of PFC for loan taken by KGPUL. PFC has sought to invoke the said shares and the company consented / given NOC for the same as on June 22, 2018. Debt Recovery Tribunal has issued a notice in February 2022 to KGPUL and others including the Company and PFC. As per the notice, it appears that the Petitioner has filed case for recovery of '' 327. 62 Crore. The Company is yet to receive the copy of petition.

a) Trade receivables are hypothecated to the banks for availing the fund based and non- fund based working capital facilities.

b) Trade receivables include an amount of '' 16.23 Crore due from Tamil Nadu Electricity Board (TNEB), now TANGEDCO, towards compensation claim. Sole arbitrator gave an Award against the company which had been set aside by Single Judge of Madras High Court giving an option to the Company to invoke the Arbitration afresh to recover its dues. Meanwhile, TNEB filed an Appeal in Madras HC against the order of the single judge and the proceedings are going on. The management assessed that the chances of a decision in favor of the company is high as the compensation amount has not been paid by TNEB in terms of the Agreement.

c) Trade receivables include '' 222.75 crore (Previous year '' 376.16 crore) of bills of exchange drawn on state utilities (customers) and discounted

There are no amounts due and outstanding to be credited to the Investor Education and Protection Fund as at year end.

* Fixed Deposits earmarked against amount received from a supplier as performance bank guarantee.

Terms and rights attached to each share.

The Company has only one class of equity shares having a par value '' 10/-per share. The holders of the equity shares are entitled to receive dividends as declared from time to time and are entitled to voting rights proportionate to their share holding at the meetings of shareholders.

* The Company had executed Corporate Guarantees for '' 200 Crore in favour of working capital lenders of its subsidiary company for the purpose of meeting additional working capital requirements of the subsidiary company. For executing corporate guarantee, the Company has charged consideration determined at arm length basis from the subsidiary company. (also refer note no. 40)

(ii) Dividends not recognised at the end of the reporting period

The Board of Directors had declared first interim dividend @ 20% of the face value of '' 10 per share ('' 2 per equity share) for the FY 2021-22 in November, 2021. The proposal for payment of second interim dividend for FY 21-22 was deferred by the Board of Directors in their meeting dated 5^th July, 2022. The payment of further dividend for FY 2021-22 is now proposed to be considered in the Board meeting wherein consolidated accounts of FY 21-22 will be adopted. Hence, there is no unrecognized dividend as on

31.03.2022.

Nature and purpose of reserves:Securities premium

Securities premium account is used to record the premium on issue of shares/ securities. This amount is utilised in accordance with the provisions of the Companies Act, 2013.

Share option outstanding account

The share option outstanding account is used to record the value of equity settled share based payment transactions with employees. The amounts recorded in this account are transferred to share premium upon exercise of stock options by employees.

General reserve

General Reserve is a free reserve which is created from retained earnings. The Company may pay dividend and issue fully paid-up bonus shares to its members out of the general reserve account, and company can use this reserve for buy-back of shares.

Contingent reserve

Contingent Reserve is a free reserve which is created from retained earnings. The company may use it to meet any contingency.

Retained earnings

Retained earnings comprise of the Company’s undistributed earnings after taxes.

FVOCI-Equity investment reserve

The Company has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive income. These changes are accumulated within FVTOCI reserve within equity. The Company transfers amounts from this reserve to retained earnings when the relevant equity securities are derecognised.

i) Claims against the Company not acknowledged as debt include:

a) The company had an arrangement with a supplier for purchase of power. The supplier claimed that the company did not off take the contracted power and claimed a compensation of '' 84.95 Crore (31 March 2021: '' 84.95 crore). The arbitrator concluded the arbitration in favour of the company, however, the supplier has contested the award at High Court.

b) The company had an arrangement with a supplier for purchase of power. However, due to the prevalent market situation, the company was unable to find a buyer for power from the supplier for most of the contracted period. The supplier raised a compensation bill of '' 43.28 Crore (31 March 2021: '' 43.28 crore) for non-supply of power. The matter is pending at Supreme Court. The company has paid an amount of '' 20.48 crore as deposit, and the same is subject to the outcome of the appeal pending before Supreme Court.

c) Pursuant to dispute with one of the suppliers, the supplier agreed to pay the LTA charges but subsequently refuted its liability to pay the LTA charges. The Central Transmission Utility (CTU) has raised a claim of '' 31.68 Crore (31 March 2021: '' 31.68 crore) on the company towards the outstanding LTA charges. However subsequently company surrendered the long term open access (LTA). The claim of CTU is being contested before Appellate Tribunal of Electricity, which has granted a stay on the order of CERC.

d) CERC has allowed the petition filed by one of the Company’s suppliers and inter alia passed certain orders/ directions against the Company for paying 100% of the Long Term Open Access charges even though only 95% of the quantum of power is being supplied by its supplier under an interim directions of Hon’ble Supreme Court of India and directing the Company to refund the transmission charges of '' 21.77 Crore (31 March 2021: '' 21.77 crore) collected from the supplier which is corresponding to 5% of LTA. The Company has filed appeal against the CERC order in Appellate Tribunal for Electricity and APTEL had granted stay of the order of CERC.

e) The Company had a PPA of 1200 MW of power with one of its suppliers, out of which 840 MW was to be sold on long term basis, 216 MW on Merchant trade basis and balance 144 MW was the free power of the home state. For sale of 840 MW on long term basis,-PTC had PSAs with four DISCOMS. However there was considerable delay on account of certain Force Majeure events and two DISCOMs illegally terminated the said PSAs and refused to off-take power under the PSAs. The Company had relinquished LTA in respect of these two DISCOMS.

Though the Company had taken the LTA but it was agreed that it was being taken on behalf of DISCOMS which were liable to pay the transmission charges. However, PGCIL claimed charges of '' 209.51 Crore (31 March 2021: '' 209.51 crore) from the Company against relinquishment of LTA along with relinquishment charges for Merchant Power and Free Power computed as per formula approved by CERC. The formula approved by CERC is under challenge in APTEL. As per PSAs the liability for payment of transmission charges was of DISCOMs. The liability towards relinquishment charges on the Company are being contested in CERC/ APTEL (for merchant power).

f) One to the suppliers provided power to the Company from another source. The customer did not pay to the Company for power supplied from the another source. Further, the customer also deducted compensation from the Company for short supply of power by not considering power supplied from the another source. Consequently the Company also deducted the corresponding amounts from the supplier. This deduction was challenged by the supplier before TNERC which directed the Company to pay the principal amount including interest which computed to '' 19.87 Crore. The Company has filed Appeal in APTEL along with an Application for Interim Stay of the order of TNERC.

g) In two cases, the suppliers have raised various issues concerning interpretation of various clauses of PPAs. The suppliers have filed the Petition before CERC. As the issues are at initial stage and still pending before CERC, the measurement of financial effects of the same is impracticable as on date. Further, in the opinion of the Company, it had fulfilled all its obligations under the agreement and regulations.

h) Other claims against the Company not acknowledged as debts '' 3.82 crore (31 March 2021: '' 2.54 crore)

ii) Disputed income tax/ custom duty/service tax pending before various forums/ authorities amount to '' 585.48 crore (31 March 2021: '' 585.48 crore). Many of income tax matters were adjudicated in favour of the Company but are disputed before higher forums/ authorities by the concerned departments.

In respect of service tax, the dispute pertains to applicability of service tax on compensation received by the Company which is passed by it to generators/discoms. Further, PTC is only acting as an intermediary in the transactions and generators/discoms are the ultimate beneficiary of the compensation received. The Company has filed a writ against the Order of the Commissioner, CGST in Delhi High Court. The company believes that it has good grounds on merits to defend itself and the chances of a decision in its favor is high.

Commissioner of Customs, Guntur passed an order confirming duty demand stating that coal imported by PTC had CV (Or m, mmf basis) and VM (on dry, mmf basis) more than 5833 kcal/kg and 14% respectively with reference to the certain vessels and fell under the category of bituminous instead of steam coal. The appeal was filed before CESTAT, Bangalore including stay application for deposit of duty. CESTAT has granted the stay and directed to deposit 50% of the differential duty, along with interest The company has paid a deposit amounting to '' 6.45 crore against custom duty/interest in July, 2015 which is subject to the outcome of the appeal.

iii) Pending resolution of the respective proceedings, it is not practicable for the company to estimate the timings of cash outflows, if any, in respect of the above as it is determinable only on receipt of judgements/decisions pending with various forums/authorities.

ii) Corporate Guarantee

During FY 2021-22, the Board approved the issuance of corporate guarantee of '' 225 Crore in favour of working capital lenders of PTC Energy Limited (PEL), a subsidiary of the Company. Out of the approved limit of '' 225 Crore, the Company executed corporate guarantee for '' 200 Crore in favour of working capital lenders of PEL for the purpose of meeting additional working capital requirements

of PEL in FY 2021-22.

Further, the Board in its meeting dated 31.05.2022 has approved additional issuance of corporate guarantee of '' 50 Crore (in addition of '' 225 Crore approved already). Subsequently, the Company has also executed additional corporate guarantee for '' 75 Crore (in addition of '' 200 Crore executed already) in favour of working capital lenders of PEL for the purpose of meeting additional working capital requirements of PEL.

Note No.39 - Disclosure as per Ind AS 19 ‘Employee benefits’

(i) Defined contribution plans:

A. Provident fund

The Company pays fixed contribution to provident fund to the appropriate authorities. The contributions to the fund for the year are recognized as expense and are charged to the profit or loss. An amount of '' 1.22 crore (31 March 2021: '' 1.19 crore) for the year is recognised as expense on this account and charged to the Statement of Profit and Loss.

B. National Pension System (NPS)

The Company pays fixed contribution to NPS to the appropriate authorities. The contributions to the NPS for the year are recognized as expense and are charged to the profit or loss. An amount of '' 0.59 crore (31 March 2021: '' 0.58 crore) for the year is recognised as expense on this account and charged to the Statement of Profit and Loss.

(ii) Defined benefit plans:

A. Gratuity-Funded

a) The Company has a defined benefit gratuity plan. Every employee who has rendered continuous service of five years or more is entitled to gratuity at 15 days salary (15/26 X last drawn basic salary) for each completed year of service subject to a maximum of '' 0.20 crore on superannuation, resignation, termination, disablement or on death.

B. Post-Retirement Medical Benefits (PRMB)- Non-funded

The Company has Post-Retirement Medical Facility Benefits (PRMB), under which the eligible retired employees and their spouses are provided medical facilities and an out-patient actual medical reimbursement subject to a ceiling fixed by the Company. The liability for the same is recognised annually on the basis of actuarial valuation.

Based on the actuarial valuation obtained in this respect, the following table sets out the status of the gratuity and the amounts recognised in the Company’s financial statements as at balance sheet date:

The estimates of future salary increases considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. Further, the expected return on plan assets is determined considering several applicable factors mainly the composition of plan assets held, assessed risk of asset management and historical returns from plan assets.

Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an approximation of the sensitivity of the assumptions shown.

The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period. This analysis may not be representative of the actual change in the defined benefit obligations as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

E. Risk exposure

Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:

a) Asset volatility

The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield,

this will create a deficit. Most of the plan asset investments are in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimise risk to an acceptable. The equity securities are expected to earn a return in excess of the discount rate and contribute to the plan deficit. Any deviations from the range are corrected by rebalancing the portfolio. The Company intends to maintain the above investment mix in the continuing years.

b) Changes in discount rate

A decrease in discount rate will increase plan liabilities, although this will be partially offset by an increase in the value of the plans’ assets holdings.

The Company actively monitors how the duration and the expected yield of the investments are matching the expected cash outflows arising from the employee benefit obligations. The Company has not changed the processes used to manage its risks from previous periods.

in service. Total number of leave (i.e. EL & NEL combined) that can be encashed on superannuation shall be restricted to 300 days and in addition to this half-pay leave is encashable upto 150 days. The scheme is unfunded and liability for the same is recognised on the basis of actuarial valuation. A provision of '' 1.43 crore (31 March 2021: '' 0.86 crore) for the year have been made on the basis of actuarial valuation at the year end and debited to the Statement of Profit and Loss.

Leave

The Company provides for earned leave benefit (including compensated absences), non-encashable leave (NEL) and half-pay leave (not applicable for new employee joining after November, 2008 and accumulated balance of the same was freezed for the employees existing at that time) to the employees of the Company which accrue annually at 34 days (included compensated absences), 6 days and 20 days respectively. Earned leave (EL) is encashable while in service whereas NEL is non-encashable while

Terms and conditions of transactions with the related parties

(a) Transactions with the related parties are made on normal commercial terms and conditions and at market rates.

(b) The Company is deputing its employees to Subsidiaries as per the terms and conditions agreed between the companies, which are similar to those applicable for deputation of employees to other companies and institutions. The cost incurred by the company towards superannuation and employee benefits are recovered from these companies.

(c) Outstanding balances of Susbsidiaries and other related parties, if any, at the year-end, are unsecured and interest free and settlement occurs through banking transaction. For the year ended 31 March

ii) The Company has invested '' 37.55 crore as 49% of equity in its associate “Krishna Godavari Power Utilities Limited (KGPUL)” for 60 MW Thermal imported coal based project. The project was 90% completed and further progress on the project was stopped due to paucity of funds. One of the lenders has carried out the valuation of assets of the project and based on the valuation report, the company had recognized an impairment loss of '' 37.55 crore in respect of such investment in FY 2015-16. The Company has pledged, in favour of Power Finance Corporation Limited (PFC), 77,77,500 Equity Shares of '' 10 each at par out of total shares of 3,75,48,700 held by it in M/s. Krishna Godavari Power Utilities Limited (KGPUL) along with the promoter of KGPUL to comply with the lending requirements of PFC for loan taken by KGPUL. PFC has sought to invoke the said shares and the company consented / given NOC for the same as on June 22, 2018. Debt Recovery Tribunal has issued a notice in February 2022 to KGPUL and others including the Company and PFC. As per the notice, it appears that the Petitioner has filed case for recovery of '' 327. 62 Crore. The Company is yet to receive the copy of petition.

2022, the company has not recorded any impairment of receivables relating to amounts owed by related parties (31 March 2021: '' Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

Also, refer Note No. 44 for “Reconciliation of impairment loss provisions”.

Note No.44 . Financial Risk Management

The Company’s principal financial liabilities comprise trade payables, borrowings and other payables including financial obligations. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets are trade & other receivables, current investments and cash and short-term deposits that derive directly from its operations. The Company also holds equity investments in subsidiaries, associate companies and other companies.

There have been no other transactions involving Equity shares or potential Equity shares between the reporting date and the date of authorisation of these Financial Statements.

Note No.43 - Disclosure as per Ind AS 36 ‘Impairment of Assets’

i) The Company had created an impairment provision of '' 50.00 Crore against the carrying value of its investment in M/s PTC Energy Limited (PEL) in FY 2020-21 considering the prevailing market conditions. The impairment provision against the carrying value of the investment continues to exist as there is no significant change in the prevailing market conditions considered at the time of creating of the impairment provision last year.

Risk management framework

The Company’s activities make risk an integral and unavoidable component of business. The company manages risks in a proactive and effective manner and has taken adequate measures to address such concerns by developing adequate systems and practices.

In order to institutionalize the risk management process in the Company, there is a Risk Management Group (RMG) and an elaborate Risk Management Policy (RMP) has been formulated.

Governance Framework

The Governance framework of the Risk Management process is constituted by three layers of authority:

i) Board of Directors, Risk Management Committee and Audit Committee

ii) Executive Management Team

iii) Functional Head(s)

The process of escalation to and monitoring of risks by the three layers in the Governance framework is built around the following key facilitating roles. A cross functional team approach has been followed to establish a workable and business focused risk management process in the PTC Group.

i) Chief Risk Officer (reporting to Risk Management Committee)

ii) Risk Owners (typically Vice President level functionaries reporting to Functional Heads)

iii) Risk Monitors Roles and Responsibilities

Board, Risk Management Committee and Audit Committee: Terms of reference of Risk Management Committee shall, inter-alia, include the following:

(i) To formulate, review and monitor risk management policy;

(ii) To implement, monitor and review the risk management framework, the risk management plan and related matters; and

(iii) Any other matter as the Audit Committee may deem appropriate after approval of the Board of Directors or as may be directed by the Board of Directors from time to time.

Chief Risk Officer (CRO): The CRO provides inputs and insights in the establishment, monitoring and structuring risk management process and further monitor its compliance in accordance with relevant provisions of the policy. CRO coordinates between the Risk Management Committee and Executive Management Team to establish an advance / proactive risk reporting system, based on ethical principles, so that risks are understood in a simple and transparent manner.

Executive Management Team: The CEO, Whole Time Directors and other Functional heads of respective Business Units / Functions constitute the Executive Management Team. By virtue of their roles, they are the best equipped to have knowledge and understanding of their respective business functions. Hence, they constitute the first layer of risk review and escalation by risk owners.

Risk Owners: Risk Owners have been delegated the ownership of risks. The Risk Owner is typically an officer of a sufficiently experienced level like Vice President / Sr. Vice President. The risk owner’s responsibilities are guided in accordance with the relevant sections of the Risk Management Policy.

Risk Management Group: Members of the Risk Management Group, supporting the CRO, monitor effective implementation and compliance of the risk management policy. They coordinate among various managerial levels of PTC and the Group Companies to establish processes and ensure smooth and timely flow of information.

Risk Monitors: Risk monitors in each Business Unit constitute a cross functional team that works closely to engage in the deployment of an active risk management process that permeates the group. A Risk Monitor a) takes up new risks for discussion b) helps evolve risk responses and c) works as an extended arm of Risk Management Group in the unit / function in managing and reporting risks.

The RMG meets every quarter or as needed. Risks are regularly monitored through reporting of key performance indicators and tools like Risk Matrix at transaction level. Outcomes/exceptions and aggregate level reports are submitted for information of the Board of Directors.

Group Exposures on Common customers: Constituted for consultation of senior management of PTC and group companies on exposures to common customers.

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations resulting in a financial loss to the Company. Credit risk arises principally from trade receivables, investment in debt securities, loans & advances, cash & cash equivalents and deposits with banks and financial institutions.

The company has Risk Governance System. To determine whether operations are within the risk appetite of the organisation at any given time, the following parameters are reported to the appropriate layer of the Risk Governance system, and in particular to the Board of Directors and Audit Committee periodically:-

For Marketing - a) Short Term: List of all open positions and periods involved in each such position; this is reported on a periodic basis to ensure timely corrective action in case of exigency.

b) Long-Term: List of all agreements where take-or-pay liability was taken by PTC and periods involved in each such position; this is reported on atleast a periodic basis to ensure timely corrective action in case of exigency.

Trade receivables

The company primarily sells electricity to bulk customers comprising mainly state power utilities owned by State Governments generally with security mechanism in the form of Letters of Credit. The company has no experience of significant impairment losses in respect of trade receivables in the past years.

For purchase of power through Power Exchange(s), for clients other than state owned power utilities, the company either takes payments from the parties on advance basis or ensures security mechanism in the form of Bank Guarantee/ Letter of Credits. Transactions with state owned power utilities are generally made without security mechanism, however transactions being with state owned power utilities, the risk is insignificant.

Investments in marketable securities

The company invests in marketable securities to churn its short term working capital funds.

The Board of directors has established an investment policy by taking into account liquidity risk as well as credit risk. The investment policy prescribes guidelines for investible funds on fulfillment of certain conditions i.e. investment in AMC who invest as per SEBI Guidelines, limit of investment in single AMC, performance rating etc. The Company’s treasury department operates in line with such policy. The treasury department actively monitors the return rate and maturity period of the investments. The Company has not experienced any significant impairment losses in respect of any of the investments.

Loans & advances

The Company has given open access advances and security deposits. There is insignificant risk in case of open access advances paid on account of state owned power utilities. In case of open access advances are paid on account of generators, the Company generally takes irrevocable undertaking from the generators

to adjust the amounts against their running accounts in case of default. The company has no experience of significant impairment losses in respect of open access advances in the past years.

