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You can view the entire text of Notes to accounts of the company for the latest year

BSE: 533122ISIN: INE399K01017INDUSTRY: Power - Generation/Distribution

BSE   ` 5.34   Open: 5.38   Today's Range 5.32
5.38
-0.02 ( -0.37 %) Prev Close: 5.36 52 Week Range 5.00
9.60
Year End :2017-03 

32. Details of contingent liabilities, pending litigations and other matters:

A. Contingent Liabilities of pending litigations not provided for in respect of:

For Parent Company

1 Writ Petition has been filed by the Company challenging the validity of demand raised by Water Resource Department (WRD) for payment of irrigation restoration charges @ Rs, 1.00 Lakh per hectare vide letter dated 29 January 2013 instead of Rs, 0.50 Lakh per hectare (as provided in Circular dated 21 February 2004). Out of the demand of Rs, 23,218.00 Lakhs, Company has already paid Rs, 11,657.00 Lakhs. The Respondents - WRD have been restrained from taking any coercive steps till further orders. The Hon'ble Bombay High Court of Mumbai bench vide Order dated 3 August 2015 has return the matter to be presented before Nagpur Bench. The Hon'ble High Court of Bombay, Nagpur Bench had reserved the order on 10 February 2016.

The Hon'ble High Court of Bombay, Nagpur Bench vide its Order dated 05 May 2016 has partly allowed the petition and declared that demand of IRC at revised rate i.e. as per decision dated 6 March 2009 from the petitioner is illegal and unsustainable. The said decision dated 6 March 2009 fixes maximum rate of IRC at Rs, 1.00 Lakh per Hectare prospectively from 1 April 2009 and is not applicable in case of petitioner to whom water allocation is finalized on

12 December 2007. Hence, the Respondents shall accordingly receive the IRC at the rate of Rs, 0.50 Lakh per Hectare with interest as mentioned supra.

A Caveat has been filed by the Company before the Hon'ble Supreme Court of India. A special leave petition has been filed by State of Maharastra through Water Resource Department. The Hon'ble Court after hearing parties has issued notice to the Company and has granted time to file Counter Affidavit. The pecuniary risk involved in the present case cannot be quantified.

2 Arbitration proceeding has been initiated by BHEL against the Company alleging the payment outstanding against the Company in respect of the materials supplied by BHEL. BHEL has filed its Statement of Claim accompanied by documents. Earlier in the petition filed before Hon'ble High Court of Delhi, the Hon'ble Court has directed to maintain status quo in regard to invocation of Bank Guarantees subject to the condition that BHEL keeps the same alive. The Hon'ble High Court has vide its Order dated 7 January 2016 disposed off the petition upon the instruction of parties that petition before Hon'ble High Court be treated as an application under Section 17 of the Arbitration and Conciliation Act, 1996 before the Arbitral Tribunal. Interim Order is to be continued unless otherwise varied by the Arbitral Tribunal. Reply to the Application u/s 17 of the Claimant has already been filed before the Hon'ble Tribunal. On 14 April 2016 The Claimant (BHEL) has filed the following three fresh applications:

1. Application under Section 17 of the Arbitration and Conciliation Act, 1996 seeking an interim prayer of release of bank guarantees.

2. Application under Section 31(6) of the Arbitration and Conciliation Act, 1996 seeking an interim award on the basis of admissions.

3. Application seeking amendment of the Claim petition. By way of the present application, merely figures in relation to BHEL Hyderabad Unit was sought to be inserted. Accordingly the Hon'ble Tribunal allowed the said application of the Claimant.

The Company has filed its statement of defense and Counter- Claim before the Arbitral Tribunal. The pecuniary risk involved in the present case cannot be quantified.

3 A Suo moto Public Interest Litigation (PIL) has been registered before Bombay High Court with regard to the occupation hazards of the employees working in various thermal power plant stations in the county. The Company has been made a party in the said PIL. The Company has filed its reply before Bombay High Court. One of the parties (Respondent) has filed an Application for Intervention. The matter is listed for completion of service of the parties in respect to the Application for Intervention. The pecuniary risk involved in the present case cannot be quantified.

4 A suit for seeking declaration/ injunction for right of way has been filed before the Civil Judge, Senior Division, Amravati by Keshav Puranlal Bundele & Others against the Company. In the said Suit, it has been alleged that due to railway line to the plant of the Company and construction of boundary wall surrounding the project, the approach road to the Plaintiffs land has been obstructed and that they are unable to access their land for cultivation. the Company (Defendant) denied the allegations in its Written Statement and is contesting the suit. The Court has declined the prayer of the Plaintiffs for grant of temporary injunction. The matter is listed for Framing of issues. A

Civil Appeal in the said matter has also been filed in District Court, Amravati by Keshav Bundele & Others (Plaintiff) against the Court's order of declining the prayer of the Plaintiffs for grant of temporary injunction. The pecuniary risk involved in the present case cannot be quantified.

5 A Petition has been filed by the Company before the Maharashtra Electricity Regulatory Commission (MERC) challenging the imposition of Liquidated Damages by MSEDCL. MERC vide interim Order has stayed the imposition of Liquidated Damages. In said petition MSEDCL has imposed an amount of Rs, 25,947.00 Lakhs as Liquidated Damages. The said Petition has been disposed off in favour of the Company by MERC on 24 November 2016 and as on date there is no obligation to pay the said amount by the Company.

6 A suit has been filed by Microsoft Corporation against the Company before High Court of Delhi alleging shortfall in the entitled software licenses being used by the Company in its offices and as such allegedly, the Company has infringed copyright in the Microsoft program/ software titles and has thereby prayed for permanent injunction against the Company and further prayed for rendition of accounts of profits and for damages. The pleadings were completed before the Joint Registrar on 17 August 2016 and the Hon'ble Registrar has listed the matter before the Court for framing of issues. The pecuniary risk involved in the present case cannot be quantified.

7 A vendor ('Plaintiff') has filed case before Civil Judge Senior Division, Amravati claiming Rs, 116.25 Lakhs and Court fees of Rs, 1.54 Lakhs against the work done pursuant to the work order dated 25 May 2012 which was issued to the plaintiff for supply, plantation and maintenance of 100,000 tree plants at the Company's 5 X 270 MW thermal power plant situated at Plot no. D-2 & D-2 (part) at additional MIDC, Nandgaonpeth Amravati. Plaintiff has also alleged that the contract was wrongly terminated by the Company vide letter dated 6 February 2014 in which the Company has also claimed liquidated damages from the plaintiff. Plaintiff is alleging that the letter was issued to them only to avoid outstanding payment. Application u/s 8 of the Arbitration and Conciliation Act has been filed for the dismissal of the suit. A Deletion Application has been filed by the company. The matter is listed for Order on the said application. The pecuniary risk involved in the present case cannot be quantified.

