The Company is the implementing agency for certain schemes of the Government Of India .The funds received for disbursement to various agencies under the scheme are kept in a separate bank account. The undisbursed funds for the scheme (including interest thereon, if any) are presented as designated funds of the Scheme . Refer Note 38 (31).

‘An amount of Z 42.63 Lakhs (As on 31.03.2022 : Z 40.50 Lakhs) kept as FDR including interest with Bank of Baroda, Bhikaji Cama Place New Delhi against two Bond holders payments i.e. M/s The Bengal Club Ltd and Ms. Maya M. Chulani as per the order dated 31.7.2009 passed in Civil Misc Writ petition No. 28928 of2009 passed by the Hon’ble Allahabad High Court.

²Provided by KfW to cover up to 70% default risks of the overall 'Access to Energy' portfolio of the Comapny under KfW VI line of credit by establishment of a portfolio risk reserve account (PRRA). The said amount shall be utilised to recover up to 70% of outstanding debt service obligation of the borrower, after exhausting Debt Service Reserve Account (DSRA), upon being declared NPA.

Out of the total unsecured loans of Z 395,448.82 Lakhs as on 31.03.2023 (As on 31.03.2022 : Z 447,471.76 Lakhs), Loans amounting to Z 395,222.01 Lakhs as on 31.03.2023 (As on 31.03.2022 : Z 447,154.80 Lakhs) are secured by intangible security by way of exclusive charge on Default Escrow Account by earmarking unencumbered specific revenue stream for repayment of IREDA loans.

During the year , the Company has sent letters to borrowers, except where loans have been recalled or pending before court/NCLT, seeking confirmation of balances as at 31.03.2023 to the borrowers. Confirmations for 4.68% (previous year : 9.75%) of the said balances have been received. Out of the remaining loan assets amounting to Z 4,487,229.29 Lakhs (previous year : Z 3,062,319.72 Lakhs) for which balance confirmations have not been received, 82.63% loans (previous year : 68.80%) are secured by tangible securities, 12.69% (previous year : 31.20%) by way of Government Guarantee/ Loans to Government and balance are unsecured loans.

For Disclosures on Credit Risk , refer Note 38 (37).

i) The possession of the NBCC premises was delayed due to Public Interest Litigation (PIL) filed in the National Green Tribunal, thus not considered as delayed w.r.t. the original plan .

ii) IREDA has taken over the possession of office space at NBCC Building, Kidwai Nagar on 06.07.21 & 2 residential flats at NBCC Building, Kidwai Nagar on 15.07.21.The MoU has been signed with NBCC-NSL limited on 27.7.2022 for award of interior work for IREDA office space.

iii) The matter for payment of property tax is also under discussions with NDMC and upon finalisation of demand by NDMC for IREDA as well as other institutions, the same will be paid.

i) Foreign currency borrowings from various multilateral / bilateral agencies viz. ADB, World Bank , KfW, AFD, JICA and EIB have been converted into rupee and hedging of the same is done by undertaking plain vanilla swap transaction /currency interest rate swap / principal only swap etc. with various banks with whom IREDA has signed International Swaps and Derivative Association (ISDA) Master Agreement. These derivative transactions have been entered into with the participating bank for a maturity period which may be shorter than the maturity period of the loan. The hedging of the foreign currency loan has been carried out at various intervals and in multiple tranches based on the drawl under the lines of credit. In addition to the interest cost and other financial charges, due to hedging of foreign currency loans, these loans carry hedging/derivative cost, which is tranche wise as per the drawl under the line of credit, thus the applicable rate of interest on these lines of credit has not been disclosed above.

ii) *With effect from 01.03.2021, the Term Loan Facility I and II from State Bank Of India were converted to FCNR(B) Demand Loan till 28.02.2022. The FCNR Loans had a fixed interest rate of 6.20% p.a. and other terms and conditions were same as that of erstwhile Term Loan Facility. After 28.02.2022, the FCNR Loans were converted back to Rupee Term Loan Facility.

iii) The Company raises funds through various instruments including bonds. During the year, the Company has not defaulted in servicing of any of its debt service obligations whether for principal or interest .

iv) Funds raised during the year have been utilised for the stated objects in the offer document/information memorandum/facility agreement.

v) The company has not been declared as a wilful defaulter by any bank or financial institution or other lenders .

vi) The statements of book debts filed by the Company with banks/ financial institutions are in agreement with the books of accounts.

vii) #The loan From India Infrastructure Finance Company Limited (IIFCL) - Loan-II was pre-closed on 24.08.2022

viii) Term Loans from banks/ financial institutions/ Govt. as mentioned in Note No. 20 have been raised at interest rates ranging from 5.60% to 8.30% payable on monthly/quarterly/semi annual rests.

1 The Company has issued only one class of equity shares having face value of ^ 10 per share.

2 Equity shareholders are entitled to receive dividends which is subject to approval in the ensuing Annual General Meeting, except in case of interim dividend.

3 Equity Shareholders have full voting rights with no restrictions.

4 The company has not, for a year of 5 years immediately preceeding the balance sheet date :

a) issued equity share without payment being received in cash.

b) issued equity share by way ofbonus share.

c) bought back any of its share.

5 The company has no equity share reserved for issue under options/contracts /commitment for the sale of shares or disinvestment .

6 Calls unpaid (showing aggregate value of calls unpaid by directors and officers): Nil

7 Forfeited shares (amount originally paid up): Nil

8 For Capital Management: Refer Note 38(38).

9 During the FY 2021-22 Government of India (GoI) had infused ^ 150,000.00 Lakhs of equity contribution leading to increase in Equity Share Capital to 2,284.60 Lakhs . Refer Note 38(43).

Nature and purpose of reserves

1 Special Reserve : Special reserve has been created to avail income tax deduction under section 36(1)(viii) of Income-Tax Act,1961 @ 20% of the profit before tax arrived from the business of providing long term finance .

2 Debenture Redemption Reserve : Debenture redemption reserve is created out of the Retained earnings for the purpose of redemption of Debentures/Bonds .This reserve remains invested in the business activities of the company.

3 General Reserve : General Reserve is used from time to time to transfer profits from retained earnings for appropriation purposes, as the same is created by transfer from one component of equity to another.

4 Foreign Currency Monetary Item Translation Reserve (FCMITR) : Foreign Currency Monetary Item Translation Difference Account represents unamortized foreign exchange gain/loss on Long-term Foreign Currency Borrowings that are amortized over the tenure of the respective borrowings. IREDA has adopted exemption of para D13AA of Ind AS 101, according to which a first-time adopter may continue the policy adopted for accounting for exchange differences arising from translation of long-term foreign currency monetary items recognised in the financial statements for the year ending immediately before the beginning of the first Ind AS financial reporting year as per the previous GAAP. Accordingly, all transactions in foreign currency are recorded at the exchange rate prevailing at the date of the transaction. The exchange differences arising on reporting of long-term foreign currency monetary items outstanding as on March 31,2018, at rate prevailing at the end of each reporting year, different from those at which they were initially recorded during the year, or reported in previous financial statements, are accumulated in a “Foreign Currency Monetary Item Translation Reserve Account” and amortized over the balance year of such long term monetary item, by recognition as income or expense in each of such years.Long-term foreign currency monetary items are those which have a term of twelve months or more at the date of origination

5 Retained Earnings : Retained earnings represent profits and items of other comprehensive income recognised directly in retained earnings earned by the Company less dividend distributions and transfer to and from other reserves.

6 NBFC Reserve : Reserve created u/s 45-IC(1) of Reserve Bank of India Act, 1934 represents transfer from retained earning @ 20 % of net profit after tax for the year .

7 Effective Portion of Cash Flow Hedges : The Company uses derivative instruments in pursuance of managing its foreign currency risk and interest rate risk associated on borrowings. For hedging foreign currency and interest rate risk, the Company uses foreign currency forward contracts, cross currency swaps and interest rate swaps. To the extent the derivative contracts designated under the hedge accounting are effective hedges, the change in fair value of the hedging instrument is recognised in ‘Effective Portion of Cash Flow Hedges’. Amounts recognised in such reserve are reclassified to the Statement of Profit or Loss when the hedged item affects profit or loss.