Cash and cash equivalents

The Company held cash and cash equivalents of '' 868.59 crore (31 March 2021: '' 416.09 crore). The cash and cash equivalents are held with banks with high credit ratings.

Deposits with banks and financial institutions

The Company held deposits with banks and financial institutions of '' 27.00 Crore (31 March 2021: '' NIL crore). In order to manage the risk, the Company makes these deposit with high credit rating as per investment policy of the company.

(ii) Provision for expected credit losses

(a) Financial assets for which loss allowance is measured using 12 month expected credit losses

The company has assets where the counter- parties have sufficient capacity to meet the obligations and where the risk of default is very low. Accordingly, loss allowance for impairment has been recognised as disclosed later in this note under “Reconciliation of impairment loss provisions”.

(b) Financial assets for which loss allowance is measured using life time expected credit losses

The company has customers (State government utilities) with sufficient capacity to meet the obligations and therefore the risk of default is negligible or low. Further, management believes that the unimpaired overdue amounts are still collectible in full, based on historical payment behavior. However, the management has made provision for expected impairment loss for the parties identified on case to case basis.

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

The Company has an appropriate liquidity risk management framework for the management of short, medium and long term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate cash re serve s/banking facilities/ reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

The Company’s treasury department is responsible for managing the short term and long term liquidity requirements of the Company. Short term liquidity situation is reviewed daily by Treasury. The Board of directors has established an investment policy by taking into account liquidity risk as well as credit risk. The Company’s treasury department operates in line with such policy. Long term liquidity position is reviewed by the Board of Directors and appropriate decisions are taken according to the situation.

Commercial department monitors the company’s net liquidity position by monitoring the level of expected cash inflows on trade and other receivables together with expected cash outflows on trade and other payables.

Typically the Company ensures that it has sufficient cash on demand to meet expected operational expenses and payments to trade payables including the servicing of financial obligations, this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.

Market risk is the risk that changes in market prices that will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

The Board of directors is responsible for setting up of policies and procedures to manage market risks of the Company.

Currency risk

The Company is exposed to foreign currency risk on certain transactions that are denominated in a currency other than entity’s functional currency, hence exposure to exchange rate fluctuations arises. The risk is that the functional currency value of cash flows will vary as a result of movements in exchange rates.

At present, the company has a Forex Risk Management Policy for hedging of foreign currency risk.

Price risk sensitivity analysis

The following table details the Company’s sensitivity to a 1% increase and decrease in the NAV of investments held. The sensitivity analysis includes only outstanding investments and adjusts their position at the period end for a 1% change in NAV. A positive number below indicates an increase in profit or equity where NAV increases by 1%. For a 1% weakening in NAV, there would be a comparable impact on the profit or equity, and the balances below would be negative.

In Company’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk and price risk because the exposure at the end of the reporting period does not reflect the exposure during the year.

Interest rate risk

The company’s fixed rate instruments are carried at amortised cost. They are therefore not subject to interest rate risk, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

Price risk

Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in net asset value (NAV) of the financial instruments held.

The Company’s price risk is mainly generated with fair value in respect of the investments held in mutual funds. Investments primarily include investment in liquid debt based mutual fund units with high credit-ratings assigned by creditrating agencies and are managed by asset management companies.

Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes investments in quoted equity instruments. Quoted equity instruments are valued using quoted prices at stock exchanges.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. This level includes mutual funds which are valued using the closing NAV.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unquoted equity instruments included in level 3.

There have been no transfers in either direction for the years ended 31 March 2022 and 31 March 2021.

Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

- the use of quoted market prices

- the fair value of the remaining financial instruments is determined using discounted cash flow/net adjusted asset value/ book value analysis/ NAV.

C) Fair value of financial assets and liabilities measured at amortised cost

The carrying amounts of trade receivables, cash and cash equivalents, loans, other bank balances, Investment (other than investment in subsidiaries, associates and joint ventures accounted at the cost in accordance with Ind AS 27 ‘Separate Financial Statements’), other financial assets, trade payables and other financial liabilities are considered to be the same as their fair values, due to their short-term nature.

The carrying values for finance lease receivables, if any, approximates the fair value as these are periodically evaluated based on credit worthiness of customer and allowance for estimated losses is recorded based on this evaluation.

The fair values for lease obligation were calculated based on cash flows discounted using a discount rate. The carrying amount of finance lease obligations approximate its fair value.

For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.

Note No.46 - Capital Management & Gearing Ratio

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the company. The primary objective of the Company’s capital management is to maximize the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders, raise debts or issue new shares.

Performance obligation

Information about the Company’s performance obligations are summarised below:

i) Sale of Power

The performance obligation is satisfied upon delivery of power and payment is generally due within 30 to 60 days from delivery. The contract generally provide customers with a right to early payment rebate which give rise to variable consideration subject to constraint.

ii) Rendering of Service

The performance obligation is satisfied over-time and payment is generally due upon completion of stage of service and acceptance of the customer. In some contracts, short-term advances are required before the consultancy is provided.

iii) Transactions identified as of agency nature

There are contracts with customers where the company acts in accordance with timely instruction of the customer and bids at Exchange platform in accordance with the procedures laid down by the Exchange. The performance obligation is satisfied and payment is due upon delivery of power to the customer.

Note No. 50 - Other information

a) The company is engaged in the business of power which in context of Ind AS 108- “Operating Segments”, is considered as the operating segment of the company.

f) (i) In accordance with the accounting policy, the surcharge recoverable

on late/ non-payment of dues by customers is recognized when no significant uncertainty as to measurability or collectability exists. Correspondingly surcharge liabilities on late/ non-payments to the suppliers, in view of the matching concept, is not being recognized in the accounts. The estimated liability in this regard, however is lower than the company’s claims from its customers.

(ii) During the year, the company has recognized surcharge of '' 452.61 crore (previous year, '' 449.14 crore) from customers on amounts overdue on sale of power which has been included in “Revenue from operations”. Correspondingly surcharge expense of '' 102.14 crore (previous year, '' 182.18 crore) paid/payable to suppliers has been included in “Operating expenses”.

g) Amount in the financial statements are presented in '' crore (upto two decimals) except for per share data and as other-wise stated.

h) The Company and its subsidiary (PTC India Financial Services Limited) had signed an agreement in March, 2017 for acquisition of land (share of 50% each) situated at Greater Noida Expressway, Noida, Uttar Pradesh to be used for construction of office building of PTC Group. Accordingly, the Company deposited its share (50%) of the transfer charges of '' 10.26 Crores with Yamuna Expressway Industrial Development Authority (YEIDA) for transfer of the land. Subsequently, YEIDA cancelled the approval for transfer and forfeited the transfer charges deposited, citing the reason as delay in registration, however, the delay was not attributable to the Company. The Company has filed an appeal before Principal Secretary, Urban Development, Government of UP as per directions of Allahabad High Court for retrieving the forfeited amount.

Presently, the matter is pending before Principal Secretary, Government of UP. As the Company had cancelled the land deal, as a matter of abundant caution, a provision against the amount deposited with YEIDA was created in the last year i.e. FY 2020-21.

The Company has considered all possible factors of the Covid-19 pandemic (including its ongoing wave) and their impact relating to its business environment. Based on current estimates, the Company expects that the carrying amount of its assets will not deteriorate and will be recoverable in full. However, the assessment of the pandemic’s impact is a continuing process, given the uncertainties associated with its nature, occurrences and duration.

The longer term outcomes and impact of the Covid-19 pandemic on the Company’s business in subsequent periods is also dependent on overall economic conditions as they evolve. The Management will continue to monitor any material changes to future economic conditions and the impacts thereof on the Company, if any.

k) On January 19, 2022, three independent directors of PTC India Financial Services Ltd (PFS), a subsidiary of the Company, resigned mentioning lapses in governance and compliance. Since then RBI, SEBI and ROC have reached out to PFS with their queries regarding the allegations made by the then its independent directors and directed it to submit its response against such allegations. SEBI also directed PFS to submit its Action Taken Report (ATR), together with its response against such allegations.

On January 24, 2022, SEBI also directed the Company to examine the allegations and come-up with its conclusion. On January 27, 2022, the Company informed SEBI that its Board of Directors has re-constituted a Risk Management Committee (RMC) to examine the allegations and submit its report to the Company’s Board. RMC of the Company submitted its report to the Company’s Board and the Company’s Board reviewed the same in its meeting dated May 31, 2022.

l) Regulation 33(3) of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 requires that if a listed entity has subsidiaries, it shall, while submitting annual audited standalone financial results also submit annual audited consolidated financial results to stock exchanges. PFS vide its letter dated May 30, 2022 informed the stock exchanges that it shall publish the financial results for the quarter and financial year ended 31^st March, 2022 on completion of the forensic audit at the earliest. Therefore, the Company could not prepare the annual consolidated financial results due to non-availability of annual audited financial results of PFS.

As the completion of audit of PFS may take time, the Company is publishing and submitting to stock exchanges its annual standalone financial results. To ensure complete compliance of Regulation 33(3) of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, it would

publish and submit to stock exchanges its annual consolidated financial results after the financial results of PFS is received.

m) Additional Information

The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period,

The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

The Company has not advanced or loaned or invested funds to any other person(s) or entity, 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

The Company has not received any fund from any person or entity, 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.

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.

The Company has not done any transaction with Struck off Companies during the year ended 31^st March 2022.

The title deed of immovable prosperities of the Company are held in the name of the Company.

The Company is not declared wilful defaulter by any bank or financial institution of any other lenders.

p). The figures for the corresponding previous years have been re-grouped/ reclassified, wherever necessary, to make them comparable.

---

Mar 31, 2018

1. Company overview

The financial statements comprise financial statements of PTC India Limited (the company) for the year ended 31 March 2018. The company is a public company domiciled in India and limited by shares (CIN: L40105DL1999PLC099328). The company is incorporated under the provisions of the Companies Act applicable in India. The shares of the Company are publicly traded on the National Stock Exchange of India Limited and BSE Limited. The registered office of the company is located at 2^nd Floor, NBCC Tower, 15 Bhikaji Cama Place, New Delhi-110066, India.

The company is principally engaged in trading of power. PTC holds Category I license from Central Electricity Regulatory Commission (CERC), the highest category with permission to trade unlimited volumes.

The financial statements were authorized for issue in accordance with a resolution of the directors on 16 May, 2018.

2.1 Basis of preparation of financial statements

(i) Statement of Compliance

The financial statements have been prepared in accordance with Indian Accounting Standards (Ind-AS) as prescribed under section 133 of the Companies Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and the Companies (Indian Accounting Standards) Amendment, Rules 2016, to the extent applicable.These Financial Statements have been prepared and presented on a going concern basis and on the accrual basis of accounting.

(ii) Basis of Measurement

The financial statements have been prepared on the historical cost basis except for certain financial assets and liabilities (including derivative instruments) that are measured at fair value (refer accounting policy regarding financial instruments). The methods used to measure fair values are discussed further in notes to financial statements.

Functional and presentation currency

These financial statements are presented in Indian Rupees (INR), which is the Company’s functional currency. All financial information presented in INR has been rounded to the nearest crore (upto two decimals), except as stated otherwise.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

2.2 Use of estimates and management judgments

The preparation of financial statements requires management to make judgments, estimates and assumptions that may impact the application of accounting policies and the reported value of assets, liabilities, income, expenses and related disclosures concerning the items involved as well as contingent assets and liabilities at the balance sheet date. The estimates and management’sjudgments are based on previous experience and other factors considered reasonable and prudent in the circumstances. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

In order to enhance understanding of the financial statements, information about significant areas of estimation, uncertainty and criticaljudgments in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is as under:

a) Useful life of property, plant and equipment

The estimated useful life of property, plant and equipment is based on a number of factors including the effects of obsolescence, demand, competition and other economic factors (such as the stability of the industry and known technological advances) and the level of maintenance expenditures required to obtain the expected future cash flows from the asset.

b) Recoverable amount of property, plant and equipment

The recoverable amount of plant and equipment is based on estimates and assumptions regarding in particular the expected market outlook and future cash flows. Any changes in these assumptions may have a material impact on the measurement of the recoverable amount and could result in impairment.

c) Impairment of non-financial assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used.

d) Defined benefit plans

The cost of the defined benefit plan and other post-employment benefits and the present value of such obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and attrition rate. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

e) Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

f) Impairment of financial assets

The impairment provisions for financial assets are based on assumptions about risk of default and expected loss rates. The Company usesjudgement in making these assumptions and selecting the inputs to the impairment calculation, based on Company’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

g) Deferred Tax

Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

h) Provisions and contingencies

The assessments undertaken in recognizing provisions and contingencies have been made in accordance with Ind AS 37, ‘Provisions, Contingent Liabilities and Contingent Assets’. The evaluation of the likelihood of the contingent events has required best judgment by management regarding the probability of exposure to potential loss. Should circumstances change following unforeseeable developments, this likelihood could alter.

i) Leases not in legal form of lease

Significantjudgment is required to apply lease accounting rules under Appendix C to Ind AS 17 ‘Determining whether an arrangement contains a lease’. In assessing the applicability to arrangements entered into by the Company, management has exercised judgment to evaluate the right to use the underlying asset, substance of the transactions including legally enforceable agreements and other significant terms and conditions of the arrangements to conclude whether the arrangement needs the criteria under Appendix C to Ind AS 17.

j) Assets held for sale

Significant judgment is required to apply the accounting of noncurrent assets held for sale under Ind AS 105 ‘Non-current Assets Held for Sale and Discontinued Operations’. In assessing the applicability, management has exercised judgment to evaluate the availability of the asset for immediate sale, management’s commitment for the sale and probability of sale within one year to conclude if their carrying amount will be recovered principally through a sale transaction rather than through continuing use.

2.3 Recent accounting pronouncements Standards issued but not yet effective IND AS 115

On 28 March 2018, the Ministry of Corporate Affairs (MCA), in consultation with the National Advisory Committee on Accounting Standards, has issued Companies (Indian Accounting Standards) Amendment Rules, 2018 to amend the Companies (Indian Accounting Standards) Rules, 2015. This results in introduction of Ind AS 115, Revenue from Contracts with customers,that comprehensively revamps the revenue recognition guidance. Consequently, Ind AS 18 and Ind AS 11 have been withdrawn, and other standards are suitably modified. The amendment is applicable to the Company from 01 April 2018.

The Company is in the process of evaluating the requirement of the amendments and its impact on the financial statements.

APPENDIX B OF IND AS 21

This appendix is for determining the date of transaction where the entity has received / paid any foreign currency advances. This appendix states that the date of transaction shall be the date on which such advance is received or paid. Therefore these non-monetary advances will not be restated at the time of their adjustment against the particular transaction.

The Company has pledged, in favour of Power Finance Corporation Limited (PFC), 77,77,500 Equity Shares of Rs.10 each at par held by it in M/s. Krishna Godavari Power Utilities Limited (KGPUL) along with the promoter of KGPUL to comply with the lending requirements of PFC for loan taken by KGPUL

Considering the provisions of Appendix C to Ind AS-17 on ‘Leases’ w.r.t. determining whether an arrangement contains a lease, the Company has ascertained that the PSA entered with one of its customers falls under the definition of finance lease. Accordingly, the written down value of the specified assets has been derecognized from PPE and accounted as Finance Lease Receivables. Recovery of amounts against depreciation, interest on loan capital and return on equity (pre-tax) components from the customer is adjusted against Finance Lease Receivables and interest. The interest component of the Finance Lease Receivables and amount received on account of revision of tariff of previous periods in respect of the above three elements are recognised as ‘Interest income on assets under finance lease’ under Note 28-’Other Income’.

a) Trade receivables are hypothecated to the banks for availing the fund based and non- fund based working capital facilities.

b) Trade receivables include an amount of ‘16.23 Crore due from Tamil Nadu Electricity Board (TNEB) towards compensation claim. Sole arbitrator gave order unfavourable to the company against which a petition has been filed by the company at Madras high Court. As assessed by the management, the chances of a decision in favour of the company is high as the award has been erroneously passed against the settled law and accordingly is likely to be set aside by the Hon’ble Madras High Court. Further, the Company has a recourse to claim similar amount from PSPCL in case the High Court Order is against the company.

c) Terms and rights attached to each share.

The Company has only one class of equity shares having a par value ‘10/- per share. The holders of the equity shares are entitled to receive dividends as declared from time to time and are entitled to voting rights proportionate to their share holding at the meetings of shareholders.

f) Shares reserved for issue under options

Information relating to PTC India Limited Employee Stock Options Scheme (ESOP), including details of options issued, exercised and lapsed during the financial year and options outstanding at the end of the reporting period, is set out in note 48 (g).

General Reserve

General Reserve is a free reserve which is created from retained earnings. The Company may pay dividend and issue fully paid-up bonus shares to its members out of the general reserve account, and company can use this reserve for buyback of shares.

Contingent Reserve

General Reserve is a free reserve which is created from retained earnings. The company may use it to meet any contingency.

Retained Earnings

Retained earnings comprise of the Company’s undistributed earnings after taxes.

FVOCI-Equity Investment Reserve

The Company has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive income. These changes are accumulated within FVTOCI reserve within equity. The Company transfers amounts from this reserve to retained earnings when the relevant equity securities are derecognised.

Considering the provisions of Appendix C to Ind AS-17 on ‘Leases’ w.r.t. determining whether an arrangement contains a lease, the Company has ascertained that the PPA entered with one of its suppliers falls under the definition of finance lease. Accordingly, the written down value of the specified assets has been recognized as PPE and accounted as Finance Lease Obligations. Paid/ payable amounts against depreciation, interest on loan capital and return on equity (pre-tax) components to the supplier is adjusted against Finance Lease Obligations and interest. The interest component of the Finance Lease Obligations and amount paid on account of revision of tariff of previous periods in respect of the above three elements are recognised as ‘Interest expense on assets under finance lease’ under Note 32- ‘Finance Cost’.

Nature and purpose of reserves:

Securities premium account

Securities premium account is used to record the premium on issue of shares/ securities. This amount is utilised in accordance with the provisions of the Companies Act, 2013.

Share option outstanding account

The share option outstanding account is used to record the value of equity settled share based payment transactions with employees. The amounts recorded in this account are transferred to share premium upon exercise of stock options by employees.

Based on the information available with the Company, there are no dues as at March 31, 2018 payable to enterprises covered under “Micro Small and Medium Enterprises Development Act, 2006”. As such, no interest is paid/payable by the Company in terms of Section 16 of the Micro, Small and Medium Enterprises Development Act, 2006.

Unpaid dividends are the amounts which have not been claimed by the investors. There are no amounts due and outstanding to be credited to the Investor Education and Protection Fund as at year end.

Considering the provisions of Appendix C to Ind AS-17 on Leases w.r.t. determining whether an arrangement contains a lease, the Company has ascertained that the PSA entered with one of its customers falls under operating lease. Recovery of amounts against depreciation, interest on loan capital and return on equity (pre-tax) from the customer are considered as lease rental on the assets under operating lease.

a) Considering the provisions of Appendix C to Ind AS-17 on ‘Leases’ w.r.t. determining whether an arrangement contains a lease, the Company has ascertained that the PSA entered with one of its customers falls under the definition of finance lease. Accordingly, the written down value of the specified assets has been derecognized from PPE and accounted as Finance Lease Receivables. Recovery of amounts against depreciation, interest on loan capital and return on equity (pre-tax) components from the customer is adjusted against Finance Lease Receivables and interest. The interest component of the Finance Lease Receivables and amount received on account of revision of tariff of previous periods in respect of the above three elements are recognised as ‘Interest income on assets under finance lease’.

b) Profit on sale/ redemption of investment includes fair value gain on financial instruments measured at fair value through profit or loss.

c) Miscellaneous income includes mainly the amount of director sitting fee received from several entities.

