O) Provisions, Contingent Assets and
Contingent Liabilities
a) Provisions
Provisions are recognized only when there
is a present obligation (legal or constructive)
as a result of a past events, and it is probable
that an outflow of resources embodying
economic benefits will be required to settle
the obligation and a reliable estimate can
be made of the amount of the obligation.
Provisions are not discounted to their
present value and are determined based
on best estimate required to settle the
obligation at the Balance Sheet date.
Provisions are reviewed at each balance
sheet date and are adjusted to reflect the
current best estimate.
b) Contingent Liabilities
Contingent liabilities are disclosed when
there is a possible obligation arising from
past events, the existence of which will
be confirmed only by the occurrence or
non-occurrence of one or more uncertain
future events not wholly within the control
of the Company or a present obligation that
arises from past events where it is either not
probable that an outflow of resources will be
required to settle or a reliable estimate of the
amount cannot be made.
c) Contingent Assets
Contingent assets usually arise from
unplanned or other unexpected events that
give rise to the possibility of an inflow of
economic benefits. Contingent Assets are
neither recognized nor disclosed, when
realization of income is virtually certain,
related asset is disclosed.
P) investment in Subsidiaries
A subsidiary is an entity controlled by the
Company. Control exists when the Company
has power over the entity, is exposed,
or has rights to variable returns from its
involvement with the entity and has the
ability to affect those returns by using its
power over entity. Power is demonstrated
through existing rights that give the ability
to direct relevant activities, those which
significantly affect the entity's returns.
Investments in subsidiaries are carried
at cost. The cost comprises price paid
to acquire investment and directly
attributable cost.
Investments are tested for impairment
whenever an event or changes in
circumstances indicate that the carrying
amount may not be recoverable. An
impairment loss is recognised for the
amount by which the carrying amount of
investments exceeds its recoverable amount.
If, in a subsequent period, recoverable
amount equals or exceeds the carrying
amount, the impairment loss recognised is
reversed accordingly.
Q) investment in joint ventures and
associates
A joint venture is a type of joint arrangement
whereby the parties that have joint control
of the arrangement have rights to the net
assets of the joint venture. Joint control is
the contractually agreed sharing of control
of an arrangement, which exists only when
decisions about the relevant activities
require unanimous consent of the parties
sharing control.
An associate is an entity over which
the Company has significant influence.
Significant influence is the power to
participate in the financial and operating
policy decisions of the investee but is
not having control or joint control over
those policies.
The investment in joint ventures and
associates are carried at cost. The cost
comprises price paid to acquire investment
and directly attributable cost.
R) Segment Reporting
Operating segments are reported in
a manner consistent with the internal
reporting provided to the chief operating
decision maker (CODM). The CODM, who
is responsible for allocating resources and
assessing performance of the operating
segments, has been identified as the Chief
Financial Officer (CFO) of the Company.
An operating segment is a component of the
Company that engages in business activities
from which it may earn revenues and incur
expenses including revenues and expenses
that relate to transactions with any of the
other components of the Company and
for which discrete financial information is
available. All operating segment's operating
results are reviewed regularly by the chief
operating decision maker to make decisions
about resources to be allocated to the
segments and assess their performance.
Segment revenues and expenses are directly
attributed to the related segment. Revenues
and expenses like dividend, interest, profit/
loss on sale of assets and investments etc.,
which relate to the enterprise as a whole and
are not allocable to segment on a reasonable
basis, have not been included therein.
All segment assets and liabilities are directly
attributed to the related segment. Segment
assets include all operating assets used by
the segment and consist principally of fixed
assets, inventories, sundry debtors, loans
and advances and operating cash and bank
balances. Segment assets and liabilities
do not include investments, miscellaneous
expenditure not written off, share capital,
reserves and surplus, deferred tax assets /
liability and provision for tax.
S) Discontinued Operations
The Company classifies disposal assets as
held for sale/ distribution if their carrying
amounts will be recovered principally
through a sale/ distribution rather than
through continuing use. Actions required
to complete the sale/ distribution should
indicate that it is unlikely that significant
changes to the sale/ distribution will be
made or that the decision to sell/ distribute
will be withdrawn. Management must
be committed to the sale/ distribution
expected within one year from the date
of classification.
For these purposes, sale transactions
include exchanges of non-current assets
for other non-current assets when the
exchange has commercial substance.