3. Disclosure in respect of Indian Accounting Standard (Ind AS)-37 "Provisions, Contingent Liabilities and Contingent Assets"

‘Income Tax (Income Tax Cases - AY 1998-99 - AY 2009-10):

This includes Income Tax cases for AY 1998-99 to AY 2002-03 were referred back on the direction of Hon’ble High Court of Delhi to Hon’ble ITAT and Hon’ble ITAT to the Assessing Officer and Income Tax cases for AY 2003-04 to AY 2009-10 were referred back on the direction of Hon’ble ITAT to the Assessing Officer (referred as AO). The AO had not passed the order on these cases within the statutory time limit prescribed under the Act. Earlier the company had deposited the taxes under protest on the basis of demand raised for the aforementioned Assessment Years.

In view of the foregoing, the demands paid over and above the tax payable as per returns filed became refundable. Accordingly, during Financial Year 2018- 19, a Writ petition has been filed with Hon’ble High Court to issue the necessary directions to the department to grant the refund for the aforementioned years. The Hon’ble High Court at Delhi had passed an interim order as under- “In the meanwhile, the respondents are permitted to proceed and complete the assessment orders and not give effect to it or take any coercive action.” Final decision in the matter is still pending.

‘Service Tax and Goods & Service Tax (GST) cases

The Company had received of Notice of Demand/Order from the Commissioner, Adjudication, Central Tax, GST Delhi East vide no GST-15/Adju/DE/IREDA/71/2017-18/3706-08 dated 15.03.2022 creating demands on IREDA amounting to ^ 11,709.11 Lakhs for Financial year 2012-13 to 2015-16. Although the company contends that entire demand is barred by limitation, it has provided for ^ 1,174.80 Lakhs (previous year ^ 1,101.41 Lakhs) including interest on conservative basis. Based on law and facts in the matter, Service Tax demand (including interest) of ^ 21,492.48 Lakhs ( previous year ^ 19,993.88 Lakhs) has been disclosed as contingent liability.

Further, since the company is a government enterprise, no mala fide intention can be attributed to it and thus, extended period of limitation ought not to be invoked based on certain decisions of Hon’ble Supreme Court in such cases and hence the penalty has not been considered for disclosure as a contingent liability. The company has filed an appeal with CESTAT, New Delhi on 15.06.2022 in the matter.

The company has also received order no. DE/NP/R-174/GST/ADC(NR)/005/2022-23 dated 28.02.2023 from the office of Additional Commissioner, Adjudication, Central Tax, GST Delhi East on recovery of GST on Guarantee Fee Paid to Government under Reverse Charge basis for the period: 01.07.2017 To 26.07.2018 raising a demand of Rs. 1,525.08 Lakhs towards Tax, Rs. 1,525.58 Lakhs towards penalty and applicable interest thereon. While the Company is in the process of filing an appeal against the same, requisite provision towards the Tax and interest thereon has already been made in the books of accounts, but the penalty has not been considered for disclosure as contingent liability as explained above.

³Includes Penalty for ^ 2.62 Lakhs imposed by Ministry of Corporate Affairs (MCA) w.r.t. non-appointment of Woman Director (Refer 58(G)). The company being a government company has no control over appointment of directors and hence the same has not been considered for provision. Also includes cases pending before Hon’ble High Court of Delhi in the form of Writ Petition against the order of disciplinary authority for dismissal of staff from service of IREDA. There is no interim order in this matter.

b) Contingent Assets: Undeterminable* (previous year: Undeterminable*).

*The Madras High Court vide its order dated 29.03.2022, regarding recovery proceedings against Arunachalam Sugar Mills Ltd. (ASML), enabled the Company to dispose off -- the assets of ASML for ^ 710.00 Lakhs plus Goods & Services Tax (GST) of 18%. The Company has already recovered ^ 177.50 Lakhs against the said sale along with GST amounting to ^ 127.80 Lakhs, which was duly deposited by the Company. The company also received ^ 23.11 Lakhs against the remaining outstanding of ^ 532.50 Lakhs through the order of the honourable court. The balance of ^ 509.39 Lakhs is with the official liquidator (OL) who was directed by the honourable court to call upon secured creditors and settle charges in favor the workmen (which are still undetermined) before transmitting the balance to the Company. The Company had ^ 0.40 Lakhs outstanding (Actual principal outstanding is ^ 4,840.12 lakhs) in its books of accounts against an equivalent provision being a NPA loss asset.

IREDA is taking appropriate steps to sell the immovable assets pertaining to M/s Arunachalam Sugar Mills Ltd., which is charged to IREDA valued at Rs. 2,850 lakhs through Hon’ble High Court vide order dated 31.03.2023 through open public auction.

5. There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as on 31.03.2023 (as on 31.03.2022: ^ Nil). This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

7. Disclosure in respect of Indian Accounting Standard (Ind AS)-23 "Borrowing Costs"

^ Nil (previous year: ^ Nil)

8. Disclosure in respect of Indian Accounting Standard (Ind AS)-19 "Employee Benefits"

General description ofvarious defined employee's benefits schemes is as under:

• Provident Fund: During the year ended 31.03.2023, the company has recognized an expense of ^ 251.41 Lakhs (previous year : ^ 519.69 Lakhs) in respect of contribution to Provident Fund at predetermined fixed percentage of eligible employees' salary and charged to statement of profit and loss which includes contribution of ^ Nil Lakhs (previous year : ^ 291.47 Lakhs ) as per sub- clause no. 28 of clause number 27AA i.e. terms and conditions of exemption of The Employees’ Provident Funds Scheme, 1952 towards loss to the trust due to diminution in the value of the investment . Any amount (if recovered) by the IREDA’s PF Trust shall be refunded

to the company. In view of recent order of the Hon'ble Supreme Court dated 4.11.2022 , the company has given its employees , opportunity to exercise the joint option for EPS 1995 pension on actual / higher salary basis.

• National Pension Scheme /Superannuation Benefit Fund (Defined Contribution Fund): During the year ended 31.03.2023, the company has recognized an expense of ^ 185.57 Lakhs in respect of contribution to National Pension Scheme (NPS) (previous year: ^ 156.29 Lakhs in respect of contribution to National Pension Scheme (NPS)) at predetermined fixed percentage of eligible employees' salary and charged to statement of profit and loss.

Other Benefits:

• Earned Leave benefit (EL): Accrual 30 days per year. Encashment 2 times in a calendar year while in service. Encashment on retirement or superannuation maximum 300 days inclusive of HPL. For the year ended 31.03.2023 the company has provided ^ 72.75 Lakhs (previous year : ^ 174.44 Lakhs as income) towards earned leave as per actuarial valuation and company's best estimates.

• Half Pay Leave benefit (HPL) : Accrual 10 full days per year. No encashment while in service. Encashment on retirement or superannuation maximum 300 days inclusive of EL. For the year ended 31.03.2023 the company has provided ^ 37.93 Lakhs (previous year: ^ 56.03 Lakhs) towards sick leave as per actuarial valuation and company's best estimates.

• Gratuity: Accrual of 15 days salary for every completed year of service. Vesting period is 05 years, and the payment is limited to 20 Lakhs subsequent to the pay revision applicable from 01.01.2017. As per actuarial Valuation and company's best estimates for the year ended 31.03.2023, towards gratuity is ^ 1,114.80 Lakhs (previous year: ^ 1,115.77 Lakhs) for on roll employee, whereas the assets held of ^ 1,188.83 against the liability of ^ Nil Lakhs (previous year: ^ 1,167.44 Lakhs against the liability of ^ 1,110.95 Lakhs). The expenses charged during the year is ^ 60.17 Lakhs (previous year: ^ 72.93 Lakhs)

• Post-Retirement Medical Benefit (PRMB): The Company contributes to the defined benefit plans for PostRetirement Medical Scheme using projected unit credit method of actuarial valuation. Under the scheme eligible ex-employees and eligible dependent family members are provided medical facilities. As per Actuarial Valuation company's best estimates for year ended 31.03.2023 towards the PRMB, the company has provided ^ 136.22 Lakhs (previous year : ^ 220.06 Lakhs).

• Baggage Allowance: At the time of superannuation, employees are entitled to settle at a place of their choice, and they are eligible for Baggage Allowance. As per actuarial Valuation and company's best estimates for the year ended 31.03.2023, towards Baggage Allowance the company has provided ^ 2.82 Lakhs (previous year : ^ 3.45 Lakhs).

• Farewell Gift: At the time of superannuation of employees, company provides farewell gift to employee as per policy framed for this purpose. Value of gift is determined on the basis on designation of the superannuating employee. During the year ended 31.03.2023, the company has provided towards the Farewell Gift ^ 1.32 Lakhs due to decrease in liability (previous year : ^ 11.07 Lakhs).