Considering the provisions of Appendix C to Ind AS-17 on Leases w.r.t. determining whether an arrangement contains a lease, the Company has ascertained that the PPA entered with one of its suppliers falls under operating lease. Paid/payables amounts against depreciation, interest on loan capital and return on equity (pre-tax)to the supplier are considered as lease rental expenses on the assets under operating lease.

a) Considering the provisions of Appendix C to Ind AS-17 on ‘Leases’ w.r.t. determining whether an arrangement contains a lease, the Company has ascertained that the PPA entered with one of its suppliers falls under the definition of finance lease. Accordingly, the written down value of the specified assets has been recognized as PPE and accounted as Finance Lease Obligations. Paid/ payable amounts against depreciation, interest on loan capital and return on equity (pre-tax) components to the supplier is adjusted against Finance Lease Obligations and interest. The interest component of the Finance Lease Obligations and amount paid on account of revision of tariff of previous periods in respect of the above three elements are recognised as ‘Interest expense on assets under finance lease’.

b) As per Power purchase agreements entered into with the off takers of Chukha and Kurichhu power projects (Bhutan), the interest earned on the term deposits made with commercial banks for the payments received on behalf of these projects is passed back to them. Accordingly interest income as well as expense is accounted for in the books of account.

Notes

i) Claims against the Company not acknowledged as debt include:

a) The company had an arrangement with a supplier for purchase of power. The supplier claimed that the company did not off take the offered surplus power and claimed a damage of Rs.84.95 Crore (31 March 2017: Rs.84.95 crore). The arbitrator concluded the arbitration in favour of the company, however, the supplier has contested the award at High Court.

b) The company had an arrangement with a supplier for purchase of power. However, due to the prevalent market situation, the company was unable to find a buyer for power from the supplier for most of the period. The supplier raised a compensation bill of Rs.43.28 Crore (31 March 2017: Rs.43.28 crore) for non-supply of power. The matter is pending at Supreme Court. The company has paid a deposit amounting to Rs.20.48 crore which is subject to the outcome of the appeal before the Appellate Tribunal.

c) Pending resolution of the issues with a supplier, the company has estimate a contingency liability of Rs.84.52 crore (31 March 2017 Rs.68.36 crore) towards his claims.

ii) Disputed income tax/custom duty pending before various forums/ authorities amount to Rs.311.16 crore (31 March 2017: Rs.241.37 crore). Many of these matters were adjudicated in favour of the Company but are disputed before higher forums/ authorities by the concerned departments.

The company has paid a deposit amounting to Rs.6.45 crore against custom duty which is subject to the outcome of the appeal.

iii) Pending resolution of the respective proceedings, it is not practicable for the company to estimate the timings of cash outflows, if any, in respect of the above as it is determinable only on receipt ofjudgements/decisions pending with various forums/authorities.

Possible Reimbursement

The contingent liabilities referred to in (i) above, include an amount of Rs.84.52 crore (31 March 2017: Rs.68.36 crore), for which Company envisages possible reimbursement from the one of its suppliers in full.

Commitments

a). Estimated amount of contracts remaining to be executed on capital account (property, plant & equipment and intangible assets) and not provided for as at 31 March 2018 is Rs.41.34 crore (31 March 2017: Rs.41.44 crore). The details is as under:-

b). In respect of investments of Rs.1408.89 crore (31 March 2017: Rs.1408.89 crore) in subsidiary Companies, the company has restrictions for their disposal as at 31 March 2018 as under:

(c) Unrecognised deferred tax assets and liabilities

(i) Unrecognized deferred tax liabilities

There is no unrecognised deferred tax liabilities

(ii) Unrecognised deferred tax assets

Deferred tax assets have not been recognized on provision for impairment in value of investment, long term Capital losses and decrease in fair value of investments through FVOCI as there is no certainty of its realisation.

(d) Dividend distribution tax on proposed dividend not recognised at the end of the reporting period

Since year end, the directors have recommended the payment of final dividend amounting to Rs.118.40 crore (31 March 2017: Rs.88.80 crore). The dividend distribution tax on this proposed dividend amounting to Rs.24.34 crore (31 March 2017: Rs.18.06 crore) has not been recognised since this proposed dividend is subject to the approval of shareholders in the ensuing annual general meeting.

Note No.3 - Disclosure as per Ind AS 17 ‘Leases’

a) Operating leases

i. Leases as lessee

a) The Company’s leasing arrangements are in respect of operating leases of premises for office. An amount of Rs.1.21 crore (31 March 2017: Rs.1.17 crore) towards lease payments in respect of premises for offices are included under ‘Rent’ in Note 33.

b) The Company has classified the arrangement with one of its suppliers as lease based on the principles enunciated in Appendix C of Ind AS 17 and accounted for as operating lease in accordance with those principles. An amount of Rs.184.97 crore (31 March 2017: Rs.193.40 crore) towards lease payments in respect of the arrangement are included under Lease rental expenses on assets under operating lease’ in Note 30-’Operating expenses’.

c) The future minimum lease payments (MLPs) under non-cancellable leases in respect of the operating leases are as follows:

ii. Leases as lessor

a) The Company has classified the arrangement with one of its customers as lease based on the principles enunciated in Appendix C of Ind AS 17 and accounted for as operating lease in accordance with those principles. An amount of Rs.184.97 crore (31 March 2017: Rs.193.40 crore) towards lease receipts in respect of the arrangement are included under ‘Lease rentals on asset under operating lease’ in Note 27- Revenue from operations. The future minimum lease payments (MLPs) under non-cancellable leases in respect of the same are as follows:

b) Finance leases

i Leases as lessee

a) Leasehold land acquired by the Company are capitalised at the present value of the total minimum lease payments to be paid over the lease term. Future lease rentals are recognised as ‘Finance lease obligations’ at their present values. The leasehold land is amortised considering the significant accounting policies of the Company.

b) The Company has classified the arrangement with one of its suppliers in the nature of lease based on the principles enunciated in Appendix C of Ind AS 17, ‘Leases’ and accounted for as finance lease in accordance with those principles.

c) The future minimum lease payments (MLPs) under non-cancellable leases in respect of the same are as follows:

(ii) Defined benefit plans:

A. Gratuity-Funded

a) The Company has a defined benefit gratuity plan. Every employee who has rendered continuous service of five years or more is entitled to gratuity at 15 days salary (15/26 X last drawn basic salary) for each completed year of service subject to a maximum of Rs.0.20 crore on superannuation, resignation, termination, disablement or on death.

Based on the actuarial valuation obtained in this respect, the following table sets out the status of the gratuity and the amounts recognised in the Company’s financial statements as at balance sheet date:

ii Leases as lessor

The Company has classified the arrangement with one of its customers in the nature of lease based on the principles enunciated in Appendix C of Ind AS 17, ‘Leases’ and accounted for as finance lease in accordance with those principles. The future minimum lease payments (MLPs) under non-cancellable leases in respect of the same are as follows:

Note No.4 - Disclosure as per Ind AS 19 ‘Employee benefits’

(i) Defined contribution plans:

A. Provident fund

The Company pays fixed contribution to provident fund to the appropriate authorities. The contributions to the fund for the year are recognized as expense and are charged to the profit or loss. An amount of Rs.0.98 crore (31 March 2017: Rs.0.95 crore) for the year is recognised as expense on this account and charged to the Statement of Profit and Loss.

B. Post-Retirement Medical Benefits (PRMB)- Non-funded

The Company has Post-Retirement Medical Facility Benefits (PRMB), under which the eligible retired employees and their spouses are provided medical facilities and an out-patient actual medical reimbursement subject to a ceiling fixed by the Company. The liability for the same is recognised annually on the basis of actuarial valuation.

Based on the actuarial valuation obtained in this respect, the following table sets out the status of the PRMF and the amounts recognised in the Company’s financial statements as at balance sheet date:

D. Defined benefit obligations

i. Actuarial assumptions

The following were the principal actuarial assumptions at the reporting date:

The estimates of future salary increases considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. Further, the expected return on plan assets is determined considering several applicable factors mainly the composition of plan assets held, assessed risk of asset management and historical returns from plan assets.

ii. Sensitivity analysis

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below:

Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an approximation of the sensitivity of the assumptions shown.

The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period. This analysis may not be representative of the actual change in the defined benefit obligations as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

E. Risk exposure

Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:

a) Asset volatility

The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets under perform this yield, this will create a deficit. Most of the plan asset investments are in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimise risk to an acceptable. The equity securities are expected to earn a return in excess of the discount rate and contribute to the plan deficit. Any deviations from the range are corrected by rebalancing the portfolio. The Company intends to maintain the above investment mix in the continuing years.

b) Changes in discount rate

A decrease in discount rate will increase plan liabilities, although this will be partially offset by an increase in the value of the plans’ assets holdings. The Company actively monitors how the duration and the expected yield of the investments are matching the expected cash outflows arising from the employee benefit obligations. The Company has not changed the processes used to manage its risks from previous periods.

(iii) Other long term employee benefit plans Leave

The Company provides for earned leave benefit (including compensated absences), non-encashable leave (NEL) and half-pay leave (not applicable for new employee joining after November, 2008) to the employees of the Company which accrue annually at 34 days, 6 days and 20 days respectively. Earned leave (EL) is encashable while in service whereas NEL is non-encashable while in service. Total number of leave (i.e. EL & NEL combined) that can be encashed on superannuation shall be restricted to 300 days and in addition to this half-pay leave is encashable upto 150 days. The scheme is unfunded and liability for the same is recognised on the basis of actuarial valuation. A provision of Rs.1.09 crore (31 March 2017: Rs.1.12 crore) for the year have been made on the basis of actuarial valuation at the year end and debited to the Statement of Profit and Loss.

Note No.5 - Disclosure as per Ind AS 24 ‘Related Party Disclosures’

a) List of Related parties:

i) Subsidiaries:

1. PTC India Financial Services Limited

2. PTC Energy Limited

ii) Associates:

Krishna Godavari Power Utilities Limited

iii) Key Managerial Personnel (KMP):

A) Whole time directors

Shri Deepak Amitabh Chairman and Managing Director

Shri Arun Kumar Director (Finance) & CFO

(Ceased to be director w.e.f. 14th Dec, 2017)

Shri Ajit Kumar Director (Commercial & Operations)

Dr. Rajib Kumar Mishra Director (Marketing & Business Development)

B) Non-whole time directors

Shri Anil Razdan (ceased w.e.f. 9^th January 2018)

Shri Dhirendra Swarup (ceased w.e.f. 9^th January 2018)

Shri Dipak Chatteijee (ceased w.e.f. 15^th April 2017)

Shri H.L. Bajaj (ceased w.e.f. 9^th January 2018)

Shri Krishna Singh Nagnyal / (w.e.f 29^th April 2017)

Shri Hemant Bhargava (ceased w.e.f. 20^th October 2016), (Nominee director of Life Insurance Corporation of India)

Shri S Balachandran (ceased w.e.f. 31^st March 2016)

Shri Ved Kumar Jain (ceased w.e.f. 7^th December 2016)

Ms. Sushama Nath (w.e.f. 20^th December 2017)

Ms. Bharti Prasad (w.e.f. 20^th December 2017)

Shri Rakesh Kacker (w.e.f. 23^rd March 2017)

Shri Jayant Purushottam Gokhale (w.e.f. 16^th March 2017)

iv) Entities having significance influence on the company

1. NTPC Limited.

2. Power Grid Corporation of India Limited.

3. Power Finance Corporation Limited

4. NHPC Limited

v) Other Related Parties:

PTC Foundation PTC India Gratuity Trust

Terms and conditions of transactions with the related parties

(a) Transactions with the related parties are made on normal commercial terms and conditions and at market rates.

(b) The Company is deputing its employees to Subsidiaries as per the terms and conditions agreed between the companies, which are similar to those applicable for deputation of employees to other companies and institutions. The cost incurred by the company towards superannuation and employee benefits are recovered from these companies.

(c) Consultancy services provided by the Company to Subsidiaries are generally on nomination basis at the terms, conditions and principles applicable for consultancy services provided to other parties.

(d) The company has taken/given office space on lease from/to subsidiary company. The rent and other terms and conditions are fixed after mutual discussion and after taking into account the prevailing market conditions.

(e) Outstanding balances of Subsidiaries and other related parties at the year-end, are unsecured and interest free and settlement occurs through banking transaction. For the year ended 31 March 2018, the company has not recorded any impairment of receivables relating to amounts owed by related parties (31 March 2017: ‘ Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

“The Company is exposed to the following risks from its use of financial instruments:

- Credit risk

- Liquidity risk

- Market risk”

This note presents information about the Company’s exposure to each of the above risks, the Company’s objectives, policies and processes for measuring and managing risk.

There have been no other transactions involving Equity shares or potential Equity shares between the reporting date and the date of authorisation of these Financial Statements.

Note No.6 - Disclosure as per Ind AS 36 ‘Impairment of Assets’

As required by Ind AS 36, an assessment of impairment of assets was carried out and based on such assessment, the Company has accounted impairment losses as below:

The Company has invested Rs.37.55 crore as 49% of equity in its associate “Krishna Godavari Power Utilities Limited (KGPUL)” for 60 MW Thermal imported coal based project .The project was 90% completed and further progress on the project was stopped due to paucity of funds. One of the lenders has carried out the valuation of assets of the project and based on the valuation report, the company has recognized an impairment loss of Rs.37.55 crore in respect of such investment in FY 2015-16.

Also, refer Note No. 43 for “Reconciliation of impairment loss provisions”. Note No.43 . Financial Risk Management

The Company’s principal financial liabilities comprise trade payables and other payables including financial obligations. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets are trade & other receivables including lease receivables, current investments and cash and short-term deposits that derive directly from its operations. The Company also holds equity investments in subsidiaries, associate companies and other companies.

Risk management framework

The Company’s activities make risk an integral and unavoidable component of business. The company manages risks in a proactive and effective manner and has taken adequate measures to address such concerns by developing adequate systems and practices.

In order to institutionalize the risk management process in the Company, there is a Risk Management Group (RMG) and an elaborate Risk Management Policy (RMP) has been formulated.

Governance Framework

The Governance framework of the Risk Management process is constituted by three layers of authority:

i) Board of Directors and Audit Committee

ii) Executive Management Team

iii) Functional Head(s)

The process of escalation to and monitoring of risks by the three layers in the Governance framework is built around the following key facilitating roles. A cross functional team approach has been followed to establish a workable and business focused risk management process in the PTC Group.

i) Chief Risk Officer (reporting to Audit Committee)

ii) Risk Owners (typically Vice President level functionaries reporting to Functional Heads)

iii) Risk Monitors

Roles and Responsibilities

Board and Audit Committee: The Board, on the recommendation of Audit Committee, approves the risk management policy framework and process and takes various decisions related to risk management policy and process.

Chief Risk Officer (CRO): The CRO provides inputs and insights in the establishment, monitoring and structuring risk management process and further monitor its compliance in accordance with relevant provisions of the policy. CRO coordinates between the Board and Executive Management Team to establish an advance / proactive risk reporting system, based on ethical principles, so that risks are understood in a simple and transparent manner.

Executive Management Team: The CEO, Whole Time Directors and other Functional heads of respective Business Units / Functions constitute the Executive Management Team. By virtue of their roles, they are the best equipped to have knowledge and understanding of their respective business functions. Hence, they constitute the first layer of risk review and escalation by risk owners.

Risk Owners: Risk Owners have been delegated the ownership of risks. The Risk Owner is typically an officer of a sufficiently experienced level like Vice President / Sr. Vice President. The risk owner’s responsibilities are guided in accordance with the relevant sections of the Risk Management Policy.

Risk Management Group: Members of the Risk Management Group, supporting the CRO, monitor effective implementation and compliance of the risk management policy. They coordinate among various managerial levels of PTC and the Group Companies to establish processes and ensure smooth and timely flow of information.

Risk Monitors: Risk monitors in each Business Unit constitute a cross functional team that works closely to engage in the deployment of an active risk management process that permeates the group. A Risk Monitor a) takes up new risks for discussion b) helps evolve risk responses and c) works as an extended arm of Risk Management Group in the unit / function in managing and reporting risks.”

The RMG meets every quarter or as needed. Risks are regularly monitored through reporting of key performance indicators and tools like Risk Matrix at transaction level. Outcomes/exceptions and aggregate level reports are submitted for information of the Board of Directors.

Group on Common Exposures: Constituted for consultation of senior management of PTC and group companies on exposures to common customers.

Credit risk

“Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations resulting in a financial loss to the Company. Credit risk arises principally from trade receivables, investment in debt securities, loans & advances, cash & cash equivalents and deposits with banks and financial institutions.

The company has Risk Governance System. To determine whether operations are within the risk appetite of the organisation at any given time, the following parameters are reported to the appropriate layer of the Risk Governance system, and in particular to the Board of Directors and Audit Committee periodically:-

For Marketing –

a) Short Term: List of all open positions and periods involved in each such position; this is reported on a periodic basis to ensure timely corrective action in case of exigency.

b) Long-Term: List of all agreements where take-or-pay liability was taken by PTC and periods involved in each such position; this is reported on at least a periodic basis to ensure timely corrective action in case of exigency.

Trade receivables

The company mainly sells electricity to bulk customers comprising mainly state power utilities owned by State Governments. The company has no experience of significant impairment losses in respect of trade receivables in the past years

For purchase of power through Power Exchange(s), the company either takes payments from the clients on advance basis or ensures security mechanism in the form of Bank Guarantee/ Letter of Credits.

Investments in marketable securities

The company invests in marketable securities to churn its short term working capital funds.

The Board of directors has established an investment policy by taking into account liquidity risk as well as credit risk. The investment policy prescribes guidelines for investible funds on fulfillment of certain conditions i.e investment in AMC who invest as per SEBI Guidelines, limit of investment in single AMC, performance rating etc. The Company’s treasury department operates in line with such policy. The treasury department actively monitors the return rate and maturity period of the investments. The Company has not experienced any significant impairment losses in respect of any of the investments.

Loans & advances

The Company has given open access advances and security deposits. The open access advances are paid on account of state owned power utilities, hence the risk is insignificant. Security deposits are made mostly on back to back basis.

Cash and cash equivalents

The Company held cash and cash equivalents of Rs.281.48 crore (31 March 2017: Rs.167.54 crore). The cash and cash equivalents are held with banks with high credit ratings.

Deposits with banks and financial institutions

The Company held deposits with banks and financial institutions of Rs.9 crore (31 March 2017: ‘ NIL crore). In order to manage the risk, the Company makes these deposit with high credit rating as per investment policy of the company.

(i) Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:

(ii) Provision for expected credit losses

(a) Financial assets for which loss allowance is measured using 12 month expected credit losses

The company has assets where the counter- parties have sufficient capacity to meet the obligations and where the risk of default is very low. Accordingly, loss allowance for impairment has been recognised as disclosed later in this note under “Reconciliation of impairment loss provisions”.

(b) Financial assets for which loss allowance is measured using life time expected credit losses

The company has customers (State government utilities) with sufficient capacity to meet the obligations and therefore the risk of default is negligible or low. Further, management believes that the unimpaired amounts that are past due by more than 30 days are still collectible in full, based on historical payment behaviour and extensive analysis of customer credit risk. However, the management has made provision for expected impairment loss for the parties identified on case to case basis.

The Company believes that, apart from the above, no impairment allowance is necessary in respect of any other assets.

Note No.7. Financial Risk Management

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

The Company has an appropriate liquidity risk management framework for the management of short, medium and long term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate cash reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

The Company’s treasury department is responsible for managing the short term and long term liquidity requirements of the Company. Short term liquidity situation is reviewed daily by Treasury. The Board of directors has established an investment policy by taking into account liquidity risk as well as credit risk. The Company’s treasury department operates in line with such policy. Long term liquidity position is reviewed by the Board of Directors and appropriate decisions are taken according to the situation.

Commercial department monitor the company’s net liquidity position by monitoring the level of expected cash inflows on trade and other receivables together with expected cash outflows on trade and other payables.

Typically the Company ensures that it has sufficient cash on demand to meet expected operational expenses and payments to trade payables including the servicing of financial obligations, this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.

(i) Financing arrangements

The company had access to the following undrawn borrowing facilities at the end of the reporting period:

(ii) Maturities of financial liabilities

The following are the contractual maturities of financial liabilities, based on contractual cash flows:

Market risk

At the reporting date the interest rate profile of the Company’s interest-bearing financial instruments is as follows:

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates, will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

The Board of directors is responsible for setting up of policies and procedures to manage market risks of the Company. At present, the company has a Forex Risk Management Policy for hedging of foreign currency risk.

