| Disclosure of enterprise's reportable segments explanatory The Company's activities during the year revolved around setting up and operating 3*660 MW Thermal Power Plant at Mansa, Punjab. Considering the nature of Company's business and operations, there are no separate reportable segments (business and/or geographical) in accordance with the requirements of Accounting Standard 17- Segment Reporting'.
Disclosure of employee benefits explanatory(f) Employees Benefits
i. Short term
The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the service.
ii. Long term
Defined contribution plans:
The Company's contribution to Provident Fund and Superannuation Fund are a defined contribution scheme and the contributions are charged to the Statement of Profit and Loss/ Capital Work in Progress, as applicable, as incurred.
iii. Defined benefit plans:
Employee benefits in the form of Gratuity are defined benefit obligations and are provided for on the basis of an actuarial valuation carried out at the year end using the Projected Unit Credit Method and charged to the Statement of Profit and Loss/ Capital Work in Progress, as applicable. Actuarial gains and losses are recognised in the Statement of Profit and Loss in the period in which they occur.
iv. Liability for compensated absences is determined on the basis of an actuarial valuation carried out at the end of the year using the Projected Unit Credit Method and charged to the Statement of Profit and Loss/ Capital Work in Progress, as applicable. Actuarial gains and losses are recognised in the Statement of Profit and Loss in the period in which they occur.
39 Employee Benefits
(i) Defined Contribution Plan:
The Company has recognized for the year ended 31st March, 2015, an amount of Rs. 0.91 crores (31st March, 2014: Rs. 0.70 crores) under defined contribution plan as follows:
Employees' Remuneration and Benefits For the year ended
31st March, 2015 Amount (Rs. crores) For the year ended
31st March, 2014 Amount (Rs. crores)
Provident Fund 0.59 0.45
Superannuation 0.32 0.25
Total 0.91 0.70
The contribution expected to be made by the Company during the financial year 2015-16 as ascertained by the management is Rs. 0.22 crores (Previous Year Rs. 0.16 crores)
(ii) Defined Benefit Plan:
The disclosure as required under AS-15 regarding the company's gratuity plan (funded) is as follows:
Actuarial assumptions
Particulars For the year ended
31st March, 2015 Amount (Rs. crores) For the year ended
31st March, 2014 Amount (Rs. crores)
Salary growth (p.a.) 5.50% 5.50%
Expected rate of Return on Plan Assets (p.a.) 7.80% 8.00%
Discount rate (p.a.) 7.80% 9.00%
Mortality rate IALM(2006-08) IALM(2006-08)
Amount recognized in Expenditure during the period
Particulars For the year ended
31st March, 2015 Amount (Rs. crores) For the year ended
31st March, 2014 Amount (Rs. crores)
Current service cost 0.12 0.10
Past service cost - -
Interest cost 0.06 0.03
Expected return on plan assets (0.03) (0.02)
Net actuarial (gains)/losses recognized 0.18 0.10
Total * 0.33 0.21
Movement in brsent value of defined benefit obligation
Particulars For the year ended
31st March, 2015 Amount (Rs. crores) For the year ended
31st March, 2014 Amount (Rs. crores)
Obligation at the beginning of the year 0.60 0.36
Current service cost 0.12 0.10
Past service cost - -
Interest cost 0.06 0.03
Actuarial (gains)/losses 0.18 0.11
Benefits paid (0.22) -
Obligation at the end of the year 0.74 0.60
Disclosure of accounting policies, change in accounting policies and changes in estimates explanatorySignificant Accounting Policies :
(a) Basis of Accounting
The financial statements of the Company have been brpared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act") as applicable. The financial statements have been brpared on accrual basis under the historical cost convention. The accounting policies adopted in the brparation of the financial statements are consistent with those followed in the brvious year except for change in the accounting policy for debrciation as more fully described in Note 2(h).
(b) Use of Estimates
The brparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year. The Management believes that the estimates used in brparation of the financial statements are prudent and reasonable. Differences between the actual results and estimates are recognized in the periods in which the results are known/materialise.