8 During the year, a writ petition has been filed by the Company before Nagpur Bench of Bombay High Court to issue appropriate Writ against the Order dated 24 February 2016 passed by Tahsildar whereby Tahsildar without considering the arguments and documents filed on record, directed the Appellant to deposit the amount of Rs, 400.00 lakhs towards payment of Royalty for using the minor minerals excavated during the construction of the Power Plant and utilized in the embankment work Railway Line on the plot of MIDC allotted to the appellant. The State of Maharashtra has filed its reply. The pecuniary risk involved in the present case cannot be quantified.

9 During the year, Public Interest Litigation ('PIL') has been filed by the petitioner before Nagpur Bench of Bombay High Court, alleging that due to heavy transportation of coal by the Company, various difficulties are being faced by the citizens i.e. threat to life and threat to health. Petitioner has alleged that the Company is not taking any steps to construct road as per standard norms required to transport 5000 MT coal from Walgaon to Nandgaonpeth MIDC. The matter is listed for arguments. The pecuniary risk involved in the present case cannot be quantified.

10 During the year, Becquerel Industries Private Limited has filed a Suit in Nagpur District Court for recovery of ' 20.73 Lakhs against Preeti Engineering alleging that the dues are pending against Preeti Engineering to whom the Non Destructive Test work had been sublet by Brothers Engineering The work to Brothers Engineering had been sublet by Bharat Heavy Electricals Limited (BHEL) and the work to BHEL had been given by the Company. The service of summons to the parties has been completed. The matter is listed for reply of the Company. The pecuniary risk involved in the present case cannot be quantified.

For RattanIndia Nasik Power Limited (RNPL)

11 A Writ Petition has been filed by BHEL before the Hon'ble High Court of Madras regarding the Tamil Nadu VAT reversal relating to supply agreement executed between BHEL and RNPL for supply of Boiler, Turbine, Generators (BTG) items for Nashik Project and consequential recovery of the same. The matter was listed for hearing and the Hon'ble High Court has issued a notice and had ordered for status quo in the said case. The Notice for the same has been accepted by the state counsel. The Hon'ble High Court had heard the matter and reserved the order. The pecuniary risk involved in the present case is Rs, 1,100.00 Lakhs (Previous year Rs, 1,100.00 Lakhs).

12 Two suits for permanent injunction has been filed before the Civil Judge, Junior Division, Sinnar, Nashik by Ramdas Pandurang Kakad and Others and Ramnath Mahadu Gade (together 'plaintiffs') respectively against RNPL with respect to the pipeline works which is being done in the Sinnar Nagar Palika area. It was alleged that the land of the plaintiffs was not acquired for this purpose and the RNPL's activity of laying pipeline work in the plaintiffs' property is illegal and it will damage the crops, land, and well of the Plaintiffs permanently. RNPL denied the allegations in its written statement and is contesting the suit. Pipeline work has also been completed. The pecuniary risk involved in the present case cannot be quantified.

13 A suit has been filed during financial year 2012-13 by the Balaji Railroads Systems Limited ('Plaintiff') at Patiala House Courts, New Delhi for recovery of Rs, 6.51 lakhs claimed to be the amount outstanding for the work done by it under the work order given by RNPL for consultancy services for the proposed railway siding. RNPL has opposed the claim and is contesting the same.

14 A PIL has been filed in connection with Nashik Kumbh Mela and it was also alleged that due to failure on the part of Nashik Municipal Corporation (NMC), untreated water is being discharged in to river Godawari and seeking a direction to prevent the NMC from polluting the river and initiate criminal prosecution under the provisions of Water (Prevention and Control of Pollution) Act, 1981. In this PIL, RNPL has been impleaded to ascertain whether the company's power plant is causing any activities resulting in release of polluted water into the river and also to ascertain whether RNPL has an obligation to take treated water from NMC's Sewerage Treatment Plants ('STP'). RNPL has filed detailed replies in the Hon'ble High Court inter-alia submitting that RNPL's power plant is a zero discharge unit and also that RNPL has no obligation either statutory or contractual to receive water from STPs of NMC. The Hon'ble High Court vide order dated 11 September 2015 has directed the Government of Maharashtra to take decision as to from where RNPL should lift the water. RNPL has filed SLP before Hon'ble Supreme Court against the said order on the ground that conscious decision has already been taken by the Government of Maharashtra allowing RNPL to lift water from Eklahare barrage. During the pendency of said SLP the State Government has taken decision which is placed on record before the Hon'ble High Court of Bombay in the form of letter dated 22 February 2016 conveying that present arrangement of drawing water from Eklahare Barrage shall not be disturbed till the tenure of the agreement of RNPL with WRD. The said letter has also been filed before the Hon'ble Supreme Court of India in the form of additional document on 12 April 2016. On 19 April 2016 the Hon'ble Supreme Court dismissed the petition as withdrawn and accordingly the RNPL is entitled to lift the treated water released by NMC as per the direction of the Court.

15 Arbitration proceeding has been initiated during the year by BHEL against the Company alleging the payment outstanding against the Company in respect of the materials supplied by BHEL. BHEL has filed its Statement of Claim accompanied by documents. Earlier in the petition filed before Hon'ble High Court of Delhi, the Hon'ble Court has directed to maintain status quo in regard to invocation of Bank Guarantees subject to the condition that BHEL keeps the same alive. The Hon'ble High Court has vide its Order dated 7 January 2016 disposed off the petition upon the instruction of parties that petition before Hon'ble High Court be treated as an application under Section 17 of the Arbitration and Conciliation Act, 1996 before the Arbitral Tribunal. Interim order is to be continued unless otherwise varied by the Arbitral Tribunal. Reply to the Application u/s 17 of the Claimant has already been filed before the Hon'ble Tribunal. On 14 April 2016, BHEL has filed application seeking amendment of the Claim petition which is allowed by the Hon'ble Tribunal. The Company has filed its Statement of Defense and Counter-Claim before the Arbitral Tribunal. The pecuniary risk involved in the present case cannot be quantified.