Currency risk

The Company is exposed to foreign currency risk on certain transactions that are denominated in a currency other than entity’s functional currency, hence exposure to exchange rate fluctuations arises. The risk is that the functional currency value of cash flows will vary as a result of movements in exchange rates.

The currency profile of financial assets as at the reporting date are as below:

Fair value sensitivity analysis for fixed-rate instruments

The company’s fixed rate instruments are carried at amortised cost. They are therefore not subject to interest rate risk, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

The company’s risk is minimal since financial lease transactions are almost on back to back basis.

Note No 8. Fair Value Measurements

(a) Financial instruments by category

Sensitivity analysis

A strengthening of the Indian Rupee, as indicated below, against the USD at the reporting date would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis is based on foreign currency exchange rate variances that the company considered to be reasonably possible at the end of the reporting period. The analysis is performed on the same basis for previous year as indicated below.

Interest rate risk

The Company is exposed to interest rate risk arising mainly on financial lease obligations and financial lease receivables. The Company is exposed to interest rate risk because the cash flows will fluctuate with changes in interest rates.

(b) Fair value hierarchy

This section explains thejudgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.

Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes investments in quoted equity instruments. Quoted equity instruments are valued using quoted prices at stock exchanges.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. This level includes mutual funds which are valued using the closing NAV.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unquoted equity instruments included in level 3.

There have been no transfers in either direction for the years ended 31 March 2018 and 31 March 2017.

Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

- the use of quoted market prices

- the fair value of the remaining financial instruments is determined using discounted cash flow/net adjusted asset value/ book value analysis/ NAV.

C) Fair value of financial assets and liabilities measured at amortised cost

The carrying amounts of trade receivables, cash and cash equivalents, other bank balances, trade payables, other financial liabilities and other financial assets are considered to be the same as their fair values, due to their short-term nature.

The carrying values for finance lease receivables approximates the fair value as these are periodically evaluated based on credit worthiness of customer and allowance for estimated losses is recorded based on this evaluation.

The fair values for lease obligation were calculated based on cash flows discounted using a current discount rate. The carrying amount of finance lease obligations approximate its fair value. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs.

For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.

Note No. 9 Capital Management

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the company. The primary objective of the Company’s capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders, raise debts or issue new shares.

Note No. 10 Disclosure as required by Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015:

A. Loans and advances in the nature of loans:

1. To Subsidiary Companies & Associates : NIL

2. To Firms/companies in which directors are interested : NIL

B. Investment by the loanee (as detailed above) in the shares of PTC : NIL

Note No. 11 Corporate social responsibilities expenses (CSR)

As per Section 135 of the Companies Act, 2013, the Company is required to spend, in every financial year, at least two per cent of the average net profits of the Company made during the three immediately preceding financial years. The company incurs CSR expenses in accordance with its CSR Policy. The details of CSR expenses for the year are as under:

Note No. 12 Other information

a) The company is engaged in the business of power which in context of Ind AS 108- “Operating Segments”, is considered as the operating segment of the company.

b) Expenditure in foreign currency (on accrual basis)

c) Income earned in foreign exchange

d) Some of the balances of trade payables, trade receivables and advances are subject to confirmation/ reconciliation. Adjustment, if any will be accounted for on confirmation/ reconciliation of the same, which in the opinion of the management will not have a material impact.

e) Dividend paid to non- resident shareholders (in foreign currency):

f) (i) In accordance with the accounting policy, the surcharge recoverable

on late/ non-payment of dues by customers is recognized when no significant uncertainty as to measurability or collectability exists. Correspondingly surcharge liabilities on late/ non-payments to the suppliers, in view of the matching concept, is not being recognized in the accounts. The estimated liability in this regard, however is lower than the company’s claims from its customers.

(ii) During the year, the company has recognized surcharge of Rs.118.59 crore (previous year, Rs.111.84 crore) from customers on amounts overdue on sale of power which has been included in “Revenue from operations”. Correspondingly surcharge expense of Rs.4.46 crore (previous year, Rs.16.67 crore) paid/payable to sundry creditors has been included in “Operating expenses”.

g) The Details of the Employee Stock Options Scheme (ESOP) is given as under:

i) Particulars of scheme

ii) Details of vesting:

iii) The details of activity under the plan have been summarized below:-

iv) The details of exercise price for stock options outstanding at the end of the year are as given:-

v) Effect of ESOP scheme on profit & loss and financial position:-

a) Effect on profit & loss:-There is no impact on profit or loss in FY 2017-18 as well in FY 2016-17

b) Effect on financial position:-

vi) Impact on reported profit and earnings per share, if the employee compensation cost would have been computed using the fair value method:- FY 2017-18, Nil (FY 2016-17, Nil)

vii) Earnings per share (Rs.)

(viii) The fair value of each stock option issued in the year 2009-10 and 200809 has been estimated using Black Scholes Options Pricing model after applying the following key assumptions (weighted value):

h) Amount in the financial statements are presented in ‘ crore (upto two decimals) except for per share data and as other-wise stated.

i) The figure for the corresponding previous year have been regrouped/ reclassified, wherever necessary to make them comparable.

---

Mar 31, 2017

1. Company overview

The financial statements comprise financial statements of PTC India Limited (the company) for the year ended 31 March 2017. The company is a public company domiciled in India and limited by shares (CIN: L40105DL1999PLC099328). The company is incorporated under the provisions of the Companies Act applicable in India. The shares of the Company are publicly traded on the National Stock Exchange of India Limited and BSE Limited. The registered office of the company is located at 2nd Floor, NBCC Tower, 15 Bhikaji Cama Place, New Delhi-110066, India.

The company is principally engaged in trading of power. PTC holds Category I license from Central Electricity Regulatory Commission (CERC), the highest category with permission to trade unlimited volumes.

The financial statements were authorized for issue in accordance with a resolution of the directors on 27 May, 2017.

2.1 Basis of preparation of financial statements

(i) Statement of Compliance

The financial statements have been prepared in accordance with Indian Accounting Standards (Ind-AS) as prescribed under section 133 of the Companies Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and the Companies (Indian Accounting Standards) Amendment, Rules 2016. These are the entity’s first financial statements presented under Ind AS and therefore Ind-AS 101, “First Time Adoption of Indian Accounting Standards” has been applied. Until 31 March, 2016, the entity prepared its financial statements under the historical cost convention, on the accrual basis of accounting, in accordance with the Generally Accepted Accounting Principles in India (‘GAAP’), mandatory accounting standards as notified under section 133 of the Companies Act, 2013, read together with rule 7 of the Companies (Accounts) Rules, 2014, and the relevant provisions of Companies Act, 2013.

The entity followed the provisions of Ind-AS 101, “First Time Adoption of Indian Accounting Standards”, in preparing its opening Ind-AS Balance Sheet as of the date of transition, viz., 1 April 2015. Certain Ind-AS accounting policies used in the preparation of Company’s opening Statement of Financial Position are different from the accounting policies applied under the earlier GAAP as at 31 March 2015, and accordingly the adjustments were made to restate the opening balances as per Ind-AS. The resulting adjustments arose from events and transactions before the date of transition to Ind-AS. Therefore, as required by Ind-AS 101, those adjustments were recognized directly through retained earnings as at 1 April 2015. An explanation of how the transition to Ind-AS has affected the reported financial position, financial performance and cash flows of the company is provided in note 44.

(ii) Basis of Measurement

The financial statements have been prepared on the historical cost basis except for certain financial assets and liabilities (including derivative instruments) that are measured at fair value (refer accounting policy regarding financial instruments). The methods used to measure fair values are discussed further in notes to financial statements.

Functional and presentation currency

These financial statements are presented in Indian Rupees (INR), which is the Company’s functional currency. All financial information presented in INR has been rounded to the nearest crore (upto two decimals), except as stated otherwise.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

2.2 Use of estimates and management judgments

The preparation of financial statements requires management to make judgments, estimates and assumptions that may impact the application of accounting policies and the reported value of assets, liabilities, income, expenses and related disclosures concerning the items involved as well as contingent assets and liabilities at the balance sheet date. The estimates and management’s judgments are based on previous experience and other factors considered reasonable and prudent in the circumstances. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

In order to enhance understanding of the financial statements, information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is as under:

a) Useful life of property, plant and equipment

The estimated useful life of property, plant and equipment is based on a number of factors including the effects of obsolescence, demand, competition and other economic factors (such as the stability of the industry and known technological advances) and the level of maintenance expenditures required to obtain the expected future cash flows from the asset.

b) Recoverable amount of property, plant and equipment

The recoverable amount of plant and equipment is based on estimates and assumptions regarding in particular the expected market outlook and future cash flows. Any changes in these assumptions may have a material impact on the measurement of the recoverable amount and could result in impairment.

c) Impairment of non-financial assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used.

d) Defined benefit plans

The cost of the defined benefit plan and other post-employment benefits and the present value of such obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and attrition rate. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

e) Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

f) Impairment of financial assets

The impairment provisions for financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Company’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

g) Deferred Tax

Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

h) Provisions and contingencies

The assessments undertaken in recognizing provisions and contingencies have been made in accordance with Ind AS 37, ‘Provisions, Contingent Liabilities and Contingent Assets’. The evaluation of the likelihood of the contingent events has required best judgment by management regarding the probability of exposure to potential loss. Should circumstances change following unforeseeable developments, this likelihood could alter.

i) Leases not in legal form of lease

Significant judgment is required to apply lease accounting rules under Appendix C to Ind AS 17 ‘Determining whether an arrangement contains a lease’. In assessing the applicability to arrangements entered into by the Company, management has exercised judgment to evaluate the right to use the underlying asset, substance of the transactions including legally enforceable agreements and other significant terms and conditions of the arrangements to conclude whether the arrangement needs the criteria under Appendix C to Ind AS 17.

j) Assets held for sale

Significant judgment is required to apply the accounting of noncurrent assets held for sale under Ind AS 105 ‘Non-current Assets Held for Sale and Discontinued Operations’. In assessing the applicability, management has exercised judgment to evaluate the availability of the asset for immediate sale, management’s commitment for the sale and probability of sale within one year to conclude if their carrying amount will be recovered principally through a sale transaction rather than through continuing use.

2.3 Recent accounting pronouncements Standards issued but not yet effective

In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7, ‘Statement of cash flows’ and Ind AS 102, ‘Share-based payment.’ These amendments are in accordance with the recent amendments made by International Accounting Standards Board (IASB) to IAS 7, ‘Statement of cash flows’ and IFRS 2, ‘Share-based payment,’ respectively. The amendments are applicable to the Company from April 1, 2017.

Amendment to Ind AS 7

The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement.

The Company is evaluating the requirements of the amendment and the effect on the financial statements is being evaluated.

Amendment to Ind AS 102

Further, amendments were made to Ind AS 102, with respect to accounting of a modification of a share-based payment transaction, treatment of vesting and non-vesting conditions in case of cash-settled share based payment transactions, and treatment of equity settled plan which otherwise allows net settlement by employers to settle their obligation towards withhold tax on share-based payment.

Such amendments do not have any effect on the Company’s financial statements.

Note No.3 - Property, plant and equipment

a) Refer Note 38 regarding property, plant and equipment under finance lease.

b) Refer Note 36 for disclosure of contractual commitments for the acquisition of property, plant and equipment.

c) The depreciation method applied to windmills has been changed from Written Down Method (WDV) to straight Line Method (SLM) to reflect the significant change in the expected pattern of consumption of the future economic benefits embodied in the wind mills. As per Ind AS 16 Property, Plant and Equipment, such change in the depreciation method is considered as a change in an accounting estimate and the effect of the change has been recognized prospectively in accordance with Ind AS 8-Accounting Policies, Changes in Accounting Estimates and Errors. The impact of the change in depreciation method is given as below:-

d) Information regarding gross block of assets and accumulated depreciation under previous GAAP is as follows:

Loans given to employees are measured at amortised cost. The deferred payroll expenditure represents benefits accruing to the employees. The same will be amortised on a straight line basis over the remaining period of the loan.

Considering the provisions of Appendix C to Ind AS-17 on ‘Leases’ w.r.t. determining whether an arrangement contains a lease, the Company has ascertained that the PSA entered with one of its customers falls under the definition of finance lease. Accordingly, the written down value of the specified assets has been derecognized from PPE and accounted as Finance Lease Receivables. Recovery of amounts against depreciation, interest on loan capital and return on equity (pre-tax) components from the customer is adjusted against Finance Lease Receivables and interest. The interest component of the Finance Lease Receivables and amount received on account of revision of tariff of previous periods in respect of the above three elements are recognised as ‘Interest income on assets under finance lease’ under Note 29-‘Other Income’.

Note No.4 - Assets classified as held for sale

The company invested a sum of Rs.224.33 crores in equity of Teesta Urja Limited (TUL). TUL was implementing a project of 1200 MW Teesta III Hydro Electric Project. The execution of the project suffered due to natural calamities and due to non availability of equity funds. This led to time and cost overruns. Govt. of Sikkim (GoS) agreed to have 51% equity holding in TUL by partly acquiring shares from the existing shareholders and partly by subscribing to new shares. Accordingly the company being an existing shareholder needed to sell a part of its shareholding amounting to Rs.44.03 crore to GoS which have been classified as held for sale at fair value of Rs.37.51 crore on the transition date i.e. 1 April 2015.

Thereafter, the investment was sold at its fair value of Rs.37.51 crore in August, 2015. As such there is no loss or profit on sale of such investments in FY 2015-16.

Nature and purpose of reserves:

Securities premium account

Securities premium account is used to record the premium on issue of shares/ securities. This amount is utilised in accordance with the provisions of the Companies Act, 2013.

Share option outstanding account

The share option outstanding account is used to record the value of equity settled share based payment transactions with employees. The amounts recorded in this account are transferred to share premium upon exercise of stock options by employees.

General Reserve

General Reserve is a free reserve which is created from retained earnings. The Company may pay dividend and issue fully paid-up bonus shares to its members out of the general reserve account, and company can use this reserve for buyback of shares.

Contingent Reserve

General Reserve is a free reserve which is created from retained earnings. The company may use it to meet any contingency.

Retained Earnings

Retained earnings comprise of the Company’s undistributed earnings after taxes.

FVOCI-Equity Investment Reserve

The Company has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive income. These changes are accumulated within FVTOCI reserve within equity. The Company transfers amounts from this reserve to retained earnings when the relevant equity securities are derecognised.

Considering the provisions of Appendix C to Ind AS-17 on ‘Leases’ w.r.t. determining whether an arrangement contains a lease, the Company has ascertained that the PPA entered with one of its suppliers falls under the definition of finance lease. Accordingly, the written down value of the specified assets has been recognized as PPE and accounted as Finance Lease Obligations. Paid/ payable amounts against depreciation, interest on loan capital and return on equity (pre-tax) components to the supplier is adjusted against Finance Lease Obligations and interest. The interest component of the Finance Lease Obligations and amount paid on account of revision of tariff of previous periods in respect of the above three elements are recognised as ‘Interest expense on assets under finance lease’ under Note 33- ‘Finance Cost’.

Based on the information available with the Company, there are no dues as at March 31, 2017 payable to enterprises covered under “Micro Small and Medium Enterprises Development Act, 2006”. As such, no interest is paid/payable by the Company in terms of Section 16 of the Micro, Small and Medium Enterprises Development Act, 2006.

Considering the provisions of Appendix C to Ind AS-17 on Leases w.r.t. determining whether an arrangement contains a lease, the Company has ascertained that the PSA entered with one of its customers falls under operating lease. Recovery of amounts against depreciation, interest on loan capital and return on equity (pre-tax) from the customer are considered as lease rental on the assets under operating lease.

Considering the provisions of Appendix C to Ind AS-17 on ‘Leases’ w.r.t. determining whether an arrangement contains a lease, the Company has ascertained that the PSA entered with one of its customers falls under the definition of finance lease. Accordingly, the written down value of the specified assets has been derecognized from PPE and accounted as Finance Lease Receivables. Recovery of amounts against depreciation, interest on loan capital and return on equity (pre-tax) components from the customer is adjusted against Finance Lease Receivables and interest. The interest component of the Finance Lease Receivables and amount received on account of revision of tariff of previous periods in respect of the above three elements are recognised as ‘Interest income on assets under finance lease’.

Considering the provisions of Appendix C to Ind AS-17 on Leases w.r.t. determining whether an arrangement contains a lease, the Company has ascertained that the PPA entered with one of its suppliers falls under operating lease. Paid/payables amounts against depreciation, interest on loan capital and return on equity (pre-tax)to the supplier are considered as lease rental expenses on the assets under operating lease.

Note No.5 - Finance costs

a) Considering the provisions of Appendix C to Ind AS-17 on ‘Leases’ w.r.t. determining whether an arrangement contains a lease, the Company has ascertained that the PPA entered with one of its suppliers falls under the definition of finance lease. Accordingly, the written down value of the specified assets has been recognized as PPE and accounted as Finance Lease Obligations. Paid/ payable amounts against depreciation, interest on loan capital and return on equity (pre-tax) components to the supplier is adjusted against Finance Lease Obligations and interest. The interest component of the Finance Lease Obligations and amount paid on account of revision of tariff of previous periods in respect of the above three elements are recognised as ‘Interest expense on assets under finance lease’.

b) As per Power purchase agreements entered into with the off takers of Chukha and Kurichhu power projects (Bhutan), the interest earned on the term deposits made with commercial banks for the payments received on behalf of these projects is passed back to them. Accordingly interest income as well as expense is accounted for in the books of account.

Note No.6 - Contingent liabilities and commitments

Notes

i) Claims against the Company not acknowledged as debt include:

a) The company had an arrangement with a supplier for purchase of power. The supplier claimed that the company did not off take the offered surplus power and claimed a damage of Rs.84.95 Crore (31 March 2016: Rs.84.95 crore, 1 April 2015: Rs.84.95 crore). The arbitrator concluded the arbitration in favour of the company, however, the supplier has contested the award at High Court.

b) The company had an arrangement with a supplier for purchase of power. However, due to the prevalent market situation, the company was unable to find a buyer for power from the supplier for most of the period. The supplier raised a compensation bill of Rs.43.28 Crore (31 March 2016: Rs.43.28 crore, 1 April 2015: Rs.43.38 crore) for non-supply of power. The matter is pending at Supreme Court. The company has paid a deposit amounting to Rs.20.48 crore which is subject to the outcome of the appeal before the Appellate Tribunal.

c) Pending resolution of the issues with a supplier, the company has estimate an contingency liability of Rs.68.36 crore (31 March 2016 Rs.54.66 crore 1 April 2015: Rs.33.24 crore) towards his claims

ii) Disputed income tax/ custom duty pending before various forums/ authorities amount to Rs.241.37 crore (31 March 2016: Rs.24.94 crore, 1 April 2015: Rs.112.80 crore). Many of these matters were adjudicated in favour of the Company but are disputed before higher forums/ authorities by the concerned departments.

The company has paid a deposit amounting to Rs.6.45 crore against custom duty which is subject to the outcome of the appeal.

iii) Pending resolution of the respective proceedings, it is not practicable for the company to estimate the timings of cash outflows, if any, in respect of the above as it is determinable only on receipt of judgements/decisions pending with various forums/authorities.

Possible Reimbursement

The contingent liabilities referred to in (i) above, include an amount of Rs.68.36 crore (31 March 2016: Rs.54.66 crore, 1 April 2015: Rs.33.94 crore), for which Company envisages possible reimbursement from the one of its suppliers in full.