(c) Fixed Assets (Tangible and Intangible)
Fixed assets are recognised at cost of acquisition including any directly attributable expenditure on making the asset ready for its intended use, other incidental expenses attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use, less accumulated debrciation, amortization and impairment loss. Machinery spares which can be used only in connection with an item of fixed asset and whose use is expected to be irregular are capitalised and debrciated over the useful life of the principal item of the relevant assets. Subsequent expenditure on fixed assets after its purchase / completion is capitalised only if such expenditure results in an increase in the future benefits from such asset beyond its brviously assessed standard of performance.
(d) Expenditure During Construction Period
All costs attributable to construction of project or incurred in relation to the project under construction, net of incidental income during the construction/br-production period, are aggregated under 'Expenditure during Construction Period' to be allocated to individual identified assets on completion.
(e) Investments
Long term investments are carried individually at cost less any provision for diminution/ impairment, other than temporary, in the value of investments. Investments are recorded as long term investments unless they are expected to be sold within one year. Current investments are carried individually, at lower of cost and fair Value. Investments are reviewed for impairment at the year end.
(f) Employees Benefits
i. Short term
The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the service.
ii. Long term
Defined contribution plans:
The Company's contribution to Provident Fund and Superannuation Fund are a defined contribution scheme and the contributions are charged to the Statement of Profit and Loss/ Capital Work in Progress, as applicable, as incurred.
iii. Defined benefit plans:
Employee benefits in the form of Gratuity are defined benefit obligations and are provided for on the basis of an actuarial valuation carried out at the year end using the Projected Unit Credit Method and charged to the Statement of Profit and Loss/ Capital Work in Progress, as applicable. Actuarial gains and losses are recognised in the Statement of Profit and Loss in the period in which they occur.
iv. Liability for compensated absences is determined on the basis of an actuarial valuation carried out at the end of the year using the Projected Unit Credit Method and charged to the Statement of Profit and Loss/ Capital Work in Progress, as applicable. Actuarial gains and losses are recognised in the Statement of Profit and Loss in the period in which they occur.
(g) Borrowing Costs
Borrowing costs include interest, amortisation of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset upto the date of capitalisation of such asset is added to the cost of the assets.
(h) Debrciation
Debrciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value. Debrciation on tangible fixed assets has been provided on the straight-line method as per the useful life brscribed in Schedule II to the Companies Act, 2013 subject to following deviations:
a. Certain Plant and Machinery items are being debrciated over 5 -20 years in accordance with its use.
b. Individual items of assets costing up to Rs. 5,000 are wholly debrciated in the year of purchase. In respect of Plant and Equipment, the life of the assets has been assessed at 40 years based on management's assessment of independent technical evaluation / advice, taking into account, inter-alia, the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, manufacturers warranties and maintenance support. The said life of Plant and Equipment is also in accordance with the life brscribed in Schedule II to the Companies Act, 2013.
Intangible assets are amortised over its expected useful life.
The estimated useful life of the intangible assets and the amortisation period are reviewed at the end of each financial year and the amortisation period is revised to reflect the changed pattern, if any.
(i) Taxes on Income
Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961 and other applicable tax laws. Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is highly probable that future economic benefit associated with it will flow to the Company.
Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets are recognised for timing differences of items other than unabsorbed debrciation and carry forward losses only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. However, if there are unabsorbed debrciation and carry forward of losses and items relating to capital losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that there will be sufficient future taxable income available to realise the assets. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each balance sheet date for their realisability.
Current and deferred tax relating to items directly recognised in reserves are recognised in reserves and not in the Statement of Profit and Loss.
(j) Impairment of Fixed Assets
The carrying values of assets / cash generating units at each balance sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their brsent value based on an appropriate discount factor. When there is indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the Statement of Profit and Loss, except in case of revalued assets.
(k) Provisions, Contingent Liabilities and Contingent Assets
A provision is recognised when the Company has a brsent obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made.
Provisions (excluding retirement benefits) are not discounted to their brsent values and are determined based on the best estimate required to settle the obligations at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognised in the financial statements and are disclosed in the Notes. A Contingent asset is neither recognised nor disclosed in the financial statements.
(l) Foreign Currency Transactions
(i) Transactions denominated in foreign currency are recorded at the exchange rates brvailing on the date of the transaction or at rates
that closely approximate the rate of date of transaction. (ii) All monetary items denominated in foreign currencies at the reporting date are restated at the rate brvailing on the reporting date.