16 A writ petition has been filed by RNPL against WRD whereby RNPL has prayed before the Hon'ble High Court for :-

(i) Holding and declaring that WRD cannot recover water tariffs at the rate of Rs, 64 per 10,000 liters in absence of any decision being taken by the Government of Maharashtra or Maharashtra Water Resources Regulatory Authority ('MWRRA'). WRD can at the most charge @ Rs, 10.70 per 10,000 liters with 25% concession.

(ii) Holding and declaring that RNPL is not liable to pay water commitment charges as the same does not find any place in agreements executed between the parties. Quashing and setting aside the demands, bills raised by WRD towards fixation of water tariffs at the rate of Rs, 64 per 10,000 liters towards water bills and water commitment charges.

(iii) Pending disposal of this petition, direct the WRD to not to insist the RNPL to pay the water bills and water commitment charges calculated at the rate of Rs, 64 per 10,000 liters and not to take any coercive steps in connection thereto. The pecuniary risk involved in the present case cannot be quantified.

17 A Petition has been filed by RNPL against WRD and Nashik Irrigation Department whereby RNPL has prayed before MWRRA :-

(i) to determine criteria and tariff as may be applicable to treated water allocated to RNPL under the agreements dated 16 January 2012 and 8 February 2012 in accordance with provisions of MWRRA Act and Rules made there under and also in accordance with other applicable law;

(ii) to stay the demand of WRD and Nashik Irrigation Department;

(iii) Pending disposal of this petition to stay the operation of the letter dated 30 November 2015 of WRD and Nashik Irrigation Department.

The pecuniary risk involved in the present case cannot be quantified.

For Amravati Power Transmission Company Limited (APTCL)

18 An appeal has been filed by APTCL against MERC before the Hon'ble Appellate Tribunal for Electricity for seeking :-

(i) To set aside the impugned order dated 15 July 2016 passed by the MERC in Case No 61 of 2016.

(ii) To direct MERC to allow the recovery of interest during construction amounting to Rs, 23.83 crores for a period pertaining to delay in construction of quad line; effect to the impugned decision dated 22 July 2010. The matter is listed for Reply by Maharashtra Electricity Regulatory Commission. The next date of hearing in the matter is 29 May 2017.

For Poena Power Development Limited (PPDL)

19 A civil suit is filed against PPDL for the inadequacy of compensation given in terms of the award under Land Acquisition Act 1894. Restoration application filed by the petitioner and notice has been issued by Civil Sub Divisional Court, Budhlada, Mansa. The pecuniary risk involved in the present case cannot be quantified.

B. Contingent Liabilities of Demand pending under the Income Tax Act, 1961 and other not provided for in respect of:

I Under the Income Tax Act, 1961

In respect of the F.Y. 2009-10 demand of Rs, 77.38 Lakhs (31 March 2016: Rs, 77.38 Lakhs and 1 April 2015: Rs, 77.38 Lakhs) was pending under section 143(3) of the Income Tax Act, 1961 against disallowance u/s 14A of the Income Tax Act, 1961 against which appeal had been filed which is pending before ITAT Delhi, as at 31 March 2017. The demand of Rs, 77.38 Lakhs had been adjusted against refund for the F.Y. 2012-13 during the FY 2015-16 by the Income Tax department. However, the appeal filed during the FY 2015-16 is pending before ITAT Delhi, as at 31 March 2017.

II Others

Guarantee provided on behalf of RattanIndia Nasik Power Limited (formerly known as Indiabulls Realtech Limited) (RNPL), a wholly owned subsidiary, towards Commitment Bank Guarantees of Rs, 5,903.79 Lakhs (31 March 2016: Rs, 5,903.79 Lakhs and 1 April 2015: Rs, 5,903.79 Lakhs) issued to subsidiaries of Coal India Limited for issuance of Letter of Assurance for supply of coal for RNPL's Nashik Thermal Power Project, partly secured by way of pledge of fixed deposits of Rs, 442.95 Lakhs (31 March 2016: Rs, 442.95 Lakhs and 1 April 2015: Rs, 442.95 Lakhs) of the Company and partly by way of pledge of fixed deposits of Rs, 152.44 Lakhs (31 March 2016: Rs, 152.44 Lakhs and 1 April 2015: Rs, 152.44 Lakhs) of RattanIndia Nasik Power Limited.

Future cash outflows in respect of the above, if any, is determinable only on receipt of judgment/ decision pending with the relevant authorities. The Company does not expect the outcome of the matters stated above to have a material adverse impact on its financial condition, results of operations and cash flows.

The Company and its subsidiaries are involved in various legal proceedings and other regulatory matters relating to conduct of its business. In respect of the other claims, the Group believes, these claims do not constitute material litigation matters and with its meritorious defenses, the ultimate disposition in these matters will not have material adverse effect on its Consolidated Financial Statements.

C. Other pending litigations as on 31 March 2017 are:

For Parent Company

1 A Petition has been filed before Maharashtra Electricity Regulatory Commission (MERC) by the Company for realizing the shortfall in supply under coal linkage granted by Government of India under New Coal Distribution Policy (NCDP), the Cabinet Committee of Economic Affairs (CCEA) approved mechanism where after Ministry of Coal amended the NCDP and communicated its decision to allow pass through of the incremental cost of procuring coal from alternative sources to meet the shortfall in supply of domestic coal under coal linkage. MERC vide its Order dated 15 July 2014 and 20 August 2014 laid down methodology to recover compensatory fuel charges. The Company on 28 August 2014 filed review petition before MERC against said Orders dated 15 July 2014 as well as Order dated 20 August 2014. MSEDCL and Prayas Energy further filed review petition against the Orders of MERC dated 20 August 2014. The review petition filed by MSEDCL stands dismissed vide Order dated 16 July 2015 and the review petition filed by the Company also got disposed of vide Order 30 October 2015. A petition has also been filed by the Company before MERC for direction to MSEDCL to implement Orders dated 15 July 2014 & 20 August 2014 of MERC. The same petition has been withdrawn on 18 February 2016. The Company has also filed appeals before Appellate Tribunal for Electricity (APTEL) against Orders dated 15 July 2014, 20 August 2014 & 30 October 2015. Both the appeals have been admitted. The matter is now listed for Directions by the Hon'ble Tribunal. The pecuniary risk involved in the present case cannot be quantified.

2 A Petition has been filed by the Company before the Nagpur bench of Bombay High Court challenging the illegal demand of Water Commitment charges and for refund of Rs, 593.22 Lakhs appropriated by the Water Resources Department of the Government of Maharashtra. The State of Maharashtra has filed its reply. The matter is listed for arguments. The pecuniary risk involved in the present case is Rs, 593.22 Lakhs.