Commitments

a). Estimated amount of contracts remaining to be executed on capital account (property, plant & equipment and intangible assets) and not provided for as at 31 March 2017 is Rs.41.44 crore (31 March 2016: Rs.0.38 crore, 1 April 2015: Rs.0.38 crore). The details is as under:-

Note No.7 - Disclosure as per Ind AS 12 ‘Income taxes’

(a) Income tax expense

i) Income tax recognised in Statement of Profit and Loss

b). In respect of investments of Rs.1408.89 crore (31 March 2016: Rs.586.69 crore, 1 April 2015: Rs.501 crore) in subsidiary Companies, the Company has restrictions for their disposal as at 31 March 2017 as under:

ii) Income tax recognised in other comprehensive income

iii) Reconciliation of tax expense and the accounting profit multiplied by India’s domestic tax rate

c). In respect of investments of Rs.165.65 crore (31 March 2016: Rs.153.61 crore, 1 April 2015: Rs.153.61 crore) in other Companies, the Company has restrictions for their disposal as at 31 March 2017 as under:

c) The future minimum lease payments (MLPs) under non-cancellable leases in respect of the operating leases are as follows:

(b) Tax losses carried forward

Deferred tax assets have not been recognised in respect of the tax losses incurred by the Company that is not likely to generate taxable income in the foreseeable future.

(c) Unrecognised deferred tax assets and liabilities Unrecognized deferred tax liabilities

There is no unrecognised deferred tax liabilities

Unrecognised deferred tax assets

Deferred tax assets have not been recognized on provision for impairment in value of investment and decrease in fair value of investments through FVOCI as there is no certainty of its realisation.

(d) Dividend distribution tax on proposed dividend not recognised at the end of the reporting period

Since year end, the directors have recommended the payment of final dividend amounting to Rs.88.80 crore (31 March 2016: 74.00 crore). The dividend distribution tax on this proposed dividend amounting to Rs.18.06 crore (31 March 2016: Rs.15.06 crore) has not been recognised since this proposed dividend is subject to the approval of shareholders in the ensuing annual General Meeting.

Note No.8 - Disclosure as per Ind AS 17 ‘Leases’

a) Operating leases

i. Leases as lessee

a) The Company’s leasing arrangements are in respect of operating leases of premises for office and land. An amount of Rs.1.17 crore (31 March 2016: Rs.0.38 crore) towards lease payments in respect of premises for offices and land are included under ‘Rent’ in Note 34.

b) The Company has classified the arrangement with one of its suppliers as lease based on the principles enunciated in Appendix C of Ind AS 17 and accounted for as operating lease in accordance with those principles. An amount of Rs.193.40 crore (31 March 2016: Rs.214.32 crore) towards lease payments in respect of the arrangement are included under Lease rental expenses on assets under operating lease’ in Note 31-’Operating expenses’

ii. Leases as lessor

a) The Company has classified the arrangement with one of its customers as lease based on the principles enunciated in Appendix C of Ind AS 17 and accounted for as operating lease in accordance with those principles. An amount of Rs.193.40 crore (31 March 2016: Rs.214.32 crore) towards lease receipts in respect of the arrangement are included under ‘Lease rentals on asset under operating lease ’ in Note 28- Revenue from operations. The future minimum lease payments (MLPs) under non-cancellable leases in respect of the same are as follows:

b) Finance leases

i Leases as lessee

a) Leasehold land acquired by the Company are capitalised at the present value of the total minimum lease payments to be paid over the lease term. Future lease rentals are recognised as ‘Finance lease obligations’ at their present values. The leasehold land is amortised considering the significant accounting policies of the Company.

b) The Company has classified the arrangement with one of its suppliers in the nature of lease based on the principles enunciated in Appendix C of Ind AS 17, ‘Leases’ and accounted for as finance lease in accordance with those principles.

c) The future minimum lease payments (MLPs) under non-cancellable leases in respect of the same are as follows:

Note No.9 - Disclosure as per Ind AS 19 ‘Employee benefits’

ii Leases as lessor

The Company has classified the arrangement with one of its customers in the nature of lease based on the principles enunciated in Appendix C of Ind AS 17, ‘Leases’ and accounted for as finance lease in accordance with those principles. The future minimum lease payments (MLPs) under non-cancellable leases in respect of the same are as follows:

(i) Defined contribution plans:

A. Provident fund

The Company pays fixed contribution to provident fund to the appropriate authorities. The contributions to the fund for the year are recognized as expense and are charged to the profit or loss. An amount of Rs.0.95 crore (31 March 2016: Rs.0.87 crore) for the year is recognised as expense on this account and charged to the Statement of Profit and Loss.

(ii) Defined benefit plans:

A. Gratuity

a) The Company has a defined benefit gratuity plan. Every employee who has rendered continuous service of five years or more is entitled to gratuity at 15 days salary (15/26 X last drawn basic salary) for each completed year of service subject to a maximum of Rs.0.10 crore on superannuation, resignation, termination, disablement or on death.

Based on the actuarial valuation obtained in this respect, the following table sets out the status of the gratuity and the amounts recognised in the Company’s financial statements as at balance sheet date:

B. Post-Retirement Medical Benefits (PRMB)

The Company has Post-Retirement Medical Facility Benefits (PRMB), under which the eligible retired employees and their spouses are provided medical facilities and an out-patient actual medical reimbursement subject to a ceiling fixed by the Company. The liability for the same is recognised annually on the basis of actuarial valuation. “

Based on the actuarial valuation obtained in this respect, the following table sets out the status of the PRMF and the amounts recognised in the Company’s financial statements as at balance sheet date:

C. Plan assets

The estimates of future salary increases considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. Further, the expected return on plan assets is determined considering several applicable factors mainly the composition of plan assets held, assessed risk of asset management and historical returns from plan assets.

ii. Sensitivity analysis

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below:

Plan assets comprise the following

D. Defined benefit obligations

i. Actuarial assumptions

The following were the principal actuarial assumptions at the reporting date:

Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an approximation of the sensitivity of the assumptions shown.

The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period. This analysis may not be representative of the actual change in the defined benefit obligations as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

E. Risk exposure

Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:

a) Asset volatility

The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. Most of the plan asset investments are in fixed income securities with high grades and in government securities. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimise risk to an acceptable. The equity securities are expected to earn a return in excess of the discount rate and contribute to the plan deficit. Any deviations from the range are corrected by rebalancing the portfolio. The Company intends to maintain the above investment mix in the continuing years.

b) Changes in discount rate

A decrease in discount rate will increase plan liabilities, although this will be partially offset by an increase in the value of the plans’ assets holdings. The Company actively monitors how the duration and the expected yield of the investments are matching the expected cash outflows arising from the employee benefit obligations. The Company has not changed the processes used to manage its risks from previous periods.

F. Expected maturity analysis of the defined benefit plans in future years

Expected contributions to post-employment benefit plans for the year ending 31 March 2018 are Rs.0.49 crore.

The weighted average duration of the defined benefit plan obligation at the end of the reporting period is as under:-

(iii) Other long term employee benefit plans Leave

The Company provides for earned leave benefit (including compensated absences), non-encashable leave (NEL) and half-pay leave (not applicable for new employee joining after November, 2008) to the employees of the Company which accrue annually at 34 days, 6 days and 20 days respectively. Earned leave (EL) is encashable while in service whereas NEL is non-encashable while in service. Total number of leave (i.e. EL & NEL combined) that can be encashed on superannuation shall be restricted to 300 days and in addition to this half-pay leave is encashable upto 150 days. The scheme is unfunded and liability for the same is recognised on the basis of actuarial valuation. A provision of Rs.1.12 crore (31 March 2016: Rs.0.75 crore) for the year have been made on the basis of actuarial valuation at the year end and debited to the Statement of Profit and Loss.

Note No.10 - Disclosure as per Ind AS 24 ‘Related Party Disclosures’

a) List of Related parties:

i) Subsidiaries:

1. PTC India Financial Services Limited

2. PTC Energy Limited

ii) Associates:

Krishna Godavari Power Utilities Limited

iii) Key Managerial Personnel (KMP):

A) Whole time directors

Shri Deepak Amitabh Chairman and Managing Director

Shri Arun Kumar Director (Finance) & CFO

Shri Ajit Kumar Director (Commercial & Operations)

Dr. Rajib Kumar Mishra Director (Marketing & Business Development)

B) Non-whole time directors Shri Anil Razdan

Shri Dhirendra Swarup Shri Dipak Chatterjee Shri H.L. Bajaj

Hemant Bhargava (Nominee director of Life Insurance Corporation of India)

Shri S Balachandran Shri Ved Kumar Jain

iv) Entities having significance influence on the company

1. NTPC Limited.

2. Power Grid Corporation of India Limited.

3. Power Finance Corporation Limited

4. NHPC Limited

v) Other Related Parties:

PTC Foundation PTC India Gratuity Trust

Terms and conditions of transactions with the related parties

(a) Transactions with the related parties are made on normal commercial terms and conditions and at market rates.

(b) The Company is deputing its employees to Subsidiaries as per the terms and conditions agreed between the companies, which are similar to those applicable for deputation of employees to other companies and institutions. The cost incurred by the company towards superannuation and employee benefits are recovered from these companies.

(c ) Consultancy services provided by the Company to Subsidiaries are generally on nomination basis at the terms, conditions and principles applicable for consultancy services provided to other parties.

(d) The company has taken/given office space on lease from/to subsidiary company. The rent and other terms and conditions are fixed after mutual discussion and after taking into account the prevailing market conditions.

(e) Outstanding balances of Subsidiaries and other related parties at the year-end, are unsecured and interest free and settlement occurs through banking transaction. For the year ended 31 March 2017, the company has not recorded any impairment of receivables relating to amounts owed by related parties (31 March 2016: Rs.Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

Note No.11 - Disclosure as per Ind AS 36 ‘Impairment of Assets’

As required by Ind AS 36, an assessment of impairment of assets was carried out and based on such assessment, the Company has accounted impairment losses as below:

The Company has invested Rs.37.55 crore as 49% of equity in its associate “Krishna Godavari Power Utilities Limited (KGPUL)” for 60 MW Thermal imported coal based project. The project was 90% completed and further progress on the project was stopped due to paucity of funds. One of the lenders has carried out the valuation of assets of the project and based on the valuation report, the company has recognized an impairment loss of Rs.37.55 crore in respect of such investment and disclosed as an exceptional item in the Statement of Profit and Loss for the year ended 31 March, 2016.

Also, refer Note No. 45 for “Reconciliation of impairment loss provisions”.

Note No.12 - First-time adoption of Ind AS Transition to Ind AS

These are the Company’s first Financial Statements in accordance with Ind AS. For periods up to and including the year ended 31 March 2016, the Company prepared its financial statements in accordance with previous GAAP, including accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended). The effective date for Company’s Ind AS Opening Balance Sheet is 1 April 2015 (the date of transition to Ind AS).

The accounting policies set out in Note 1 have been applied in preparing the financial statements for the year ended 31 March 2017, the comparative information presented in these financial statements for the year ended 31 March 2016 and in the preparation of an opening Ind AS Balance Sheet at 1 April 2015 (the Company’s date of transition). According to Ind AS 101, the first Ind AS Financial Statements must use recognition and measurement principles that are based on standards and interpretations that are effective at 31 March 2017, the date of first-time preparation of Financial Statements according to Ind AS. These accounting principles and measurement principles must be applied retrospectively to the date of transition to Ind AS and for all periods presented within the first Ind AS Financial Statements.

Any resulting differences between carrying amounts of assets and liabilities according to Ind AS 101 as of 1 April 2015 compared with those presented in the previous GAAP Balance Sheet as of 31 March 2015, were recognized in equity under retained earnings within the Ind AS Balance Sheet.

An explanation of how the transition from previous GAAP to Ind AS has affected the company’s financial position, financial performance and cash flows is set out in the following tables and notes.

Optional exemptions availed and mandatory exceptions

In the Ind AS Opening Balance Sheet as at 1 April 2015, the carrying amounts of assets and liabilities from the previous GAAP as at 31 March 2015 are generally recognized and measured according to Ind AS in effect as on 31 March 2017. For certain individual cases, however, Ind AS 101 provides for optional exemptions and mandatory exceptions to the general principles of retrospective application of Ind AS. The Company has made use of the following exemptions and exceptions in preparing its Ind AS Opening Balance Sheet:

Business combinations

The Company has elected not to apply IND AS 103 Business Combinations retrospectively to business combinations that occurred before the date of transition.

Property, plant and equipment & Intangible assets

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment and intangible assets as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition.

Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value.”

Designation of previously recognised financial instruments

Ind AS 101 allows an entity to designate investments in equity instruments at FVOCI on the basis of the facts and circumstances at the date of transition to Ind AS.

The Company has elected to apply this exemption for its investment in equity investments in the following companies:

1. Teesta Urja Limited

2. Athena Energy Ventures Private Limited

3. Chenab Valley Power Projects Private Limited

Arrangements containing a lease

Appendix C, Ind AS 17 requires an entity to assess whether an arrangement contains a lease at its inception. However, Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS. The Company has elected to apply this exemption for such contracts/arrangements.

Estimates

An entity’s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

Ind AS estimates as at 1 April 2015 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

- Investment in equity instruments carried at FVTPL or FVTOCI;

- Investment in debt instruments carried at FVTPL; and

- Impairment of financial assets based on expected credit loss model.”

Classification and measurement of financial assets

The Company has also elected the option under Ind AS 101 by not applying the requirement of Ind AS 109 in case of employee loans which requires that these shall be recognized initially at fair value and subsequently at amortized cost. As per the exemption, if an entity finds impracticable to apply retrospectively effective interest method, the fair value of the financial asset at the date of transition to Ind ASs shall be the new amortized cost of that financial asset at the date of transition to Ind AS.

Employee stock option expense

Under the previous GAAP, the cost of equity-settled employee share-based plan were recognised using the intrinsic value method. Under Ind AS 102 Share-based payment, the cost of equity settled share-based plan is recognised based on the fair value of the options as at the grant date. However, IND AS 101 permits a first-time adopter not to apply Ind AS 102 Share-based Payment to equity instruments that were vested before the date of transition to Ind AS.

Accordingly, the company has elected to recognise the cost of equity-settled employee share-based plan using the intrinsic value method.

Reconciliation between previous IGAAP and Ind AS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliation from previous IGAAP to Ind AS.

Notes to first-time adoption:

1 Property, plant & equipment

a) Under Indian GAAP, the company accounted for long term leasehold land taken for its office space as perpetual lease and the payments of ground paid for the said lease were being charged to profit or loss. Under Ind-AS, the company has accounted for such lease as finance lease and the payments of ground rent have been apportioned into reduction in finance obligation and recognition of interest thereon.

On transition date the carrying value of property, plant and equipment has been increased by Rs.0.04 crore with a increase in financial liabilities (finance lease obligation) by Rs.0.71 crore and decrease in retained earnings by Rs.0.67 crore.

During the year ended 31 March, 2016, depreciation on leasehold land is charged by Rs.0.05 crore with a corresponding reduction in value of property, plant and equipment. Further, ground rent under the head “’’Other expenses”“ has been derecognised by Rs.0.08 crore with corresponding recognition of “’interest expense on assets under finance lease”“ under ‘Finance cost’ .

b) Under Indian GAAP, the company capitalized upfront lease payment as leasehold land for its windmill plant . Under Ind-AS, such upfront payment is to be treated as advance rent.

The effect of the adjustments resulted in decrease in property, plant & machinery by Rs.0.08 crore with a corresponding increase in value of prepayments on transition date.

Out of total prepayments of Rs.0.08 crore, current portion of Rs.0.01 crore and non current portion of Rs.0.07 crore have been classified under the head ““Other current assets”“ and ““Other non-current assets”“ respectively.

During the year ended 31 March, 2016, depreciation on leasehold land is derecognized by Rs.0.01 crore with a corresponding reduction in prepayments under the head ““Other current assets’.

2 Fair valuation of investments

Under the previous GAAP, investments in equity instruments and mutual funds were classified as long-term investments or current investments based on the intended holding period and realisability. Long-term investments were carried at cost less provision for other than temporary decline in the value of such investments. Current investments were carried at lower of cost and fair value. Under Ind AS, these investments are required to be measured at fair value.

The resulting fair value changes of these investments have been recognised in retained earnings as at the date of transition and subsequently in the profit or loss for the year ended 31 March 2016. This increased the retained earnings by Rs.8.15 crore on transition date and Rs.8.19 crore on 31 March 2016. Corresponding increase is in value of non-current investment and current investment by Rs.4.80 crore and Rs.3.35 crore respectively as on transition date and Rs.Nil and Rs.8.19 crore respectively on 31 March, 2016.

During the year ended 31 March, 2016, other income has increased by Rs.0.04 crore due to net change in fair value of the investments.

3 Financial assets (Employee loans)

Under previous GAAP, employee loans and other long term advances to be settled in cash or another financial asset are recorded at cost. However, under Ind AS, certain assets covered under Ind AS 32 meet the definition of financial assets which include employee loans and long term advances to be settled in cash or another financial asset are classified as financial assets at amortized cost. Thus in case interest rate on such financial assets is lower than market rate, these financial assets have been discounted to present value.

The effect of the adjustments resulted in reduction in the value of financial assets (employee loans) and increase in value of non-financial assets (Deferred payroll expenses) by Rs.0.36 crore and Rs.0.31 crore respectively on transition date. As at 31 March 2016, the value of financial assets (employee loans) has been reduced and value of non-financial assets (Deferred payroll expenses) has been increased by Rs.0.37 crore and Rs.0.32 crore respectively.

Retained earnings have been decreased by net impact of Rs.0.05 crore of above adjustments on transition date as well on 31 March, 2016.

Out of total reduction of employee loans of Rs.0.36 crore (on 31 March, 2016 Rs.0.37 crore), current portion of Rs.Nil crore (on 31 March, 2016 Rs. 0.03 crore) has been classified under the head ““Current loans”“ and non current portion of Rs.0.36 crore (on 31 March, 2016 Rs.0.34 crore) has been classified under the head ““ Non-current loans”“.

Out of total increase in deferred payroll expenses of Rs.0.31 crore (on 31 March, 2016 Rs.0.32 crore), current portion of Rs.0.03 crore (on 31 March, 2016 Rs.0.03 crore) has been classified under the head ““Other current assets”“ and non current portion of Rs.0.28 crore (on 31 March, 2016 Rs. 0.29 crore) has been classified under the head ““ Other non current assets.

During the year ended 31 March, 2016, employee cost has been increased by Rs.0.03 crore with a corresponding reduction in deferred payroll expenses. Further interest on employee loan is increased by Rs.0.03 crore under the head ““Other income”“ due to unwinding of present value of financial assets”“.

4 Arrangements containing the lease

A) Arrangements with generators

The company has entered into power purchase agreements (PPAs or arrangements) with generators for supply of electricity. Under

Ind AS, the amounts receivable under these arrangements have the substance of a lease under the provisions of Appendix C to Ind AS 17 as these arrangements are dependent on use of specific assets and convey the right to use those assets. The evaluation of the arrangements is based on the facts and circumstances existing at the date of transition of the lease. Based on these evaluations, the Company has identified that the two arrangements entered into with generators are to be treated as leases. The company analyzed with reference to Ind AS 17 for classification as either finance or operating leases. Accordingly, one arrangement is classified as finance lease and another as operating lease.

i) Finance lease

Under Indian GAAP, the amounts payable to the generators were recognized as purchases . However, under Ind AS, power plant is to be treated as assets taken on finance lease and amounts payable against depreciation, interest on loan capital and return on equity (pre-tax) components are to treated as made against finance lease and have been segregated into finance expense and repayment of principal.

On transition date the carrying value of property, plant and equipment has been increase by Rs.812.20 crore with corresponding increase in financial liabilities (finance lease obligations) by Rs.790.78 crore and Increase in amount of retained earnings by Rs.21.42 crore.

Out of total financial lease obligations of Rs.790.78 crore (on 31 March, 2016 Rs.733.71 crore), current portion of Rs.74.13 crore (on 31 March, 2016 Rs.19.45 crore) has been classified under the head ““Other financial liabilities”“ and non current portion of Rs.716.65 crore (on 31 March, 2016 Rs.714.26 crore) has been classified under the head ““ Borrowings.

During the year ended 31 March 2016, purchase of energy was reduced by Rs.164.92 crore with corresponding recognition of interest expense on assets on finance lease under ‘finance cost’ by Rs.100.63 crore and reduction in value of finance lease payable by Rs.64.29 crore.

ii) Operating lease

Under Indian GAAP, the amounts payable to the generators were recognized as purchases. However, under Ind AS, amounts payable against depreciation, interest on loan capital and return on equity (pre-tax) components are to treated as made against operating lease and recognised as lease rental expense.

