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NOTES TO ACCOUNTS

Adani Green Energy Ltd.

You can view the entire text of Notes to accounts of the company for the latest year
Market Cap. (₹) 7640.21 Cr. P/BV 3.95 Book Value (₹) 12.36
52 Week High/Low (₹) 73/29 FV/ML 10/1 P/E(X) 0.00
Bookclosure 07/08/2019 EPS (₹) 0.00 Div Yield (%) 0.00
Year End :2018-03 

Note:

Retained earnings represents the amount that can be distributed by the Company as dividends considering the requirements of the Companies’ Act, 2013.

Notes: a) Security details and repayment schedule for the balances as at 31st March, 2018

i) Trade credits from Banks aggregating to Rs, 2831.00 lakhs (As at 31st March 2017 Rs, Nil) are secured or to be secured by exclusive charge on underlying equipments and subservient charge on all current assets and movable fixed assets, both present and future of the borrower. Trade Credit facilities will be contractually converted in Rupee Term Loan on due dates.The same carries an interest rate in range of of 8% p.a. to 10% p.a.

ii) Rupee term loans from Banks aggregating to Rs, 4,273 lakhs (As at 31st March, 2017 Rs, 4541 lakhs) are secured /to be secured by first charge on all immovable assets and movable assets including current assets of the company.

Further secured by pledge of Equity shares and corporate guarantee of holding company and entities under common control. The same carries an interest rate in range of 9% p.a. to 11% p.a. Rupee term loan from Bank are payable in 68 structured quarterly installments starting from FY 2017-18.

iii) Rupee term loans from Banks aggregating to Rs, 150,000 lakhs (As at 31st March 2017 Rs, Nil) are secured/ to be secured

by first charge on Loan and Advances, Investment and Current Assets of the company. The same carries an interest rate in range of of 9% p.a. to 11% p.a. Further secured by pledge of Equity shares of the holding company and entities under common control. as first charge. Rupee term loan from Bank are payable in 60 structured monthly installments starting from FY 2019-20.

b) Repayment schedule for the balances as at 31st March, 2018.

i) Unsecured term loans from related party of Rs, 75,729.38 Lakhs (As at 31st March, 2017 Rs, 37,161.52 Lakhs) are repayable

on mutually agreed dates after a period of 4 years from balance sheet date and carry an interest rate in range of 10.05% p.a. to 11% p.a.

Notes:

i) Loans from related parties are repayable within one year from the date of agreement and carry an interest rate ranging from 10% p.a. to 10.60% p.a.

ii) Rupee term loans from Banks aggregating to Rs, 25,000 lakhs (as at 31st March 2017 Rs, Nil) are secured /to be secured by first Pari-Passu charge on all Movable and current assets (both present and future) of 12MW wind power project in MP Project and second pari-passu charge on all the current assets and movable Fixed assets (both present and future) excluding any project specific assets on books of the borrower and investments by way of Equity Share Capital/ CCD in SPV’s). Facility is further secured by corporate guarantee and pledge of share of holding company and entities under common control. The loan has bullet repayment in the FY 2018-19. The same carries an interest rate in range of of 9.00% p.a. to 11.00% p.a.

Notes:

i) There are no Micro, Small and Medium Enterprises, as defined in the Micro, Small and Medium Enterprises Development Act, 2006 to whom the Company owes dues on account of principal amount together with interest and accordingly no additional disclosures have been made. The above information 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.

ii) Refer Note 39 for related party balances.

34 Financial Instruments, Financial Risk and Capital Management :

The Company’s risk management activities are subject to the management direction and control under the framework of Risk Management Policy as approved by the Board of Directors of the Company. The Management ensures appropriate risk governance framework for the Company through appropriate policies and procedures and these risks are identified, measured and managed in accordance with the Company's policies and risk.

The Company’s financial liabilities comprise mainly of borrowings, trade and other payables. The Company's financial assets comprise mainly of investments, cash and cash equivalents, other balances with banks, loans, trade receivables and other receivables.