Sensitivities due to mortality & withdrawals are not material & hence impact of change due to these not calculated. Sensitivities as rate of increase of pensions in payment, rate of increase of pensions before retirement & life expectancy are not applicable.

9. Disclosure in respect of Indian Accounting standard (Ind AS)-108: "Operating Segments"

(i) Operating segments

Based on the "management approach" as defined in Ind AS 108, the CMD, the Chief Operating Decision Maker (CODM) evaluates the performance and allocates resources based on an analysis of various performance indicators by business segments. The accounting principles used in the preparation of the financial statements are consistently applied to record revenue and expenditure in individual business segment and are as set out in the significant accounting policies.

The Company operates in two segments - Financing activities in the Renewable Energy (RE) & Energy Efficiency (EE) sector and Generation of power through Solar Plant operations at Kasaragod, Kerala. Major revenue for the company comes from the segment of financing activities in the RE & EE sector. The other operating segment -Generation of power through Solar Plant is not a reportable segment. The company operates in India; hence it is considered to operate only in domestic segment. As such considered as a single business/geographical segment for the purpose of Segment Reporting.

¹ Shri Pradip Kumar Das has been appointed as Chairman & Managing Director (CMD), IREDA w.e.f. 06.05.2020 and was entrusted with additional charge of Director (Finance) w.e.f. 06.05.2020. Subsequently, MNRE extended the post of additional charge of Director (Finance) to Shri Pradip Kumar Das, CMD, IREDA from time to time and last extended w.e.f. 06.05.2022 for a period of six months which was valid till 05.11.2022. MNRE vide Office Order No.1/13/2017-IREDA dated April 10, 2023 entrusted the additional charge for the post of Director (Technical), IREDA to Shri Pradip Kumar Das, Chairman & Managing Director, IREDA for a period of three months w.e.f. 05.03.2023 or till the appointment of a regular incumbent, or until further orders, whichever is earliest.

² Shri Chintan N. Shah, Director (Technical) has completed his tenure on March 4, 2023 (a/n). Accordingly, he is ceased to be director of IREDA.

³ MNRE vide its letter dated 31.10.2022 has informed that Central Deputation tenure of Shri Vimalendra Anand Patwardhan, Former JS & FA, and MNRE has been completed on 25.10.2022. Accordingly, Shri Vimalendra Anand Patwardhan is ceased to be Govt. Nominee Director of IREDA.

⁴ MNRE vide its order no.340/85/2017-IREDA dated February 7, 2023, has informed that Shri Dinesh Dayanand Jagdale, Director (Govt Nominee) Ceased to be Director of IREDA w.e.f February 7, 2023.

⁵ MNRE vide its order no.340/85/2017-IREDA dated February 7, 2023, has appointed Shri Padam Lal, JS& FA, MNRE and Shri Ajay Yadav, JS, MNRE as Govt. Nominee Directors on the Board of IREDA. However, DIN of Shri Ajay Yadav has been obtained from Registrar of Companies on February 14, 2023. Accordingly, Shri Ajay Yadav is deemed to be director of IREDA w.e.f February 14, 2023.

⁶ Ministry of New and Renewable Energy (MNRE) vide its order no. 340-11/1/2018-IREDA dated 21.01.2022 appointed Shri Shabdsharan Brahmbhatt, as Part-Time Non-Official Director (Independent Director) on the Board of IREDA for a period of three years with immediate effect. However, as DIN has been obtained from Registrar of Companies on 28.01.2022. Accordingly, he is deemed to be Director w.e.f. 28.01.2022.

⁷ Ministry of New and Renewable Energy (MNRE) vide its order no. 340-11/1/2018-IREDA dated 28.03.2022 appointed Shri Chennakesava Murthy Jaganath, as Non-Official Director (Independent Director) on the Board of IREDA for a period of three years from the date of the order. However, as DIN has been obtained from Registrar of Companies on 31.03.2022. Accordingly, he is deemed to be Director w.e.f. 31.03.2022. Also, the name of Shri Chennakesava Murthy Jaganath has been updated as Dr. Jagannath C. M. Jodidhar in MCA records on 29.09.2022.

⁸ Ministry of New and Renewable Energy (MNRE) vide its order no. 340-11/1/2018-IREDA dated 06.03.2023 , has appointed Shri Ram Nihal Nishad & Smt. Rohini Rawat, as Part-Time Non-Official Directors (Independent Directors) on the Board of IREDA for a period of three years w.e.f. the date of issue of the order or until further orders, whichever event occurs earlier. However, DIN of both the Directors have been obtained from Registrar of Companies on 09.03.2023. Accordingly, they are deemed to be director of IREDA w.e.f 09.03.2023.

⁹ Shri Surendra Suyal, (Company Secretary) was appointed as the Chief, Internal Audit by the Board in its 361st meeting w.e.f. 23.05.2022. Pursuant to retirement of Shri Surendra Suyal on 31.10.2022, Smt. Ekta Madan, Sr. Manager (Corporate Affairs) has been designated as Company Secretary cum Compliance Officer in compliance to the provisions of Section 203 of Companies Act, 2013 and Shri Som Pal, GM (Internal Audit) has been appointed as Chief Compliance Officer w.e.f 01.11.2022.

• The Chairman and Managing Director, Director (Finance) and Director (Technical) have also been allowed staff car including private journey upto a ceiling of 1000 Kms. per month on payment of monthly charges as per Department of Public Enterprises guidelines.

• Contribution towards Gratuity Fund, for Functional Directors is not ascertainable separately as the contribution to LIC is not made employee wise.

• Provision for leave encashment, post-retirement medical benefit, farewell gift etc. to functional director have been made on the basis of actuarial valuation and are in addition to the above given compensation.

Major terms and conditions of transactions with related parties

1. Transactions with related parties are made on terms equivalent to those that prevail in arm’s length transactions

2. The remuneration and staff loans to Key Managerial Personnel are in line with the service rules of the Company.

3. There are no pending commitments to the Related Parties.

During the year, the Company has also received interest of ^ 3,998.57 Lakhs (previous year: ^ 1,051.06 Lakhs) and repayment of principal of ^ 667.08 Lakhs (previous year : ^ 541.38 Lakhs) on the loans to government related entities. Further, an amount of ^ 712.57 Lakhs (previous year : ^ 617.15 Lakhs) has been accounted for as Service Charges towards the various schemes implemented as per the mandate of the Government of India (GoI) (Refer Note 28 ). During the year ended 31.03.2023; MoU has been signed with NBCC-NSL limited on 27.07.2022 for award of interior work for IREDA office space at NBCC office Kidwai Nagar for which the BoQ has been submitted for total amount of ^ 1,711 Lakhs. approx.

Above transactions with the Government related entities cover transactions that are significant individually and collectively. The Company has also entered into other transactions such as telephone expenses, air travel and deposits etc. with other CPSUs. They are insignificant individually & collectively and hence not disclosed. All transactions are carried out on market terms.

12. Disclosure in respect of Indian Accounting standard (Ind AS) 116 "Leases"

The company has applied Ind AS 116 with the date of initial application of April 01, 2019. The company has applied Ind AS 116 using the modified retrospective approach, under which the cumulative effect of initial application is recognized in retained earnings on April 01,2019. The company has applied the above-mentioned approach to all of its lease arrangement enforceable as on April 01,2019.

As per Para C11 of Ind AS 116, for leases that were classified as finance leases applying Ind AS 17, the carrying amount of the right-of-use asset and the lease liability at the date of initial application shall be the carrying amount of the lease asset and lease liability immediately before that date measured applying Ind AS 17. Hence, the carrying amount of lease asset in case of leasehold property at India Habitat Centre (IHC) and August Kranti Bhawna (AKB), the Company has carried forward the same amount as right of use asset as per Ind AS 116.

a) Description of lease accounted as Right of Use assets as per Ind AS 116

The Company has lease agreements for office space in Mumbai and Solar Park Land at Kerala. The tenure of each agreement and rental payments are different. The Company has applied the measurement principles under Ind AS 116 for the leases on which exemption under short term lease are not available in line with the accounting policy of the Company.

14. Performance Related Pay

During the year ended 31.03.2023, the Company has made a provision of '935.54 Lakhs (previous year : '695.96 Lakhs) towards the performance related pay. An amount of '524.82 Lakhs was paid during the year (previous year : ' 810.59 Lakhs) to the eligible employees as per the underlying scheme.