During the year ended 31 March 2016, purchases was reduced by Rs.214.32 crore with corresponding recognition of lease expenses on assets under operating lease under the head ‘Operating expenses’.

B) Arrangements with customers

The company has entered into Power Sale Agreements (PSAs or arrangements) with its customers for sale of electricity. However, under Ind AS, the amounts receivable under these arrangements have the substance of a lease under the provisions of Appendix C to Ind AS 17 as these arrangements are dependent on use of specific assets and convey the right to use these assets. The evaluation of the arrangements is based on the facts and circumstances existing at the date of transition of the lease. Based on these evaluations, the Company has identified that the two arrangements entered into with customers are to be treated as leases. The company analyzed with reference to Ind AS 17 for classification as either finance or operating leases. Accordingly, one arrangement is classified as finance lease and another as operating lease.

i) Finance lease

Under Indian GAAP, the amounts receivables from customers were recognized as sales of electricity. However, under Ind AS, power plant is to be treated as assets given on finance lease and amounts receivable against depreciation, interest on loan capital and return on equity (pre-tax) components are to treated as made against finance lease and has been segregated into finance income and repayment of principal. On transition date the carrying value of property, plant and equipment has been decrease by Rs.812.20 crore with a corresponding increase in financial assets (finance lease receivables) by Rs.790.78 crore and decrease in amount of retained earnings by Rs.21.42 crore.

Out of total lease receivable of Rs.790.78 crore (on 31 March, 2016 Rs.733.71 crore), current portion of Rs.74.13 crore (on 31 March, 2016 Rs.19.45 crore) has been classified under the head ““Other Financial Assets”“ and non current portion of Rs.716.65 crore (on 31 March, 2016 Rs.714.26 crore) has been classified under the head ““ Other non-current financial assets”“.

During the year ended 31 March 2016, sale of energy was reduced by Rs.164.92 crore with recognition of interest income on assets on finance lease by Rs.100.63 crore under the head ‘Other Income’ and reduction in value of finance lease receivables by Rs.64.29 crore.

ii) Operating lease

Under Indian GAAP, the amounts receivable from customers were recognized as sales of electricity. However, under Ind AS, power plant is to be treated as assets given on operating lease and amounts receivable against depreciation, interest on loan capital and return on equity (pre-tax) components are to treated as made against operating lease and have been recognised as lease rental income.

During the year ended 31 March 2016, sales of energy was reduced by Rs.214.32 crore with corresponding recognition of lease income on assets under operating lease under the head ‘Revenue from operations’.

5 Assets classified as held for sale

Under Indian GAAP, a portion of the equity investment in Teesta Urja Limited was classified under the head ““ Current investments”“ for the year ended March 31, 2015 as such portion was expected to be realised within 12 months. Thereafter, the investment was sold in the year ended March 31, 2016. Under Ind-AS GAAP, such non-current equity investment amounting to Rs.37.51 crore (at fair value) has been reclassified under the head ““Assets classified as held for sale”“ at the transition date i.e. 1 April 2015.

6 Presentation of financial assets and financial liabilities

Under Indian GAAP, trade receivables, trade payables, open access advances and advances from customers were settled off to the extent related to a single party for the purpose of presentation in the financial statements. However, under Ind-AS, such setting off is permissible only if an entity intends either to settle on a net basis or to realise the asset and settle the liability simultaneously and currently has a legally enforceable right to set off the recognized amounts.

As on transition date, trade receivables and open access advances have been increased by Rs.279.76 crore and Rs.8.78 crore respectively with a corresponding increase in trade payables and advances from vendors by Rs.266.07 crore and Rs.22.47 crore respectively. As on 31 March, 2016, trade receivables have been increased by Rs.482.37 with a corresponding increase in trade payables and advances from vendors by Rs.472.36 crore and Rs.10.01 crore respectively.

7 Proposed dividend

Under the previous Indian GAAP, dividends proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognised as a liability. Under

Ind AS, such dividends are recognised when the same is approved by the shareholders in the general meeting. Accordingly, the liability for proposed dividend (including dividend distribution tax) included under provisions has been reversed by Rs.78.38 crore and Rs.89.06 crore on transition date and 31 March, 2016 respectively with corresponding adjustment to retained earnings. Consequently, the total equity increased by an equivalent amount.

8 Remeasurements of post-employment benefit obligations

Both under previous GAAP and Ind-AS, the company recognised costs related to its post-employment defined benefit plan on an actuarial basis. Under previous GAAP, the entire cost, including actuarial gains and losses, are charged to profit or loss. Under Ind-AS, remeasurements [comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts included in net interest on the net defined benefit liability] are recognised in Other comprehensive income.

As a result, profit for the year ended 31 March 2016 decreased by Rs.0.03 crore (net of tax of Rs.0.01 crore) with corresponding increase in Other comprehensive income during the year.

9 Rebate on purchase of power

The company earns rebate on purchases by making early payments to vendors as per agreements. Under Indian GAAP, rebate on purchases was classified under the head ““Revenue from operations”“ . However, under Ind AS, such rebate is reduced from purchases. Accordingly purchases are shown net of rebate on purchase of power.

During the year ended 31 March, 2016, purchases was reduced by Rs.104.92 crore with corresponding reduction in rebate on purchase of power under the head ““Revenue from operations”“.

10 Rebate on sale of power

The company gives rebate on sale of power on early payments received from its customers as per agreements. Under Indian GAAP, rebate on sale of power was shown as an expense . However, under Ind AS, such rebate is reduced from sale of electricity classified under the head ““Revenue from operations”“. Accordingly sale of electricity is shown net of rebate on sale of power.

During the year ended 31 March, 2016, sale of electricity was reduced by Rs.52.95 crore under the head ““Revenue from operations”“ with corresponding reduction in rebate on sale of power.

11 Deferred taxes

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP.

In addition, the various transitional adjustments lead to temporary differences. According to the accounting policies, the Group has to account for such differences. Deferred tax adjustments are recognised in correlation to the underlying transaction either in retained earnings or a separate component of equity. On the date of transition, the net impact on deferred tax liabilities is of Rs.1.53 crore (31 March 2016: Rs.0.67 crore). The movement of Rs.0.85 crore in the deferred tax liabilities during the year ended 31 March, 2016 has been recognized in the statement of Profit or Loss by Rs.0.86 Crore (income) and Rs.0.01 crore (expense) in other comprehensive income.

12 Other equity :

Retained earnings as at 1 April 2015 has been adjusted consequent to the above Ind AS transition adjustments. Refer ‘Reconciliation of total equity as at 31 March 2016 and 1 April 2015 as given above for details.

13 Other comprehensive income

Under Indian GAAP, the Company has not presented other comprehensive income (OCI) separately. Items that have been reclassified from statement of profit and loss to other comprehensive income includes remeasurement of defined benefit plans and fair value gain/loss on FVTOCI equity instruments. Hence, Indian GAAP profit or loss is reconciled to total comprehensive income as per Ind AS.

14 Statement of cash flows for the year ended 31 March, 2016

Note No.13 . Financial Risk Management

The Company’s principal financial liabilities comprise trade payables and other payables including financial obligations. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets are trade & other receivables including lease receivables, current investments and cash and short-term deposits that derive directly from its operations. The Company also holds equity investments in subsidiaries, associate companies and other companies.

The Company is exposed to the following risks from its use of financial instruments:

- Credit risk

- Liquidity risk

- Market risk

This note presents information about the Company’s exposure to each of the above risks, the Company’s objectives, policies and processes for measuring and managing risk.

Risk management framework

The Company’s activities make risk an integral and unavoidable component of business. The company manages risks in a proactive and effective manner and has taken adequate measures to address such concerns by developing adequate systems and practices.

In order to institutionalize the risk management process in the Company, there is a Risk Management Group (RMG) and an elaborate Risk Management Policy (RMP) has been formulated.

Governance Framework

The Governance framework of the Risk Management process is constituted by three layers of authority:

i) Board of Directors and Audit Committee

ii) Executive Management Team

iii) Functional Head(s)

The process of escalation to and monitoring of risks by the three layers in the Governance framework is built around the following key facilitating roles. A cross functional team approach has been followed to establish a workable and business focused risk management process in the PTC Group.

i) Chief Risk Officer (reporting to Audit Committee)

ii) Risk Owners (typically Vice President level functionaries reporting to Functional Heads)

iii) Risk Monitors

Roles and Responsibilities

Board and Audit Committee: The Board, on the recommendation of Audit Committee, approves the risk management policy framework and process and takes various decisions related to risk management policy and process.

Chief Risk Officer (CRO): The CRO provides inputs and insights in the establishment, monitoring and structuring risk management process and further monitor its compliance in accordance with relevant provisions of the policy. CRO coordinates between the Board and Executive Management Team to establish an advance / proactive risk reporting system, based on ethical principles, so that risks are understood in a simple and transparent manner.

Executive Management Team: The CEO, Whole Time Directors and other Functional heads of respective Business Units / Functions constitute the Executive Management Team. By virtue of their roles, they are the best equipped to have knowledge and understanding of their respective business functions. Hence, they constitute the first

---

Mar 31, 2016

# refer Note No 27(l).

(b) The Company has pledged, in favor of Power Finance Corporation Limited (PFC) , 77,77,500 Equity Shares of Rs,10 each at par held by it in M/s. Krishna Godavari Power Utilities Limited (KGPUL) along with the promoter of KGPUL to comply with the lending requirements of PFC for loan taken by KGPUL.

b) Trade receivables are hypothecated to the banks for availing the non- fund based working capital facilities.

c) Trade receivables include an amount of Rs,16.23 Crore due from Tamil Nadu Electricity Board (TNEB) towards compensation claim. Sole arbitrator gave order unfavorable to the company against which a petition has been filed by the company at Madras high Court. As assessed by the management, the chances of a decision in favour of the company is high as the award has been erroneously passed against the settled law and accordingly is likely to be set aside by the Hon’ble Madras High Court. Further, the Company has a recourse to claim similar amount from PSPCL in case the High Court Order is against the company.

* includes Rs,20.48 crore deposited with GUVNL and Rs,6.45 crore deposited with Commissioner of custom (refer Note No. 27 (c)(i)).

b) Loans and advances due from directors-NIL.

b) Dividend received from subsidiary company Rs,33.73 crore (Previous year Rs,33.73 crore)

Note- The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

x) Details of expenses incurred for defined contribution plans during the year:

b) As per Power purchase agreements entered into with the off takers of Chukha and Kurichhu power projects (Bhutan), the interest earned on the term deposits made with commercial banks for the payments received on behalf of these projects is passed back to them. Accordingly, interest income as well as expense is accounted for in the books of account.

* inclusive of service tax

c) The Company has taken warehouse and some office space on operating lease . The disclosures as per AS-19 are given as under:-

i) Rs,0.37 crore has been debited to the statement of profit and loss (Previous year Rs,0.08 crore).

ii) Details of future lease payments

* Total CSR expense incurred during the year is Rs,1.33 Crore (Rs,0.33 from amount to be spent in FY 2015-16 and Rs,1.00 crore for contribution to prime minister relief fund from unspent amount of FY 2014-15).

Note No. 27 - OTHER INFORMATION

a) The company is in the business of power. Consultancy income has not been reported separately as the same being insignificant. As such, there are no separate reportable segments as per Accounting Standard -17 on Segment Reporting as notified by the Companies (Accounting Standards) Rules 2006.

j) (i) In accordance with the accounting policy, the surcharge recoverable on late/ non-payment of dues by customers is recognized when no significant uncertainty as to measurability or collectability exists. Correspondingly surcharge liabilities on late/ non-payments to the suppliers, in view of the matching concept, is not being recognized in the accounts. The estimated liability in this regard, however is lower than the company’s claims from its customers.

(ii) During the year, the company has recognized surcharge of Rs,103.63 crore (previous year, Rs,60.75 crore) from customers on amounts overdue on sale of power which has been included in “Revenue from operations”. Correspondingly surcharge expense of Rs,33.72 crore (previous year, Rs,3.32 crore) paid/payable to sundry creditors has been included in “other operating expenses”.

g) Some of the balances of trade payables, trade receivables and advances are subject to confirmations/ reconciliations. Adjustment, if any will be accounted for on confirmation/ reconciliation of the same, which in the opinion of the management will not have a material impact.

h) In the opinion of the management, the value of current assets, loans and advances on realization in the ordinary course of business, will not be less than the value at which these are stated in the balance sheet.

l) The company invested Rs. 37.55 Crore as 49% of equity into 60 MW-Thermal -imported coal based project. The project is about 90% complete and the further progress on the project has stopped due to paucity of funds. One of the lenders has carried out the valuation of the assets of the project and based on the valuation report the company has made full provision for diminution in value of investment in the said project, even though the efforts are on to revive the project. But for this provision, the PAT of the company would have been Rs. 271.16 crores for the year.

m) The previous year figures have been reclassified / regrouped / rearranged to conform to this year classification, wherever necessary.

---

Mar 31, 2014

Note No. 1 – OTHER INFORMATION

a) The company is in the business of power. Consultancy income and sale/ purchase of coal have not been reported separately as the same being insignificant. As such, there are no separate reportable segments as per Accounting Standard-17 on Segment Reporting as notified by the Companies (Accounting Standards) Rules 2006.

(b) Estimated amount of capital commitments:

(Rsin crore)

Particulars As at As at 31.03.2014 31.03.2013

Claims of supplies 132.38 128.56

Income Tax demands 19.69 6.79

Custom Duty 17.16 10.61

Total 169.23 145.96

Remarks :

(a) Rs. 84.95 Crore pertaining to claim of Himachal Pradesh State Electricity Board. The arbitrator concluded the arbitration in favour of PTC on 31.10.2008, however HPSEB has contested the award in the High Court of Himachal Pradesh.

(b) Rs. 43.28 Crore pretaining to compensation bills raised by Gujarat Urja Vikas Nigam Limited (GUVNL). GUVNL filed a petition before GERC for direction of payment. GERC passed order against PTC. PTC fi led an appeal before APTEL which had directed PTC to deposit 50% of the amount (Rs 20.48 crore) determined GERC. Presently, arguments have been concluded and order has been reserved by APTEL.

@High Court passed the liquidation orders for Ashmore PTC India Infrastructure Advisors Private Limited and Ashmore PTC India Energy Infrastructure Trustee Private Limited on 03.02.2014 and 05.02.2014 respectively

(c) Certain balances of trade payables, trade receivables and advances are subject to confi rmation.

(i) In the opinion of the management, the value of current assets, loans and advances on realization in the ordinary course of business, will not be less than the value at which these are stated in the balance sheet.

(2) Dividend paid to non- resident shareholders (in foreign currency):

(d) In accordance with the accounting policy, the surcharge recoverable on late/ non-payment of dues by sundry debtors is accounted for on receipt basis. Correspondingly surcharge liabilities on late/non-payments to the suppliers, in view of the matching concept, is not being recognized in the accounts. The estimated liability in this regard, however is lower than the company''s claims from its sundry debtors.

(e) During the year, the company has received surcharge of Rs. 206.43 crore (previous year, Rs. 12.53 crore) from sundry debtors on amounts overdue on sale of power which has been included in "Revenue from operations". Correspondingly surcharge expense of Rs. 68.02 crore (previous year, Rs. 1.15 crore) paid/payable to sundry creditors has been included in "other operating expenses".

(f) The previous year figures have been reclassified/regrouped/ rearranged to conform to this year classification, wherever necessary.

---

Mar 31, 2013

Note No. 1 - NON CURRENT INVESTMENTS

(a) Non current investments

(b) The Company has pledged, in favour of Power Finance Corporation Limited (PFC), 77,77,500 Equity Shares of '' 10 each at par held by it in M/s. Krishna Godavari Power Utilities Limited (KGPUL) along with the promoter of KGPUL to comply with the lending requirements of PFC for loan taken by KGPUL.

(c) Provision for diminution of investments has been made for the Company''s investment in Ashmore PTC India Energy Infrastructure Advisors Private Limited and Ashmore PTC India Energy Infrastructure Trustee Private Limited.

(d) As per Accounting Standard - 27 - ''Financial reporting of interest in Joint Ventures'' notified under Companies (Accounting Standards) Rules 2006, the Company''s share of ownership interest, assets, liabilities, income, expenses, contingent liabilities and capital commitments in the joint venture

i) Economic Assumption:

The principal assumptions are the discount rate and salary increase. The discount rate is based upon the market yields available on government bonds at the accounting date with a term that matches that of the liabilities and the salary increase takes.

Note No. 2 - OTHER INFORMATION

a) The company is primarily in the business of power. Consultancy income has not been reported separately as the same being insignificant. As such, there are no separate reportable segments as per Accounting Standard -17 on Segment Reporting as notified by the Companies (Accounting Standards) Rules 2006.

b) Estimated amount of capital commitments:

c) Details of contingent liabilities:

i) Claims against the Company not acknowledged as debt:

d) The Company has entered into the following related party transactions. Such parties and transactions have been identified as per Accounting Standard 18 "Related Party Disclosures'' notified under Companies (Accounting Standards) Rules, 2006.

e) Certain balances of trade payables, trade receivables and advances are subject to confirmation.

f) In the opinion of the management, the value of current assets, loans and advances on realization in the ordinary course of business, will not be less than the value at which these are stated in the balance sheet.

g) In accordance with the accounting policy, the surcharge recoverable on late/ non-payment of dues by sundry debtors is accounted for on receipt basis. Correspondingly surcharge liabilities on late/ non-payments to the suppliers, in view of the matching concept, is not being recognized in the accounts. The estimated liability in this regard, however is lower than the company''s claims from its sundry debtors.

h) The previous year figures have been reclassified / regrouped / rearranged to conform to this year classification, wherever necessary.

---

Mar 31, 2012

1) Details of contingent liabilities:

i) Claims against the Company not acknowledged as debt:

(Rs.in mn)

Particulars As at As at Remarks 31.03.2012 31.03.2011

Claims of 1,285.64 1,285.64 1. Out of total claims, suppliers Rs. 849.50 mn pertains to claim of Himachal Pradesh State Electr -icity Board. The arbitrator concluded the arbitration in favour of PTC on 31.10.2008, however HPSEB has contested the award in the High Court of Himachal Pradesh.

2. Gujarat Urja Vikas Nigam Limited (GUVNL) has raised bills for compens -ation for an amount of Rs.432.77 mn. GUVNL has filed a petition bef -ore GERC for direction of payment. In the opinion of the Company and also as per legal opinion , the said compens -ation is not payable and PTC has challenged the conten -tion of GUVNL. GERC has held that it had jurisdiction to hear the matter and PTC has filed an appeal against the said judge -ment before APTEL mean -while the proceedings before GERC continue till the pendency of appeal before APTEL."

Income tax 43.36 2.15 demands

Others * 37.95 541.15

Total 1,366.95 1,828.94

b) Pursuant to the notification dated December 29, 2011 issued by the Ministry of Corporate Affairs amending the Accounting Standard 11, the subsidiary company (PFS) has exercised the option as per Para 46A inserted in the Standard for all long term monetary assets and liabilities. Consequently an amount of Rs. 86.90 mn (without considering tax benefit of Rs. 28.19 mn) is carried forward in the Foreign currency translation account as on March 31, 2012.

Had the earlier method of accounting been followed for the above items, the net profit for the year ended March 31, 2012 would have been lower by Rs. 58.71 mn (net of taxes) before minority interest and Rs. 35.23 mn after minority interest.

c) Certain balances with parties are subject to confirmation.

d) In the opinion of the management, the value of current assets, loans and advances on realization in the ordinary course of business, will not be less than the value at which these are stated in the balance sheet.

e) Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended 31 March, 2012 are prepared as per Revised Schedule VI. The adoption of Revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. Accordingly, the previous year figures have also been reclassified/regrouped/rearranged to conform to this year classification.

---

Mar 31, 2011

1 Share issue expenses amounting to Rs. NIL (Previous Year Rs. 40.74 million) have been adjusted against the Share Premium Account as per Section 78 of Companies Act, 1956.