The Company has exposure to the following risks arising from financial instruments:

- Market risk;

- Credit risk; and

- Liquidity risk

Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and commodity risk.

i) 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's exposure to the risk of changes in market interest rates relates primarily to the Company's long-term debt obligations with floating interest rates.

The Company manages its interest rate risk by having a mixed portfolio of fixed and variable rate loans and borrowings. The company's borrowings from banks are at floating rate of interest and borrowings from related parties are at fixed rate of interest.

The sensitivity analysis have been carried out based on the exposure to interest rates for instruments not hedged against interest rate fluctuations at the end of the reporting period. The said analysis has been carried on the amount of floating rate non - current liabilities outstanding at the end of the reporting period. A 50 basis point increase or decrease represents the management’s assessment of the reasonably possible change in interest rates.

ii) Foreign Currency risk

Foreign currency risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company is exposed to the effects of fluctuation in the prevailing foreign currency exchange rates on its financial position and cash flows. Exposure arises primarily due to exchange rate fluctuations between the functional currency and other currencies from the Company’s operating and financing activities.

iii) Price risk

The Company’s exposure to price risk in the investment in mutual funds and classified in the balance sheet as fair value through profit or loss. Management monitors the prices closely to mitigate its impact on profit and cash flows. Since these investments are insignificant, the exposure to price changes is minimal.

Credit risk Trade Receivable:

Total receivables of the company are from its related entities and State Electricity Distribution Company (DISCOM) which are Government undertaking. The Company is regularly receiving its dues from its related entities and DISCOM. Delayed payments carries interest as per the terms of agreements. Trade receivables are generally due for lesser than one year, accordingly in relation to these dues, the Company does not foresee any Credit Risk.

Other Financial Assets:

This comprises mainly of deposits with banks, investments in mutual funds and other intercompany receivables.

Credit risk arising from these financial assets is limited and there is no collateral held against these because the counterparties are group companies, banks and recognized financial institutions. Banks and recognized financial institutions have high credit ratings assigned by the international credit rating agencies.

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company monitors its risk of shortage of funds using cash flow forecasting models. These models consider the maturity of its financial investments, committed funding and projected cash flows from operations. The Company's objective is to provide financial resources to meet its business objectives in a timely, cost effective and reliable manner and to manage its capital structure. A balance between continuity of funding and flexibility is maintained through continued support from lenders, trade creditors as well as through issue of equity shares.

Capital Management

The Company’s objectives for managing capital is to safeguard continuity and healthy capital ratios in order to support its business and provide adequate return to shareholders through continuing growth. The Company's overall strategy remains unchanged from previous year.

The Company sets the amount of capital required on the basis of annual business and long-term operating plans which include capital and other strategic investments.

The funding requirements are met through a mixture of equity, internal fund generation, and other non - current/current borrowings. The Company's policy is to use current and non - current borrowings to meet anticipated funding requirements. The Company monitors capital on the basis of the net debt to equity ratio.

The Company believes that it will able to meet all its current liabilities and interest obligation on timely manner.

No changes were made in the objectives, policies or processes for managing capital during the years ended as at 31st March, 2018 and as at 31st March, 2017.

Note:

i) Investments in subsidiaries and joint ventures classified as equity investments have been accounted at historical cost. Since these are scope out of Ind AS 109 for the purposes of measurement, the same have not been disclosed in the tables above.

ii) Fair value of financial assets and liabilities measured at amortized cost is not materially different from the amortized cost. Further, impact of time value of money is not significant for the financial instruments classified as current. Accordingly, the fair value has not been disclosed separately.

i) 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. NAV represents the price at which the issuer will issue further units of mutual fund and the price at which issuers will redeem such units from the investors. Accordingly it is representation of the fair value.