The criteria for held for sale/ distribution
classification is regarded met only when
the assets are available for immediate sale/
distribution in its present condition, subject
only to terms that are usual and customary
for sales/ distribution of such assets, its
sale/ distribution is highly probable; and it
will genuinely be sold, not abandoned. The
Company treats sale/ distribution of the
asset to be highly probable when:
• The appropriate level of management is
committed to a plan to sell the asset,
• An active programme to locate a buyer
and complete the plan has been initiated
(if applicable),
• The asset is being actively marketed
for sale at a price that is reasonable in
relation to its current fair value,
• The sale is expected to qualify for
recognition as a completed sale within one
year from the date of classification, and
• Actions required to complete the plan
indicate that it is unlikely that significant
changes to the plan will be made or that
the plan will be withdrawn.
Discontinued operations are excluded from
the results of continuing operations and are
presented as a single amount as profit or
loss after tax from discontinued operations
in the Statement of Profit and Loss.
3.2 Use of Assumptions, Judgments and
Estimates
The preparation of standalone financial
statements in conformity with the requires
management to make judgments, estimates
and assumptions, that affect the application
of accounting policies and reported amounts
of assets, liabilities, income, expense
and disclosure of Contingent assets and
liabilities at the date of these standalone
financial statements and the reported
amount of revenues and expenses for
the years presented. Actual results may
differ from these estimates. Estimates
and underlying assumptions are reviewed
at each Balance Sheet date. Revision to
accounting estimates are recognised in the
period in which the estimates is revised and
future period impacted.
This note provides an overview of the areas
that involved a higher degree of judgment
or complexity, and of items which are
more likely to be materially adjusted due
to estimates and assumptions turning
out to be different than those originally
assessed. Detailed information about
each of these estimates and judgments is
included in relevant notes together with
information about the basis of calculation
for each affected line item in the standalone
financial statements:
a) Revenue
The application of revenue recognition
accounting standards is complex and
involves a number of key judgements
and estimates. Revenue is measured
based on the transaction price, which is
the consideration, adjusted for volume
discounts, price concessions and incentives,
if any, as specified in the contract with the
customer. The Company exercises judgment
in determining whether the performance
obligation is satisfied at a point in time or
over a period of time.
The measurement of construction contracts
in progress is based on an assessment of
the stage of each project and expectations
concerning the remaining progress towards
completion of each contract, including the
outcome of disagreements. The assessment
of stage, income and expenses, including
disagreements, is made by the project
management on a project-by-project basis.
The assessment of disagreements relating
to extra work, extensions of time, demands
concerning liquidated damages, etc., is
based on the nature of the circumstances,
knowledge of the client, the stage of
negotiations, previous experience and
consequently an assessment of the
likely outcome of each case. For major
disagreements, external legal opinions are a
fundamental part of the assessment.
Estimates concerning the remaining
progress towards completion depend on a
number of factors, and project assumptions
may change as the work is being performed.
Likewise, the assessment of disagreements
may change as the cases proceed. Actual
results may therefore differ materially from
expectations. Provisions for estimated
losses, if any, on uncompleted contracts are
recorded in the period in which such losses
become probable based on the expected
contract estimates at the reporting date.
b) Fair value measurement of financial
instruments
The Company measures financial
instruments, such as investments at fair
value at each balance sheet date. Fair
value is the price that would be received
to sell an asset or paid to transfer a liability
in an orderly transaction between market
participants at the measurement date.
The fair value measurement is based on
the presumption that the transaction to
sell the asset or transfer the liability takes
place either:
• In the principal market for the asset or
liability, or
• In the absence of a principal market, in
the most advantageous market for the
asset or liability
The principal or the most advantageous
market must be accessible by the Company.
The fair value of an asset or a liability is
measured using the assumptions that market
participants would use when pricing the asset
or liability, assuming that market participants
act in their economic best interest.
A fair value measurement of a non¬
financial asset takes into account a market
participant's ability to generate economic
benefits by using the asset in its highest and
best use or by selling it to another market
participant that would use the asset in its
highest and best use.
The Company uses valuation techniques
that are appropriate in the circumstances
and for which sufficient data are available
to measure fair value, maximising the use of
relevant observable inputs and minimising
the use of unobservable inputs.
All assets and liabilities for which fair value
is measured or disclosed in the financial
statements are categorised within the fair
value hierarchy, described as follows, based
on the lowest level input that is significant to
the fair value measurement as a whole:
Level 1 — Quoted (unadjusted) market
prices in active markets for identical assets
or liabilities
Level 2 — Valuation techniques for which
the lowest level input that is significant to
the fair value measurement is directly or
indirectly observable
Level 3 — Valuation techniques for which
the lowest level input that is significant to
the fair value measurement is unobservable
For assets and liabilities that are recognised
in the financial statements on a recurring
basis, the Company determines whether
transfers have occurred between levels in
the hierarchy by reassessing categorisation
(based on the lowest level input that is
significant to the fair value measurement as
a whole) at the end of each reporting period.
