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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. (₹) 8070.31 Cr. P/BV 9.61 Book Value (₹) 5.37
52 Week High/Low (₹) 58/29 FV/ML 10/1 P/E(X) 0.00
Bookclosure 07/08/2019 EPS (₹) 0.00 Div Yield (%) 0.00
Year End :2019-03 

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, 2019

(i) Rupee term loans from Banks aggregating to Rs,3,847.98 lakhs (as at 31st March, 2018 Rs,4,273.00 lakhs) are secured /

to be secured by first charge on all immovable assets and movable assets including current assets of the company. 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 Financial Year 2017-18.

(ii) Rupee term loans from Banks aggregating to Rs,1,75,000 lakhs (as at 31st March 2018 Rs,1,50,000 lakhs) 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 9% p.a. to 11% p.a. Rupee term loan from Bank are payable in 14 structured quarterly installments starting from Financial Year 2019-20.

(b) Repayment schedule for the balances as at 31st March, 2019.

(i) Unsecured term loans from related party of 5,850.18 Lakhs (as at 31st March, 2018 75,729.38 lakhs) are repayable on mutually agreed dates after a period of more than 1 year from balance sheet date and carry an interest rate in range of 10.50% p.a. to 10.70% p.a.

Notes:

(i) Trade credits from Banks aggregating to Rs,54,113.12 lakhs (as at 31st March 2018 Rs,64,802.68 lakhs) 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. The same carries an interest rate in range of 8.00% p.a. to 10.30% p.a. for domestic currency and 1.90% p.a. to 3.80% p.a, for Foreign Currency.

(ii) Rupee term loans from Banks aggregating to Nil (as at 31st March 2018 Rs,25,000 lakhs) 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 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). The loan has bullet repayment in the Financial Year 2018-19. The same carries an interest rate in range of 9.00% p.a. to 11.00% p.a.

(iii) 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.

The Honourable Supreme Court of India vide its order dated 28 th February, 2019 held that 'Basic Wages' for the contribution towards Provident Fund (PF) should only exclude [in addition to specific exclusions under Section 2(b)(ii) of the Employees Provident Fund Act, 1952]:

a) amounts that are payable to the employee for undertaking work beyond the normal work which he/she is otherwise required to put in and

b) allowances which are either variable or linked to any incentive for production resulting in greater output by an employee and that the allowances are not paid across the board to all employees in a particular category or were being paid especially to those who avail the opportunity

With reference to the above mentioned judgment, the Company's Management is of the view that there is considerable uncertainty around the timing, manner and extent in which the judgment will be interpreted and applied by the regulatory authorities. Management is of the view that any incremental outflow in this regard can only be determined once the position being taken by the regulatory authorities in this regard is known and the Management is able to evaluate all possible courses of action available.

Accordingly, no provision has been currently recognized in these Financial Statements in this regard.

1.Financial Instruments and Risk Review :

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 that 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 ;

- Liquidity risk ; and

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 fixed and 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 fair value of 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. The Company hedges at least 25% of its total exposure for 12 months as per the policy.

Every 1% point depreciation / appreciation in the exchange rate between the Indian rupee and U.S.dollar on the exposure of $ 0.03 million and 0.03 million EURO as on 31st March, 2019 and 0.08 million EURO as on 31st March, 2018, would have decreased / increased the Company's loss for the year as follows :

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.

The Company has understanding from related parties to extend repayment terms of borrowings as required.

Maturity profile of financial liabilities:

The table below provides details regarding contractual maturities of financial liabilities at the reporting date based on contractual undiscounted payments:

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.

Notes

(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.

(ii) The fair values of the derivative financial instruments has been determined using valuation techniques with market observable inputs as at reporting date. The models incorporate various inputs including the credit quality of counter-parties and foreign exchange rates.

2. Pursuant to the Indian Accounting Standard (Ind AS- 33) - Earnings per Share, the disclosure is as under:

3. As per Indian Accounting standard 19 "Employee Benefits", the disclosure as defined in the accounting standard are given below.

The status of gratuity plan as required under Ind AS-19 :

The Company operates a defined benefit plan (the Gratuity plan) covering eligible employees, which provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's salary and the tenure of employment.

vii. Sensitivity Analysis

Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase and mortality. The sensitivity analysis below have been determined based on reasonably possible changes of the assumptions occurring at the end of the reporting period, while holding all other assumptions constant. The results of sensitivity analysis is given below:

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 Rs,618.61 lakhs (as at 31st March, 2018 Rs,107.06 lakhs)

c) Maturity Profile of Defined Benefit Obligation

Weighted average duration (based on discounted cash flows) - 5 years

xi. 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 2018-19.

The actuarial liability for compensated absences as at the year ended 31st March, 2019 is Rs,498.47 lakhs (Previous Year Rs,93.96 lakhs).