16. The Company uses derivative instruments in pursuance of managing its foreign currency risk and interest rate risk associated on borrowings. For hedging foreign currency and interest rate risk, the Company uses foreign currency forward contracts, cross currency swaps, principal only swaps and interest rate swaps. To the extent the derivative contracts designated under the hedge accounting are effective hedges, the change in fair value of the hedging instrument is recognized in ‘Effective Portion of Cash Flow Hedges’. Amounts recognized in such reserve are reclassified to the Statement of Profit and Loss when the hedged item affects profit or loss.

17. In addition to the security held by way of assets etc., of the borrowing entities, the Company held FDRs & Guarantees issued by Banks amounting to '24,935.83 Lakhs and '18,599.32 Lakhs respectively (previous year : '20,055.86 Lakhs and '16,466.17 Lakhs respectively) as additional securities for loans granted.

18. As per the Board approved Foreign Exchange and Derivative Risk Management Policy of IREDA, an open exposure on foreign currency loans (40% of outstanding forex borrowing) is permissible. The open exposure as on 31.03.2023 is '188,629.68 Lakhs (previous year : '1,94,043.39 Lakhs) which is 18.62% ( previous year: 18.60 %) ofthe outstanding forex borrowing and is within the permissible limits.

Out of the said open exposure part hedging has been done for EURO 3,03,84,097.05 loan has been part hedged by taking Principal Only Swap (USD/INR) for USD 33,726,347.73 equivalent to ' 27,728.76 Lakhs (as on 31.03.2022 USD 33,726,347.73 equivalent to '25,566.97 Lakhs). JPY 23,71,500,000 has been hedged by taking Principal Only Swap (USD/JPY) equivalent to USD 1,76,00,564.05 amounting to '14,655.87 Lakhs at applicable rate on 31.03.2023 (as on 31.03.2022: Nil)

(ii) Fair value of Investment Property :

The market value of the property has been assessed (as per the valuation done by a registered valuer as defined under rule 2 of Companies (Registered Valuers and valuation) Rules, 2017) at '258.16 Lakhs as on 31.03.2023 (previous year: '230.00 Lakhs).

21. Decommissioning liabilities included in the cost of property, plant and equipment

As per Ind AS 16 Property, Plant and Equipment, Appendix A “Changes in Existing Decommissioning, Restoration and Similar Liabilities”, specified changes in decommissioning, restoration or similar liability needs to be added to or deducted from the cost of the asset to which it relates; the adjusted depreciable amount of the asset is then depreciated prospectively over its remaining useful life. As per para 55 of Ind AS 16, the depreciable amount of an asset is determined after deducting its residual value. The amount of decommissioning liability and residual value related to solar plant is not reliably ascertainable. Hence, decommissioning liability related to the solar plant and the residual value have not been considered. However, the management is of the opinion that the decommissioning cost (net of residual value of the solar plant), will not be material.

22. Approval of financial statements

The financial statements for the year ended on 31.03.2023 were approved by the Board of Directors of the company and authorized for issue on 25.04.2023.

23. Revenue from Contracts with Customers

Company is operating a solar power plant. The Power Purchase Agreement (PPA) has been signed between IREDA and Kerala State Electricity Board Limited (KSEBL) on 31.03.2017 @ ' 4.95/KWH or rate as approved by Kerala State Electricity Regulatory Commission (KSERC), whichever is lower. Accordingly, IREDA filed a petition for approval of the Power Purchase Agreement with KSERC, which in its interim order dated 14.02.2018 approved an interim tariff of ' 3.90 per unit till March 2018. During the financial year 2019-20, KSERC passed a tariff order and determined tariff of ' 3.83 per unit. Accordingly, Company has recognized the

gross revenue on the supply of power to KSEBL. Further, the Company has also continued to provide its consultancy services during the year.

24. SOLAR POWER PROJECT

The company entered into an MOU with Solar Energy Corporation of India (SECI) in the year 2014-15 for implementation of 50 MW Solar Project of IREDA situated at Ambalathara Solar Park, Kasaragod District, in the state of Kerala. It has been capitalized in the books in FY 2016-17 at ' 29,398.48 Lakhs. In turn, SECI (as a Project Management Consultant (PMC) on behalf of IREDA had selected M/s. Jakson Engineers Limited as EPC (Engineering Procurement and Construction) consultant for designing, engineering, supply, construction, erection, testing, commissioning of Solar PV Power Plant at a fixed price of ' 26,929.25 Lakhs plus 8% management charges (including Taxes) of ' 2,456.32 Lakhs payable to SECI and ' 12.92 Lakhs being interest capitalized during the FY 2016-17. An amount of ' 1,500.00 Lakhs (excluding taxes) which was paid as advance towards evacuation charges to Renewable Power Corporation of Kerala Limited (RPCKL), the Solar Park Developer, was capitalized during FY 2017-18. During FY 2019-20, a further amount of ' 812.71 Lakhs was paid and capitalized.

The PPA was signed between IREDA and Kerala State Electricity Board Limited (KSEBL) on 31.03.2017 @ ' 4.95 /KWH or rate as approved by Kerala State Electricity Regulatory Commission (KSERC), whichever is lower. Accordingly, IREDA filed a petition for approval of the Power Purchase Agreement with KSERC, which in its interim order dated 14.02.18 had approved an interim tariff of ' 3.90 per unit. Further to the same, KSERC, in its order dated 06.02.19 had approved of the levelized tariff @ ' 3.83 per unit. It has also further ordered as under:

• KSEB Ltd shall reimburse, any tax paid on the Return on Equity (RoE), limited to the amount of equity specified in this Order. For claiming the tax, developer shall furnish the proof of payment of such tax to KSEB Ltd.

• KSEB Ltd shall reimburse, the land lease paid by IREDA /RPCKL, less amount received as subsidy, if any, in addition to the above.

Accordingly, in the FY 2020-21, IREDA had made a claim of ' 1,313 Lakhs from RPCKL, who had responded in the negative of the claim and the value thereof. Further, IREDA has approached Appellate Tribunal for Electricity (APTEL) with a review petition for review of the tariff fixed which is pending. Notwithstanding, the generation income has been accounted for @ ' 3.83 per unit.

The Company had issued the Operational Acceptance certificate on 09.03.2020. The Plant handover and taking over has been done on 09.03.2021. The Solar Project has been set up on Leasehold land, for which no lease rentals were payable for the first 5 years. The Company has entered into a lease agreement with Renewable Power Corporation of Kerala Limited (RPCKL) with respect to the land use for a period of 28 years (from 07.10.2015 to 06.10.2043). As per the agreement, the Company was exempted from payment of the land lease charges till 06.10.2020. As per KSERC Tariff order dated 06.02.2019, IREDA is eligible to avail reimbursement of land lease charges paid to RPCKL. In view of this reimbursement letter to KSEBL has been sent on 24.03.2022 for lease rent paid. The same being uncertain, no asset has been created towards the same.

Further, IREDA had filed a review petition on 05.04.2022 before the Appellate Tribunal for Electricity and IREDA is pressing its grounds on being permitted the total costs paid by it to RPCKL in full which amounts to

2.538.00 Lakhs and not ' 1,225.00 Lakhs as allowed by the State Commission. In a cost-plus based tariff determination process under Sections 61, 62 & 64 of the Electricity Act, 2003, the actual costs incurred by the Petitioner ought to be capitalized in tariff and the State Commission cannot proceed based on estimates. Since the Review can only be sought for on limited grounds, IREDA proceeded with filing of a Second Appeal as permissible before the Hon'ble Supreme Court on 08.06.2022 in terms of Section 125 of the Electricity Act, 2003, on certain legal grounds. Diary No. has been given i.e., No. 18137 of2022. IREDA has filled rejoinder to the reply filed by RPCKL.

IREDA has filed the Review Petition No. 15 of 2023 under Section 120 (2) (f) of the Electricity Act, 2003 seeking review of the Judgement dated 10.02.2022 passed by the Hon’ble Appellate Tribunal of Electricity in Appeal No. 141 of 2021. The present review is limited to the decision of this Hon’ble Tribunal on the issue of expenditure incurred by IREDA as project development cost and paid to Respondent No. 2 - Renewable Power Corporation of Kerala Limited. M/s RPCKL has filed the counter reply. Thereafter IREDA has filed the rejoinder. Pleadings has been completed. The matter is now listed for final hearing. The next date is not yet notified.