For the purpose of fair value disclosures,
the Company has determined classes of
assets and liabilities on the basis of the
nature, characteristics and risks of the asset
or liability and the level of the fair value
hierarchy as explained above.
c) Depreciation / amortization and
impairment of property, plant and
equipment / intangible assets.
Property, plant and equipment and
intangible assets are depreciated/ amortized
on straight-line /written down value basis
over the estimated useful lives (or lease
term if shorter) in accordance with Schedule
II of the Companies Act, 2013, taking into
account the estimated residual value,
wherever applicable.
The Company reviews carrying value of its
property, plant and equipment and intangible
assets whenever there is objective evidence
that the assets are impaired. In such situation,
assets' recoverable amount is estimated
which is higher of asset's or cash generating
units (CGU) fair value less cost of disposal
and its value in use. In assessing value in
use, the estimated future cash flows are
discounted using pre-tax discount rate,
which reflect the current assessment of time
value of money. In determining fair value less
cost of disposal, recent market realisations
are considered or otherwise in absence of
such transactions appropriate valuations are
adopted. the Company reviews the estimated
useful lives of the assets regularly in order
to determine the amount of depreciation
/ amortization and amount of impairment
expense to be recorded, adequately during
any reporting period. This reassessment may
result in change in estimate impacting the
financial result of the Company.
d) Arrangements containing leases
The Company enters into service/hiring
arrangements for various/services. The
determination of lease is based on an
assessment of several factors, including, but
not limited to, transfer of ownership of leased
asset at end of lease term, lessee's option to
purchase and estimated certainty of exercise
of such option, proportion of lease term
to the asset's economic life, proportion of
present value of minimum lease payments
to fair value of leased asset and extent of
specialised nature of the leased asset.
e) Impairment of Financial assets
The Company evaluates whether there
is any objective evidence that financial
assets including loan, trade and other
receivables are impaired and determines
the amount of impairment allowance as a
result of the inability of the parties to make
required payments. The Company bases the
estimates on the ageing of the receivables,
creditworthiness of the receivables and
historical write-off experience and variation
in the credit risk on year-to-year basis.
f) Impairment of non-financial assets
Impairment exists when the carrying value
of an asset or cash generating unit exceeds
its recoverable amount, which is the higher
of its fair value less costs of disposal and
its value in use. The fair value less costs of
disposal calculation is based on available
data from binding sales transactions,
conducted at arm's length, for similar assets
or observable market prices less incremental
costs for disposing of the asset. The value
in use calculation is based on a DCF model.
The carrying amounts of the Company's
non-financial assets are reviewed at each
reporting date to determine whether there
is any indication of impairment. If any such
indication exists, then the recoverable
amounts of cash-generating units have
been determined based on value in use
calculations. These calculations require the
use of estimates such as discount rates and
growth rates.
g) Income taxes
Significant judgment is required in
determination of taxability of certain income
and deductibility of certain expenses
during the estimation of the provision for
income taxes.
h) Defined benefit obligation (DBO)
Critical estimate of the DBO involves a
number of critical underlying assumptions
such as standard rates of inflation,
mortality, discount rate, anticipation of
future salary increases etc. as estimated
by Independent Actuary appointed for this
purpose by the Management. Variation in
these assumptions may significantly impact
the DBO amount and the annual defined
benefit expenses.
i) Fair Value Measurements
When the fair values of financial assets
and financial liabilities recorded in the
Balance Sheet cannot be measured
based on quoted prices in active markets,
their fair values are measured using
valuation techniques which involve various
judgements and assumptions. Judgements
include consideration of inputs such as
liquidity risk, credit risk and volatility.
Changes in the assumptions about these
factors could affect the reported fair value of
financial instruments.
j) Provisions and Contingencies
Provisions and liabilities are recognised in the
period when it becomes probable that there
will be a future outflow of funds resulting from
past operations or events and the amount of
cash outflow can be reliably estimated. The
timing of recognition and quantification of the
liability requires the application of judgment
to existing facts and circumstances, which
can be subject to change.
Management judgment is required for
estimating the possible outflow of resources,
if any, in respect of contingencies/claim/
litigations/ against the Company as it is not
possible to predict the outcome of pending
matters with accuracy.
The carrying amounts of provisions and
liabilities and estimation for contingencies
are reviewed regularly and revised
to take account of changing facts
and circumstances.
3.3 Standards issued but not yet effective.
There are no standards issued up to
the date of issuance of Company's
financial Statements.