3 During the year, a Petition has been filed by the Company for asking MERC to

(i) direct MSLDC to revise the Merrit Order Despatch (MOD) Stack for the month of September, 2016 and prepare future MOD Stacks in accordance with the Availability Based Tarif (ABT) Order and applicable legal framework taking into consideration Energy Charge as approved/ determined by this Hon'ble Commission

(ii) direct to revise the MOD Stack principles to take into account the fixed as well as variable charge including any fuel adjustment surcharge or any other charge which increases the total tariff of generating stations.

(iii) grant compensation to the Company for the revenue loss incurred.

(iv) grant compensation to the Company for loss incurred on account of wrongful and frequent backing down instructions and in terms of the principles contained in the Regulations 6.3B (3) of the CERC (Indian Electricity Grid Code) (Fourth Amendment) Regulations, 2016.

(v) devise an appropriate mechanism to provide for technical minimum operation of generating stations in accordance with the Indian Electricity Grid Code. And,

(vi) direct the Respondents to provide detailed working of the MOD Stack publically and in a transparent manner.

In the last hearing, the Commission has directed that, for the purpose of monthly MOD stack, the Energy Charges Rate/ Variable Charges for the Generating Stations for which the Tariff is determined by the Commission shall be considered as the Energy Charges as approved by the Commission for the financial year for the respective Station plus Fuel Surcharge Adjustment for previous month, i.e., n-1 month. The Commission directs Maharastra State Power Generation Company Limited to submit following information:

1. Copies of Fuel Surcharge Adjustment Bills for all months from December 2015 to July 2016.

2. Station-wise comparison of all parameters considered for MOD rate vis-a-vis tariff determined by the Commission pertaining to all months starting from February, 2016 to September, 2016. It should be indicated whether MOD rates so arrived are inclusive of Other Variable Charges. The pecuniary risk involved in the present case cannot be quantified.

4 During the year, a Petition has been filed by the Company before MERC under Section 86 of the Electricity Act, 2003 read with statutory framework governing procurement of power through competitive bidding and Article 10 of the Power Purchase Agreements dated 22 April 2010 and 05 June 2010 executed between the Company and Maharashtra State Electricity Distribution Company Limited for compensation due to Change in Law impacting revenues and costs during the period from the date of commencement of supply of power by the Company. The matter is listed for Admission. The pecuniary risk involved in the present case cannot be quantified.

5 During the year, a Petition has been filed by the Company before MERC under Section 86 of The Electricity Act, 2003 for seeking a declaration for sale of un-availed Capacity to third parties in terms of Article 4.5.3 of the PPA of Power Purchase Agreements dated 22 April 2010 and 5 June 2010. the Company has sought:-

(i) For quashing of communication dated 13 January 2017 whereby MSEDCL has refused the sale of un-availed capacity to third parties.

(ii) To direct MSEDCL to grant Short Term Open Access.

(iii) To direct MSEDCL to grant sufficient time period for recalling the unscheduled capacity.

On the last date of hearing it was agreed that MSEDCL and the Company would meet to discuss the issues in granting Open Access vis a vis provisions of PPA as the Generator is under zero scheduling. The Commission had directed them to meet on 8 February or 9 February, 2017 in the office of Executive Director (Commercial), MSEDCL and submit the Minutes of Meeting duly signed by both the parties within a week's time. the Company is at liberty to apply for Short Term Open Access, which would be decided by MSEDCL on merits in terms of the DOA Regulations. The matter has been Reserved for Order.

6 During the year. a Petition has been filed by MSEDCL before MERC under Section 86 of the Electricity Act, 2003 read with Article 13 of PPAs under Case 1 Stage 1 and Article 10 of PPAs under Case 1 Stage 2, whereby, MSEDCL has sought:-

(i) To declare and accept the Guidelines/Circulars issued by RBI as Change in Law as provided in respective PPAs.

(ii) To allow to make the late payment surcharge in the event of delay in payment at the rate of two (2) percent excess of the applicable base rate per annum on the amount of outstanding payment calculated on day to day basis for each day of delay against the PPAs mentioned in aforesaid Para 2.2 and 2.3 from 1 July 2010 till 31 March 2016 and thereafter at the rate of two (2) percent in excess of the applicable rate under MCLR system.

The matter is pending before MERC for adjudication. The pecuniary risk involved in the present case cannot be quantified.

7 A Petition has been filed before Central Electricity Regulatory Commission (CERC) by Company seeking modification/ revision of the mechanism for calculation of the escalation index for domestic coal by linking it with actual coal price of CIL on the ground that thermal power plants based on domestic coal and get fuel through coal linkage granted by the GOI. Although such domestic coal is supplied by CIL , the escalation index for domestic coal published by CERC for the purpose of payment in PPA under Case -1 bidding process stakes WPI for non-coking coal as the basis for calculating the index. The matter was reserved for Orders on 4 February 2016. By Order dated 25 May 2016 the CERC disposed off the said petition whereby the CERC held that the Ministry of Commerce and Industry has set up a Committee to revise the WPI and create a separate index for the coal used in the power sector and it would be premature on the part of CERC to undertake any exercise for revision of indices without taking into consideration the WPI being developed by Ministry of Commerce and Industry for the power sector and that the new series of WPI for power sector would address the concerns of the petitioners and other generators. A review petition was filed by the Company before CERC against the Order dated 25 May 2016.The said review petition has been Disposed off vide Order dated 20 October 2016. The pecuniary risk involved in the present case cannot be quantified.

8 The company has filed an application before the Nagpur Bench of the Hon'ble High Court to bring to its knowledge the publication of an article by Hitavada newspaper that casts aspersions against Indiabulls (now the Company) and the Advocate General. There is no notice regarding any listing of the matter since long. The pecuniary risk in the matter cannot be quantified.

9 A Petition has been filed by the Company before the MERC for direction to MSEDCL to make payments of Rs, 55,811.00 Lakhs towards the outstanding amount due and payable to the Company for supply of power and also for direction to MSEDCL to open a Letter of Credit as per Article 8.4.2 of the PPAs and further for payment of penal interest @ 2% above prime lending rate of State Bank of India on the outstanding amounts. The matter is listed for arguments on the next date of hearing. The pecuniary risk in the matter cannot be quantified.