viii. Asset Liability Matching Strategies

The Company has purchased insurance policy, which is basically a year-on-year cash accumulation plan in which the interest rate is declared on yearly basis and is guaranteed for a period of one year. The insurance Company as part of the policy rules, makes payment of all gratuity outgoes happening during the year (subject to sufficiency of funds under the policy). The policy, thus, mitigates the liquidity risk. However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of liabilities. Thus, the Company is exposed to movement in interest rate (in particular, the significant fall in interest rates, which should result in an increase in liability without corresponding increase in the asset).

ix. Effect of Plan on Entity's Future Cash Flows

a) Funding arrangements and Funding Policy

The Company has purchased an insurance policy to provide for payment of gratuity to the employees. Every year, the insurance company carries out a funding valuation based on the latest employee data provided by the Company. Any deficit in the assets arising as a result of such valuation is funded by the Company.

b) Expected Contribution during the next annual reporting period

The Company’s best estimate of Contribution during the next year is ' 107.06 lakhs

x. The Company has defined benefit plans for Gratuity to eligible employees, the contributions for which are made to Life Insurance Corporation of India who invests the funds as per Insurance Regulatory Development Authority guidelines.

The discount rate is based on the prevailing market yields of Government of India’s securities as at the balance sheet date for the estimated term of the obligations.

The expected contributions for Defined Benefit Plan for the next financial year will be in line with FY 2017-18.

The actuarial liability for compensated absences as at the year ended 31st March, 2018 is Rs, 93.96 Lakhs (Previous Year Rs, 81.17 Lakhs).

39 Related party transactions

a. List of related parties and relationship

The Management has identified the following entities and individuals as related parties of the Company for the year ended 31st March, 2018 for the purpose of reporting as per IND AS 24 - Related Party Disclosure which are as under:-

Ultimate Controlling Entity_: S. B. Adani Family Trust (SBAFT)_

Holding Company : Adani Enterprises Limited

Subsidiary Companies Zemira Renewable Energy Limited (Up to 20th December 2017)

Adani Green Energy (MP) Limited Parampujya Solar Energy Private Limited Rosepetal Solar Energy Private Limited Adani Green Energy (Tamilnadu) Limited Kilaj Solar (Maharashtra) Private Limited Adani Wind Energy (Gujarat) Private Limited Adani Green Energy (UP) Limited Gaya Solar (Bihar) Private Limited Mahoba Solar (UP) Private Limited Adani Renewable Power LLP Fellow Subsidiary Companies (with whom Prayatna Developers Private Limited

transactions are done)

Joint Venture Entity : Kodangal Solar Parks Private Limited (w.e.f. 22nd March, 2018)

Step down Subsidiary (with whom Ramnad Renewable Energy Limited

transactions are done) Kamuthi Renewable Energy Limited

Ramnad Solar Power Limited Kamuthi Solar Power Limited

Adani Renewable Energy Park (Gujarat) Limited (up to 27th March, 2017)

Wardha Solar (Maharashtra) Private Limited (w.e.f. 15th July, 2016)

Entities under common control / associate Adani Infra (India) Limited

Entities (with whom transactions are done) Adani Power Limited

Adani Power (Mundra) Limited Universal Trade and Investments Limited

Adani Port & SEZ Limited_

Adani Power Maharashtra Limited Adani Power Rajasthan Limited Adani Transmission Limited

Adani Renewable Energy Park Limited (w.e.f. 28th March, 2017)

Adani Renewable Energy Park Rajasthan Limited (w.e.f. 28th March, 2017)

Adani Renewable Energy Park (Gujarat) Limited (w.e.f. 28th March, 2017)

Adani Green Technology Limited

Mundra Solar Limited (w.e.f. 28th March, 2017)

Mundra Solar PV Limited (w.e.f. 31st March, 2017)

Mundra Solar Techopark Private Limited (w.e.f. 27th March, 2017)

Adani Tradecom LLP

Adani Trading Services LLP

Adani Properties Private Limited

Belvedere Golf and Country Club Private Limited

Udupi Power Corporation Limited

a. List of related parties and relationship (Contd.)