25. During the previous year ended on 31.03.2022, the company liquidated its Investment in the Associate Company - MP Windfarms Limited, to M/s I-Bahn Retail Services Pvt. Ltd. for a consideration of ' 24.00 Lakhs. Accordingly, the transfer/sale ofthe entire 168,000 Equity Shares of Face Value of ' 10/- each (including

48.000 Equity Shares of' 10/- each allotted as Bonus Shares) held by IREDA was transferred on 26.03.2022.

26. The property tax demand raised up to 31.03.2023 in respect of all the residential and office premises have been paid. The property tax in respect of office building at India Habitat Centre has been paid as per the demand of India Habitat Centre, which was based on unit area method. South Delhi Municipal Corporation (SDMC) has raised an issue with India Habitat Centre to include license fee received for the facilities area for the purpose of calculating ratable value for the period 1994-2004. This matter was pending with the Hon’ble Delhi High Court as on 31.03.2023. However , subsequently the issue was settled between SDMC and IHC and petitions were withdrawn by both the Parties. Vide order dated 11th April 2023 of Hon’ble High Court , no further liability has arisen.

27. In terms of Section 135 of The Companies Act, 2013, IREDA is required to constitute a corporate social responsibility (CSR) Committee of the Board of Directors and the Company has to spend 2% of the average net profits of the company’s three immediately preceding financial years calculated as per section 198 of the Companies Act 2013. In accordance with the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 notified w.e.f. 22.01.2021, any unspent amount pursuant to any ongoing project shall be transferred to unspent CSR Account in any scheduled bank within a period of thirty days from the end of the financial year, to be utilized within a period of three financial years from the date of such transfer. Any unspent CSR amount, other than for any ongoing project, shall be transferred to a Fund specified in Schedule VII, within a period of six months of the expiry of the financial year. Further, if the Company spends an amount in excess of the requirement under statute, the excess amount may be carried forward and set off in three succeeding financial years against the amount to be spent.

As the notification was made effective during FY 2020-21, the Company complied with the amended provisions of Section 135 of the Companies Act, 2013 with effect from the FY 2020-21. Accordingly, the unspent CSR amount as at 31.03.2020 would continue to be dealt with in accordance with the pre-amendment framework.

b. For FY 2022-23, the Board had approved CSR budget of ' 1,057.73 (FY21-22'685.34 Lakhs) based on 2% of

the average standalone Profit (before tax) as per Companies Act, 2013. The projects sanctioned in a year may be completed in subsequent years based on milestone linked payment to various stages of completion of the project. Further, as per the DPE guidelines, the CSR Budget is non-lapsable, and any unspent amount is carried forward to the next year for utilization for the purpose for which it was allocated.

During the year ended, an aggregate amount of ' 697.44 Lakhs (previous year: ' 950.60 Lakhs) has been spent in cash on CSR projects based on the progress of the projects. Out ofthe funds released during the year, an amount of ' 448.43 Lakhs relates to the projects expenditure in the financial year 2022-23 and balance of ' 249.01 Lakhs relates to the projects expenditure of the earlier years (previous year: an aggregate amount of ' 950.60 Lakhs was spent, of which ' 872.93 Lakhs was pertaining to the expenditure on projects expenditure of FY 2021-22 and balance of ' 77.67 Lakhs relates to the projects expenditure of the earlier years).

d. There were no related party transactions by the Company in relation to CSR expenditure in the current year or previous year.

30. Additional Information

a) Expenditure in Foreign Currency:

• On Travelling '15.34 Lakhs (previous year: ' Nil)

• Interest & Commitment expenses: ' 18,944.31 Lakhs (previous year: '9,119.43 Lakhs).

b) Earnings in Foreign Exchange:

• Interest: ' Nil Lakhs (previous year: ' 1.81 Lakhs)

c) During the year, M/s KFW paid '48.29 Lakhs (previous year: '203.98 Lakhs) (including '43.38 Lakhs directly to consultants hired under TA Programme under Direct Disbursement Procedures and ' 4.91 Lakhs directly to IREDA towards taxes) against Technical Assistance Programme (TAP) of EURO

0.60 Million sanctioned to IREDA in respect of KFW IV lines of credit for “Technical Assistance for Solar PV Project Pipeline in India” etc.

d) During the year, M/s KFW paid '116.15 'NilLakhs (previous year: '173.93 Lakhs) (including '104.34 Lakhs directly to consultants hired under TA Programme under Direct Disbursement Procedures and '11.81 Lakhs directly to IREDA towards taxes) against TAP of EURO 1 million sanctioned to IREDA in respect of KFW VI line of credit for expert services for capacity building measures and costs for related goods and services for IREDA.

e) The World Bank has sanctioned a Clean Technology Fund (CTF) Grant of USD 2 Million to assist in financing of the Shared Infrastructure for Solar Parks Project under IBRD III Line of credit. During the year, World Bank released '174.55 Lakhs including '49.96 Lakhs towards revenue expenses and ' 124.59 Lakhs towards capital expenses (previous year: ' 246.92 Lakhs) to IREDA under the CTF Grant.

31. MNRE / UNDP - IREDA SCHEME FUNDS

The Company besides its own activities implements Programme on behalf of Ministry for New and Renewable Energy on the basis of Memorandum of Understanding entered into with the said Ministry. In terms of stipulations of each of the MoUs, MNRE has placed an agreed sum in respect of each Programme with the company for Programme implementation. Interest on MNRE funds is accounted as and when received. As the income generated by the MNRE Programme loans is not the income of the company and also the loan assets belong to MNRE, the same is not considered for asset classification and provisioning purposes. On closure of the respective Programme, the company is required to transfer the amount standing to the credit of MNRE (inclusive of interest accrued thereon) to MNRE after deducting the service charges, irrecoverable defaults, and other dues as stipulated in the MoU.

a) Generation Based Incentives (GBI) / Capital Subsidy Scheme etc.: IREDA is the Program Administrator on behalf of Ministry of New & Renewable Energy (MNRE) for implementation of Generation Based Incentive Scheme and Capital Subsidy for Wind and Solar Power Projects registered under the Scheme. Under these schemes, fund is provided by MNRE to IREDA for the purpose of disbursement of the same towards energy generation to the GBI claimants i.e., the Project Developers/ DISCOM as per the scheme. Therefore, essentially, the activity is receipt and utilization of funds. For release of GBI fund by MNRE, IREDA is required to submit the Utilization Certificate along with Audited Statement of Expenditure duly certified by a Chartered Accountant, for the previous tranche of fund released by MNRE. The said requirement is fully complied with by IREDA, and nothing further has been required by MNRE so far. The statutory auditors have not audited the accounts of Scheme.

The amount due to MNRE on account of the above at the close of the year, along with interest on unutilized funds kept in separate bank accounts with Nationalized Banks as savings banks / short-term deposits etc. shown as Bank balances other than included in Cash and Cash Equivalents (Refer Note 3) and the corresponding liability is shown under the head Other Financial Liabilities (Refer Note 22) in the Balance Sheet.

b) GEF -MNRE -United Nations Industrial Development Organization (UNIDO) Project: Ministry of New and Renewable Energy and UNIDO have jointly implemented a GEF-5 funded project on using biogas/bio-methane technology for waste to energy conversion, targeting innovations and sustainable energy generation from industrial organic wastes. Under the said project UNIDO will provide funds for subsidizing the interest rate by 5% for the project developers and IREDA is the fund handler. During the year no claims have been made to UNIDO, however funds amounting to '255.14 Lakhs has been received

by IREDA towards the 1^st tranche of USD 3,40,000, along with GST of '45.92 Lakhs (claimed on 01.02.2022). The requisite fund liability (including accrued interest) is disclosed under Note 22-Other financial liabilities.

32. MNRE GOI FULLY SERVICED BONDS

In terms of O.M. No. F.15 (4)-B (CDN)/2015 dated 03.10.16 issued by Department of Economic Affairs, Ministry of Finance, Government of India, IREDA had been asked to raise an amount of ' 400,000 Lakhs through GOI fully serviced bonds for utilization of the proceeds by them for MNRE Schemes / Programs relating to Grid Interactive Renewable Power, off-Grid/Distributed & Decentralized Renewable Power and Investment in Corporations & Autonomous Bodies. A MoU between MNRE and IREDA has also been signed on 25.01.17 defining the role and responsibilities of both. Para No I of General Clauses at page 5 of the MoU specifically defines that the borrowings of MNRE bonds shall not be considered as assets/liability for any financial calculation by the Company. This implies that the amount raised by way of MNRE bonds while shall be reflected in the borrowing as well as assets however, there will be no impact of the same on IREDA s borrowings/ Assets or Income / Expenses.