2 As per Power Purchase Agreements entered into with the off takers of Chukha and Kurichhu power projects (Bhutan), the interest earned on the Term Deposits made with commercial banks for the payments received on behalf of these projects is passed back to them.Accordingly interest income as well as expense is accounted for in the books of account.

3 The company is primarily in the business of trading of power. Generation of power and consultancy income have not been reported separately as the same is insignificant. As such,there are no separate reportable segments as per Accounting Standard -17 on Segment Reporting as notified by the Companies (Accounting Standards) Rules 2006.

4 Investment in PTC Financial Services Limited (subsidiary) includes six shares of Rs.10 each held by the nominees on behalf of the Company.

5 In the opinion of the management, the value of current assets, loans and advances on realization in the ordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.

6 Book Debts are hypothecated to the banks for availing the non- fund based working capital facilities.

7 Based on the information available with the Company, there are no dues as at March 31, 2011 payable to enterprises covered under " Micro Small and Medium Enterprises Development Act, 2006". No interest is paid/payable by the Company in terms of Section 16 of the Micro, Small and Medium Enterprises Development Act, 2006.

8 The management is of the opinion that no case of impairment of assets exists under the provision of Accounting Standard (AS)-28 on Impairment.

9 Term Deposits of Rs. 310 mn ( Previous Year NIL) has been pledged with banks against Letter of credit opened by the subsidiary company.

10 Dividend Received from subsidiary company –NIL

11 Loans and Advances due from directors-NIL.

12 The employee stock option (ESOP) expenses for the year has become negative due to reversal of ESOP expenses in accordance with the accounting treatment prescribed under SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, on account of surrender/forfeiture of employee stock option.

13 The Company has pledged, in favour of Power Finance Corporation Limited (PFC) , its 77,77,500 Equity Shares of Rs 10 each at Par held by it in M/s. Krishna Godavari Power Utilities Limited (KGPUL) along with the promoter of KGPUL to comply with the lending requirements of PFC.

14 Sundry Debtors include an amount of Rs.162.30 mn due from Tamil Nadu Electricity Board ( TNEB) towards compensation claim.The Company considers the said amount good and recoverable even though TNEB has not accepted the claim of the company and the matter has been referred to Madras High Court for appointment of an Arbitrator in this respect.

15 The Company has based on legal opinion determind that service tax was payble on professional charges on power exchage transactions. Accordingly, the company has, subsequent to the balance sheet date, paid an amount of Rs. 15.78 mn being liability on service tax on power exchange transaction upto March 31, 2011.

16. Figures of the previous Year have been regrouped/reclassified wherever consided neccessary to confirm to current Year classification.

17 Schedules A to K and accounting policies form an integral part of accounts.

---

Mar 31, 2010

1. The company has called for and received in 2007-08, Rs. 11,999.95 millions from Qualified Institutional Placement (QIP). The company has also called for and received in current year, Rs. 4,999.92 millions from Qualified Institutional Placement (QIP). The amount raised has been utilized in the following manner:-

2. Share issue expenses amounting to Rs. 40.74millions (Previous Year Rs. NIL million) have been adjusted against the Share Premium Account as per Section 78 of Companies Act, 1956.

3 As per Power Purchase Agreements entered into with the off takers of Chukha and Kurichhu power projects (Bhutan), the interest earned on the Term Deposits made with commercial banks for the payments received on behalf of these projects is passed back to them.Accordingly interest income as well as expense is accounted for in the books of account.

4. The company is primarily in the business of trading of power. Generation of power and consultancy income is insignificant. As such , there are no separate reportable segments as per Accounting Standard -17 on Segment Reporting as notified by the Companies (Accounting Standards) Rules 2006.

5. Details of Contingent liabilities:

a) Claims against the company not acknowledged as debt



Particulars As at As at Remarks

31.03.2010 31.03.2009

Claims of suppliers 1,285.64 852.87 1. Out of total claims, Rs. 849.50 Million pertains to claim of Himachal Pradesh State Electricity Board. The Arbitrator concluded the arbitration in favour of PTC on 31.10.2008, however HPSEB has contested the award in the High Court of Himachal Pradesh.

2. Gujarat Urja Vikas Nigam Limited (GUVNL) has raised bills for compensation for an amount of Rs.432.77 mn. In the opinion of the company and also as per legal opinion, the said compensation is not payable and therefore the company has taken up the matter with GUVNL and Government of Gujarat for resolution of the same.

Income Tax Demands 9.81 7.71 Case is pending with the Appellate Authority

Others 2.23 2.23

Total 1,297.68 862.81



6. Quantitative information

7. *Remuneration to Directors (including Chairman & Managing Director):

In addition to the above remuneration, the whole time directors have been allowed the use of staff car on payment of Rs.780/- p.m.

The above does not include provision for CMDs and one of directors (Shri Deepak Amitabh) leave salary and gratuity for the year which have been included in the overall provision for leave salary and gratuity made on actuarial basis.

*Does not include expenses on account of amortization of ESOP.

*Including Service Tax

8. Current liabilities, Sundry debtors and certain balances of Loans and Advances are subject to confirmation.

9. In the opinion of the management, the value of current assets, loans and advances on realization in the ordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.

10. Book Debts are hypothecated to the banks for availing the non- fund based working capital facilities.

11. Details of expenses incurred for defined contribution plans during the Year:

12. The company has entered into the following related party transactions. Such parties and transactions have been identified as per Accounting Standard 18 “Related Party Disclosures issued by the Institute of Chartered Accountants of India.

13. The elements considered for calculation of Earning per Share (Basic and Diluted) are as under:

14. The information given in Schedule-F does not include any amount which is outstanding and payable to Micro, Small and Medium Enterprises based on the information available with the company. Details as required by Schedule VI of the Companies Act,1956 is given below: I

The principal amount and the interest due thereon (to be shown separately) remaining unpaid to any supplier as at the end of each accounting Year

NIL

II the amount of interest paid by the buyer in terms of section 16 of the Micro, Small and Medium Enterprises Development Act, 2006, along with the amount of the payment made to the supplier beyond the appointed day during each accounting Year

NIL

III

The amount of interest due and payable for the Year of delay in making payment (which have been paid but beyond the appointed day during the Year) but without adding the interest specified under the Micro, Small and Medium Enterprises Development Act,

NIL

IV

the amount of interest accrued and remaining unpaid at the end of each accounting Year

NIL

V

the amount of further interest remaining due and payable even in the succeeding Years, until such date when the interest dues as above are actually paid to the small enterprise, for the purpose of disallowance as a deductible expenditure under section 2

NIL

15. Investment in PTC Financial Services Limited (subsidiary) includes six shares of Rs.10 each held by the nominees on behalf of the Company.

16. The management is of the opinion that no case of impairment of assets exists under the provision of Accounting Standard (AS)-28 on Impairment.

17. Investments had been made under the Discretionary Portfolio Management Agreement entered into between the Company and HDFC AMC Limited (Portfolio Manager) of Rs. 50 Millions.

A. Equity Shares (fully paid-up, quoted unless otherwise stated) as at 31/03/2010 (Figures in Rs.)

NIL

B. Mutual Funds (fully paid-up, un-quoted) as at 31/03/2010 (Figures in Rs.)

NIL

C. Equity Shares (fully paid-up, quoted unless otherwise stated) as at 31/03/2009 (Figures in Rs.) 3,998 Equity Shares Of Re.2 each in AIA Engineering Ltd at a cost of Rs.541,655, 25,136 Equity Shares Of Re.1 each in Apollo Tyres Ltd at a cost of Rs.492,072, 3,307 Equity Shares Of Re.5 each in Biocon Ltd at a cost of Rs.399,447, 2,687 Equity Shares Of Re.2 each in Blue Star Ltd at a cost of Rs. 414,625, 4,130 Equity Shares Of Re.2 each in Crompton Greaves Ltd at a cost of Rs. 562,904, 1,602 Equity Shares Of Re.10 each in ICICI Bank Ltd at a cost of Rs. 718,991, 343 Equity Shares Of Re.5 each in Infosys Technologies Ltd at a cost of Rs.396,213, 4,575 Equity Shares Of Re.2 each in Pantaloon Retail India Ltd at a cost of Rs. 961,131, 1,366 Equity Shares Of Re.1 each in Tata Consultancy Services Ltd at a cost of Rs. 662,425, 822 Equity Shares Of Re.10 each in Jammu & Kashmir Bank Ltd at a cost of Rs. 280,248, 5,025 Equity Shares Of Re.2 each in United Phosphorous Ltd. at a cost of Rs. 555,913, 3,984 Equity Shares Of Re.1 each in Zee Entertainment Ltd at a cost of Rs. 554,268, 12,000 Equity Shares Of Re.5 each in Himatsingka Seide Ltd at a cost of Rs. 722,400,1,554 Equity Shares Of Re.1 each in ITC Ltd at a cost of Rs. 247,498, 758 Equity Shares Of Re.2 each in Larsen &Toubro Ltd at a cost of Rs. 329,315, 3,000Equity Shares Of Re.10 each in HBL Nife Power Systems Ltd. at a cost of Rs. 701,057. 1,489 Shares Of Re.2 each in Siemens Ltd at a cost of Rs. 877,453, 2,993 Shares Of Re.2 each in Carborundum Universal Ltd at a cost of Rs. 323,543, 779 Shares Of Re.10 each in State Bank of India Ltd at a cost of Rs. 129,3975, 8,547 Shares of Rs. 1 each in Voltas Ltd at a cost of Rs. 345,174, 742 Shares of Rs. 10 each in Bank of Baroda Ltd at a cost of Rs. 135,701,977 Shares of Rs. 10 each in Bharat Petroleum Corp at a cost of Rs. 334,915, 643 Shares of Rs. 10 each in Bharti Airtel Ltd. at a cost of Rs. 392,706, 13,610 shares of Rs. 1 each in Dish TV India Ltd. at a cost of Rs. 299,526,4,701 Shares of Rs. 2 each in HCL Technologies Ltd. at a cost of Rs. 494,402,2,506 Shares of Rs. 5 each in Reliance Communications Ltd at a cost of Rs. 427,674,1,627 Shares of Rs. 10 each in Tata Steel Ltd at a cost of Rs. 247,696.

D. Mutual Funds (fully paid-up, un-quoted) as at 31/03/2009 (Figures in 4 Rs.)

4,605,068.72 units of Rs.10 each in HDFC QIF Plan C WD at a cost of Rs. 46,051,451

(ii) Investments under PMS purchased and sold during the year 01/04/2009 to 31/03/2010

A. Equity Shares (fully paid-up,quoted) for the Year 01/04/2009 to 31/03/2010 (Figures in Rs.):

Purchases:

3,864 shares of Rs.2 in Dishman Pharmaceuticals & Chemicals Ltd at a cost of Rs. 425,952,4132 shares of Rs.10 in IRB Infrastructure Developers Ltd at a cost of Rs. 428,797, 6,704 shares of Rs.2 in Unitech Ltd at a cost of Rs. 293,979, 2,875 shares of Rs.10 in United Breweries Holdings Ltd at a cost of Rs. 316,875, 2,513 shares of Rs.10 in Unity Infraprojects Ltd at a cost of Rs. 317,155, 1,406 shares of Rs. 10 in Zee Entertainment Enterprises Ltd at a cost of Rs. 160,618, 797 shares of Rs.10 in Sadbhav Engineering Ltd at a cost of Rs. 316,608,

Sales:

3,998 Equity Shares Of Re.2 each in AIA Engineering Ltd at a Price of Rs.1,144,876, 25,136 Equity Shares Of Re.1 each in Apollo Tyres Ltd at a Price of Rs.621,006, 3,307 Equity Shares Of Re.5 each in Biocon Ltd at a Price of Rs.820,217, 2,687 Equity Shares Of Re.2 each in Blue Star Ltd at a Price of Rs. 957,120, 742 Shares of Rs. 10 each in Bank of Baroda Ltd at a Price of Rs. 197,130, 977 Shares of Rs. 10 each in Bharat Petroleum Corp at a Price of Rs. 568,877, 1,286 Shares of Rs. 5 each in Bharti Airtel Ltd. at a Price of Rs. 531,211, 4,130 Equity Shares Of Re.2 each in Crompton Greaves Ltd at a Price of Rs. 1,308,880, 13,610 shares of Rs. 1 each in Dish TV India Ltd. at a Price of Rs. 400,192, 4,701 Shares of Rs. 2 each in HCL Technologies Ltd. at a Price of Rs. 737,217, 1,602 Equity Shares Of Re.10 each in ICICI Bank Ltd at a Price of Rs. 1,344,415, 343 Equity Shares Of Re.5 each in Infosys Technologies Ltd at a Price of Rs.766,934, 2,506 Shares of Rs. 5 each in Reliance Communications Ltd at a Price of Rs. 753,738, 4,575 Equity Shares Of Re.2 each in Pantaloon Retail India Ltd at a Price of Rs. 1,552,293, 1,366 Equity Shares Of Re.1 each in Tata Consultancy Services Ltd at a Price of Rs. 790,432,1,627 Shares of Rs. 10 each in Tata Steel Ltd at a Price of Rs. 386,135. 822 Equity Shares Of Re.10 each in Jammu & Kashmir Bank Ltd at a Price of Rs. 471.879, 5,025 Equity Shares Of Re.2 each in United Phosphorous Ltd. at a Price of Rs. 819,126, 5,390 Equity Shares Of Re.1 each in Zee Entertainment Ltd at a Price of Rs. 1,266,518, 12,000 Equity Shares Of Re.5 each in Himatsingka Seide Ltd at a Price of Rs. 569,821, 1554 Equity Shares Of Re.1 each in ITC Ltd at a Price of Rs. 285,979, 758 Equity Shares Of Re.2 each in Larsen &Toubro Ltd at a Price of Rs. 1,247,922, 3,000 Equity Shares Of Re.10 each in HBL Nife Power Systems Ltd. at a Price of Rs. 579,931, 1,489 Shares Of Re.2 each in Siemens Ltd at a Price of Rs. 425,148, 2993 Shares Of Re.2 each in Carborundum Universal Ltd at a Price of Rs. 476,010, 779 Shares Of Re.10 each in State Bank of India Ltd at a Price of Rs. 1,668,372, 8547 Shares of Rs. 1 each in Voltas Ltd at a Price of Rs. 1,255,349, 3,864 shares of Rs.2 in Dishman Pharmaceuticals & Chemicals Ltd at a cost of Rs. 794,401, 4,132 shares of Rs. 10 in IRB Infrastructure Developers Ltd at a cost of Rs. 874,047, 6,704 shares of Rs.2 in Unitech Ltd at a cost of Rs. 358,596, 2,875 shares of Rs.10 in United Breweries Holdings Ltd at a cost of Rs. 573,325, 2,513 shares of Rs.10 in Unity Infraprojects Ltd at a cost of Rs. 1,022,812,

B. Mutual Funds (fully paid-up, unquoted) for the Year 01/04/2009 to 31/ 03/2010 (Figures in Rs.):

Purchases:

12,942.872 Units Of Rs10 each in HDFC Cash Management Savings Growth at a cost of Rs. 238,000, 15,482.063 Units Of Rs10 each in HDFC Cash Management Savings Growth at a cost of Rs. 285,000, 42,962.279 Units of Rs 10 each in HDFC Cash Management Savings Growth at a cost of Rs. 791,000, 68,195.606 Units Of Rs10. each in HDFC Cash Management Savings Growth at a cost of Rs. 1,259,000, 96,255.179 Units Of Rs10 each in HDFC Cash Management Savings Growth at a cost of Rs. 1,777,000, 39,862.833 Units Of Rs10 each in HDFC Cash Management Savings Growth at a cost of Rs. 737,000, 35,399.282 Units Of Rs10. each in HDFC Cash Management Savings Growth at a cost of Rs. 655,000, 37,825.979 Units Of Rs10. each in HDFC Cash Management Savings Growth at a cost of Rs. 700,000, 5,643.671 Units Of Rs10. each in HDFC Cash Management Savings Growth at a cost of Rs. 106,000, 89,614.637 Units Of Rs.10 each in HDFC QIF Plan C Wholesale Div at a cost of Rs. 896,146.37, 37,030.122Units Of Rs.10 each in HDFC QIF Plan C Wholesale Div at a cost of Rs.370,301.22, 883,224.72 Units Of Rs.10 each in HDFC CM Treasury Advantage Plan- WD at a cost of Rs. 8,850,000, 678.997 Units Of Rs.10 each in HDFC CM Treasury Advantage Plan- WD at a cost of Rs. 6,801, 670.694 Units Of Rs.10 each in HDFC CM Treasury Advantage Plan- WD at a cost of Rs. 6,718, 653.539 Units Of Rs.10 each in HDFC CM Treasury Advantage Plan- WD at a cost of Rs. 6,546, 662.86 Units Of Rs.10 each in HDFC CM Treasury Advantage Plan- WD at a cost of Rs. 6,639, 672.201 Units Of Rs.10 each in HDFC CM Treasury Advantage Plan- WD at a cost of Rs. 6733, 646.157 Units Of Rs.10 each in HDFC CM Treasury Advantage Plan- WD at a cost of Rs. 6,472, 690.918 Units Of Rs.10 each in HDFC CM Treasury Advantage Plan- WD at a cost of Rs. 6,920, 709.185 Units Of Rs.10 each in HDFC CM Treasury Advantage Plan- WD at a cost of Rs. 7,103, 674.264 Units Of Rs.10 each in HDFC CM Treasury Advantage Plan- WD at a cost of Rs. 6,753, 683.654 Units Of Rs.10 each in HDFC CM Treasury Advantage Plan- WD at a cost of Rs. 6,847 604.151 Units Of Rs.10 each in HDFC CM Treasury Advantage Plan- WD at a cost of Rs. 6,052, 479.973 Units Of Rs.10 each in HDFC CM Treasury Advantage Plan- WD at a cost of Rs. 4,809.