4.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, 2019 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) (up to 31st March, 2018)

Holding Company : Adani Enterprises Limited (up to 31st March, 2018)

Entities with joint control of, or significant : S. B. Adani Family Trust (SBAFT) (w.e.f 1st April, 2018)

influence over, the entity; : Adani Trading Services LLP (w.e.f 1st April, 2018)

: Universal Trade and Investments Limited (w.e.f 1st April, 2018)

: Adani Properties Private Limited (w.e.f 1st April, 2018)

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 (up to 21st October, 2018)

: Adani Wind Energy (Gujarat) Private Limited

: Adani Green Energy (UP) Limited

: Kodangal Solar Parks Private Limited (w.e.f 11th January, 2019)

: Prayatna Developers Private Limited (w.e.f 1st April, 2018)

: Adani Renewable Energy Park Limited

: Gaya Solar (Bihar) Private Limited

: Adani Green Energy Two Limited

: Adani Green Energy Four Limited

: Mahoba Solar (UP) Private Limited

: Adani Green Energy Pte Limited (w.e.f 10th August, 2018)

: Adani Renewable Energy (KA) Limited

: Adani Solar USA Inc (w.e.f. 24th August, 2018)

: Adani Phuoc Minh Wind Power Company Limited (w.e.f 1st September, 2018)

: Adani Phuoc Minh Solar Power Company Limited (w.e.f 1st September, 2018)

: Adani Wind Energy (GJ) Limited

: Adani Renewable Energy (MH) Limited

: Adani Renewable Power LLP

Joint Venture Entity : Kodangal Solar Parks Private Limited (up to 10th January, 2019)

: Adani Renewable Energy Park Rajasthan Limited (w.e.f. 8th August, 2018)

Step down Subsidiaries : Ramnad Renewable Energy Limited

(with whom transactions are done) : Kamuthi Renewable Energy Limited

: Ramnad Solar Power Limited

: Adani Green Energy One Limited

: Adani Green Energy Three Limited

: Adani Green Energy Five Limited

: Kamuthi Solar Power Limited

: Adani Renewable Energy (RJ) Limited

: Adani Renewable Energy (TN) Limited

: Adani Renewable Energy (GJ) Limited

: Adani Wind Energy (TN) Limited

: Adani Saur Urja (KA) Limited

: Kilaj Solar (Maharashtra) Private Limited (w.e.f. 22nd October, 2018)

: Adani Green Energy (Australia) Pte Limited (w.e.f 11th August, 2018)

: Adani Green Energy (US) Pte Limited (w.e.f 11th August, 2018)

: Adani Green Energy (Vietnam) Pte Limited (w.e.f 11th August, 2018)

: Adani Renewable Energy Park (Gujarat) Limited

: Wardha Solar (Maharashtra) Private Limited

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

(with whom transactions are done) : Adani Power Limited

: Adani Enterprises Limited (w.e.f 1st April, 2018)

: Adani Power (Mundra) Limited

: Universal Trade and Investments Limited (upto 31st March, 2018)

: Adani Port & SEZ Limited

: Adani Power Maharashtra Limited

: Belvedere Golf and Country Club Private Limited

: Adani Finserve Private Limited

: Karnavati Aviation Private Limited

: Adani Township and Real Estate Company Private Limited

: Adani Infrastructure Management Service Limited

: Adani Rugby Run Finance Pty Limited

: Prayatna Developers Private Limited (upto 31st March, 2018)

: Adani Logistics Limited

: MPSEZ Utilities Private Limited

: Aravali Transmission Service Company Limited

: Maru Transmission Service Company Limited

: Maharashtra Eastern Grid Power Transmission Co Ltd

: Adani Electricity Mumbai Limited

: The Dhamra Port Company Limited

: Mundra Solar Limited

: Mundra Solar PV Limited

: Adani Tradecom LLP

: Adani Trading Services LLP (up to 31st March, 2018)

: Adani Properties Private Limited (up to 31st March, 2018)

: Udupi Power Corporation Limited

Key Management Personnel : Gautam S. Adani, Director

: Rajesh S. Adani, Director

: Sagar R. Adani, Executive Director (w.e.f 31st October, 2018)

: Jayant Parimal, Chief Executive Officer (w.e.f 7th May, 2018) (Managing Director up to 6th May, 2019)

: Ashish Garg, Chief Financial Officer

: Pragnesh Darji, Company Secretary

: Sushama Oza, Director (w.e.f 24th May, 2018)

: Raaj Kumar Sah, Director (w.e.f 1st May, 2018)

: Sandeep M. Singhi, Director (w.e.f 29th October, 2018)

: Nayna Gadhvi, Independent Director (up to 9th November, 2017)

: Jay Himmatlal Shah, Independent Director (up to 24th May, 2018)

Terms and conditions of transactions with related parties

Outstanding balances of related parties at the year-end are unsecured. Transactions entered into with related parties are made on terms equivalent to those that prevail in arm's length transactions.

Note:

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.

5. 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.