IREDA had raised ' 164,000.00 Lakhs GOI Fully Serviced Bonds on behalf of MNRE during the year 2016-17 and the same has been shown under Note No. 24 - Other Non-Financial liabilities. Against this an amount of ' 163,879.20 Lakhs has been disbursed up to 31.03.2023 (previous year: '163,879.20 Lakhs) as per the instructions of the MNRE for various plans/schemes. The said amount has been shown under Note No. 17 -Other Non-Financial Assets - as amount recoverable from MNRE. The amount was kept in MIBOR Linked deposit on which the accrued interest of '1,160.42 Lakhs as on 31.03.2023 (previous year: ' 1,117.48 Lakhs) has been shown under Note No. 24 - Other Non-Financial liabilities. The balance cumulative amount (inclusive of interest accrued / earned) as on 31.03.2023 is '928.69 Lakhs (previous year: '885.75 Lakhs) which is kept in MIBOR Linked Term Deposit and remaining in Current Account amounting to '352.53 Lakhs as on 31.03.2023 (previous year: '352.53 Lakhs) which are shown under Note No. 3 - Other Bank Balances in respective sub heads.

During the year ended 31.03.2023, interest on the GOI fully Serviced Bond of '12,434.70 Lakhs (previous year: '12,434.70 Lakhs) became due for payment to the investors and the same has been received from GOI and paid to the investor.

33. SUBSIDY / INCENTIVE RECEIVED FROM MNRE AND HANDLED ON THEIR BEHALF

A. Interest Subsidy

As per the Government policy, MNRE is providing interest subsidy. The interest subsidy is released to borrowers implementing MNRE programmes of Co-generation, Small Hydro, Briquetting, Biomass, Solar Thermal and Waste to Energy on NPV basis and for Solar and SPV programmes on actual basis. The interest subsidy is passed on to the borrowers on quarterly basis subject to complying with the terms and conditions of the sanction by these borrowers.

B. Capital subsidy

During the year, an amount of '3,594.77 Lakhs (previous year: '3,871.38) was received from MNRE towards Capital Subsidy. Out of the total capital subsidy amount available, '3,594.77 Lakhs (as on 31.03.2022: '3,871.38) was passed on to the borrowers on compliance of the terms and conditions of the capital subsidy scheme.

34. Debenture Redemption Reserve

In terms of Rule 18 (7) (b) (ii) of The Companies Act 2013, the company is required to create a Debenture Redemption Reserve (DRR) upto 25% of the bonds issued through public issue. The Company has made a provision for DRR, so as to achieve the required amount over the respective tenure of the Tax-Free Bonds. Accordingly, a sum of '4,629.11 Lakhs has been provided for the year ended 31.03.2023 (previous year: ' 4,629.11 Lakhs).

35. NBFC Reserve

In terms of RBI circular no. DNBR (PD)CC.No.092/03.10.001/2017-18 dated May 31, 2018, IREDA is required to create NBFC reserve under Section 45-IC of RBI Act, 1934 @ 20% of post-tax profit. Accordingly, for the year ended 31.03.2023, an amount of '17,300 Lakhs has been appropriated (previous year: '12,700 Lakhs) towards NBFC reserve.

This section explains the judgement and estimates made in determining the fair values of financial instruments that are

a) Recognized and measured at fair value and

b) Measured at amortized cost and for which fair values are disclosed in financial statements. To provide an indication about reliability of the inputs used in determining fair value the company has classified its financial instruments into three levels prescribed under accounting standard. An explanation on each level follows underneath the table.

c) Considering the materiality, we have ignored discounting of employee loan and security deposits.

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, traded bonds and mutual funds that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock exchanges is valued using the closing price as on the reporting date. The mutual funds are valued using the closing NAV

Level 2: Financial instruments that are not traded in active market (for example, traded bonds,) is determined using other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level 3: Technique which use inputs that have a significant effect on the recorded fair value that are not based on observable market data like unlisted equity securities.

MTM calculation is based upon the valuation provided by the registered independent valuer as defined under rule 2 of Companies (Registered Valuers and valuation) Rules, 2017, for outstanding derivative instrument at reporting date.

Fair value measurements using significant unobservable inputs (level 3)

Pre-tax rate that reflects current market assessments of the time value of money and the risk specific to the asset.

IV. Valuation Processes

For valuation of MTM value of hedge deal, IREDA has obtained valuation from a registered independent expert valuer, who has provided such valuation after considering movement in market position, movement in exchange rate, interest rate etc.

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

The fair values for borrowings, loans to companies, debt securities are calculated based on cash flows discounted using current lending rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs, including own credit risk.

The fair values of non-current borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk.

37. Financial risk management

Risk is managed through a risk management framework, identification measurement and monitoring subject to risk limits and other controls. The Board of Directors is responsible for overall risk management approach and for approving the risk management strategies and principles.

The risk committee has the responsibility for the development of risk strategy and implementing principles, framework, policies and limits. The risk committee is responsible for managing risk decisions and monitoring risk level and report to the Board. The company’s finance & treasury is responsible for managing its assets and liability and overall financial structure. The Company also has ALCO in place and Board approved ALM policy for managing liquidity, funding, reviewing asset liability mismatch and setting up various risk tolerance limits. The finance & treasury is responsible for the funding and liquidity management of the company. The company also has a designated Chief Risk Officer (CRO) as per the directive of the RBI.

Company’s activities expose it to market risk, liquidity risk and credit risk. To minimize any adverse effects on the financial performance of the company pertaining to foreign currency exposure arising due to the foreign currency liabilities, derivative financial instruments such as foreign exchange forward contracts, swaps etc. are entered into to hedge foreign currency risk exposures. Derivatives are used exclusively for hedging purpose and not as trading or speculative instruments. A Foreign Exchange and Derivatives Risk Management Policy, and a Foreign Exchange and Derivative Management Committee (FMC) is in place in the Company and hedging instruments are used to lower/mitigate the currency and interest rate risks on the foreign currency borrowings.

This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the impact of hedge accounting in the financial statements.

Credit risk is the inherent risk in the lending operation and arises from lowering of the credit quality of the borrowers and the risk of default in repayments by the borrowers. A robust credit appraisal system is in place for the appraisal of the projects in order to assess the credit risk. The process involves appraisal of the projects, rating by external agencies and assessment of credit risk, appropriate structuring to mitigate the risk along with other credit risk mitigation measures.

The company splits its exposures into smaller homogenous portfolio based on shared credit risk characteristic, as described below in the following order:-

• Secured/ unsecured i.e., based on whether the loans are secured.

• Nature of security i.e., nature of security if the loans are determined to be secured.

• Nature of loan i.e., RE Sector to which the loan has been extended.

An assessment of whether credit risk has increased significantly since initial recognition is performed at each reporting date by considering the change in the risk of default occurring over the remaining life of the financial instrument. In determining whether the risk of default has increased significantly since initial recognition, the Company considers more than 30 days overdue as a parameter. Additionally, the Company considers any other observable input indicating a significant increase in credit risk.

The Company defines a financial instrument as in default when it has objective evidence of impairment at the reporting date. It has evaluated these loans under stage III on case-to-case basis based on the defaulted time, performance/operation ofthe project.

Company has recognized provision on loans and advances based on ECL Model.

Collateral and other credit enhancement.

The amount and type of collateral required depends on an assessment of the credit risk. The main type of collaterals are FDR/BGs, Charge on immovable property belonging to the promoter and corporate guarantees on case to case basis.

(a) The company manages and controls credit risk by setting limits on the amount of risk it is willing to accept for individual counterparties and for industry concentrations, and by monitoring exposures in relation to such limits.

Liquidity Risk is the inability to meet short term and long-term liabilities as and when they become due. Liquidity is monitored by Liquidity gap analysis. The Liquidity risk is managed by a number of strategies such as Short term & long-term resource raising, resource raising based on projected disbursement and maturity profile.