(i) The Company does not have any loans which are either credit impaired, disputed or where there is
a significant increase in credit risk, other than as mentioned in Note (ii) below.
(ii) The Company had given intercorporate deposit of T 10,000 lakhs to Mcleod Russell India Limited
in earlier years. They could not honour its commitment of repayment and the Company filed
the insolvency case under Section 7 of Insolvency and Bankruptcy code, 2016 with NCLT in
September 2020. The Interim Resolution Professional (IRP) was appointed by NCLT. However,
both the parties came to the consent terms for settlement of disputes, and T 7,000 lakhs has
been paid till January 2022. The balance T 3,000 Lakhs was to be paid by issuance of Equity
shares. Since the borrower did not issue shares and violated the consent terms, the company has
approached NCLT on 29 July 2024 to get the settlement enforced. During the current year, the
Company has received an affidavit from Mcleod Russell India Limited dated 09 December 2024.
The balance payments will be made in six installments starting from October 2024. The Company
has received 5 installment of T 2,600 lakhs during the year and the balance amount of T 400 lakhs
in April 2025.
i) Receivables of EPC division are hypothecated with Banks against non-fund based facilities availed
by the Company.
ii) No trade receivable are due from directors or other officers of the company either severally or
jointly with any other person. Nor any trade receivable are due from firms or private companies
respectively in which any director is a partner, a director or a member.
iii) Trade receivables are mainly due from PSU and State Electricity Boards, which are not exposed
to default risk. As per management assessment, no provision is made for expected credit loss due
to very low credit risk of receivables. Further management has also considered past experience of
losses on receivables. The Company has not recognised provision for doubtful receivables in any
of the previous periods. The objective of managing counterparty credit risk is to prevent losses.
The Company assesses the credit quality of the counterparties, taking into account their financial
position, past experience and other factors.
* Not Due includes retention money receivable from customers.
vi) The Company was executing a project in Afghanistan till 15th August 2021 which has now been
terminated for reasons attributable to Da Afghanistan Brishna Sherkat (DABS) due change in
political scenario in Afghanistan. As on 31 March 2025, total receivables from the project are
? 6,105.00 lakhs (including retention) included under trade receivables and oher financial assets.
DABS has confirmed that all outstanding payment as on 15th August 2021 for the goods supplied
and services rendered prior and untill this date will be paid by Asian Development Bank (ADB).
ADB has hired the services of United Nations Office for Project Services (UNOPS) to approve
the bills for payment after receipt of duly processed bill from DABS. On 19 December 2024, the
Company had submitted an acknowledgement of verification and claim eligibility process (VCEP),
under which the verfication of claim invoices and expenditure for works, goods and services
performed and/or delivered is in process. The management is confident of the entire receivable in
due course.
vii) During the previous years, the Company has executed and completed a project for Bengal Energy
Limited (BEL) for a contract value of ? 15,500 lakhs. This project was completed in the year 2012
and was handed over to BEL as per the terms of the contract and is presently being used by them
in their normal course of business. Trade receivable outstanding as on 31 March 2025 pertaining
to this project is ? 1,182.64 lakhs which is under arbitration proceedings currently after a new
arbitrator was appointed by the Hon'ble High Court in October 2022 post which the proceedings
has been resumed. The matter was listed for hearing on 17 May 2024 on which date the arbitrator
had directed the Company to submit multiple responses and documents, wherein an adjournment
was sought by the Company. The matter was listed for hearing on 20 May 2024, the same got
adjourned. On 17 July 2024, the Arbitrator directed BEL to file the affidavit of evidence of first
witness on or before 31 July 2024. The matter was listed for hearing on 18 August 2024. The
Respondent failed to file any Affidavit of evidence within the decided timeline. Subsequently on 15
November 2024, the Hon'ble High Court has extended the time by a further period of one year.
viii) The Company had outstanding receivables of ? 1,833.98 lakhs towards Late payment surcharge
(LPS) from Sale of energy. During the quarter ended June 2024, the Company had received an
approval letter from Tamil Nadu Generation & Distribution Corporation Limited (TANGEDCO) for
delayed payment of interest on energy charges from 2009-10 to 2020-21 amounting to ? 7,824.70
lakhs which has been received by the end of quarter ended September 2024. The Company has
recognized Revenue/ Profit from discontinued operation amounting to ? 5,990.72 lakhs (? 7,824.70
lakhs less ? 1,833.98 lakhs) on account of recovery of LPS on delayed payment of energy charges.
ix) Refer note 41(D) for information about credit risk and market risk of trade receivables.
x) There are no receivables which have a significant increase in credit risk.
xi) Due from related party ? 9,386.64 Lakhs (31 March 2024 : ? 3,917.22 Lakhs).
i) On 19 July 2024, the Company has approved the issue and allotment of 86,80,555 fully paid-up
equity shares of the Company to eligible Qualified Institutional Buyers (QIB) in accordance with
SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 at an issue price of T 1,440
per share (including securities premium of T 1,438 per share) for a consideration of T 1,25,000 lakhs.