10 A Petition has been filed before Maharashtra Electricity Regulatory Commission (MERC) by the Company for direction to Maharashtra State Electricity Distribution Company Limited (MSEDCL) to permit settling/netting of consumption towards start-up power in energy terms against the power supplied in terms of PPAs and for refund of amount of Rs, 921.06 Lakhs paid by the Company towards start up power during October 2012 to May 2015 on account of excess recovery of charges for start-up by incorrect categorization of the Company in to HT-Commercials instead of "Industrial category". The Order in the said Petition has been reserved.

11 The Company was restrained from sourcing the shortfall on account of linkage coal through alternate sources, as was required pursuant to the decision of the Cabinet Committee on Economic Affairs of June 2013, followed by change in the National Coal Distribution Policy and direction from the Ministry of Power to the regulatory commissions in July 2013. Further, as per the Power Purchase Agreements ("PPAs") entered into between the Company and Maharashtra State Electricity Distribution Company Limited ("MSEDCL"), MSEDCL was to make arrangements for evacuation of entire contracted capacity of 1200 MW. However due to transmission constraints, MSEDCL could arrange for evacuation of only 750 MW. As a result of the above, during the previous year, the Company has raised its claim estimated at Rs, 39,689.02 Lakhs with MSEDCL in respect of resultant unscheduled units and is in the process of filing its petition for the same with the appropriate authority. Consequently, the same has not been recognized in the financial statements.

For RattanIndia Nasik Power Limited (RNPL)

12 A PIL has been filed before Aurangabad Bench by Machindra and Other agriculturists from Kopargaon against State of Maharashtra and Others challenging allocation of water for Nashik Thermal Power Plant of RNPL. Company has filed its reply and raised objections as to the maintainability of the PIL. The pecuniary risk involved in the present case cannot be quantified.

13 A review petition had been filed by RNPL against the order of APTEL dated 10 February 2015 allowing an appeal by Wardha Power Company Limited against the order of MERC approving procurement of additional quantum of 650 MW power from RNPL. The Review petition got disposed off by APTEL vide Order dated 18 May 2015. The Company has filed Appeal before the Hon'ble Supreme Court against the orders dated 10 February 2015 as well as 18 May 2015. The Hon'ble Supreme Court on 24 September 2015 passed order of status quo. The pecuniary risk involved in the present case cannot be quantified.

14 A writ petition has been filed before Bombay Bench of Hon'ble Bombay High Court by Maharashtra Suraksha Rakshak Kamgar Union against Nashik Security Guard Board & RNPL alleging violation of provisions of Security Guard Scheme 2002. The pecuniary risk involved in the present case cannot be quantified.

15 A Writ Petition has been filed during the year by RNPL against Southern Power Distribution Company of Telangana Limited (TSSPDCL) and others who has issued RFQ document in clear deviation of Model RFQ prescribed by the Government of India, thereby imposing unreasonable restrictions in consequence of which petitioner would be ineligible to participate in the bidding process. The deviations, if any, were supposed to be subject to approval from the appropriate Commission prior issuance of RFQ whereas the Telangana State Electricity Regulatory Commission (TSERC) accorded post facto approval. As such the Company filed another writ petition against TSERC which also got tagged with the said writ petition against TSSPDCL. The Hon'ble High Court vide Order dated 22 June 2015 admitted the writ petitions for hearing but did not grant any interim relief. The Company challenged the said Order dated 22 June 2015 by way of writ appeals before Hon'ble Division Bench which stand dismissed vide Order dated 24 July 2015. The pecuniary risk involved in the present case cannot be quantified.

16 A petition has been filed under the Electricity Act, 2003 before Maharashtra Electricity Commission by RNPL against Maharashtra State Electricity Transmission Company Limited for permitting RNPL to operationalise the BPTA dated 4 January 2011 and the LOTA incrementally as and when RNPL enters into long-term arrangements/ PPAs for sale of power. The matter has been reserved for order on 21 March 2017. The pecuniary risk involved in the present case cannot be quantified.

17 A petition has been filed by MSEDCL under Section 33(1), (4) and Section 86 of the Electricity Act, 2003 for seeking directions for optimization of power generation in the state of Maharashtra by reducing the technical minimum operation of generating power plant as per CERC defined norms and also applicable provisions of Maharashtra State Grid Code and Maharashtra Scheduling and Dispatch Code. MSEDCL has sought to set technical minimum capacity of all generating stations coming under the jurisdiction of MERC and having PPA with MSEDCL at uniform level of 55% and to issue directions to MSLDC for backing down power plant to 55% while managing the demand by observing MOD. The pecuniary risk involved in the present case cannot be quantified.

18. Estimated amount of contracts remaining to be executed on account of capital and other commitments towards the Project not provided for: Rs, 1,106,206.97 lakhs (31 March 2016: Rs, 1,236,472.66 lakhs and 1 April 2015: Rs, 1,190,178.16 lakhs) -advances made there against Rs, 130,176.68 lakhs (31 March 2016: Rs, 115,440.50 lakhs 1 April 2015: Rs, 108,715.55 lakhs)

Further, the Parent Company has signed a long term power purchase agreement (PPA) with Maharashtra State Electricity Distribution Company Limited for supply of 1,200 MW of power generated from the power station. The PPA has tenure of twenty five years.

19. Fixed deposits include interest accrued but not due of Rs, 652.54 lakhs (31 March 2016: Rs, 547.37 lakhs and 1 April 2015: Rs, 359.65 lakhs) on fixed deposits pledged with banks.

20. Employee Stock Options Schemes

The Company has formulated ESOS/ ESOP schemes for applicable/ eligible employees. The schemes so formulated are also applicable to the eligible employees of its subsidiaries and of other companies under common control with the Company. The subsidiaries have adopted the said schemes of the Company which are administered by a Compensation Committee constituted by the Board of Directors of the Company.

Stock Option Schemes of RattanIndia Power Limited ("RPL"):

RPL ESOP - 2008

On 10 January 2008 the erstwhile IPSL, had established the IPSL ESOS Plan, under which, IPSL was authorised to issue upto 20,000,000 equity settled options at an exercise price of Rs, 10 per option to eligible employees. Employees covered by the plan were granted an option to purchase equity shares of IPSL subject to the requirements of vesting. A Compensation Committee constituted by the Board of Directors of IPSL administered the plan. All these options were outstanding as at 1 April 2008.