Key Management Personnel : Gautam S. Adani, Director

: Rajesh S. Adani, Director

: Jayant Parimal, Managing Director

: Ashish Garg, Chief Financial Officer

: Pragnesh Darji, Company Secretary

: Nayana Gadhavi, Independent Director (Upto 9th November, 2017)

: Jay Himmatlal Shah, Independent Director

Terms and conditions of transactions with related parties

Outstanding balances of related parties at the year-end are unsecured. Transaction entered into with related party are made on

terms equivalent to those that prevail in arm's length transactions.

Notes:

The names of the related parties and nature of the relationships where control exists are disclosed irrespective of whether or not there have been transactions between the related parties. For others, the names and the nature of relationships is disclosed only when the transactions are entered into by the Company with the related parties during the existence of the related party relationship.

1. The Company publishes the unconsolidated financial statements of the Company along with the consolidated financial statements of the company. In accordance with Ind AS 108 - Operating Segments, the Company has disclosed the segment information in the consolidated financial statements.

2 Previous year's figures have been recast, regrouped and rearranged, wherever necessary to confirm to this year's classification.

3 During the year ended March 31, 2018, the Board of Directors of Adani Enterprises Limited (hereinafter referred as "AEL’) and the Company had approved the Scheme of Arrangement (“the Scheme") among AEL and the Company and their respective shareholders and creditors. Pursuant to the Scheme, the Renewable Power Undertaking of AEL will be transferred to the Company with appointed date of April 01, 2018. The Scheme was sanctioned by National Company Law Tribunal ("NCLT"), bench at, Ahmedabad vide its order dated 16th February, 2018.

Subsequent to the year end, the Company has made an applications to SEBI and Stock Exchanges viz. BSE Limited and the National Stock Exchange of India Limited for getting necessary approvals for listing of equity shares of the Company and the Company is awaiting approvals for listing of its equity shares.

4 Recent Indian Accounting Standards (Ind AS)

Standards issued but not yet effective

On 28 March 2018, Ministry of Corporate Affairs (MCA) has notified new standards and amendments to existing standards. These amendments are effective for annual periods beginning after 1 April 2018.

Ind AS 115 Revenue from contract with customers

I nd AS 115 establishes a comprehensive framework for determining whether, how much and when revenue is recognized. It replaces existing revenue recognition guidance, including Ind AS 18 Revenue and Ins AS 11 Construction Contracts. The core principle of the new standard that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further, the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts with customers.

This Standard permits two possible methods of transition i.e. retrospective approach and modified retrospective method.

The Company is in the process of evaluating and identifying the key impacts along with transition options to be considered while transiting to Ind AS 115.

Amendments to existing Ind AS

The following amended standards are not expected to have a significant impact on the Company's financial statements. This assessment is based on currently available information and may be subject to changes arising from further reasonable and supportable information being made available to the Company when it will adopt the respective standards.

Ind AS 40 - Investment Property

The amendment lays down the principle regarding the transfer of asset to, or from, investment property.

I nd AS 21 - The Effects of Changes in Foreign Exchange Rates

The amendment lays down principles to determine the date of transaction when a company recognizes a nonmonetary prepayment asset or deferred income liability.

Ind AS 12 - Income Taxes

The amendments explains that determining temporary differences and estimating probable future taxable profit against which deductible temporary differences are assessed for utilization are two separate steps.

5 Events occurring after the Balance sheet Date

The Company evaluates events and transactions that occur subsequent to the balance sheet date but prior to approval of the financial statements to determine the necessity for recognition and/or reporting of any of these events and transactions in the financial statements. There are no subsequent events to be recognized or reported that are not already disclosed.

6 Approval of financial statements

The financial statements were approved for issue by the board of directors on 7th May, 2018.

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