(b) Terms and rights attached to shares
Rights, preferences and restrictions attached to equity shares
The Company has only one class of equity shares having a par value of T 2 per share. Each holder
of equity share is entitled to one vote per share. In the event of liquidation, the equity shareholders
are entitled to receive the remaining assets of the Company after distribution of all preferential
amounts, in proportion to their shareholdings.
(c) In the period of five years immediately preceding 31 March 2025
(i) No additional shares were allotted as fully paid-up by way of bonus shares or pursuant to
contract without payment being received in cash during the last five years.
(ii) The Company had bought back 26,82,400 equity shares of T 2 each fully paid up during
the financial year 2019-20 and 23,80,981 equity shares of T 2 each fully paid up during the
financial year 2022-23.
(d) Dividend
The final dividend on shares is recorded as a liability on the date of approval by the shareholders
and interim dividends are recorded as a liability on the date of declaration by the Company's Board
of Directors.
The Company declares and pays dividends in Indian rupees. Companies are required to pay
/ distribute dividend after deducting applicable withholding income taxes. The remittance of
dividends outside India is governed by Indian law on foreign exchange and is also subject to
withholding tax at applicable rates.
B The description, nature and purpose of each reserve within other equity are as follows:
(a) Capital redemption reserve: In accordance with Section 69 of the Companies Act, 2013,
the Company creates capital redemption reserve equal to the nominal value of the shares
bought back as an appropriation from the general reserve.
(b) Securities premium: Securities premium reserve is used to record the premium on issue of
shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.
(c) General reserve: Under the erstwhile Companies Act 1956, a general reserve was created
through an annual transfer of net income at a specified percentage in accordance with
applicable regulations. The purpose of these transfers was to ensure that if a dividend
distribution in a given year is more than 10% of the paid-up capital of the Company for that
year, then the total dividend distribution is less than the total distributable reserves for that year.
Consequent to introduction of the Act, the requirement of mandatory transfer of a specified
percentage of the net profit to general reserve has been withdrawn and the Company can
optionally transfer any amount from the surplus of profit and loss to the General reserves.
This reserve is utilised in accordance with the specific provisions of the Act.
(d) Capital reserve: Capital reserve is utilised in accordance with provision of the Act.
(e) Retained earnings: Retained earnings represents the profits earned by the Company
till date, less any transfers to general reserve, dividends or other distributions paid
to shareholders.
(f) Equity instruments through OCI: The Company has elected to recognise changes in the
fair value of certain investments in equity securities through other comprehensive income.
These changes are accumulated within the head 'equity instruments through OCI' shown
under the head other equity.
(g) Remeasurement of Defined Benefit Obligations: This represents the cumulative gains
and losses arising on the revaluation of debt instruments measured at fair value through
other comprehensive income that have been recognized in other comprehensive income,
net of amounts reclassified to profit or loss when such assets are disposed off or when such
instruments are impaired.
(ii) Under the AMISP Contract, the payment for the supply and installation of meters is to be
received over a period ranging between 93 to 108 months. The Company concluded that there
is a significant financing component to this contract, considering the length of time between the
customer's payment and the transfer of the performance obligation for the supply and installation
of meters to the customer. In determining the interest to be applied to the amount of consideration,
the Company concluded that the interest rate implicit in the contract (i.e., the interest rate that
discounts the consideration to be received for the services rendered to the amount received
in installments) is appropriate because this rate is commensurate with the rate that would be
reflected in a separate financing transaction between the entity and its customer at the inception
of the contract.
Note
(i) The Company had entered into a joint venture (JV) with Kalpataru Power Transmission Limited
(KPTL) to set up Kohima- Mariani Transmission Limited (KMTL). The JV was sold off in November
2021 to Apraava Energy Private Limited (AEPL). However, before sale, KMTL had filed a petition
with Central Electricity Regulatory Commission (CERC) for relief of excess cost incurred by KMTL
for events related to change in various laws, and it was decided that any favorable benefits will
be passed on to the erstwhile shareholders by one time payment. As a result of the above, the
Company had received ? 116.19 lakhs (31 March 2024 - ? 2,501.80 lakhs) as Company's share.