(i) Financing arrangements

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

The Company has working capital facilities in the form of cash credit (CC)/overdraft (OD)/short term loan (STL)/working capital demand loan (WCDL) aggregating to ' 293,000 Lakhs, (previous year 31.03.2022: ' 323,000 Lakhs). The Utilization of overall working capital as on 31.03.2023 is ' 100,000 Lakhs (previous year: ' 20,144.23 Lakhs).

Market risk is the possibility of loss mainly due to fluctuation in the interest rates and foreign currency exchange rates. To mitigate the lending interest rate risk, the company has a committee which periodically reviews its lending rates based on market conditions, ongoing interest rates of the peers and incremental cost of borrowings.

Company’s borrowings comprise of both floating rate and fixed rate borrowings linked to benchmark rates as applicable. For the foreign currency borrowings, the company mitigates the risk due to floating interest rate by taking hedging arrangements. Further the company periodically monitors the floating rate linked portfolio.

The foreign exchange borrowings from overseas lending agencies exposes the company to foreign currency exchange rate movement risk. As per the Board approved policy, company mitigates the foreign currency exchange rate risk by undertaking various derivative instruments to hedge the risk such as Principal only swap, Currency and Interest Rate Swaps (derivatives transactions), forward contracts etc. These derivative contracts, carried at fair value, have varying maturities depending upon the underlying contract requirement and risk management strategy of the Company.

I. Foreign currency risk: -

The company has foreign exchange exposure in the form of borrowings from overseas lending agencies as part of its resources raising strategy. Large cross border flows together with the volatility may render IREDA’s Balance Sheet vulnerable to exchange rate movements. As per its Board approved policy, company mitigates the foreign exchange risk through Principal only swap, Currency and Interest Rate Swap etc. (derivatives transactions). These foreign exchange contracts, carried at fair value, have varying maturities depending upon the underlying contract requirement and risk management strategy of the Company.

(b) Sensitivity

Sensitivity of profit and loss due to changes in exchange rates arises mainly from foreign currency denominated financial instruments. The below table presents the impact on Statement of Profit and Loss ( Gain / (-) Loss) due to changes in foreign currency exchange rate against INR by 5% on foreign currency exposure*: -

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates to the long-term foreign currency loans with floating interest rates and floating interest rate term loan from banks. The Company manages its foreign currency interest rate risk according to its Board approved Foreign Currency and Derivatives Risk Management policy.

The company’s fixed rate rupee borrowings are carried at amortized 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.

(c) Impact of hedging activities

Derivative financial instruments and Hedge accounting

The Company has a Board approved policy for undertaking derivative financial instruments, such as Principal Only Swap (POS), Cross Currency & Interest Rate Swap (CCIRS), Forwards, Interest Rate Swaps (IRS), Cross, Currency and Cross Currency Options, structured / cost reduction products etc. to hedge and mitigate its foreign currency risks and interest rate risks.

The Company uses derivative financial instruments, in form of Principal Only Swap (POS), Cross Currency & Interest Rate Swap (CCIRS), Forwards, Interest Rate Swaps (IRS), Cross, Currency and Cross Currency Options, structured / cost reduction products etc. to hedge its foreign currency risks and interest rate risks.

Hedge ineffectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item and hedging instrument. The Company applies the following effectiveness testing strategies:

- For cross currency swaps and interest rate swaps that exactly match the terms of the terms of the hedged item, the economic relationship and hedge effectiveness are based on the qualitative factors using critical terms match method.

The Company has established a hedge ratio of 1:1 for the hedging relationships as the underlying risk and notional amount of the hedging instruments are identical to the hedged items.

38. Capital Management Risk Management:

The primary objective of the Company’s capital management policy is to ensure compliance with regulatory capital requirements. In line with this objective, the Company ensures adequate capital at all times and manages its business in a way in which capital is protected, satisfactory business growth is ensured, cash flows are monitored and rating are maintained.

Consistent with others in the industry, the company monitors capital on the basis of the following ratio: Net debt (total borrowings) divided by Total ‘Equity’ as shown in the balance sheet.

39. Disclosure required under SEBI guidelines for “Funds raising by issuance of Debt Securities by Large Entities”:

In compliance with SEBI circular no. SEBI/HO/DDHS/CIR/P/2018/144 dated November 26, 2018, IREDA identified itself as a Large Entity Corporate as per the applicability criteria given under the aforesaid circular. Accordingly, the following is being disclosed:

40. Disclosure related to COVID 19

The Company has considered the possible effects from the pandemic relating to COVID-19 in the preparation of these financial statements including the recoverability of carrying amounts of financial and non-financial assets and ECL calculations. The Company will continue to closely monitor any material changes to future economic conditions.

41. Consortium matter under NCLT - M/s Gangakhed Sugar & Energy Limited

During the financial year 2019-20, a fraud was detected by UCO Bank and other bankers of M/s Gangakhed Sugar & Energy Limited. UCO bank has declared the account as fraud on May 11,2020, and OBC has declared the said account as fraud on January 21, 2020. The Company has sanctioned a project loan of ' 10,000.00 Lakhs out of which an amount of ' 4,960.61 Lakhs is outstanding as on 31.03.2023 (previous year: ' 5,107.95 Lakhs). The said account is NPA in the books of the Company since 30.09.2019. IREDA’s loan facility was takeout of existing loan towards Cogeneration asset. As per the audit report shared by consortium lead, no instance of fraud was mentioned towards cogeneration asset. The Borrower Company is under insolvency process through NCLT since October 2019. All transactions including the fraudulent transactions and resolution plan are presently listed for decision by NCLT Mumbai Bench under IBC and hearing is underway.

42. Disclosure - for AP cases involving Power Purchase Agreement (PPA) issue- Accounts with over dues beyond 90 days but not treated as credit impaired.

Several borrowers have obtained an interim order from Hon’ble High Court of Andhra Pradesh to not to classify the account as Non-Performing Asset. Accordingly, the loan outstanding of the borrower have not been classified as Stage III Asset, even though the over dues are more than 90 days old. However, the Company has created an adequate provision of '48,510.54 Lakhs on Loan outstanding of '89,312.93 Lakhs in the books of accounts as per Expected Credit Loss (ECL) as on 31.03.2023 (previous year: provision of '39,543.65 Lakhs on Loan outstanding of '91,879.22 Lakhs) after considering the financial and operational parameters of the projects. Though the accounts are not declared as NPA, but the income is booked into this account on cash /realization basis (i.e., any ‘interest due and not received’ is reversed and not been taken as interest income)

43. Equity Infusion

In the budget announcement of February 2021, Hon’ble Finance Minister had announced infusion of '150,000.00 Lakhs as equity in the company. During the FY22, the Government of India infused equity of '150,000.00 Lakhs, as a result the Paid-up Equity Share Capital of the Company has increased to ' 228,460 Lakhs as on the year ended 31.03.2022. Accordingly, the 1,500,000,000 equity shares were allotted on 31.03.2022 to the President of India, through Secretary, Ministry of New and Renewable Energy (MNRE). Paid up equity capital as on 31.03.2023: ' 228,460 Lakhs (' 228,460 Lakhs in the previous year).

Said infusion of equity has enhanced the capital base and enabled the company to leverage it and do higher on lending for Renewable Energy (RE) projects thus contributing to the Government of India target of RE capacity installation. Refer Note 25 of the financial statements.

44. Disclosure in respect of Indian Accounting Standard (Ind AS) -20 “Accounting for Government Grant and Disclosure of Government Assistance”

a) Grant for Capital Assets

• Intangible assets under development

The expenditure incurred for development of Enterprise Resource Planning (ERP) software - Microsoft Dynamics 365 (D365), which are eligible for capitalization under intangible assets is carried as ‘Intangible assets under development’ till they are ready for their intended use. As on 31.03.2023, the Company has disclosed an amount of '485.57 (previous year: '311.16 Lakhs) under “intangible assets under development” (Refer Note 15 of the Financial Statements).

• World Bank Clean Technology Fund (CTF) Grant: -

World Bank CTF Grant received related to Intangible assets under development are treated as deferred income and are recognized in the Statement of Profit and Loss on a systematic and rational basis over the useful life of the asset. Systematic allocation of deferred income will start from the date of being ready for intended use of software - Microsoft Dynamics 365 (D365).

