Torrent Power Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Dec 2018
Auditor and Management Disclosures and Notes for the quarterly results dated 31 Dec 2018
1. Indian Accounting Standard (Ind AS) 115 "Revenue from Contracts with Customers", replaces, inter alia, the existing Ind AS 18 "Revenue" and is mandatory for reporting periods beginning on and after 1st April, 2018. The application of Ind AS 115 has impacted the Company's policy with respect to revenue recognition of licensed electricity distribution business. The Company has applied the Modified Retrospective Approach for transition adjustments. Due to the application of Ind AS 115, Retained Earnings as at 1st April, 2018 are higher by Rs. 649.42 Crore, while Revenue from Operations and Profit for the quarter ended & nine months ended 31st December 2018, are higher by Rs. 66.93 Crore & Rs. 198.13 Crore respectively.
2. The 1200 MW gas based power plant located at Dahej, India (DGEN), started commercial operations from November 2014. During FY 2015-16, the Company operated DGEN for intermittent periods. It did not operate the plant in subsequent periods and maintained it in cold standby mode for immediate start-up, as and when required.
The management had carried out an impairment assessment estimating the value-in-use of DGEN based on various assumptions including expected demand, future price of LNG and the expected tariff rate, by involving a third party independent valuer as of 31st March, 2018. The management has reviewed if there are any events or changes in circumstances during the period which could impact the estimate of the value-in- use. Considering the above assessment/review, the estimated value-in-use does not indicate any impairment in the carrying amount of the plant of Rs. 4,437.34 Crore as at 31st December, 2018.
3. The chief operating decision maker evaluates the Company's performance and applies the resources to whole of the Company business viz. "Generation, Transmission and Distribution of Power'1 as an integrated utility. Further, the Company's cable business is not a reportable segment in terms of revenue, profit, assets and liabilities. Hence the Company does not have any reportable segment as per Ind AS - 108 "Operating Segments".
4. The entire immovable and movable assets including current assets, both present and future, of the Company are mortgaged and hypothecated by way of first charge in favour of holders of Non-Convertible Debentures series no. 1, 2A / 2B / 2C and 3A / 3B / 3C and which charge is held on a pari passu basis with lenders of term loans, cash credits and non-fund based credit facilities.
5. The figures for the previous periods have been regrouped, wherever necessary, to make them comparable with the figures for the current period.
6. The Audit Committee has reviewed the above results and the same have been subsequently approved by the Board of Directors in their respective meetings held on 5th February, 2019.