Defined contribution plans
The Company makes contributions, determined as a specified percentage of employee salaries, in
respect of qualifying employees towards Provident Fund, which is a defined contribution plan. The
Company has no obligations other than to make the specified contributions. The contributions are
charged to the Statement of Profit and Loss on an accrual basis. The amount recognised as an expense
towards contribution to provident and pension fund for the year aggregated to T 374.52 lakhs (31 March
2024: T 286.32 lakhs). The balance amount charged to the Statement of Profit and Loss on an accrual
basis pertains towards gratuity and ESI.
Defined benefit plans
(a) The Company operates one post-employment defined benefit plan for gratuity. The gratuity plan
entitles an employee, who has rendered at least five years of continuous service, to receive 15
days basic salary for each year of completed service at the time of retirement/exit.
(b) These defined benefit plans expose the Company to actuarial risks, such as currency risk, interest
risk and market (investment) risk.
inherent risk
The plan is defined benefit in nature which is sponsored by the Company and hence it underwrites all
the risk pertaining to the plan. In particular, this exposes the Company, to actuarial risk such as adverse
salary growth, change in demographic experience, inadequate return on underlying plan assets. This
may result in an increase in cost of providing these benefits to employees in future. Since the benefits
are lump sum in nature, the plan is not subject to longevity risk.
(XI) Risk exposure:
Valuation are based on certain assumptions, which are dynamic in nature and may vary over time.
As such valuations of the Company is exposed to follow risks -
a) Salary increase: Higher than expected increases in salary will increase the defined
benefit obligation.
b) Investment risk: Since the plan is funded then asset liabilities mismatch and actual
investment return on assets lower than the discount rate assumed at the last valuation date
can Effect the defined benefit obligation.
c) Discount rate: The defined benefit obligation calculated use a discount rate based on
government bonds. If bond yields fall, the defined benefit obligation will tend to increase.
d) Mortality and disability: If the actual deaths and disability cases are lower or higher than
assumed in the valuation, it can Effect the defined benefit obligation.
e) Withdrawals: If the actual withdrawals are higher or lower than the assumed withdrawals
or there is a change in withdrawal rates at subsequent valuations, it can effect defined
benefit obligation.
35 Discontinued Operations
The Company had 3.60 MW of wind assets remaining out of the partial sale transaction, which was
classified as assets held for sale for the year ended 31 March 2023, has been sold off and exceptional
gain of ? 79.65 lakhs has been accounted for during the previous year ended 31 March 2024.
Further the Company had outstanding receivables of ? 1,833.98 lakhs towards Late payment surcharge
(LPS) from Sale of energy. During the year, the Company had received an approval letter from Tamil
Nadu Generation & Distribution Corporation Limited (TANGEDCO) for delayed payment of interest
on energy charges from 2009-10 to 2020-21 amounting to ? 7,824.70 lakhs which has been received.
The Company has recognized Revenue/ Profit from discontinued operation amounting to ? 5,990.72
lakhs (? 7,824.70 lakhs less ? 1,833.98 lakhs) on account of recovery of LPS on delayed payment of
energy charges.
Note:
(a) In the opinion of the management, no provision is considered necessary for the disputes
mentioned above on the ground that there are fair chances of successful outcome
of appeals. i
(b) It is not practicable for the Company to estimate the timings of cash outflows, if any, in
respect to the above pending resolution of the respective proceedings.
B Commitments:
The Company does not have any capital commitments in the current and previous year.
39 Corporate social responsibility expenses ('GSR'}:
As per Section 135 of the Act, a CSR committee has been formed by the Company. The funds are
utilised on the activities which are specified in Schedule VII of the Act.
(a) Gross amount required to be spent as per the limits of Section 135 of the Act: ? 545.60 lakhs (Year
ended 31 March 2024: ? 519.04 lakhs)
The Company's policy is to maintain a stable and strong capital structure with a focus on total equity
so as to maintain investors, creditors and market confidence and to sustain future development and
growth of its business. In order to maintain the capital structure the Company monitors the return on
capital. The Company aims to manage its capital efficiently so as to safeguard its ability to continue as a
going concern and to optimise returns to all its shareholders. For the purpose of the Company's capital
management, capital includes issued equity share capital and all other equity reserves attributable to
the equity holders, whereas debt includes borrowings which primarily includes the payables pertaining
to the purchase of goods, less cash and cash equivalents.