The company has disclosed '485.57 Lakhs as grant (including reimbursement, direct disbursement to vendor and amount yet to be reimbursed from World Bank for the expenses incurred) (previous year '311.16 Lakhs) towards the development of intangible assets till 31.03.2023. The company has disclosed the said grant as “Capital Grant from World Bank -Clean Technology Fund (CTF)” under “Other non- financial liabilities”. (Refer Note 24 of the Financial Statements)

b) Revenue Grant

The Company has received a revenue grant “Technical Assistance” (TA) from KFW and World Bank, amounting to '214.40 Lakhs for the year ended 31.03.2023 (previous year: '429.49 Lakhs) for engaging external consultant to assess loan applications submitted by borrowers for credit line of KFW and IREDA. The Company in compliance with Ind AS 20 “Government grant and assistance” has adopted to present its revenue grant as deduction to the related expenses.

49. Registration of charges or satisfaction with Registrar of Companies (ROC)

All forms were filed on time except the following two charge forms on which additional fees has been paid due to launch of MCA Version 3. MCA has disabled the e-Filings of forms including CHG-1, CHG-4, CHG-6, and CHG-8 on V2 portal from 15th Aug 2022 due to launch of MCA 21-V3 Portal.

1. Creation of Charge in favour of Bank of India for an amount of ' 110,000 Lakhs. Agreement was executed with BOI on 27.07.2022 and accordingly due date of filing of form was 25.08.2022 and form was filed on 26.09.2022 on V3 portal ofMCA.

2. Creation of Charge in favour of Punjab National Bank for an amount of ' 150,000 Lakhs. Agreement was executed with PNB on 29.07.2022 and accordingly Due date of filing of form was 27.08.2022 and form filed on 27.09.2022 on V3 portal of MCA.

50. Undisclosed income

There were no transactions not recorded in the books of accounts that has been surrendered or disclosed as income during the current and previous reporting years in the tax assessments under the Income Tax Act, 1961. Thus, no further accounting in the books of accounts is required.

51. Compliance with number of layers of companies

Company has not invested in layers of companies as specified under Companies (Restriction on number of Layers) Rules, 2017 during the current and previous reporting years.

52. Compliance with approved Scheme(s) of Arrangements

No scheme of Arrangements has been approved by the competent authority in terms of sections 230 to 237 ofthe Companies Act, 2013 during the current and previous reporting year.

53. Utilization of Borrowed funds and Share premium

a. Company has not advanced or loaned or invested any funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall

i. 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

ii. Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

b. Further, the company has not received any fund from any person(s) or entity (ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the company shall

i. Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf ofthe company (Ultimate Beneficiaries) or

ii. Provide any guarantee, security, or the like to or on behalf of the Ultimate Beneficiaries.

The company is of the opinion that the money receivable with respect to the MNRE GOI Fully Serviced Bonds (Refer Note 38(33) is not covered under the above disclosure as the same is in accordance with the mandate / MOU ofthe GOI.

54. Details of Crypto Currency or Virtual Currency

Company has not traded or invested in Crypto currency or Virtual Currency during the current and previous reporting years.

55. One Time Settlement (OTS) , Write - Offs (Loan Assets) .

During the year ended 31.03.2023, Seven (07) OTS were sanctioned / extended (previous year: Seven (07)), out of which Seven (07) OTS stands fully settled (previous year: Two (02) ). Total amount of ' 5,390.92 Lakhs (previous year ' 916.60 lakhs) has been recovered against the said settled OTS resulting in income of ' 1,175.34 Lakhs (previous year ' 204.16 lakhs) and write back of impairment allowance of ' 1,504.87 Lakhs (previous year ' 1,301.76 lakhs). The Company has written off an amount of ' 799.76 lakhs (previous year '1,301.66 Lakhs).

The Company has written off an amount of ' 0.70 Lakhs (previous year: ' 0.30 lakhs) pertaining to Seven (07) borrowers (previous year three (03) borrowers) classified as “NPA loss assets”.

56. Recent accounting pronouncement:

On March 31, 2023, MCA amended the Companies (Indian Accounting Standards) Rules, 2015, applicable from April 1, 2023, as below: -

a) Ind AS 1 - Presentation of Financial Statements: -

The amendments require companies to disclose their material accounting policies rather than their significant accounting policies. Accounting policy information, together with other information, is material when it can reasonably be expected to influence decisions of primary users of general-purpose financial statements. The company does not expect this amendment to have any significant impact in its financial statements.

b) Ind AS 12 - Income Taxes: -

The amendments clarify how companies account for deferred tax on transactions such as leases and decommissioning obligations. The amendments narrowed the scope of the recognition exemption in paragraphs 15 and 24 of Ind AS 12 (recognition exemption) so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences. The company is evaluating the impact, if any, in its financial statements.

c) Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors: -

The amendments will help entities to distinguish between accounting policies and accounting estimates. The definition of a change in accounting estimates has been replaced with a definition of accounting estimates. Under the new definition, accounting estimates are “monetary amounts in financial statements that are subject to measurement uncertainty”. Entities develop accounting estimates if accounting policies require items in financial statements to be measured in a way that involves measurement uncertainty. The company does not expect this amendment to have any significant impact in its financial statements.

? Exchange Traded Interest Rate (IR) Derivatives - Nil

? Disclosures on Risk Exposure in Derivatives

a) Qualitative Disclosure

(i) The company recognized various market risks including interest rate, foreign exchange fluctuation and other assets liability mismatches.

(ii) All derivative deals are undertaken under the supervision of Forex Management Committee (FMC). In order to protect the company from foreign exchange fluctuation and interest rate risk, the company has entered into long term agreements with ISDA Banks to hedge such risk through derivative instrument.

(iii) The company is taking active action for protection against exchange fluctuation risk by adopting hedging instrument on case-to-case basis. In this regard, during the year ended 31.03.2023, IREDA has entered into two hedging deal with two ISDA Banker for two line of credit ie JICA-II & KFW-VI.

(iv) IREDA has board approved Foreign Exchange and Derivatives Risk Management Policy, such policy defines the maximum permissible limit of open exposure which cannot be more than 40% of the foreign currency loan outstanding. IREDA’s foreign currency loan open exposure as on 31.03.2023 is 18.62 % (previous year 18.60% of total foreign currency loan exposure).

vi) Institutional set-up for liquidity risk management

The Board of Directors of the Company has constituted the Asset Liability Management Committee, Risk Management Committee and Investment Committee. The Asset Liability Management Committee, inter alia, reviews the asset liability profile, risk monitoring system, liquidity risk management, funding and capital planning, profit planning and growth projections, forecasting and analyzing different scenarios and preparation of contingency plans.

Further, the Risk Management Committee, inter alia, monitors and measures the risk profile of the Company and oversees the integrated risk management system of the Company. The Company manages liquidity risk by maintaining sufficient cash/treasury surpluses.

Management regularly monitors the position of cash and cash equivalents. Assessment of maturity profiles of financial assets and financial liabilities including debt financing plans and maintenance of balance sheet liquidity is considered while reviewing the liquidity position. (Through submission and monitoring of DNBS 4A and DNBS 4B Statements). The company is already working on improving the existing liquidity risk management process by setting up of process for calculation of Liquidity Coverage Ratio (LCR) and management of liquidity risk through stock ratios.

L. Disclosure on Liquidity Coverage Ratio: -

RBI has issued final guidelines on Liquidity Risk Management Framework for Non-Banking Financial Companies and Core Investment Companies on November 04, 2019. As per the said guidelines, LCR requirement shall be binding on all non-deposit taking systemically important NBFCs with asset size of 10,000.00 crore and above from December 1, 2020, with the minimum LCR to be 50%, progressively increasing, till it reaches the required level of 100%, by December 1,2024, as per the timeline given in the guidelines. Further, NBFC are required to publicly disclose the information related to Liquidity Coverage Ratio on a quarterly basis. Accordingly, the disclosure on Liquidity Coverage Ratio of IREDA is as under:

C) Disclosure of complaints - Refer Note 57 (H)

D) Corporate Governance - Refer Corporate Governance section of the Annual Report ( To be presented in AGM)

E) Breach of covenant

The company has not breached terms of covenants in respect of loans availed or debt securities issued by the company .

F) Divergence in Asset Classification and Provisioning- NIL*

*Final Report of RBI for FY 2021-22 conducted during current FY is awaited.

G) Disclosure on modified opinion, if any, expressed by auditors, its impact on various financial items and views of management on audit qualifications- NIL

H) Items of income and expenditure of exceptional nature - NIL

61. The figures are rounded off to the nearest Rupees (?) in Lakhs (except number of shares). Previous reporting year figures have been re-arranged/re-grouped wherever considered necessary to make them comparable with the current reporting year figures.