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

7. The Board of Directors of Adani Enterprises Limited (hereinafter referred as "AEL') and the Board of Directors of the Company had approved the Scheme of Arrangement ("the Scheme”) among AEL and the Company and their respective shareholders and creditors. The Scheme was sanctioned by National Company Law Tribunal (”NCLT”), bench at, Ahmadabad vide its order dated 16th February, 2018. Pursuant to the sanction of the Scheme, the Renewable Power Undertaking of AEL has been transferred to the Company with appointed date of 1st April, 2018.

Accordingly following effects are given in the books of accounts of the Company:

(i) The existing 64,96,89,000 equity shares of Rs,10 each held by AEL in the Company stand cancelled, against which the Company has allotted 83,69,55,473 equity shares of Rs,10 each to the shareholders of AEL in swap ratio of 761 equity shares of the Company for every 1,000 equity shares held by shareholders of AEL.

(ii) The transfer and vesting of the Renewable Power Undertaking is accounted for in the books of accounts of the Company as per the "Pooling of Interest Method" prescribed under Indian Accounting Standard 103 - "Business Combinations" notified under Section 133 of the Companies Act, 2013 (the Act') read with relevant rules issued there under and other applicable accounting standards prescribed under the Act.

(iii) The excess of the value of equity shares allotted over the book value of assets and liabilities transferred has been recorded as reduction from capital reserve.

8. Business Combination

Since the scheme of demerger described in note no 42 above qualifies as common control business combinations under Ind AS 103 - "Business Combinations", the previous period comparative figures have been restated as if the business combination had occurred with effect from 1st April, 2017 and accordingly, Capital reserve is calculated based on the net assets as on 1st April, 2017.

9. During the year, the Company has converted the loan of ' 74,914.24 Lakhs from Adani Properties Private Limited (APPL) into Unsecured Perpetual Debt. This debt is perpetual in nature with no maturity or redemption and is repayable only at the option of the borrower. The distribution on this debt is cumulative and at the discretion of the borrower at the rate of 11% p.a. where the borrower has an unconditional right to defer the same. As this debt is perpetual in nature and ranked senior only to the Share Capital of the borrower and the borrower does not have any redemption obligation, this is considered to be in the nature of equity instruments. This Unsecured Perpetual Debt have been presented as Instruments entirely equity in nature.

10. Due to micro, small and medium enterprises

Under the Micro Small and Medium Enterprises Development Act, 2006, (MSMED) which came in to force from 2nd October, 2006, certain disclosers are required to be made relating to Micro, Small and Medium enterprises. On the basis of the information and records available with management, outstanding dues to the Micro and Small enterprise as defined in the MSMED Act, 2006 are disclosed as below.

The disclosure in respect of the amount payable to enterprises which have provided goods and services to the Company and which qualify under the definition of micro and small enterprises, as defined under Micro, Small and Medium Enterprises

Development Act, 2006 has been made in the Financial statement as at 31st March, 2019 based on the information received and available with the Company. On the basis of such information, no interest is payable to any micro, small and medium enterprises.

11. Ind AS 115 Revenue from contracts with customers was issued on 28th March, 2018 and supersedes Ind AS 11 Construction Contracts and Ind AS 18 Revenue and it applies, with limited exception, to all revenue arising from contracts with its customers. Under Ind AS 115, revenue is recognized when a customer obtains control of goods or services. The Company has adopted Ind AS 115 using the cumulative effect method (without practical expedients) with the effect of initially applying this standard recognized at the date of initial application i.e. 1st April, 2018. Accordingly, the comparative information i.e. information for the year ended 31st March 2018, has not been restated. The adoption of the standard did not have any material impact on the financial statements of the company. Additionally, the disclosure requirements in Ind AS 115 have not generally been applied to comparative information.

Contract balances:

(a) The following table provides information about receivables, contract assets and contract liabilities from the contracts with customers.

The contract assets primarily relate to the Company's right to consideration for work completed but not billed at the reporting date. The contract assets are transferred to receivables when the rights become unconditional. This usually occurs when the company issues an invoice to the Customer.

The contract liabilities primarily relate to the advance consideration received from the customers.

The Trade receivables primarily relate to the Company's right to consideration for work completed at the reporting date.

(b) Significant changes in contract assets and liabilities during the period:

12. Recent Indian Accounting Standards (Ind AS) Standards issued but not yet effective Ind AS 116 - Leases (effective from 1st April, 2019)

Ind AS 116 Leases replaces existing lease accounting guidance i.e. Ind AS 17 Leases. It sets out principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases, except short-term leases and leases for low-value items, under a single on-balance sheet lease accounting model. A lessee recognizes a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. Lessor accounting largely unchanged from the existing standard - i.e. lessors continue to classify leases as finance or operating leases.

Based on the preliminary assessment, the Company does not expect any significant impacts on transition to Ind AS 116 on its Net worth. The management is under process of its assessment is based on currently available information and may be subject to changes arising from further reasonable and supportable information when the standard will be adopted. The quantitative impacts would be finalized based on a detailed assessment which has been initiated to identify the key impacts along with evaluation of appropriate transition options.

13. 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.

14. Approval of financial statements

The financial statements were approved for issue by the board of directors on 15th May, 2019.

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