B. Measurement of fair values
Valuation process and technique used to determine fair value of financial assets and
liabilities classified under fair value hierarchy other than Level 1:
(a) The fair value of cash and cash equivalents, other bank balances, trade receivables, loans, trade
payables and other financial assets and liabilities approximate their carrying amount largely due
to the short-term nature of these instruments. Further, management also assessed the carrying
amount of certain non-current loans and non-current other financial assets which are reasonable
approximation of their fair values and the difference between the carrying amount and the fair
values is not expected to be significant.
(b) Investments in equity instruments are classified as FVTOCI. Fair value of unquoted investments
is determined in whole or in part, using a valuation model based on assumptions that are neither
supported by prices from observable current market transactions in the same instrument nor are
they based on available market data. This Level includes investment in unquoted equity shares. Fair
value of quoted equity instruments are determined using quoted prices available in the market.
(c) Investments in preference shares are classified as FVTPL. Fair value of unquoted investments is
determined in whole or in part, using a valuation model based on assumptions that are neither
supported by prices from observable current market transactions in the same instrument
nor are they based on available market data. This Level includes investment in unquoted
preference shares.
(d) The fair values of investments in mutual fund units is based on the net asset value ('NAV') as
stated by the issuers of these mutual fund units in the published statements as at Balance
Sheet date.
(e) In case of investments in debt instruments, the fair values in an active market is determined using
market approach and valuation techniques which maximise the use of observable market data and
rely as little as possible on entity-specific estimates.
(f) The carrying amount of financial assets and financial liabilities measured at amortised cost in the
financial statement are a reasonable approximation of their fair values, since the Company does
not anticipate that the carrying amount would be significantly different from the values that would
eventually be received or settled.
fair value hierarchy
Level 1- Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the
entity can access at the measurement date.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable
inputs).
The Company's financial liabilities comprise mainly trade payables. The Company's financial
assets comprise mainly investments, loans, trade receivables, cash and cash equivalents and other
balances with banks. The Company's financial risk management is an integral part of how to plan
and execute its business strategies.
The Company's activities expose it to market risk, interest rate risk and foreign currency risk.
The Board of Directors ('Board') oversee the management of these financial risks. The risk
management policies of the Company guides the management to address uncertainties in its
endeavour to achieve its stated and implicit objectives. It prescribes the roles and responsibilities
of the Company's Management, the structure for managing risks and the framework for risk
management. The framework seeks to identify, assess and mitigate financial risks in order to
minimise potential adverse effects on the Company's financial performance.
The following disclosures summarise the Company's exposure to financial risks and information
regarding use of derivatives employed to manage exposures to such risks. Quantitative sensitivity
analysis have been provided to reflect the impact of reasonably possible changes in market rates
on the financial results, cash flows and financial position of the Company.
(i) Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial
instrument fails to meet its contractual obligations, and arises principally from the Company's
receivables from customers and loans given. Credit risk arises from cash held with banks and
financial institutions, as well as credit exposure to customers, including outstanding accounts
receivables. The maximum exposure to credit risk is equal to the carrying value of the financial
assets. The objective of managing counterparty credit risk is to prevent losses in financial assets.
The Company assesses the credit quality of the counterparties, taking into account their financial
position, past experience and other factors.
In respect of trade and other receivables, the Company recognises lifetime expected credit losses
on trade receivables using a simplified approach by computing the expected credit loss allowance
for trade receivables based on a provision matrix. The provision matrix takes into account historical
credit loss experience and is adjusted for forward looking information. The expected credit loss
allowance is based on the ageing of the receivables that are due and rates used in provision
matrix. Trade receivables are typically unsecured and are derived from revenue earned from
two main classes of trade receivables i.e. receivables from government promoted agencies and
receivables from private third parties. A substantial portion of the Company's trade receivables
are from government promoted agencies having strong credit worthiness. Further the Company
does not have a history of credit losses from such government promoted agencies, accordingly,
provision for expected credit loss is not made in respect of trade receivables.
The credit risk for cash and cash equivalents, bank deposits, loans and financial instruments
is considered negligible, since the counterparties are reputable organisations with high quality
external credit ratings.
(ii) Liquidity risk
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its
obligations on time or at reasonable price. Prudent liquidity risk management implies maintaining
sufficient cash and marketable securities and the availability of funding through an adequate
amount of credit facilities to meet obligations when due. The Company's finance team is
responsible for liquidity, funding as well as settlement management. In addition, processes and
policies related to such risks are overseen by senior management. Management monitors the
Company's liquidity position through rolling forecasts on the basis of expected cash flows.
The Company's approach to managing liquidity is to ensure, as far as possible, that it will have
sufficient liquidity to meet its liabilities when they are due, under both normal and stressed
conditions, without incurring unacceptable losses or risking damage to the Company's reputation.