Pursuant to a Scheme of Amalgamation under Sections 391 to 394 of the Companies Act, 1956, duly approved by the Hon'ble High Court of Delhi at New Delhi vide its order dated 1 September 2008, IPSL was amalgamated with Sophia Power Company Limited ("SPCL"). With effect from the Appointed Date the IPSL ESOS Plan was terminated and in lieu, in terms of Clause

14 (c) of the Scheme of Amalgamation, SPCL - IPSL Employees Stock Option Plan - 2008 ("SPCL - IPSL ESOP - 2008") was established in SPCL for the outstanding, unvested options for the benefit of the erstwhile IPSL option holders, on terms and conditions not less favorable than those provided in the erstwhile IPSL ESOS Plan and taking into account the share exchange ratio i.e. one equity share of SPCL of face value ' 10 each for every one equity share of IPSL of face value ' 10 each. All the option holders under the IPSL ESOS Plan on the Effective Date were granted options under the SPCL - IPSL ESOP - 2008 in lieu of their cancelled options under the IPSL ESOS Plan. The SPCL - IPSL ESOP - 2008 was treated as a continuation of the IPSL ESOS Plan and all such options were treated outstanding from their respective date of grant under the IPSL ESOS Plan. During the year ended 31 March 2015, pursuant to the name change of the Company from India bulls Power Limited. to RattanIndia Power Limited, the name of the ESOP scheme SPCL - IPSL Employees' Stock Option Plan 2008 ("SPCL-IPSL ESOP 2008") was changed to RattanIndia Power Limited Employees' Stock Option Plan 2008 ("RPL ESOP 2008"). These options vest uniformly over a period of 10 years commencing one year after the date of grant.

RPL ESOS 2009

During the financial year ended 31 March 2010, the Company had established the "India bulls Power Limited Employees' Stock Option Scheme 2009" ("IPL ESOS 2009"). The Company had issued 20,000,000 equity settled options at an exercise price of Rs, 14 per option under the IPL ESOS 2009 to eligible employees which gave them the right to subscribe to stock options representing an equal number of equity shares of face value Rs, 10 each of RPL. During the year ended 31 March 2015, pursuant to the name change of the Company from India bulls Power Limited. to RattanIndia Power Limited, the name of the ESOS scheme IPL ESOS 2009 was changed to RattanIndia Power Limited Employees' Stock Option Scheme 2009 ("RPL ESOS 2009"). These options vest uniformly over a period of 10 years commencing one year after the date of grant.

RPL ESOS 2011

During the Financial Year ended 31 March 2012, the Company has established the "India bulls Power Limited Employee Stock Option Scheme -2011" ("IPL ESOS -2011"). The Company had issued 50,000,000 equity settled options at an exercise price of ' 12 per option equivalent to the fair market value of the equity shares of RPL on the date of grant of option under the IPL ESOS -2011 to the eligible employees of the Company which gave them the right to subscribe an equal number of equity shares of face value of ' 10 each of RPL. During the year ended 31 March 2015, pursuant to the name change of the Company from India bulls Power Limited. to RattanIndia Power Limited, the name of the ESOS scheme IPL ESOS 2011 was changed to RattanIndia Power Limited Employees' Stock Option Scheme 2011 ("RPL ESOS 2011"). These options vest uniformly over a period of 10 years commencing one year after the date of grant.

21. Employee Benefits Defined contribution:

Contributions are made to the Government Provident Fund and Family Pension Fund which cover all regular employees eligible under applicable Acts. Both the eligible employees and the Company make pre-determined contributions to the Provident Fund. The contributions are normally based upon a proportion of the employeeRs,s salary. The Company has recognized in the Statement of Profit and Loss an amount of Rs, 35.09 lakhs (31 March 2016: Rs, 26.12 lakhs) and in expenditure during construction Rs, 6.95 lakhs (31 March 2016: Rs, 8.14 lakhs) towards employer's contribution towards Provident Fund.

Defined benefits:

Provision for unfunded Gratuity payable and Superannuation benefits payable to eligible employees on retirement/ separation is based upon an actuarial valuation as at the year ended 31 March 2017. Major drivers in actuarial assumptions, typically, are years of service and employee compensation. The commitments are actuarially determined using the 'Projected Unit Credit Method' as at the year end. Gains/ losses on changes in actuarial assumptions are accounted for in the other comprehensive income/ Capital work-in-progress, as applicable and as identified by the Management of the Company.

Other benefits:

Provision for unfunded compensated absences payable to eligible employees on a ailment/ retirement/ separation is based upon an actuarial valuation as at the year ended 31 March 2017. Major drivers in actuarial assumptions, typically, are years of service and employee compensation. The commitments are actuarially determined using the 'Projected Unit Credit Method' as at the year end. Gains/ losses on changes in actuarial assumptions are accounted for in the Statement of Profit and Loss/ Capital work-in-progress, as applicable and as identified by the Management of the Company.

Based on the actuarial valuation obtained in this respect, the following table sets out the status of Gratuity, Compensated Absences and Superannuation and the amounts recognized in the financial statements for the year ended 31 March 2017:

*ESOSs and ESOPs which are anti-dilutive have been ignored from earnings per equity share calculation.

38. The Group has taken various premises on operating leases/ leave and license and lease payments recognized in the statement of profit and loss and property, plant and equipment amounting to Rs, 774.51 lakhs and Rs, 126.45 lakhs respectively for the year ended 31 March 2017 (31 March 2016: Rs, 411.87 lakhs for statement of profit and loss and Rs, 231.75 lakhs for property, plant and equipment) in respect of the same. The underlying agreements are executed for a period generally ranging from

11 months to three years, renewable at the option of the Group and are cancellable, by giving a notice generally of 30 to 90 days. An agreement is entered into by the Parent Company for a period of 9 years with non-cancellable period of initial 3 years. There are no restrictions imposed by such leases and there are no subleases. The minimum lease rentals outstanding as at Balance Sheet dates are as under:

39 Disclosures in respect of related parties:

As per Ind AS-24 "Related Party Disclosure", the related parties where control exist or where significant influence exists and with whom transactions have taken place are as below:

Related parties where control exists:

I. Company having substantial RattanIndia Infrastructure Limited

_interest__(formerly known as Indiabulls Infrastructure and Power Limited)_

II. Enterprise over which Key IIC Limited Management Personnel have Sepset Constructions Limited significant influence (with whom Citra Real Estate Limited

transactions have been entered RattanIndia Solar Private Limited (Formerly known as RattanIndia Solar Limited) during the year/ Previous year) Ashkit Power Limited (w.e.f. 5 August 2015)