Foreign currency monetary items of the Company, outstanding at the balance sheet date are restated at the year-end rates. Non-
monetary items of the Company are carried at historical cost. (iii) Exchange differences relating to long term monetary items falling under Accounting Standard 11 are accounted as under: (a) In so far as they relate to the acquisition of a debrciable capital asset added to / deducted from the cost of the asset and
debrciated over the balance life of the asset. (b) In other cases accumulated such differences in "Foreign Currency Monetary Item Translation Difference Account" and amortized to
the Statement of Profit and Loss over the balance life of the long term monetary item but not beyond March 31, 2020. (iv) Exchange difference relating to short term monetary items are accounted in the Statement of Profit and Loss.
(m) Derivative Instruments
In order to hedge its exposure to foreign currency risk, the Company enters into foreign currency forward contracts. Changes in the fair value of derivatives that are designated and qualify as cash flow hedges and are determined to be an effective hedge are recorded in hedging reserve account. Any cumulative gain or loss on the hedging instrument recognized in hedging reserve is kept in hedging reserve until the forecast transaction occurs. Amounts deferred to hedging reserve are recycled in the Statement of Profit and Loss in the periods when the hedged item affects the Statement of Profit and Loss. If a hedge of a forecast transaction subsequently results in the recognition of a non-financial asset or a non-financial liability, or a forecast transaction for a non-financial asset or non-financial liability becomes a firm commitment for which fair value hedge accounting is applied, the associated gains and losses that were recognized directly in equity are removed, and are included in the initial cost or other carrying amount of the asset or liability Derivative financial instruments that do not qualify for hedge accounting are recognised in accordance with AS- 11 "The Effects of Changes in Foreign Exchange Rates" where the brmium arising at the inception of such a derivative is amortised over the life of the derivative instrument. Similarly Exchange differences on such derivative instruments are recognised in the statement of Profit and Loss in respective year.
(n) Cash and cash equivalents (for purposes of Cash Flow Statement):
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.
(o) Cash flow statement
Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
(p) Inventories
Inventories comprising fuel, stores and spares, consumables, supplies and loose tools are valued at the lower of cost (weighted average basis) and the net realisable value after providing for obsolescence and other losses, where considered necessary. Cost includes all charges in bringing the goods to the point of sale, including octroi and other levies, transit insurance and receiving charges.
(q) Revenue recognition
Revenue is recognised when no significant uncertainty as to the measurability and collectability exists.
Interest income is accounted on accrual basis. Dividend income is accounted for when the right to receive it is established.
(r ) Earning per share
Basic earnings per share are calculated by dividing the net profit or loss after tax (including the post-tax effect of extraordinary items, if any) for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year is adjusted for events of bonus issue, bonus element in a rights issue to existing shareholders, share split and reverse share split (consolidation of shares).
For the purpose of calculating diluted earnings per share, the net profit or loss after tax (including the post-tax effect of extraordinary items, if any) for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares, if any.
Disclosure of general information about companyCompany's Overview :
Talwandi Sabo Power Limited (herein after referred as "TSPL") was incorporated as a Special Purpose Vehicle by Punjab State Power Corporation Limited (herein after referred as "PSPCL") [formerly known as Punjab State Electricity Board (PSEB)] to construct a 3*660 MW coal based thermal power plant (The Plant) on Build, Own and Operate (BOO) basis. TSPL became a wholly owned subsidiary of Sesa Sterlite Limited (herein after referred as "SSL") [formerly known as Sterlite Energy Limited (SEL)] pursuant to the selection of SSL as the successful bidder after going through a tariff based International Competitive Bidding (ICB) process. The Share Purchase Agreement (SPA), Power Purchase Agreement (herein after referred as "PPA") for sale of power from the Plant to PSEB for a period of 25 years and other necessary documents were signed between SSL, TSPL and PSPCL on September 01, 2008. In view of the scheme of amalgamation and arrangement amongst the group companies and made effective during the brvious year with the effective date of August 17, 2013, Sesa Sterlite Limited became the holding company of TSPL.
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