The table below analysis derivative and non-derivative financial liabilities of the Company into relevant
maturity groupings based on the remaining period from the reporting date to the contractual maturity
date. The amounts disclosed in the table are the contractual undiscounted cash flows.
(iii) Market risk
Market risk is the risk that changes in market prices - such as foreign exchange rates and interest
rates - will affect the Company's income or the value of its holdings of financial instruments. The
objective of market risk management is to manage and control market risk exposures within
acceptable parameters, while optimising the return.
(b) interest rate risk
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 exposure to the risk of
changes in market interest rates relates primarily to the Company's long term and short term
borrowing with floating interest rates. The Company constantly monitors the credit markets and
rebalances its financing strategies to achieve an optimal maturity profile and financing cost.
Note 1:
(a) Debt = Non-current borrowings current borrowings
(b) Net worth = Paid-up share capital reserves created out of profit - accumulated losses Equity
component of other financial instruments (net of taxes)
(c) EBITDA = Net Profit after taxes Non-cash operating expenses like depreciation and other
amortizations Interest other adjustments like loss on sale of Property, Plant and Equipment etc.
(d) Debt service = Interest and lease payments principal repayments
(e) Purchase = cost of materials consumed closing inventory of raw materials - opening inventory
of raw materials
(f) Working Capital = current assets - current liabilities
(g) EBIT = Earnings before interest and tax and exceptional items
(h) Capital employed = tangible net worth (total assets - total liabilities - intangible assets) total debt
(i) PAT considered is only of continuing operations
Note 2:
(a) Since the change in ratio is less than 25%, no explanation is required to be disclosed.
(b) Changes on account of increased net profit and decrease in working capital financing.
(c) Increased on account of decrease in receivables outstanding as compared to sales during the year.
(iii) The Company do not have any charges or satisfaction which is yet to be registered with ROC
beyond the statutory period.
(iv) The Company have not traded or invested in crypto currency or any form of virtual currency during
the financial year.
(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies),
including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
a. directly or indirectly lend or invest in other persons or entities identified in any manner
whatsoever by or on behalf of the Company (Ultimate Beneficiaries); or
b. provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(vi) The Company has not received any fund from any person(s) or entity(ies), including foreign
entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the
Company shall:
a. directly or indirectly lend or invest in other persons or entities identified in any manner
whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries); or
b. provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(vii) The Company does not have any such transaction which is not recorded in the books of accounts that
has been surrendered or disclosed as income during the year in the tax assessments under the Income
Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
(viii) The Company has not been declared wilful defaulter by any bank or financial institution or
government or any government authority.
(ix) The Company has not entered into any scheme of arrangement which has an accounting impact
on the current or previous financial year.
(x) There are no events or transactions after the reporting period which is required to be disclosed
under Ind AS 10.
(xi) The Company have complied with the number of layers prescribed under clause (87) of section 2
of the Act read with Companies (Restriction on number of Layers) Rules, 2017.
45 As per section 128 of the Companies Act , 2013 read with proviso to Rules 3(1) of the Companies
(Accounts) Rules, 2014 ('the Account Rules') with respect to financial year commencing on 1
April 2024, has used an accounting software for maintaining its books of account. The audit trail
(edit log) feature for any direct changes made at the database level was not enabled for the said
accounting software used for maintenance of all accounting records by the Company. However,
the audit trail (edit log) at the application level was operated throughout the year for all relevant
transactions recorded in the software. Furthermore, the audit trail (edit log) has been preserved
by the Company as per the stautory requirements for record retention.
46 Code of Social Security, 2020
The Code of Social Security, 2020 ('Code') relating to employee benefits during employment and
post employment received Presidential assent in September 2020. Subsequently, the Ministry
of Labour and Employment had released the draft rules on the aforementioned Code on 13
November 2020. However, the same is yet to be notified. The Company will evaluate the impact
and make necessary adjustments to the financial statements in the period when the Code will
come into effect.
47 Previous year figures have been re-grouped / re-classified wherever necessary, to confirm to
current year's classification. The impact of such reclassification/regrouping is not material to the
financial statements.
For Walker Ohandiok & Co LLP For and on behalf of the Board of Directors of
Chartered Accountants Techno Electric & Engineering Company Limited
Firm's Registration Number: 001076N/N500013
Dhiraj Kumar P. P. Gupta S. N. Roy
Partner Managing Director Director
Membership No.: 060466 (DIN No.: 00055954) (DIN No.: 00408742)
Place: Kolkata Pradeep Kumar Lohia Niranjan Brahma
Date: 27 May 2025 Chief Financial Officer Company Secretary
(Membership No.: A-11652)
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