Notus Infrastructure Limited

RR Infralands Private Limited

Vikhyat Finlease And Trading Private Limited

Tupelo Builders Private Limited

Priapus Infrastructure Limited

Priapus Real Estate Private Limited#

Priapus Properties Private Limited#

Priapus Developers Private Limited#

III. Key Management Personnel

Name__Designation_

Rajiv Rattan Chairman and Director of the Company (Whole Time Director upto 6 March 2015)

Jayant Shriniwas Kawale Managing Director of the Company (w.e.f. 1 October 2014)

Vishna Chandra Vishwakarma Whole Time Director of Company (upto 7 July 2015)

Himanshu Mathur Whole Time Director of the Company (w.e.f. 8 July 2015)

Venugopal Keshanakurthy CFO of the Company (from 12 February 2016 to 20 January 2017)

Samir Taneja CFO of the Company (w.e.f. 8 February 2017)

# During the year, Priapus Properties Private Limited ('PPPL') and Priapus Real Estate Private Limited ('PREPL') were merged with Priapus Developers Private Limited ('PDPL').

22. Financial instruments i) Fair values hierarchy

Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:

Level 1: Quoted prices (unadjusted) in active markets for financial instruments.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data rely as little as possible on entity specific estimates.

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

The carrying amount of other financial assets and financial liabilities measured at amortized cost in the financial statements are a reasonable approximation of their fair values. (refer note 41(i)).

(iv) Valuation process and technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

(a) Mutual funds: Use of NAV's obtained from the asset manager.

(b) Derivatives: Use of dealer quotes for similar instruments.

ii) Risk Management

The Group is exposed to various risks in relation to financial instruments. The Group's financial assets and liabilities by category are summarized in note 41(i). The main types of risks are market risk, credit risk and liquidity risk. The most significant financial risks to which the Group is exposed are described below:

The Group's risk management is carried out by a central finance department (of the Group) under direction of the Board of Directors. The Board of Directors provides principles for overall risk management, and covering specific areas, such as foreign exchange risk, interest rate risk, credit risk and investment of excess liquidity.

The Group continuously monitors defaults of customers and other counterparties, and incorporates this information into its credit risk controls. The Group's policy is to deal only with creditworthy counterparties.

The Group's management considers that these financial assets that are not impaired or past due for each of the reporting dates under review are of good credit quality.

The Group considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an on-going basis throughout each reporting period. In general, it is presumed that credit risk has significantly increased since initial recognition if the payments are more than 30 days past due. A default on a financial asset is when the counterparty fails to make contractual payments when they fall due. This definition of default is determined by considering the business environment in which entity operates and other macro-economic factors.

(i) The Group's management considers assets other than trade receivables, which are 30 days past due and analyses facts and circumstances surrounding each such defaults separately. If the facts indicate a probability of loss of value, the assets then expected cash flows are plotted in an present value based impairment model to determine the amount of impairment loss. Amounts are written off only in the following circumstances: a) no probable legal recourse is available for recovery, b) the counterparty is bankrupt, c) the cost of recovery is more than the amount or d) after all possible efforts the Group is unable to recover amounts after a period of 3 years.

(ii) Group's major trade receivables are only with, government owned counterparty and are recovery under the power purchase agreement and bulk power transmission agreements. Therefore, these trade receivables are considered high quality and accordingly no life time expected credit losses are recognized on such receivables based on simplified approach. Any provisions against such receivables are for liquidated damages and not related to credit worthiness of the counterparty. The Group considers that trade receivables are not credit impaired as these are receivable from Government undertaking.

(iii) The credit risk for cash and cash equivalents and other bank balances is considered negligible, since the counterparties are reputable banks with high quality external credit ratings.

B) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature of the business, the Group maintains flexibility in funding by maintaining availability under committed facilities.

Management monitors rolling forecasts of the Group's liquidity position and cash and cash equivalents on the basis of expected cash flows. The Group takes into account the liquidity of the market in which the entity operates.

Maturities of financial liabilities

The tables below analyze the Group's financial liabilities into relevant maturity groupings based on their contractual maturities for all non-derivative financial liabilities.

* Borrowings excludes finance lease obligations, refer note 38 for disclosure of maturity profile of finance lease obligations.

C) Market Risk

a) Foreign currency risk

The Group is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the US Dollar. Foreign exchange risk arises from recognized assets and liabilities denominated in a currency that is not the Group's functional currency.

b) Interest rate risk

i) Liabilities/ assets

The Group's policy is to minimize interest rate cash flow risk exposures on long-term financing. At 31 March 2017, the Group is exposed to changes in market interest rates through bank borrowings at variable interest rates. The Group's fixed deposits are carried at amortized cost and are fixed rate deposits. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

23. Capital management

The Group's capital management objectives are

- to ensure the Group's ability to continue as a going concern

- to provide an adequate return to shareholders

The Group monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as presented on the face of balance sheet.

Management assesses the Group's capital requirements in order to maintain an efficient overall financing structure while avoiding excessive leverage. This takes into account the subordination levels of the Group's various classes of debt. The Group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

For the purpose of this clause 'Specified Bank Notes' shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8 November, 2016.

24. (i) The Company had, on 20 October 2010, allotted 420,000,000 share warrants to certain Promoter Group entities which were partly paid and at the option of the warrant holders were convertible into equivalent number of Equity shares of the Company. Under the Court approved Scheme of Arrangement by and amongst India bulls Real Estate Limited, India bulls Infrastructure and Power Limited, India bulls Builders Limited, the Company, Poena Power Supply Limited and their respective shareholders and creditors (Scheme - 2011), it had been stipulated that any of such Warrants remaining outstanding on the day of the Scheme - 2011 becoming effective, would stand converted into partly paid Equity shares of the Company. However, prior to the effectiveness of the Scheme - 2011 the warrant holding entities conveyed to the Company their unwillingness to exercise the warrants per se, so that as on the date of effectiveness of the Scheme

- 2011, no warrants were outstanding. Consequently, an amount of Rs, 30,450.00 lakhs representing the upfront money paid on these warrants was forfeited by the Board of Directors of the Company and appropriated towards the Capital Reserve of the Company.

(ii) During the previous year, the Company received an amount of Rs, 5,876.43 lakhs consequent to disposal of its investment in IPL- PPSL Scheme Trust as part settlement of corpus of Rs, 950.00 lakhs, the resulting balance of Rs, 4,926.43 lakhs has been credited to Capital Reserves.

25. First time adoption of Ind AS

These are the Group's first consolidated financial statements prepared in accordance with Ind AS.