Sales:

32,549.788 Units Of Rs.10 each in HDFC Cash Management Savings Growth at a price of Rs.600,000, 10,838.17 Units Of Rs.10 each in HDFC Cash Management Savings Growth at a price of Rs.200,000, 96,194.862 Units Of

Rs.10 each in HDFC Cash Management Savings Growth at a price of Rs.1,776,180.41, 21,620.804 Units Of Rs.10 each in HDFC Cash Management Savings Growth at a price of Rs.400,000, 37,831.294 Units Of Rs.10 each in HDFC Cash Management Savings Growth at a price of Rs.700,000, 885000 Units Of Rs.10 each in HDFC QIF Plan C Wholesale Div at a price of Rs. 8,850,000, 3,846,713.475 Units Of Rs.10 each in HDFC QIF Plan C Wholesale Div at a price of Rs. 38,467,135, 891,051.311 Units Of Rs.10 each in HDFC CM Treasury Advantage Plan- WD at a price of Rs. 8,935,641,155,504.846 Units of Rs 18.8558 each in HDFC Cash Management Savings Growth at a Price of Rs.2,932,168.27

C Investments under PMS purchased and sold during the Year 01/04/2008 to 31/03/2009

Equity Shares (fully paid-up,quoted) for the Year 01/04/2008 to 31/03/2009 (Figures in Rs.):

Purchases:

3998 Equity Shares of Re.2 each in AIA Engineering Ltd at a cost of Rs 541655, 25136 Equity Shares of Re.1 each in Apollo Tyres Ltd at a cost of Rs 492072, 300 Equity Shares of Re.10 each in BHEL Ltd at a cost of Rs 427883, 3307 Equity Shares of Re.5 each in Biocon Ltd at a cost of Rs 399447, 2687 Equity Shares of Re.2 each in Blue Star Ltd at a cost of Rs 414625, 4130 Equity Shares of Re.2 each in Crompton Greaves Ltd at a cost of Rs 562904, 1602 Equity Shares of Re.10 each in ICICI Bank Ltd. at a cost of Rs 718991, 713 Equity Shares of Re.5 each in Infosys Technologies Ltd. at a cost of Rs 823616, 914 Equity Shares of Re.5 each in Maruti Suzuki Ltd. at a cost of Rs 449730, 803 Equity Shares of Re.10 each in ONGC at a cost of Rs 550306, 4575 Equity Shares of Re.2 each in Pantaloon Retail India Ltd. at a cost of Rs 961131, 1650 Equity Shares of Re.2 each in Satyam Computers Ltd at a cost of Rs 276006, 1366 Equity Shares of Re.1 each in Tata Consultancy Services Ltd at a cost of Rs 662425, 822 Equity Shares of Re.10 each in Jammu & Kashmir Bank Ltd at a cost of Rs 280248,

5025 Equity Shares of Re.2 each in United Phosphorous Ltd. at a cost of Rs 555913, 3984 Equity Shares of Re.1 each in Zee Entertainment Ltd at a cost of Rs 554268, 779 Shares Of Re.10 each in State Bank of India Ltd at a cost of Rs. 1293976, 1038 Shares Of Re.5 each in Sun Pharmaceuticals Industries Ltd at a cost of Rs. 2328384, 742 Shares of Rs. 10 each in Bank of Baroda Ltd at a Cost of Rs. 135701, 977 Shares of Rs. 10 each in Bharat Petroleum Corp at a Cost of Rs. 334915, 643 Shares of Rs. 10 each in Bharti Airtel Ltd. at a Cost of Rs. 392706, 13610 Shares of Rs. 1 each in Dish TV India Ltd. at a Cost of Rs. 299526, 4701 Shares of Rs. 2 each in HCL Technologies Ltd. at a cost of Rs. 494402, 2506 Shares of Rs. 5 each in Reliance Communications Ltd at a cost of Rs. 427674, 666 Shares of Rs. 10 each in United Spirits Ltd. at a cost of Rs. 347076, 8547 Shares of Rs. 1 each in Voltas Ltd at a cost of Rs. 345174, 238 Shares of Rs. 2 each in Larsen and Toubro Ltd of Rs. 166955

Sales:

15066 Equity Shares of Re.1 each in ITC Ltd at price of Rs. 2659273, 500 Equity Shares of Re.10 each in Bosch Ltd. at price of Rs. 1510171, 1000 Equity Shares of Re.10 each in Procter & Gamble India Ltd at price of Rs. 748938, 15000 Equity Shares of Re.1 each in Shanthi Gears Ltd at price of Rs. 542338, 1811 Equity Shares of Re.2 each in Siemens Ltd at price of Rs. 512680, 12007Equity Shares of Re.2 each in Carbourundum Universal Ltd at price of Rs.1100759, 832 Shares of Re.5 each in Sun Pharmaceuticals at price of Rs.886965, 7000 Equity Shares Of Re.10 each in Subex Systems Ltd at a price of Rs.1027639, 552 Equity Shares of Re.10 each in Container Corporation of India at a price of Rs.456336, 8000 Equity Shares of Rs. 1 each in Asahi India Safety Glass Ltd at a price of Rs. 299447, 300 Equity Shares of Rs. 10 each in BHEL Ltd at a price of Rs. 430208, 370 Equity Shares of Rs. 5 each in Infosys Technologies Ltd at a price of Rs. 498473, 914 Equity Shares of Rs. 5 each in Maruti Suzuki India Ltd. at a price of Rs. 511052, 803 Equity Shares of Rs. 10 each in ONGC at a price of Rs. 581854, 1650 Equity Shares of Rs. 2 each in Satyam Computers Ltd at a price of Rs. 101304, 666 Equity Shares of Rs. 10 each in United Spirits Ltd. at a price of Rs. 462086, 358 Equity Shares of Rs. 2 each in Larsen & Toubro Ltd at a price of Rs. 304414, 1870 Equity Shares of Rs. 5 each in Sun Pharmaceuticals

Ltd. at a price of Rs. 1919529

D. Mutual Funds (fully paid-up, unquoted) for the Year 01/04/2008 to 31/03/2009 (Figures in Rs.):

Purchases:

18428.312 Units Of Rs10 each in HDFC Cash Management Savings Growth at a cost of Rs.314000, 60278.76 Units Of Rs10 each in HDFC Cash Management Savings Growth at a cost of Rs.1028000, 13267.902 Units Of Rs10 each in HDFC Cash Management Savings Growth at a cost of Rs.229000, 7005.978 Units Of Rs10. each in HDFC Cash Management Savings Growth at a cost of Rs.122000, 60,756.11 Units Of Rs10 each in HDFC Cash Management Savings Growth at a cost of Rs.1092000, 14645.76 Units Of Rs10 each in HDFC Cash Management Savings Growth at a cost of Rs.264000, 185748.04 Units Of Rs10. each in HDFC Cash Management Savings Growth at a cost of Rs.3349000, 81704.477 Units Of Rs.10 each in HDFC QIF Plan C Wholesale Div at a cost of Rs.817535, 77601.305 Units Of Rs.10 each in HDFC QIF Plan C Wholesale Div at a cost of Rs.776013. 95141.47 Units of Rs.10 each in HDFC QIF Plan C Wholesale Div at a cost of Rs.951415., 18735.182 Units of Rs 10 each in HDFC Cash Management Savings Growth at a cost of Rs. 339000, 53630.409 Units Of Rs 10 each in HDFC Cash Management Savings Growth at a cost of Rs. 971000, 9166.763 Units of Rs 10 each in HDFC Cash Management Savings Growth at a cost of Rs. 166000, 12913.765 Units of Rs 10 each in HDFC Cash Management Savings Growth at a cost of Rs. 234000, 6823.497 Units of Rs 10 each in HDFC Cash Management Savings Growth at a cost of Rs. 124000, 25600.684 Units of Rs 10 each in HDFC Cash Management Savings Growth at a cost of Rs. 467000, 8460.052 Units of Rs 10 each in HDFC Cash Management Savings Growth at a cost of Rs. 155000, 12748.639 Units of Rs 10 each in HDFC Cash Management Savings Growth at a cost of Rs. 234000, 97057.48 Units of Rs.10 each in HDFC QIF Plan C Wholesale Div at a cost of Rs.970575.

Sales:

141695.744 Units Of Rs.10 each in HDFC Cash Management Savings Growth at a price of Rs.2400000, 76143.619 Units of Rs.10 each in HDFC Cash Management Savings Growth at a price of Rs.1300000, 55613.64 Units of Rs.10 each in HDFC Cash Management Savings Growth at a price of Rs.1000000, 33339.82 Units of Rs.10 each in HDFC Cash Management Savings Growth at a price of Rs.600000, 29119.65 Units of Rs.10 each in HDFC Cash Management Savings Growth at a price of Rs.524288, 149588.63 Units of Rs.10 each in HDFC Cash Management Savings Growth at a price of Rs.2700000, 33226.64 Units Of Rs.10 each in HDFC Cash Management Savings Growth at a price of Rs.600000, 17578.525 Units of Rs.10 each in HDFC Cash Management Savings Growth at a price of Rs.318071.10, 11041.976 Units Of Rs.10 each in HDFC Cash Management Savings Growth at a price of Rs.200000, 38638.81 Units of Rs.10 each in HDFC Cash Management Savings Growth at a price of Rs.700000, 33030.371 Units of Rs.10 each in HDFC Cash Management Savings Growth at a price of Rs.600000, 10951.103 Units of Rs.10 each in HDFC Cash Management Savings Growth at a price of Rs.200000,

10948.885 Units Of Rs.10 each in HDFC Cash Management Savings Growth at a price of Rs.200000,, 16386.279 Units of Rs.10 each in HDFC Cash Management Savings Growth at a price of Rs.300000, 5872.876 Units of Rs.10 each in HDFC Cash Management Savings Growth at a price of Rs.107599.31, 8460.052 Units of Rs.10 each in HDFC Cash Management Savings Growth at a price of Rs.155115.90, 12748.639 Units of Rs.10 each in HDFC Cash Management Savings Growth at a price of Rs.234325.08.

18 Dividend Received from subsidiary company –NIL

19 As per Accounting Standard - 27 - Financial reporting of interest in Joint Ventures issued by the Institute of Chartered Accountants of India, the Companys share of ownership interest, assets, liabilities, income, expenses, contingent liabilities and capital commitments in the joint venture company,

*Based on audited figures as on 31.03.2010.

20 Loans and Advances due from directors-NIL.

21 Current tax expense for the year includes an amount of Rs.252.30 lacs on ESOP expenses for the previous year based on recent decision of Delhi Income Tax Appellate Tribunal.

22 The Company has pledged, in favour of Power Finance Corporation Limited (PFC) , its 77,77,500 Equity Shares of Rs. 10 each at Par held by it in M/s. Krishna Godavari Power Utilities Limited (KGPUL) along with the promoter of KGPUL to comply with the lending requirements of PFC.

23 Sundry Debtors include an amount of Rs. 162.30 mn due from Tamil Nadu Electricity Board ( TNEB) towards compensation claim.The Company considers the said amount good and recoverable even though TNEB has not accepted the claim of the company and the matter has been referred to Madras High Court for appointment of an Arbitrator in this respect.

24 Figures of the previous Year have been regrouped /reclassified wherever considered necessary to confirm to current Year classification.

25 Schedules A to and accounting policies form an integral part of accounts.

---

Mar 31, 2003

1. The Promoters, Agreement originally signed by and amongst Power Grid Corporation of India Ltd. (POWERGRID), National Thermal Power Corporation Ltd. (NTPC) and Power Finance Corporation Ltd. (PFC) has since been amended in July, 2002 to increase the Authorised Capital of the company from Rs. 150 crores to Rs. 750 crores and to induct National Hydroelectric Power Corporation Ltd. (NHPC) as a subscriber to PTCs equity, with a status equal to that of POWERGRID, NTPC and PFC. All the four companies have agreed to individually subscribe to not less than 8% of the paid up capital of the company, up to the Authorized Capital of Rs. 750 crores.

NHPC has since subscribed to the equity capital of Rs. 8 crores at par and PFC has subscribed to an additional capital of Rs. 2 crores at par. These amounts have been utilized towards the business operations of the company.

2. Trading of power generated by Chukha Hydel Power Corporation Ltd., Bhutan and Kurichhu Hydro Power Corporation Ltd, Bhutan has been taken over by the company from Power Grid Corporation of lndia Ltd. with effect from 01.10.2002.

3 As per the Revised Mega Power Policy of the Government of India, the company has taken over all developmental work in respect of various Mega Power Projects from Power Grid Corporation of India Limited (POWERGRID) Reimbursement of expenditure to POWERGRID towards developmental expenditure incurred prior to take over of the work had been accounted for to the extent intimated, pending final reconciliation and confirmation of accounts.

PTC had earlier shown a sum of Rs. 52,35,210 as reimbursable to POWERGRID for development work undertaken by it prior to the Commencement of Business of PTC. This issue came up for discussion with Ministry of Power, Govt. of India and it was inferred that all development expenses incurred by POWERGRID prior to the Commencement of Business of PTC should be borne by it and not by PTC. POWERGRID has accordingly been informed about this and the amount has been reversed and booked under Contingent Liabilities - Claims not acknowledged as debts (please refer Note at serial number 14).

4. During the financial year 2001-02, PTC had paid a sum of Rs. 2.0 lakhs to Central Electricity Authority (CEA) as advance towards carrying out consultancy works. Since CEA has not furnished any bills for the consultancy services rendered to the company and the same is not quantifiable the advance is, therefore, not adjusted.

5. In accordance with Accounting Policy number 4 (vi), an expenditure of Rs. 1,49,01,100 incurred in connection with increasing the Authorised Capital from Rs. 150 crores to Rs. 750 crores is treated as "Deferred Revenue Expenditure" and shall be written off equally in five years beginning with the financial year 2002-03.

Had the company not adopted this policy and charged off this expenditure to revenue, the profit of the company for the period would have been lower by Rs. 1 .19 crores.

6. During the year, PTC sold power to, inter alia, Madhya Pradesh State Electricity Board (MPSEB) and Bihar State Electricity Board (BSEB). Both these SEBs, while releasing part of the outstanding payments, have availed of rebates which were not due to them as the payments were not made within the stipulated period. PTC has taken up the matter with them but nevertheless, not considered the same as income due to uncertainty of realization in terms of Accounting Standard 9. The amount of this rebate is Rs. 1.49 crores.

7. As per PPAs entered into with the offtakers of Chukha and Kurichhu power projects, the interest earned on the Term Deposits made with commercial banks for the payments received from them, is passed back to them. PTC has accounted for the same as income as well as an expense in its books of accounts.

8. PTC had purchased office accommodation valuing Rs. 19.64 crores (inclusive of stamp duty) at Bhikaji Cama Place from M/s National Buildings Construction Corporation Ltd., a Govt of India Undertaking and Agreement to Sell in respect thereof had been signed on 21.02.2002 and possession taken over. Sale Deed in respect of the premises is yet to be executed.

9. In the absence of invoice(s) from seller(s), the company has accounted for its liability at the year-end based on the data available.

10. Names of small scale industrial undertakings to whom the company owes any sum, which was outstanding for more than 30 days as at the Balance Sheet date - NONE.

11. Estimated amount of capital commitments - Rs 1.31 lakhs (Previous Year - Rs. 5. 00 lakhs)

12. Claims not acknowledged as debts - Rs.73,34,539 (Previous year - Rs. 20,99, 329)

13. Income earned in foreign exchange 31.03.2003 31.03.2002 Rs. Rs.

NIL NIL

14. The actuarial valuation in respect of retirement benefits of the companys employees has been made as on 31.03.2003.

15. Current liabilities. Sundry debtors and Loans and Advances are subject to confirmation.

16. Audit Fee is subject to approval by the shareholders.

17. Figures of the previous year have been regrouped/reclassified wherever considered necessary to conform to current years classification.

18. Schedules A to J form an integral part of accounts.

---

Mar 31, 2002

1. As per the Revised Mega Power Policy of the Government of India, the Corporation has taken over all developmental work in respect of various Mega Power Projects from Power Grid Corporation of India Limited (POWERGRID). Reimbursement of expenditure to POWERGRID towards developmental expenditure incurred prior to take over of the work has been accounted for to the extent intimated, pending final reconciliation and confirmation of accounts. A Memorandum of Understanding between the Corporation and POWERGRID in respect of the said work is also under finalization.

2. Ministry of Power, Govt. of India had proposed that the Corporation will take over the trading of Power between M/s. Chukha Hydro Power Corporation (CHPC) and Kurichhu Project Authority (KPA) of Bhutan and the State Electricity Boards of certain Eastern states with effect from 1.3.2002. However, pending formal advice from Govt. of India to the Royal Govt. of Bhutan, the trading is being continued to be undertaken and accounted for by M/s. Power Grid Corporation of India Ltd.

3. PTC has purchased office accommodation valuing Rs. 19.57 crores (inclusive of stamp duty) at Bhikaji Cama Place, New Delhi from M/s National Building Construction Corporation Ltd., a Govt. of India Undertaking and Agreement to Sell in respect thereof has been signed on 21.02.2002 and possession taken over. PTC has paid Rs. 1,69,706/- towards proportionate ground rent for the period from 21.02.2002 to 31.03.2002, as also the maintenance charges of Rs. 12,857/- for the ibid period. Sale deed in respect of the premises is yet to be executed.

4. In the absence of invoice(s) from seller(s), the corporation has accounted for its liability at the year-end based on the data available.

5. The terms of award of Consultancy work to ICICI Ltd. for Hirma Power Project prescribes payment of fee to ICICI on recovery from the beneficiary State Electricity Boards. The contract with ICICI Ltd. has been closed during the year and final payment released to ICICI. Advances include Rs.17,68,672/- debited for recovery from the State Electricity Boards.

6. The Income Tax liability of the corporation for F Y 2001-02 has been worked out after setting off carried forward losses and depreciation for the previous years, as per the I T Returns filed by the corporation with the Income Tax Department.

7. PTC had paid a sum of Rs. 2.0 lakhs to Central Electricity Authority (CEA) as advance towards carrying out consultancy works on its behalf. Since CEA has not furnished any bills for the consultancy services rendered to the corporation and the same is not quantifiable, the advance is, therefore, not adjusted.

8. Names of small scale industrial undertakings to whom the Corporation owes a sum exceeding Rs. 1 lakh, which was outstanding for more than 30 days as at the Balance Sheet date- NONE.

9. Estimated amount of capital commitments - Rs. 5.0 lakhs (Previous Year - NIL).

10. Claims not acknowledged as debts - Rs.20,99,329/- (Previous year Rs.20,99,329/-).

14. Income earned in foreign exchange

15. The actuarial valuation in respect of retirement benefits of the corporations employees has been made as on 31.03.2002.

17. Audit Fee is subject to approval by the shareholders.

18. Figures of the previous year have been regrouped/reclassified wherever considered necessary to conform to current years classification.

19. Schedules A to J form an integral part of accounts.

---

Mar 31, 2001

1. Figures of the current year are not strictly comparable with those of the previous year as the previous year was the first year of the Corporation and the accounts of the previous year were drawn for a period of 11 months and 15 days.

2. The Corporation has changed its accounting policy with respect to treatment of developmental expenditure incurred on potential Power Projects. In the preceding year, such expenditures were being dealt with based on the terms of individual Proposals. The expenditures were treated as ‘Deferred Revenue Expenditure only in cases where the Proposals envisaged payment of Management Fee to the Corporation. Otherwise, the expenditures were charged to the Profit & Loss Account.

Previous year was the first year of operation of the Corporation and the developmental activities have commenced in full swing in the current year. Developmental Expenditure relate to addressing of key issues like the Payment Security Mechanism, framing of the Power Purchase Agreements, fixation of Tariff, modalities of purchase and sale, etc. These key issues are relevant to all the potential Power Projects and are one-time expenditures incurred to prepare and equip the Corporation to purchase and sell power of all potential Power Projects effectively in the future. The present trading operations of the Corporation are short term in nature. It is, therefore, considered appropriate to change the Accounting Policy to defer all the developmental costs till the end of the Preparatory Stage. The Accounting Policy has, therefore, been changed and all Developmental Expenditure, net of incidental income, are treated as ‘Deferred Revenue Expenditure to be written off equally in five years beginning with the financial year 2003-04 as it is expected that significant developmental work would get concluded by that year.

Had the Corporation not changed the Accounting Policy as above and accounted for Developmental Expenditure on the same basis as in the preceding year, loss for the year would have been higher by V Rs.29,157,705/-.

3. i As per the Revised Mega Power Policy of the Government of India, the Corporation has taken over all L developmental work in respect of various Mega Power Projects from Power Grid Corporation of India Limited (POWERGRID). Reimbursement of expenditure to POWERGRID towards developmental expenditure incurred prior to take over of the work has been accounted for to the extent intimated, pending final reconciliation and confirmation of accounts. A Memorandum of Understanding between the Corporation and POWERGRID in respect of the said work is also under finalization.

4. Ministry of Power had directed that the Corporation will take over the trading of Power between M/s. Chukha Hydel Power Corporation Limited, Bhutan and the State Electricity Boards of certain Eastern states with effect from 1.7.1999. However, pending execution of the agreements and advice from Government of India to the Royal Government of Bhutan, trading is being continued to be undertaken by and accounted for by M/s. Power Grid Corporation of India Ltd.

5. The terms of award of Consultancy work to ICICI Ltd. for Hirma Power Project prescribes payment of fee to ICICI on recovery from the beneficiary State Electricity Boards. The value of services availed has exceeded the contract value because of increase in scope of work. Advances include Rs.10,37,500/- debited for recovery from the State Electricity Boards in respect of the additional work which is subject to confirmation by the State Electricity Boards.

6. Names of small scale industrial undertakings to whom the Corporation owes a sum exceeding Rs. 1 lac, which was outstanding for more than 30 days as at the Balance Sheet date- None.

7. Audit Fee is subject to approval by the shareholders in general meeting.

8. Estimated amount of capital commitments - Nil. (Previous Year Nil).

9. Claims not acknowledged as debts - Rs.20,99,329/- (Previous Year Rs1 1,99,329/-).

10. No provision for income tax is considered necessary in view of losses.

15. Figures of the previous year have been regrouped/reclassified wherever considered necessary to conform to current years classification.

16. Schedules A to I form an integral part of accounts.