The accounting policies set out in note 3 have been applied in preparing the consolidated financial statements for the year ended 31 March 2017, the comparative information presented in these consolidated 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 Group's date of transition). An explanation of how the transition from previous GAAP to Ind AS has affected the Group's financial position, financial performance and cash flows is set out in the following tables and notes.

A Ind AS optional exemptions

1 Deemed cost for property, plant and equipment and 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 as recognized 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 after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets. Accordingly, the Group has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value.

2 Leases

Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. 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, except where the effect is expected to be not material.

The Group has elected to apply this exemption for such contracts/ arrangements.

3 Business combinations

Ind AS 101 provides the option to apply Ind AS 103 prospectively from the transition date or from a specific date prior to the transition date. The Group elected to apply Ind AS 103 prospectively to business combinations occurring after its transition date. Business combinations occurring prior to the transition date have not been restated.

B Ind AS mandatory exceptions

1 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.

2 Classification and measurement of financial assets and liabilities

The classification and measurement of financial assets will be made considering whether the conditions as per Ind AS 109 are met based on facts and circumstances existing at the date of transition.

Financial assets can be measured using effective interest method by assessing its contractual cash flow characteristics only on the basis of facts and circumstances existing at the date of transition and if it is impracticable to assess elements of modified time value of money i.e. the use of effective interest method, fair value of financial asset at the date of transition shall be the new carrying amount of that asset. The measurement exemption applies for financial liabilities as well.

Applying a requirement is impracticable when the entity cannot apply it after making every reasonable effort to do so. It is impracticable to apply the changes retrospectively if:

a) The effects of the retrospective application or retrospective restatement are not determinable;

b) The retrospective application or restatement requires assumptions about what management's intent would have been in that period;

The retrospective application or retrospective restatement requires significant estimates of amounts and it is impossible to distinguish objectively information about those estimates that existed at that time.

3 De-recognition of financial assets and liabilities

Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter to apply the de-recognition requirements in Ind AS 109 retrospectively from a date of the entity's choosing, provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognized as a result of past transactions was obtained at the time of initially accounting for those transactions.

The Group has elected to apply the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.

C (i) Reconciliations between previous GAAP 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 reconciliations from previous GAAP to Ind AS.

Note - 1 Arrangements in respect of generation assets considered as operating lease and straight lining income on such operating leases

Under previous GAAP, arrangement for sale of electricity has been considered has revenue transaction and amount received has been considered revenue from sale of electricity.

Under Ind AS this arrangement has been considered an operating lease in accordance with Appendix C of Ind AS 17, portion of consideration received/ receivable from sale of electricity has been considered as lease rent and this has been straight lined over the lease term.

Note - 2 Financial assets and liabilities at amortized cost

Under previous GAAP, all financial assets and financial liabilities were carried at cost.

Under Ind AS, financial assets and financial liabilities are initially measured at fair value and subsequently certain financial assets and liabilities are measured at amortized cost which involves the application of effective interest rate method. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial asset or financial liability to the fair value amount on the date of recognition of financial asset or financial liability.

Note - 326Impact of consolidation of IPL-PPSL Scheme Trust as subsidiary

Under Ind AS, the Parent Company was concluded to control over the IPL-PPSL Scheme Trust, which was accordingly consolidated as a subsidiary of the Parent Company. Upon consolidation of IPL-PPSL Scheme Trust, equity shares on the Parent Company held by IPL-PPSL Scheme Trust were treated as treasury shares by the Group and reduced form Equity.

Note - 27

Effect of changes in pattern of recognition of lease rentals and incentives

Under Ind AS, lease payments under an operating lease shall be recognized as an expense on a straight-line basis over the lease unless the payments to the less or are structured to increase in line with expected general inflation to compensate for the less or’s expected inflationary cost increases. Also lessee shall recognize the aggregate benefit of incentive as a reduction of rental expenses over the lease term, on a straight-line basis.

Note - 28

Remeasurements of post-employment benefit obligations

Under Ind AS, re-measurements i.e. actuarial gains and losses, excluding amounts included in the net interest expense on the net defined benefit liability are recognized in other comprehensive income instead of profit or loss. Under the previous GAAP, these re-measurements were forming part of the profit or loss for the year.

The above information and that given in Note 23 - 'Trade Payables' regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the Auditors.

29. During the year, the Group sold its investments at cost in 10 wholly owned subsidiaries; viz. Mabon Power Limited, Hecate Power Company Limited, Hecate Hydro Electric Power Limited, Poena Power Company Limited, Devona Power Systems Limited, Devona Power Management Limited, Devona Power Supply Limited, Albina Power Utility Limited, Devona Power Solutions Limited, Albina Powergen Limited.

30. The Company is engaged in power generation and the setting up of power projects for generating, transmitting and supplying all forms of electrical energy and to undertake allied/ incidental activities in connection therewith. Considering the nature of the Company's business and operations, and the information reviewed by the Chief Operating Decision Maker (CODM) to allocate resources and assess performance, the company has one reportable business segment i.e. "Power generation and allied activities" as per the requirements of Ind AS 108 - 'Operating Segments'. Revenue of Rs, 133,450.34 lakhs (31 March 2016- Rs, 254,106.14 lakhs) are derived from a single external customer and the Company operates in one geography.

31. In respect of amounts as mentioned under Section 125 of the Companies Act, 2013, there are no delays in transfer of dues required to be credited to the Investor Education and Protection Fund as at 31 March 2017. There were no dues required to be credited to the Investor Education and Protection Fund as at 31 March 2016 and 1 April 2015.

32. The Board of Directors of Parent Company in its meeting held on 22 May 2017 has decided to constitute a Refinancing and Restructuring Committee to (a) evaluate various refinancing/ restructuring schemes (including S4A) under guidelines issued by RBI from time to time for Amravati power plant under the Company and (b) consider, examine and evaluate the ways and means of bringing about a restructuring of the core business of the Company through a proposed demerger of Nashik plant from the Company, in a mode and manner which is in the best interests of the two companies and their shareholders. The necessary steps in this direction shall be taken post a thorough examination and evaluation of the proposals received from the said committee.

33. The Parent Company is covered under Section 135 of the Companies Act, 2013 and accordingly constituted a Corporate Social Responsibility Committee of the Board. However, as the Company did not have average net profits based on the immediately preceding three financial years, the Company is not required to spend amounts towards Corporate Social Responsibility in terms of the Companies Act, 2013.